Medical Debt Malpractice

United States Public Interest Research Group (U.S. PIRG), April 11, 2017

Millions of Americans are contacted by debt collectors every year over debt related to medical expenses.

Medical debt collectors often employ aggressive tactics and attempt to collect debt from the wrong customers – putting consumers’ credit records at risk. Medical debt accounts for more than half of all collection items that appear on consumer credit reports. A review of 17,701 medical debt collection complaints submitted to the Consumer Financial Protection Bureau (CFPB) shows that problems with medical debt collection are widespread and harm Americans across the country.

Complaints submitted to the CFPB suggest that many consumers contacted about medical debt should not have been contacted in the first place, and that many contacts involve aggressive or inappropriate tactics.

* Nearly two-thirds (63%) of complaints about medical debt collection assert either that the debt was never owed in the first place, it was already paid or discharged in bankruptcy, or it was not verified as the consumer’s debt.

* Many complaints document inappropriate and aggressive tactics including frequent or repeated calls, calls harassing friends and family, threats of legal action, or the use of abusive language.

Medical debt collection affects a broad swath of the population and subjects millions of consumers to undue stress and financial harm. State and federal policymakers should work to protect consumers from unfair treatment by medical debt collectors.

Federal policymakers should also defend the CFPB against attempts to eliminate or cripple it, and should continue to ensure the CFPB has the resources, independence and tools at its disposal to effectively protect consumers from all kinds of predatory financial behavior.…


Medical Debt: You May Not Owe It

By Ann Carrns
The New York Times, April 12, 2017

Nearly two-thirds of people who complained to federal regulators about medical debt collectors said they did not owe the money, a new report found.

The report, by the advocacy group United States Public Interest Research Group — better known as U.S. PIRG — and the Frontier Group, a left-leaning think tank, examined more than 17,000 publicly available complaints about medical debt collection filed with the Consumer Financial Protection Bureau over more than three years.

Chi Chi Wu, a lawyer with the National Consumer Law Center, said the findings in part reflected the complexity of the health care payments system, which often involves insurers that may pay all or part of the cost of care. Consumers may not understand the details of how their health insurance works, and may think that it covers more than it actually does. Co-payments and deductibles — the amount that you pay before insurance does — can often trip people up.

“The medical and health care billing process is just really confusing and complicated,” Ms. Wu said.…

The United States is unique in having a massive amount of personal medical debt when we are spending twice the amount per person on health care than the average of other wealthy nations in which medical debt is much less common. What is wrong here?

The primary defect is in the way we finance health care – especially depending on private sector intermediaries (the insurance industry) that create innovative methods of financing health care that work very well for their own industry but work poorly for patients with health care needs. This flawed system has created greater opportunities for the debt collection industry which, again, serves its own industry well but also works very poorly for patients.

Regular readers know that a well designed single payer system would eliminate much of this waste and grief. What is difficult to understand is why we have failed to enact an improved Medicare for all program before now. It is long past due.