Mnet Health News delivers the latest news and information articles for the world of healthcare.

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HHS ‘A Bill You Can Understand’ Challenge is Underway

The U.S. Department of Health and Human Services is soliciting new approaches to medical billing from healthcare organizations and other innovators through its “A Bill You Can Understand” challenge. “People who use healthcare in the U.S. today can often receive bills from multiple hospitals, doctors, labs or specialists for the same episode of care that vary in content, presentation and use of health industry jargon,” HHS reports.

“Because of this, it can be difficult for patients to understand what they owe, what their insurance plan covers, and whether the bills are correct or complete.”  HHS will issue awards for the design that is easiest to understand and the best transformational approach to improve the medical billing system for patients.

“Submissions will be judged based on understandability, creativity and how well they address the challenges outlined by patients, providers and payers, among other criteria explained on the challenge website,” according to HHS.  Several healthcare organizations have agreed to test or implement the winning designs. Entries for the challenge will be accepted until Aug. 10, 2016.  More information:


How Hospitals Can Work With In-House Collections (Pt. 3 How Costs for Providers and Consumers Shape Collections)

Measuring the costs for implementing an in-house collection department as opposed to outsourcing with a third-party vendor should be considered comparatively in helping patients resolve their accounts which now bear an increase in financial responsibility.  Providers are also facing an increase in costs related to security and compliance, as well as technology regulations and these things can divert attention from the patients themselves.  

The costs of technology for security coupled with an increase in patient responsibility for healthcare are inspiring healthcare systems and providers to make adjustments to other areas of spending which can include collections.  

Medical bill obligations are not likely to change in the near future.  The amount of employers who are now offering only high deductible plans has grown quite a bit in the last several years and is expected to continue that pattern.  As the percentage of high deductible plans continues to grow, the amount of insureds who choose to forgo a level of healthcare has also increased and will continue to do so in the future.

A recent Kaiser Survey shows that 20 percent of those sampled that currently have health insurance report that they have had problems in paying for medical services in the last year.  They also point out that such bills can cause financial hurdles as well as changes in their lifestyle and even employment.

The survey further points out that of those who had insurance when bills were created, 75 percent of them claim that the amount that was their responsibility (such as copays, coinsurance and deductibles) was more than they felt they could reasonably afford.  The report showed that this seemed to be true of those who had chosen high deductible plans as well as those who had lower deductible plans which could suggest that this is a very real problem since even those who have lower responsibility plans were reporting issues.

Providers can strive to strike a balance between patient medical bill issues and budgeting for compliance and technology investments for the facility.  A balance should also be found between working with patients and front-end expenses such as the implementation of in-house systems that could be beneficial to self-pay collections.

Even though it might be more beneficial for the larger hospital systems to make use of in-house collection departments, tips from the world of banking can still be advantageous to healthcare facilities and systems of all sizes as the shift continues to a greater level of customer service in the healthcare industry while patients continue to take on more financial responsibility.

“To offer a world class patient experience, an investment in training and education of customer service agents is paramount” said Hamilton.



How Hospitals Can Work With In-House Collections (Pt. 2 Finding the Balance Between In-House Collections & Outsourcing)

However, in-house collections is typically not the right fit for all providers.  Many see the smaller surgical hospitals and ASC’s as benefitting more from outsourcing collections to a third party since it is more likely that each employee will need to handle multiple jobs which results in employees being stretched thin.

An analysis of the cost of doing such processes in-house versus outsourcing them should be completed.  It behooves most health systems to reduce costs wherever possible, so an evaluation needs to be made regarding the size of each health system or hospital.  This requires a cost/benefit analysis to decipher whether an in-house collection department is appropriate or if outsourcing to a third-party collection vendor may be the best course of action.

The costs can be large including technology costs such as the purchase of collections software, predictive dialers, and phone systems as well as all of the costs associated with hiring additional staff and the necessary management and systems needed to ensure compliance and evaluate staff performance.  Even with in-house collection departments set up, providers would find it necessary to ensure a high level of customer service to protect the patient relationship.

Providers may be able to follow processes used by banks, such as providing billing statements that are easy to read and understand, they would also need to make certain that there are staff available to communicating with patients regarding billing questions.  Patients need to see that the provider is willing to work with them to build a long-lasting relationship.

Healthcare providers can also choose to outsource a limited number of accounts while choosing to work the majority on an in-house basis.  Those providers that choose a partnership with third-party agencies can mirror banking processes for their choice of vendor partners.  Banks are typically very choosy in this area.  Hospitals can do the same by making site visits with vendor partners they are potentially looking to work with while also developing a list of expectations as well as a list of best practices.

“In the past, the healthcare industry may have had a less formal process of choosing vendor partners, but this has certainly changed in the last few years” said Hamilton.  Healthcare providers should make certain that they evaluate and analyze the return on their investment by looking at the level of productivity as well as the increase in level of collections after partnering with a vendor according to Hamilton.

Vendor partners should be in regular contact with their provider clients, which can help keep both organizations up to speed on any regulatory requirements.


How Hospitals Can Work With In-House Collections

The fact that self-pay amounts, high deductible plans and patient responsibility are changing since the ACA was passed is well known.  A recent survey shows that more than 60 percent of employers have already added or are planning on adding a high deductible plan in the next few years.

Another report shows that hospitals here in the US are seeing their level of risk from a financial perspective change based on the fact that patients are now carrying a greater level of financial responsibility through their health plans.

This report shows that since the ACA was enacted in October of 2013 and the number of people carrying health insurance began to grow, provider collections have grown and a noteworthy portion of the revenue now comes from a source that is more stable than the previous method of self-pay patient responsibility from the uninsured.

There has been an increase of 13 percent of total accounts receivable from insured self-pay patients in the last year based on the information gleaned from the report.  The amount of accounts receivable in total from self-pay patients who are uninsured has decreased by 22 percent.  This is viewed as being the result of patients joining Medicaid who are high financial risks in Medicaid expansion states.

While insurance costs and healthcare coverages are changing, a new direction is gaining steam as to how providers of healthcare can manage revenue cycle processes while still ensuring a high level of customer service.

Self-pay collections for hospitals can be improved through typical in-house processes but also by making use of outsourcing options through a third party agency.  Hospitals that opt to make use of in-house collections can benefit from banking processes for the collection of debt in dealing with consumers.

“Hospitals can learn some important lessons from banks” said Mnet Health Services CEO David Hamilton.  “Banks often do outsource but also rely heavily on in-house collection processes” said Hamilton.  It could be beneficial for hospitals to look at how banks make use of technological advances and apply that to their own processes in working with developing a compliance management protocol, call monitoring, and reviewing patient accounts.

Oftentimes, automated systems used by banks include skip-tracing, analytic reports pertaining to calls, and automated dialers to be certain the level of customer service is not only apropos but also specific to the customer.  Banks are also constantly evaluating their processes to make certain that they are efficient but also that they are truly helpful in working accounts.  “While the technology for self-pay is not quite where we would like for it to be yet; some hospitals are making use of automated dialers, although most are not yet equipped for them” said Hamilton.



Long-Term Decline in Consumers’ Trouble with Paying Medical Bills Continues

The number of individuals under age 65 with problems paying medical bills continues to decline, according to the most recent updated estimates by the National Health Interview Survey from the National Center for Health Statistics—part of the Centers for Disease Control and Prevention. The percentages of people under age 65 who were in families having problems paying medical bills declined from 21.3 percent (56.5 million) in 2011 to 16.5 percent (44.5 million) through the first six months of 2015. 

The number through the first six months of 2014, from NHIS survey results released in June 2015, was 47.7 million, ACA International previously reported. In 2011, about 20 percent of families ages 18-64 were in families having problems paying medical bills compared to 15.9 percent through the first six months of this year, according to the latest survey results. 

The percentage of people under age 65 who were uninsured and in families having trouble paying medical bills also declined from 35.7 percent in 2011 to 29.8 percent in the first 6 months of 2015. Through June 2015, children ages 0-17 were more likely than adults ages 18-64 to be in families having problems paying medical bills.  However, the percentage of children in those families did decline from 23.2 percent in 2011 to 18.1 percent through June 2015. 

Findings from the survey also show that 21.8 percent of people under age 65 with public insurance coverage were in families having trouble paying their medical bills compared to 12.7 percent with private insurance coverage –both declines since 2011, according to the survey.  Fewer families with people under age 65 who are identified as poor in the survey are having trouble paying medical bills than in 2011. 

Overall, each year people who were poor or near-poor were twice as likely as those who were not-poor to be in families having problems paying medical bills, according to the survey. In September 2015, the U.S. Centers for Disease Control and Prevention National Health Interview Survey also found that the percentage of people who do not obtain needed medical care for cost reasons is declining. 

According to that survey, 4.4 percent of the population interviewed from January through March 2015 failed to obtain needed medical care due to the expense at some time during the past 12 months, a figure that is lower than the 2013 estimate of 5.9 percent. 

Between 1997 and 2002, the percentage of people who did not obtain medical care for cost reasons ranged from a low of 4.2 percent to a high of 4.7 percent. From there, starting in 2003, the percentage started to increase to a high of 6.9 percent in 2010, according to the survey. In 2011, it started to decline to the most recent amount of 4.4 percent. More information: W399M

According to the survey:

*The percentage of poor people under age 65 who were in families having problems paying medical bills decreased from 32.1 percent in 2011 to 24.5 percent in the first six months of 2015.

*The percentage of "near-poor" people under age 65 who were in families having problems paying medical bills decreased from 34.7 percent in 2011 to 27.1 percent in the first six months of 2015.

*The percentage of "not-poor" people under age 65 who were in families having problems paying medical bills decreased from 15.2 percent in 2011 to 12.2 percent in the first six months of 2015.


Could the Message I Just Left for a Patient Be Viewed as a Communication With a Third Party?

The debate about how a message can be left without violating the Fair Debt Collection Practices Act (FDCPA) has been ongoing for many years at this point.  The topic is now regularly discussed in the healthcare community as providers work diligently to ensure compliance with rules and regulations governing debt collection practices while actively encouraging patients to pay for services that have been rendered.  Recently, a District Court in the State of Oregon joined the discussion and the opinion issued interestingly indicates that each decision should be specific to the facts of a particular case.

In the Oregon case, a consumer made allegations that a collection agency was in violation of FDCPA when it left two separate messages for the consumer on her cell phone which were overheard by others (third parties).  Before the messages being called into question were left, the consumer, Ms. Peak, had agreed to a payment arrangement with the collection agency holding her debt.  

Throughout the course of her payment arrangement, the collection agency made contact with Peak to confirm her method of payment while also confirming that the phone number that they had on file was the best number to reach her.  Apparently, Peak was driving in her car at this point, so the collection representative was now aware that the phone number was that of a cell phone.  

However, the collection agency was unaware that Peak’s boyfriend had cancelled his own wireless coverage and had taken to using Peak’s phone; gaining access to any voice mail messages left for her.  At some point after that, the collection agency made another attempt to reach out to Peak on her cell phone but instead reached her voicemail.  Later on, her boyfriend began listening to voicemails that had been left on the cell phone and heard the collection agency message left for Peak.

A month later the same collection agency called and left another voicemail that was similar in nature to the message mentioned above.  However, this time, Peak decided to listen to her message through the loudspeaker on her cell phone in the break room provided by her employer, which, oddly enough, was another collection agency; so, the message was heard by her employer.  After that, she filed suit asserting that the collection agency that had been reaching out to her had violated the FDCPA alleging that the messages that were heard by others were communications with third parties and unauthorized.

The court came to the conclusion that the messages did, in fact, qualify as “communications” under FDCPA rules, however, they were not to be viewed as communications with a third party.  The court took the stand that “a communication is only with a third party” if “the debt collector knows or should reasonably anticipate the communication will be heard or seen by a third party.”  The court further stated “no matter how careful a debt collector is, there is always some risk a third party will intercept the communication.”

The court also declared that “Congress intended the FDCPA to cause debt collectors to be very careful in the way they communicate with consumers, but it did not intend the statute to completely shut down all avenues of communication and force debt collectors to file a lawsuit in order to recover the amount owed.”  A “strict liability standard would invite abuse” while “a negligence standard strikes the right balance because it holds debt collectors liable for failure to take reasonable measures to avoid disclosure to third parties, but does not require them to avoid such disclosure at all costs”.

The determination was made by the court that it was unreasonable to believe that it could have been foreseeable by the collection agency that the phone messages could be heard by Peak’s employer or her boyfriend.  The court pointed out that a pivotal piece of information was the fact that the calls placed were sent to a cell phone and that the outgoing message coming from that phone identified only Peak as the owner of the phone.  

Finally, the court pointed out that “the cell phone/land line distinction is important because a caller may reasonably assume messages left on a cell phone’s voicemail system will not be accidentally overheard, as they must be accessed through the cell phone itself.  By contrast, if any person is in the vicinity of a land line answering machine, that person may overhear a message as it is being left.” 

While common sense seems to have prevailed in this case, ambiguity still exists under the FDCPA as well as the governance of the Consumer Financial Protection Bureau (CFPB).  Now is a good time to be certain that your medical office or collection vendor is doing everything necessary to be compliant.


Underinsured Face Financial Struggles with Medical Bills and Paying Medical Debt

Thirty-one million people, or 23 percent, with health coverage in the U.S. were underinsured in 2014, according to a recent report released by The Commonwealth Fund. The share of working-age adults who had health insurance all year but were underinsured was statistically unchanged since 2010, after nearly doubling, from 12 percent to 22 percent, between 2003 and 2010.

People are considered underinsured if they have had health insurance for a full year, but have high deductibles or out-of-pocket expenses relative to their income, according to a news release on the report.  The study, The Problem of Underinsurance and How Rising Deductibles Will Make It Worse, is based on The Commonwealth Fund’s Biennial Health Insurance survey, which interviewed people 19-64 years old between July and December 2014. 

It could not separately assess the effects of the Affordable Care Act on underinsurance because people insured all year in the survey had coverage that began prior to the law’s major insurance expansions going into effect.  The financial consequences of being underinsured are significant.  Approximately 50 percent of those who were underinsured had problems paying medical bills or were paying off medical debt over time, according to the news release. 

More than one-third either had trouble paying or couldn’t pay their medical bills (38 percent) and one-third had medical debt they were paying off over time (34 percent). More than one-fifth were contacted by a collection agency about unpaid medical bills (23 percent) or said they had to change their way of life in order to pay their medical bills (22 percent).  “The financial and health insecurity that comes from being underinsured is substantial and puts people’s health and well-being at risk,” said Commonwealth Fund President David Blumenthal.

“If health insurance costs continue to be shifted to consumers at the rates we have seen over the past 10 years, the problem will likely grow.”  Underinsured adults who had difficulties paying their medical bills reported the following consequences:

-44 percent received a lower credit rating.

-47 percent used all of their savings.

-34 percent took on credit card debt.

-9 percent took out a mortgage against their home or a loan. 

-7 percent declared bankruptcy.

In addition to financial strain, people who were underinsured also skipped needed healthcare—44 percent either didn’t go to the doctor when they were sick; did not fill a prescription; skipped a physician-recommended medical test or follow-up visit; or didn’t see a specialist when their doctor told them to do so.

Employment and Insurance

Underinsured rates are increasing among people with health insurance through their employers, particularly at companies with 100 or fewer employees. Those companies are sharing more of their healthcare costs with employees, especially in the form of higher deductibles, according to The Commonwealth Fund. 

While people buying coverage on their own are still more likely to be underinsured than those with employer coverage (37percent versus 20 percent), the share of people with employer insurance who are underinsured has doubled since 2003, when it was 10 percent.

Rising Deductibles Contribute to the Underinsured Rate

Over the past 10 years, deductibles have contributed to underinsured rates in two ways: More people than ever before have plans with deductibles, and those deductibles are taking up larger shares of people’s incomes. According to the report, in 2003, 40 percent of people with private health insurance had no deductible, while in 2014 just 25 percent didn’t have one. 

In 2014, 14 million people had deductibles that were 5 percent or more of their income, while only four million had deductibles that high in 2003.  Also, in 2014, 11 percent of adults enrolled in a private plan had a deductible of $3,000 or more, up from just 1 percent in 2003. While many people were underinsured because they had high out-of-pocket costs and high deductibles, 7 million people were underinsured due to deductibles alone in 2014, The Commonwealth Fund reported.

“People with health insurance should be able to get the healthcare they need without depleting their savings accounts or worrying about potential bankruptcy,” said Sara Collins, vice president for health care coverage and access at The Commonwealth Fund and the report’s lead author. “Changing the way we design health insurance benefits to keep rising deductibles in check could help keep health care affordable.”  More information:


Action Taken by CFPB Against Debt Collector Specializing in Medical Debt

The CFPB recently announced their intent to take action against a company specializing in medical debt collection for keeping consumers from making use of specific debt collection rights and improperly handling credit reporting disputes for consumers.  These methods have the potential to create confusion and alarm in consumers and also could affect the credit rating of thousands.  The company in question has been ordered to change their business practices, pay a penalty of $500,000.00 and provide more than $5.4 million dollars to consumers who have been affected.

The debt collector, Syndicated Office Systems, prevented consumers “from exercising critical debt collection rights” according to the Director of the CFPB, Richard Cordray.  Syndicated Office Systems is a medical debt collection agency that focuses on medical debt for healthcare providers, doctors and hospitals systems under the name Central Financial Control.  

Debt collectors, including those focusing on healthcare, have the capability of supplying information to credit reporting agencies, which means they can have a profound effect on the credit reports of consumers.  Currently, more than 43 million people in the U.S. have credit reports that have been affected adversely by medical debt credit reporting.  A report from the CFPB recently pointed out that medical bill credit reporting can cause confusion and difficulty for consumers and that medical debt has the capability of penalizing the credit scores of consumers more than is necessary.

Syndicated Office Systems supplied information pertaining to the status of collection accounts to the major credit reporting agencies.  The credit reports created by these agencies track all purchasing and repayment history supplied by those furnishing such information.  These reports are then sold to help decipher eligibility for credit and even employability in certain instances.  

Collection efforts are normally initiated through letters and phone calls by Syndicated Office Systems.  Debt collectors are typically required to send debt validation notices to consumers within five days of their initial communication.  These validation notices are designed to make consumers aware of their right to request proof of the debt’s validity or dispute the debt.  However, the CFPB found during their investigation that Syndicated Office Systems did not send out validation notices to thousands of consumers.

The company also improperly handled consumer credit reporting disputes, according to the CFPB investigation, by not investigating or responding to consumers within the thirty day window provided by the law.  Since the company delivers information that can be tied back to medical accounts that are past due; that information needs to be validated or disputed and has the capability of lowering a consumer’s credit score.

Due to their investigation, the CFPB has charged the company with violating the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).  The violations include mishandling consumer credit reporting disputes by failing to respond to more than 13,000 credit report disputes within the 30 day window provided by law.  The CFPB also claims Syndicated Office Systems prevented consumers from exercising their debt collection rights by failing to send debt validation notices to more than 10,000 consumers. 

The CFPB claims that such violations had the capability of negatively impacting the credit reports and otherwise harming thousands of consumers.  These infractions could ultimately prevent consumers from obtaining credit or could increase the interest rates paid to receive credit.  


Collection Agencies Prepare for the Affordable Care Act in 2015

 With the start of the New Year, collection agencies working on behalf of healthcare providers have a lot to do to keep up with the requirements of the Affordable Care Act and its potential impact on their clients’ accounts.

Provisions of the Affordable Care Act in effect in 2014 included tax credits to provide more affordable care to the middle class; establishing the health insurance marketplace; increasing the small-business tax credit for employers providing health insurance; increasing access to Medicaid; and promoting individual responsibility to obtain health insurance, according to the U.S. Department of Health and Human Services.

In 2015, certain employer mandates to offer healthcare coverage will be in place. According to the U.S. Treasury Department, the employer responsibility provision will be in effect for companies with 100 or more full-time employees this year, and companies with 50 or more full-time employees will have to be on board in 2016.

The HHS and Congressional Budget Office recently estimated enrollment numbers for the Affordable Care Act by the time the open-enrollment period ends on Feb. 15, 2015. HHS predicted that 9-9.9 million people would register for insurance, while the Congressional Budget Office estimated 13 million people would enroll through the Affordable Care Act marketplaces.

Sticking to Best Practices

While the open-enrollment period continues and legislators debate potential changes to the Affordable Care Act, collection agencies are focusing on maintaining consistent service to their healthcare clients.  “I’ve heard from clients who have wanted me to completely overhaul how we work their accounts or scrutinize each step of what we do, all the way to clients who have said, ‘I’m looking to you for answers—you tell me what to do,’” said Michael Rainwater, CCAE, CCCE, IFCCE, administrator of Uptain Group Inc. in Knoxville, Tenn.

Rainwater said his agency works to be a source of consistent information while the healthcare community is bombarded with news and updates about the Affordable Care Act.  The ACA International and Healthcare Financial Management Association best practices continue to be a useful tool to help providers better resolve medical accounts.

“If a client comes to us and asks for recommendations, those best practices are what we’re using as the template for them,” Rainwater said.  The best practices, for example, outline ways to improve patient education and communication, make bills patient friendly and establish policies for account resolution.

Learning for 2015

In 2014, healthcare debt was nearly 38 percent of all debt collected in the credit and collection industry, making it the leading category of debt collection, according to the ACA/Ernst and Young study, The Impact of Third-Party Debt Collection on the National and State Economies.

In spite of that trend, collection professionals are closely watching how the Affordable Care Act and self-pay could affect their healthcare accounts in the future.  Misti Cook, a client advocate in the sales and marketing department at Cascade Collections Inc. in Salem, Ore., said as of late November, her company’s client base is approximately 70 percent healthcare collections.  Cook said Cascade Collections works with consumers on behalf of healthcare provider clients to offer solutions to pay their debt, and has a 35 to 40 percent recovery rate on healthcare accounts.

However, company executives are aware that things could change down the road as a result of the Affordable Care Act.  Cook said at times it is more difficult to collect on patients’ accounts because they may be experiencing other financial setbacks in addition to their medical debt.  According to a survey from The Commonwealth Fund released in November 2014, the amount of healthcare out-of-pocket costs relative to consumers’ income is increasing, in addition to healthcare premiums and deductibles.

The report notes that as healthcare premiums rise, many employers and individuals are selecting insurance plans with higher deductibles and copayments in an attempt to keep premium costs in check. Overall, 13 percent of people with private health insurance whose plans include a deductible now have deductibles equivalent to 5 percent or more of their income. That figure includes 25 percent of adults with low incomes and approximately 20 percent of adults with moderate incomes ($11,490to $45,960 a year for a single person).

Cook said Cascade Collections has focused on keeping up with local and national Affordable Care Act updates in order to pass that information along to clients.  “We try to train clients to communicate with patients about collections,” Cook said. “Then it’s not as big of a shock and it’s easier for them to process.”

For example, Cook said Cascade Collections offers pre-collect letters outlining that patients with a bill to pay should contact their creditor (the healthcare provider) within 30 days or the account will be turned over for collections.  Scott King, a collection consultant in Cascade Collections’ sales and marketing department, agreed that staying informed is important.  “It’s all about education and knowing what’s coming down the pike,” King said.

Rainwater said that while he sees communications or information about the Affordable Care Act coming into his agency on a daily basis, the credit and collection industry is still waiting to see how the act will affect healthcare accounts.

“Potentially there could be significant changes to when we collect, how we collect [and] charity-screening requirements,” Rainwater said. “All of those things require training of collectors and language on correspondence we send out.  As more parts of the Affordable Care Act and mandates come in to play, communicating with clients about what they want in treatment of their account holders is important.” 


Medical Debt Collection Complaints Climb

Patient complaints about the collection methods employed by medical debt collectors rose markedly during the third quarter of 2014, even as overall complaints about collection practices decreased.  In the third quarter, the Consumer Financial Protection Bureau (CFPB) took in more than 9,500 complaints about debt collection which was more than a 6 percent decline from both the first and second quarters with each quarter registering more than 10,000 complaints.

The complaint database for the CFPB notes complaints that have been sent to the Bureau that have given companies the chance to respond to the complaints but does not list complaints that have been sent to other agencies, complaints still in process with the consumer, or complaints that have not been completed.

While the CFPB complaint submission method is simple with standardized fields, consumers are prompted to choose the type of debt that prompted them to log a complaint with the CFPB.  The most common type of debt in the third quarter to merit complaints falls in the “Other” category which covers debts from health clubs, telecommunication companies, cable services and the like.  Debts from credit cards and other “Unclassified” debt were in the second and third most common debt types in Q3. 

Complaints stemming from collection activities related to medical accounts encountered the biggest change in number of complaints reported however.  In Q3 of 2014 collection complaints rooted in medical debt were at 13 percent in contrast to 9.5 percent in the first quarter and 10.3 percent in the second quarter.  In the month of August alone, more than 14 percent of the total of collection complaints were related to medical debt creating a noteworthy spike.

A recent published report called for supervision by the CFPB for large collection agencies working with medical accounts which is in direct contrast with the conclusion drawn by the CFPB regarding medical debt.  Currently, the CFPB does not include medical collection activities in revenue calculations that initiate supervision under its “Larger Market Participant” rule.  Groups such as the National Consumer Law Center, publishers of the aforementioned report, would like to see this changed with more scrutiny focused on collection agencies working with medical debt.

“That’s really the problem with using a collection vendor who has a one-size-fits-all approach to collecting medical debt” said Stacy Vink, Collection Manager at Mnet Financial.  “Patients want to speak to a collection representative who can help them decipher their medical bill and understand how the amount of patient responsibility was ascertained” said Vink.  “A collector that works with bad debt related to cars, boats and planes doesn’t have the ability to give the patient the answers they are looking for” Vink noted. 

“At Mnet Financial, we only work in the field of healthcare so our collection representatives fully understand an explanation of benefits and can help the patient to understand it as well” said Vink.  “By helping the patient to completely understand their medical bill and how it relates to their insurance policy, the collection agent can then work with the patient to find the right solution to resolve their medical debt” Vink said.

The accounts receivable management industry is now awaiting the inevitable increase in regulation with regard to the collection of medical debt.  The inclusion of medical accounts in the CFPB rule proposals for the collection of debt may someday become a reality but whether or not this comes to fruition, collection agencies working with medical debt find themselves preparing for changes in the near future.


Eleventh Circuit Clarifies That FCC’s Prior Express Consent Ruling Applies in Medical Debt Collection

On Sept. 29, 2014, the Eleventh Circuit Court of Appeals ruled 3-0 in favor of the credit and collection industry in the case of Gulf Coast Collection Bureau, Inc. v. Mais, No. 13-14008 (11th Cir., Sept. 29, 2014). At issue was the district court’s refusal to apply the Federal Communications Commission’s interpretation of the term “prior express consent” in the Telephone Consumer Protection Act.

The Eleventh Circuit ruled that the district court lacked the power to review the validity of the FCC’s 2008 declaratory ruling interpreting the term “prior express consent” under the TCPA.  The court also held that the FCC’s 2008 declaratory ruling applies to a wide range of creditors and collectors, including those pursuing medical debt.

In so ruling, the court found that the consumer’s act of providing a mobile contact number to a creditor is consistent with the meaning of “prior express consent” announced by the FCC in its 2008 ruling, and the debt collector’s calls to the consumer fell within the TCPA prior express consent exception as interpreted by the FCC. This is the first federal appellate court opinion to clarify the scope of the FCC’s consent ruling.

In the Mais case, the underlying facts provided that, in 2009, the consumer went to the emergency room while wife interacted with the admissions staff on his behalf. She provided her husband’s cellular telephone number to the admissions representative, identifying it as a residential line. The consumer’s wife signed additional paperwork for her husband, including a “Notice of Privacy Practices” that stated the hospital “may use and disclose health information about [the consumer’s] treatment and services to bill and collect payment.”

Neither the consumer nor his wife ever provided his number to any other provider/creditor related to his hospital stay. Instead, a hospital-based radiology provider electronically retrieved his cellular telephone number and other information from the hospital. After not paying the charges, the consumer’s account was forwarded to a third-party debt collector who used a predictive dialer to dial telephone numbers through automated technology without human involvement.

Using its predictive dialer, the third-party debt collector placed calls to the consumer in an effort to collect the medical debt owed. The third-party debt collector attempted between 15 and 30 debt collection calls to the consumer’s cellular telephone and left four messages relating to the debt.

On appeal, the Eleventh Circuit reversed every material aspect of the lower court’s controversial ruling.  First, the Eleventh Circuit held that district courts do not have jurisdiction to challenge FCC rulings. According to the court, district courts are prevented from issuing a ruling that is contrary to an FCC ruling even if the primary purpose of the underlying lawsuit is not to directly challenge the ruling.

Second, the court held that the FCC did not distinguish between medical debt and commercial debt in its prior express consent ruling; therefore, calls to collect medical debt should not be treated any differently than calls to collect commercial debt.

Third, the court held that the consumer “provided” his cell phone number to the creditor even though it was provided indirectly through the hospital administrator. In reaching this conclusion, the court noted that the hospital was authorized to provide the phone number to the creditor on the consumer’s behalf. The court also pointed to the FCC’s recent declaratory rulings clarifying that the “TCPA does not prohibit a caller from obtaining consent through an intermediary.”

On Nov. 1, 2013, ACA International submitted an amicus brief to the Eleventh Circuit in the Mais appeal. ACA submitted the “friend of the court” brief to support its member’s case, and to provide insight to the court with respect to how the TCPA is interpreted and applied by the credit and collection industry and why the TCPA must be consistently and predictably applied.

ACA argued that the district court’s decision not only runs contrary to the statutory scheme and results in bad public policy, it also deprives the credit and collection industry of fair notice of what the TCPA both requires and prohibits. In the Eleventh Circuit’s decision in Mais, the court not only acknowledged ACA’s amicus brief, it quoted ACA’s amicus brief almost directly when it rejected “Mais’ argument that the 2008 FCC Ruling was not an order within the meaning of the Hobbs Act.”

 ACA’s efforts to proactively support the credit and collection industry are part of the association’s Industry Advancement Program, and are made possible by funding through ACA’s Industry Advancement Fund.  More information:


Finance: Legislators Seek to Increase Transparency of Medical Credit Industry

The U.S. Government Accountability Office has issued a report on medical credit cards and related products following a request from several legislators concerned about medical debt and predatory lending practices against people who are uninsured or underinsured.

Reps. Elijah Cummings (D-Md.) and Maxine Waters (D-Calif.) as well as Sen. Ed Markey (D-Mass.) requested the report in 2013 after hearing concerns that consumers may have been misled by financial institutions offering medical credit cards and related products, including installment loans.  The GAO’s report reviews financing options and interest rates charged to consumers who use credit cards for medical expenses outside of their insurance coverage.

“Medical debt already is an unbearable burden for millions of Americans,” Markey said. “Consumers may believe they are on a path toward physical wellness when these financial products are often leading them toward financial ruin.”  Additional legislative efforts have occurred recently to address the level of medical debt in the U.S. Waters has introduced legislation that would require consumer reporting agencies to remove any information related to fully paid or settled medical debt from a consumer’s credit report within 45 days.

Waters also called on House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) to hold a hearing on the issue and her proposed legislation, which has not occurred.  “We need to take a close look at the issue of medical credit cards, and this report is a good first step,” Waters said.  ACA International has worked on this issue as well through its participation on a Medical Debt Collection Task Force with the Healthcare Financial Management Association. The task force developed best practices to help make paying medical bills an easier and fairer proposition for consumers.  More information:


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