To say we are behind on medical debt is an understatement on many levels. It wasn’t until 2021 that the Census Bureau finally caught up with the data it collected on this question in 2017.
Long known as the number one reason individuals file for bankruptcy, medical debt has continued to rise in the years since, with consumer complaints pacing the rise.
On Wednesday, April 20, the Consumer Financial Protection Bureau (CFPB) released the complaint bulletin “Medical Billing and Collections Issues Outlined in Consumer Complaints” detailing the scope and complexity of the problem.
The CFPB said it sent more than 750,000 complaints to businesses for review and response in 2021. Previous CFPB research found $88 billion in medical debt held by consumers last year.
“The topic of medical debt has often come up in the context of debt collection and consumer reporting,” the newsletter notes. “Last year, 15% of debt collection complaints were about attempts to collect a medical bill. Additionally, consumers mentioned “medical” in several thousand complaints about credit or consumer reports. »
Unlike most shopping, the CFPB noted, people often don’t have time to shop for care — and often make decisions about it under stressful circumstances. “People don’t usually plan ahead” for medical emergencies, the bureau observed.
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Medical debt pain points
Attempts to collect debts that people didn’t actually owe were the most common consumer complaint. These increased by 31% in 2021, the CFPB said. Other typical disputes were that the debt had already been paid – or that the amounts quoted were inaccurate or simply wrong.
“Third-party collectors have often updated consumer credit reports as a result of debt litigation,” the bulletin says in a concerning section. “This would generally happen without any follow-up questions from the third-party debt collector to the consumer.”
The CFPB said: “These observations rekindle concerns about potentially significant gaps in the quality and quantity of information that collectors receive when placing or selling debt, which can cause collectors to contact the wrong people. consumers, for the wrong amount or for debts that the collector is not entitled to collect.
See also: Medical payments and recoveries take fire amid rising healthcare costs
The 27-page report is filled with complaints that are all too familiar to anyone who has ever received a shocking medical bill after a health incident they thought insurance would cover.
Here is a typical example, taken from the report:
“I was transported by ambulance from [Hospital A] at [Hospital B] by [ambulance transport provider] in July [XX], 2021. They are an off-grid provider. Their services were selected by strangers at [Hospital A] without my specific knowledge.
This story ends as many do, with this consumer being harassed over the phone for an outstanding balance from a supplier he did not personally hire or approve.
COVID-19 further complicated matters as the CFPB received numerous complaints about ER visits that patients believed were covered by CARES Act funding and other pandemic relief.
Medical Billing Must Trust Transfusion
Among other common complaints, the CFPB said that 32% of debt collection disputes closed “relate to the subject of written notification of the debt – a higher percentage than any other type of debt, including debts that are not not recognized by the consumer”.
Invoices and notices in complaints are often alleged to contain incorrect information, incomplete information and, in some cases, too much personally identifiable information (PII).
Another frequently cited problem is the inability to recognize the provider or procedure in question.
CFPB said: ‘This can happen when the name of the health care provider on the notice is different from the name of the professional(s) who provided the treatment, as is often the case when a provider is part of of a larger medical group.
According to a press release accompanying the report, “many medical bills flagged on credit reports are disputed, inaccurate, or not due,” supporting previous CFPB research that found that medical bills “are less predictive of future repayment than other invoices or credit obligations”.
“Specifically, medical bills are less helpful to lenders in determining a credit seeker’s likelihood to repay a new extension of credit, such as a personal loan.”
Related: Only a third of patients get an estimate of healthcare costs before visits