Medical Credit Cards Under Investigation by HHS, CFPB

Three federal agencies are taking a closer look at medical credit cards and other payment products used to cover health services — including their impact on patients’ financial stability and providers’ role in promoting them.

According to a news release, the Department of Health and Human Services, the Treasury Department and the Consumer Financial Protection Bureau on Friday launched a joint investigation of these financial products into how they work, what risks they pose and their impact on billing services. Information about the impact has been sought. The agencies opened a 60-day public comment period to receive feedback from consumers, lenders and providers.

“This is an area where all three agencies are interested and are trying to learn more and understand the magnitude of harm, the sources of harm and what needs to be done to achieve better outcomes for patients and their families said Diane Thompson, senior advisor to the director at the CFPB.

In a statement, HHS Secretary Javier Becerra said the investigation builds on previous reviews related to medical billing, health care costs and transparency.

Medical credit cards and loans have traditionally been used for non-urgent procedures such as dental care or cosmetic surgery, but more recently they are increasingly being used for primary, specialty and emergency care when patients When under stress, it is often promoted as a payment option. ,

Many credit cards offer a one-month grace period on interest payments, but if patients fail to pay the balance in full within that time, they will be charged the total deferred interest charges as well as future interest payments. are responsible.

From 2018 to 2020, patients using these products for health care fees paid $1 billion in deferred interest costs, according to a CFPB report Released in May. The report found that nearly $23 billion in health care spending during that period was paid for using medical credit cards or loans with deferred interest terms.

HHS leaders were not made available for follow-up interviews. The Treasury Department did not immediately respond to a request for additional comments.

Rebecca Novick, director of the health law unit at the advocacy group The Legal Aid Society, said she welcomes additional scrutiny on payment products, especially given their disproportionate impact on low-income patients.

Novick said, “It’s an issue for a large segment of the population, and certainly what we see is that the people who can least afford it are sometimes hit the worst with medical debt.” is put in.”

The agencies also want more information on how providers benefit from promoting payment products, such as sharing a portion of the revenue or securing lower processing fees based on how many patients sign up. It can also be a way for providers to circumvent the insurance claims process and financial aid programs, Thompson said.

In some cases, payment products may enable providers to charge uninsured or self-pay patients higher prices, increasing the overall cost of care, according to the news release.

“We don’t know as much about incentives in this area as we’d like to know. We really don’t know why it is that providers are making these available to patients in providers’ offices or what providers think about these products when They provide them,” she said.

Thompson said the additional information could lead to greater accountability and potentially shape legislation around medical billing, debt collection and financial aid programs.

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