CFPB kicks off rulemaking to remove medical bills from credit reports | Hacker News Reader

CFPB kicks off rulemaking to remove medical bills from credit reports

consumerfinance.gov

178 pointsgeox184 comments

Tangential but kudos to Rohit Chopra, he has done a stellar job at CFPB, between the credit reporting changes and the elimination of bank fees alone he has had quite the impact. Just a few years it looked more likely that the CFPB would be dissolved.

I agree that Chopra is excellent at his job. Unfortunately, It's still in danger of being dissolved. The Supreme Court is hearing a case in October challenging the legality of the agency's funding mechanism. https://en.wikipedia.org/wiki/Consumer_Financial_Protection_...

>Its structure included a director that could not be fired by the President except for cause, and the ability to request funding from the Federal Reserve rather than the United States Congress

I mean, that does sound pretty insane

Does it in the light of how the US government actually works?

Trying to prevent some future elected government from changing course? I can see the appeal, but yeah, it sounds like a bad precedent.

Congress could always change the laws that govern it. This just prevents a single executive from replacing the head and neutering the agency as the tides change

That's not a desirable feature in a representative democracy.

I think you kinda want some institutional inertia though.

Your representatives are in congress

Not having a unitary executive seems perfectly compatible with representative democracy.

Similar to supreme court judges

You’d be surprised how few representative democracies suffer from the same whiplash inducing pendulum effect the US suffers from.

In most western nations the top civil servant and all those below them are non-partisan career civil servants that keep the ship running at all times and have better employment protections than the average employee (which already requires for cause in those countries).

A new Minister’s (Secretary in US parlance) role is mainly that of someone who plots a course and the civil servants in the ministry try to follow it.

As a side note, the concept or “government shutdown” is also entirely foreign in those countries, if not outright ridiculous.

The president and the entire executive branch have an obligation to faithfully execute the law. For all officers of the United States, that is a sworn obligation.

And how has that been going with Trump? This feels like a prayer at this point

Of course that's appealing when it's something you want, but what would think of it if the Republicans win the House, Senate, and Presidency again (as they did in 2016) and do something similar?

For example, they might create an Administration of Land Management with authority over all extraction rights on federal land, funded by fees paid for those rights, and with a director the President cannot remove except for cause.

And it wouldn't be possible for Democrats to change that until they too won the House, Senate, and Presidency at the same time.

A government full of agencies like that would make elections mostly irrelevant, and things would change only when one party won everything.

Someone said it earlier, but this horror you’re describing is the case in plenty of developed countries.

Many of those countries have parliamentary systems where the chief executive is always from the majority party (or coalition) in parliament, so they never have the divided governments that are so common in the US.

Many also have a House of Lords or Bundesrat or something similar that is not elected by the people, whose purpose is to make the government less democratic. We should not try to be more like those governments.

Of those that remain, how many have agencies not subject to the chief executive like the CFPB?

Creating a separate arm of the government accountable to neither the president nor congress seems like the legal equivalent of a rootkit

Its structured this way because it was a reaction to the 08 crash and subsequent bailout of wall street. Seems to be the only reform that came out of that area, and measured against how much the banks chafe against the CFPB, I’d say it was working.

This would also challenge the federal reserve structure.

The Federal Reserve started as a government sponsored banking cartel to solve a specific problem. It was not intended to be a regulatory agency until not that many years ago, and is not appropriate for the job. Bank and consumer finance regulation should fall under the Treasury Department or the Commerce Department somewhere. There are agencies that have similar responsibilities now. Those agencies should be regulating the banks, not the banks or some subsidiary of a banking cartel regulating themselves. The recent bank failures are a case in point.

"director that could not be fired by the President except for cause"

This is the same as the FTC and others.

"This Court, as the majority acknowledges, has sustained the constitutionality of the FTC and similar in- dependent agencies. See ante, at 2, 13–16. The for-cause protections for the heads of those agencies, the Court has found, do not impede the President’s ability to perform his own constitutional duties, and so do not breach the separation of powers."

https://www.supremecourt.gov/opinions/19pdf/19-7_n6io.pdf

It’s different from the FTC because its funding comes directly from the federal reserve.

So it’s independent of both the President and Congress.

It’s more independent than many courts.

What could possibly go wrong?

> What could possibly go wrong?

They might accidentally get something done that helps people?

>> What could possibly go wrong?

> They might accidentally get something done that helps people?

Since you're missing the point: make me dictator, so I can finally get stuff done that helps people.

Too much independence is a recipe for serious problems, even if (theoretically) it could be used accomplish major things.

If there's serious problems, then Congress can act. The structure just makes it harder for Republicans to kill it quietly for an unsupportable reason.

It is quite difficult for Republicans to reverse any act of Congress without another act of Congress. The assent of the House, the Senate, and (usually) the President is required.

Anything that specifically needs a law passed to undo it is safer than one that can just have its budget ~zeroed out in the yearly budget, or any of the more-than-yearly CRs and debt-ceilings and whatever other nonsense negotiations.

This is for both reasons of public scrutiny (there's so much in the budget that it's easy for things to get relatively lost), but also because the budget, in practice, just needs 50+1 votes. Usual laws need 60 due to Senate procedures. Ignoring the House since there's not much difference there.

It’s different from the FTC because its funding comes directly from the federal reserve.

So the CFPB--a bureau within the federal reserve--cannot be funded by the federal reserve?

So it’s independent of both the President and Congress.

Just like the federal reserve.

The federal reserve doesn't just set interest rates and lend money... they're also tasked with regulation of the financial system. So it makes sense that the CF(inancial)PB would be part of it. In fact, the creation of the CFPB was just the consolidation of work done by several bureaus, including the federal reserve. Kind of like when DHS was created--just a reorganization.

The Federal Reserve is quite different from the FTC, so my statement still stands.

> This is the same as the FTC and others.

No, its not; the Fed has a board of five commissioners, not a single director. This is rather the norm for independent executive-branch agencies with leadership that can be removed only for cause.

> No, its not; the Fed has a board of five commissioners, not a single director. This is rather the norm for independent executive-branch agencies with leadership that can be removed only for cause.

Is there a specific Constitutional requirement for a board as well as a Chair if it's for-cause-only?

Because otherwise that seems like a very narrow difference to ask the Court to rule on regarding the appointment/firing of the head...

> Is there a specific Constitutional requirement for a board as well as a Chair if it’s for-cause-only?

Well, no.

The specific rule is that for-cause-only removal is inconsistent in general with the vesting of executive power in the President in Article II, with two exceptions:

(1) Agencies with a role similar to that of the FTC in 1935 that exercise no part of the executive power but serve solely as a legislative/judicial aid, and

(2) Inferior officers (not principal officers of agencies) with limited duties and no policymaking role.

(While each of these rules comes from separate lines of cases, they were summarized together and referenced in support of the decision by which the Supreme Court struck down the for-cause-only rule at the CFPB [0], which specifically found that the for-cause-only provision combined with the single-director structure would clearly violate separation of powers as a reason not to further extent the existing exceptions to the prohibition of for-cause-only restrictions to allow the one at the CFPB.)

> Because otherwise that seems like a very narrow difference to ask the Court to rule on regarding the appointment/firing of the head…

The Court has already ruled against that, the present challenge is to the funding structure.

[0] https://www.supremecourt.gov/opinions/19pdf/19-7_new_bq7d.pd...

The CFPB is part of the federal reserve and both of those rules also apply to the federal reserve. It makes sense that a bureau of the Fed would follow Fed rules.

The Fed is tasked with financial regulation, and did some of the work of the CFPB before it was created.

By design the Fed is independent, including funding, from Congress. If you're curious why, there's lots of history around how and why a central bank was created... dating all the way bank to Andrew Hamilton.

> in danger of being dissolved

Defunded, not dissolved.

In government there is no difference.

> In government there is no difference.

The defunding means that future budget cannot be allocated. There is a window for the aggregate organization, structure, and assets to be renamed or absorbed (changed) to satisfy the implied decision's objections. In this case, it's a matter of how it's funded: as an arm of the Federal Reserve, as I understand it. If Biden claims it (in some way), it could remain.

Same ephemera.

The newest FICO models already exclude this debt, though this is a much more significant step since most lenders and loan types you care about use very old FICO models that do include it and are unlikely to be updated any time soon.

Do you know why lenders still use very old FICO models? Is this just inertia, or are the new models more expensive, or do the old models predict default risk better for those loan types?

More expensive, for one. That's why CreditKarma and other 'free score' services often use Vantage, rather than FICO.

I think up until last year it was federal policy for Fannie Mae & Freddie Mac to use fico 5, and the rest of the industry kinda follows.

Now I think they can use a new model, but it's probably some inertia on changing.

Just a complete guess. Banks and related insurance are using historical data with prediction models to forecast risk. Once the FICO version changes all that data is apples to oranges and the forecasting is less accurate.

The big reason is that the different scores come out of the models. That may seem counter-intuitive, but models tend to be very tied to specific populations in specific ranges, and stability is often as valuable as predictability. Different model behavior - up or down - means that financial institutions have to retest their entire strategy to make sure that it doesn't screw up the segmentation and models that they have layered on top of various credit scores. This is not a trivial or short process - It's pretty common to see 6 month and 12 month champion/challenger tests.

Even then, assuming that there is not a significant lift in predictability (unlikely as the FICO score is good at what it does) or addressability (do people who previously had a thin file now have enough data to make a decision) then you also end up looking and saying that it's not worth the changes to move to a newer score.

Also, scores are incredibly regulated. Proving that the model you layer on top of the FICO score doesn't have a disparate impact (something standing in as a proxy to a protected bit of information such as ethnicity) is expensive.

VantageScore doesn't really change this; it's a copycat of the FICO score that came about because the credit unions don't like having the score aspect out of their control and would rather people just pay them instead of an independent third party instead.

The only thing that really would change the score in any way is additional data - but social media mining for scores is not acceptable outside of China (where their score predicts compliance with government not credit risk).

Consumer credit is heavily regulated. Not only is discriminating based on protected class illegal, the bank has to be able to explain its credit risk model to regulators. They can't use stuff like machine learning because that would be an unexplainable black box.

Credit risk modeling is literally the core of their business. Often banks don't use FICO directly. They run their own model. They want to pick up as many customers who are likely to successfully finish their loan payments without picking up too many customers who are relatively more likely to default if there's a recession. A few basis points here and there is a big deal. There's models for mortgages, car loans, credit cards, boat loans, etc.

The licensing cost of a new model, or just the upgrade costs must be justified by some benefit. Banks are stereo-typically slow moving.

What are going to be the second-order consequences of such a policy?

Are providers going to run credit checks on you before they agree to take you on as a patient?

Require that you sign a document that gives them the right to garnish your wages for non-payment?

Require up-front payment for services?

Increase prices to cover the revenue lost to people that realize how little consequence there is for non-payment?

Be less profitable by not price gouging?

In America, hospitals cannot refuse emergency care.

So, while price gouging and insurance gouging are a thing, the actual hospitals may be poorly compensated in many places.

That's why rural areas are losing hospitals.

I agree entirely but just don’t think that credit reports solve or help anything in this domain.

> don’t think that credit reports solve or help anything in this domain

They help hospitals collect. Not saying that makes it right. Just that it has a purpose beyond greed and gouging.

I’d have to see data in order to confirm this is true. Once a delinquency gets placed on a credit report paying the bill doesn’t help the person that owes. It also assumes that the people not paying are choosing to do so rather than not being able to. Given the debts are sold at a steep discount, I’d say it’s more efficient to have lower prices up front which could potentially be affordable for more of the customers.

When one is applying for a mortgage one of the conditions is to pay off any debt in collection status. I agree that lack of universal healthcare with reasonable out of pocket costs is the underlying issue.

>In America, hospitals cannot refuse emergency care.

Can they do this in any developed country?

>That's why rural areas are losing hospitals.

Maybe a system with only privately run hospitals is a stupid plan.

Sorry, forgot to clarify: most other places provide socialized medicine.

So too in the US. You are probably not aware of the insane socialized mess that is the US health system due to initial good intentions.

Medicare, Medicaid, govt supported controls on number of new doctors per year, so much regulation and red tape.

The US govt spends more on healthcare than most other nations. If that isn’t socialized medicine, I don’t know what is.

Thankfully we are just indirectly socialized unlike our neighbors to the North who suffer from many things like longer wait times for emergencies and vital surgeries.

It is hard to operate a rural hospital. Rural areas not only are dwindling in population but tend to be poorer. There's a higher mix of Medicaid/Medicare plans versus employer health plans. With our current fee for service medical service economic model, rural hospitals that don't do as many surgeries or have to transfer people to the city hospital literally send patients and the revenue they bring in off to big cities. Recruiting staff is harder due to in demand professionals wanting the services and opportunities a big city provides. County hospital are partially local taxpayer supported but once again rural areas have a thinner tax base. HHS sends Federal dollars but this is limited.

Certain states are trying extra hard to exacerbate the problem by not expanding Medicaid.

> In America, hospitals cannot refuse emergency care.

How is that unique to America? What other developed nation doesn't have this rule?

The way it is funded in the US is probably special. EMTALA is enforced by making it mandatory part of Medicare participation.

If you don't bill Medicare you don't have to provide care to anyone.

Meh, hospitals put uncompensated care at about $40 billion a year in 2020:

https://www.aha.org/fact-sheets/2020-01-06-fact-sheet-uncomp...

That's not just unpaid emergency care that they are forced to provide, it's all their billing that isn't paid.

That's out of $1.3 trillion of hospital revenues in 2020:

https://www.cms.gov/data-research/statistics-trends-and-repo...

3% is a lot (because it's coming out of their net income from other procedures), but it shouldn't be driving hospitals out of business.

> That's why rural areas are losing hospitals.

Yes. And they are being run into the ground by "venture capital" as if they were local newspapers.

Please do upfront pricing. It’s so annoying getting a bill afterwards how the fully covered treatment was actually not covered and multiple thousands. Leading to haggling with the insurance company and hospital.

> Starting in 2022, there are new protections that prevent surprise medical bills. If you have private health insurance, these new protections ban the most common types of surprise bills. If you’re uninsured or you decide not to use your health insurance for a service, under these protections, you can often get a good faith estimate of the cost of your care up front, before your visit. If you disagree with your bill, you may be able to dispute the charges. Here’s what you need to know about your new rights.

https://www.cms.gov/newsroom/fact-sheets/no-surprises-unders...

https://www.cms.gov/NOSURPRISES

https://www.consumerfinance.gov/about-us/blog/no-surprises-a...

The problem is that disputing claims is hard and puts an unnecessary burden on the patient at a time when they are struggling elsewhere. Companies operate in bad faith and more needs to be done to regulate companies (hospitals and insurers).

Why the hell shouldn’t that apply to people that are going to use insurance? The reason our healthcare costs are so high is because everyone with insurance past their deductible is price insensitive. People might at least care about their copay enough to make a difference.

I know providers will balk because they negotiate with different insurers, but if they know how much they’re going to bill after the fact surely they can give you an estimate before.

My favorite ones.

"Payment is due at the time services are rendered"

So you pay what they say it costs.

Then months later you get a random bill from them for more.

How can they reasonably expect you to pay in these circumstances? They were clear about wanting payment upfront, you agreed to the price, (presumably) paid them, received the service/treatment. That should be the end of the story. What legal basis do they possibly have to send a bill months later? "We felt like we needed more money because we had a bad quarter" is not going to cut it.

In many cases the patient has insurance with set co-pays so providers collect only the co-pay at time of service based on a good faith assumption that the insurer will pay the rest of the claim at an agreed rate. But if the insurer doesn't pay by a certain deadline then the provider might bill the patient for the balance. Then the patient has to argue with their insurer over the claim.

This is a screwed up system that leaves patients caught in the middle of commercial disputes. But providers do deserve be paid for services rendered and it would be unfair to just stiff them.

But also, the patient paid for health insurance for the explicit reason that insurance provides protection against surprise costs, often paying thousands of dollars per year for it.

So fuck the patient? That's the current regime.

You may have a misunderstanding of medical insurance. Such policies are very specific and never promised blanket protection against surprise costs.

Let's say you crash your car and take it to an auto body shop for repair. If for some reason your auto insurance doesn't pay for the repairs would you tell the mechanic to fuck off and eat the cost? I understand there are issues in healthcare with price transparency and estimates, but the basic principle is the same. Regardless of insurance or lack thereof, customers are obligated to pay for services they receive.

You must be confused about how health insurance works in the US, as well as the effectiveness of a bad analogy. Also people who disagree with your must certainly be ignorant -- particularly on HN.

> If for some reason your auto insurance doesn't pay for the repairs would you tell the mechanic to fuck off and eat the cost?

I have a free choice of both auto insurance and car mechanic. On the other hand I may not have a choice about health insurance company (usually from the employer) or the emergency room I'm sent in the ambulance to -- particularly if I'm unconscious.

Actually I am quite familiar with how health insurance works in the US. If you don't like the plans available through your employer you are welcome to buy another policy elsewhere. You have free choice, although you might lose your employer's subsidy.

That employer subsidy is a massive difference!

e.g. Your payroll deduction is $50 per pay period. The deductible is $2000 per year. Out of pocket max $4000. The network is wide. This is because your employer is paying for the other 85% of this plan and employed people need less medical services on average than the public as a whole.

You switch to a plan off Healthcare.gov. It costs $500/mo. Deductible is $8000/year and out of pocket max is $15000. The network of providers is only in one state and only at one brand. I don't think anyone would actually reject a cushy employer plan for an exchange plan.

I’ve had this happen to me as a cash/self-pay/no insurance involved patient before. They’re shameless.

Because what are you gonna do about it? They have the ability (unless this goes through) to prevent you from seeking employment, renting, or buying a roof over your head if you don’t bend over and do whatever they tell you to do.

I've gotten 'bills' (well, the insurance company telling me I owe a provider some money) for services that haven't been rendered! Just because my provider tried to pre-approve something and insurance denied it but the letter was phrased in a way that implied I was on the hook for it. Luckily a call to my doctor cleared that up.

How can you do an upfront pricing for emergency situations?

Wait til you hear about how United Healthcare was sued for not covering Lifeflight flights from car accidents because "no preauthorization was obtained"...

Can you link to a good source for this story?

You can't, but the vast majority of US healthcare expenses are routine/primary care. If we have price transparency, then price sensitive individuals seeking routine care will drive prices down to a reasonable cost. Many emergency treatments are used in non-emergency situations, and charging a wildly different rate would certainly violate some price gouging law.

The debate around US healthcare often misses the point. We all agree it is too expensive. The next question we should ask is: how much does it cost? And the answer is we don't know. That is fundamentally an issue, because price discovery cannot occur if the price is unknown. Our current healthcare system is not a failure of capitalism; it is anti-capitalist. Collusion between big insurance, big pharma, and hospitals have captured the system.

We need robust price transparency legislation.

I support price transparency legislation, but I don't think that this is what is going to solve the healthcare affordability. This is a monopoly by design, price transparency is good for markets that are more open to shopping around.

Since 1986 in the United States, for all practical purposes, you don't. You provide stabilizing treatment before inquiring as to the patient's ability to pay[0].

Like most [1] significant [2] healthcare legislation in the US, this was passed via budget reconciliation.

0 - https://en.wikipedia.org/wiki/Emergency_Medical_Treatment_an...

1 - https://en.wikipedia.org/wiki/Consolidated_Omnibus_Budget_Re...

2 - https://en.wikipedia.org/wiki/Health_Care_and_Education_Reco...

Loved the $1,200 bag of saline the EMT squirted into my eyes because I expressed concern about debris being in them after a crash in which my side window exploded into my face.

Upfront pricing AND optional upfront payment for non-emergency services. If you choose to pay upfront you should receive no further bills, period.

How about the insurers and providers working together on reasonable billing and not make patients pay random charges over which they had no control and information about cost?

Probably charging everyone more to accommodate the potential lost revenue.

A pull back in "credit." This rule is a blunt instrument. It will reduce medical debt stress caused by the way American healthcare is financed. It will also allow more people to default on their medical bills even the ones that are reasonably priced and correctly coded. It's kind of like how the CARES Act for COVID-19 banned reporting mortgage forbearance to credit. Then Chase Bank narrowed new business to 20% down and excellent credit score in response to the future reduced information environment.

Since high deductible health plans become common (with multi-thousand deductibles) some hospitals and doctor's offices have required patient responsibility balances to be paid before the surgery or procedure. Some providers refuse service if you have past due bills with them. Providers in the medical-industrial complex already cherry pick customers by often not accepting Medicaid or Medicare. You may have noticed that doctor's offices are more likely to be opened in affluent areas. In effect your choices for local medical services can be affected by not just your health plan but the average purchasing power of the area!

I hope this truly has the effect that it is meant to have. But being the pessimistic type towards US healthcare and insurance and credit agencies, I really expect this to go nowhere, or become so watered down that it is essentially meaningless.

Under this system, what would be the reason to pay your medical bills?

Your wages can still be garnished.

Why should people pay their medical debt that only exists because Congress refuses to implement a functioning national healthcare delivery system?

If Congress refuses to act, the executive branch can sidestep them providing temporary relief until Congressional reps turn over enough to pass material legislation to fix the system.

Why should people pay for food when Congress refuses to hand out free food for everyone?

> when Congress refuses to hand out free food for everyone?

Can you say that when USDA food security and nutrition assistance benefits are around $183B a year? Certainly, it isn't for everyone, but for those in need. Why would we not extend similar policy to healthcare in a more efficient manner? No one is arguing for free healthcare (although that phrase is used colloquially), but a more efficient payer and delivery system, versus all of the bloat between patients and providers as exists today (insurance companies, pharmacy benefit managers, etc). Sibling comment by willcipriano touches on this bloat.

https://www.ers.usda.gov/data-products/ag-and-food-statistic...

Note that Medicare and Medicaid budget dwarfs federal food budget

It's like literally an order of magnitude more spending

> Certainly, [free food] isn't for everyone, but for those in need. Why would we not extend similar policy to healthcare in a more efficient manner?

But we do have a similar system for healthcare! If you're poor enough you qualify for Medicaid [1], and if you don't qualify for Medicaid but your income is too low to afford the full price plans the ACA provides pro-rated subsidies.

It's not that different from SNAP, and both are a mix of working well and poorly.

[1] Unless you live in Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, Wyoming, which opted out of Medicaid expansion. Even though expansion had the federal government covering >90% of costs...

> versus all of the bloat between patients and providers as exists

bloat and illegal monopolization: https://www.reuters.com/legal/us-accuses-investment-firm-ane...

US citizens, per captia, spend more on socialized medicine than any other nation. Then we pay again for the private system. With those facts in mind I see no moral reason to pay, we already did.

https://data.oecd.org/healthres/health-spending.htm

Food is the only thing congress has happened to manage. Prices have been low and stable for generations due to agricultural policies. Everything else has spiraled out of control.

Agriculture can be mechanized. Diagnosis and treatment of disease and injury has not yet been automated. America has an awful medical financing system where a hospital sends a bill for 10x the market price and then the health insurance boasts that they got you a 90% discount.

My understanding is that medical debt would still be collectible and could be sold to third party debt collectors. It just couldn't hurt your credit report.

I mean, getting sent to collections sucks regardless of whether it affects your credit score - see, e.g., patio11’s recent blog post[0]. If you don’t pay, chances are you will still regret it.

[0] https://www.bitsaboutmoney.com/archive/the-waste-stream-of-c...

Only emergency rooms are legally obligated to treat you to the point of stabilization.

As most doctors are now part of hospital ran conglomerates, a failure to pay your bill for an orthopedic consult can still be recorded in the hospitals system and you could be denied an appointment by your OBGYN.

That's true from an EMTALA standpoint. But in certain circumstances once a doctor-patient relationship has been established and a course of treatment has started the doctor may be legally and/or ethically bound to either continue that treatment or pass the patient over to another willing doctor. They aren't necessarily always allowed to immediately drop a patient for failure to pay.

Keyword: “abandonment.”

The obvious consequence would be that people go to the emergency room for any kind of healthcare. That’s a much worse outcome for hospitals so I doubt they would deny people primary care.

Have you been to an "emergency" room lately?

Nope, and almost everyone reading this hasn’t either. This is not a helpful or productive comment. Instead consider saying “at my last visit to the ER, I encountered many people seeking treatment for XYZ which I do not think should be considered an emergency” or something similar so others can learn from your experience that they don’t have.

It's interesting that we just assume it makes sense for the patient to self assess what level of care they need.

I wonder if there are sensible reasons to not have a single point of contact for unscheduled care, or if it is just dumb inertia?

I know there are some hospitals that have provided urgent care type services at urgent care type prices in their emergency rooms, I haven't looked to see if it worked well or if they are still doing it.

Spelling out what I implied - my experience has been the exact opposite of how OP is insisting that it should be. I'm not interested in typing up a report of my various experiences with the medical industry and scrubbing it of the right amount of identifying information merely to refute some prognostication that's so abstract it's not even wrong.

Yes and I have a company that sells to health systems.

Emergency rooms are already the treatment of last resort for the uninsured. Visit any ER on a Tuesday afternoon in a major city and you'll be stuck in a two hour queue behind what are 95% primary care issues.

The $400 Tylenol people love to complain about in the hospital is a direct result of the government mandate to treat thousands of patients a day effectively for free because we can't get our shit together and provide universal healthcare.

It’s terrible for a hospital’s business to have their ER clogged by people who don’t have emergencies and can’t pay. It means they see a much lower volume of people who can pay.

So they aren’t going to deny people primary care because doing so will just cause them to wind up in the ER.

> It’s terrible for a hospital’s business to have their ER clogged by people who don’t have emergencies and can’t pay.

It is already a big enough problem they don't seem to care. Hospitals in less affluent areas are getting interest free loans from the state to keep emergency care from bankrupting them: https://calmatters.org/health/2023/08/california-hospitals-b...

> So they aren’t going to deny people primary care because doing so will just cause them to wind up in the ER.

You seem to be confused that I am speaking to some hypothetical future situation. Hospital networks require you to either pay outstanding balances or meet with someone to arrange a payment plan before you can be seen. Taking away the ability to report to credit is only going to make them more aggressive in this practice.

I have a company that sells to hospitals, they absolutely care about keeping the wrong people out of the emergency room.

“ Hospital networks require you to either pay outstanding balances or meet with someone to arrange a payment plan before you can be seen.”

Putting them on a payment plan is not the same thing as forcing them to pay. I believe they would force payment for elective care, not preventative.

Hospitals and doctors don’t do this. It’s unethical to deny someone treatment because you’re not sure they can pay.

Emergency rooms don’t do this. Non-emergency health providers of all sorts will deny you services if you have an outstanding balance.

I assume you live outside the United States. Healthcare here is... special.

It may be unethical, but it happens all the time. My father got cancer in 2020 and died earlier this year. During that time, I was continuously shocked at the delays in tests and treatments that he experienced because specialists wouldn't see him until he had approval from Medicare. Without those delays, I think there's a good chance that we'd be looking forward to another Christmas with him.

(We live in the US if this anecdote didn't make it obvious).

I haven't paid a medical bill under $1k in years ... it never goes into collections and I never hear about it after the 2nd or 3rd letter in the mail. My providers never mention it, my insurance company never mentions it.

Civil action could be started against you in court. If you don’t show up the other party would win a default judgement. If you did you could and likely would still lose and have to pay. At that point your assets could be legally taken from you and wages garnished.

Medical “debts” are almost always unilateral fees you never agreed to. No provider will state upfront what the fees will be! I got billed after the birth of my first child for services that had not been rendered by a physician who wasn’t even present, which my attorney characterized as “fraud” in a stern letter but that the hospital viewed as “debt”. I prevailed obviously but imagine the range of outcomes.

The other people to contact there are your insurers. Despicable as some of them may be, they too hate provider fraud. Even if they don't appear to do something to censure the provider, it is on their file, and enough complaints will be problematic.

I had a similar situation with a kidney stone. Transferred from my hospital to another by ambulance - I was moved from the ambulance gurney to the surgery bed in the hallway of the ER, and was billed for a ER visit among everything else, though no care had been rendered, no ER staff had been involved (hospital transport techs), it just happened to happen in the ER, and not even in a room.

One thing’s for sure, the lawyers and finance professionals at the CFPB aren’t going to remove your legal defense fees and delinquent mortgage payments from your credit report, even though being in jail and being homeless also massively increase your mortality.

They can sue you.

Presumably an actual legal judgement against you would still go on your credit report, as it does today.

Get ready for more debt.

I’ll repost my comment from a recent thread, but this article is a surprise to me, I thought this had already been the case for years?

Reposted comment —

As far as I can tell, this is the correct way to handle this? I haven’t paid attention to any medical bills sent in the mail since I started working 15 years ago (I generally pay what they ask at the point of service), and I’ve never noticed any consequences (no denial of service anywhere, has never shown up in any way on my credit report, etc) — as far as my experience has shown, any bills sent after the fact are completely optional to pay.

My ex had collectors calling her several times a day for months while she was disputing a bill. It probably depends on whether the hospital writes the bill off or sells it to collectors.

I feel for your ex, I have three (3) in office visits covered by my insurance that are overdue as of August. I’ve had to go back and forth on the phone in a Kafka-hell to get my insurance to cover a covered visit because of some opaque clerical error (and I write medical insurance review software and I’m still confused as to who is to blame…). Insurance issued a payment last month finally, but the doctor has yet to recognize it so I still get reminders on being “late” for a bill I don’t ultimately owe.

I cannot imagine how infuriated I would be if I were being punished on my credit for someone else’s clerical error.

"I’ve had to go back and forth on the phone in a Kafka-hell to get my insurance to cover a covered visit because of some opaque clerical error"

the same happened to my ex. Something had gone wrong between hospital and insurance and both refused to fix it. Which left her in between trying to figure this out while trying to recover. It's really infuriating that they can treat people that way. Once you experience this together with billing for things that never happened and insurance refusing things they have to cover, you can only conclude that insurances and hospitals are basically fraudsters that for some reason are allowed to get away with it.

But I guess that’s my whole point is once they sell it to collectors it’s equivalent to the bill not existing? My confusion is around wondering if I’ve somehow fallen through the cracks and got lucky or other people have the same experience.

Why do other people pay bills they receive in the mail?

I doubt the collection agencies would even purchase these at this point.

That's not always the case. Some hospitals will still keep a record of the unpaid bill on your account even after they pass the debt to a collector, and the collector will report whether you pay to the hospital.

The practice and billing parts of the system are usually mostly separate, so the person checking you in for your appointments may not know or have any way to see that you have unpaid bills and you won't necessarily be denied care for it, but there's no real standard here either.

If the hospital/provider sends your bill to a collections agency, then it can definitely show up on your reports. Especially so if you are actually sued for the debt, in which case the judgement is also a public record.

I've had this happen a couple times in the past when I was in treatment for cancer and underemployed. One agency reported the collections action and it went on my credit report (no indication that it's medical debt or anything else, so I imagine it would be up to the consumer to contest these things with the bureau?) Another collector didn't, so I never paid the bill or heard from them again!

>If the hospital/provider sends your bill to a collections agency, then it can definitely show up on your reports.

So I agree this was the impression I got in theory, but in practice I’ve never seen this happen. Why is there this mismatch? I check my credit reports once a year, there’s nothing showing up

It's entirely up to the hospital and the collectors they use (if they use any at all) how aggressively they pursue unpaid bills and whether they will involve your credit report to encourage people to pay. If you've mostly been going to the same places (or as another comment said, live somewhere where it's not as easy to send medical bills to collections), I can see it not really being a problem for you.

I have, sometimes bills go to collections without me even receiving a bill from the doctor/hospital themselves.

Wow you've lived a charmed life, friend. This is not the experience of the vast majority of people. Medical debt is real, and crushing.

Yes, crushing indeed. Number one cause of bankruptcies in the US is medical expenses.

That's not really true, or at least it would be hard to say for sure. Every source saying that cites the same survey where a majority of respondents claimed that it was at least a contributing factor. Its actually really hard to get good breakdowns of the numbers on this.

It's sort of a straw that breaks the camel's back situation in most cases I would wager. It's less that medical debt caused bankruptcy than it, added on top of housing debt and car loans and credit cards and student loans etc., finally pushed a household to a point where getting out from under it all was too much.

Yeah, I don’t exactly disagree. Many years ago I worked at a debt counseling company and had occasion to look at the records and listen in on phone calls. It was really quite fascinating and heartbreaking. There definitely seemed to be a few common patterns. Big debts around car crashes and complicated births were not uncommon. But on the other hand almost everyone had a crazy mortgage and a pile of credit card debt too.

I have someone in Las Vegas who stole my identity and is using it for medical services. I get collection notices for these services sent to my house (I'm not near Las Vegas) and I have to dispute every one of them. I've had to file police reports on it, but the Police in Vegas don't really care about helping me.

Had a echocardiogram that I was told would be covered but insurance didn't pay, and they balance billed me for $5K. I never paid. Got handed to debt collectors. Wrote to them saying it isn't my debt and to cease contacting me.

If they take it to court I'll lawyer up and fight.

In any case, I gave neither debt collectors nor medical office my residential address or mobile number. I suggest you NEVER give your residential address to medical offices either, or they'll happily tell debt collectors where you sleep. Which personally I think should be a HEPA violation but apparently it isn't.

Give them a virtual mailbox or office address where you can receive mail.

Do you live in California? I know CA has much more consumer-friendly restrictions on sending medical bills to collections. It essentially can’t happen in CA.

They are letting the interest build to such a magnitude that they can eventually sue your estate and easily recover the losses and more if you have assets at the time of death.

It would be surprising if this worked, given that a creditor who did not mitigate his damages reasonably and instead lurked, awaiting a windfall is not entitled to damages.

It does go on your credit REPORT. However, the impact it has on your credit SCORE is what varies, especially with newer models.

I assume you're in the US.

What you're probably seeing are the bills that your service provider sends to insurance, and then your insurance sending you a statement of benefits.

If these were real bills, they would keep sending them.

(Sometimes these can be amusing: I had surgery in 2011, and the hospital billed the insurance company $100,000. The insurance company responded that the agreed cost for services should be $20,000. The hospital ended up getting $20,000. IMO, $20,000 was plenty to pay everyone involved.)

I stopped getting any care at a large hospital near me's outpatient office because they had a bad habit of just sending bills to collections before my insurance responded to them, and then not updating anything once they did, so I'd get a debt collector notice and call the hospital, and they'd say "oh you paid that in full, you shouldn't be getting a notice" "well you should probably tell that to the debt collector".

Over and over again.

So if those started showing up on my credit report eventually, it'd be a significant impact, even though I was not involved in any failure to pay. Fortunately, they never did, but for many people, that's not true.

Does this mean I don't have to pay any medical bills unless they sue me? Awesome, that's one less thing!

I mean by the logic you're using you don't have to pay ANY bill or abide by ANY contract unless someone goes to court to make you.

Great time for disabled people to die because they won’t be able to get care. Disabled people can’t pay for psychotic medical bills as it is and this will just result in medical providers denying care without upfront pay.

I've never had a doctor run a credit report on me before, have you?

organizations will start doing it to protect profits probably

Hopefully they have a plan for a better mechanism to discourage frivolous ambulance calls and ER visits. Those resources are overloaded by casual abuse resulting in higher costs and wait times for those who truly need emergency care. Without an alternate disincentive that problem will only get worse with this change.

This is yet another problem that could, hypothetically, be addressed by centralizing / single-payering the system.

With one administrator having access to all that data, it would be straightforward to see where ERs and ambulances are being over-used for non-emergencies and address that in the community with both more funding for preventative care and intervention / education initiatives to get people using preventative care.

I think having cost be the anti-abuse disincentive is the worst of all worlds -- cost is clearly not an effective deterrent of abuse given our current state of overutilization. It IS a deterrent in the case of avoidance, or arguably worse, a punishment in the case of attendance, for those who DO need it.

I'm a volunteer EMT and my org runs free clinics staffed by doctors+nurses at major events to handle emergencies. It's truly free -- we don't bill anyone, insurance included -- but I've had people in dire medical distress avoid coming with me because they're afraid of the bill. Hell, I've had people in the midst of full blown psychosis and their single lucid thought is to yell "DON'T TAKE ME I CAN'T AFFORD AN AMBULANCE BILL" and my heart breaks.

The American healthcare system is continuously setting and raising the high water mark for how deeply in failure the system is, but bankrupting people is not the holistic solution we need, in my opinion.

People make "frivolous" visits because they are legally required to stabilize patients. This is what passes for a social safety net in the US, and we have failed in developing anything better for those not covered by Medicaid.

People often make frivolous ambulance calls if they have trouble getting to the hospital or PCP.

There are often reasons, and we would have a more reliable, more humane system if we focused on cheaper care over penalizing the poor. Providing only guaranteed emergency care is absurdly expensive.

IIRC this gap exists in states (guess which!) that opted out of Medicaid expansion. So a solution is available if states take it.

This is a nationwide problem, it's not restricted to states that opted out of expansion. Federal Law requires that ERs treat anyone who comes in, regardless of ability to pay. Until the poor are able to access other resources like urgent care clinics, this is going to continue to be a problem.

Well the poor have access to Medicaid, and if they make more than the Medicaid maximum, subsidized ACA plans. In neither of those cases should you have to go to the ER for non-emergency care.

I believe the biggest problem is the coverage gap I mentioned, where 10 states for political reasons have not opted into the higher Medicaid maximums which creates a gap between Medicaid and ACA. This is dumb as hell.

I am having trouble figuring out where exactly the other coverage gaps are or how big they are. I'm sure there are some.

I would definitely support a switch to single payer to smooth out this mess.

To be fair, someone making $25,000 a year will have almost as much trouble paying out of pocket for an MRI as someone making $15,000. But the former won't qualify for Medicaid and the heavily-discounted health insurance won't do much to help with their first $10,000 of medical debt.

Good but worthless advice to the majority living without any savings: don't get sick and don't get injured. Can anyone blame them if they avoid expensive testing? Medicaid is a great bandage, but the US needs a better system.

That’s not the only reason. A (well known, national) turkey company considered building an on-site clinic just because so many of their Somali immigrant employees were going to the ER over frivolous things.

They have insurance. Of course, that’s certainly not limited to immigrants. I think anyone who has spent any time in an ER waiting room has thought “you’re in here for that?” I’ve heard plenty of anecdotes from doctors about people with insurance or no going to the ER for colds.

As an aside, even though the Somali population is just a small fraction of the total population in the area they seem to be about half of the people in the (non-ER) clinic. I’ve always wondered what was up with that.

> Hopefully they have a plan for a better mechanism to discourage frivolous ambulance calls and ER visits. Those resources are overloaded by casual abuse resulting in higher costs and wait times for those who truly need emergency care.

Do you have any statistics regarding this? I'm sure there are some people that use the services unnecessarily, but is it really enough that it's a significant issue?

> Without an alternate disincentive that problem will only get worse with this change.

The ER is the only place that people can get care when they are uninsured and not wealthy. Your family doc will say no. Immediate care will say no. But the ER can't say no. People in this situation are mostly upper lower class and lower middle class who have lost their jobs or fell into an administrative crack. If you are poor, you will qualify for something to cover the cost. It's terrifying and is probably one of the best arguments for reform there is.

> Without an alternate disincentive

The problem isn’t (IMO) an insufficient disincentive — it’s lack of a credible alternative. I have perfectly fine insurance, and getting an appointment for a merely slightly urgent issue is a pain in the rear. If I’m traveling, it’s almost impossible.

COVID made this all worse. Last year, I saw a resort clinic (well staffed by assorted medical professionals) turning away anyone with any symptoms of illness and sending them straight to the ER (10 miles or so away through the snow) because they “might have COVID”.

Urgent care facilities ought to be offloading ERs in most cases. Something as trivial as needing some stitches is an ER visit instead. I think this kind of ends up trivializing ER.

That and drug seeking...

I've had to use urgent care a half dozen times over the past 20 years. In all but one case, they sent me to the ER because they didn't want to be responsible for my care outcomes. None of them were really "emergencies".

I'm lucky if there is an actual MD on premises at my in-network urgent care.

Our local urgent care closes at 7:30pm on weekdays and 4pm on weekends. That doesn’t help.

It helps for half the day.

The hilarious thing is that the emergency room mandate has long been used as an excuse for opposing universal coverage. People used to say thing like "nobody in America is dying because they can't go to the hospital," as if that was bar.

Now it apparently serves an excuse for claiming ER should cost more. Truly a universal policy, I guess.

Imagine thinking a visit to the ER was "frivolous". As if significant numbers of people would subject themselves to an ER for fun. Imagine looking at a situation in which significant numbers of people have no other access to care but ERs and think, "Those freeloaders!" What sort of twisted mirror-world ethics are these? How does one get to the point where they could type this, read it over, and hit send? You'd think the shame alone would be lethal.

I think it should be acceptable that unpaid medical debt appears on the credit report. The medical debt should be removed once the debt is paid.

The above is for medical debt only and how I would prefer the system to work. There are other good comments about possible second and third order effects from such changes to debt reporting.

Reply on news.ycombinator.com