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Featured | October 15, 2021

Leveraging Compassionate Patient Financing to Stay Compliant With Changing Regulatory Guidelines

Medical Debt 

As the cost of healthcare rises, more Americans are finding themselves in medical debt – 1 in 6, according to the National Consumer Law Center. Medical debt makes up an average 52% of collection items on credit reports. A new JAMA study found that Americans have more unpaid medical bills than originally reported, a total of $140 billion, up from $81 billion reported in 2016 

The true total is likely even higher. The $140 billion only measures debt from collections agencies. It does not include lawsuits filed by providers or medical credit cards. These statistics have caught the attention of legislatures, with many states imposing regulations to help protect patients from medical debt.  

The Regulatory Environment  

In July 2020, SB-639 took effect in California prohibiting medical providers from offering credit cards or loans that include deferred interest. The intention behind the bill is to protect patients from unwittingly signing up for a credit card with introductory zero interest that later accrues to a high interest rate, often as high as 30%. Connecticut introduced similar legislation that would require hospitals to publicly report how they collect debt and cap the interest rates that patients could owe.  

Maryland legislation mandates a hospital cannot file an action against a patient or give notice to a patient until after 180 days after the initial bill was provided or file an action against a patient until the hospital determines whether the patient is eligible for free or reduced-cost care. 

Other states like New Mexico have laws that set restrictions for filing lawsuits against patients to collect medical debt. The New Mexico Patient Debt Collection Practices Act prevents healthcare providers from sending medical bills to collections or filing medical debt lawsuits for people whose household income is at or below 200% of the federal poverty level. 

The federal Comprehensive Debt Collection Improvement Act would (among other things) require debt collectors to wait at least two years after the first payment of a medical debt is due before engaging in activities to collect that debt. 

Uncompensated Care 

As out-of-pocket medical expenses continue to rise for patients, we’ll likely see more regulations at both the state and federal level. While well intentioned to protect consumers, these regulations could have a profound effect on health systems already suffering from the cost of uncompensated care.  

According to the American Hospital Association, hospitals have provided more than $660 billion worth of uncompensated care since 2000. This statistic does not include the financial impact of COVID-19. AHA reports that hospitals have already lost $323 billion in 2020 because of the pandemic.  

The CarePayment Solution  

The challenge medical providers are facing is how to help patients afford the care they need within regulatory guidelines, while also maintaining health system revenue vital to serving their communities. 

CarePayment provides a solution that helps patients pay for their healthcare and increases collections for providers – while staying within current and proposed legislation. CarePayment offers patients long-term payment plans that are always 0.00% APR over the life of the loan. Through our compassionate and intelligence-based communications, we engage more patients to pay than any other solution and guarantee providers a minimum 2-5X net cash increase. Additionally, 89% of patients are more satisfied with their provider when CarePayment is offered.  

Because CarePayment is a patient-centric company with the mission to make healthcare affordable for all patients, the CarePayment program is already compliant with new and proposed regulations. In fact, here are a few ways we are equipped to help hospitals navigate new policies: 

  • We are not a debt collection agency. CarePayment does not report patient information to credit agencies, nor do we take legal action against patients. 
  • We never charge interest. CarePayment is always 0.00% APR over the entire life of the loan.  
  • Our platform enables adjustable, patient-specific repayment terms. CarePayment can help you rollout income-based configurations for patients for states the require income-based payment plans.  
  • We communicate directly with patients about payment plans. At all points of contact, CarePayment enables custom communication regarding payment plans and other financial assistance options. 


Our compliance and legal teams continue to monitor legislation and are available to assist providers in developing new policies and procedures that align with new regulatory requirements. For more information on the latest regulatory changes in the patient billing and financing environment, read our latest download Improving Patient Financial Engagement within Rapidly Changing Regulatory Guidelines 

Want to learn more about CarePayment’s 0.00% APR patient financing program? Fill out our Sales Inquiry form and a CarePayment associate will be in touch shortly.