CMS, CFPB take on improper medical collections in Medicare

CMS and the Consumer Financial Protection Bureau (CFPB) are together cracking down on Medicare providers who improperly bill low-income beneficiaries, with a new joint statement reiterating billing and debt collections best practices for this patient population.

The joint statement discusses the Qualified Medicare Beneficiary (QMB) group, which Medicare providers may not bill for cost-sharing, including co-pays or deductibles.

"Medical bills are a major contributor to bankruptcy and financial collapse for a family," CFPB Director Rohit Chopra said in a press release. "The CFPB and CMS are working to ensure that Medicare beneficiaries are not subjected to illegal debt collection on improper medical bills."

QMBs are low-income older adults and people with disabilities whose Medicare Part A and B cost-sharing is covered by state Medicaid agencies. The joint CMS-CFPB statement stated that this status is "essential to the health and well-being of those enrolled, promoting access to Medicare-covered services, and helping free up an individual's limited income for food, housing, and other life necessities," the two agencies wrote.

"Despite federal law, some providers and suppliers continue to improperly bill QMBs," CMS and CFPB added.

In the past several years, around 17% of the Medicare-related complaints fielded by the CFBP have been in relation to QMB status, the agency said. Most of those complaints (11% of all Medicare-related CFPB complaints) detail a healthcare provider or debt collector attempting to collect inaccurate charges or debts.

Improper charges and debts can affect a QMB's credit score, therefore, affecting their financial health and ability to access housing, utilities and other types of insurance, CFPB and CMS said.

The joint statement outlined key protections for QMBs and reiterated the laws and regulations Medicare providers and suppliers may not bill QMBs for cost-sharing. CMS stressed that providers that violate these protections are breaching their Medicare provider agreement or obligations under Medicare Part C.

Violators will be subject to sanctions and will need to refund any amounts they improperly billed.

CMS also issued a memo detailing health plan responsibilities, particularly related to communicating QMB status to Medicare providers.

"The Biden-Harris Administration's efforts to make health care more affordable are life-changing for millions of Americans," CMS Administrator Chiquita Brooks-LaSure said in the press release. "This guidance is part of our ongoing commitment to ensure people have access to health care without fear of receiving bills that they should not have to pay. No one should go bankrupt from getting the health care they need."

For its part, the CFPB stressed the role of the Fair Debt Collection Practices Act (FDCPA). This law prohibits false or misleading representation as a means of collecting debt. According to the CFPB, Medicare providers would be violating the FDCPA if they pursue cost-sharing debts for QMBs, even if that provider or debt collector was supplied inaccurate information about QMB status from a health plan.

The agency also outlined provider and debt collector responsibilities under the Fair Credit Reporting Act.

"This may include misrepresentations about whether QMBs owe particular amounts and how much individuals owe," the CFPB wrote in the joint statement. "Reporting that a third party owes a debt to a healthcare provider when the underlying bill is prohibited by the SSA may demonstrate that furnishers have failed to establish or implement reasonable written policies and procedures regarding the accuracy and integrity of information they furnish."

Sara Heath has covered news related to patient engagement and health equity since 2015.