More and more healthcare providers are pulling patients’ credit reports to assist with deciding how to work with patients on billing. The large credit reporting companies such as TransUnion and Experian now offer less expensive versions of specialized reports that are typically sold to hospitals by smaller healthcare providers.
Under the Fair Credit Reporting Act, it is legal for healthcare providers to check a patient’s credit if (i) the patient has a balance owed or (ii) is applying for financial help. In any other instance, the provider must ask for authorization prior to checking a patient’s credit. Healthcare providers also have to remember they cannot refuse to treat a patient seeking emergency treatment, regardless of whether the patient can afford to pay or their credit score.
While these credit reports can provide valuable insight to healthcare providers and can help with the financial planning between the provider and the patient, there are still concerns. First and foremost, healthcare providers need to be aware of the privacy issues that may arise. If you are considering pulling your patients’ credit reports, it is necessary to have a procedure to follow regarding how to treat a patient with bad credit.
Consumer advocates worry that credit checks will force healthcare providers to pressure patients into immediate payment or pressure customers into putting their bills on a high interest credit card. In reality, a credit check will allow healthcare providers to assess whether a person qualifies for discounted services or charity care.
Patients, on the other hand, may worry that a healthcare provider checking their credit score will negatively impact the patient’s credit. These credit inquiries are “soft inquiries,” meaning they do not affect credit scores and do not show up on credit reports issued to lenders.
Again, it is always best to be upfront with your patients. Having an open dialogue is imperative to maintaining a trusting relationship with your patients. Communicating with them about the credit report can be beneficial to both you, as the provider, and to them, as a patient. For example, a good payment history on their report does not mean they may not have a financial need or that their medical bills would not burden them. Ultimately, if you decide to pull your patients’ credit reports, talk to them about it. Having an open dialogue with them from the beginning could save you a lot of hassle and headaches down the road.