The Consumer Financial Protection Bureau (CFPB) and the Centers for Medicare & Medicaid Services (CMS) released new guidance this week to prevent health care providers, Medicare Advantage plans, and debt collectors from issuing unlawful medical bills to Medicare recipients who live at or below the poverty line.
Under federal law, CMS can sanction traditional Medicare providers and suppliers, Medicare Advantage providers and suppliers, and debt collectors for improperly billing millions of people who are members of the Qualified Medicare Beneficiary (QMB) group. In 2021, about one in eight Medicare beneficiaries–8.7 million people–were enrolled in the QMB eligibility group. The law prohibits health providers who accept Medicare from billing them for cost-sharing, such as co-pays or deductibles.
The agency also released new resources that clarify that health care providers must refund any improper charges, regardless of whether they received incorrect information about a recipient's QMB status from Medicare Advantage plans.
“Medical bills are a major contributor to bankruptcy and financial collapse for a family,” said CFPB Director Rohit Chopra, in an announcement. “The CFPB and CMS are working to ensure that Medicare beneficiaries are not subjected to illegal debt collection on improper medical bills.”
The guidance is meant to ensure people have access to health care without fear of receiving bills that they should not have to pay, explained CMS Administrator Chiquita Brooks-LaSure. “No one should go bankrupt from getting the health care they need,” she said.
CMS said the improper bills can cascade into debt collection actions and negative credit reports, creating lasting financial harm for protected beneficiaries and contributing to a medical billing system rife with inaccuracies.
The new guidance clarifies that:
· Debt collectors may not collect on improper and inaccurate bills targeting Medicare beneficiaries. The Fair Debt Collection Practices Act prohibits collecting bills that are not actually owed or are in the wrong amount.
· Debt collectors may not tarnish credit reports with improper and inaccurate bills. Providing inaccurate information may violate the Fair Credit Reporting Act and may also demonstrate that debt collectors do not verify the accuracy of information they furnish.