The medical billing and collection system “devotes insufficient resources to preventing, identifying, and correcting errors,” and the issues are especially acute for older consumers, who face a more complex billing system than their younger counterparts, and are being billed for amounts they do not owe, according to a report released yesterday by the Consumer Financial Protection Bureau.
A copy of the report, published by the Bureau’s Office for Older Americans, can be accessed by clicking here.
While fewer older Americans have unpaid medical bills than younger consumers, the share of older Americans with unpaid medical debts is increasing, even though older Americans have access to more health insurance, including Medicare and Medicaid.
The CFPB looked at consumer complaints filed by older Americans related to issues with healthcare debts to note that individuals often get caught up in a “doom loop” when trying to address inaccurate bills. Rather than take the time to figure out the problem, consumers pay the erroneous bill to make it go away, likely because they are looking to improve their credit score to help with a major purchase, the CFPB explained.
The Bureau also took credit for “significant” changes to the practices of debt collectors thanks to its scrutiny of the accuracy of medical tradelines reported on consumers’ credit reports. “The recent decrease in medical tradelines listed on consumers’ credit reports suggests that debt collectors are beginning to recognize these data integrity issues,” the CFPB noted in its report. “This decline may be explained partly by structural dysfunctions in medical billing and collections, which increase the risk that debt collectors will not meet their legal obligations and will therefore decide not to collect on these debts.”
