Debt collectors, which may include third-party “revenue cycle management” companies, violate federal law when they collect on inaccurate or legally invalid medical debts, according to guidance released Tuesday by the federal consumer financial protection agency.
The Consumer Financial Protection Bureau (CFPB) said it issued the guidance to clarify its view of the debt collection practices. The bureau also asserted that the illegal practices include “double-dipping to get paid for services already covered by insurance, hounding consumers to pay fake or exaggerated charges, misrepresenting consumers’ rights to contest bills, and collecting on debts without documentation that the amount is actually owed.”
The agency also said that debt collectors may not collect on inaccurate, unsubstantiated, or invalid medical bills.
The agency claimed that about 100 million Americans owe more than $220 billion in medical debt — and that medical bills are “often confusing and filled with errors.”
“The CFPB’s action aims to protect consumers from careless or predatory practices that can lead to inflated healthcare costs,” the agency said in a release.
The bureau said it has received complaints from people receiving collections notices for debts they do not owe, that were already paid by the consumer or insurance, or that should have been covered by insurance, government programs, or hospital financial assistance.
“Hospitals and other healthcare providers in the United States are increasingly outsourcing medical billing and collection activities to third parties, such as ‘revenue cycle management’ firms, who may have legal obligations under the Fair Debt Collection Practices Act (FDCPA),” CFPB said.
CFPB Takes Aim at Double Billing and Inflated Charges in Medical Debt Collection
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