No. SB 1222
Filed under Healthcare.
Medical Debt; Defining the terms “medical debt collector” and “medical debt creditor”; prohibiting medical debt creditors and medical debt collectors from engaging in specified activities to collect medical debt; specifying limitations on the amount of interest a debtor may be charged for medical debt; providing that certain debtors may not be charged any interest or late fees on their medical debt, etc.
Plain English Summary
AI-GENERATEDMedical debt creditors and debt collectors can no longer threaten arrest, foreclose on property, garnish wages or tax refunds, seize bank accounts, or report unpaid medical bills to credit agencies to collect a health care bill.
Interest on medical debt is capped at 2 percent a year. Patients who qualify for a hospital's financial assistance policy cannot be charged any interest or late fees at all, even on a court judgment for the debt.
Hospitals can still sell unpaid bills to a debt collector without first checking a patient's eligibility for financial help, but only if their contract with the buyer caps interest and requires the debt be returned if the patient turns out to qualify.
This section also drops a current protection that treated withholding medically necessary care from a nonpaying patient as a regulated collection tactic, so that safeguard no longer applies here.
AIA medical debt creditor or its collector can never use arrest threats, property liens, foreclosure, wage or tax-refund garnishment, tax offsets, bank seizure, or credit reporting to collect a health care bill, regardless of what steps it has taken first.
AIInterest charged on medical debt is capped at 2 percent per year, overriding any contract term that sets a higher rate, and the same cap governs interest on court judgments entered over unpaid medical bills.
AICurrent law treats a facility's deferring, denying, or conditioning medically necessary care on a patient's unpaid bills as an extraordinary collection action requiring an eligibility check first. That listed protection is deleted, and no replacement appears among the new prohibited activities.
AIA patient who qualifies for a facility's financial assistance policy cannot be charged any interest or late fee at all on medical debt, a stronger protection than the general 2 percent cap that applies to everyone else.
AISelling a patient's debt is normally an extraordinary collection action requiring the facility to first try to determine financial-assistance eligibility, but a sale is exempt from that step if the facility's contract with the buyer bars prohibited tactics, caps interest, and lets the debt be recalled for an eligible patient.