According to the Consumer Financial Protection Bureau, U.S. service members say their credit ratings have been affected by medical billing errors and late payments to providers under Tricare — issues that can jeopardize their security clearances and chances of promotion.
A new report from the CFPB found that in 2021, active duty, Reserve, and National Guard members filed more than 42,700 complaints with the agency, with more than 60% relating to credit issues and debt collection.
Among this group, medical debt and health care billing issues were among “the top drivers,” a surprising finding given that active duty personnel and activated Guard and Reserve members receive medical benefits. comprehensive and that their families have extensive coverage under Tricare.
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“Servicemen have said they fear the irreparable harm that negative credit reports from incorrect medical bills could do to their careers,” The CFPB Member Affairs Office wrote in its annual report, released on Monday.
From 2018 to 2021, the CFPB received more than 5,000 complaints about medical billing and negative credit reports, including 1,500 from service members in 2021 alone.
The report noted that service members often encountered problems when being referred to a non-military provider or seeking care in an emergency room.
Military credit was also hit when the billing process broke down between the provider and the military’s Tricare health program, the report said.
A member of the service told the CFPB that when he sought emergency care, he filled out the necessary paperwork for coverage, but then received a bill for the radiology services he received during the visit. . They thought it was paid for by Tricare as part of the overall hospital bill, but instead the radiology part went to collections.
“In February 2021, three separate same day/service account numbers were subject to collections and listed on my credit report, causing it to drop over 70 points,” the service member wrote in his complaint to the CFPB.
Compounding the problem, according to the CFPB, are credit bureaus tracking consumer debts and payments, which did not sufficiently respond to disputes, according to the report.
“I have instructed the company … to thoroughly investigate the [debt collector] rely on my credit report because it is inaccurate,” another member of the service wrote. “The insurance paid this debt. Now, [debt collector] tries to be paid twice by us as patients as well as by the hospital. It’s illegal and unethical… [the company] always refused to take it off.”
A Kaiser Family Foundation analysis of Census Bureau survey data found that nearly 1 in 10 adults owe more than $250 in medical debt, totaling $195 billion nationally.
But data is scarce on the extent of the problem in the US military community, according to the CFPB.
“These complaints raise significant concerns that medical debt has an underappreciated and underresearched effect on the financial health of service members, which in turn may affect military readiness,” the report notes.
The analysis also revealed that the reserve component and members of the National Guard are affected by medical debt and incorrect billing due to their unique status, under which they can be covered by private insurance through their civilian jobs or the military healthcare system if activated. for more than 30 days.
“The CFPB has heard from reservists that vendors are not billing the correct entity due to confusion that reservists are not full-time military members. Instead, they often bill the member directly to the member or directly to a debt collector,” the report said. said.
And veterans face similar concerns, especially if they receive care at non-VA facilities. Often, veterans believe their care with a civilian provider will be covered, only to learn later they didn’t meet VA payment standards, the report said.
In other cases, non-VA medical providers wrongly referred bills that had been paid or were due to be paid by the VA to third-party collection agencies, according to the report.
Earlier this year, the VA took steps to ensure that veterinarians’ credit scores were not affected by negative medical debt reports. The VA has announced that it will only release information about unpaid medical bills to national consumer reporting companies after it has exhausted all debt collection efforts, determined that the patient is n is not severely disabled and the debt is over $25.
As a result of the changes, the VA estimates that 99% of the 530,000 cases of debt reported annually by the department to credit bureaus will stop.
The three largest credit reporting companies – Equifax, Experian and TransUnion – announced in March that paid medical bills would no longer be listed on credit reports and that unpaid medical bills must be at least one year old. to be reported.
They also agreed to exclude medical collection debt under $500 on consumer reports.
David Treacher, deputy director of government relations at the National Association of Military Families, said the measures are helpful, but more information is needed to determine the extent of the problem in the military community.
Bad credit reports can cause “serious harm to service members and their families,” preventing them from getting a home loan, renting a house when they move, buying a car and more.
“It’s on the family side. On the service side, a negative credit report can affect whether they maintain their security clearance and their job,” Treacher said. “Military families have sacrificed so much, and these credit report errors and medical billing issues are causing a lot of stress.”
He encouraged military families having difficulty resolving their credit issues to report the problems to the CFPB.
In its report, the CFPB recommended that the Department of Defense improve data collection on medical debt among the military and its effects on credit scores. He also encouraged providers and businesses to create safeguards to ensure that service members are not charged incorrectly and called on credit reporting companies to respond promptly to complaints from service members, families and veterans.
“Military members are expected to keep their finances in order at every stage of their military career,” the report said. “The CFPB wants to ensure that the military is able to effectively navigate the military financial lifecycle.”
– Patricia Kime can be contacted at [email protected]. Follow her on Twitter @patriciakime.
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