The Consumer Financial Protection Bureau (CFPB), U.S. Department of Health and Human Services (HHS), and U.S. Department of Treasury are investigating the prevalence of high-cost specialty financial products for patients.
These products, which may include medical credit cards and installment loans, are often marketed to patients as a way to pay for routine medical care. However, they often drive higher health care costs and medical debt.
The three agencies are seeking information about the prevalence of these products, as well as patients’ experiences with them. In addition, they are looking for information on incentives for health care providers to offer these products to patients. The CFPB will use public input to address any patient harms caused by these specialty financial products.
“Financial firms are partnering with health care players to push products that can drive patients deep into debt,” CFPB Director Rohit Chopra said. “We are opening a public inquiry to better understand how these practices are affecting patients in our country.”
Medical payment products were once used primarily to pay for care not traditionally covered by health insurance plans. However, they are now also used to pay for a broader set of services, including emergency room visits and primary and specialty care.
Even when medical care may otherwise be covered by insurance, patients may be pitched these products by their health care providers who then pass the administration of patient billing and collections over to financial service companies.
“This inquiry builds on the Department’s work to protect patients from unfair billing practices, lower costs, and increase transparency in our health care system,” HHS Secretary Xavier Becerra said. “Hearing directly from patients about their experiences will help shape policies that can prevent families from incurring medical debt.”
The CFPB found that healthcare providers may be disincentivized to explain legally mandated financial assistance programs or zero-interest repayment options before offering these products to patients. The agencies also noted that these products can saddle patients with ballooning deferred interest or creditor lawsuits.
“Treasury is proud to partner with agencies across the Biden Administration to crack down on these often abusive practices that take advantage of patients during vulnerable times. We look forward to receiving stakeholder input so that we can better protect patients and consumers,” Deputy Secretary of the Treasury Wally Adeyemo said.
Also, given the current complexities of financial assistance programs and insurance plans, health care providers can encounter difficulties when trying to receive payment for care. Those challenges may encourage them to suggest that patients and families finance their care through specialty credit products. But while they may relieve administrative burdens from health care providers, they often shift the burdens to patients.
This request for information will provide a consumer voice in the agencies’ next steps for these products. The CFPB encourages comments and data from the public and all interested stakeholders. Comments must be received within 60 days of the request for information being published in the Federal Register.