Requirements in the bill, including notifying consumers before taking any action on a medical debt, take effect July 1.
On June 2, Nevada Gov. Steve Sisolak signed S.B. 248, which 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.
The bill was the focus of the Nevada Collectors Association’s (NCA) and ACA International leadership’s advocacy during the state’s 81st legislative session and, while members did make headway through amendments to the legislation, it will impact health care providers working with debt collection agencies and impact the process for consumers to learn they have an outstanding 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 included 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 April 12, and it was approved in the Assembly May 21.
The amendments and additions to the bill approved May 10, including those in response to 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. Medical debt does not include an open-end or closed-end extension of credit made by a financial institution to a borrower that may be used by the borrower, at the borrower’s discretion, for any lawful purpose including, but not limited to, the purchase of goods or services provided by a medical facility, a provider of health care or a provider of emergency medical services.
- Written communications about medical debt should be sent by certified mail. Not less than 60 days before taking any action to collect a medical debt, a collection agency shall send to the medical debtor written notification by certified mail 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. The written notification shall set forth the name of the medical facility, provider of health care or provider of emergency medical services that provided 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.
- Nothing shall prohibit a collection agency from accepting a voluntary payment from a “medical debtor” so long as the “medical debtor” initiates the contact with the collection agency and the collection agency discloses to the “medical debtor” that a payment is not demanded or due nor will the medical debt be reported to any credit reporting agencies during the notice period. Any voluntary payment by a “medical debtor” to a collection agency toward the medical debt shall not extend the applicable statute of limitations. A voluntary payment made by the “medical debtor” to a collection agency is not an admission of liability and shall not be construed as a waiver of any defenses to the collection of the medical debt.
- No action by the “medical debtor” to initiate contact with the collection agency can be construed to allow the collection agency to take action to collect the medical debt prior to the expiration of the 60-day waiting period. The protections set forth are for the benefit of the “medical debtor” and cannot be waived.
“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.”
The bill takes effect July 1, 2021.