The Consumer Financial Protection Bureau (CFPB) recently issued guidance to prevent families from being targeted by illegal medical debt collection tactics.
In the United States, an estimated 100 million people owe more than $220 billion in medical debt. The bills often are confusing and filled with errors, and predatory practices inflate healthcare costs.
Hospitals and healthcare providers are increasingly outsourcing medical billing and collection activities to third parties.
The CFPB has received complaints regarding bills that should have been covered by insurance, government programs, or hospital financial assistance; that were already paid by the consumer or insurance; or were not owed.
Illegal practices detailed in the guidance including:
Debt collectors must not collect bills that include exaggerated services, or charges for services the consumer did not receive.
Debt collectors cannot attempt to collect medical bills that have already been paid.
Debt collectors must not attempt to collect amounts that surpass federal or state caps.
Debt collectors must not attempt to collect medical debts unless they are substantiated. This can include documentation of payments or financial assistance eligibility.
When the payment obligation may be uncertain, debt collectors must not misrepresent to consumers that the amount being collected is fully settled.