Key Senator Presses DoD on Protecting Service Members from Medical Debt

Sen. Elizabeth Warren during a Senate Armed Services Committee hearing.
Sen. Elizabeth Warren listens to testimony during a Senate Armed Services Committee hearing on Capitol Hill in Washington, July 18, 2017. (DoD Photo by U.S. Army Sgt. James K. McCann)

A Democratic senator in charge of overseeing Pentagon personnel policies is pushing the Defense Department to do more to protect service members after a report published last year found thousands with erroneous medical debt despite those troops being covered by Tricare.

In a letter sent Thursday to Defense Secretary Lloyd Austin, Sen. Elizabeth Warren, D-Mass., pressed for answers on whether the department has implemented recommendations from that report, which was produced by the Consumer Financial Protection Bureau, or CFPB.

"These outstanding medical debts can have severe consequences for service members' career opportunities and could impact their ability to continue to serve," Warren wrote in the letter, which was obtained by ahead of its release.

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"The CFPB has called for more robust data collection to better understand the scope of medical debt challenges faced by service members and recruits, and recommends that private care providers and third-party billing agencies have adequate systems to submit and process Tricare claims to ensure service members are not billed incorrectly," added Warren, who is credited with proposing the creation of the CFPB when she was a professor at Harvard University. "It is unclear what steps, if any, DoD has taken to implement the CFPB's recommendations."

A Defense Department spokesperson did not respond to a request for comment Thursday on Warren's letter.

Warren was appointed to chair the Senate Armed Services Committee's personnel subcommittee this year and has identified health care and medical debt as one of her top priorities.

The CFPB report published in June of last year, an annual examination of service members' top financial concerns, found that more than 5,000 troops and family members reported medical billing issues to the agency from 2018 to 2021. In 2021 alone, the CFPB received more than 1,500 complaints from service members about incorrect medical bills appearing on credit reports, according to the report.

About 54% of the complaints in 2021 were about attempts to collect medical debt the service members did not actually owe, according to the report.

While Tricare is supposed to cover when a service member needs health care at a private doctor rather than a military treatment facility, private medical providers incorrectly processing Tricare claims or breakdowns in communication between Tricare and providers often result in cases improperly being turned over to a collections agency and the service member's credit score taking a hit, according to the CFPB.

The frequent moves required as part of military service may exacerbate the issue if service members never receive medical bills and collections notices sent to an old duty station, the report added.

As one service member told the CFPB, a collections agency "never reached out to me as they used an address I haven't lived in since 2018. Nor did the[y] contact [the hospital] who had the correct address as we had been in touch."

"Debt collection practices often create a unique risk to service members," James Rice, assistant director of the CFPB's Office of Servicemember Affairs, said in written testimony to Congress last year. "We have seen in our complaints that some debt collectors threaten to report service members to their chain of command to collect on a debt. Too often, this can occur for debts that the service member may not even owe. We have also heard stories of service members that pay off debt on accounts they don't owe just so it doesn't show up on their credit report."

In her letter, Warren gave the Pentagon until March 30 to answer questions on what the department is doing in light of the CFPB findings.

Specifically, Warren asked whether the department is working with medical providers or third-party billing companies to ensure Tricare claims are processed correctly and if there is any assistance available to service members with billing concerns.

She also asked whether the department has any efforts to ensure mail gets to service members if they move, whether the department collects any data about service members' medical debt, and whether medical debt is considered in decisions about promotions or security clearances.

"Medical debt continues to be a pressing issue for millions of Americans," Warren wrote. "Outstanding medical debt can have severe consequences for service members, jeopardizing their job security or promotion eligibility."

-- Rebecca Kheel can be reached at Follow her on Twitter @reporterkheel.

Related: Medical Billing Errors Hurt US Troops' Credit, Federal Consumer Agency Says

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