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July 7, 2023

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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

Public input will bolster agencies’ broad efforts to safeguard consumers against predatory medical debt and collections practices

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB), U.S. Department of Health and Human Services (HHS), and U.S. Department of Treasury (Treasury) launched an inquiry into high-cost specialty financial products, such as medical credit cards and installment loans, that are pushed on patients as a way to pay for routine medical care and which drive up health care costs and medical debt. 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 three agencies seek information about the prevalence of these products, patients’ experiences with them, and health care providers’ incentives to offer these high-cost products to patients, which may include avoiding the insurance claims process and financial assistance programs. The CFPB will use the public input as it considers ways to address the patient harms caused by these specialty financial products.

“Financial firms are partnering with health care players to push products that can drive patients deep into debt,” said CFPB Director Rohit Chopra. “We are opening a public inquiry to better understand how these practices are affecting patients in our country.”

“This inquiry builds on the Department's work to protect patients from unfair billing practices, lower costs, and increase transparency in our health care system,” said HHS Secretary Xavier Becerra. “Hearing directly from patients about their experiences will help shape policies that can prevent families from incurring medical debt.”

“Treasury is proud to partner with agencies across the Biden Administration to crack down on these often abusive practices that take advantage of patients during vulnerable times. We look forward to receiving stakeholder input so that we can better protect patients and consumers,” said Deputy Secretary of the Treasury Wally Adeyemo.

Medical payment products were once used primarily to pay for care not traditionally covered by health insurance plans, such as dental and vision care, fertility services, and cosmetic surgery. However, medical payment products are now also used to pay for a broader set of services, including emergency room visits and primary and specialty care. Even when medical care may otherwise be covered by insurance or financial assistance, patients may be pitched these products by their health care providers who then pass the administration of patient billing and collections over to financial service companies. The CFPB’s research has highlighted that healthcare providers may be disincentivized to explain legally mandated financial assistance programs or zero-interest repayment options before offering these products to patients. These products can also saddle patients with ballooning deferred interest or creditor lawsuits.

Given the current complexities of financial assistance programs and insurance plans, health care providers can encounter difficulties when trying to receive payment for care. 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.

The request for information will help the agencies better understand consumer harms and financial challenges raised by specialty medical payment products. The request for information will 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. Specifically, the agencies are requesting information about:

• The specialty medical payment product market. The agencies are interested in data and comments on the interest and fee costs for these products, as well as in understanding their marketing, application, and approval processes. The CFPB is also interested in trends of medical payment product use, including the total outstanding consumer debt on medical credit cards, medical installment loans, and other medical payment products. The data will help the agencies better understand how these products are being used, their scope of use, and who controls that use.

• Patient experiences and downstream consequences. The agencies want to know more about these products’ risks, and whether consumers fully understand the risks. The risks of paying medical bills using a medical payment product may include loss of medical bill negotiating power, aggressive debt collection practices, lawsuits, and loss of credit reporting protections.

• Billing and financial assistance issues. The agencies want to learn more about how medical credit cards and loans may exacerbate existing issues in health care billing and collections. For example, uninsured and out-of-network patients are often charged higher prices than those negotiated by in-network insurers for the same medical services. Medical payment products may enable providers to continue charging high prices to uninsured or self-pay patients who would otherwise be unable to pay.

• Health care provider incentives. The agencies want to learn more about incentives offered to health care providers to promote medical payment products, as well as how those incentives affect the promotion of these products by providers to patients. In some cases, this may include a share of the revenue from these products. Other medical payment product issuers offer lower processing or management fees to providers who enroll high numbers of patients – thereby incentivizing those medical providers to enroll as many of their patients as possible.