Credit Reporting Companies Need to “Remove” Any Debts or Unpaid Taxes in Twenty-two Years of Breast Cancer Treatment”
After undergoing a year of treatment for her breast cancer, doctors told Wingard she was cancer free. She was hoping for this good news. But it also meant she no longer qualified for a program in North Carolina that offers temporary Medicaid coverage to patients undergoing active breast cancer treatment.
Medical debt has sunk her credit score so low that she has struggled to qualify for loans, and applying for jobs and apartments has become a harrowing experience.
A federal law banning certain types of surprise medical bills went into effect this year, and some states have strengthened protections against medical debt by expanding Medicaid or holding nonprofit hospitals accountable for providing financial assistance to low-income patients.
Under the new policies, Equifax, Experian and TransUnion will remove from credit reports any paid debts or individual bills that were less than $500 and had gone to collections, even if unpaid. The idea is to remove the black mark of collections from the credit report so people can more easily get a home loan or car, but this doesn’t wipe out what people owe.
The changes, which go into full effect in 2023, are expected to benefit an estimated 16 million Americans. A federal report released this summer suggests that people who don’t need it the most.
“Although the credit reporting companies have trumpeted this as a big change, the fact is they’re just removing the small stuff,” says Ryan Sandler, a co-author of the report and senior economist with the Consumer Financial Protection Bureau. “They’re not maybe doing as good of a thing as their press releases would like you to believe.”
It’s likely that the population that’s going to have their collections removed will live in majority white neighborhoods and high income neighborhoods.
Collections under $500 often result from an unpaid copay or coinsurance, Sandler says, and people with insurance are more likely to be richer and white.
Medical Debt Ruled Her Credit Its Like Youre Being Punished For Being Sick: The Impact Of Her Uninsured Social Security Cardiac
Wingard doesn’t qualify for the public insurance program in her state because her low income doesn’t entitle her to Medicaid.
She has been a teacher, tutor, contact tracer and driver but none of those jobs have health insurance. Wingard tried to buy private insurance on the marketplace, but her monthly premium was too high and she couldn’t afford it.
In February, Wingard needed a specialized mammogram to check for cancer recurrence. Ahead of the appointment, she talked to a local nonprofit that would cover the cost. But a few weeks after the procedure, Wingard received a bill for nearly $1,900. There was some miscommunication between the nonprofit and the hospital, Wingard says. The bill went to collections as she tried to resolve the issue. Even after the credit agency policies take full effect next year it will not be removed because it’s more than $500.
Source: https://www.npr.org/sections/health-shots/2022/10/06/1126787264/medical-debt-ruined-her-credit-its-like-youre-being-punished-for-being-sick
She’ll Never Give Up: How to Start a Movement to Rethink Medical Debt and Universal Insurance for Mental Health Care in the U.S.
Her fridge and stove have both been broken for more than a year. She can’t get a loan to replace them so she often settles for a can of soup or chicken wings instead.
In emergencies — such as when she needed to repair a broken tooth this fall — Wingard borrows from family. It is difficult to ask for money, she says. It makes you feel like you can’t do anything.
Mark Rukavina is a program director with the nonprofit health advocacy group Community Catalyst. He says that even if both candidates are equally qualified, employers might not consider one less responsible because of his or her low credit score.
Last spring, the White House directed federal agencies to work on relieving medical debts for veterans and to stop considering medical debt in evaluating eligibility for some federally backed mortgages.
Wingard is ready for change to be louder and stronger. And she has an idea for how to get there: a march on Washington to demand relief from medical debt and universal insurance to reduce future bills.
“For a million people to gather up there and say we need better health care, I think that’d be history-making,” she says. “Maybe then they’ll recognize we need help.”
KHN Looks at Collection Practices at a Large Sample of Hospitals: Case Study of the Los Angeles Hospital and Consumer Law Enforcement
The collection practices are commonplace among all types of hospitals in all regions of the country, including public university systems, leading academic institutions, small community hospitals, for-profit chains and nonprofit Catholic systems.
Some hospitals did not respond to multiple requests for information. But KHN was able to gather details about most. It emerges that a trip to the hospital can have jaw- dropping bills but also expose patients to legal risks that jeopardize their livelihood. The results include:
At the same time, a majority of hospitals scrutinized by KHN effectively shroud their collection activities, publicly posting incomplete or in many cases no information about what can happen to patients if they can’t pay.
These are some of the findings from an examination of billing and financial aid at a wide range of hospitals. Each of these hospitals have been investigated by KHN over the past year. The reporting included interviews with patients to clarify the way hospitals handle patients that don’t pay their bills.
People don’t know what is going to happen. It can be terrifying,” said Tracy Douglas, a consumer attorney at Bet Tzedek Legal Services in Los Angeles. The older woman Douglas works with was afraid to ask for financial assistance from the hospital because she worried they would take her home if she could not pay.
Debt Collections When You’re In a Hurry: The Case of Basit Balogun, an Epidemiologist, at a New York City Hospital
Basit Balogun was a freshman at Lafayette College in Pennsylvania when a heart attack caused by a previously undetected birth defect landed him in the hospital. He was hit with bills ranging from tens of thousands of dollars to a few hundred dollars, because his insurance had expired.
When he couldn’t pay, the hospital reported him to a credit agency, which he discovered only after he’d graduated and was trying to rent an apartment in New York City. “I kept getting rejected and rejected,” Balogun recalled. “I was very sad.”
After landing a job with Goldman Sachs, Balogun used his sign up bonus to begin paying off his debt. He’s still making payments five years later. He thinks twice before going to the doctor.
Nick and Elizabeth Woodruff also had their faith shaken by hospital debt collectors. He was the subject of a lawsuit by Our Lady of Lourdes Memorial Hospital, where he received care for a dangerous foot infection.
The hospital boasts Catholic values and states they take pride in their charity work, but Elizabeth is surprised by how callous they have been.
Hospital spokesperson Lisa Donovan subsequently told KHN this was an “administrative oversight.” “Lourdes is reviewing matters to ensure that all legal activities have been disposed/dismissed,” she said in an email.
Accountability in Charity Care: A Case Study of Financial Aid at a Boston Nonprofit Medical Center, the Massachusetts Community Catalyst, and the Tennessee Justice Center
“Every day people are having to make choices about housing and clothing and food because of medical debt,” says Emily Stewart, executive director of Community Catalyst, a Boston nonprofit leading the effort. It’s necessary for the Biden administration to put protections in place.
Many patients rely on financial aid and hospitals that are exempt from taxes need to make it more accessible in order to protect them from out of pocket costs. “For too long, nonprofit hospitals have not been behaving like nonprofits,” said Liz Coyle, executive director of the nonprofit Georgia Watch.
Information about financial assistance is hard to find at many medical centers. About 1 in 5 hospitals researched by KHN, including public university systems in five states, don’t post aid policies online.
Visitors to the website of Opelousas General Health System in Louisiana who click on the “Patient Resources” tab can learn that the Lil’ General Café serves panini and pancakes, but they won’t find any information about getting help with medical bills.
About two-thirds of the hospitals researched by KHN require patients to report their assets, sometimes in great detail. Centura-St. Anthony Hospital, a Catholic medical center in suburban Denver, notes in its policy that in reviewing patient assets it may count crowdfunding or social media accounts patients have set up to help pay bills. Patients are asked to report the make, model, and year of their cars.
The executive director of the Tennessee Justice Center said that it gets calls from people who should have qualified for aid, but didn’t.
In 2017, the state also successfully sued CHI Franciscan, another Catholic system that authorities found wasn’t properly offering charity care. To settle that case, CHI Franciscan, now part of the mammoth CommonSpirit Health chain, provided more than $40 million in debt relief and refunds and helped patients repair their credit, according to the state attorney general’s office.
Credit reporting, a threat that is supposed to induce patients to pay, is the most common collection tactic, KHN’s analysis and other data shows. Patients are less likely to be taken to court.
An Investigative Study of the Impact of Medical Centers’ Debt Collection Practices on Patient Accounts: A New Orleans-based Medical System that Sues Patients or Threaten Their Credit
Half of the hospitals earning top spots on the U.S. News and World Report’s annual scorecard are medical centers.
The same is true of hospitals that sell patient accounts, a practice in which medical providers typically package a group of outstanding bills and sell them to a debt-buying company, usually for a small percentage of what is owed. Debt buyers then keep whatever they can collect.
A few hospitals have barred all aggressive collections, including two of California’s leading academic medical centers at UCLA and Stanford University. The University of Vermont Medical Center is a part of the large New Orleans-based health system.
That can make a difference for patients, data suggests. A recent analysis by the Consumer Financial Protection Bureau found that while medical debt is widespread across the Appalachian region, one notable exception is western Pennsylvania.
When he was a manager at the Community Catalyst he worked to expand protections for patients with medical debt.
“Nobody should be denied care because they have an outstanding medical bill,” he said. “If they got sick, nobody should have a lien on their home.”
Source: https://www.npr.org/sections/health-shots/2022/12/21/1144491711/investigation-many-u-s-hospitals-sue-patients-for-debts-or-threaten-their-credit
Medical Bills and Debt Collectors: The KHN-Newton Perspective on the Patient and Consumer Consumer Laws Acting to Protect Americans from Healthcare Debts
Researchers who worked on this story include KHN writer Megan Kalata and Dr. Margaret Ferguson, Anna Back, and Amber Cole, who were students at the Milken Institute School of Public Health at George Washington University.
Kaiser Health News produces in-depth journalism about health issues. TheKaiser Family Foundation has three major operating programs: Policy Analysis, Polling and KHN. The organization provides information on health issues to the nation.
Dozens of advocates for Patients and Consumers are pushing the Biden administration to take more aggressive steps to Protect Americans from Medical Bills and Debt Collectors.
The groups are pushing the IRS to crack down on hospital systems that do not provide financial assistance to low-income patients and that make it hard to get aid.
National advocates for the initiative include the National Consumer Law Center, the Arthritis Foundation and the Leukemia & Lymphoma Society.
Nationwide, 100 million people have health care debt, according to a KHN-NPR investigation, which has documented a crisis that is driving Americans from their homes, draining their savings, and preventing millions from accessing care they need.
Many of the debt that appears on credit reports is hidden as credit card balances, loans from relatives or payment plans for hospitals and other medical providers.
New laws have been enacted by California, Colorado, Maryland, New York, and other states to expand consumer protections. And the three largest credit agencies — Equifax, Experian, and Transunion — said they would stop including some medical debt on credit reports as of last July.
But many consumer and patient advocates say the actions, while important, still leave millions of Americans vulnerable to financial ruin if they become ill or injured. “It is critical that the CFPB take additional action,” the groups write to the federal agency created in 2010 to bolster oversight of consumer financial products.
The groups also are asking the CFPB to eliminate deferred interest on medical credit cards. This arrangement is common for vendors such as CareCredit, whose loans carry no interest at first but can exceed 25% if patients don’t pay off the loan in time.
“We appreciate the challenges, but a broad ban on credit reporting could have some unintended consequences,” said Jack Brown III, president of Florida-based Gulf Coast Collection Bureau, citing the prospect of struggling hospitals and other providers closing, which would reduce care options.
The collection industry’s leading trade association warned that more medical providers would begin demanding upfront payment and put additional pressure on patients.
IRS Rules for Charitable Healthcare in For-Profit and Public Hospitals with an Application to Higher-Energy Nonprofit Organizations
Aid at some hospitals is limited to patients with income as low as $13,590 a year. It is possible for people who make more that five or six times their annual wage to get assistance at other hospitals.
The groups are asking the IRS to issue rules that would set common standards for charity care and a uniform application across nonprofit hospitals. (Current regulations for charity care do not apply to for-profit or public hospitals.)