The American Hospital Association wants the federal Consumer Financial Protection Bureau to know that medical debt is unlike other consumer debt and should be treated differently.

Since November the CFPB has sought comment on a wide range of issues concerning consumer debt collection in preparation for writing new rules to govern the accounts receivable management industry. That comment period closed Friday, and the AHA was one of the many industry groups to submit comments.

In its request for public comment published in November, CFPB asked to hear from the public about debt collection practices. “Debt collection affects a significant number of consumers and the Bureau is considering proposing rules relating to debt collection,” the CFPB writes. “Therefore, the Bureau is interested in learning through responses to this advance notice of proposed rulemaking (ANPR) about the debt collection system, about consumer experiences with the debt collection system, and about how rules for debt collectors might protect consumers without imposing unnecessary burdens on industry.”

While the CFPB request for comment focused primarily on general consumer debt, it did seek comment in several limited areas regarding medical debt, and that flirtation is what prompted the AHA to respond. “We want to ensure that CFPB recognizes the significant ways in which medical debt differs from other types of consumer debt, and accounts for those differences when issuing future rules or guidance, or setting CFPB policy,” writes  AHA Senior Vice President and General Counsel Melinda Reid Hatton in a letter to the CFPB sent Friday. “Those differences also directly bear on a number of questions CFPB poses in its ANPR.”

Hatton focused on three areas:

  1. That medical debt typically does not involve a “consumer financial product or service” and that hospitals do not “extend credit” to patients. This is something the CFPB recognized as well.
  2.  That debt collection of a medical bill should not be constrained based on the number of days out  because “it is often impossible to predict how long after a bill is ‘due’ that a patient’s ultimate liability for out-of-pocket expenses will be determined,” Hatton writes. “There is no meaningful number of days after a hospital visit or other point that a bill can consistently be considered ‘in default’ or ‘delinquent.’”
  3. In its rulemaking the CFPB should “recognize the consumer protections in the IRS’s requirements for 501(c)(3) hospital debt collection practices.” While non-profit hospitals, as first-party creditors, would not be affected by the Fair Debt Collection Practices Act (FDCPA), it’s collection partners would be, and these partners are already covered by the proposed IRS regulations.

Other responses

ACA International, which represents collection partners, announced that it submitted its response Thursday as did the Consumer Relations Consortium. Most other accounts receivable management (ARM) industry trade groups also submitted comprehensive responses to the ANPR.

The industry could see new proposed rules by the end of 2014, although the comment process drew heavy attention from industry (both ARM and creditors), consumers and their advocates, and current financial regulators. More than 250 official comments have been published through the government’s site and nearly 1,200 informal comments were logged on, a new consumer-focused comment portal created in partnership with Cornell University.’s sister website,, will host a a webinar, insideCompliance: Assessing the Impact of CFPB Rules on Debt Collectors, discussing the public ANPR comments and what’s next in the rulemaking process. Get a comprehensive first look at the comments collected by the CFPB in this timely, information-packed webinar. Understand what the data the CFPB collected means in terms of next steps for the industry. Learn from top compliance experts what collection agencies can do right now to get ready for more CFPB oversight. editor Patrick Lunsford contributed to this report.

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