High-cost medical financial products for consumers under microscope by three agencies

Credit cards and loans, often with high interest rates, allegedly pushed onto patients to pay for their health care costs are under scrutiny by three federal agencies, including the consumer financial protection group.

The three agencies – the Consumer Financial Protection Bureau (CFPB), U.S. Department of Health and Human Services (HHS), and U.S. Department of Treasury – termed their action an “inquiry into high-cost financial products,” such as medical credit cards and installment loans. The agencies claimed the products are pushed onto patients to pay for routine medical care and which, they alleged, drive up health care costs and medical debt. Officially, the agencies have launched a request for information (RFI).

“Today’s request for information builds on CFPB research on medical payment products and medical billing and collections, in addition to other actions by the CFPB and Federal agencies to relieve the burden of medical debt and collections practices,” the agencies said in a joint release.

The agencies said they seek information about the prevalence of the products, patients’ experiences with them, and health care providers’ incentives to offer the high-cost products to patients. The agencies said the products may include avoiding the insurance claims process and financial assistance programs. The CFPB said it would use the public input as it considers ways to address the patient harms caused by these specialty financial products.

The agencies asserted that even when medical care may otherwise be covered by insurance or financial assistance, patients may be pitched the products by their health care providers, who then pass the administration of patient billing and collections over to financial service companies. The CFPB said its research has highlighted that healthcare providers may be disincentivized to explain legally mandated financial assistance programs or zero-interest repayment options before offering the products to patients. “These products can also saddle patients with ballooning deferred interest or creditor lawsuits,” the bureau said.

“Given the current complexities of financial assistance programs and insurance plans, health care providers can encounter difficulties when trying to receive payment for care,” the agencies asserted in their release. “Those challenges may encourage them to suggest that patients and families finance their care through specialty credit products. While these products may relieve administrative burdens from health care providers, they do so by shifting the burdens to patients.”

According to the agencies, the RFI will help the agencies better understand consumer harms and financial challenges raised by specialty medical payment products. The RFI will also, the said, provide a consumer voice in the agencies’ next steps around these products. For the CFPB, that includes actions regarding the credit origination, debt collection, and credit reporting practices of the financial companies that originate and service these products, the agencies said.

CFPB, U.S. Department of Health and Human Services, and U.S. Department of Treasury Launch Inquiry into Costly Credit Cards and Loans Pushed on Patients for Health Care Costs