Federal And State Legislators Introduce Bills Seeking Medical Debt Relief

Democratic senators have reintroduced legislation to prevent health care providers from actions such as wage garnishment in connection with medical debts.

It is among several proposals on medical debt collections introduced at the state and federal level this year.

The COVID-19 Medical Debt Collection Relief Act, sponsored by U.S. Sens. Chris Van Hollen, D-Md., Jeff Merkley, D-Ore., and Sherrod Brown, D-Ohio, would, according to a news release:

  • Suspend all extraordinary collection actions by health care providers for all medical debt (e.g. wage garnishment, bank account seizure) during the covered period (i.e. from Feb. 1, 2020, until the end of the public health emergency or 18 months after enactment of this bill).
  • Allow suspension of existing repayment plans during the covered period for any medical debt and ensure reasonable forbearance and repayment options for consumers. Interest or fees shall not accrue while the payment plan is suspended.
    • Require providers to notify patients with repayment plans of their ability to suspend them;
    • Require the U.S. Department of Health and Human Services to issue guidance on best practices for notifying patients of this option, including taglines that point to language assistance services.
  • Implement the following consumer protections for medical debt stemming from COVID-19-related testing and treatment that was incurred between Feb. 1, 2020, and 60 days after the end of the public health emergency:
    • One-year extension of federal and state health insurance appeal deadlines;
    • Prohibition on accrual and collection of fees and interest related to these debts;
    • Prohibition on any extraordinary collection actions.
  • Hold health care providers and their agents liable for failure to comply.

The legislation was referred to the Senate Committee on Health, Education, Labor and Pensions.

ACA International’s team is reviewing the bill as well as other legislation cosponsored by Van Hollen, the Medical Debt Relief Act.

Senate and House Democrats are seeking to remove medical debts from consumers’ credit reports and delay credit reporting in the new legislation, ACA previously reported.

The bills, S. 214 sponsored by U.S. Sen. Jeff Merkley, D-Ore., and H.R. 773, sponsored by U.S. Rep. Katie Porter, D-Calif., “would remove paid-off or settled medical debt from a patient’s credit report and institute a year-long waiting period before new medical debt can be reported,” according to a news release from Merkley’s office.

The Senate legislation is also cosponsored by U.S. Sens. Robert Menendez, D-N.J., Richard Blumenthal, D-Conn.

State Medical Debt Legislation

New Mexico’s legislature is considering a bill to prevent health care providers from sending medical bills to collections or filing medical debt lawsuits for people whose household income is at or below 200% of the federal poverty level.

The Patients’ Debt Collection Practices Act, sponsored by State Reps. Katy Duhigg, Martin Hickey and Deborah Armstrong, was passed by the New Mexico Senate Health and Public Affairs Committee Feb. 18 and referred to the New Mexico Senate Judiciary Committee, where it passed with a committee substitution. This bill is now eligible for consideration by the full Senate.

In Maryland, the state’s House of Representatives is considering a medical debt bill with requirements for hospital debt collection policies and payment arrangements, according to the bill’s fiscal and policy note. It would also prohibit a hospital from taking specified actions when collecting debt.

The bill, according to the fiscal and policy note, also requires a hospital to submit “an annual report to the Health Services Cost Review Commission (HSCRC) including information on the number of patients against whom the hospital (or a debt collector used by the hospital) has filed an action to collect debt owed; the number of patients the hospital has and has not reported or classified a bad debt; and the dollar amount of the cost of the hospital services provided to patients but not collected by the hospital for patients covered by insurance and patients without insurance.”

The reports must be posted on the HSCRC website and it must submit the report to the Senate Finance Committee and the House Health and Government Operations Committee and make it available to the public at no cost.

The bill was considered during a Feb. 16 hearing before the Maryland House of Representatives. There is companion legislation in the Maryland State Senate and if the bill passes and is signed by the governor, it will take effect Oct. 1, 2021.