The National Consumer Assistance Plan (NCAP) has brought many changes to data furnishers, and there are more on the way, including in the healthcare collections field. For a refresher, NCAP is the result of an agreement between the big three consumer reporting agencies (Experian, Equifax and TransUnion) and multiple state attorneys general. The final result is a set of reforms that are reshaping, in many ways, how data is furnished to CRAs.
While many of the NCAP reforms have already been implemented, a new round of reforms is set to take effect. Medical debt continues to be a huge market in the credit and collection industry. In 2013, healthcare-related
debt represented nearly 38 percent of debt collected through the third-party collection industry, according to the ACA International white paper, “The Role of Third Party Debt Collection in the U.S. Economy.”
Required by Sept. 15, 2017 for Debt Collectors and Debt Buyers
Do not report medical debt collection accounts (as defined by Creditor Classification Code 02) until they are at least 180 days past the date of first delinquency with the original creditor that led to the account being sold or place for collection.
Delete accounts that are being paid by insurance or were paid in full through insurance. This does not include accounts paid in full by the consumer. The date of first delinquency with the original creditor needs to be determined by the provider and furnisher based on the underlying financial agreements and the creditor’s policies for when an account becomes “delinquent.”
Date of delinquency, as defined in the Fair Credit Reporting Act, is “the month and year of the commencement of the delinquency on the account that immediately preceded collection activity, charge to provide or loss, or similar action.”
Now is the time to tackle these changes in order to make the transition smooth. Begin working with your operations personnel to update your policies and procedures and train your staff. Consult with other agencies that you may be in contact with to see how they are dealing with the new requirements. Educate clients on NCAP and work with them as you move forward.
Most importantly, carefully review any information provided by the CRAs and contact the CRAs as soon as you have questions. The CRAs are the entities steering the implementation of the NCAP, so they are in the best position to provide clarification to furnishers.
Andrew Pavlik formerly served as ACAInternational’s senior compliance analyst.