Stakeholders, including ACA International and the Nevada Collectors Association, sought clarity on the bill and worked on amendments during the state’s legislative session.
Less than a month after it was signed by Nevada Gov. Steve Sisolak, the state’s new medical debt bill will take effect on July 1. The new law requires debt collectors, as defined by statute, to provide medical debtors with 60 days notice of placement or assignment before the debt collector takes any action to collect a medical debt. In addition, the new law prohibits certain practices relating to the collection of medical debt, including restrictions on civil actions to collect medical debt, restrictions on credit reporting medical debt, and restrictions on collection fees (including attorney’s fees) that can be added to medical debt balances.
The new law, Nevada Senate Bill 248 (2021) (S.B. 248), quickly became a focus of advocacy efforts by the Nevada Collectors Association (NCA) and ACA International during the state’s 81st legislative session. While members did make headway through amendments to the legislation, key provisions were amended after ACA leaders provided testimony. As a result of these last-minute changes, the new law will affect health care providers working with debt collection agencies, impose new restrictions on the collection of medical debt in the state, and create apparent conflict between state and federal law with respect to the collection of medical debt.
ACA members including ACA President G. Scott Purcell, president of Professional Credit, NCA President Tim Myers, business development at Clark County Collection Service LLC, and ACA Board Member Christian Lehr, president of Health Care Collections-I LLC, testified in opposition to the bill before the Nevada Assembly Committee on Commerce and Labor April 23.
Their testimony expressed concerns about the payments process from consumers who may want to make a voluntary payment during the proposed 60-day waiting period before collection actions can begin, ACA previously reported.
The Nevada Senate approved the bill on April 12; the Assembly approved it on May 21. Gov. Sisolak signed the bill into law on June 2.
The amendments and additions to the bill approved May 10, including some reflecting ACA members’ concerns, include:
- Changing the definition of “medical debt” in the bill to include the financing or an extension of credit established by a third party solely to purchase goods or services provided by a medical facility, a provider of health care or a provider of emergency medical services.
- Under this definition, medical debt does not include open-ended or closed-ended credit furnished by a financial institution to a borrower and used, at the borrower’s discretion, for the purchase of goods or services provided by a medical facility, health care provider or provider of emergency medical services.
- At least 60 days before taking “any action” to collect a medical debt, a debt collection agency must send to the medical debtor via registered or certified mail a notice identifying the name of the collection agency and informing the medical debtor that it has been assigned or otherwise obtained the medical debt for collection. This 60-day notice must set forth the name of the medical facility, health care provider or emergency medical services provider to that furnished the goods or services for which the medical debt is owed; the date on which those goods or services were provided; and the principal amount of the medical debt.
- Debt collectors may still accept “voluntary payment” from “medical debtors” within the 60-day waiting period so long as the “medical debtor” initiates the contact with the collection agency and the collection agency discloses to the “medical debtor” both that “payment is not demanded or due” and that the medical debt will not be reported to a credit reporting agency during the 60-day waiting period.
The new law specifies that any “voluntary payment” by a “medical debtor” to a collection agency shall not extend the applicable statute of limitations for that debt.
- The new law specifies that any voluntary payment made by a “medical debtor” to a collection agency shall not constitute an admission of liability for the medical debt and shall not be construed as a waiver of any defenses to the collection of the medical debt.
- The new law expressly states that the protections set forth in it shall be deemed remedial—i.e., for the purpose of protecting the “medical debtor”—and cannot be waived.
ACA members who testified during the state’s legislative session expressed that the bill would limit health care providers’ solutions for recovering past-due receivables; will limit consumers’ access to affordable health care; and will create confusion for debt collection agencies, attorneys, and consumers alike, because of tensions and conflict between applicable state and federal law.
“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 during his April testimony. “I don’t think [that] is what everybody is trying to accomplish.”