by Judd Peak, CCO and General Counsel

George Buck, President Emeritus

Frost -Arnett Company

All of today’s industries are faced with the alphabet soup conundrum of regulations and laws that affect their business processes and procedures. The revenue cycle function of healthcare providers is certainly no exception, and their accounts receivable management partners have their own set of unique challenges. Many of the regulations that accounts receivable management (ARM) companies must comply with were written some 25-plus years ago and do not address the current technological conveniences that many consumers desire when it comes to the communication, privacy and understanding of their healthcare receivable. Additionally, many of the regulations create barriers that hinder the success of effective patient pay.

Telephone Consumer Protection Act (TCPA):

For years, the Telephone Consumer Protection Act (TCPA) has been a bane for collection agencies attempting to effectively communicate with consumers. An antiquated law originally designed to address overzealous telemarketers, the TCPA has not kept up with technology and continues to prohibit the use of legitimate telecommunications platforms to reach consumers. It has always been considered a “bet the business” issue, since civil claims under the TCPA are class actionable. A scattering of court cases in the past year has scaled back some of the prohibitions under the TCPA, but the law remains viable and strict compliance is necessary. The best advice we can give creditors is to take advantage of the statute’s “get-out-of-jail-free” safe harbor: obtain prior express consent from the consumer to be able to dial his or her mobile telephone and make sure that consent transfers to your vendors, business associates and affiliated entities. The existence of consumer consent can remove the obstacles to effective and efficient calling.

Fair Credit Reporting Act (FCRA):

In recent years, the Fair Credit Reporting Act (FCRA) has been used with increasing frequency to attack creditors and data furnishers who chose to credit report consumer debt.  The Bureau of Consumer Financial Protection (BCFP) has specifically besieged the credit reporting of medical debt. To their point, medical debt is not always a valid indicator of credit worthiness and, thus, the credit reporting of medical debt should be curtailed. It has become a standard practice of the BCFP to cull credit reporting to fish out the “bad” actors for enforcement actions. The increased focus has bled into other areas, as well. Already, the three national credit bureaus have placed significant restrictions on medical debt reporting. Moreover, credit rating agencies such as FICO have revamped their scoring models to downgrade the importance of medical debt, and consumers are beginning to understand that a medical trade line on a consumer credit report does not have the negative impact it once had.

Fair Debt Collection Practices Act (FDCPA):

The FDCPA is an example of another regulation that has not kept up with the advances in technology and communication. Enacted in 1977, the FDCPA has not been amended since becoming law. At its core, the FDCPA limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity. The law restricts the means and methods by which collectors can contact consumers, as well as the time of day and number of times contact can be attempted. If the FDCPA is violated, a suit may be brought against the debt collection company and the individual debt collector within one year, to collect damages and attorney fees. The FDCPA is one of the most heavily litigated laws with more than 10,000 lawsuits filed in federal courts. This does not account for the threats of litigation that are settled prior to suit being filed. In all reality, the federal court system has taken on the role of “modernizing” the FDCPA through its disparate and sometimes conflicting rulings across the 94 district and 13 circuit courts.

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Bureau of Consumer Financial Protection (BCFP)

The BCFP (formerly known as the Consumer Financial Protection Bureau or CFPB), an outgrowth of the 2008 recession and mortgage crisis, was created to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace. Previously, that responsibility had been divided among several agencies. The work of the BCFP includes:

  • Rooting out unfair, deceptive, or abusive acts or practices by writing rules, supervising companies, and enforcing the law
  • Enforcing laws that outlaw discrimination in consumer finance
  • Taking consumer complaints
  • Enhancing financial education
  • Researching the consumer experience of using financial products
  • Monitoring financial markets for new risks to consumers

The BCFP has the power to examine and regulate any financial product and take enforcement action against those that commit egregious acts against consumers. The ARM industry is advocating with the BCFP for common sense rulemaking that will be beneficial to the industry and consumers alike.

Regulatory oversight of the ARM industry – especially as it pertains to medical collections – is here to stay. Legal compliance is the new normal and must be factored in to all decision-making, such as effective operations, pricing, and choosing appropriate vendors.


Buck George.Frost Arnett.2017Judd PeakPresident Emeritus George Buck and Chief Compliance Officer andGeneral Counsel Judd Peak are part of the leadership team at Nashville-headquartered Frost-Arnett Company, which has been helping healthcare clients resolve healthcare account balances for 125 years. Now staffing three offices, Frost-Arnett works with clients nationwide on early-out, bad debt recovery, as well as pre-certification, pre-service, insurance follow-up and cleanup work for legacy systems.  For more information, go online to