With medical debt significantly impacting the credit reports of 43 million Americans, the Consumer Financial Protection Bureau (CFPB) is addressing how the collection and reporting of healthcare debt is handled. In a field hearing held today in Oklahoma City, the CFPB announced new requirements that will hold all players in the credit reporting market accountable in order to reduce error and consumer harm when collecting or negotiating these debts.
Medical bills, which often result from unexpected illnesses or circumstances, are less transparent than other types of bills. Taking insurance complexities into account, consumers may not be unware of what they owe until they are contacted by a collection agency or discover one or more unpaid bills on their credit report. With medical expenses accounting for more than 50 percent of all overdue debt on Americans’ credit reports, incurred healthcare expenses are adversely affecting credit scores.
Concerned by these and other problems in the healthcare billing and payment processes, the bureau is taking action to hold furnishers of credit information, credit bureaus and creditors “accountable for ensuring the accuracy of data in credit reports. In an effort to reduce errors and correctly estimate the creditworthiness of consumers who owe medical debt, major credit reporting companies will be required to submit regular accuracy reports, highlighting risk areas for consumers, including any disputes that may have been filed with the credit reporting agencies.