Collector - May 2015

By Katy Zillmer

healthcare

CRAs Agree to Policy Overhaul

Three consumer reporting agencies announce changes to medical debt reporting

Three of the major U.S. consumer reporting agencies, Equifax, TransUnion and Experian, recently announced a new National Consumer Assistance Plan, which includes changes to reporting consumers’ medical debts. The plan became effective in the state of New York on March 8 after cooperative discussions and a settlement agreement between the agencies and New York Attorney General Eric Schneiderman. It will eventually be implemented nationwide, according to the attorney general’s office.

The Plan

The new plan for the CRAs aims to enhance their ability to collect complete and accurate consumer information and will provide consumers more transparency and a better experience interacting with credit bureaus about their consumer credit reports.

ACA International, as part of a Medical Debt Collection Task Force led by the Healthcare Financial Management Association, contributed to developing best practices, released just over a year ago, to help make paying medical bills an easier and fairer proposition for consumers. The best practices for healthcare providers and their business partners include following up with CRAs when a consumer’s account is resolved.

The National Consumer Assistance Plan announced by Equifax, Experian and TransUnion also includes following up with CRAs, and focuses on enhancements in two primary areas: consumer interaction with national CRAs and data accuracy and quality.

180 Days

The settlement agreement between the New York attorney general and the CRAs that likely resulted in the National Consumer Assistance Plan states, “CRAs shall prevent the reporting and display of medical debt identified and furnished by collection furnishers when the date of the first delinquency is less than 180 days prior to the date that the account is reporting to the CRAs.”

This means medical debts won’t be reported until after a 180-day waiting period from the date of delinquency. Date of delinquency, as defined in the Fair Credit Reporting Act, is “the month and year of the commencement of the delinquency on the account that immediately preceded collection activity, charge to provide or loss, or similar action.”

This date needs to be determined by the provider and furnisher based on the underlying financial agreements and the creditor’s policies for when an account becomes “delinquent.”

Typically, the date of delinquency will precede the date of placement with the agency.

The 180-day waiting period for reporting medical debts in the agreement will allow insurance payments to be applied, according to the New York attorney general. The

CRAs will also remove previously reported medical collections that have been or are being paid by insurance from consumers’ credit reports.

Debt collection agencies whose healthcare provider clients request that they report

consumers’ accounts to the three CRAs also rely on them to follow up when the account is paid.

Implementation

Implementation of the requirements will occur over three years and 90 days from the March 8 effective date and includes three phases.

Requirements for medical debt collections, including the delay of sending accounts to CRAs and removing paid medical bills from consumers’ credit reports, are included in phase three. CRAs have until the completion date to meet those requirements.

CRAs have within six months from the effective date to complete phase one and 18 months from the effective date to complete phase two of the implementation plan.

As more details on the agreement emerge, it’s important for agencies working in healthcare collections and their healthcare provider clients to communicate about their expectations and plans going forward.cm