February 16, 2016

Risky business: Keeping up with consumer credit rules that impact providers and their patients

By laura aylward

“On January 8, 2016, the U.S. House of Representatives passed a bill¹, now under consideration in the Senate, that requires federal courts to deny class certification in cases where the class members did not suffer the same type of injury as the named plaintiff.

This law would affect professional plaintiffs who try to create a class, for example, through soliciting consumers to claim violations of the Telephone Consumer Protection Act by healthcare providers and other companies. TCPA regulates, among other things, the use of auto-dialers and prerecorded messages which many providers and their vendors rely on for efficient and economical patient outreach. This type of class-action litigation against callers is definitely on the rise.

Keeping up with the complex and changing consumer protection regulations and laws can pose challenges for hospitals, medical practices and other businesses who rely on calling campaigns as a part of patient or customer outreach. In addition to TCPA, other key laws that providers must abide by in patient financing include the Equal Credit Opportunity Act, the Truth in Lending Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Failing to comply exposes organizations that offer patient financing and pursue collections on receivables to escalating levels of risk and potential penalties and fines.

In addition to concern about aggressive plaintiff lawyers, providers should be concerned about regulatory scrutiny. With medical debt being the No. 1 cause of personal bankruptcy and reason for damaging people’s credit scores more than any other type of debt, federal and state regulators and policymakers are also examining how providers handle consumer health care balances, payment plans, communications and related issues.

In a recent article for Healthcare Financial Management, we outlined steps that providers can take to bring their policies and actions in line. They include:

  • Update admission forms to enhance disclosures and obtain consent for a variety of practices, such as the use of autodialers, sharing and use of information, and consumer awareness of financing practices
  • Make payment policies uniform
  • Require business associate compliance with not just privacy laws, but also other consumer protections laws

Staying current with consumer protection laws and regulations isn’t just good business practice or an important way to reduce organizational risk, although it certainly is both. It can be an important check-and-balance for providers that their services and actions reflect their values and support their mission to serve their communities.

There’s no better example of that than IRC 501(r) which became fully effective December 29, 2015. The rules for maintaining non-profit hospital tax-exempt status may form a platform for engaging patients financially as well as clinically, as we noted in another blog post.

¹ H.R. 1927: Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2016