Jun 20, 2022 | Blogs

Changes in Medical Debt Credit Reporting Benefits Consumers and Providers Alike

Medical debt reporting is about to change, and providers need to take notice as it could impact their collection efforts. Beginning July 1st of this year, medical debt that has already been paid will no longer appear on credit reports from TransUnion, Experian, or Equifax. The length of time it takes for new, unpaid medical debt to be included on a report will be extended from six months to one year, giving consumers extra time to work with their providers on a payment solution 1. In addition, beginning in the first half of 2023, medical debt under $500 will no longer be included on credit reports at all.

In addition to these changes, the federal government recently announced new reforms to help “ease the burden of medical debt,” and make it easier for American families to afford the care they need. The reforms also help ensure medical debt won’t get in the way of individuals pursuing financial opportunities.

Half of all Americans now carry medical debt and of those, nearly 46% have medical debt in collections.2

At first glance, providers may worry that these changes, especially the lack of medical debt data, may skew their ability to determine if a patient is able to pay. It would seem this is a valid concern, making it harder to determine which accounts to turn over to collections, which to keep in house, and which to write off. In reality, the concern is unfounded as research shows that “medical debt is not a reliable predictor of overall financial health” and that including resolved medical debt on credit reports leads to the underestimation of creditworthiness by as much as 22 points.3

Why should providers care about these changes? There are several reasons. We’ve highlighted the three we believe are actually opportunities to not only improve patient collections, but enhance the patient experience as well.

Increase revenue and a better patient experience

Many consumers put off care because they fear that adding any additional medical debt might negatively impact their credit score and make it harder to get credit for things like mortgages, cars, small business loans, or personal loans. Our annual iVitaFi Patient and Provider Market Research for 2021 found that nearly half (47%) of consumers said they would be “extremely” or “somewhat” likely to cancel or skip a service due to concerns about paying. When patients put off care, they can experience worsening conditions, expensive hospitalizations or visits to the emergency room, or life-threatening complications.

Having medical debt information removed from their credit profiles will likely encourage consumers to finally get the care they had been putting off. This is a perfect opportunity for providers to grow revenue, expand their service offerings, enhance the patient-provider relationship, and increase loyalty and referrals.

Proactively prepare for new mandates

Current federal legislation requires that providers who receive federal healthcare funding offer financial assistance to patients who qualify. This includes offering non-predatory payment plans. These latest reforms are an attempt to ensure providers are compliant with these existing mandates.

The reforms also involve greater evaluation of provider billing practices that may impact access to affordable care and the accrual of medical debt.4 This includes requesting provider data on lawsuits against patients, financial assistance and financial product offerings, and any 3rd-party contracting or debt-buying practices. The Department of Health and Human Services (HHS) will then use this information when making decisions about grants. They will also use the information to “publish topline data and policy recommendations for the public and share potential violations with the relevant enforcement agencies of jurisdiction.”5

We see these reforms as a great opportunity for providers to reevaluate and shore up their current financial assistance and payment plan programs. They should ask themselves if their processes are as thorough as they could be, and if they’re leveraging all available resources to ensure patients have access to the assistance they need. Providers who partner with 3rd-party collection vendors should take this opportunity to speak with those vendors and ask the same questions.

Become an advocate for patients

Alongside these reforms, the Consumer Financial Protection Bureau (CFPB) will step up its efforts to identify credit reporting companies and debt collection agencies that “violate patients’ and families’ rights, and hold violators accountable.”6

The CFPB is also developing educational tools to help consumers better understand and navigate the complex realm of medical billing. This will include materials intended to “help patients access the financial assistance they are entitled to.”7 The information will include resources to help those already experiencing issues like aggressive medical debt collectors or “coercive credit reporting,” making it easier to submit complaints.

One of the best things providers can do is to become advocates for their patients by completely eliminating the potential that their patients will ever experience unscrupulous collection practices and by making it easier to pay for their care. A great way to do this is to partner with a non-recourse lender to provide customized payment plans for patients at or before the time of service.

iVitaFi’s non-recourse line of credit offers patients flexible, affordable payment options through a no-interest, no-fee credit line. With this type of credit program, providers receive full payment up front without having to worry about taking back an account that goes into default, or working for months or even years to collect only a small portion of original amount. Patients benefit by being able to afford the care they need when they need it.

Non-recourse payment programs help enhance the patient experience, reduce the cost to collect, and increase profit margins on self-pay accounts.

Talking points for your staff

The best way to address these changes is by having conversations with your patients. Let them know that you’re aware of the reforms and that they can serve as opportunities to help them improve their financial health. Following are talking points to get the conversation started. You may also want to print these out and post them around your office, exam rooms, or waiting rooms.

  • The top credit bureaus no longer include paid medical debt on credit reports.
    • This means you can get the care you need without worrying that it will affect your credit score or keep you from getting a loan, mortgage, or other lines of credit. 
    • If you’ve been putting off care, let’s talk.
  • If you’ve been putting off care because you think you can’t afford it, we can help.
    • Our financial assistance experts will do a thorough review of your current situation and look for every available resource available.
    • We can help you apply for financial assistance, so you don’t have to go it alone.
  • We now offer interest-free payment programs to make it easier for you to get the care you need when you need it.
    • Now that credit bureaus no longer report medical debt, you don’t have to worry that getting additional care will impact your credit score.
    • Our new payment programs are customized to fit within your budget.
    • You can even add balances from future services or balances from other family members, making it easier to pay.

The time to act is now

Patients have taken on greater responsibility for their medical costs, which have significantly increased the amount of medical debt they carry. The recent changes in medical debt reporting and the new reforms by the HHS seek to reduce the negative impact of medical debt on individuals and families so they can get the care they need without impairing their financial health. Providers can help by taking proactive steps to ensure their patients understand the benefits of these changes. In return, providers can improve their revenue while enhancing the patient experience. It’s a win-win opportunity.


2 “Many Americans Still Can’t Pay Off Less than $5,000 in Medical Debt,” (