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May 29, 2019

Improved Medical Debt Relief Act Endorsed by Patient Advocates

The newly re-introduced Medical Debt Relief Act will shield millions of patients nationwide from unfair credit-reporting practices, according to the National Patient Advocate Foundation (NPAF), a national nonprofit organization amplifying patient voices in support of access to affordable, equitable health care.

 

The Medical Debt Relief Act of 2019, introduced by Senator Jeff Merkley, prohibits credit bureaus from including medical collections on reports for an entire year, starting from the first time a patient is notified of the debt. While some credit agencies place a 180-day embargo before citing past due medical bills on credit reports, there is no current governance and the practice is not uniformly followed.

 

“An appeals process can take a long time, and unfortunately for many patients, they could still be in that process before even a 180 day deadline,” said Rebecca Kirch, NPAF executive vice president for health care quality and value. “Enforcing and extending a prohibition on reports is the only way to realistically approach this problem.”

 

Along with the extended prohibition on credit reporting, the bill requires agencies to promptly remove settled medical debts from credit reports.  Additionally, the bill improves consumers’ ability to correct credit report errors by establishing a new appeal process for initial reviews of disputed items and reduces the amount of time that adverse credit information stays on reports.

 

“These provisions are critical steps in allowing patients and their families the time they need to evaluate the validity of medical bills, contest those that are in error and resolve coverage or billing disputes without being unfairly penalized. These protections are also important to help families avoid household material hardships and support patient and family quality of life, enabling affected individuals to focus on treatment and recovery rather than distressing financial hardship caused by illness,” wrote Kirch in a letter of support to Senator Merkley.

 

One in six Americans have a past-due medical bill on their credit report. These bills will stay on a report for seven years. Still, despite its ubiquity, studies have shown that medical debt is less predictive than other types of consumer debt for evaluating credit-worthiness.  Credit reports that include medical debt, then, are ultimately less reliable than those which do not.

 

“Not only is medical billing already a system rife with abuse,” said Kirch, referring to statistics that cite errors in medical bills ranging from anywhere from 20 percent to 80 percent of all bills, “but we are working within a population that is already disadvantaged and potentially living with a serious illness. The Medical Debt Relief Act is sorely needed as a safeguard for patients, caregivers and their families.”

 

Senator Jeff Merkley introduced the Medical Debt Relief Act last week. Current cosponsors include Senators Richard Blumenthal, Elizabeth Warren, Bob Menendez and Dick Durbin.