CFPB Medical Billing Changes Mean a Need to Focus on Insurance

Government actions often mean that providers need to adjust how they address medical billing – recent news out of the White House is no different. 

The federal government has long been trying to address the state of patient payments and medical billing services and has made new moves in terms of credit cards and financing. For providers, this could mean a direct impact to your cash flows and a need to look for stability from insurance payments as the patient side continues to adjust and adapt.

In May, the Consumer Financial Protection Bureau (CFPB) published a report on the state of specialty financial products that impact medical billing. This included medical credit cards and installment loans. The report makes the claim that these options are more expensive for patients than others such as regular credit cards – something providers should be aware of if a large portion of their revenues come from patient pay. The report goes on to outline risks to consumers and a background on the products [1]. 

Providers who are concerned about having to rely more on insurance payments for a healthy revenue cycle will want to pay attention to the section of the report that covers marketing to providers. It outlines how financial firms market these products to hospitals and other providers and how these firms also provide training and promotional materials to help providers offer the products to patients. It also covers the incentives these firms use including promises of reduced costs, shorter payment times, and minimizing financial risk. The agency claims that these can be a deterrent to providers to give details on alternatives like zero-interest repayment options and legally mandated financial assistance programs. 

One area of particular interest to providers should be the increased burden on their staff when informing patients of terms and risks. Providers need to spend time explaining products to patients, meaning staff have to be trained on how to explain complex concepts like deferred interest plans if they don’t want to rely solely on the training and marketing materials that come from financing companies.

For providers who want to stay on top of this trend in changes to the patient financial experience, there are a few things to keep in mind:

• You should stay up to date: The bureau hosted a hearing on medical debt and payment products on July 11th. You can get more details on that on their website [2]. 
• Review your current processes: As things stand now, are you using any of these products? What percent of your revenue do they take up? If the government were to make changes in how they’re handled, how would you be impacted? 
• Prepare for future investment: It’s very likely that these actions at the federal level will eventually translate to changes for you. Do you have the cash flows to invest in additional training for your staff?
• Assess your history: How often are you encountering junk plans now? Are they more prone to medical billing denials and do they require more effort to appeal? Have you been documenting the impact on your cash flows?  If not, now is a good time to set up KPIs to monitor activity and how future changes could impact the health of your revenue cycle. 
• Shore up your insurance side: This announcement from the CFPB doesn’t stand alone. It’s part of a trend of actions from multiple areas of government to protect patients as they take on a greater share of the cost of care. But the road will not be smooth. Providers will need to make sure that their revenue cycle processes in medical billing on the insurance side are as stable and efficient as possible to get them through any future disruption.

Providers should also be aware of actions happening elsewhere in the federal government. The Biden administration recently anointed its plans to target short-term or “junk” health insurance plans. The rule is in response to the previous administration's expansion of plans with skimpy coverage. They are also known as Association Health Plans (AHPs) and short-term plans. 

These plans allow small businesses as well as self-employed people to form associations to purchase insurance the same way a larger employer would. These policies might cover fewer treatments and services than patients are aware of. They are designed to fill temporary coverage gaps and last a maximum of 12 months, being allowed to be renewed for up to 36 months. Under the Affordable Care Act, they do not fall under the definition of individual health insurance coverage, which means they could possibly discriminate against patients with pre-existing conditions and are not required to provide coverage for things such as prescription medications, maternity services, and mental health services. 

As these plans are under threat, providers will need to take a different approach to medical billing services. This level of uncertainty in the future of insurance means that having an external partner who understands the potential changes and risks will be critical as the future unfolds. To learn how we can be that medical billing partner for your organization, start here.