Warren, Castro, Casar Urge Military to Improve Access to Medical Debt Relief for Civilian Patients
“We are deeply concerned that the proposed rule inappropriately restricts DoD’s authority to waive these fees (debts), as intended by Congress.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), along with Representatives Joaquin Castro (D-Texas) and Greg Casar (D-Texas) wrote to the Defense Health Agency (DHA) urging it to strengthen the proposed Military Health System Modified Payment and Waiver Program (MHS MPWP) rule to limit costs for non-beneficiary civilians - people not covered by a military health care plan - who cannot afford to pay the high costs of treatment at a military hospital. The MHS MPWP establishes a sliding fee scale and “catastrophic fee waiver” for patients not covered by military health care. The lawmakers urged DHA to amend the proposed rule to prioritize using DoD’s authority to waive fees for patients and to require that financial relief options be provided to patients across services, including on invoices upon discharge. The lawmakers specifically want the agency to amend the rule to prioritize the Department of Defense’s (DoD) debt waiver authority, expand debt relief options for civilians, and implement a less bureaucratic process for civilians seeking relief.
Civilians often arrive at Military Treatment Facilities (MTF) incapacitated and in need of emergency, life-saving care. Uninsured or underinsured civilians are often taken to MTFs as the closest available option for emergency care and typically do not have any choice to seek more affordable care, leaving them at high risk of medical debt. Civilians treated at MTFs are routinely left with five figure bills and are stuck navigating a complicated debt relief process with often wrong or deceitful information about their right to seek relief.
Under a provision secured by Representative Castro in the fiscal year 2023 National Defense Authorization Act, Congress expanded the military’s authority to waive medical costs for any non-beneficiary civilian patients if their care helps train military medical providers, therefore increasing the medical readiness of the military. This came after a report by the Government Accountability Office found that DoD and DHA rarely used its authority to waive civilian medical debt, billing over 60,000 civilian patients between 2016 and 2021 and only reducing 0.1 percent of the debt in eligible cases.
Additionally, the lawmakers argued simply waiving these fees is more time and cost-effective than pursuing repayment from patients. When patients are unable to pay the exorbitant medical bills for getting treatment at an MTF, DHA is required to send bills delinquent by more than 180 days to collections. However, on average each year, the Treasury Department only recovers 1 percent of the delinquent debts DHA sends it. The lawmakers also pushed the agencies to suspend collections of any debt while any application is pending for the MPWP and to temporarily continue suspending debts while the rule is first implemented.
The lawmakers pushed for broader relief that aligns with several states that provide medical debt relief to low-income individuals such as Washington, Vermont, and Illinois, by providing free care for patients with income at or below the 300% federal poverty line and reduced fees for patients whose income is up to 600% FPL. Additionally, when it comes to making payments, DHA should move toward a less bureaucratic process, similar to states like Massachusetts, California, and Oregon, which have simpler processes to assess the ability of patients to pay or limit sending bills to collections for certain low-income patients or patients in the process of seeking relief.
Lastly, to prevent further debt burden for patients, the lawmakers urged DHA to stop counting patients’ medical debt as taxable income, which could result in patients still having to pay an increase in taxes they cannot afford. DoD should work with the IRS to waive the debt under the “general welfare exclusion” so patients do not have to pay these harmful additional costs.
DHA accepted public comments on this rule until December 2, 2024. Once finalized, the rule will apply to non-beneficiary patients who received medical care provided on or after June 21, 2023.
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