man with credit card and cell phone

Many hospitals and medical providers have directed people seeking legally mandated financial aid to instead apply for consumer credit in the form of loans or credit cards to pay their bills. Well, finally someone noticed.

It’s actually pretty common: The financial aid pages of hospital websites are supposed to include full explanations of how to request free or discounted care under the “charity care” financial aid policies that hospitals are legally mandated to offer. But increasingly the financial aid pages show options for medical credit cards or installment loans to pay for healthcare services. Those credit cards and loans, as consumer credit, are treated differently on people’s credit reports than medical debt.

The Consumer Finance Protection Bureau, the U.S. Department of Health and Human Services and the Department of Treasury recently began an investigation into the practice. The agencies called for information from people about their experiences.

The charity care application process can be drawn-out and confusing, according to Jared Walker, founder of DollarFor, a nonprofit that helps people through the system. Walker said in a recent interview that often while people are trying to apply for charity care, they are sent into collections, where the threat of bad credit reporting can cause them to pay bills that actually might be reduced by charity care.

This financial assistance page from Olathe Medical Center, pictured above, shows how a question about financial assistance first directs the questioner to an application for consumer credit, and then offers the kind of financial assistance that is the means-tested charity care program DollarFor helps patients find.

Driving patients deep in debt

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

Care Credit, one of the biggest of the medical care credit companies, has long been used by people who don’t have ready money for things like vet bills and cosmetic surgery. But the expansion into other kinds of care is what the agencies are investigating. The agencies said they were interested in knowing how the products work, and how the money works — for instance, what incentives there are for hospitals to sell these products.

“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,” the C.F.P.B. wrote in a press release. “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 C.F.P.B.’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.”

“Uninsured and out-of-network patients are often charged higher prices than those negotiated by in-network insurers for the same medical services,” the C.F.P.B. said. “Medical payment products may enable providers to continue charging high prices to uninsured or self-pay patients who would otherwise be unable to pay.”

Comments and data from the public and any stakeholders are welcome, the release said. Comments must be received within 60 days of the request for information being published in the Federal Register.
Regulations.gov comment form for this notice 

Read comments received 

Read the Interagency Request for Information on Medical Payment Products.

Consumers can submit complaints about other financial products or services by visiting the C.F.P.B.’s website or by calling (855) 411-CFPB (2372).

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...