The CFPB has issued a compliance bulletin and policy guidance on medical debt collection and consumer reporting requirements in connection with the No Surprises Act.
The No Surprises Act sets forth requirements that apply to certain individuals who receive care from an out-of-network provider that furnishes emergency services, inpatient services an in-network facility, or air ambulance services. The Act applies to health plan years beginning on or after January 1, 2022.
FDCPA. In the bulletin, the CFPB cautions debt collectors about the intersection of certain Fair Debt Collection Practices Act (FDCPA) prohibitions and the No Surprises Act. In particular, the CFPB advises that the FDCPA prohibition on the use of “false, deceptive, or misleading” representations includes misrepresenting that a consumer must pay a debt stemming from a charge that exceeds the amount permitted by the No Surprises Act. It also notes that courts have found that collecting an amount that exceeds what is owed could violate the FDCPA prohibition on the use of “unfair or unconscionable means” to collect a debt.
Credit reporting. In the bulletin, the CFPB also cautions consumer reporting agencies (CRAs) and furnishers of information relating to unpaid medical debts to CRAs about the intersection of the Fair Credit Reporting Act (FCRA) and Regulation V and the No Surprises Act. The CFPB reminds CRAs and furnishers of the following FCRA/Regulation V requirements:
- When preparing a consumer report, CRAs must follow procedures to ensure maximum accuracy of the information reported;
- Furnishers must establish and implement reasonable procedures regarding the accuracy and integrity of the information they furnish to CRAs; and
- Both CRAs and furnishers must conduct reasonable and timely investigations of consumer disputes to verify the accuracy of furnished information.
The CFPB advises CRAs and furnishers that these accuracy and dispute requirements apply with respect to debts from charges that exceed the amount permitted by the No Surprises Act. Accordingly, a furnisher of information to a CRA indicating that a consumer owes a debt arising from out of network charges, or a CRA that includes such information in a consumer report, may violate the FCRA and Regulation V if the amount of the charges exceed the amount permitted by the No Surprises Act or if the furnisher or CRA fails to meet its dispute obligations.
It is important to evaluate what steps can be taken to reduce the risk of potential liability for the types of claims outlined above when collecting or furnishing information on medical debts. Attorneys in Ballard Spahr’s Employee Benefits and Executive Compensation and Health Law Practice Groups are advising clients on the No Surprises Act and rules and are closely monitoring related developments. Members of these groups recently issued a briefing on the No Surprises Act rules and regularly report on developments on the firm’s Health Care Reform Dashboard. They are available to work with members of the firm’s Consumer Financial Services Group who regularly advise on debt collection and FCRA compliance matters.