New medical debt collection law protects consumers
The Nevada and New Mexico Legislatures recently enacted new laws that address medical bill information and collection practices. The measures took effect in July. How does the Nevada law affect debt collectors, hospitals and patients? Does it sufficiently protect consumers? And does it compare favorably to other states? Read on.
Indigent patients in Nevada who owe money are excluded from collection actions. That is, extreme collection measures, such as lawsuits, cannot be taken against people whose earnings are less than 200 percent of the poverty line. In addition, healthcare facilities and third-party providers must send an annual report of indigent patients' medical care financial details to the state’s human services department for review. All in all, the law takes the typically high cost of medical care off indigent patients' hands if they are unable to pay.
The new law also requires that healthcare facilities verify whether a patient has health insurance before billing, and that they provide evidence of that verification in the billing statement. If a patient is not insured, the facility must provide the patient with information on available insurance. If there is a financial aid opportunity, whether through public assistance programs or the facility itself, that also must be made known to the patient. Finally, if a patient wishes to apply to a public program or insurance, the facility is obliged to assist in the application process.
It doesn’t stop there. Billing statements must contain information including the date the medical care was administered, the nature of the care and the associated amount. This policy ensures that patients understand exactly what they are being billed for.
The law also requires that within 30 days of receiving payment, the healthcare provider, debt collector, third-party medical care provider or creditor must acknowledge receipt of the payment and send evidence of such to the payer. That statement must include account details, the amount paid, the date payment was received and the new balance, along with any applied interest rate and current or accrued interest since the last payment.
The new New Mexico law also was aimed at preventing health care providers from sending medical bills to collections or filing medical debt lawsuits for people whose household income is at or below 200 percent of the federal poverty level, among other things. Requirements in that bill include many of the same directives as the Nevada law, including that charges for health care services and medical debt for indigent persons cannot be pursued through collection actions. It also says collection actions that violate the law can and will be terminated upon the determination that a patient is an indigent patient. Health care facilities in New Mexico also must offer to verify and, if requested, verify whether a patient has any health insurance, and offer uninsured patients information about insurance or public assistance. If requested, as in Nevada, health care providers must help with the application process for programs.
In Utah, for comparison, the recently passed Healthcare Debt Collections Amendment (HB128) lays out some basic criteria for debt collectors to meet before making any move, including that collectors must give debtors a reasonable amount of time after a late payment notification and before any collection action. Healthcare providers and billers must give patients 45 days after a notice of debt to pay the debt; Medicare beneficiaries must be given 60 days. The notice is mandated to include transparent information about the nature and amount of the patient's debt, and a warning of reportage if the patient does not pay. (Medical debt in Utah has a statute of limitations of six years, and creditors and collection agencies cannot misrepresent their ability to sue. Patients in Utah even have the right to ask providers, creditors and collection agencies if their medical debt is within the statute of limitations, and creditors are required by law to truthfully answer.)
These new laws are intended to better inform patients and protect customers from abusive and oppressive debt collection techniques. In my estimation, Nevada's new medical debt collection bill adequately safeguards consumers' rights and interests.
Lyle Solomon serves as a principal attorney for the Oak View Law Group in California. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento and has contributed articles to assorted publications including Entrepreneur and Business Insider.