The Biden-Harris Administration has announced to relieve more than 15 million Americans from all their medical debt. But aren’t you wondering about how this medical debt relief program will affect your medical bill collections? This decision has far-reaching consequences for both patients and providers. It will provide relief for patients, but at the same time, providers may suffer on a large scale. It will especially affect providers in states like Texas, where medical debt collection practices are subject to specific state laws.
But don’t worry! This blog will explore everything about how this debt relief program will affect your practices in Texas so you can prepare beforehand. We will examine its potential influence on the Texas timely billing law, a medical bill sent to collections, and the statute of limitations on medical bills. First of all, let’s understand what this Biden-Harris medical debt ban program is all about:
The Biden-Harris Administration’s Decision to Waive Off 7$ Billion Patient Debt
Biden-Harris’s administration has taken a decision to waive off 7$ billion medical debt of American patients to clean their credit reports. It will help people to take loans with clear credit reports. But on the other hand, this action forecasts a major change in the US federal healthcare policy and billing laws. It will lessen the financial strain on patients, but at the same time, it will introduce new regulations. It will restrict reporting of medical debts to credit bureaus, regulate collection practices, and offer more protection to patients from unexpected medical bills.
How Will It Impact Medical Bill Collections of Practices in Texas?
Texas is famous for its strict Texas laws on unpaid medical bills and debt collection policies. The same is the case with these new federal regulations that may alter how providers in Texas will do their medical bill collections. Below are the key areas where Texas providers may see changes, so read them in order to not get surprised in the future:
1. Texas Timely Billing Law
Healthcare providers in Texas are bound to a specific time limit to submit claims to insurance companies. Here, providers typically have 95 days from the date of service to submit a claim to an insurance company. If they miss this deadline, they may lose the right to get medical bill collections from either the insurance company or the patient. The Biden-Harris administration’s new policy could introduce stricter federal rules on timely billing, which might override Texas state laws. This policy will affect your medical bill collections in 7 ways:
i. Stricter Federal Regulations in the Future
The administration’s program may impose stricter federal rules on how quickly healthcare providers must submit claims and handle billing. If these federal regulations are stricter than Texas’s existing 95-day requirement, providers might need to adjust their claim submission processes to comply with the new national standards. This could lead to conflicts where federal rules demand faster or more precise billing practices than state law currently requires.
ii. Potential for Superseding State Law
Federal laws generally take precedence over state laws. If the medical debt relief program enacts regulations that conflict with Texas’ timely billing law, the federal standards likely override the state law. This could create a situation where providers must comply with a new set of timelines for medical bill collections that are different from what they are accustomed to under Texas law.
Past Example
To give a past reference, a similar situation occurred in 2010 with the implementation of the Affordable Care Act (ACA). In this case, the ACA introduced several federal requirements that directly impacted how states managed Medicaid reimbursements. The ACA required states to increase Medicaid payment rates to certain healthcare providers, which led some states to revise their reimbursement timelines and policies. This federal intervention effectively superseded existing state regulations, which, as a result, forced states like Texas to modify their practices to align with the new federal standards.
iii. Increased Administrative Burden
If the new federal regulations are more complex or require additional documentation, Texas providers might face increased administrative burdens. They would need to ensure that their billing processes not only meet state requirements but also adhere to the new federal standards. This dual compliance could increase the workload for billing departments and necessitate updates on billing software and procedures.
iv. Impact on Medical Bill Collections
The new federal rules could slow down how quickly providers receive payments. If these regulations are designed to protect patients from aggressive debt collection, healthcare providers might see delays in getting paid. This could be particularly challenging for smaller practices that depend on timely payments to keep their operations running smoothly.
v. Legal and Compliance Challenges
According to Texas law on unpaid medical bills, providers will now need to keep a close eye on both state and federal regulations. It’s important to stay informed about any changes to ensure compliance and avoid penalties. This might mean that your legal teams have to carefully manage any conflicts between state and federal laws. To stay on the safe side, practices may need to train their staff on new regulations, update their billing procedures, and perhaps even consult legal experts to fully grasp the impact of the federal program.
vi. Long-Term Effects on Texas Law
In the long run, the introduction of federal regulations through the Biden-Harris administration’s program could prompt Texas to revise its own timely billing laws. If federal standards prove effective in reducing medical debt or streamlining billing practices, Texas lawmakers might consider amending state laws to align with federal regulations, further impacting how healthcare providers in the state manage their billing processes.
vii. How the Medical Bills Sent to Collections Will Be Affected?
According to Texas laws, healthcare providers can send unpaid medical bills to collections after a certain period. The Biden-Harris administration’s decision introduces new restrictions on when and how medical debts can be sent to medical bill collections. For example, providers may now be required to wait longer before sending a debt to collections or may need to exhaust additional avenues for payment resolution before taking such action.
This change could delay the medical bill collections, affecting providers’ cash flow. It may also necessitate changes in internal billing and collection procedures. It will require providers to invest in updated training and possibly new software systems to ensure compliance with the new regulations. Here, professional medical billing services in Texas may help you with their expertise.
2. Statute of Limitations on Medical Bills
In Texas, the statute of limitations for collecting medical debt is four years. This means that providers have four years from the date of service to collect unpaid bills. The Biden-Harris administration’s policy may impact this statute by introducing federal guidelines that either shorten or lengthen this period. Here’s how this might happen, along with a past example to illustrate the potential impact:
i. Possible Shortening of the Statute of Limitations
The federal government may shorten the statute of limitations to protect people from long-term medical debt. Texas providers might then have less time, potentially under four years, to pursue unpaid bills legally.
How Will It Impact on Providers?
The possible shortening of the Statute of Limitation may demand providers to speed up their collection efforts due to the shortness of time. These rampant efforts could result in more aggressive billing or a faster transfer of unpaid bills to medical bill collection agencies.
Past Example
A similar scenario occurred in the 2000s when the Fair Debt Collection Practices Act (FDCPA) introduced more strict federal regulations on debt collection practices. Although the FDCPA did not directly alter state statutes of limitations, it did impose stricter rules on how debts could be collected. These impositions indirectly affected the process of how quickly providers must act to stay within the medical bill collections’ legal bounds.
ii. Possible Extension of the Statute of Limitations
On the other hand, the federal program could extend the statute of limitations, allowing providers more time for medical bill collections. This could be part of a broader strategy to give patients more leeway in paying off medical bills, especially in current economic hardships.
How Will It Impact on Providers?
While an extended statute of limitations might seem beneficial by providing more time to collect debts but at the same time, it could come with additional federal regulations.
Past Example
In the early 2010s, the Dodd-Frank Act brought about the creation of the Consumer Financial Protection Bureau (CFPB). The CFPB then set new rules for debt collection, including medical debts, focusing on greater transparency and fairness. These changes influenced how long providers could wait before a debt was deemed delinquent and impacted state laws and practices.
How the Debt Relief Program Will Benefit Providers?
This 7$ billion medical debt relief program will not only benefit patients in America, but it will also help providers. It is right that it primarily focuses on patient welfare, but at the same time, it will offer several benefits to providers, such as:
i. Reduced Legal Challenges
It is common for providers to face legal challenges for unpaid medical bills, such as lawsuits or disputes over wrong or over-billing practices. This debt relief will timely pay providers while saving them from legal disputes, resulting in lower legal fees, less time spent in court, and less harm to the provider’s reputation.
ii. Better Cash Flow Management
When patient debts are reduced, providers may experience improved cash flow. With fewer outstanding balances, they can more accurately predict their revenue and manage their finances more effectively. This improved cash flow can be used to hire more staff, upgrade technology, or expand services.
Conclusion
To conclude the discussion, it is clear that this debt relief program will relieve American patients a lot but will also affect your medical bill collections at the same time. To protect your cash flow in this wave, you must stay vigilant about the regulatory changes coming up in the Texas law on unpaid medical bills. You can also consult RCM specialists and medical billing companies in Texas to guide you about the billing regulations and help you gain benefits instead of losing your revenue at such a crucial time.
Frequently Asked Questions (FAQs)
What happens when you get sent to collections for a medical bill?
When you are sent to collections for a medical bill what happens is the agency will try to collect your debt, but remember it may negatively impact your credit score.
What happens if a medical bill goes to collections?
When a medical bill goes to collections, it can hurt your credit score, and you might start getting frequent calls or letters from the collection agency until the debt is paid.
How long before a medical bill goes to collections?
Your medical bill normally goes to collections after 90 to 180 days of non-payment, depending on the provider’s policies or the state’s laws.
