Virginia on Track to Pass Medical Debt Statute of Limitations Bill

hour glassThe bill sets the medical debt statute of limitations at three years, unless it is for a payment plan that allows hospitals or health care providers more time to collect the debt.

03/04/2022 6:00 A.M.

4 minute read

Virginia’s legislative session adjourns March 12, and one of the bills on track to pass this year would reduce the statute of limitations on collecting medical debt from five years to three years.

The bill, H.B. 573, “provides that the statute of limitations for an action on any contract, written or unwritten, to collect medical debt, including actions brought by the Commonwealth, is three years from the original date of a health care service unless the contract with a hospital or health care provider is for a payment plan that allows for a longer period of time for the collection of debt by the hospital or health care provider.”

The bill passed in the Virginia House Feb. 14, and passed in the commonwealth’s Senate Judiciary Committee Feb. 28 by a 15-0 vote. Virginia delegate Nadarius Clark, D-Portsmouth, introduced the bill.

However, the Senate committee amended the bill, which means it will be reviewed by the House again before being sent to the governor’s desk.

The committee added the following sentence to the bill, as well as the text in bold below.

A. Subject to the provisions of [Section] 8.01-243regarding injuries to person and property and of [Section] 8.01-245regarding the application of limitations to fiduciaries, and their bonds, actions founded upon a contract, other than actions on a judgment or decree, shall be brought within the following number of years next after the cause of action shall have accrued:

  1. In actions or upon a recognizance, except recognizance of bail in a civil suit, within 10 years; and in actions or motions upon a recognizance of bail in a civil suit, within three years, omitting from the computation of such three years such time as the right to sue out such execution shall have been suspended by injunction, supersedeas or other process;
  2. In actions on any contract that is not otherwise specified and that is in writing and signed by the party to be charged thereby, or by his agent, within five years whether such writing be under seal or not;
  3. In actions by a partner against another for settlement of the partnership account or in actions upon accounts concerning the trade of merchandise between merchant and merchant, their factors, or servants, within five years from the cessation of the dealings in which they are interested together;
  4. In actions upon (i) any contract that is not otherwise specified and that is in writing and not signed by the party to be charged, or by his agent, or (ii) any unwritten contract, express or implied, within three years;
  5. In actions, including those brought by the Commonwealth, upon any contract under subdivision 2 or 4 for health care services that were provided by a licensed health care provider, within three years after the cause of action accrues pursuant to subdivision 10 of [Section] 8.01-249.

Provided that as to  B. In the case of any action to which [Section] 8.2-725 of the Uniform Commercial Code is applicable, that section shall be controlling except that in products liability actions for injury to person and for injury to property, other than the property subject to contract, the limitation prescribed in [Section] 8.01-243 shall apply.

In actions on a contract between a natural person and a licensed health care provider for services by such provider, 30 days after the later of (i) issuance of the initial invoice or the due date stated in such invoice to the patient or person legally responsible for payment or (ii) if the patient voluntarily enters into a payment plan with the provider, 30 days after the default date contained in such payment plan, provided that any lien perfected in writing pursuant to § 8.01-66.5 shall not toll such statute of limitations during the pendency of any action for any injuries relating to such services.

The bill, as introduced, further provides that no execution shall be issued and no action brought on a judgment, including a judgment in favor of the Commonwealth, rendered on medical debt after seven years from the date of such judgment. Where the medical debt incurred was for life-sustaining treatment, no execution shall be issued and no action brought on such judgment more than three years from the date of such judgment.

Under current law, the period within which such execution or action shall be brought is 20 years in circuit court and 10 years in general district court.

If the bill is approved by Virginia’s legislature, it will only apply to contracts entered on or after July 1, 2022.

ACA International continues to work with industry partners to further amend the legislation.

Contact Andrew Madden, ACA’s vice president of state unit and government affairs, at [email protected] for more information and to share your input on the bill.

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

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