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A federal judge has overturned a previous Biden administration rule that would have removed about $49 billion in medical debt from consumers’ credit reports. The rule until now had been caught up in court battles. Even so, last year, the 3 major credit bureaus voluntarily said they would exclude medical debts under $500 from their reporting. The Consumer Financial Protection Bureau (CFPB) estimated that if implemented, the rule could have erased medical debt from the credit reports of about 15 million Americans. The rule was challenged by trade groups, and the federal judge in Texas ultimately decided that the CFPB had exceeded its authority. At the same time, the CFPB’s new leadership also stopped defending the policy to remove the medical debt under the Trump administration. Medical debt will remain on credit reports.
Unpaid bills: “Although I’m fully in favor of rules that protect consumers, prohibiting urgent care centers from reporting unpaid medical bills creates a serious problem,” says Alan A. Ayers, MBA, MAcc, President of Urgent Care Consultants and Senior Editor of JUCM. “If there’s no consequence for not paying—if urgent care collections have no teeth—many of these bills will go unpaid. This loss of income could eventually force centers to cut services, which hurts access to care for the entire community.”