The Consumer Financial Protection Bureau's latest publication has captured the concern of many healthcare providers.
Up until now, healthcare providers haven't been classified as a creditor by the CFPB, meaning debt collection regulations had little to no impact on daily operations or compliancy checks. But when the CFPB released its Outline of Proposed Debt Collection Rules on July 18 during a field hearing, new rules and regulations around first and third-party debt collection agencies has caused somewhat of a stir within the industry.
The proposed regulations around consumer debt collection and transfer is forcing healthcare providers to analyze their current processes and practices around billing and collections. What's more, healthcare providers now need to look closely at their existing partnerships with both first and third party debt collectors. Undoubtedly, once the rules and regulations are put into place, the way agency partners are selected and managed will have to shift.
To stay abreast of these changes, providers must take into account how these new regulations will impact their following policies, procedures and processes:
- Patient data collection and guarantor information
- Storage, management and transfer of patient data
- Credit agreements and payment plan approval
- Charity care
- Electronic payments
- Retrieval of credit reports
- Patient disputes and investigations
- Choosing and working with first and third party debt collectors
- Litigation of patient receivables
Why the sudden change? Many healthcare providers have been asking this question, wondering how they'll manage such a big shakeup in compliance. Based on the CFPB's response at the hearing, the new regulations are an answer to the most frequent complaints filed against credit grantors, hospitals and debt collectors by customers, including:
- Repeated contact for debts that patients don't actually owe
- Harassment over a false sense of urgency to pay debts
- Misleading customers with inaccurate or incomplete debt statements
- Threats of illegal action
- Not receiving or being sent notices to pay
- Improper communication and contact from debt collectors
Medical debt is one of the main concerns of the patients making these complaints, which is why these new regulations should be taken seriously by the healthcare industry.
The pending rule that will affect healthcare providers the most, is the CFPB's viewpoint that any creditor, i.e. any healthcare provider, is responsible for the actions of their collection partners. While we don't know the details of the final rulings, change is definitely coming to the way healthcare providers handle debt collection processes, and it's important to be prepared.
Below are five key takeaways from the Outline that will help providers prepare for these changes alongside the industry:
1. Be scrupulous with data.
Based on what we could determine from the hearing, the CFPB seems concerned with delivering a full, accurate synopsis of patient debt to outsourced agencies. Be wary of limited or incorrect data and know that when the final rules are published, data transfer could become more regulated.
2. Reassigning accounts to a second or third party could become difficult.
If proposed requirements around placing accounts with an outsourced, second or third party agency become a reality, anticipate major changes in the way referrals are executed.
3. Patient dispute processes might need to change.
The CFPB is attempting to address many customer complaints around patient dispute and the processes in place that providers use to address them. If the new rules pass, expect to work with your agency partners to formally spell out your dispute practices.
4. You might have to abandon credit reporting.
One of the regulations up for approval prevents providers from pulling credit reports on an account until the data furnisher makes contact with the consumer about their outstanding payments. The pending rules are so formidable for providers that many might halt the practice of credit reporting altogether.
5. Be ready for more restrictive contact requirements with consumers.
From the number of attempts it takes you to reach a consumer, to how you associate with an account, to the number of conversations you have with a patient per week, major changes are coming to the way debt collectors and agencies communicate with consumers.
While the CFPB hasn't determined an exact timeline for the new rules to take hold, it's healthy to expect effective compliance dates to take place in early 2017. Stay on top of new updates around the CFPB's rulings and do what you can now to proactively prepare to ensure a smooth transition.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.