Medical debt legislation at the state level is attempting to tackle the issue. ACA’s position is that whether at the federal or state level, all stakeholders need to be involved.
09/11/2023 2:40 P.M.
4 minute read
Federal legislative and regulatory actions on issues from medical debt to data privacy are often mirrored in the states—especially the medical debt topic of late, according to an article from Politico.
“In the absence of federal consensus and in anticipation of congressional inaction, state legislators have enacted a variety of consumer protections to mitigate or forestall medical debt,” wrote deputy editor, health care, Dan Goldberg. “Several more bills are being debated in the coming weeks, expected to be signed later this year and taken up when sessions reconvene in 2024.”
The article notes that more than a dozen states have passed or are considering laws on medical debt and health care costs. Legislators in Pennsylvania, for example, have proposed bills to permit purchasing and forgiving medical debt with state funds.
That proposal, from Democrat Pennsylvania State Rep. Arvind Venkat, would qualify Pennsylvania residents for debt forgiveness if “their household income is less than four times the poverty level or if their medical debt equals more than 5% of their income,” according to the article.
Other legislation is focused on medical debt interest and collections.
Colorado was the first state to pass a law on medical debt credit reporting, which took effect Aug. 7.
Overall, HB23-1126 from Democratic sponsors State Rep. Naquetta Ricks and State Rep. Tony Exum will prohibit medical debt information on credit reports and “prohibit a debt collector or collection agency, when attempting to collect debt that the debt collector or collection agency knows or should know is medical debt or to obtain information about a consumer in relation to an attempt to collect medical debt from making a false or misleading representation that the medical debt will be included in a consumer report or factored into a consumer’s credit score,” ACA International previously reported.
A similar bill in New York was passed this year and is pending approval from the state’s governor.
Oregon and Illinois are among other states that have introduced legislation focused on medical debt and health care costs, according to Politico.
ACA tracks hundreds of state bills each year and medical debt is a prominent focus, as well as at federal regulators like the Consumer Financial Protection Bureau.
The CFPB is planning to convene a panel of stakeholders for a rulemaking related to the Fair Credit Reporting Act. ACA has advocated in regard to the FCRA rulemaking that the CFPB does not have jurisdictional authority over many issues related to medical debt and has limited authority under the FCRA to engage in rulemaking in this area, according to a letter (PDF) to Capitol Hill on the CFPB’s semiannual report to Congress.
Legislation introduced in the Senate targets communications with consumers from health care providers about any medical debt owed as well as transparency on their medical debt practices, ACA previously reported.
What’s often missing in these proposals, while well-intended, is considering the complex set of processes in revenue cycles. Any legislation should be well vetted by providers, payors and collection agencies to ensure the overall goals actually get achieved. Too often we’ve seen well-intended legislation reduce access to care for the most vulnerable in our communities by not looking at downstream consequences. Placing focus on the back-end processes has proven damaging to finding true root-cause improvements needed on the front-end that would bring about meaningful change in helping patients and consumers be aware of their health care payment options.
The Affordable Care Act provides free or reduced cost medical care for lower-income Americans by using funds nonprofit providers would have paid in taxes to pay for their care.
For more updates on state laws and trends to know, a quarterly series from ACA, “State Specifics for Collectors,” will eliminate confusion and help trainers, compliance officers and collectors in the accounts receivable management industry gain a better understanding of the most important state “can and cannots” to remain compliant on every call, no matter the consumer location. Stefanie Jackman, partner at Troutman Pepper, Abigail Pressler, general counsel at NCB Management Services Inc., and Nicholas Prola, general counsel at Professional Finance Company Inc., will lead this session.
The next webinar is from 2 to 3 p.m. CDT, Sept. 15. Visit the registration page here.
For more state and federal advocacy updates, members are invited to register and join the weekly ACA Huddle at 11 a.m. CDT on Wednesdays.
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