Articles

CFPB Medical Debt Reporting Ban Vacated, and What it Means for Healthcare Revenue Cycle Professionals

Aug 6, 2025

On July 11, 2025, a federal judge in Texas vacated the Consumer Financial Protection Bureau’s (CFPB) rule that would have removed medical debt from consumer credit reports. This decision has significant implications for healthcare providers, particularly in managing self-pay accounts receivable (AR) and patient financial experiences. 

Background of the Ruling 

The CFPB’s rule, finalized in January 2025, aimed to eliminate medical debt from credit reports, arguing that such debts often result from unforeseen medical events and should not penalize consumers’ creditworthiness. This rule was immediately challenged by industry groups in court.  However, U.S. District Judge Sean Jordan ruled that the CFPB exceeded its authority under the Fair Credit Reporting Act (FCRA), which permits the reporting of properly coded medical debt data obscuring the name of the provider.  The ruling was a joint request from the CFPB and industry groups, including the Consumer Data Industry Association (CDIA) and the Cornerstone Credit Union League, who contended that the rule conflicted with existing federal law.  

The arguments against the rule stated that  

  • The Rule was created without appropriately studying the impact this type of rule would have on Medical Providers and Credit and Collection Companies.  
  • Removing credit reporting from medical debt would financially harm the patient and the providers. 
  • Patients who move after their healthcare visit may not know they have outstanding account(s) 
  • Providers who are unable to reach the patient before the account was sent to bad debt face an inability to collect the outstanding balances causing a decrease in collections to their facility.   
  • Providers working in rural areas or those with tight margins face decreased payments, possibly causing budget shortfalls and reduced or lack of care options for their community. 
  • Collection agencies who serve medical providers were expecting lower recoveries impacting their already slim margins.  In States where Medical Debt was banned from credit reporting, agencies were reporting 10-13% drops in recovered payments for their healthcare clients.  
  • Credit Reporting Agencies have already taken steps to improve the opportunity for healthcare consumers to reach out to collection agencies to work on payment options and settlements by extending the length of time from first contact to reporting.  Credit reporting on medical debt is prohibited on original assigned balances under $500.00 and not permitted for a year after the first collection statement is sent to the consumer.   

The Upside of the Ruling for Healthcare Providers 

While the recent court ruling vacating the CFPB’s medical debt reporting rule may not be good news for consumers, it brings some potential upsides for healthcare providers, particularly in the realm of debt recovery and financial stability. 

One of the most significant benefits of the ruling is that it allows medical debt to remain on credit reports, which can be an important tool in notifying consumers of outstanding accounts and enhancing more timely payment from patients. For many healthcare organizations, credit reporting has long been a tool utilized to assist in the organization to recover outstanding self-pay balances.

  • Increased Motivation to Pay: Patients are often more motivated to address payment options for their medical bills when they know that unpaid balances can be reported. With medical debt still visible on credit reports, healthcare providers can potentially accelerate collections and reduce delinquent accounts. 
  • Financial Stability and Cash Flow: Maintaining the ability to report medical debt can help improve cash flow for hospitals and other healthcare providers. With 8-12% of a hospital’s overall revenue coming from patient payments, credit reporting is an important tool to notify patients of outstanding balance and encourages payment.  This is hugely important for many smaller providers whose margins rely on the recovery of patient balances.

  

  • Potential for Reduced Bad Debt: By utilizing credit reporting, healthcare organizations will be able to continue to recover bad debt recoveries that would otherwise be decreased without the credit reporting option. This could help reduce the financial burden on the organization and keep healthcare services running smoothly, ultimately improving the provider’s bottom line. 
  • Accountability for Unpaid Debt: The ability to report unpaid medical debt gives healthcare providers a stronger sense of accountability from patients. Many individuals are more likely to make payment arrangements if they are aware their credit history could be affected. This incentive helps align patient behavior with the hospital’s financial goals, making debt collection more efficient. 

In summary, while the ruling has introduced uncertainty around future regulations, healthcare providers should recognize that credit reporting remains a vital tool in the collections process. By continuing to leverage this tool responsibly, providers can boost recovery rates, minimize bad debt, and maintain financial health amidst rising self-pay balances.

 

How to Support Patients Through CFPB Changes 

1. Enhance Patient Financial Engagement 

  • Financial Counseling:  
    • Implement financial counseling sessions for scheduled services before services are rendered to educate patients about their financial responsibilities and available payment options.  
    • For those who show up at Urgent Care or ER – provide Financial Counseling after they are seen and before discharge to discuss the billing and payment process and provide options for patient balances.   
    • Have a clear posted link for Patient Information or a printed Patient Responsibility Pamphlet that will outline available financial assistance resources with links, patient billing policies and payment policies set by the hospital.   
  • Provide Clear and Transparent Information: It’s essential for healthcare providers and their contracted representative partners, to offer clear, concise materials explaining the changes brought on by the CFPB ruling, especially regarding medical debt reporting. By proactively addressing patient confusion, such as how medical debt may now impact their credit reports, healthcare organizations can alleviate concerns and help patients understand their financial responsibilities. This can include written guides, FAQs, or videos that clearly explain what the ruling and its ultimate dismissal means and what options are available for payment assistance.
     
  • Transparent Billing Practices: Provide clear, timely and detailed billing statements to help patients understand charges and reduce disputes.

 

2.  Offer Flexible Payment Solutions 

  • Payment Plans: Develop customizable payment plans that accommodate patients’ financial situations, increasing the likelihood of timely payments.
  • Financial Assistance Programs: Establish and provide information on financial assistance programs to support patients who are unable to pay their bills in full.
  • Bank Loans or Financing: Work with local or national banks or loan companies for larger balances to assist patients with low-cost options to pay their accounts over a longer period. 

 

3.  Leverage Technology for Efficient AR Management
 

  • Automated Billing Systems: Utilize automated billing systems to streamline the billing process and reduce errors.
  • Patient Portals: Implement patient portals that allow patients to view and pay their bills online, enhancing convenience and reducing administrative burdens.

 

4.  Monitor Regulatory Developments

  • Stay Informed: Regularly review updates from regulatory bodies at both the Federal and State level to anticipate changes that may impact billing and collections practices.
  • Adapt Policies: Adjust internal policies and procedures promptly to comply with new regulations and maintain operational efficiency. 

It’s been a wild ride this year for healthcare providers working to stay abreast of Federal and State legislative changes.  The recent court ruling reinstating medical debt on credit reports helps to ensure the status quo for billing and recovery but has provided confusing and conflicting information for patients who believe that the FINAL RULE presented on 1/7/25 by the CFPB was law when it was not yet in effect. 

Providers should continue to support their patients, and credit and collection agencies should continue to support consumers by providing education on the changing rules; helping them to understand their debt; and working to identify the best way for patients to help resolve balances.  By enhancing patient financial engagement, offering flexible payment solutions, leveraging technology, and staying informed about regulatory changes, providers can navigate these challenges effectively and maintain financial stability. 

 

 

Sources:  

  • Capio Statement on Court Order Vacating Medical Debt Reporting Rule: CAPIO 
  • CFPB Medical Debt Reporting Ban Vacated by Texas Federal Judge: Bloomberg Law 
  • Crowe LLP – Higher Out-of-Pocket Patient Bills Are Hitting Hospitals Hard: Crowe 
  • Kodiak Solutions – Rate of Initial Denials of Medical Insurance Claims Continued to Rise in 2024: Businesswire 
  • MGMA – Collection Challenges Growing for Medical Practices: MGMA 

 

 

 

Karie Bostwick

VP of People and Compliance

As VP of People and Compliance at Revenue Enterprises, Karie Bostwick oversees People functions including recruiting, training, onboarding, engagement and satisfaction. Additionally, she is responsible for compliance training, oversight and monitoring.

Karie has a long history of working in the revenue cycle support industry. Her skills span leadership, operations start up, policies and procedures development, operations workflow, budgeting and client management.

She is passionate about the experience of our people, patients and the Healthcare clients we serve and believes that a team of diverse, talented and motivated individuals working together toward a common goal can make a difference.

Robert Sterett

VP of Information Technology

As a transformational leader Robert Sterett has leveraged his 20 years of experience to build effective service lines and exceptional teams. In his role as VP of Information Technology at Revenue Enterprises, Robert excels at taking a unique, balanced, and strategic approach to technology leadership with people first for the best possible outcome. Using his experience from engineering, project management and service line management he takes a multi-faceted approach to ensure the right people are in the correct position coupled with the best technology to meet or exceed all expectations from security to compliance and business continuity.

Robert’s leadership style lends itself to building long term relationships and has consistently been a relied upon strength in many organizations. Over Robert’s time as an IT operational and project leader, he has spent significant time in both hands-on technology facing roles and client centric management roles to bring the best solutions that strive to meet the business and client needs.

Focusing heavily on his personal development skills and opportunities, Robert continues to foster coaching and mentorship relationships everywhere in his life, and the lives around him.

Douglas Dunbar

VP of Sales & Marketing

As VP of Sales and Marketing for Revenue Enterprises, Douglas Dunbar leads with a passion for building strategic partnerships, nurturing relationships, and upholding customer service excellence. In his role, Doug focuses on marketing and brand strategy, sales team leadership, and working closely with members of the management team to best serve company goals.

Doug has over 28 years of National sales and marketing call/contact center leadership, with 10 years of service specifically at Revenue Enterprises. Currently, Doug serves as part of Wyoming HFMA Chapter leadership and has held various roles in Colorado HFMA Chapter leadership for over 9 years.

In his spare time, Doug is very family oriented. Additionally, he loves traveling, cycling, golfing, fishing, hunting, and boating.

Kris Brumley, MBA

President & COO

As President & COO of Revenue Enterprises, Kris Brumley is a collaborative partner within the executive team and a leader for operational functions across the organization. Kris productively shares vision, drives innovation, and supports those around her in a way that elevates them and fosters continuous improvement and results. She has helped create a supportive environment for clients resulting in 98% client retention and a 65% NPS score for all clients and 75% for top clients by revenue.

Kris possesses an MBA in data analytics and has twenty-five years of experience in the healthcare industry, with 19 specifically in revenue cycle. She brings a wealth of customer service experience to her role and has worn many hats at Revenue Enterprises including Director of Business Development, EBO Division Director, and VP of Client Experience Management.

In her personal life, Kris is as busy outside of work as inside. She values spending time with her family, and enjoys fishing, hiking, traveling and interior decorating and design.

Timothy (Tim) Brainerd

CEO

As CEO of Revenue Enterprises for almost 20 years, Tim Brainerd leads by example. He promotes a shared vision and stewards a culture of Integrity, Passion, and Respect. He has assembled and empowered high-performing talent and teams to support customers, facilitate strategic planning and manage the capital of the company. Under his leadership, Revenue Enterprises has doubled in size three times over the past fifteen years while maintaining a culture of caring and gratefulness.

Tim has close to four decades of revenue cycle experience, including nineteen years with RSI
Enterprises. He has been a past president of Colorado Chapter of the HFMA and a presenting speaker on the topic of Leadership. He is a fifteen-year member of Vistage International, the world’s largest CEO coaching and peer advisory organization for small and midsize business leaders.

Raised in the Midwest, Tim values humble principles like being respectful, caring, passionate, self-reliant, and most importantly grateful. His most important lesson and the lesson he hopes to pass on in all relationships is living the Golden Rule–do unto others as you would have them do unto you. He is intentional in his choices and believes in making decisions, taking action, being accountable, and loving your neighbors.

Whenever possible, Tim spends his time with his wife of nearly forty years, his adult children, and his grandchildren. His hobbies include fishing, golfing, traveling as well as game nights and sharing great food with his family.