Hearing Today in Industry Case Against New Nevada Medical Collection Law

A hearing is scheduled for this afternoon in before a federal judge in Nevada courtroom attorneys representing a dozen collection agencies and ACA International will seek to obtain a temporary restraining order blocking legislation that governs how medical debts are collected in the state.

The law went into effect on July 1. The agencies filed their lawsuit against the state on June 28, but their emergency motions for a temporary restraining order and preliminary injunction seeking to block the law from going into effect were found to “raise various substantive issues that cannot be resolved prior to July 1, 2021” and if the plaintiffs wanted to keep the law from going into effect on July 1 they “could have filed their motions earlier had they wanted more expedited treatment,” noted Judge Richard F. Boulware II, who will hear arguments in the case today.

There has been a lot of confusion and concern about the law — SB248 — which places a number of new requirements on collectors that work healthcare accounts in Nevada. AccountsRecovery.net held a webinar last week seeking to provide information and answer questions about the law — a recording of the event is available by clicking here.

SB248 violates the First Amendment, Fourteenth Amendment as well as preemption provisions in the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, the plaintiffs claim in their suit against the state of Nevada. Among the arguments put forth by the plaintiffs in their suit are that SB248, which prohibits collection agencies from “taking any action to collect a medical debt” for 60 days after sending a notice to consumers, does not define what “action” means, such as whether it simply prohibits initiating a collection lawsuit or whether the word encompasses other collection activity. SB248 also conflicts with existing state law in Nevada which requires collectors to send notifications to consumers within five days of an initial communication because SB248 says that agencies have to wait 60 days after sending the initial notice before taking any action. Now, the Financial Institutions Division of the Nevada Department of Business and Industry has been answering questions and attempting to provide guidance on some of these issues, but, at the end of the day, the law “erects artificial barriers to the collection of lawful medical debt and was designed specifically to prevent physicians, health care providers, and providers of emergency services from using licensed debt collection companies to secure payment for lawful debts arising from the provision of their medical goods and services to the public,” the plaintiffs allege in their complaint.

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