RISE summarizes recent regulatory-related headlines.
Final rule removes medical debt from credit reports
The federal Consumer Financial Protection Bureau (CFPB) on Tuesday issued a final rule that will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans.
The new regulations ban the inclusion of medical bills on credit reports used by lenders and prohibit lenders from using medical information in their lending decisions.
The rule will increase privacy protections and prevent debt collectors from using the credit reporting system to coerce people to pay bills they don’t owe. The CFPB said research indicates that medical debts provide little predictive value to lenders about borrowers’ ability to repay other debts, and consumers frequently report receiving inaccurate bills or being asked to pay bills that should have been covered by insurance or financial assistance programs.
"People who get sick shouldn’t have their financial future upended,” said CFPB Director Rohit Chopra in an announcement. “The CFPB’s final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.”
Massachusetts court orders 3 UnitedHealth insurance companies to pay $165M for deceptive sales scheme
Suffolk Superior Court in Massachusetts on Monday ordered three UnitedHealth insurance companies to pay $165 million in restitution and civil penalties for misleading customers into buying unnecessary health insurance.
HealthMarkets, Inc. and its subsidiaries, The Chesapeake Life Insurance Company, and HealthMarkets Insurance Agency, Inc., formerly known as Insphere Insurance Solutions, Inc., are based in Texas and have operated in Massachusetts and around the country. The deceptive practices date back to 2011 and primarily occurred before UnitedHealthcare acquired the companies in 2019.
The court ordered the companies to pay over $50 million in restitution for Massachusetts consumers and over $115 million in civil penalties to Massachusetts for violating the state’s consumer protection law by misleading consumers into buying unnecessary health insurance products and a prior consent judgment meant to protect consumers.
“For years, the defendants preyed on financially vulnerable individuals, deceiving them into buying products they didn’t need or couldn’t afford. This order holds the companies accountable and will provide meaningful restitution to consumers across the Commonwealth,” said Campbell.
In April 2022, the Superior Court found all three liable for violating the prior consent judgment and the Massachusetts Consumer Protection Act. The court found that the companies deceived consumers both about their sales agents and the insurance products they were selling; deceptively advertised claims that their sales agents were objective and that they represented all insurance carriers; and that the companies’ claims of objectivity were untrue and that the agents “did not, in fact, represent all health insurance licensed in Massachusetts or even all insurers that issued supplemental health insurance in Massachusetts.”
A spokesperson for UnitedHealth told Becker’s Payer Issues that the company planned to appeal the decision.
Marketers, providers in Texas, Virginia, and South Carolina agree to pay over $1.1M to settle laboratory kickback allegations
Two laboratory marketers and three physicians have agreed to pay a total of $1,137,914 to resolve False Claims Act allegations they took part in laboratory kickback schemes in violation of the Anti-Kickback Statute.
The Department of Justice announced the settlements involved laboratory marketers Shahram Naghshbandi of Fort Worth, Texas, and John Bello of Chesterfield, Va.; three physicians Dr. Abbesalom Ghermay of Plano, Texas; Dr. Daniel Theesfeld of Longview, Texas; and Dr. James Cook of Richmond, Va.; and medical practice owner Troy Belton, of Columbia, S.C., and associated entities.
The settlements resolve allegations that laboratory marketers and their companies paid or conspired to pay kickbacks to doctors, and that doctors and their companies received kickbacks in return for laboratory referrals. The alleged kickbacks resulted in the submission of false or fraudulent laboratory testing claims to Medicare in violation of the False Claims Act.
“Kickbacks can harm taxpayer-funded healthcare programs and improperly influence health care providers’ medical decisions,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey in the announcement. “Patients should always be able to rely on their medical professionals making decisions in the patients’ best interest, and not for any monetary reason. We will continue to pursue all those involved in illegal kickback schemes.”
CMS: Nearly 24M have selected health coverage in ACA marketplace
The Centers for Medicare & Medicaid Services (CMS) on Wednesday announced that so far 23.6 million consumers, including 3.2 million new consumers, have selected health coverage for 2025 through the marketplaces since the start of open enrollment. The figure represents 11.6 million more enrollees compared to the 2021 open enrollment period.
The agency said that it is on track for a record high number of plan selections for this year’s open enrollment, which extends through January 15.
“We can’t lose sight of what’s behind our tremendous, record-setting progress: Millions of individuals and families who now have a critical connection to the lifeline of health care coverage,” said CMS Administrator Chiquita Brooks-LaSure in the announcement. “To the millions more who may still need coverage: Don’t delay. Help is still available, including tax credits that have made coverage more accessible by reducing the barrier posed by high costs.”