Senators Propose COVID-19 Medical Debt Collection Relief Act

Democrat senators on Tuesday proposed legislation to prevent health care providers from actions such as wage garnishment in connection with medical debts.

The COVID-19 Medical Debt Collection Relief Act , sponsored by U.S. Sens. Chris Van Hollen, D-Md., and Chris Murphy, D-Conn., 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 latter of 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.
  • Implement consumer protections for medical debt that was incurred between Feb. 1, 2020, and 60 days after the end of the public health emergency for COVID-19-related testing and treatment, including:
    –  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.

Van Hollen announced the legislation in a Senate Committee on Banking, Housing and Urban Affairs hearing Wednesday with Consumer Financial Protection Bureau Director Kathy Kraninger.

On Thursday, the House Financial Services Committee discussed several legislative proposals in a hybrid hearing also including testimony from Kraninger.

The Relief for Consumers During COVID-19 Act, sponsored by U.S. Rep. Joyce Beatty, D-Ohio, was discussed.

The bill, according to the hearing memorandum , “would provide for a temporary debt collection moratorium for consumers during the COVID-19 emergency period, and for 120 days thereafter. This would also provide sustainable repayment plans when borrower payments resume and would provide creditors access to a low-interest, long-term loan from the Federal Reserve until borrower payments resume. Similar provisions were included in H.R. 6800, the HEROES Act.”

Read more about COVID-19 legislation and ACA’s response in the 2020 Accounts Receivable Management Industry Advocacy booklet and a summary on the HEROES Act.

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