CFPB bars medical debt from credit reports

[Snook_on_the_Line]

https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-rule-to-remove-medical-bills-from-c...

link sourced from Doctor of Credit's daily feed

[Snook_on_the_Line]

Link at the bottom leads to a pdf of the final rule.       Fair warning, it's 345 pages long

says it goes into effect 60 days from publication.  

with so many people's scores about to skyrocket I predict this will actually lead to tighter underwriting standards across the lending industry 

[IsambardPrince]

They already took it to a well known activist judge in Texas who legislates from the bench, and things will probably just get worse from there.

The new administration is likely to fight in favor of medical bills where people are literally just back there playing "The Price is Right" (for them anyway), and even if they don't, the Fifth Circuit Court of Appeals is where it goes next, and it's such a horrible appeals court that even SCOTUS frequently overturns them. But SCOTUS is so corrupt and scummy and nobody can do anything about them, and they know it, and they don't even try to hide it anymore, that I wouldn't expect any help from them.

The one thing that would work is if more States passed laws like the one in Connecticut. That way there'd be no jurisdiction to sue in Texas and get the worst judge in the country like they do with national rules.

He's not just "the worst judge in the country" by way of "I don't like him." He's one of the most reversed judges in the entire "Fifth Circus" Appeals Court district. They know what they did here. They want a nationwide injunction full of a bunch of politicking by a notoriously bad judge whose decision is unlikely to stick. He doesn't care about laws, he just fills his rulings with invective and nonsense.

[Cowboys4Life]

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@Snook_on_the_Line wrote:

Link at the bottom leads to a pdf of the final rule.       Fair warning, it's 345 pages long

says it goes into effect 60 days from publication.  

with so many people's scores about to skyrocket I predict this will actually lead to tighter underwriting standards across the lending industry 

---

There will be a bigger fall out than that.  I have been in healthcare for 40+ years and the providers are already discussing cutting off care to anyone who is carrying a balance currently until it is brought current or a payment plan is in place and a minimum number of payments has been made.  The secondary fall out will be one that most consumers don't even realize.  Filing insurance is done by providers as a COURTESY.  There is absolutely no legal basis or contractual basis in their agreement with the insurers to file a claim on the patient's behalf.  What they are going to start doing is requiring payment for the services up front and giving the patient the necessary paperwork to file a claim to be reimbursed.  So unless you can pay for your care to start with good luck finding it.  Last:  it isn't a HIPAA violation to share who owes money to prevent someone from running up a bill with one physician/practice and simply transferring to another practice.  The provider who is owed money can withhold records until paid.  Keep all of that in mind when you decide you don't need to pay your deductible or out of pocket portion.

[IsambardPrince]

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@Cowboys4Life wrote:

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@Snook_on_the_Line wrote:

Link at the bottom leads to a pdf of the final rule.       Fair warning, it's 345 pages long

says it goes into effect 60 days from publication.  

with so many people's scores about to skyrocket I predict this will actually lead to tighter underwriting standards across the lending industry 

---

There will be a bigger fall out than that.  I have been in healthcare for 40+ years and the providers are already discussing cutting off care to anyone who is carrying a balance currently until it is brought current or a payment plan is in place and a minimum number of payments has been made.  The secondary fall out will be one that most consumers don't even realize.  Filing insurance is done by providers as a COURTESY.  There is absolutely no legal basis or contractual basis in their agreement with the insurers to file a claim on the patient's behalf.  What they are going to start doing is requiring payment for the services up front and giving the patient the necessary paperwork to file a claim to be reimbursed.  So unless you can pay for your care to start with good luck finding it.  Last:  it isn't a HIPAA violation to share who owes money to prevent someone from running up a bill with one physician/practice and simply transferring to another practice.  The provider who is owed money can withhold records until paid.  Keep all of that in mind when you decide you don't need to pay your deductible or out of pocket portion.

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Aside from some scaremongering and misinformation from the people in the industry who have stolen and chiseled so much money from Americans and used the credit reporting system in a way that I would say should be criminally punitive for people who can't pay their largely made-up hospital bills, I doubt much will change.

They aren't doing any of this in Connecticut, which passed this as a law years ago. They can sue people if they want to but they can't prevent them from renting an apartment and forcing them to go homeless because they went to the ER, where they start the billing at like $10,000 just for being there, and that's just where it starts before they do anything.

These hospitals are crooked with a capital crooked, and I think we all saw what people thought about the industry with the Brian Thompson thing where most people seem to be at least glad he's gone if not glad how it happened.

Most of the cost of medical care in the US, is just people who don't do anything, who wear business suits, sucking out more than half the money for themselves, and it doesn't work like this in any developed country except the US, and there's no defense for it other than jingoism or if you're one of the people who sticks a straw into suffering people and starts sucking them dry for needing medicine.

I've only had one provider try to hold my medical records, and it was due to some stupid person he had in the office who marked my account as "unpaid" after I had, in fact, already paid. I was so furious I grabbed my chart anyway since it was on paper back then and told them to look again. I had a job that wanted to hire me, for healthcare btw, which was not going to hold the position, and they needed my TB test results back that day, and the stupid office person at the doctor's office was going to cause me to become unemployed!

Later, that doctor was arrested and charged with felonies by the State of Indiana, and lost his medical license, for sexually abusing patients and his own office staff, overprescribing narcotics, and using office secretaries to do work that required a nursing license. He's on the sex offender list now and according to my mom he still shows up at mass sometimes. Wonder if it's done him any good.

Anyway, he was NOT running a clean practice and he was a criminal. A convicted criminal now.

You run into a lot of crooks and incompetent people everywhere, especially these days.

Incompetence, especially. It's like nobody even knows what the heck they're doing anymore. We're living in Idiocracy. This month alone I dealt with three people at Walgreens who didn't even know how to delete an insurance card and add a different one and they're back there filling prescriptions.

In my observation, I'd say that the typical medical office these days has a combined IQ of about 12 at the front desk. It's tragic. It's horrifying to even consider that someday I may become too old to take care of myself and this latest generation will be the doctors and nurses.

It's already becoming more common that the Nurse Practitioners and Doctors in a medical office don't seem to know, or care, how to do anything except bill you. You really expect us to believe they'll stop billing insurance? Which is how they get paid to sit on their thumb when you're sick?

If they were computer programmers working at a tech firm, they'd be out on their butts from "stack ranking" and "performance improvement plans". This doesn't happen in medicine because they don't run on a quality of service model.

[IsambardPrince]

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@Snook_on_the_Line wrote:

Link at the bottom leads to a pdf of the final rule.       Fair warning, it's 345 pages long

says it goes into effect 60 days from publication.  

with so many people's scores about to skyrocket I predict this will actually lead to tighter underwriting standards across the lending industry 

---

It might help if FICO themselves hadn't weakened the position of the credit bureaus by admitting that medical debt isn't a great predictor of loan repayment with their latest scoring models. There's two models now that weight medical debt significantly less severely, and VantageScore does too, and I mean, so you basically have their admission that they were coming down too hard on people for years, yet they'll still sell lenders the model that did that.

How tenable is the legal argument when FICO themselves produced whitepapers pitching their new credit models and the bureaus sell them and banks use them?

[IsambardPrince]

https://www.cnbc.com/2025/01/13/medical-debt-banned-from-credit-reports.html

Another article from CNBC shows how the credit bureaus and medical debt collectors used defamatory information to get people to pay bills they might not even owe.

"Americans had around $88 billion in medical debt on their credit reports as of 2022, a separate CFPB report found. Often, that debt was accrued in emergency situations or didn’t represent an accurate amount owed by the patient. Additionally, collection agencies would use those credit reports to coerce patients into paying the bills, regardless of whether they actually owed them, the CFPB said."

The Report:

https://www.consumerfinance.gov/about-us/newsroom/cfpb-estimates-88-billion-in-medical-bills-on-cred...

Select excerpts with bold emphasis:

"Medical debt weakens underwriting accuracy: Previous research by the CFPB has shown that medical billing data on a credit report is less predictive of future repayment than reporting on traditional credit obligations. Some newer credit scoring models weigh medical collections tradelines less heavily, with dramatic effects; an updated FICO model resulted in an average 25-point increase in consumers’ scores. However, there has been very little adoption so far, and the most widely-used models use the older, less accurate approach. As a result, people with medical debt, who are disproportionately Black and Hispanic, continue to be penalized with lower credit scores."

[...]

"The CFPB is working with the U.S. Department of Health and Human Services to ensure that patients are not coerced into paying bills more than the amounts due. In January, the CFPB issued a compliance bulletin that reminded debt collectors, credit reporting companies, and others that it is illegal to collect or report as owing a debt that is not legally due and owing, including where the billed amount violates the No Surprises Act."

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In my experience, they don't explain why you owe a bill, even when you ask them to. If they give you an explanation, it is murky and opaque and raises more questions about the validity of the debt than it actually answers, and then they send it to collections.

Oftentimes, the insurance company improperly denied it and didn't even follow their own complete joke of an appeals process, or worse, the hospital or doctor's office, or lab, never billed it in the first place and handed it over to collections without even informing you first.

That happened to my husband four years ago. LabCorp didn't bill Blue Cross, and handed over a thousand dollars in lab bills directly to a collection agency without even telling us there was a bill. To get this defamatory and illegal information off his credit report, it took me months of playing phone tag and us writing to and calling people including the credit bureaus. Their entire goal is to wear you down and get you to pay money you don't even owe them.

In one case, Quest Diagnostics violated my bankruptcy. They didn't use the billing codes my doctor said that she was running labs for, and then they got my insurance to deny the claim due to the lack of billing codes, I was filing bankruptcy anyway in 2020, so rather than appeal it, I put the bill from Quest into the bankruptcy, and then I had Quest continue to try to collect over $300 from me after they were informed by the BNC that I had received a discharge. They kept claiming that they lost it or sent it to the wrong address (an address they had given me).

It's always something with these people and nobody is even allowed to ask questions because they break laws and usually get away with it. That must mean that it's more profitable to break the law than it is to follow the law, and I expect that the next 4 years are going to be a rough ride for Americans who are defrauded, coerced, and defamed by bad actors in the medical and credit reporting businesses.

Most people would have just paid LabCorp when they did that to my spouse and live with the FICO score damage, but not me. I'm like a pitbull on the pantleg, you know. No you may not have $1,000 but you can have me annoying the crap out of you and screaming over the phone at people until you give up.

Anyway, I'm glad that his FICO score was good (still is, and he's a citizen now so these people don't matter anymore) while the USCIS people were watching it. Every now and then it said US Citizenship and Immigration Washington DC on his soft pulls but always when it was "only good things". It's very difficult in this country with all the lies and defamation and debt traps they set for people to maintain a solid credit rating no matter how honest and upstanding you are.

It's perhaps unsurprising when we live in a country so horrible that they openly boast of ripping off dying cancer patients as a "haul".

"It’s no surprise that Merck is on the list, with 56% of its revenue exposed to patent expirations. Most of that comes from mega-blockbuster cancer drug Keytruda, which generated  $25 billion in sales last year, accounting for 42% of the company’s total haul. Keytruda is set to lose its exclusivity in 2029."

[IsambardPrince]

Semi-Related to this topic.

The Indiana State government is pushing a bill to cap "non-profit" hospitals at no more than 200% of the rates that Medicare pays for the procedures in question, or else they would have to declare themselves as for-profit hospitals and pay taxes.

The Indiana legislators promoting the bill say that hospital networks in Indiana are abusing their non-profit status and are taking advantage of not paying their taxes, despite charging much more than similar hospitals in other States.

Under the proposed bill, the Indiana legislature finds that the following hospital networks are overcharging patients based on these guidelines, and if passed, the bill would force them to reduce prices by the following percentages for uninsured patients:

Ascension St. Vincent: Reduce prices by 40.5%
Community Health Network: Reduce prices by 34%
Deaconess Health System: Reduce prices by 23%
Franciscan Health: Reduce prices by 30%
IU Health: Reduce prices by 40.6%
Parkview Health: Reduce prices by 40.8%

I had long suspected that Parkview Health was one of the greediest and most egregious hospital networks in Indiana. In 2009, I had two seizures and ended up in the ER in one of their rural hospitals, and the bills came flying in until I owed over $15,000 for being uninsured in the ER for just 3 hours or so. When they discharged me, I couldn't remember my own name or who my mother was.

In 2015, I met my ex, who worked cleaning their hospitals at Randalia and PRMC in Fort Wayne, Indiana, and they only paid him $9.50 an hour, despite having a CEO that made millions each year, despite being listed as "non-profit".

They seem to me to be specialists in suing people, they strike me as a very litigious hospital. They threatened me, but at the time, I was judgment proof, so they backed off. When I filed bankruptcy in 2020 over other problems, I threw Parkview Hospital and their Physicians Group in purely to shut them up forever.

So according to Indiana, they overcharge by nearly 41% on average and pay essentially no taxes due to being a "non-profit", which is a designation normally reserved for charities, and then that's what ends up being listed as the debt amount on your credit report.

During my ordeal, they lied and said that if I signed up for Indiana Medicaid, they would waive the balance in full if I was denied and write it off as charity care and stop pursuing it. When I brought the denial letter, they said "We never said that. Nobody ever said that."

I did end up suing the State of Indiana FSSA, pro se, and winning, and getting the decision on my Medicaid case reversed, and managed to have the Appeals Division strike down a part of the State Medicaid law that didn't conform to federal law. The Republicans quietly made conforming changes in the next session of the General Assembly. However, by the time I got the decision reversed and was approved for Medicaid, the lookback period was over and they never did have to pay the hospital.

I wonder how many people in Indiana have 40% too much debt listed on their credit report and are being sued for egregious amounts of uncompensated care by hospitals with multimillion dollar CEOs that are paying nine bucks an hour to some people, and the hospital in question has no tax bill. Anyone, anyone?