Draft Medical Debt Collection Bill Circulating in Colorado

A bill is being circulated in the Colorado legislature — which is also backed by the state’s Attorney General — that would cap the interest rate on medical debt, establish requirements on medical debt payment plans, and make violations of surprise or balance billing laws a deceptive trade practice, among other provisions.

A copy of the proposed legislation can be accessed by clicking here.

The bill would define medical debt to include debt arising from the receipt of health-care services or medical products or devices. It would cap the interest rate on medical debt at 3% per year. Collectors would be required to provide itemized statements concerning the debts when requested by individuals in writing. Collection agencies and creditors would be required to provide written notification of any payment plans, and notices to the consumer if the payment plan will become inoperative and the opportunity to renegotiate the payment plan. If a consumer appeals denial of coverage from an insurance provider, collectors would be required to stop collection efforts and stop reporting information about the debt to the credit reporting agencies.

The bill also raises the pleading requirements for filing lawsuits against individuals with unpaid medical debts.

There bill also includes a provision prohibiting the assignment of medical debts to collection agencies, requiring all lawsuits on medical debts to be brought in the name of the service provider, not a third-party debt collector.