The nation’s three leading national credit reporting agencies have entered into an agreement that requires the companies to improve credit reporting accuracy, overhaul their dispute proceduresand provide greater protections for consumers.
The National Consumer Assistance Plan was developed by Experian, Equifax and TransUnion in cooperation with New York Attorney General Eric Schneiderman after his office launched an investigation into the consistent complaints filed by New York residents regarding erroneous reports, identity theft and fraud.
Schneiderman said of the plan, “The nation’s largest reporting agencies have a responsibility to investigate and correct errors on consumers’ credit reports. This agreement will reform the entire industry and provide vital protections for millions of consumers across the country.”
But what does this mean for your medical practice or healthcare organization? The plan outlines numerous reforms the credit reporting agencies (CRAs) will be required to implement over a three year period, and many of the reforms will be instituted nationwide.
For healthcare professionals the most important changes include those to medical debt reporting. The changes aim to reduce disputes over medical debt resulting from insurance coverage delays and disputes.
180-Day Waiting Period for Reporting Medical Debt
The credit reporting agencies are instituting a 180-day waiting period from the date of first delinquency before medical debt can be reported on a consumer’s report. This waiting period will provide additional time to resolve delinquencies resulting from disputes or delays on the part of third-party payers, such as insurance companies.
This is not inconsistent with the 501(r) guidelines developed to clarify the new restrictions imposed on charitable hospitals under the Affordable Care Act. These new regulations require charitable hospitals to notify patients of the availability of financial assistance for at least 120 days, and to allow them to apply for at least 240 days, from the date of the first post-discharge bill. Hospitals' ability to take collection actions against a patient is also restricted during this time.
Removal of Paid Medical Debts
Under the National Consumer Assistance Plan, the CRAs will also be required to remove all medical debts from a consumer’s credit report that have been, or are being paid, by insurance. This is similar to, but more restrictive than, the changes announced by Fair Isaac to its newest credit scoring model, FICO 9. FICO 9 promises to remove all paid accounts from consumer reports when calculating a credit score. This new rule for CRAs will require the removal of only those accounts paid by insurance.
Additional New Requirements
The following reforms will also be implemented by the credit reporting agencies, and are outlined in more detail in the announcement of the reform from Schneiderman's office. The changes can be found in their entirety in this final Settlement Agreement.
Improvement of the Dispute Resolution Process:
CRAs will be required to employ specially trained individuals to review supporting documentation for all disputes involving mixed files, fraud or identity theft. It also requires all denied disputes submitted through the electronic dispute resolution system currently in place will be reviewed by a specialist for final determination.
Increasing the Visibility of AnnualCreditReport.com:
All consumers are entitled to one free annual credit report from AnnualCreditReport.com. CRAs are now required to prominently display this information on their sites where consumers can find it.
Additional Free Credit Report:
CRAs will be required to provide a second free report to consumers who experience a change in their credit report as a result of filing a dispute.
The CRAs will develop policies to monitor data furnishers’ performance and to take action against those who fail to comply with the new best practices.
Media Campaign about Consumers’ Rights:
CRAs will be required to carry out an extensive consumer education campaign to ensure consumers understand their rights.
The reporting agencies will begin implementing these changes within the next few months, and will have them in place in their entirety in the state of New York within the next three years. It is unclear at this time which reforms will be required nationwide, but further updates are expected.
Healthcare organizations that are currently working with a collection agency that credit bureau reports are urged to discuss what is being done at the agency to ensure compliance with these reforms so they are prepared when they go national.
Written by Ali Bechtel, Public Relations Coordinator
This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice, please consult an attorney.