Report Ranks States According to Medical Debt Collection Laws

A report has been released ranking each of the 50 states according to how they protect consumers related to medical debts, assigning only three a score of “good” while assigning 20 a score of “poor.” The report was cited yesterday during a hearing discussing a proposed bill in North Carolina, which would move the state from 28th on the aforementioned list to second.

The report developed its score by interviewing subject-matter experts, who were asked to identify policy goals that were identified as being helpful and important to consumers. The top four policy goals were:

  • Reduce how often people incur medical debts
  • Increase the ability of patients to resolve debts out of court
  • Improve the openness, efficiency, and equity for people navigating medical debt court cases without a lawyer,
  • Reduce the negative consequences for debtors after court

Maryland, California, and Maine were the only three states to score a “good” rating, according to the report. Tennessee, South Carolina, and Texas were the states with the lowest scores.

Among the recommendations made by the report were:

  • Expand Medicaid under the Affordable Care Act
  • Mandate screening for patients for insurance eligibility and charity/discount care programs
  • Require providers to notify individuals about charity care policies before sending a bill to collections
  • Prohibit sending a bill to collections or credit reporting while the patient is working with his or her insurance, applying for financial assistance, or making payments on a payment plan
  • Setting a minimum amount of time before a provider can sue for an unpaid debt
  • Implement a three-year statute of limitations on medical debt
  • Restrict garnishments

The recommendations are important because those are the provisions that we are likely to see in bills and other measures that states may choose to consider, like North Carolina for example.

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