More than half of respondents to the latest ARMSights poll believe that the Consumer Financial Protection Bureau’s proposed rule prohibiting the reporting of medical debt credit reporting will have a “significantly” negative impact on their overall effectiveness to collect on medical debts. Overall, nearly 90% of respondents believe the proposed rule, if it goes into effect as currently written, will have a negative impact on collections efficacy.
ARMSights, which is sponsored by Belvista Software, provides insights into trends impacting the accounts receivable management industry and acts as a barometer to illustrate how people are feeling and what actions they are taking.
About 40% of the survey’s respondents are currently furnishing information on half of their medical debts to the credit reporting agencies. Overall, 78% of respondents are furnishing information to the credit reporting agencies on at least some portion of their medical debt portfolios.
When asked which actions they are likely to take to offset the inability to furnish information about medical debts, the most common answer provided by the respondents was “file more collection lawsuits.”
Asked to share their thoughts about the proposed rule, respondents wondered about the impact on healthcare providers, especially smaller private practices, healthcare prices, and how consumers may be harmed in the long run. Here is a sampling of comments:
- Smaller private practices may experience significant cashflow deficits. Hopefully they will remain in practice as we already have a shortage of medical professionals along with an aging population.
- It’s going to cost all of us more money. Healthcare costs will increase for all of us. Employers will end up to provide less medical coverage because insurance costs will go up. There will be widespread consequences to these changes.
- Just like many of the rules made by lawmakers for the industry – nobody seems to think through the actual impact it will have on the overall economy and healthcare industry.
- I believe this is an extremely shortsighted move that will result in increased costs for medical care. If people aren’t held accountable for their outstanding charges, why pay them? If these charges don’t get paid, the costs will be passed along to those that do pay their bills. How is that in any way fair?
- The CFPB wants lenders to make lending decisions based on creditworthiness. The notion that medical debt has no real effect on creditworthiness is utter nonsense. Medical debt is the second most important factor in people filing bankruptcy in the US. To suggest that lenders shouldn’t take it into account when making lending decisions is hypocritical and reckless. It will result in the closure of more small hospitals and practices and increase consolidation in the health-care market. Rural areas especially will suffer. The CFPB is cherry-picking data to support a pre-conceived notion, not letting the evidence lead it to solutions. It will harm health-care providers and consumers. Although I know it will never happen, the CFPB should reverse this ill-conceived decision.
- Healthcare providers might need to consider denying patients recurring visits if they owe so much and are not paying their obligation.
- I believe fewer people will maintain medical insurance because they see no need to pay their medical bills. Smaller practices are already seeing fewer payments on bills less than $500. There will be more upfront payments being requested, which has already started.
- What is the difference in someone who cannot pay their electric bill or a co-pay?
- When it was announced that the CRAs would stop reporting under $500, we received immediate pushback from debtors, even though it wasn’t going into effect for 9 months. That portion of the business is now down 70%. I expect this new rule to continue the slide and probably force us to shutter that portion of our business.