Calif. Doctor Says ‘Big Three’ Pact to Not Report Unpaid Medical Bills Under $500 Is Illegal

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A California doctor alleges Experian, Equifax and TransUnion—the “Big Three” credit reporting bureaus—have violated antitrust law by collectively refusing to report unpaid medical bills under $500 on consumer credit reports. 

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The 22-page lawsuit contests that while the companies touted their March 2022 agreement as benefiting patients, the arrangement is unlawful as it “illegally restrains trade” and diminishes access to medical care by driving providers out of certain markets. 

“The harder it is for medical providers to recover unpaid bills, the more likely the resulting financial difficulties will force medical providers to stop providing service in locations where patients are less likely to pay,” the complaint states. “This will disproportionately affect lower-income patients.” 

Ultimately, the “conspiracy” among Experian, Equifax and TransUnion to “devalue their credit reports” targets and harms medical providers given that they “now have a more costly path to collect payment on unpaid medical bills, if they can feasibly collect at all.”

“The effect of this conspiracy will be massive and will ripple through the United States for years to come,” the complaint claims. 

The plaintiff, a Lincoln, California dermatologist, argues that the decision to not report sub-$500 medical debts places individual providers such as himself at “a severe financial disadvantage” in comparison to larger entities, such as hospitals. Per the complaint, the majority of the bills sent by the plaintiff’s practice to patients are for amounts that are less than $500. 

In the past, the submission of unpaid medical bills by providers to credit reporting agencies was a “mutually beneficial transaction,” as the latter’s reports would become more valuable with the information and the former would receive help in persuading patients to pay their bills based on their desire to avoid negative credit reporting. Per the case, the U.S. Consumer Financial Protection Bureau has estimated that an outstanding balance of around $88 billion in medical collections existed on consumer reports as of 2021. 

The plaintiff claims to be among many thousands of medical providers who have been harmed by the pact among the Big Three credit reporting agencies. 

“This conspiracy violates Section 1 of the Sherman Act and Section 16720 of the Cartwright Act,” the case states, citing the relevant antitrust laws. 

The lawsuit looks to cover medical providers nationwide who have uncollected bills of under $500 for medical-related services. 

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