Federal regulations for bad debt collections make an impact on your revenue stream, but state legislation is also constantly changing. At Americollect, we frequently review new laws and healthcare regulations to see how they may aﬀect your ability to recover the revenue that your facility has earned. By sharing this information with you, we are working to keep you informed about what changes are happening. Below you will find the most recent state legislation impacting healthcare revenue recovery in Colorado, Nevada, and New York.
Governor Jared Polis signed a new healthcare regulation bill from Colorado’s Assembly that will go into eﬀect August 7, 2023. This bill covers the inclusion of medical debt information on consumers’ credit reports.
HB23-1126 will prohibit medical debt information on credit reports and, “prohibits a debt collector or collection agency, when attempting to collect 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.”
Debt collectors and collection agencies will also be prohibited from making false or misleading representations that the medical debt will be included in a consumer report. Failing to disclose that medical debt will not be included in a consumer report also violates the bill. In both cases debt collectors and collection agencies are not allowed to infer that the debt may impact their credit score. This healthcare regulation does not retroactively impact conduct that occurred before the August 7, 2023, eﬀective date.
On July 1, 2021, S.B. 248 was signed into law, requiring debt collection agencies to send a medical debt notification to a consumer 60 days before taking any action to collect a medical debt. While this was not an issue, the fact that the letter was required to be sent by registered or certified mail greatly increased the cost to healthcare providers who wished to recover bad debt.
In June of 2023, Nevada Governor Joe Lombardo signed oﬀ on a new law that revised the requirements related to S.B. 248 codified at NRS 649.366(1)—that required the 60-day notice to be sent by registered or certified mail. The removal of the registered or certified mail requirement was included in S.B. 335. This new healthcare regulation goes into eﬀect on October 1, 2023, at which time collection agencies will be permitted to send the two-day notice via regular mail. This can help healthcare providers and/or collection agencies to save on mailing costs.
Though the New York Assembly adjourned its legislative session, they did pass A6275A. This is the Fair Medical Debt Reporting Act created to “amend the public health law and the general business law in relation to prohibiting medical debt from being collected by a consumer reporting agency or included in a consumer report.” It did not pass the senate before it adjourned, and they are not expected to reconvene this year.
The healthcare regulation bill prohibits hospitals, medical providers, and ambulance services from reporting any portion of a medical debt to a consumer reporting agency (CRA). Also, any contracts made with a collection entity that buys or tries to collect a medical debt must include a provision that prohibits those entities from reporting any portion of said debt to a CRA. In addition, it also removes any medical debt that is reported by a hospital, medical provider, or ambulance service from CRA reports.
In the bill, medical debt is defined as “an obligation or alleged obligation of a consumer to pay any amount whatsoever related to the receipt of health care services, products or devices provided to a person by a hospital licensed under article (28) of this chapter, a health care professional authorized under title eight of the education law or an ambulance service certified under article (30) of this chapter.” It does not include expenses on a credit card unless that card is issued under a plan specifically for healthcare services.
Americollect continues to monitor the various legislative actions states take that can impact your revenue. If you have questions about these bills or any others, please contact us today!
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