Massachusetts is moving forward with a plan to keep medical debt off consumers' credit reports, aiming to protect residents from a health care bill becoming long-term financial harm.
According to the Boston Globe, debt collectors and some health care providers are pushing back, arguing that the change could hurt smaller practices and reduce the accuracy of credit reports.
What's happening?
Governor Maura Healey first introduced the idea in January during her State of the Commonwealth speech. In June, the Massachusetts Department of Public Health proposed regulations that would bar licensed health care providers and facilities from sending medical debt information to consumer credit agencies.
State officials say the rules would prevent unpaid medical bills from dragging down credit scores and making it harder for people to rent an apartment, buy a home, or secure a loan. DPH held two public hearings in late July, and Healey has said she wants the rules adopted quickly.
Medical debt remains a widespread issue, even among insured families. The biennial Massachusetts Health Insurance Survey found that 13.5% of residents had family medical debt, and most affected households were insured when the debt arose. Tests, surgeries, chronic care, dental care, and emergency care were among the most common causes.
Critics say the proposal goes too far. Jeff DiMatteo, president of Franklin-based debt collection agency American Profit Recovery, wrote in testimony that "The suppression of medical debt information undermines the accuracy and fairness of the credit reporting system."
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Why does it matter?
For many families, medical debt differs from other forms of debt. People do not choose when they need emergency treatment, and the need for long-term care or a major procedure can occur unexpectedly. But the resulting bills can follow them financially long after they leave the doctor's office or hospital.
Marcella Lampon, policy manager at Health Care For All, said the burden falls disproportionately on people of color and pointed to data showing that more than 28% of Massachusetts residents said they or a family member have delayed or gone without needed care because of cost.
At the same time, hospitals, ambulance services, and smaller medical practices said unpaid bills are more than just an administrative issue. Jay Gonsalves, board member of the New England Collectors Association and CEO of Action Collection Agencies, argued that reporting legitimate debt helps prompt payment and supports providers dealing with uncompensated care.
That leaves policymakers trying to balance two competing concerns: protecting patients from lasting financial damage while recognizing that independent practices and public emergency services may have far fewer financial resources than large hospital systems.
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What's being done?
State officials are still reviewing public comments, and the Public Health Council will ultimately need to vote on the rules for DPH-licensed providers and facilities. Providers who fail to comply risk losing their licenses, though the DPH commissioner may issue waivers in cases of "undue hardship."
Some groups want those exemptions broadened. David Sipala, president of the Massachusetts Foot and Ankle Society, urged DPH to exclude solo practitioners, arguing that one-size-fits-all rules do not reflect the realities facing smaller offices. He also suggested a narrower alternative that would permit reporting only for "substantial, valid, and delinquent" debts of at least $1,500 that remain unpaid for 180 days after multiple written notices and an opportunity to dispute the bill.
Emergency medical services leaders are also asking for carveouts. Michael Ryan, Carver's chief of emergency medical services, said EMS agencies are funded differently from other DPH-licensed entities and depend on transport revenue to help offset municipal costs.
As state officials consider the final rules, Health and Human Services Secretary Kiame Mahaniah said, "People need protection from potential financial ruin, and they need it today."
David Sipala, president of the Massachusetts Foot and Ankle Society, added that solo practices "often lack the reserves, collection departments, and access to capital available to larger institutions."
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