Change In Rules Of Reporting Medical Debt

Thursday, December 11th 2014, 7:09 pm
By: News 9

It's a frustrating reality that medical bills account for more than half of the overdue debt in America.

A new government study finds the main reason is most people are confused by the bills they receive.

The report released Thursday, by the Consumer Financial Protection Bureau, calls for change in the rules of reporting the debt in hopes of decreasing the number of errors.

Experts say most Americans get lost in a medical debt maze rarely leaving their credit reports unscathed.

“Medical care should not make your credit report sick,” said Consumer Financial Protection Bureau Director Richard Cordray.

Cordray and other industry representatives held a public hearing in Oklahoma City to discuss the findings.

The report says 1 in every 5 people surveyed has medical debt, and for many that's their only debt.

“Most medical debts that end up on a consumer's credit profile are for small amounts,” he said.

The average medical debt totaled $579.

Unlike an unpaid utility bill or missed car payment, medical bills are often unpredictable.

“Medical collections are unique. They are results from bill that are unpredictable, typically unplanned, and involuntary incurred in emotionally charged situations,” said Mark Rukavia of Community Health Advisors.

Some medical debts are the result of disputes between doctors and insurance companies. By the time the two parties work it out, the patient often receives notice from a credit agency causing a tarnished credit score.

But now, CFPB will require major credit reporting agencies to report any complaints they receive about the accuracy of consumers' credit reports. Also, investigating companies that have an abnormally high dispute rate will be required.

CFPB gave a few recommendations on how to keep medical debts off their credit reports, they include: going over your bills closely, keeping all your records, and if disputes arise act fast.

Read the full report.