A medical debt collection bill has been introduced in the Delaware legislature that has support from both sides of the aisle and a large number of co-sponsors, giving it some momentum to become law. Like many of the other medical collection bills being considered in state legislatures across the country, this piece of legislation would place restrictions on how medical debts are collected and hold health care facilities liable for the actions of debt buyers or debt collectors taken to collect on unpaid debts.
A copy of the proposed legislation, sponsored by state Sen. Spiros Mantzavinos, a Democrat, can be accessed by clicking here. The bill has been referred to a Senate committee. No hearing on the bill has been scheduled to date. The state legislature is in session through the end of June.
The bill defines extraordinary collection actions to include:
- Selling debts to a third party, unless the buyer agrees to certain provisions, like refusing to engage in extraordinary collection activities, refusing to charge interest on the debt, and returning the debt to the creditor if the patient is eligible for financial assistance.
- Commencing a civil action
- Garnishing the patient’s wages or seizing property
Debt collectors and healthcare providers would be prohibited from charging interest on unpaid medical debts and must offer payment plans that do not exceed 5% of the patient’s gross monthly income. Initial payments on payment plans would not be due for at least 90 days after the services were provided.
Collectors and creditors would be prohibited from engaging in any permissible extraordinary collection activity for 120 days after the bill has been sent to the patient, and patients must receive notice 30 days in advance of taking any extraordinary collection action.
The bill would also ban interest and late fees on medical debts and gives patients a private right of action.