Bill Collection Made Tougher by Recent Changes in Credit Reporting

Americans owe $220 billion in medical debt,¹ and the most effective method for collecting money could soon cease to be an option.

Mark Nestor, MD, PhD, highlighted this issue during a presentation at the Winter Clinical Hawaii 2025 meeting in Waikoloa Village, Hawaii.

“Bad news: Everybody here is owed money by their patients, [and] it’s getting much harder to laugh,” Dr. Nestor said.

After the three major credit bureaus voluntarily decided in 2023 to stop reporting medical debt under $500,² the Consumer Financial Protection Bureau finalized a rule this year to ban the inclusion of medical bills on credit reports used by lenders and prohibit lenders from using medical information in their lending decisions.³ The rule would remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans, but it is being challenged in court.³ Even if the challenges are successful, Dr. Nestor noted that most dermatology bills are less than $500.

“Now every patient knows because of the news that they don’t have to pay you and go to credit reporting for under $500,” he said. “That is bad for dermatology.”

Of course, Dr. Nestor noted, there are other ways to collect money, but none are perfect. Collecting at the time of service or keeping a credit card on file is not always easy, and billing the patient or sending to collections is costly.

“You can take them to court,” he said, “but the bottom line is: What do you do if they can’t pay? It’s all about the ethics.”

1. CFPB Takes Aim at Double Billing and Inflated Charges in Medical Debt Collection. Consumer Financial Protection Bureau. Published October 1, 2024. Accessed February 21, 2025. https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-aim-at-double-billing-and-inflated-charges-in-medical-debt-collection/
2. Have medical debt? Anything already paid or under $500 should no longer be on your credit report. Published May 8, 2023. Accessed February 21, 2025. https://www.consumerfinance.gov/about-us/blog/medical-debt-anything-already-paid-or-under-500-should-no-longer-be-on-your-credit-report/
3. CFPB Finalizes Rule to Remove Medical Bills from Credit Reports. Consumer Financial Protection Bureau. Published January 7, 2025. Accessed February 21, 2025. https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports/