Medical Debt Relief Act Reintroduced in Senate

The legislation would require a 180-day waiting period before reporting medical debts, similar to the National Consumer Assistance Plan mandates currently in effect.

8/21/2018 11:00 AM

HealthcareNews
Medical Debt Relief Act Reintroduced in Senate

U.S. Sen. Jeff Merkley, D-Ore., has reintroduced legislation to amend requirements for reporting medical debt under the Fair Credit Reporting Act.

Co-sponsors of the Medical Debt Relief Act include U.S. Sens. Richard Blumenthal, D-Conn., Dianne Feinstein, D-Calif., Elizabeth Warren, D-Mass., Dick Durbin, D-Ill., Bob Menendez, D-N.J. and Maggie Hassan, D-N.H.

The Medical Debt Relief Act would “amend the Fair Credit Reporting Act to institute a 180-day waiting period before medical debt will be reported on a consumer’s credit report and to remove paid-off and settled medical debts from credit reports that have been fully paid or settled.”

It would also “amend the Fair Debt Collection Practices Act to provide a timetable for verification of medical debt and to increase the efficiency of credit markets with more perfect information, and for other purposes.”

Since the legislation was last introduced in 2016, consumer reporting agencies Experian, Equifax and TransUnion and multiple state attorneys general agreed to a set of reforms that are reshaping, in many ways, how data is furnished to CRAs, known as the National Consumer Assistance Plan (NCAP).

Under the NCAP, as of September 2017, debt collectors and debt buyers should not report medical debt collection accounts until they are at least 180 days past the date of first delinquency with the original creditor that led to the account being sold or placed for collection, ACA International previously reported. The NCAP also requires debt collectors and debt buyers to delete accounts that are being paid by insurance or were paid in full through insurance. This does not include accounts paid in full by the consumer.

The 2018 legislation introduced by Merkley defines medical debt as “debt arising from the receipt of medical services, products or devices.”

“Due to the atypical nature of medical debt, the predictive value of medical accounts on credit reports is low. Credit reporting companies have testified before Congress that removing medical debt from consideration would not harm the predictive value of consumer credit reports,” according to a news release from Merkley’s office.

ACA International is reviewing the proposed legislation for its potential impact on association members and the accounts receivable management industry.

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