Medical
debt
is
unfortunately
synonymous
with
healthcare
in
the
United
States.
Approximately
41%
of
Americans
have
debt
for
medical
or
dental
bills
–
meaning
they
are
currently
owing
a
bill,
being
contacted
by
a
collection
agency
or
actively
paying
off
past
balances.
Furthermore,
an
April
2024
report
from
the
Consumer
Federal
Protection
Bureau
(CFPB)
found
that
15
million
Americans
had
medical
bills
on
their
credit
reports,
accounting
for
a
whopping
$49
million
worth
of
outstanding
debt.
As
2025
brought
in
a
new
administration
at
the
federal
level,
it
also
brought
with
it
new
changes
in
regards
to
various
facets
of
healthcare,
including
you
guessed
it
–
medical
debt
reporting.
In
January
2025,
thanks
to
Biden-era
rulings,
the
CFPB
finalized
a
rule
to
free
Americans
from
the
weight
of
medical
debt
on
existing
credit
reports.
Lenders
no
longer
had
access
to
this
historic
data
in
credit
decisions,
including
“coding”
or
contextual
data
–
unless
exceptions
applied.
Fast
forward
to
July
2025,
a
federal
judge
in
Texas
overruled
the
decision
nationally,
claiming
that
the
former
administration’s
policy
was
in
violation
of
the
Federal
Credit
Reporting
Act
(FCRA).
As
someone
who
has
spent
the
better
part
of
30
years
promoting
healthcare
financial
wellness,
healthcare
financial
education
and
patient
advocacy,
I
am
passionate
about
breaking
down
what
this
ruling
means
for
the
millions
of
Americans
who
currently
have
or
might
one
day
have
medical
debt.
Takeaway
#1:
There
have
been
no
changes
to
medical
debt
reporting.
First
and
foremost,
consumers
and
providers
alike
should
know
this
–
nothing
has
changed
with
medical
debt
reporting
on
a
Federal
Level.
There
was
not
a
ban
as
the
CFPB
led
us
to
believe
on
1/7/25;
it
was
an
announcement
of
a
final
rule
that
never
took
effect.
The
default
federal
standard
per
the
Credit
Reporting
Agencies
and
FCRA
still
governs.
Medical
debts
over
$500
are
allowed
to
be
reported
on
a
credit
report
if
properly
coded
and
it’s
been
365
days
following
the
first
collection
notice.
This
gives
consumers
grace
and
time
to
work
with
the
collection
agency.
Fifteen
states
provide
consumer
protections,
including
California,
New
York
and
most
recently
Delaware.
Additionally,
credit
bureaus
such
as
Equifax,
Experian
and
TransUnion
have
their
own
set
of
consumer
provisions,
including:
removal
of
reporting
on
paid
medical
collections,
not
reporting
on
medical
debt
under
$500
and
requirement
of
a
year-long
waiting
period
before
reporting
unpaid
medical
bills.
However
at
the
federal
level
the
rule
set
in
place
by
the
previous
administration
earlier
this
year
is
effectively
dead.
Takeaway
#2:
Hospitals
can
still
notify
consumers
of
accounts
and
collect.
In
my
opinion,
the
media
paints
a
somewhat
dreary
picture
of
the
impact
of
what
medical
debt
reporting
on
credit
checks
really
is.
Headlines
often
hype
up
the
fact
that
medical
debt
reporting
is
unfair
to
consumers,
and
throw
around
words
like
“misleading,”
“harmful,”
and
“outdated.”
I’d
like
to
present
an
alternative
point
of
view.
I
believe
medical
debt
reporting
offers
hospitals
and
those
in
collection
agencies
a
powerful
tool
–
leverage.
Healthcare
is
the
only
industry
in
the
United
States
where
a
consumer
can
walk
into
a
place
of
service
and
receive
something
of
value
without
having
to
pay
either
before
or
after
the
service
is
done.
These
services
are
critical
in
nature
and
can
be
urgent
or
emergent.
Given
the
never-ending
reductions
in
payments
from
federal
programs
such
as
Medicare
and
Medicaid
and
the
increasing
impact
of
patient
balances
on
the
hospital’s
bottom-line,
hospitals
are
left
to
operate
at
a
deficit,
and
guess
what?
Patient
care
may
suffer
due
to
the
lack
of
patient
payments
and
monetary
resources.
Medical
debt
reporting
isn’t
just
about
lenders
calculating
risk.
It’s
about
hospitals
having
the
opportunity
to
encourage
patient
payment,
reduce
bad
debt
and
ultimately
maintain
financial
independence.
In
short,
hospitals
need
to:
-
Leverage
ways
to
bring
cash
in
the
door
–
Point
of
service
collections
help
to
capture
patient
balances
early
in
the
revenue
cycle.
Reporting
medical
debt
gives
hospitals
and
collections
companies
powerful
leverage
on
the
back
end
of
the
revenue
cycle.
It
notifies
patients
of
outstanding
accounts
and
provides
incentives
for
timely
payment.
-
Review
financial
and
payment
policies
–
With
8-12%
of
overall
revenue
coming
from
patient
balances,
hospitals
should
review,
update
and
promote
their
payment
policies
to
ensure
patients
are
aware
of
how
to
pay
their
accounts
and
options
to
resolve
outstanding
balances.
-
Utilize
financial
counseling
efforts
–
Hospitals
with
higher
patient
balances
should
use
financial
counseling
efforts
to
help
patients
identify
possible
eligibility
for
financial
assistance,
Medicaid
or
other
hospital-based
assistance/discount
programs.
Additionally,
Financial
Counselors
can
set
payment
plans
with
patients
early
in
the
process.
-
Outsource
self-pay
collections.
This
might
sound
like
an
oxymoron,
but
hospitals
still
benefit
financially
from
any
recovered
payments
(even
those
collected
from
third-party
agencies).
With
staffing
costs
at
a
premium
and
the
lack
of
technology
to
push
wide-spread
outreach
to
patients,
utilizing
a
first-
or
third-party
agency
provides
a
way
for
hospitals
to
focus
on
the
care
they
provide
to
patients
and
other
billing
matters.
They
manage
the
agency
and
allow
their
agency
partner
to
drive
collections.
The
cost
is
lower
the
earlier
the
account
is
outsourced
and
the
work
efforts
followed
early
in
the
process
mirror
the
hospital’s
policies.
Takeaway
#3:
Consumers
can
still
dispute
balances.
Mistakes
happen.
Reports
show
that
80%
of
medical
bills
contain
errors,
costing
the
health
industry
$125
billion
or
more
annually
and
causing
significant
delays
with
reimbursements.
While
this
number
is
startling,
the
errors
range
from
coding
errors
causing
delays
in
billing
and
reimbursement
to
demographic
errors
of
the
patient’s
address
or
other
information.
Despite
hospitals’
best
efforts
with
quality
checks
and
auditing,
errors
continue,
and
hospitals
are
working
diligently
to
improve
this
fact.
Regardless,
whether
you
are
living
in
a
state
that
bans
medical
debt
reporting
or
not
you
as
a
consumer
have
a
right
to
dispute
your
debt
and
request
a
review
and
audit
of
inaccurate
balances.
The
“weight”
or
value
of
medical
debt
on
a
credit
report
is
not
as
impactful
as
you
might
think.
Other
types
of
debt–credit
cards
and
installment
loans
–
are
scrutinized
far
more
closely
than
medical
debt
when
lenders
are
looking
at
the
whole
pie.
In
conclusion
Medical
debt
reporting
sits
at
the
intersection
of
healthcare,
finance,
and
policy
—
and
as
this
year
has
proven,
that
landscape
is
constantly
evolving.
While
federal
protections
have
stalled,
state
laws
and
credit
bureau
policies
still
offer
relief
for
consumers.
Hospitals
continue
to
rely
on
credit
reporting
as
a
source
of
financial
leverage,
but
it
is
up
to
patients
to
stay
informed,
proactive,
and
empowered
to
dispute
errors
and
understand
their
rights.
Photo
Credit:
freedigitalphotos
user
Naypon
Karie
Bostwick
is
Vice
President
of
People
and
Compliance
at
Revenue
Enterprises,
where
she
has
spent
over
16
years
helping
healthcare
organizations
improve
patient
billing
experiences
and
operational
efficiency.
With
a
career
spanning
more
than
three
decades
in
revenue
cycle
management,
Medicaid
eligibility,
and
customer
service,
Karie
is
known
for
her
patient-centric
approach,
leadership
in
compliance,
and
dedication
to
creating
supportive
work
environments.
She
has
played
a
key
role
in
building
client
services,
enhancing
training
and
recruitment,
and
driving
technology
adoption
to
streamline
healthcare
collections.
This
post
appears
through
the MedCity
Influencers
program.
Anyone
can
publish
their
perspective
on
business
and
innovation
in
healthcare
on
MedCity
News
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MedCity
Influencers. Click
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