Increase Consumer Protections Medical Transactions

The act:

• Caps the rate of interest on medical debt at 3% per annum;
• Defines "medical debt", for purposes of a statutory cap on interest rates and fair debt collection practices, to include medical debt arising from the receipt of health-care services or medical products or devices, excluding debt charged to a credit card;
• Upon the consumer's written request, requires a debt collector or collection agency collecting on medical debt to cease collection on the medical debt until the debt collector or collection agency provides to the consumer an itemized statement concerning the medical debt and allows the consumer to dispute the validity of the medical debt;
• Establishes requirements relating to payment plans for medical debt, including written documentation of the payment plan between the consumer and the debt collector or debt collection agency; notice to the consumer if the payment plan will be accelerated or declared in default or inoperative due to nonpayment; and the opportunity to renegotiate the payment plan;
• Prohibits a debt collector or collection agency, during an internal or external review or other appeal of a health insurance decision, from collecting on the medical debt, reporting the medical debt to a consumer reporting agency, or selling the medical debt to a debt buyer;
• Requires a creditor, debt collector, or collection agency that files a legal action to collect medical debt to include the identity of the original creditor, an itemization of the charges and, prior to the entry of a default judgment against the creditor, provide evidence of the medical debt;
• Makes it a deceptive trade practice to violate provisions relating to billing practices, surprise billing, and balance billing laws; and
• Requires a health-care provider or health-care facility to provide, upon request of a prospective patient, an estimate of the total cost of a health-care service (service) to a person who intends to self-pay for the service (self-pay estimate). The act includes requirements for the self-pay estimate and caps the amount by which the final, total cost of the service may exceed the self-pay estimate to the lesser of 15% of the self-pay estimate or $400, with exceptions for emergency or unforeseen, medically necessary services required during the service. The act makes it a deceptive trade practice to violate provisions relating to the self-pay estimate.

EFFECTIVE May 4, 2023
(Note: This summary applies to this bill as enacted.)