Senate Banking Committee Democrats Call for Medical Debt Ombudsman

© 2022 ACA International. All rights reserved. Reprinted from ACA Daily with permission from ACA. Additional information: www.acainternational.org.

Originally published March 28, 2022.

In advance of a hearing on medical debt [March 29, 2022], chairman of the Senate Committee of Banking, Housing and Urban Affairs Sherrod Brown, D-Ohio, and several Democrat committee members called for Consumer Financial Protection Bureau Director Rohit Chopra to create an ombudsman position for consumer medical debt.

“In order to curtail the considerable adverse effects faced by consumers holding medical debt burdens, we respectfully ask that the CFPB consider using its authority to stem unfair medical debt collection practices and ease the strain felt by consumers, through both additional research and the creation of a medical debt ombudsman position,” the letter, also backed by U.S. Sens. Tina Smith, D-Wis., Elizabeth Warren, D-Mass., Jack Reed, D-R.I., and Raphael Warnock, D-Ga., stated.

The letter cites the CFPB’s recent report, “Medical Debt Burden in the United States,” highlighting the U.S. medical billing system and the credit reporting infrastructure connected to medical debt.

ACA has taken issue with the accuracy of the report and has expressed concerns that it does not address the actual problems with the health care system.

While the CFPB estimates in the report that there are $88 billion in medical bills on consumers’ credit reports, the report lacks attention and context to the stringent processes health care providers and debt collectors have in place to resolve a payment and ensure it is accurate before it is placed on a consumers’ credit report—all with the goal to help that consumer, ACA International previously reported.

ACA has been pushing back on misinformation from the CFPB and has also taken issue with the unintended consequences that will happen as a result of the actions of the credit reporting agencies in a letter to their leadership.

ACA also provided questions and answers about some of the key issues for the Senate Banking Committee’s hearing on medical debt.

The Q&A document sent to the Senate Banking Committee answers these questions:

  • Do consumers benefit by not reporting medical debt under $500?
  • Do consumers benefit when medical debt credit reporting is delayed from 180 days to 365 days?
  • I heard that most of the debt under $500 is not actually owed and may be illegitimate or phantom debt. Is that true?

The hearing included witnesses Emily Stewart, executive director, Community Catalyst; Benedic N. Ippolito, senior fellow, American Enterprise Institute; David A. Hyman, Scott K. Ginsburg Professor of Health Law & Policy, Georgetown University Law Center; Robyn King of Ohio; and Berneta L. Haynes, staff attorney, National Consumer Law Center. Additional witnesses may be added later, according to the committee.

The Senate Banking Committee members’ letter to Chopra also says there is the need for:

  • Additional research to understand the full scope of issues surrounding the U.S. medical debt burden.
  • Further examination of medical debt collection practices, particularly the steps taken before bills are sent into collection. It would be helpful to know the number of people against whom legal action is taken, including court summons, wage garnishments, liens, etc.
  • Research on the size of the debt selling market for medical bills, including information on the number and size of the debt buyers and the health entities most likely to sell medical debt and further research into how consumers incur medical debt.
  • How private-equity owned institutions collect medical debt and report it to credit reporting companies, whether private equity companies have played a role in increasing medical debt accumulation across the board, and how private-equity owned revenue cycle management companies collect medical debt.
  • Consideration to create an ombudsman position for medical debt similar to the ombudsman position created to ensure student loan servicers comply with federal and state laws. This position could help to facilitate consumer complaint resolution and compliance with federal directives, like the recently implemented federal ban on surprise medical bills. An ombudsman can also monitor the changes announced earlier this month by Equifax, Experian, and TransUnion to ensure that the proposed changes to medical debt credit reporting are uniformly and universally implemented.
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