Healthcare Provider, Collection Agency Facing Class-Action Lawsuit for Allegedly Violating State Law

A healthcare provider and the collection agency working on the provider’s accounts are facing a class-action lawsuit alleging they violated a recently enacted state law in New Mexico by engaging in debt collection activities before verifying whether the incomes of those patients protected them from such activities.

The class-action, which includes about 200 plaintiffs who have been sued by the provider since the law went into effect, was filed as counterclaim after a patient was sued by the provider and the agency for an unpaid healthcare debt. The lawsuit claims the plaintiff’s income protects her from such actions under the Patients’ Debt Collection Practices Act, which went into effect in New Mexico last year. Under the terms of the law, healthcare providers are prohibited from engaging in a number of activities — including filing collection lawsuits — when a patient’s income does not exceed 200% of the federal poverty level.

A copy of the complaint is available by clicking here.

The complaint asks the court to:

• Prevent the healthcare provider from filing lawsuits and engaging in other collection activities without first checking the individual’s income
• Dismiss all pending lawsuits and garnishment proceedings against individuals whose income levels qualify them for protection under the law
• Undo any credit reporting that has taken place
• Return any wages that have been garnished

What The Healthcare Provider Said: “MountainView Regional Medical Center is aware of the the requirements of the state law regarding medical debt collection and previously implemented policies and procedures to ensure compliance with the law. We are not aware of any departure from those policies and procedures. We will review the allegations in the lawsuit and work with the New Mexico Center on Law and Poverty if the review identifies mistakes or departures from the hospital’s policies and procedures.”