By: Thomas Law Group On: January 25, 2018 In: Health Care Professionals Comments: 0

The ever-changing environment of health care reform has resulted in insurance plans with sizable deductibles and copayments, which may create patient billing and collection issues. The Truth in Lending Act (TILA) applies to any business that regularly extends credit to consumers for personal, family, or household purposes. This definition applies directly to the extension of credit for medical services and will apply to your practice if (1) you regularly extend credit, which is defined as more than 25 times per year and (2) the credit is either subject to a finance charge or payable and subject to a written agreement in more than four installments. Certain transactions are exempt from TILA including charges for actual unanticipated late payments.
TILA mandates general disclosure requirements at account opening such as when finance charges will be imposed, an explanation of how it will be determined, and the corresponding annual percentage rate. A statement of billing rights must also be provided, which provides the consumer with contact information if they discover billing errors or have questions regarding their bill. TILA also requires clear disclosures for any other transaction fees such as late payments and returned-payment fees.
TILA also imposes disclosure requirements on periodic statements. Common required disclosures include the account balance outstanding at the beginning of the billing cycle, an identification of each credit transaction, and credit to the account during the billing cycle, and the amount of finance charges debited or added to the account during the billing cycle.
Failure to comply with TILA can expose a creditor to civil, statutory, and even criminal consequences. Private actions include actual damages, attorney’s fees, and court costs. Statutory damages are double the calculated finance charge and can be imposed on creditors who fail to comply with specified disclosure requirements. Criminal penalties are up to $5,000 for each willful violation and up to one year of imprisonment.
If your practice offers financing to patients, it is critical that you determine whether it falls under TILA. If your financing practices fall under this definition, a proper compliance assessment is critical to ensure you are satisfying all of the disclosures requirements mandated by TILA. For more information, please contact the attorneys at Thomas Law Group.