You Can No Longer Sign Patients Up for Deferred Interest Medical Credit Cards in California
Effective this July, sleep subspecialists and dental sleep
medicine practitioners can no longer give patients pre-filled applications or in
any way help patients sign up for CareCredit or similar cards in their offices.
By Lisa Spear
After a number of people came forward with complaints accusing medical offices of predatory practices, a new law in California will go into effect this July to prohibit medical and dental providers from signing patients up for deferred interest credit cards in their practices.
“The most common scenario we hear about is from low-income
people who signed up for far more credit than they could possibly pay off,”
says Jen Flory, a policy advocate at the Western Center on Law & Poverty, a
sponsor of the bill.
Under the new law, patients will still be able to sign up
for these products on their own time. Medical providers can still market these
credit cards, but they will no longer be able to help people sign up at their
practices or to pre-fill out an application for a deferred interest credit card
on behalf of a patient. Providers also will be barred from charging deferred
interest medical credit cards for services not yet performed.
“While third-party financing may have a place when patients
need services that they cannot immediately pay for, more needs to be done to
protect consumers,” says a statement from Senator Holly Mitchell, coauthor of
the legislation. “Consumers should not feel pressured into applying for these
products and need to better understand what they are signing up for.”
Overall, the law attempts to increase and strengthen
consumer protections around medical debt.
According to information provided by Mitchell’s press office,
deferred interest credit cards are most prevalent in offices where services are
not typically covered by a patient’s health insurance, including some sleep specialists
and dental sleep medicine practitioners. In some cases, the services are covered
by Medi-Cal (California’s Medicaid healthcare program), but medical providers
fail to bill the appropriate payor, instead foisting high-interest debt onto their
patients, explains Flory.
The new law stipulates that medical providers who accept Medi-Cal explain to Medi-Cal patients
what Medi-Cal does and does not cover.
Currently, deferred interest credit cards can be used to
cover sleep medicine services, including polysomnography, positive airway
pressure therapy, and hypoglossal nerve stimulation for obstructive sleep
apnea. There are as many as 200,000 medical offices and wellness centers across
the country that offer deferred interest credit cards through CareCredit.
When the law goes into effect, providers would still have
the ability to offer credit cards that include 0% interest promotional periods,
which begin charging interest after the end of the promotional period on the
remaining unpaid balance, according to a statement provided by Mitchell’s press
office, which also says that people confuse deferred interest with no
interest credit cards. Deferred interest means that if the patient does not pay
off entire balance within the no-interest period, then the patient will be
charged all of the interest accrued during the deferral period,
including on the parts of the balance that the patient has already paid. Not
realizing that they are accruing interest, patients are then shocked to later
see high interest charges later added to their accounts, Mitchell’s office
The new legislation comes after people came to the Western
Center on Law & Poverty explaining that they did not realize that they had
signed up for a medical credit card. Others had credit cards opened up in their
names while undergoing a procedure or medical treatment. Some people said they
had no recollection of signing up for the card, explains Flory.
Flory says the responsibility of properly explaining how
these credit cards work will still lie with the medical providers. She advises
that providers advocate for their patients by first educating themselves on
what these medical credit cards are and the possible repercussions these
products may have for their patients.
“Stand up for your patients and keep at it,” Flory says. “We
would love for deferred interest credit cards to be kept out of the medical
Lisa Spear is
associate editor of Sleep Review.
from Sleep Review https://www.sleepreviewmag.com/practice-management/laws-regulations/financial/sign-patients-up-deferred-interest-medical-credit-cards-california/