The American Dental Association has voiced concerns with a new final rule eliminating an exception allowing third-party debt collectors to include medical debt on credit reports, according to a Jan. 10 news release from the ADA.
Here are eight things to know:
1. The new rule, issued Jan. 7 by the Consumer Financial Protection Bureau, prohibits creditors from including medical debt when making credit eligibility determinations.
2. Under the rule, credit bureaus are not allowed to include medical debt information on consumer credit reports and lenders are not allowed to use medical information in their lending decisions.
3. The bureau defined medical debt information as information that pertains to a debt owed by a consumer to a healthcare provider.
4. In an August letter, the ADA expressed potential issues with the rule, claiming that if put into place, consumers would have a lower incentive to prioritize the payment of their dental bills because their credit will not be affected by nonpayment.
5. The ADA also said the rule would compromise the bargaining power and position of creditors attempting to collect legitimate medical debt.
6. The organization recommended a phase-in period to allow dentists and dental practices to adjust their billing systems accordingly.
7. The rule will become effective 60 days after being published in the Federal Register.
8. Medical and credit reporting industries are likely to sue to block the rule.