Native American communities are disproportionately impacted by medical debt, with systemic billing and reimbursement issues leading to wrongful collections and credit reporting that violate federal law.
The big picture: The Consumer Financial Protection Bureau and Indian Health Service issued new guidance last week emphasizing the responsibilities of medical providers, billers, and debt collectors under the Indian Health Care Improvement Act (IHCIA), the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act.
- What’s prohibited: The IHCIA explicitly bars providers from holding IHS-approved Purchased/Referred Care (PRC) program patients liable for costs like co-pays or deductibles. Providers must bill all alternate resources first and may not pursue patients for unpaid balances after PRC payment.
- Debt collectors may face strict liability under the FDCPA for attempting to collect improper bills from PRC patients and may violate the FCRA by furnishing inaccurate debt information.
By the numbers:
- Native communities are twice as likely to have medical debt in collections compared to the national average.
- Average medical debt balances in Native communities are 33% higher than the U.S. average.
Zoom in: Missteps in the PRC billing process often result in delayed payments or wrongful collections.
- Providers may bypass PRC reimbursement and send bills to collections, imposing fees and damaging credit reports.
- Patients are frequently asked to sign waivers making them responsible for bills that should be covered by PRC, a practice the IHS deems unenforceable under federal law.
What they’re saying:
- CFPB Director Rohit Chopra: “Federal law clearly prohibits these billing practices, collection attempts, and reporting of unlawful debts.”
- IHS Director Roselyn Tso: “This collaboration with the CFPB underscores our commitment to protecting IHS patients and ensuring compliance with federal law.”
