Multiple federal agencies, including the Consumer Financial Protection Bureau, are looking into high-cost specialty finance products for patients to cover healthcare costs, CFPB Director Rohit Chopra said in a news release earlier this month.
CFPB is joining the U.S. departments of Health and Human Services and Treasury started to investigate the loans, including medical credit cards and installment loans, according to CFPB's July 7 news release. These specialty finance products "are pushed onto patients as a way to pay for routine medical care but actually increase health care costs and medical debt," the news release said.
"Financial firms are partnering with health care players to push products that can drive patients deep into debt," Chopra said in the news release. "We are opening a public inquiry to better understand how these practices are affecting patients in our country."
In addition to other steps taken by the CFPB and other federal agencies to reduce the burden of medical debt and collections practices, the news release also described a request for information that expands on CFPB research on medical payment products, medical billing and medical collections.
The three federal agencies and investigating how common the specialty finance products are, what consumers think about them and what motivates medical professionals to recommend these expensive loans to their patients. Part of the investigation will include incentives for these specialty finance products, including evasion of the insurance claims process and financial aid programs. CFPB also will consider public feedback in deciding how to address patient harms brought on by these specialty financial products.
Medical payment products were once primarily used to pay for services like dentistry and vision care, reproductive treatments and cosmetic surgery that were not often covered by health insurance programs. A wider range of services, including emergency room visits, general care and specialty care, now also are being covered by medical payment plans. Patients may be sold one these products by their healthcare professionals, who subsequently hand off the management of patient billing and collections to financial service corporations, even when medical care is otherwise covered by insurance or financial aid.
CFPB's research has found healthcare providers may be disincentivized from explaining legally required financial aid programs or zero-interest repayment choices to patients before recommending these services. Patients who use these products may potentially face lawsuits from creditors or rising delayed interest.
"This inquiry builds on the Department's work to protect patients from unfair billing practices, lower costs, and increase transparency in our health care system," Health and Human Services Secretary Xavier Becerra said in the news release. "Hearing directly from patients about their experiences will help shape policies that can prevent families from incurring medical debt."
