Implications for revenue cycle performance, compliance, and patient trust in healthcare

More than 15 million Americans have medical debt on their credit reports—totaling over $49 billion, according to the Consumer Financial Protection Bureau (CFPB).¹

For many, a single hospital bill can trigger long-term financial harm, from lowered credit scores to limited access to housing or employment. What began under the Biden administration as a push for stronger patient protections for medical debt has now been reversed under new leadership and Congressional priorities. These changes affected how providers manage revenue, how patients experience billing, and how credit bureaus handle sensitive health-related financial information.

For healthcare executives and physician-owners, staying aligned with regulatory shifts and public expectations is essential — especially when it comes to consumer-facing financial operations. Balancing the need to get paid for care provided with policies that may expand the uninsured population and raise patient self-pay debt means reevaluating fee schedules, streamlining billing workflows, and tightening revenue operations for transparency and efficiency — all while remaining flexible enough to adapt as regulations and public pressure continue to shift.

Regulatory background on consumer medical debt

Medical debt has long been a point of tension between healthcare providers, patients, and credit agencies. In 2022 and 2023, the three major credit bureaus — Equifax, Experian, and TransUnion — took voluntary steps to remove certain medical debts from consumer credit reports, including debts that were paid, under $500, or less than a year old.² These measures were intended to reduce the long-term impact of medical debt on consumers’ credit scores and loan eligibility.

In January 2025, the Consumer Financial Protection Bureau (CFPB) finalized a rule to go further: it would eliminate all medical debt from credit reports and prohibit its use in lending decisions, arguing that medical debt is often inaccurate, hard to verify, and not predictive of future loan default.³ The CFPB estimated that removing medical debt could raise credit scores by about 20 points and enable approximately 22,000 additional mortgage approvals annually.

However, that rule, originally set to take effect in March 2025, has recently been reversed, following litigation filed by the Consumer Data Industry Association and Cornerstone Credit Union League.⁴ Judge Sean Jordan of the U.S. District Court of Texas’ Eastern District found that the rule exceeds the CFPB's statutory authority under the Fair Credit Reporting Act and lacks adequate justification.⁵

Legislative shift: from consumer protection to rollback

Under the 118th Congress (2022-2024), efforts focused on shielding consumers: bills introduced addressed transparency in billing, medical debt forgiveness, and limiting its inclusion in credit reports. These efforts reflected a growing concern over the role of medical billing in credit access and financial hardship.

Under the 119th Congress, priorities have shifted. Congressional Review Act (CRA) resolutions (S.J.Res. 36 and H.J.Res. 74) aim to block the CFPB’s rule, signaling a broader shift away from consumer protection toward deregulatory efforts and preserving lender access to full credit histories.⁶ Additionally, the legal challenge to the CFPB’s medical debt rule escalated as the CFPB, now led by President Trump-appointed Acting Director Russell Vought, joined the plaintiffs in their lawsuit to vacate the rule. In a motion filed in late April 2025, the CFPB itself asked the court to invalidate its own rule, arguing that it exceeded the agency’s statutory authority and that Congress should determine whether medical debt can appear on credit reports.⁷ On July 11, Texas Judge Sean Jordan agreed that the Fair Credit Reporting Act doesn’t permit the CFPB to remove patients’ medical debt from these reports.

Over 15 million Americans have medical debt on their credit reports totaling over $49 billion, making this issue top of mind for patients, providers, payers, and policymakers alike.

Patient medical debt is a balancing act for physicians: equity, access, and revenue

Physicians face a tough challenge. Removing all medical debt from credit reports can benefit patients — especially those who are low-income, uninsured, or from historically marginalized communities — by improving access to credit for essentials like housing or transportation. This move aligns with broader public health goals around equity and addressing social determinants of health.

But on the ground, physician-owners and small practices rely on consistent patient payments to keep their doors open. From their perspective, eliminating medical debt from credit files may weaken financial accountability, making it easier for patients to defer or ignore bills or to opt out of health insurance altogether.⁸ The American Hospital Association (AHA) raised this concern in its public comments to the CFPB, cautioning that the rule could erode motivation for maintaining coverage and lead some patients to assume there are no consequences for not paying.

“While hospitals offer financial assistance,” the AHA noted, “such assistance is not a substitute for comprehensive health insurance,” and removing debt from credit reports may lead patients to avoid paying for care they’ve already received and been deemed responsible for.⁹ These choices, the AHA emphasized, have downstream consequences—not only straining provider finances but also delaying patients’ access to preventive and restorative care, increasing systemwide costs over time.

That worry is growing in the wake of the One Big Beautiful Bill Act (OBBB, H.R. 1, Public Law 119-21), signed into law on July 4, 2025. According to the Congressional Budget Office, the law is expected to cut Medicaid funding by $1 trillion over the next decade and leave 11.8 million fewer Americans insured by 2034, due to stricter work requirements and more frequent eligibility redeterminations.¹⁰ With the anticipated loss of insurance coverage for millions, healthcare organizations are bracing for a surge in potential uncompensated care.

Health IT priorities for revenue cycle management and compliance

To help collect payments from patients (whether or not the bills are reported to credit agencies), practices must proactively engage patients at the time of the appointment, not wait until debts are delinquent. Begin patient engagement early — before bills go out — using transparent cost estimators, pre-service financial communications, and insurance eligibility checks. This helps build better communication and reduce surprises at billing time. Invest in patient-friendly digital payment tools such as flexible payment plans, automated reminders, and online payment portals that make it easier for patients to pay when and how they prefer. Finally, encourage patients to sign up for the patient portal, and download the app for their mobile devices, as well as to opt-in to text reminders.

Ensure transparency in financial reporting and collection strategies. In an environment where billing practices are scrutinized by regulators and patients alike, clear communication — itemized statements, clear explanation of disputed items, and fair collection practices — builds trust and reduces reputational risk.

Healthcare technology and revenue cycle leadership in a shifting environment

Medical billing is linked to patient credit access, regulatory scrutiny, and consumer expectations. As medical costs continue to rise and headlines focus on claims denials, billing disputes, and even violent backlash, patients are demanding greater clarity, fairness, and accountability in how they’re billed. Even if federal policy returns medical debt to credit reporting, health systems are facing growing expectations to address the financial side of care with the same transparency and responsiveness as clinical delivery.

For health IT and revenue leaders, the priority should be to invest in tools that support early, proactive communication, patient-friendly digital payment options, adaptive compliance mechanisms, and transparent financial workflows. These investments not only help provide financial stability and operational efficiency; they also help build trust in a healthcare economy defined by complexity, continued scrutiny, and change.

Interested in learning more? Get helpful tips on RCM best practices such as updating fee schedules and reducing no shows.