On July 7, 2023, the Consumer Financial Protection Bureau (CFPB), U.S. Department of Health and Human Services (DOH), and U.S. Department of Treasury (DOT) initiated a public inquiry into certain financial products, such as medical credit cards and installment loans that the CFPB characterized as “high-cos specialty products.”  The CFPB, DOH, and DOT claim that these products are often “pushed” upon consumers and effectively drive up the cost of routine medical care, which leads to increased medical debt.  The inquiry is part of the continued effort by the CFPB to investigate medical financing products and medical debt and builds upon research conducted by the Bureau regarding these products, previously covered here by Consumer Financial Insights.

The CFPB, DOH, and DOT’s request for information seeks comments from the public and interested parties relating to financial products that are used to pay for medical costs.  The agencies stated that they “seek to understand the prevalence, nature, and impact of these products, including disparities across different demographic groups. The agencies also seek to understand the effects these products may have on patients and on the health care system.” The agencies specifically request information about:

• The medical financing product market, including interest and fee costs for medical financing products and further information about the “marketing, application, and approval processes.” The CFPB stated that it is also interested in “trends of medical payment product use, including the total outstanding consumer debt on medical credit cards, medical installment loans, and other medical payment products,” which will help the agencies have a more fulsome understanding of how these products are used.
• Consumer understanding of the risks associated with these products. The CFPB specifically identified “loss of medical bill negotiating power, aggressive debt collection practices, lawsuits, and loss of credit reporting protections.”
• Whether medical financing products “exacerbate existing issues in health care billing and collections.” The CFPB gave the example of how uninsured or out-of-network patients may be charged higher prices than negotiated by in-network providers and expressed concern that medical payment products may further enable this trend of charging such patients more.
• The incentives offered by medical financing companies to health care providers to promote medical payment products, such as revenue sharing, and how these incentives impact how the products are offered to patients.

This public inquiry is consistent with the CFPB’s continued interest in these products and their impact on consumers.  The comment period is open for 60 days until September 7, 2023.

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