Members state the bill, while well-intended, will restrict collections to the point where health care providers will lose revenue and raise costs-harming the consumers and patients they aim to serve. Editor’s note: This article is available for members only.
ACA International members testified before the Nevada Assembly Committee on Commerce and Labor last week in opposition to an amended version of S.B. 248, which revises provisions of state law related to the collection of medical debt.
The bill, which passed in the Nevada Senate 19-2 April 12, requires a collection agency to notify a consumer before taking any action to collect a medical debt and prohibits certain practices relating to the collection of medical debt.
During his testimony, ACA President G. Scott Purcell, president of Professional Credit in Springfield, Oregon, noted that best practices to prevent extraordinary collection actions are already in place between ACA and the Healthcare Financial Management Association.
“We’ve got really good frameworks in play, and I feel like this [bill] is really well intended but is going to hurt providers, which will reduce access and increase costs for the materially poor and the middle class,” Purcell said. “I don’t think [that] is what everybody is trying to accomplish.”
The two-part amendment to the bill presented April 23 is intended to clarify potentially confusing language identified by stakeholders and, at the request of stakeholders, “that medical debt may be pursued for collection in justice court in a small claims action if it falls within the jurisdictional limit.”
It strikes provisions such as requiring a collection agency to notify the consumer whether a third party has been billed for medical goods or services; and whether the “medical facility, provider of health care or provider of emergency medical services offers a program of financial assistance for medical debtors.”
The proposed bill also states that a collection agency, or its manager, agents or employees, shall not, for any medical debt:
- Take any confession of judgment or any power of attorney running to the collection agency or to any third person to confess judgment or to appear for the debtor in a judicial proceeding.
- Commence a civil action to collect the medical debt if the amount of the medical debt, excluding interest, late fees, collection costs, attorney’s fees and any other fees or costs, is less than the maximum jurisdictional amount set forth in subsection of NRS 73.010.
- Charge or collect a fee of more than 5% of the amount of the medical debt, excluding interest, late fees, collection costs, attorney’s fees and any other fees or costs, as a collection fee or as an attorney’s fee for the collection of the medical debt.
The amendment adds the following text: “Nothing in this subsection shall be construed to prohibit the commencement of a small claims action in justice court to collect the medical debt.”
Tim Myers, president of the Nevada Collectors Association, submitted written testimony stating that the amendment on small claims actions represents the unit’s primary concerns with the bill.
“While we understand the good intentions of the bill (to help protect consumers from bad actors), the Nevada Collectors Association respectfully opposes the bill as currently written because it simply goes too far,” Myers said. “Our primary concern is with Section 8 of the bill because this section would prohibit our members from serving our medical clients by preventing civil actions on debt less than $10,000.”
Purcell shared similar comments in his written testimony.
“All medical providers will be prohibited from seeking legal recourse on bills that are less than $10,000,” Purcell said. “This bill will unintentionally lead consumers to simply stop paying any medical bills that are less than $10,000. If there is no recourse, consumers will have an incentive to ignore bills … under the proposed legislation, medical providers would be required to absorb all but 5% of the costs to collect outstanding medical bills. That is not a sustainable financial model and will harm consumers through increased costs and diminishing services.”
During the hearing, Christian Lehr, an ACA board member and president of Health Care Collections-I LLC, said the bill will impact his agency’s clients that are small and medium-size health care clinics.
“In our experience when bills such as this have gone through, it has caused a decrease in providers who are willing to provide medical service on credit,” Lehr said.
Testifying on behalf of health care providers and businesses, Peter Guzman, the president of the Latin Chamber of Commerce in Las Vegas, echoed Lehr’s comments.
“We have many business members who are medical providers,” Guzman said. “Unfortunately, it appears this bill still needs some work. This bill would hurt those members who fall into the definition of medical provider facilities and providers of emergency medical services. These medical businesses rely on collecting their accounts receivables. It’s how they pay their employees, it’s how they pay their rent, it’s how they make a living. These medical providers take care of us when we need them and if they can’t collect on their valid debts, guess what happens? They lay off employees and eventually go out of business.”
The bill, sponsored by State Sen. Marilyn Dondero Loop, D-Las Vegas, may be reconsidered in the Senate now that an amendment was introduced in the Assembly.
“They shouldn’t be punished for trying to charge and collect for their medical services,” Guzman said. “My fear is that this bill and bills like this will cause significant harm in many ways. It will drive up the cost of medical care, it will place a financial burden on medical providers and eventually drive medical providers out of our community. Sometimes well-intended bills just don’t work, this appears to be one of them.”