The CFPB’s new rule and potential rural health care impact

On Jan. 7, the Consumer Financial Protection Bureau (CFPB) finalized a rule designed to remove medical debt from consumer credit reports, a move originally proposed in June 2024.

This rule is designed to removed medical debt from credit histories of Americans, which the Biden administration estimates will eliminate $49 billion in medical debt for 15 million Americans (HFMA, 2025). While this is a step toward addressing the widespread issue of medical debt, the rule's impact on health care providers, especially those in rural areas, is a significant concern.

Why is this a concern?

Rural hospitals face unique financial challenges. These institutions often operate with slimmer margins and fewer resources than their urban counterparts. As a result, rural hospitals are likely to bear the brunt of the negative consequences of the CFPB’s rule.

If medical debt is no longer on credit reports, the perceived financial responsibility for patients may be diminished, potentially leading to reduced incentives for patients to pay their medical bills. This could result in significant financial harm to vulnerable health care providers, increased litigation costs, and potential shift to upfront payments (HFMA, 2025). According to a study done by the ACA, the first-year financial impact on providers could be as high as $24 billion (ACA, 2025).

What are some consequences?

One immediate consequence of the rule may be that hospitals require upfront payments for elective procedures. Without the ability to report unpaid debts to credit agencies, providers may look to secure payment before services are rendered.

While this could help mitigate some financial risk, it may also create barriers to care, especially for patients in rural communities who already struggle with access to health care. Rural hospitals might find themselves in the difficult position of denying or postponing care to those unable to meet upfront payment requirements, potentially exacerbating health disparities.

The CFPB has framed medical debt as a crisis impacting millions of Americans, but the potential collateral damage to health care providers and rural hospitals is a critical concern (CFPB, 2023).

The intended benefits of this rule — easing the financial burden on patients — must be weighed against the reality that health care institutions will face increased financial instability if they are unable to collect on outstanding debts. As hospitals are already facing increasing pressures to cut costs, the loss of revenue from unpaid medical debt could force providers to make difficult decisions.

Without alternative solutions or safeguards, the rule could lead to financial instability for these hospitals, reduced access to care for patients, and greater disparities in health care outcomes. Policymakers must carefully consider these unintended consequences as they work to address the medical debt crisis.

Are there any solutions?

The future of the CFPB's rule and its impact on rural health care remains uncertain, but there are several steps rural and providers can consider to ease this transition.

One option is to implement a sliding scale payment model for elective and non-emergent procedures, where patients’ ability to pay is assessed based on their financial circumstances.

This approach provides flexibility for patients who may not be able to pay upfront but can still afford manageable payment plans. It allows hospitals to secure partial payment upfront while accounting for the financial realities of the communities they serve.

Another strategy is to integrate third-party payment platforms or financing services that specialize in managing medical debt. These platforms can assist patients in managing medical bills over time, reducing the risk of unpaid debts and providing hospitals with an alternative way to secure funds. These services can be done seamlessly without the patient knowing it is done by a third party, all while programming a workflow that suits the unique needs of the facility.

Rural hospitals can also explore debt recovery strategies that focus on patient engagement rather than aggressive collection efforts, which can be counterproductive. This approach may assist some facilities in recovering funds that might otherwise have been written off by their staff. Giving patients the ability to talk with an expert recovery team who is aware of their financial options while still guaranteeing compliance will help with debt recovery.

By adopting a combination of proactive strategies — such as sliding scale models, expanding financial assistance programs, improving billing practices, and engaging in community health initiatives — rural hospitals can mitigate the financial strain caused by this new rule. These approaches not only ensure the financial health of rural providers but also maintain access to critical care for vulnerable populations.

NRHA adapted the above piece from Magnet Solutions, a trusted NRHA partner, for publication within the Association’s Rural Health Voices blog.

About the author: Magnet Solutions is a family-owned company based in Western Nebraska, specializing in early-out self-pay recovery for healthcare providers. With a focus on critical access and regional hospitals, Magnet Solutions offers personalized, priority service that ensures accounts are handled with care, not lost in the high-volume systems of larger networks. Backed by a team of experts and a proven track record of success, the company utilizes cutting-edge technology to maximize efficiency and tailor solutions to each client's unique needs.

References:

Hut, Nick (2025). In pushing through restrictions on medical debt reporting, CFPB brushes off criticisms and concerns. https://www.hfma.org/revenue-cycle/in-pushing-through-restrictions-on-medical-debt-reporting-cfpb-brushes-off-criticisms-and-concerns/?utm_medium=email&utm_source=rasa_io&utm_campaign=newsletter. HFMA.

ACA Fights Government Overreach in Lawsuit on CFPB Final Medical Debt Rule (2025). https://link.acainternational.org/m/1/77543820/02-b25009-67585abe35974624b3110740a79b4e59/4/966/045227d8-49e1-4dd5-96a4-ffdee762f028. ACA International.

Have medical debt? Anything already paid or under $500 should no longer be on your credit report. (2023). https://www.consumerfinance.gov/about-us/blog/medical-debt-anything-already-paid-or-under-500-should-no-longer-be-on-your-credit-report/. Consumer Financial Protection Bureau.