California Governor Gavin Newsom signed California AB 1521, the judiciary omnibus bill, into law on October 1. One of the things this bill does is finalize the updates to medical debt credit reporting requirements. These requirements were initially passed in California SB 1061, which Americollect reported on in 2024.
California AB 1521 clarifies that the notice requirements in SB 1061 required in a contract creating a medical debt only apply to a written agreement. It would not apply in instances where there is no written contract for medical services, such as when a patient is transported to a provider in an ambulance during an emergency.
The definition of medical debt in California SB 1061 is “a debt owed by a consumer to a person whose primary business is providing medical services, products, or devices, or to the person’s agent or assignee, for the provision of medical services, products, or devices. Medical debt includes, but is not limited to, medical bills that are not past due or that have been paid.”
California SB 1061 also:
- Prohibits using medical debt listed on a consumer credit report as a negative factor when making a credit decision.
- Prohibits consumer credit reporting agencies from making a consumer credit report containing medical debt information.
- Prohibits a person from furnishing information regarding medical debt to a consumer credit reporting agency and makes a medical debt void and unenforceable if a person knowingly violates this provision.
Americollect will continue to report on California AB 1521 as more information becomes available.
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