Notice2023-14726
Request for Information Regarding Medical Payment Products
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 12, 2023
Issuing agencies
Consumer Financial Protection BureauHealth and Human Services DepartmentCenters for Medicare & Medicaid ServicesTreasury Department
Abstract
The CFPB, an independent agency, HHS, and the Treasury (collectively, the agencies), are soliciting comments from the public and interested parties on medical credit cards, loans, and other financial products used to pay for health care. The agencies seek to understand the prevalence, nature, and impact of these products, including disparities across different demographic groups. The agencies also seek to understand the effects these products may have on patients and on the health care system. In particular, the agencies seek comment on whether these products may allow health care providers to operate outside of a broad range of patient and consumer protections. The agencies also seek comment on whether these products may contribute to health care cost inflation, displace hospitals' provision of financial assistance, lead patients to pay inaccurate or inflated medical bills, increase the amount patients must pay due to financing costs, or otherwise harm patients' mental, physical, and financial well-being, including through downstream credit reporting and debt collection practices. In line with the agencies' work to lower health care costs and reduce the burden of medical debt, the agencies also seek comment on policy options to protect consumers from harm.
Full Text
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<title>Federal Register, Volume 88 Issue 132 (Wednesday, July 12, 2023)</title>
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[Federal Register Volume 88, Number 132 (Wednesday, July 12, 2023)]
[Notices]
[Pages 44281-44290]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-14726]
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CONSUMER FINANCIAL PROTECTION BUREAU
[Docket No. CFPB-2023-0038]
DEPARTMENT OF HEATH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[Docket No. CMS-2023-0106]
DEPARTMENT OF THE TREASURY
[Docket No. TREAS-DO-2023-0008]
Request for Information Regarding Medical Payment Products
AGENCY: Consumer Financial Protection Bureau (CFPB), Centers for
Medicare & Medicaid Services, Department of Health and Human Services
(HHS), and Department of the Treasury (Treasury).
ACTION: Request for information.
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SUMMARY: The CFPB, an independent agency, HHS, and the Treasury
(collectively, the agencies), are soliciting comments from the public
and interested parties on medical credit cards, loans, and other
financial products used to pay for health care. The agencies seek to
understand the prevalence, nature, and impact of these products,
including disparities across different demographic groups. The agencies
also seek to understand the effects these products may have on patients
and on the health care system. In particular, the agencies seek comment
on whether these products may allow health care providers to operate
outside of a broad range of patient and consumer protections. The
agencies also seek comment on whether these products may contribute to
health care cost inflation, displace hospitals' provision of financial
assistance, lead patients to pay inaccurate or inflated medical bills,
increase the amount patients must pay due to financing costs, or
otherwise harm patients' mental, physical, and financial well-being,
including through downstream credit reporting and debt collection
practices. In line with the agencies' work to lower health care costs
and reduce the burden of medical debt, the agencies also seek comment
on policy options to protect consumers from harm.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below by September 11, 2023.
ADDRESSES: Interested parties are encouraged to submit written comments
to any and all agencies listed below. Comments submitted to the Federal
eRulemaking Portal will be shared with all agencies for consideration.
Comments should be directed to:
CFPB: You may submit responsive information and other comments,
identified by Docket No. CFPB-2023-0038, by any of the following
methods:
<bullet> Federal eRulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#f5b890919c969499b1909781a7b3bcaac7c5c7c6b596938597db929a83"><span class="__cf_email__" data-cfemail="1a577f7e73797b765e7f786e485c5345282a28295a797c6a78347d756c">[email protected]</span></a>. Include Docket No.
CFPB-2023-0038 in the subject line of the message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake--Request for
Information Regarding Medical Payment Products, Consumer Financial
Protection Bureau, 1700 G Street NW, Washington, DC 20552. Because
paper mail in the Washington, DC area and at the Bureau is subject to
delay, commenters are encouraged to submit comments electronically.
HHS: You may submit responsive information and other comments,
identified by Docket No. CMS-2023-0106, by any of the following
methods:
1. Electronically. You may submit electronic comments on this
regulation to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: Docket No. CMS-2023-0106, P.O.
Box 8010, Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: Docket No. CMS-
2023-0106, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD
21244-1850.
Treasury: You may submit responsive information and other comments,
identified by Docket No. TREAS-DO-2023-0008, by any of the following
methods:
<bullet> Federal eRulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments.
Instructions: The agencies encourage the early submission of
comments. All submissions must include the document title and docket
number. Please note the number of the topic on which you are commenting
at the top of each response (you do not need to address all topics). In
general, all comments received will be posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All comments, including attachments and other
supporting materials, will become part of the public record and subject
to public disclosure. Proprietary information or sensitive personal
information, such as account numbers or Social Security numbers, or
names of other individuals, should not be included. Comments will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT:
CFPB: Octavian Carare, Supervisory Economist, Consumer Financial
Protection Bureau, at <a href="/cdn-cgi/l/email-protection#a0efc3d4c1d6c9c1ce8ee3c1d2c1d2c5e0c3c6d0c28ec7cfd6"><span class="__cf_email__" data-cfemail="317e5245504758505f1f72504350435471525741531f565e47">[email protected]</span></a> or (202) 435-7700. If
you require this document in an alternative electronic format, please
contact <a href="/cdn-cgi/l/email-protection#d1929781938e90b2b2b4a2a2b8b3b8bdb8a5a891b2b7a1b3ffb6bea7"><span class="__cf_email__" data-cfemail="86c5c0d6c4d9c7e5e5e3f5f5efe4efeaeff2ffc6e5e0f6e4a8e1e9f0">[email protected]</span></a>.
HHS: Czarina Biton, Centers for Medicare & Medicaid Services, at
<a href="/cdn-cgi/l/email-protection#094a73687b606768274b607d6667496a647a2761617a276e667f"><span class="__cf_email__" data-cfemail="60231a0112090e014e2209140f0e20030d134e0808134e070f16">[email protected]</span></a> or 301-276-1770.
Treasury: Thomas West, Deputy Assistant Secretary, U.S. Department
of the Treasury at <a href="/cdn-cgi/l/email-protection#cb9fa3a4a6aab8e59caeb8bff98bbfb9aeaab8beb9b2e5aca4bd"><span class="__cf_email__" data-cfemail="0155696e6c60722f56647275334175736460727473782f666e77">[email protected]</span></a> or 202-622-2000.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background:
a. Overview
b. The Medical Payment Product Market
c. Patient Experience and Downstream Consequences
d. Risk of Exacerbating Billing and Financial Assistance Issues
e. Potential Distortion of Health Care Provider Incentives
[[Page 44282]]
f. Potential for Consumer Harm
II. Request for Information
a. General Questions
Market-Level Inquiries
Individual Inquiries
b. CFPB-Specific Questions
c. HHS-Specific Questions
d. Treasury-Specific Questions
I. Background
a. Overview
Many people have difficulty paying for medical care. Although
insurance coverage has expanded over the last two decades and the
uninsured rate has recently reached historic lows, the cost of medical
care, and particularly the out-of-pocket cost for patients and
families, has grown faster than inflation.\1\ For many patients, the
financial challenges associated with paying for medical care are
compounded by the complexities of health care coverage determinations
as well as by medical billing and payment systems that can result in
inaccuracies and errors that only increase the financial and
psychological burden on patients.
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\1\ Peterson-KFF, Shameek Rakshit, Emma Wager, Paul Hughes-
Cromwick, Cynthia Cox, and Krutika Amin, ``How does medical
inflation compare to inflation in the rest of the economy?'' (March
2023), available at <a href="https://www.healthsystemtracker.org/brief/how-does-medical-inflation-compare-to-inflation-in-the-rest-of-the-economy/">https://www.healthsystemtracker.org/brief/how-does-medical-inflation-compare-to-inflation-in-the-rest-of-the-economy/</a>.
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Although patients have many options to pay for care, health care
providers may encourage patients and their families to use commercial
medical payment products, including medical credit cards and
installment loans, to finance care.\2\ Health care providers may
promote medical payment products because the use of these products
allows providers to avoid the administrative burden of slow and complex
insurance reimbursement, outsource servicing and collections costs, get
paid faster, and receive payment from people who otherwise would not
pay the full price for care.\3\ However, for patients, using these
products can complicate insurance coverage, interfere with the
availability of financial assistance, make it difficult to dispute
inaccurate or inflated medical bills, and increase the total cost of
care through interest and fees. It is also possible that some people
who pay for care using medical payment products are charged higher
prices for their care than they otherwise would have been asked to pay,
such as gross charges (also known as chargemaster prices).\4\
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\2\ CFPB, ``Medical Credit Cards and Financing Plans'' (May
2023), available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
\3\ Id. at 8.
\4\ ``Gross charge'' and ``chargemaster'' here refer to the
definitions provided in 45 CFR 180.20, namely, ``Chargemaster means
the list of all individual items and services maintained by a
hospital for which the hospital has established a charge,'' and
``Gross charge means the charge for an individual item or service
that is reflected on a hospital's chargemaster, absent any
discounts.''
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Patients may use risky and expensive commercial medical payment
products rather than low- or no-cost alternatives because they do not
know alternatives exist, they do not understand the risks and costs of
medical payment products, or they feel pressured or coerced into
signing up for these products.\5\ In some cases, medical payment
products may allow patients to access care they would otherwise have to
forgo. However, these payment products can also lead to patients paying
more out of pocket if patients use medical payment products to pay
bills that should have been covered by insurance or financial
assistance, to pay inaccurate bills which they then have difficulty
disputing post-payment, or to pay bills in full whose balances they
would otherwise have been able to negotiate pre-payment.
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\5\ Id. at 10.
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Health care providers and financial companies may also use these
payment products to attempt to avoid restrictions on credit reporting
and debt collection practices that otherwise apply to medical debt,
including restrictions imposed by national credit reporting companies
and restrictions imposed by Federal law.\6\ Specifically, the three
national credit reporting companies voluntarily do not report medical
debt collections items with original balances under $500 or which are
less than one year old, but they have not restricted the reporting of
debt collections items reported with classification codes indicating
that they are ``credit card'' or ``installment loan'' collections.
Additionally, section 501(r) of the Internal Revenue Code (IRC)
prohibits tax-exempt hospital organizations from engaging in
extraordinary collection actions, including reporting the patient's
debt to credit reporting companies or sending the patient's debt to a
third-party debt collector, before the organization has made reasonable
efforts to determine whether the individual is eligible for assistance
under the hospital's financial assistance policy.\7\ However, the
agencies believe that tax-exempt hospitals and the financial companies
that partner with them may not be making reasonable efforts to
determine whether an individual is eligible for financial assistance
before offering the individual a medical payment product or taking
extraordinary collection actions to attempt to collect an overdue
medical payment product balance.
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\6\ CFPB, ``Debt collectors re-evaluate medical debt furnishing
in light of data integrity issues,'' available at <a href="https://www.consumerfinance.gov/about-us/blog/debt-collectors-re-evaluate-medical-debt-furnishing-in-light-of-data-integrity-issues/">https://www.consumerfinance.gov/about-us/blog/debt-collectors-re-evaluate-medical-debt-furnishing-in-light-of-data-integrity-issues/</a>.
\7\ Internal Revenue Service, ``Billing and Collections--Section
501(r)(6),'' available at <a href="https://www.irs.gov/charities-non-profits/billing-and-collections-section-501r6">https://www.irs.gov/charities-non-profits/billing-and-collections-section-501r6</a>.
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In this Request for Information (RFI), CFPB, HHS, and Treasury seek
comment on the prevalence, nature, and impact of medical payment
products on consumers and on the health care system. The agencies also
seek comment on policy options to address practices by health care
providers, health insurance issuers, employer-sponsored health plans,
and financial companies that result in consumers paying excess costs.
This RFI builds upon recent work by CFPB, HHS, Treasury, and other
Federal agencies to assist consumers with managing health care costs
and medical bills, and to protect patients and consumers from paying
inaccurate or inflated medical bills.\8\ That work includes CFPB
research into the extent and impact of medical debt and the accuracy of
those debts,\9\ as well as CFPB guidance to prevent unlawful medical
debt collection and reporting.\10\ It also includes actions by HHS and
other agencies to implement surprise
[[Page 44283]]
billing protections,\11\ enforce price transparency measures,\12\ lower
health care costs,\13\ and increase access to affordable, quality
health care.\14\ Additionally, it includes policy development by
Treasury on surprise billing protections and on requirements that
specifically apply to tax-exempt hospitals, including those relating to
billing and collection, financial assistance policies, and community
benefits.
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\8\ The White House, ``FACT SHEET: New Data Show 8.2 Million
Fewer Americans Struggling with Medical Debt Under the Biden-Harris
Administration'' (Feb. 2023), <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/14/fact-sheet-new-data-show-8-2-million-fewer-americans-struggling-with-medical-debt-under-the-biden-harris-administration/">https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/14/fact-sheet-new-data-show-8-2-million-fewer-americans-struggling-with-medical-debt-under-the-biden-harris-administration/</a>, and The White House, ``FACT SHEET: The
Biden Administration Announces New Actions to Lessen the Burden of
Medical Debt and Increase Consumer Protection'' (Apr. 2022),
available at <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/11/fact-sheet-the-biden-administration-announces-new-actions-to-lessen-the-burden-of-medical-debt-and-increase-consumer-protection/">https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/11/fact-sheet-the-biden-administration-announces-new-actions-to-lessen-the-burden-of-medical-debt-and-increase-consumer-protection/</a>.
\9\ CFPB, ``Medical debt burden in the United States,''
available at <a href="https://www.consumerfinance.gov/data-research/research-reports/medical-debt-burden-in-the-united-states/">https://www.consumerfinance.gov/data-research/research-reports/medical-debt-burden-in-the-united-states/</a>; CFPB, ``Debt
collectors re-evaluate medical debt furnishing in light of data
integrity issues,'' available at <a href="https://www.consumerfinance.gov/about-us/blog/debt-collectors-re-evaluate-medical-debt-furnishing-in-light-of-data-integrity-issues/">https://www.consumerfinance.gov/about-us/blog/debt-collectors-re-evaluate-medical-debt-furnishing-in-light-of-data-integrity-issues/</a>; and CFPB, ``Medical Billing and
Collections Among Older Americans,'' available at <a href="https://www.consumerfinance.gov/data-research/research-reports/issue-spotlight-medical-billing-and-collections-among-older-americans/full-report/">https://www.consumerfinance.gov/data-research/research-reports/issue-spotlight-medical-billing-and-collections-among-older-americans/full-report/</a>.
\10\ CFPB ``Bulletin 2022-01: Medical Debt Collection and
Consumer Reporting Requirements in Connection with the No Surprises
Act,'' available at <a href="https://www.consumerfinance.gov/compliance/supervisory-guidance/cfpb-bulletin-2022-01-medical-debt-collection-consumer-reporting-requirements-in-connection-with-no-surprises-act/">https://www.consumerfinance.gov/compliance/supervisory-guidance/cfpb-bulletin-2022-01-medical-debt-collection-consumer-reporting-requirements-in-connection-with-no-surprises-act/</a>.
\11\ See HHS, ``HHS Kicks Off New Year with New Protections from
Surprise Medical Bills,'' available at <a href="https://www.hhs.gov/about/news/2022/01/03/hhs-kicks-off-new-year-with-new-protections-from-surprise-medical-bills.html">https://www.hhs.gov/about/news/2022/01/03/hhs-kicks-off-new-year-with-new-protections-from-surprise-medical-bills.html</a>.
\12\ See CMS, ``Hospital Price Transparency Enforcement
Updates,'' available at <a href="https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates">https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates</a>.
\13\ See CMS, ``Hospital Price Transparency Enforcement
Updates,'' available at <a href="https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates">https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates</a>.
\14\ See The White House, ``Executive Order on Continuing to
Strengthen Americans' Access to Affordable, Quality Health
Coverage,'' available at <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/">https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/</a>.
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Patients' use of medical payment products occurs within the larger
context of medical billing and collections as well as health insurance
practices, and affects access to health care, implicating the
jurisdictions of CFPB, HHS, and Treasury. Given these overlapping
equities, the agencies are committed to working together to understand
and address the harms medical payment products may cause, as part of
their work more generally on health care costs, medical billing, and
medical collections.
b. The Medical Payment Product Market
Commercial medical payment products include medical credit cards
and installment loans used to help patients cover the cost of medical
treatments. Charges to these products are limited to medical
procedures, items, or services at participating medical service
providers, including primary and specialty care, labs and diagnostics,
inpatient and outpatient services, dental, vision, and pharmacy
care.\15\
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\15\ Medical payment products may also include Buy Now Pay Later
(BNPL) products, an emerging product category sometimes referred to
as ``Care Now Pay Later.'' See, e.g., Stuart Condie, `` `Buy Now,
Pay Later' Looks to Healthcare for Shot in the Arm,'' Wall Street
Journal (July 22, 2022), available at <a href="https://www.wsj.com/articles/buy-now-pay-later-looks-to-healthcare-for-shot-in-the-arm-11658491200">https://www.wsj.com/articles/buy-now-pay-later-looks-to-healthcare-for-shot-in-the-arm-11658491200</a>. Certain other payment methods that are marketed for use
to cover medical costs do not restrict charges to medical items and
services; the agencies are interested in hearing more about these
products and their similarities to or differences from medical-only
payment products.
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Medical payment products are administered by financial services
companies, who manage the billing and collections process for these
products and earn revenue through interest and fees. Medical credit
card companies include CareCredit, a subsidiary of Synchrony Financial;
Wells Fargo; and Comenity, a subsidiary of Bread Financial. The medical
installment loan market includes a large number of companies, among
which some of the most prominent are AccessOne, Prosper, PayZen,
Walnut, and Scratchpay.\16\ Many medical installment loan companies,
including the five previously mentioned, are backed by private equity
firms.\17\
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\16\ The number of medical installment loan providers is much
greater than the number of medical credit card lenders, and these
products vary in many ways. Appendix A in ``Medical Credit Cards and
Financing Plans'' includes a sample of installment loans and
publicly available information on their terms and conditions. CFPB,
``Medical Credit Cards and Financing Plans,'' at 18, available at
<a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
\17\ See, e.g., KFF, ``How Banks and Private Equity Cash In When
Patients Can't Pay Their Medical Bills'' (Nov. 2022), available at
<a href="https://kffhealthnews.org/news/article/how-banks-and-private-equity-cash-in-when-patients-cant-pay-their-medical-bills/">https://kffhealthnews.org/news/article/how-banks-and-private-equity-cash-in-when-patients-cant-pay-their-medical-bills/</a>.
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Medical payment products were once used primarily to pay for care
not traditionally covered by health insurance plans, such as dental and
vision care, fertility services, and cosmetic surgery. However, medical
payment products are now also used to pay for a broader set of
services, including emergency room visits and primary and specialty
care. Available data, although limited, show significant growth in the
medical payment product industry over the last several years. For
example, CareCredit grew from 4.4 million cardholders and 177,000
participating providers in 2013 to 11.7 million cardholders and over
250,000 participating health care providers in 2023.\18\ Available data
also suggest that medical payment products often have significantly
higher interest rates than general purpose credit products; a recent
CFPB report found that the typical annual percentage rate (APR) for
medical credit cards was 27 percent, compared to a mean APR of 16
percent for general purpose credit cards.\19\ Patients who use medical
payment products may additionally find themselves facing high fees,
deferred interest charges, and other adverse financial impacts.\20\
Additionally, as with other credit cards and installment loans,
applying for and opening a medical payment product account may have
negative implications for consumers' credit scores and access to credit
through factors like hard credit checks, increased credit line
utilization, decreased average account age, or eventual account
closure.
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\18\ This number, as publicized by CareCredit, includes also
veterinary service providers and cardholders that use their card to
finance veterinary care. CFPB, ``Medical Credit Cards and Financing
Plans'' at 7, available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
\19\ CFPB, ``Medical Credit Cards and Financing Plans,''
available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
\20\ CFPB, ``Medical Credit Cards and Financing Plans,''
available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
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c. Patient Experience and Downstream Consequences
The agencies seek additional information regarding the patient
experience with medical payment products, including potential issues
with the marketing, application, and enrollment processes as well as
the impacts these products have on patients' financial, physical, and
mental health.
In general, coupling the sale of financial products to consumers
with the provision of medical care may create consumer harm. In some
cases, patients who trust their health care providers and their staff
to give expert health care advice may place similar trust in the
financing products offered by those providers and their staff. This may
influence patients to sign up for products that are not in their best
financial interest, especially when seeking or receiving medical care,
a time when patients may be particularly vulnerable.\21\ Some patients
have told the CFPB that they felt pressured to make quick financial
decisions in a health care provider's office while under physical and
emotional stress. Additionally, health care provider staff may not have
the information, or the expertise needed to answer patients' questions
about the terms and conditions of the financial products they offer.
Staff may fail to inform patients of alternative payment options,
including financial assistance.\22\ Staff
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\21\ Jim Hawkins, ``Doctors as Bankers: Evidence from Fertility
Markets'' Tulane Law Review (July 2010), available at <a href="https://www.tulanelawreview.org/pub/volume84/issue4/doctors-as-bankers">https://www.tulanelawreview.org/pub/volume84/issue4/doctors-as-bankers</a>.
\22\ CFPB, ``Complaint Bulletin,'' available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>; and CFPB, ``Medical Credit Cards and
Financing Plans'' at 8, available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
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[[Page 44284]]
might also fail to provide information about the potential insurance
coverage implications of using a medical payment product, or may
encourage use of medical payment products instead of assisting the
patient with filing an insurance claim. The CFPB has also received
reports of some patients--particularly patients with limited English
proficiency--allegedly being signed up for medical payment products
without their knowledge or consent.
Given these risks, the agencies seek additional information on
medical payment product marketing, application, and enrollment
processes, including how and when patients are offered these products,
what information patients are given about these products, and how
patients make decisions about utilizing these products. The agencies
are interested in how promotion of these products may interfere with
patients' health insurance coverage, undermine the provision of
financial assistance, and reduce the availability and utilization of
traditional provider-offered payment plans. The agencies are also
interested in providers' and financial companies' disclosure practices
and the information that is shared with patients about these products.
Additionally, the agencies are interested in patients' experiences with
medical payment products, including their overall satisfaction or
dissatisfaction with these products as well as information on how these
products were marketed to them, whether they understood the terms and
conditions of the products, whether they felt pressured into signing
up, or whether they were signed up for a medical payment product
without their knowledge or consent.
Secondly, the agencies seek to understand the impacts of these
products on patients' financial health, including through high interest
rates and fees, credit scoring or other scoring products, credit
reporting practices, and debt collection practices. Many medical
payment products charge interest and fees, including deferred interest,
which may significantly increase the amount patients owe for their
care.\23\ Patients with lower credit scores may be offered less
favorable interest rates and terms, including shorter billing cycles
(less than 30 days) that may increase the odds that these patients will
incur late fees. Patients with lower credit scores may also be offered
shorter deferred interest periods, increasing the likelihood that these
patients will incur interest. Additionally, some financial services
companies offer health care scoring products designed for health care
providers, such as financial clearance scores and propensity-to-pay
scores, which can be used to restrict access to care and promote
payment products rather than financial assistance for those
eligible.\24\ In some cases, patients with low financial clearance
scores may be denied care unless they can pay up front, increasing the
pressure on these patients to sign up for medical payment products. In
other cases, patients whose predicted income and household size would
qualify them for financial assistance, but who have a higher predicted
propensity to pay, are channeled to medical payment products instead of
being offered financial assistance.
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\23\ Many medical payment products offer complex deferred
interest promotions, which consumers often do not understand fully,
and which can significantly increase the cost of their care if they
do not pay in full during the promotional period. About 1 in 5
consumers who use a deferred interest product to pay for care will
ultimately pay interest. Borrowers with subprime credit scores are
more likely to pay interest, perhaps in part because they are
generally given less time to pay in full before being charged
interest. CFPB, ``Medical Credit Cards and Financing Plans'' at 13,
available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
\24\ See, e.g., Experian, ``Patient Financial Clearance,''
<a href="https://www.experian.com/healthcare/products/payment-tools/patient-collections-and-financial-clearance">https://www.experian.com/healthcare/products/payment-tools/patient-collections-and-financial-clearance</a>; TransUnion, ``TransUnion
Healthcare and VisitPay: A Patient Financial Engagement Solution,''
<a href="https://www.transunion.com/resources/transunion/doc/healthcare/transunion-healthcare-and-visitpay-a-patient-financial-engagement-solution-aite-brief.pdf">https://www.transunion.com/resources/transunion/doc/healthcare/transunion-healthcare-and-visitpay-a-patient-financial-engagement-solution-aite-brief.pdf</a>.
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Since medical credit cards have unique features such as shorter
deferred interest periods and shorter billing cycles compared to other
lines of credit, those with medical payment products may be at
heightened risk of being sent to collections and reported to credit
reporting companies. When past-due medical payment product balances are
reported to credit reporting companies, this can lower patients' credit
scores, even though medical debts generally are less predictive of
creditworthiness than other debts.\25\ Lower credit scores can make it
harder for consumers to get a loan, rent or buy a home, or find a
job.\26\ Medical credit card or loan collections may be reported to
consumer reporting agencies even when other medical bills could not
appear on consumer reports, such as because of the restrictions on
extraordinary collections actions placed by Congress \27\ or the
national credit reporting companies' voluntary decision not to report
medical collections that are paid, under $500, or less than a year
old.\28\ Moreover, the incidence of referral to collections may be
increased if patients paying for care with medical payment products are
charged higher prices, if the costs of patients' medical services are
inflated by interest and fees, or if paying via a medical payment
product leads to the failure to file a timely and accurate insurance
claim. Patients may also be sued for alleged medical payment product
debts, which can lead to financial consequences like wage garnishment,
bank attachments, seizure of personal property, and liens against
patients' homes. Many people file bankruptcy in order to resolve large
outstanding medical bills; \29\ it is possible that medical payment
products contribute disproportionately to bankruptcy filings by people
facing significant health challenges. Given these potential financial
health impacts, the agencies are interested in information on the
interest charges, default rates, credit reporting practices, and
collections practices associated with medical payment products.
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\25\ Kenneth P. Brevoort & Michelle Kambara, ``Data point:
Medical debt and credit scores'' (May 2014), available at <a href="https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-credit-scores.pdf">https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-credit-scores.pdf</a>.
\26\ Alyssa Brown & Eric Wilson, ``Data Point: Consumer Credit
and the Removal of Medical Collections from Credit Reports'' (Apr.
2023), available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-removal-medical-collections-from-credit-reports_2023-04.pdf">https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-removal-medical-collections-from-credit-reports_2023-04.pdf</a>.
\27\ Internal Revenue Service, ``Billing and Collections--
Section 501(r)(6),'' available at <a href="https://www.irs.gov/charities-non-profits/billing-and-collections-section-501r6">https://www.irs.gov/charities-non-profits/billing-and-collections-section-501r6</a>.
\28\ The three national credit reporting companies forbid credit
reporting of medical debt collections items with original balances
under $500 or which are less than one year old, but these
restrictions do not apply to debt collections items reported with
classification codes indicating that they are ``credit card'' or
``installment loan'' collections. See CFPB, ``Have medical debt?
Anything already paid or under $500 should no longer be on your
credit report,'' available at <a href="https://www.consumerfinance.gov/about-us/blog/medical-debt-anything-already-paid-or-under-500-should-no-longer-be-on-your-credit-report/">https://www.consumerfinance.gov/about-us/blog/medical-debt-anything-already-paid-or-under-500-should-no-longer-be-on-your-credit-report/</a>.
\29\ David Himmelstein et al., ``Medical Bankruptcy: Still
Common Despite the Affordable Care Act,'' American Journal of Public
Health (Mar. 2019), <a href="https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2018.304901">https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2018.304901</a>.
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Thirdly, the agencies seek to understand the impacts of these
products on patients' physical and mental health. Studies show that
people often delay or avoid medical care out of concern about high
costs or medical debt or because they believe they will be turned away
due to their unpaid medical bills.\30\ Fifteen percent of adults
[[Page 44285]]
with medical debt say they have been denied health care because of
their unpaid medical bills.\31\ To the extent that medical payment
products contribute to higher health care costs and medical debts,
these products may increase health care denial, delay, and avoidance,
contributing to worse health outcomes and higher eventual health care
costs due to forgone preventive and early intervention services. Higher
costs and increased debt can also increase stress on consumers,
contributing to negative physical and mental health outcomes.\32\ Given
the risks to patients' health, the agencies seek comment on medical
payment products' contribution to care avoidance and their impact on
consumers' physical and mental health. The agencies are also interested
in understanding if and when health care providers may deny or alter
patients' care if they refuse to sign up for or fall behind on payments
for a medical payment product.
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\30\ See, e.g., Alyce Adams et al., ``The Impact of Financial
Assistance Programs on Health Care Utilization: Evidence from Kaiser
Permanente,'' American Economic Review: Insights, (Sept. 2022),
available at <a href="https://www.aeaweb.org/articles?id=10.1257/aeri.20210515">https://www.aeaweb.org/articles?id=10.1257/aeri.20210515</a>; Audrey Kearney et al., ``Americans' Challenges with
Health Care Costs,'' KFF (July 14, 2021), <a href="https://www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/">https://www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/</a>.
\31\ Lunna Lopes et al., ``Health Care Debt in the U.S.: The
Broad Consequences Of Medical And Dental Bills,'' KFF (June 16,
2022), available at <a href="https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/">https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/</a>.
\32\ CFPB, ``Medical debt burden in the United States,'' at 32-
35, available at <a href="https://www.consumerfinance.gov/data-research/research-reports/medical-debt-burden-in-the-united-states/">https://www.consumerfinance.gov/data-research/research-reports/medical-debt-burden-in-the-united-states/</a>.
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The agencies welcome comment on the above and on medical payment
products' broader impacts on consumers' financial wellness, health care
access, and physical and mental health.
d. Risk of Exacerbating Billing and Financial Assistance Issues
Medical credit cards and loans may exacerbate existing issues in
health care billing and collections by making it more difficult to
resolve billing inaccuracies and allowing certain patients to be
upcharged for services. For example, uninsured and self-pay
patients,\33\ as well as patients receiving care from out-of-network
providers,\34\ are often charged higher prices than those negotiated by
health insurance issuers and group health plans for the same care
furnished by an in-network provider \35\ (provided these patients are
not determined eligible for financial assistance by a tax-exempt
hospital).\36\ The availability of medical payment products may enable
health care providers to charge higher prices to uninsured, self-pay,
or out-of-network patients who would otherwise be unable to pay such
prices and might instead seek more affordable care. In some cases,
health care providers might offer medical payment products to uninsured
patients instead of helping these patients determine their eligibility
for health insurance coverage through Medicaid, Medicare, or subsidized
Marketplace plans. Out-of-network health care providers might also
offer medical payment products to patients instead of referring those
patients to an in-network provider.
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\33\ ``Self-pay patients'' here refers to the definition
provided in 45 CFR 149.610(a)(2)(xiii)(B), which defines a self-pay
individual as ``an individual who has benefits for such item or
service under a group health plan, or individual or group health
insurance coverage offered by a health insurance issuer, or a health
benefits plan under chapter 89 of title 5, United States Code but
who does not seek to have a claim for such item or service submitted
to such plan or coverage.''
\34\ A provider network is a list of the doctors, other health
care providers, and hospitals that a plan contracts with to provide
medical care to its members. These providers are called ``network
providers'' or ``in-network providers.'' A provider that isn't
contracted with the plan is called an ``out-of-network provider.''
CMS, ``What You Should Know About Provider Networks,'' available at
<a href="https://marketplace.cms.gov/outreach-and-education/what-you-should-know-provider-networks.pdf">https://marketplace.cms.gov/outreach-and-education/what-you-should-know-provider-networks.pdf</a>.
\35\ See Gerard Anderson, ``From `Soak the Rich' To `Soak the
Poor': Recent Trends In Hospital Pricing'' (June 2007), Health
Affairs, available at <a href="https://www.healthaffairs.org/doi/full/10.1377/hlthaff.26.3.780">https://www.healthaffairs.org/doi/full/10.1377/hlthaff.26.3.780</a>. See also Ge Bai, & Gerard F. Anderson,
``US Hospitals Are Still Using Chargemaster Markups to Maximize
Revenues'' (Sept. 2016), Health Affairs, available at <a href="https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2016.0093">https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2016.0093</a>.
\36\ In the case of individuals who receive care at a tax-exempt
hospital who are determined eligible for financial assistance under
the hospital's financial assistance policy, section 501(r)(5)
prohibits tax-exempt hospitals from using gross charges and requires
them to limit amounts charged for emergency or other medically
necessary care to not more than the amounts generally billed to
individuals who have insurance covering such care. Internal Revenue
Service, ``Limitation on Charges--Section 501(r)(5),'' available at
<a href="https://www.irs.gov/charities-non-profits/limitation-on-charges-section-501r5">https://www.irs.gov/charities-non-profits/limitation-on-charges-section-501r5</a>.
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Promotion of medical payment products may also undermine hospitals'
provision of financial assistance. Section 501(r) of the Internal
Revenue Code, which resulted from section 9007(a) of the Affordable
Care Act, requires tax-exempt hospitals to establish a financial
assistance policy for low-income patients, and many non-tax-exempt
hospitals also voluntarily offer financial assistance to patients who
meet criteria established by these hospitals. However, studies show
that, in practice, many patients who are likely eligible for financial
assistance under their hospitals' policies do not receive free or
discounted care.\37\ In some instances, patients eligible for financial
assistance are instead being steered to medical payment products, which
are more profitable for providers.\38\ One way in which these products
may be advantageous to health care providers, particularly tax-exempt
hospitals, is by using these products in support of their non-profit
status. For example, one medical installment loan company advertises to
hospitals that its interest-charging loan product is a ``community
benefit that makes care affordable'' and ``supports your organization's
compliance with IRS regulation 501(r).'' \39\
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\37\ See, e.g., Octavian Carare, et al., ``Exploring the
connection between financial assistance for medical care and medical
collections'' (Aug. 2022), CFPB, <a href="https://www.consumerfinance.gov/about-us/blog/exploring-connection-between-financial-assistance-for-medical-care-and-medical-collections/">https://www.consumerfinance.gov/about-us/blog/exploring-connection-between-financial-assistance-for-medical-care-and-medical-collections/</a>.
\38\ See, e.g., Washington State Office of the Attorney General,
``AG Ferguson files lawsuit against Swedish, other Providence-
affiliated hospitals, for failing to make charity care accessible to
thousands of Washingtonians,'' available at <a href="https://www.atg.wa.gov/news/news-releases/ag-ferguson-files-lawsuit-against-swedish-other-providence-affiliated-hospitals">https://www.atg.wa.gov/news/news-releases/ag-ferguson-files-lawsuit-against-swedish-other-providence-affiliated-hospitals</a>; State of California Department of
Justice, ``Attorney General Bonta Issues Consumer Alert Following
Reports of Hospitals Failing to Inform Patients of Options for Free
or Reduced-Price Medical Care,'' available at <a href="https://oag.ca.gov/news/press-releases/attorney-general-bonta-issues-consumer-alert-following-reports-hospitals-failing">https://oag.ca.gov/news/press-releases/attorney-general-bonta-issues-consumer-alert-following-reports-hospitals-failing</a>; and The Office of Minnesota
Attorney General Keith Ellison, ``Attorney General Ellison secures
relief from unfair bill collection for Hutchison Hospital
patients,'' available at <a href="https://www.ag.state.mn.us/Office/Communications/2020/10/29_HutchinsonHealth.asp">https://www.ag.state.mn.us/Office/Communications/2020/10/29_HutchinsonHealth.asp</a>.
\39\ ClearBalance HealthCare, ``Experience to Solve Patient
Pay,'' <a href="https://www.bokfinancial.com/-/media/Files/PDF/Commercial/Healthcare/CBHC_Overview.ashx">https://www.bokfinancial.com/-/media/Files/PDF/Commercial/Healthcare/CBHC_Overview.ashx</a>.
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Finally, utilizing medical payment products may undermine patients'
medical billing rights, including their No Surprises Act rights to
dispute surprise bills and their Affordable Care Act rights to
insurance appeals and reviews. Consumers report that errors in medical
bills are common; among those with medical debt, more than four in ten
say they received an inaccurate bill, and nearly seven in ten say they
were asked to pay a bill that should have been covered by
insurance.\40\ However, some consumers report being told that they had
no right to dispute inaccurate bills placed on a medical payment
product, even if they discovered after enrolling in the payment product
that they were billed in error or that their bill should have been
covered by insurance--or even if they never received the service at
all.
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\40\ KFF, ``Healthcare Debt in the US: The Broad Consequences of
Medical and Dental Bills,'' available at <a href="https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/">https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/</a>.
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e. Potential Distortion of Health Care Provider Incentives
Several factors may incentivize health care providers to promote
medical payment products even when these products are not in patients'
best
[[Page 44286]]
financial interest. First, changes to private health care coverage may
incentivize providers to promote medical payment products. For example,
providers may turn to medical payment products in response to growing
deductibles, copayments, and coinsurance charged by private group
health plans and health insurance issuers, which many patients cannot
afford to pay in cash up front.\41\ Slow insurance reimbursement and
frequent insurance denials, downcoding,\42\ or appeals may also make
medical payment products an attractive alternative to insurance
payment. Additionally, out-of-network providers may promote medical
payment products to patients because group health plans and health
insurance issuers may not directly reimburse out-of-network providers;
having patients pay out-of-network providers up front using a medical
payment product effectively transfers the risk of non-reimbursement or
slow reimbursement from the out-of-network provider to the patient.
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\41\ Fifty percent of U.S. adults say they would be unable to
pay a $500 medical bill without going into debt; the average
deductible for single person health coverage was $2,004 in 2021, up
from $1,273 in 2013. KFF, ``Average Annual Deductible per Enrolled
Employee in Employer-Based Health Insurance for Single and Family
Coverage,'' available at <a href="https://www.kff.org/other/state-indicator/average-annual-deductible-per-enrolled-employee-in-employer-based-health-insurance-for-single-and-family-coverage/">https://www.kff.org/other/state-indicator/average-annual-deductible-per-enrolled-employee-in-employer-based-health-insurance-for-single-and-family-coverage/</a>; and KFF, ``Health
Care Debt In The U.S.: The Broad Consequences Of Medical And Dental
Bills,'' available at <a href="https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/">https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/</a>. Regarding the marketing of medical
payment products to providers to address these rising health care
costs, see Allison J. Zimmon, ``Rx for Costly Credit: Deferred
Interest Medical Credit Cards Do More Harm than Good,'' 35 B.C.J. L
& Soc. Just. 319 (2015).
\42\ Downcoding here refers to the practice of a plan or issuer
reviewing a claim submitted by a health care provider or facility
and altering the service code or modifier to another service code or
modifier that the plan or issuer determines to be more appropriate,
resulting in a lower reimbursement.
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Secondly, health care providers may be incentivized to promote
medical credit cards and loans because these products result in faster
payment, lower administrative costs, and more revenue overall for the
health care provider compared to alternatives like financial assistance
or provider-administered payment plans. In their promotional materials,
financial companies offering medical payment products emphasize their
products' potential to deliver payments within a few days, minimize
financial risk, and reduce the administrative burden associated with
collecting debts or negotiating with group health plans or health
insurance issuers. Traditionally, when a patient cannot pay their bill
upfront, the health care provider would take on the costs of
administering a payment plan, mailing statements, processing accounts
receivable, handling disputes, and engaging debt collectors. When a
patient instead pays for medical services out-of-pocket or via credit
card or installment loan, the health care provider avoids many of these
costs and generally receives payment immediately or within days. If the
patient does not use their health insurance coverage, the health care
provider may also be able to charge them higher rates, such as gross
charges or a cash rate rather than a charge negotiated between the
provider and third-party payers.\43\ Additionally, easy access to
credit may encourage patients to consume more health care from
providers who offer medical credit products, resulting in more overall
revenue for these providers. Indeed, some financial companies
explicitly advertise that their products will help providers ``upsell''
patients on more expensive and potentially unnecessary care.\44\
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\43\ Here, ``gross charges,'' ``cash rates,'' and ``charges
negotiated between the provider and third-party payers'' refers to
the definitions of those terms provided in section 2718(e) of the
Public Health Service Act (Hospital Price Transparency).
\44\ For example, ``Cherry can be used for consumers that want a
product/service but don't want to pay the full amount upfront today.
This gives you, the business owner, the power to upsell and increase
your sales.'' CFPB, ``Medical Credit Cards and Financing Plans,'' at
9 n.29, available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
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Certain financial companies offer additional incentives to health
care providers to promote medical payment products. In some cases, this
may include a share of the revenue from these products. For example,
one medical installment loan company advertises that providers who
offer the product will ``share in interest revenue collected.'' \45\
Other medical payment product companies offer lower processing or
management fees to providers who enroll more consumers--giving those
providers an incentive to enroll as many patients as possible.\46\
Where financial companies incentivize the referral or recommendation of
business reimbursable under Federal health care programs, it is
possible that these practices may implicate Federal laws or regulations
including the Federal anti-kickback statute, 42 U.S.C. 1320a-7b(b) and
its implementing regulations, which provides for criminal penalties for
whoever knowingly and willfully offers, pays, solicits, or receives
anything of value to induce or reward the referral, recommendation, or
arranging for the referral or recommendation of business reimbursable
under Federal health care programs.
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\45\ Choice Payment Services, ``ChoicePays+,'' available at
<a href="https://choicepays.com/choicepays/">https://choicepays.com/choicepays/</a>.
\46\ CFPB, ``Medical Credit Cards and Financing Plans,'' at 10,
available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf">https://files.consumerfinance.gov/f/documents/cfpb_medical-credit-cards-and-financing-plans_2023-05.pdf</a>.
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Some medical payment product companies advertise that their
products allow health care providers, debt collectors, and credit
reporting companies to attempt to avoid restrictions on extraordinary
collection actions and on credit reporting of alleged bills. Under IRC
501(r) and the regulations thereunder, tax-exempt hospital
organizations must make reasonable efforts to determine whether an
individual is eligible for assistance under the hospital organization's
financial assistance plan before engaging in extraordinary collection
actions against that individual, such as credit reporting, third-party
collections, and debt sale (except under certain special
conditions).\47\ However, the agencies believe financial companies may
be engaging in credit reporting, debt sales, and other extraordinary
collection actions on debts arising from an individual's care at a tax-
exempt hospital without first making reasonable efforts to determine
that individual's financial assistance eligibility.
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\47\ Internal Revenue Service, ``Billing and Collections--
Section 501(r)(6),'' available at <a href="https://www.irs.gov/charities-non-profits/billing-and-collections-section-501r6">https://www.irs.gov/charities-non-profits/billing-and-collections-section-501r6</a>.
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Additionally, the three national credit reporting companies
voluntarily refrain from reporting medical collections items that are
less than $500 or under one year old to the credit reporting companies.
However, these restrictions do not extend to debts reported with
classification codes indicating that they are ``credit card'' or
``installment loan'' collections, even if the credit card or
installment loan was used to pay medical bills.
f. Potential for Consumer Harm
The growing prevalence of medical payment products creates
significant potential for consumer harm. Patients are often offered and
enroll in medical payment products at a health care provider's
location, meaning that health care providers and their staff are
frequently the people who are directly marketing these products to
their patients. People trust health care providers and their staff to
provide sound and effective treatment options. When their health care
providers and their staff also provide information or
[[Page 44287]]
advice on payment options, patients might assume the health care
provider or staff member is being transparent about the full set of
options and not being driven by their own financial incentives.\48\
Patients might also extend their trust in their health care providers
to a referred financial services company. Additionally, financial
decisions by patients in health care settings are compromised by the
stress inherent in managing an illness or injury.
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\48\ Office of Inspector General (OIG) Advisory Opinion 02-12 at
11 (``[H]ealth care providers are in a position of trust and may
exert undue influence when recommending health care related items or
services, particularly to their own patients.'').
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Incomplete, incorrect, or misleading information about the cost of
their treatment, financing options offered, and the availability of
low- or no-cost financing alternatives can also compromise financial
decisions made at the point of care. As a result, patients may feel
pressured or coerced into signing up for medical payment products that
cause downstream financial or health problems, including through debt
collection or credit reporting of medical bills that might have
inaccurate information. Patients might also avoid or delay care if they
are unaware of the availability of financial assistance and other
affordable financing options or are concerned about their ability to
pay their health care bills.
II. Request for Information
In this RFI, the CFPB, HHS, and Treasury seek data and comments on
the scope, prevalence, terms, and impacts of medical payment products,
including medical credit cards and loans. The agencies are also
interested in the downstream consequences of these products and in
potential actions to address any harms caused by these products.
To better understand the medical payment product market, the
agencies seek data and comments on the interest and fee costs of these
products (including both interest rates and total accrued interest),
the application and approval process for these products, and trends of
medical payment product use. The agencies also seek information as to
the total outstanding consumer debt on medical credit cards, medical
installment loans, and other medical payment products. Data regarding
the characteristics and demographics of medical payment products users
is also welcome, such as whether users are insured or uninsured,
whether certain populations or income groups are more likely to use
these products, and whether use is concentrated in certain geographies
or for patients seeking particular kinds of care. The agencies also
seek to better understand the level of concentration in the medical
payment product market, the ownership of medical payment product
companies (including ownership by health care providers, health
insurance issuers, or private equity firms), and the implications of
these factors for competition and consumer choice. To that end, the
agencies seek specific information on the types of financial entities
that offer medical credit cards and loans.
The agencies seek to understand to what extent medical credit cards
and loans may hamper financial assistance and access to benefits, and
any options for regulators to reduce such barriers. The agencies also
seek to understand the extent to which health care providers, including
tax-exempt hospitals, screen patients for public or private insurance
eligibility, financial assistance eligibility, or other benefits before
offering them medical credit cards or loans. The agencies additionally
seek comment on how frequently patients discover billing errors after
signing up for a medical payment product, the main sources of billing
errors, and how paying medical bills via a medical payment product
affects patients' ability to dispute those bills. The agencies seek
comment on how to ensure that patients retain their rights to challenge
inaccurate bills regardless of payment method.
The agencies also seek comment on incentives offered by financial
companies to health care providers for their promotion of medical
payment products, including revenue-sharing and other incentives. The
agencies are also interested in any training or other support that
medical payment product companies offer to providers. The agencies are
interested in whether such incentives or support might implicate the
Federal anti-kickback statute or other laws or regulations. The
agencies also seek information regarding how plans and issuers' billing
and reimbursement practices affect health care providers' decisions to
offer and promote medical payment products.
The agencies seek additional information on the prices or versions
of standard charges offered to patients who use these products, and
whether these charges are adequately disclosed in accordance with
hospital price transparency requirements and No Surprises Act good
faith estimate requirements. The agencies seek information on whether
medical payment product companies are operating outside of protections
against credit reporting of medical collections items and against
extraordinary collection actions by tax-exempt hospitals. Finally, the
agencies seek to better understand how notice and consent requirements
for post-stabilization and non-emergency health care items or services
under the No Surprises Act intersect with providers' promotion of
medical credit cards and loans to out-of-network patients.
In general, the agencies welcome any information that allows us to
better understand the impact of medical payment products on patients'
physical, mental, and financial health. The agencies also welcome
suggestions of actions Federal agencies could take to address harms
caused by medical payment products and related issues connected to
medical billing and collections or medical debt more generally. The
agencies welcome comment on these areas, including comments in response
to any of the following specific questions:
a. General Questions
Market-Level Inquiries
1. What are the benefits, costs, and risks of medical payment
products for consumers, health care providers, and companies offering
these products?
2. What are the terms of medical payment products, including
interest rates and fees?
3. How much debt do consumers carry on medical credit cards and
loans in total, and what is the average individual debt level?
4. How concentrated is the medical payment product market, and what
role do private equity firms play in this market?
5. Are there specific populations (e.g., race, socioeconomic
status, gender identity, sexual orientation, age, language, etc.) or
geographic regions that experience disproportionately higher
utilization of medical payment products?
6. What are the health equity impacts of medical payment products
and related billing and collection policies and practices?
i. Do medical payment products affect members of specific
underserved communities differently, including members of Tribal
communities and geographically isolated communities?
ii. Do certain products or policies present opportunities to better
serve members of underserved communities?
7. Patients can pay for care in many different ways, such as by
medical credit card or loan, general purpose credit card, insurance, or
through a zero-interest payment plan. What are
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the costs and benefits for health care providers of offering each of
these methods? Are there situations where one method of payment is more
advantageous than another?
8. What incentives do financial services companies offer health
care providers, including revenue-sharing or other financial or non-
financial incentives?
9. How do medical payment products and health insurance coverage
interact? Do group health plan or health insurance issuer practices
contribute to uptake of medical payment products by patients and
providers?
i. How many days do providers typically have to wait to be paid by
plans or issuers versus by medical payment product companies or general
purpose credit card companies? What factors, such as administrative
requirements or clinical reviews, contribute to any differential
resolution timelines?
ii. Does a patient's use of a medical payment product exempt them
from certain consumer protections, provider requirements, or group
health plan or health insurance issuer requirements? Are different
types of health coverage treated differently?
10. Does health care provider organizational structure, including
ownership by private equity, affect providers' decisions to offer and
promote these products?
11. What are some best practices for health care providers who
offer medical payment products in avoiding adverse financial and health
impacts for patients?
i. Are there specific tactics or practices that are well tailored
and adapted for use by health care professionals in and serving
underserved communities, including Tribal communities and
geographically isolated communities?
ii. What actions should the agencies take to develop and encourage
uptake of these established best practices?
iii. Are there examples of actions or best practices at the State
or local level to which the Federal government should look?
12. To what extent are patients using medical payment products to
pay bills that are incorrect, or that could be covered or defrayed by
lower-cost alternatives?
i. What billing errors may patients commonly encounter?
ii. How does using a medical payment product affect patients'
rights to dispute incorrect bills?
iii. Are certain groups of patients, such as members of specific
underserved communities, more likely to experience medical billing
errors or issues resolving disputes over bills paid using medical
payment products?
13. What actions should agencies consider taking to better
understand the effects of medical payment products on consumers and the
health care industry, educate consumers and providers about the risks
of these products, and collect complaints?
i. What are some sources of data on medical payment products? What
additional data are needed to understand the impact of medical payment
products on patients and the health care industry?
ii. What data collection, data analysis, and research actions
should agencies take?
iii. Are there different or other actions that agencies should
consider for underserved communities, including Tribal communities and
geographically isolated communities?
iv. What types of consumer complaints have States and localities
received?
14. Where medical payment products are causing harm, what are some
specific levers for regulatory oversight and enforcement by Federal
agencies that regulate financial products or health care providers?
i. Are there specific areas for Federal enforcement actions?
ii. Are there examples of regulation or enforcement at the State or
local level to which the Federal government should look?
iii. What complementary legislative actions are worth exploring?
Where may additional statutory authority be needed?
Individual Inquiries
1. Have medical payment products ever been marketed to you,
including by your health care provider? If so, please describe your
experience and how the products were marketed to you. Were other
options, such as financial assistance, marketed or explained at the
same time?
2. If you have used a medical credit card or loan to pay for your
care, what was your experience with the product?
a. What benefits or harms did you experience?
b. Was your health affected by your use of a medical credit card or
loan?
c. How much did interest and fee charges add to the cost of your
care?
d. How did using a medical credit card or loan affect your credit
score and your ability to access credit?
e. Would you use a medical credit card or loan to cover medical
expenses again? Why or why not?
3. Have you ever tried to dispute a medical bill you paid using a
medical credit card or loan? If so, please describe your experience.
4. Have you ever had an overdue bill on a medical credit card or
loan sent to collections? How quickly was the bill sent to collections?
Did your experience with collections affect your credit score, your
access to medical care, or your health?
5. Have you ever felt pressured to pay for care using a medical
payment product or general purpose credit card when you believed that
was not in your best interest? If so, please describe your experience.
6. Have you ever used or been pressured to use a medical credit
card or loan to pay a bill that you believe should have been covered by
your health insurance? If so, please describe your experience.
7. Have you ever used or been pressured to use a medical credit
card or loan to pay a bill that you believe should have been covered by
your health care provider's financial assistance policy? If so, please
describe your experience.
8. Has your knowledge about the availability of medical credit
cards or loans led you to believe that health insurance might not be
necessary, or not acquire health insurance?
b. CFPB-Specific Questions
The CFPB implements and enforces Federal consumer financial law,
including the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Equal Credit Opportunity Act, and the Consumer
Financial Protection Act's prohibition on unfair, deceptive, or abusive
acts or practices in connection with the offering or provision of
consumer financial products or services. As such, the CFPB seeks to
better understand consumer financial issues raised by medical payment
products, including the credit practices of medical payment product
companies as well as the debt collection and credit reporting practices
utilized by both health care providers and medical payment product
companies. The CFPB welcomes comment on these areas, including comments
in response to any of the following specific questions:
1. What actions should the CFPB consider taking to address
problematic practices related to medical credit cards or loans,
including debt collection and credit reporting practices?
2. How do firms offering medical financial products typically
market to providers?
3. How do creditors and their affiliates underwrite loans to
patients? What specific factors (e.g., age, type of
[[Page 44289]]
medical procedure, credit score, etc.) are considered in underwriting?
4. Do consumers understand the risks of paying medical bills via a
medical credit card, installment loan, or other commercial payment
product, including lowered ability to negotiate their bill with their
provider?
5. To what extent are alleged debts placed on medical credit cards
and loans sent to debt collectors? How do medical payment product
companies' debt collection practices differ from those of health care
providers, and are any issuer or provider debt collection practices
posing risks to consumers?
6. How can the CFPB use its authorities to ensure people with
medical bills in collections, including medical payment product debt,
are screened for eligibility for financial assistance and other
benefits?
7. How are health care providers and financial companies using
credit or ``propensity to pay'' scores to determine patients'
eligibility for financial assistance or medical payment products? What
are the implications for compliance with the Fair Credit Reporting Act
or other CFPB authorities?
8. When hospitals write off a patient's debt as uncollectible or
``bad debt'' and cease attempts to collect, do they notify patients
that collection attempts will cease? Would patients benefit from such
notifications, and would such notifications reduce hospital revenue?
c. HHS-Specific Questions
The Department of Health and Human Services shares jurisdiction
with the Departments of Treasury and Labor over key health care
consumer protections related to health coverage, including those
enacted by the Affordable Care Act and the No Surprises Act. HHS is
also responsible for regulation and oversight of Medicare, Medicaid and
the Children's Health Insurance Program, and the Affordable Care Act
Marketplaces, and shares responsibility for enforcement of Federal
health care fraud and abuse laws, including the Federal anti-kickback
statute. HHS works to enhance the health and well-being of all
Americans by providing for effective health and human services and by
understanding and addressing the barriers patients experience in
accessing health care. HHS also includes the Indian Health Service
(IHS), which administers and oversees health and human services
programs for American Indians and Alaska Natives.
HHS seeks to better understand how medical payment products affect
access to care and intersect with health care coverage, including
Medicare, Medicaid, and the Children's Health Insurance Program, group
and individual health insurance coverage (including Marketplace plans
and employer-sponsored coverage), and non-comprehensive coverage
products. HHS also seeks specific comments from all Indian Health Care
Providers, including Indian Tribal Governments, Tribal Organizations,
and Urban Indian Organizations about medical credit card and loans and
the role they play in the Indian health care provider billing
environment. HHS additionally seeks to understand how medical payment
products interact with Affordable Care Act and No Surprises Act
protections and the prohibitions set forth in the Federal anti-kickback
statute.\49\ Relevant Affordable Care Act protections include the right
to seek an internal appeal and an external review of an insurance claim
denial. Relevant No Surprises Act protections include surprise billing
protections and good faith estimate rights for uninsured and self-pay
patients (including the right to use a Federal dispute process to
challenge a bill that is $400 or more higher than a patient's good
faith estimate). Finally, HHS seeks to understand whether any financial
institution or health care provider practices in connection with
medical payment products may violate health care fraud and abuse laws,
including the Federal anti-kickback statute.
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\49\ 42 U.S.C. 1320a-7b(b), the Federal anti-kickback statute,
provides for criminal penalties for whoever knowingly and willfully
offers, pays, solicits, or receives anything of value to induce or
reward the referral, recommendation, or arranging for the referral
or recommendation of business reimbursable under any of the Federal
health care programs, including Medicare and Medicaid. To assess the
application of the Federal anti-kickback statute requires an
examination of all of the facts and circumstances of an arrangement.
---------------------------------------------------------------------------
HHS welcomes comment on the intersection of medical payment
products with Federal health programs, Federal laws against health care
fraud and abuse, and Affordable Care Act and No Surprises Act
protections, including comments in response to any of the following
specific questions:
1. What actions should HHS consider taking to address problematic
practices related to medical credit cards or loans, particularly as
they relate to patients eligible for or enrolled in Medicare, Medicaid,
or the Children's Health Insurance Program, or patients enrolled in
Affordable Care Act Marketplace plans?
2. What types of health insurance (Medicare, Medicaid, private
insurance, etc.) are particularly associated with the likelihood that
an individual is offered or makes use of medical credit cards and
loans, and how does the type of health coverage affect relevant
provider billing practices?
3. Are there particular health care provider types that are most
associated with being offered or offering medical payment products, and
are these providers receiving directed payments or other incentives
through State Medicaid programs?
4. Has the No Surprises Act and its surprise billing protections
affected the prevalence and use of medical credit cards and loans, and
if so, how?
i. Has the notice and consent process been used to promote medical
cards and loans to patients seeking health care items or services from
out-of-network providers/facilities, and if so, how? For example, in
instances where the No Surprises Act permits providers and facilities
to seek notice and obtain consent from an insured patient to waive
their balance billing and cost-sharing protections under the No
Surprises Act, are providers and facilities impermissibly attaching or
incorporating medical card or loan documents or information to the
notice and consent forms, or giving them to the patient at the same
time as the notice and consent forms?
ii. What steps are health care providers and facilities putting
into place to ensure that bills paid through medical payment products
do not violate surprise billing requirements and that patients who use
medical payment products retain their No Surprises Act rights?
5. How does or might the use of medical credit cards and loans
affect the amount and timing of cost sharing a patient covered through
Medicare, Medicaid, and/or the Affordable Care Act Marketplace owes for
a covered service?
i. Are there any observable differences in cost sharing among
patients belonging to underserved communities, such as Tribal
communities or geographically isolated communities?
6. Hospital Price Transparency: What prices or versions of standard
charges (e.g., cash prices) are offered to patients who sign up for a
medical credit card or installment loan? What steps are taken by health
care providers to ensure these charges are adequately disclosed in
accordance with hospital price transparency requirements? Do these
charges reflect and specifically identify facility fees?
7. How might HHS improve patient understanding of options for
covering the cost of medical treatments? At what points in the care
process could patients be provided with information about
[[Page 44290]]
their financial obligations and payment options?
Anti-Kickback Statute
HHS is interested in whether incentives offered to health care
providers by financial companies may implicate the Federal anti-
kickback statute. Specifically, HHS is interested in the following
questions:
8. What financial relationships exist between medical payment
product companies and health care providers? For example, do companies
provide financial incentives to providers who enroll patients in
medical payment products? Do providers pay financial companies to
collect patients' overdue balances? Or, do providers have arrangements
with financial companies to indemnify the company in whole or in part
if the patient defaults, such as an arrangement that when patients
default on their debt to the financial company, the debt reverts to the
provider?
9. Do health care providers or financial institutions market or
recommend medical credit cards or loans to Federal health care program
beneficiaries (e.g., Medicare, Medicaid, Affordable Care Act
Marketplace, or Children's Health Insurance Program enrollees)? Is the
use of these products limited to certain types of health care items or
services, such as items and services that are not reimbursable by
Medicare or another third-party payor?
10. Do medical payment product companies recommend certain health
care providers to their users? Do companies limit where or how patients
use medical credit cards?
11. Is the health care provider (or the medical payment product
company) offsetting some of the patient's medical debt or providing any
other incentives to the patient (e.g., travel rewards for charges to
the card)?
d. Treasury-Specific Questions
The Treasury Department oversees policy decisions relating to the
Internal Revenue Code, including those provisions relating to tax-
exempt hospitals found in section 501(r). Section 501(r)(4) and 26 CFR
1.501(r)-4 require tax-exempt hospital organizations to establish and
widely publicize a written financial assistance policy that applies to
all medically necessary care provided by the hospital organization.
Section 501(r)(6) and 26 CFR 1.501(r)-6 require hospital organizations
to make reasonable efforts to determine whether an individual is
eligible for assistance under the hospital organization's financial
assistance policy (FAP) before engaging in extraordinary collection
actions against that individual. Extraordinary collection actions
include credit reporting an unpaid medical bill, deferring or denying
care to a patient due to their unpaid medical bills, taking legal or
judicial action to recoup an alleged medical debt, or selling an
alleged medical debt.
However, selling an alleged medical debt is not considered an
extraordinary collection action if, prior to the sale, the hospital
facility enters into a legally binding written agreement with the debt
buyer that meets four conditions: (1) the buyer agrees not to engage in
any extraordinary collection actions to obtain payment; (2) the buyer
agrees not to charge interest in excess of the rate in effect under
section 6621(a)(2) at the time the debt is sold (currently set at 7
percent through June 2023); (3) the debt is returnable to or recallable
by the hospital facility upon a determination that the individual is
financial assistance-eligible; and (4) if the individual is determined
to be financial assistance-eligible and the debt is not returned or
recalled, the buyer must adhere to specified procedures which ensure
that the individual does not pay, and has no obligation to pay, the
buyer and the hospital facility together more than that individual is
personally responsible for paying under the financial assistance
policy.
Treasury welcomes comment on the interplay between the requirements
that apply to tax-exempt hospitals and medical payment products,
including comments in response to any of the following specific
questions:
1. What policy actions should Treasury consider taking to address
problematic practices related to medical credit cards or loans,
including debt collection and credit reporting practices, to conform
with the existing tax laws and regulations pertaining to tax-exempt
hospitals?
2. Should a tax-exempt hospital's signing patients up for medical
payment products be considered similar to a tax-exempt hospital's
selling medical debt, such that the special rules that only exclude
debt sales from being extraordinary collection actions if certain
requirements are met would be applied to these payment products?
3. How would applying the debt sale special rules to payment
products change hospitals' and payment product providers' current
practices, especially those related to financial assistance eligibility
screening, extraordinary collection actions, interest rates, and recall
or return of balances owed by FAP-eligible individuals?
4. How do tax-exempt hospitals' promotion of medical payment
products compare to their operationalization of the requirement that
their financial assistance policies be widely publicized?
5. What are best practices for hospitals publishing and making
patients aware of financial assistance programs (beyond compliance with
the widely publicized requirements found in the section 501(r)
regulations)?
6. Are medical payment product companies advertising their products
as delivering community benefits or as a form of financial assistance?
7. Are tax-exempt hospitals claiming that their promotion of
medical payment products delivers community benefits or provides
financial assistance, including in their filings of Form 990, Schedule
H?
8. Does the availability of medical payment products generally
benefit the community or assist patients financially?
Signing Authority for HHS
The Administrator of the Centers for Medicare & Medicaid Services
(CMS), Chiquita Brooks-LaSure, having reviewed and approved this
document, authorizes Vanessa Garcia, who is the Federal Register
Liaison, to electronically sign this document for purposes of
publication in the Federal Register.
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
Thomas C. West Jr.,
Deputy Assistant Secretary for Tax Policy, Department of the Treasury.
Vanessa Garcia,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2023-14726 Filed 7-11-23; 8:45 am]
BILLING CODE 4810-AM-P; 4120-01-P; 4810-AK-P
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</html>Indexed from Federal Register on July 12, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.