Bill Introduced in Senate to Ban ‘Extraordinary’ Collection Actions Of Medical Debt

A bill has been reintroduced in the Senate that would prohibit healthcare providers and their agents from engaging in “extraordinary collection actions” until the COVID-19 pandemic is over or 18 months after the law is enacted.

S.355, or The COVID-19 Medical Debt Collection Relief Act of 2021 was introduced this week by Sen. Chris Van Hollen [D-Md.], who originally introduced the legislation last year. Text of the bill can be accessed by clicking here.

The bill would prohibit:

  • Selling an individual’s debt to another party
  • Reporting adverse information about the individual to consumer credit reporting agencies or credit bureaus.
  • Actions that require a legal or judicial process, including but not limited to:
    • Placing a lien on an individual’s property
    • Attaching or seizing an individual’s bank account or any other personal property
    • Commencing a civil action against an individual
    • Garnishing an individual’s wages

Individuals who have entered into payment plans for unpaid medical debts would be allowed to suspend those payments until the covered period of the law expired. The law would also bar any interest from accruing or any additional fees to be added to the unpaid balance.

The bill would also set out a number of protections for debts incurred during the first two months of the pandemic last year.

“As the COVID-19 pandemic continues to wreak havoc on the health and economic wellbeing of so many Americans, it’s unconscionable that some hospitals are going after patients’ wages and bank accounts to collect medical debts,” said Sen. Van Hollen, in a statement. “When many are struggling to pay rent and put food on the table, this practice can leave families destitute. We should never allow medical debts to ruin livelihoods – but especially not as we face this pandemic.”

The bill is endorsed by Community Catalyst, National Consumer Law Center (on behalf of its low-income clients), Consumer Federation of America, and the Center for Responsible Lending.

Sen. Van Hollen cited the results of a poll, conducted last October in Maryland about the effects of medical debt, as an indication that there is “widespread support” to curb “drastic” collection measures.

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