CFPB Estimates $88 Billion in Medical Bills on Credit Reports

Last week, the Consumer Financial Protection Bureau (CFPB) released a report estimating that  43 million people had medical bills on their credit reports, with the total outstanding amount at $88 billion. The report covers the complicated process of the medical billing system in the U.S., and how the healthcare system is supported by infrastructure where mistakes are common and patients face obstacles getting errors resolved.

“It is all too common for patients and their families to be caught in a doom loop between their provider and their insurance company,” said CFPB Director Rohit Chopra in prepared remarks. “I am concerned that the credit reporting system is being weaponized as a tool of coercion to get people to pay medical bills they may not even owe.”

The report highlights sources of confusion when medical bills go into collection or are put on a credit report. Bills are often sent to collections by multiple parties, which can result in multiple charges for the same visit. The total billed amount can also become unrecognizable and most patients cannot manage the time and effort needed to dispute unfair charges.

Additionally, the CFPB found that as of the second quarter of 2021, 58 percent of bills in collections and on credit records are medical bills. The COVID-19 pandemic has caused both insured and uninsured patients to incur substantial costs. Many consumers have also deferred routine care during the pandemic, so medical debt is expected to rise again.

“As we look to recover, it will be critical that we ensure that patients seeking care do not find their financial lives ruined. I expect that we will report further on any additional efforts to combat coercive credit reporting this summer,” Chopra said.

The CFPB said it intends to hold credit reporting companies accountable and take action against furnishers who commonly report inaccurate information. It also plans to work with federal partners like the Department of Health and Human Services to reduce coercive credit reporting, and will determine if unpaid medical billing data should be included in credit reports.