Bipartisan Bill Introduced On Credit Reporting Of Medical Payments

The legislation would mandate that credit reporting agencies consider positive medical payments in credit scores, contrary to the regulatory proposal on medical debt credit reporting from the CFPB.

New legislation on Capitol Hill seeks to reverse course on federal law that limits positive reporting medical payments on credit reports.

It also stands in stark contrast to the Consumer Financial Protection Bureau’s current proposed rule that would prohibit  medical debt credit reporting, ACA International previously reported.

While the CFPB’s proposal moves through the rulemaking process, U.S. Reps. Don Bacon, R-Neb., and Marie Gluesenkamp Perez, D-Wash., introduced the bipartisan Reporting Medical Debt Payments as Positive Consumer Credit Information Act of 2024 to help consumers build their credit by allowing completed medical payments to be reported to the credit reporting agencies (CRAs).

“Currently, medical debt negatively affects credit scores, but making payments on this debt does not improve credit scores,” according to a news release from Bacon’s office. “This bill will reverse those limitations in federal law by accepting medical payments positively to build an individual’s credit score.”

“If you’re working hard to pay off your medical bills, you should be able to see it reflected in your credit score,” said Rep. Gluesenkamp Perez in the news release. “Reporting positive progress on medical debt will help working families across Southwest Washington build credit for the future in spite of the financial strain of unexpected medical expenses.”

ACA member company Capio Partners, which specializes in helping patients manage medical debt, issued a statement supporting balanced solutions for medical debt like the legislation from Bacon and Gluesenkamp Perez.

“As we continue to champion balanced solutions to help patients manage their medical debt, the introduction of the Reporting Medical Debt Payments as Positive Consumer Credit Information Act of 2024 by Reps. Don Bacon and Marie Gluesenkamp Perez is a key stepping stone,” Capio said in a LinkedIn post.

Mark Detrick, Capio’s CEO, also was published in American Banker’s BankThink columnhighlighting the opportunity for balanced medical debt solutions that prioritize patients’ needs while recognizing the realities of our health care system.

“Positive credit reporting is one such solution that can empower patients on their medical debt repayment journeys and move them toward financial stability,” he wrote. Instead of punishing patients for unpaid debts, this method rewards responsible actions like making timely payments. Just as paying rent or car loans helps build credit, paying off medical debt should do the same. It’s a simple shift that could make a big difference for those looking to improve their financial standing.”

The legislation (PDF) amending the Fair Credit Reporting Act, among other changes, would allow:

• A furnisher of medical debt information to provide CRAs information relating to medical debt paid or settled by a consumer that antedates the consumer report of the consumer by one year.
• A furnisher of medical debt information to provide CRAs information relating to the satisfactory performance of a consumer meeting the obligations of a payment plan for a medical debt owned by such furnisher if they and the consumer have entered into a payment plan with respect to the medical debt and the consumer is meeting the obligations of the payment plan, as determined by the furnisher.

“The majority of patients work diligently to meet their financial obligations, yet these efforts often go unrecognized under current credit reporting practices,” Detrick added. “The Reporting Medical Debt Payments as Positive Consumer Credit Information Act of 2024 addresses this by ensuring that on-time payments are factored into credit evaluations, offering patients a fairer chance to access financial services and rebuild their credit. Positive credit reporting is already helping consumers making rental payments and mortgage payments boost their credit scores, and medical debt payments should be no different.”