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Healthcare Collections Closely Scrutinized as Regulation Looms

Healthcare collections has grown to the point of being the second largest source of revenue in the collection industry.  In fact, healthcare collections now accounts for as much as $5.5 billion annually.  Factors such as bankruptcy policy that allows medical debt to be discharged; a market that remains splintered; and growth rates make it clear that healthcare ARM companies and medical system leadership should see the healthcare space as a reliable area of growth.

The Consumer Financial Protection Bureau (CFPB) has been rather uninvolved in the process of medical debt collection until very recently.  The primary target of the CFPB has been the research of loans secured by consumers for things such as mortgages, automobiles, and through credit cards.  Medical debt collections have typically remained unnoticed by the Federal Trade Commission (FTC) as well opting instead to focus on the enforcement of the Federal Debt Collection Practices Act (FDCPA). 

Recent developments make it seem likely, however, that a closer review and inquiry is likely by 2016.  One such event worth noting happened in December of 2014, when the CFPB conducted a hearing in Oklahoma City about collection practices of medical collectors and the issue of credit reporting.  That same month, the chairperson of the FTC announced that their focal point for the coming year would be on mergers taking place between medical providers and hospitals.  The spark for such attention is said to be based on a concern that mergers could eliminate competition; thus increasing prices for patients.

Another development pointing to an increase in scrutiny came recently by way of a press release from the White house during The White House Conference on Aging assigning the CFPB with the task of “protecting the older Americans from financial exploitation and elder abuse”.  An advisory report is expected to be released by the end of this year to give support to financial institutions helping them recognize, prevent and report this type of abuse.

The current strategy of the FTC is likely to hinder the rate of medical provider acquisitions and mergers in the foreseeable future.  This also appears to suggest that more robust and comprehensive regulations for the collection of medical debt are on the way.  With that being the case, now may be the perfect time for medical providers to ensure that their ARM vendor has a powerful solution for meeting compliance standards.

Last modified onTuesday, 11 August 2015 21:33
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