The nation's largest hospital lobby wants the Consumer Financial Protection Bureau (CFPB) to consider medical debt separate from other forms of debt, AHA News Now reported.
The distinction is an important one, as the fledgling agency is in the midst of promulgating regulations as to how to regulate various types of debt. Hospitals have also come under the microscope for debt collection practices in recent years, such as systematically suing patients for nominal amounts that they owe.
The American Hospital Association, in a lengthy comment letter sent to the CFPB, asked that the bureau not lump medical debt together with obligations such as credit card debt, which often have hard and fast payment deadlines and agreements as to when an account might become delinquent.
"In reality, the bulk of how hospitals actually seek reimbursement as part of the post-visit process is not 'debt collection' in the typical sense of having a debt collector contact a consumer demanding immediate payment, but rather is working through the billing process to submit insurance claims, determine out-of-pocket expenses owed, and work with patients to review their financial responsibility and options for financial assistance," wrote Melinda Hatton, the AHA's general counsel.
Moreover, hospitals can only collect a small amount of what is due at the time care is rendered because of co-payments, and they must provide services whether or not the patient has an ability to pay. And patients who have insurance must calculate what they owe through a bunch of complex calculations and existing contracts.
As a result, Hatton asked the agency not to classify medical debt as a consumer financial product, and provide leeway as to the amount of time that must pass before organizations consider accounts in default. She also asked that the agency consider Internal Revenue Service rules that govern how not-for-profit hospitals handle debt.