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The Consumer Financial Protection Bureau (CFPB) recently issued new medical debt collection rules, targeting practices like double billing and inflated charges. This is a significant development for revenue cycle management (RCM) teams, highlighting the need for robust internal controls and a focus on patient financial experience.

Why is the CFPB issuing new medical debt collection rules?

Medical debt is a major burden in the US, with millions of Americans struggling to pay exorbitant bills. The CFPB is concerned that inaccurate billing practices are contributing to this problem, leading to consumers being harassed for debts they don’t truly owe.

What practices are under scrutiny?

The CFPB’s guidance outlines several illegal collection practices:

Double Billing: Collecting on bills already paid by the patient, insurance, or government programs.

Exceeding Legal Limits: Demanding payment for amounts exceeding state or federal caps on medical charges.

Falsified or Fake Charges: Attempting to collect on bills with “upcoded” services (exaggerated charges) or services never received.

What do new medical deb collection rules mean for RCM teams?

The CFPB’s increased scrutiny of medical debt collection practices highlights the critical importance of clean and accurate medical billing. RCM teams must take proactive steps to ensure their billing processes are compliant with federal and state regulations, including:

Invest in Coding Accuracy: Implementing robust coding compliance programs is essential to minimize errors. Upcoding, which involves assigning incorrect or higher-paying codes for services, not only puts patients at risk of inflated bills but also exposes healthcare facilities to potential penalties from regulatory agencies.

Prioritize Prior Authorization: Ensure that all services requiring prior authorization from insurance companies are obtained before they are provided. This helps to reduce the likelihood of patients receiving services that are not covered by their insurance, leading to unexpected and potentially burdensome bills.

Enhance Billing Transparency: Provide patients with clear and easy-to-understand bills that detail the specific services provided, their associated costs, and the insurance coverage breakdown. This empowers patients to identify and dispute any errors or discrepancies in their bills.

Foster Open Communication: Establish clear communication channels for patients to inquire about their bills and report any concerns or errors. RCM teams should respond promptly and professionally to all patient inquiries, addressing their concerns in a timely manner.

Stay Updated on Regulatory Changes: Keep up-to-date with the latest federal and state regulations related to medical billing and debt collection. This includes staying informed about any changes in coding guidelines, prior authorization requirements, and patient rights.

Benefits of Clean Billing Practices

Beyond regulatory compliance, clean billing practices offer several benefits:

Improved Patient Satisfaction: Accurate and transparent bills foster trust between patients and healthcare providers. When patients receive clear and understandable bills, they are less likely to experience confusion or frustration, reducing the likelihood of disputes and improving overall patient satisfaction.

Reduced Denials and Rejections: Clean claims, which are free from errors and inconsistencies, are less likely to be denied by insurance companies. This reduces the administrative burden on RCM teams and minimizes delays in the revenue cycle, ultimately improving cash flow.

Lower Risk of Audits and Penalties: Adhering to clean billing practices significantly reduces the risk of audits and potential penalties from regulatory agencies like the CFPB. By minimizing errors and ensuring compliance, healthcare providers can protect their financial stability and avoid costly legal consequences.

Final Thoughts

The CFPB’s focus on medical debt collection is new challenge for RCM teams. By prioritizing clean coding, communication with patients, and transparency in billing, RCM teams can ensure compliance and contribute to a fairer and more efficient healthcare system for all. Remember, focusing on patient financial experience is no longer just good practice, it’s a regulatory imperative.

Get in touch with us today and learn more about how MailMyStatements’  BillingCycle Plus software can help streamline your patient billing and payment collection process with digital tools like eStatements, SMS text message payment alerts and reminders, and machine learning chatbots.