On November 13, Representative Gary J. Palmer (R-AL) introduced House Joint Resolution 220, which seeks congressional disapproval of an advisory opinion published by the Consumer Financial Protection Bureau (CFPB or Bureau) relating to medical debt collection practices.
The text of the resolution, which has been referred to the House Committee on Financial Services, reads:
Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Bureau of Consumer Financial Protection relating to “Debt Collection Practices (Regulation F); Deceptive and Unfair Collection of Medical Debt”.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Bureau of Consumer Financial Protection relating to “Debt Collection Practices (Regulation F); Deceptive and Unfair Collection of Medical Debt” (89 Fed. Reg. 80715; published October 4, 2024), and such rule shall have no force or effect.
The rule in question, which the resolution aims to disapprove, results from an advisory opinion issued by the CFPB on October 1, 2024. As discussed here, the advisory opinion outlined what the CFPB considers to be the obligations of debt collectors under the Fair Debt Collection Practices Act (FDCPA) and Regulation F when collecting medical debts. The opinion focuses in particular on what types of activities the CFPB believes are deceptive and unfair practices in medical debt collections.
Specifically, the CFPB stated that debt collectors will be strictly liable under the FDCPA and Regulation F for engaging in the following practices when collecting medical bills:
- Collection of Amounts Not Owed Because Already Paid: Debt collectors must ensure they are not attempting to collect amounts that have already been paid, either fully or partially, by the consumer, insurance, or a government payor. Collecting such amounts would violate the FDCPA’s prohibitions against unfair and deceptive practices.
- Collection of Amounts Not Owed Due to Federal or State Law: Debt collectors must not attempt to collect amounts that consumers are not legally obligated to pay. Examples include state workers’ compensation laws or the Nursing Home Reform Act that may relieve consumers of certain medical debts.
- Collection of Amounts Above Permitted Limits: Debt collectors must adhere to federal and state laws that limit the amounts that can be charged for medical services. For example, the No Surprises Act restricts the charges for out-of-network emergency services.
- Collection of Amounts for Services Not Received: Debt collectors must not attempt to collect amounts for services that were not actually rendered. Practices such as “upcoding,” where a patient is billed for more expensive services than those received, are prohibited.
- Misrepresentation of the Nature of Legal Obligations: Debt collectors must not misrepresent the legal status of a debt. This includes presenting uncertain payment obligations as settled or determined amounts.
- Substantiation of Medical Debts: Debt collectors must have a reasonable basis for asserting that the debts they collect are valid and the amounts correct. This includes obtaining appropriate documentation to substantiate the debt, consistent with patient privacy laws.
In conjunction with the advisory opinion, the CFPB also released a consumer advisory titled “Pause and review your rights when you hear from a medical debt collector.” It advises consumers to verify the accuracy of medical bills, negotiate amounts owed, and seek legal assistance if necessary. The advisory recommends not hastily paying medical debt without first ensuring its validity and exploring potential reductions or disputes.
We will continue to monitor the progress of House Joint Resolution 220 and provide updates as they become available.
