Regulation F Brings New Regulations to Debt Collection. Here’s How It Impacts Healthcare.

The debt collection industry is facing new regulations that will shape collections practices to come as an extension and supplement of the federal Fair Debt collection Practices Act. The Consumer Financial protection bureau's regulation f is aiming to cut back on usurious serious collection tactics, improve communications around debt collection and address prohibitions on abusive and false representations. So with regulation comes new processes and new methods for interacting with debtors, like allowing a limited content voicemail message to create a touchpoint with the consumer or addressing restrictions on coercive advertisements or violent language against the consumer and overall new call restrictions as well around time zones and contacting a consumer's place of employment. For a more focused analysis on the impact of regulation F on a very specific industry. We sourced Olivia Britt, senior director of revenue cycle strategies at chavista. She gave her perspectives on how regulation F's collection rule changes will ripple into the health care industry and specifically the industry's revenue integrity and accounts receivable operations. To summarize, regulation f for our customers, regulation f is the final rule. It implements the Fair Debt Collection Practices act, FCPA and the role. This final rule goes into effect November 30 of 2021 and what this rule does is it clarifies three things for us. It tells us the information that we must provide before collection activity begins on account. So what information must we send to that patient before we start collection activity? Two it prohibits collectors collection agencies from threatening legal action on a time bar debt and a time barred debt is a debt that is past the statute of limitation, so a long term payment agreement. A patient may have a moral obligation to make the payment, but after the statute of limitations is passed, they do not have a legal obligation. And the last thing that it clarifies for us is what steps must be taken before we report a patient's debt to a credit reporting agency. And that's really how I would summarize regulation for our consumers, and this impacts all of our providers, all of our providers that send air to a collection agency. It's very rare that I see anyone doing this themselves internally themselves. There's just so much compliance around bad debt collections, but really, it's very important that our providers are aware and understand that they should be sending certain information to their collection agencies to ensure that regulation f is being followed and very important. And where we're going to see probably our most significant gaps is with the model validation notice, which is going to be the first thing that we send. It's the first communication that we would make before we start collection activity, but it's very clear in the information that has to be included in that validation notice, and they've provided us five dates. There's it's very clear there's no substituents on those dates. There's no exceptions. It must be one of the five. That would be the last statement date, the last written notice that was mailed to a patient. The charge off date. The date that it was written off to a collection agency. The last payment date, the last transaction date or the Last Judgment date again. Really, it's very important if you have a collection agency that is telling you that you do not need one of those five dates, they are wrong. It's very clear. It's risky when you use the date of a file. There's really, you know, I don't think there's room for so. Institutions like I said are interpretations of that you need to be making sure that information is in the file. And the great thing about sending the model validation notice and following the rules, the final rule and what they've outlined and summarize for us is it does provide some safe harbor protection for us in our client. So it prevents the litigious patients or the litigious type accounts where we will see a lot of consumer attorneys getting involved. But again, very important that model validation validation notice is being used and followed. And what we're doing is we are making sure that is our first communication. We've gone back to our clients and requested the information that we need in our placement file to make sure that it's clearly laid out, as they have outlined for us. We are also adding to our payment coupon the ability for a patient to dispute the debt. It's very clear in the body, it's clear in the coupon and we give the options for them to dispute that debt. Again, very important, this rule goes into effect November 30. If you are not prepared, if you have not talked to your collection agency, cease collections until you can ensure that they are following and prepared for regulation to ensure that you are in compliance. If you want to get in on the hub for B2B community, make sure that you're subscribing to market scale. For more thought leadership content.