Prepared Remarks of CFPB Director Rohit Chopra at a White House Convening on Medical Debt

When American families deal with a serious medical diagnosis or an emergency, this isn't just a threat to their physical health. For too many Americans, it can destroy their financial life, too. This isn't right.

Over 100 million Americans have debt from medical bills. This often puts an enormous strain on people's finances, draining their savings, hurting credit scores, and driving families toward bankruptcy. Medical bills and the threat of debt collection also prevent people from seeking additional health care they need.

When facing a frightening diagnosis or emergency procedure, patients can hardly shop around for the best price from the back of an ambulance or their hospital bed. And medical bills are often confusing and opaque, filled with hard-to-interpret codes or outright errors that can cost people thousands of dollars. Among those with medical debt, more than four in ten say they received an inaccurate bill, and nearly seven in ten say they were asked to pay a bill that should have been covered by insurance.

The Consumer Financial Protection Bureau has been laser focused on dealing with the growing burdens of medical debt. After our research about serious problems in medical credit reporting, the three credit reporting conglomerates removed these items from tens of millions of credit reports. Even after these changes, our analysis revealed that many are still battling bills on their credit report. Earlier this year, we proposed a rule to ban medical bills on credit reports to end this practice altogether. States across the country have also enacted their own bans.

Too often, predatory companies threaten to put medical debt on people's credit reports, where lenders, landlords, and employers presume their accuracy. Faced with further harm to their financial security, people may feel pressured to pay off these bills, even if the charges are wrong or fake. We are working to finalize our credit reporting rule now.

Today, the CFPB is taking additional actions to address unlawful and predatory medical debt collection practices. We have issued new guidance that takes on the illegal collection of medical bills that are false, inflated, or may not actually be owed.

One reason the CFPB is concerned about coercive medical debt collection is because billing errors are widespread. Research has found significant inaccuracies on medical bills, confirming what we have heard directly from patients about being charged for care they didn't receive, for care that should have been covered by insurance, or even for care provided to someone else entirely.

The CFPB's new guidance sends a clear message to debt collectors that attempts to collect on error-filled or unsubstantiated medical bills are illegal and unacceptable. Companies are not allowed to double dip and collect on bills already paid by the consumer, private insurance, Medicare or Medicaid. Debt collectors cannot seek payments for bills that exceed federal or state caps, like the limits in the No Suprises Act, or for bills with inflated charges. Debt collectors can't lie to patients about their rights to contest bills in order to pressure people into paying negotiable charges.

In addition to issuing our advisory opinion today, we released a nationwide consumer advisory with information for people on their rights under the law and how they can protect themselves and avoid paying medical bills they don't owe or where the amount is wrong.

While the CFPB is working to stop unfair and predatory medical debt collection, we also are concerned about how these bills accrue in the first place. That's why the CFPB also published information today about hospital financial assistance programs, often called "charity care."

To qualify for tax benefits, nonprofit hospitals must offer assistance programs to patients in need. However, the CFPB continues to hear complaints from consumers that raise questions about whether these programs are working as intended. Sometimes, this is because of the eligibility requirements set by hospitals. In other cases, patients are not screened for eligibility or face complex and time-consuming applications. When patients are unable to access timely financial assistance for which they are eligible, they may accrue additional medical debt or turn to medical payment products like credit cards that add to their financial burden.

In a few moments, we're going to hear directly from several people who have experienced firsthand the difficulties of medical debt. They will share how medical bills have affected their credit scores, their ability to expand small businesses, how they budget, and how they care for their families and communities. Darcy, Amber, Paul, and Lindsey, thank you for joining us to share your stories. Your experiences shine a light on why our work is critical and urgent. The CFPB will continue our work with other federal agencies, with state governments, and with medical and financial providers to stop unjust medical bills and predatory debt collection.

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