The governor of Minnesota this week signed the Medical Debt Fairness Act into law, but thankfully, the final version of the bill looks different than it was originally drafted.
Most of the bill will go into effect this coming October, with the remaining provisions going into effect next April.
Under the bill, hospitals are prohibited from referring an account to collections until it determines that the patient is ineligible for charity care or denies an application to charity care. Hospitals were also going to be allowed to deny healthcare services to patients because of outstanding medical debt, but that provision was removed from the final version of the bill.
Entities collecting medical debt will be prohibited from reporting medical debt to credit reporting agencies and would not be allowed to transfer the debt of a deceased patient to that patient’s spouse.
The bill defines medical debt as debts incurred primarily for medically necessary health treatment or services. Medical debt includes debt charged to a credit card or other credit instrument, on or after October 1, under an open-end or closed-end credit plan offered specifically to pay for health treatment or services. Medical debt does not include:
- debt charged to a credit card or other credit instrument, under an open-end or closed-end credit plan, that is not offered specifically to pay for health treatment or services;
- services provided by a veterinarian;
- services provided by a dentist; or
- debt charged to a home equity line of credit.
Collecting parties are prohibited from:
- in a collection letter, publication, invoice, or any oral or written communication, threaten wage garnishment or legal suit by a particular lawyer, unless the collecting party has actually retained the lawyer to do so;
- use or employ sheriffs or any other officer authorized to serve legal papers in connection with collecting a claim, except when performing the sheriff’s or other officer’s legally authorized duties;
- use or threaten to use methods of collection that violate Minnesota law;
- furnish legal advice to debtors or represent that the collecting party is competent or able to furnish legal advice to debtors;
- communicate with debtors in a misleading or deceptive manner by falsely using the stationery of a lawyer, forms or instruments which only lawyers are authorized to prepare, or instruments which simulate the form and appearance of judicial process;
- publish or cause to be published any list of debtors, use shame cards or shame automobiles, advertise or threaten to advertise for sale any claim as a means of forcing payment of the claim, or use similar devices or methods of intimidation;
- operate under a name or in a manner which falsely implies the collecting party is a branch of or associated with any department of federal, state, county, or local government or an agency thereof;
- transact business or hold the collecting party out as a debt settlement company, debt management company, debt adjuster, or any person who settles, adjusts, prorates, pools, liquidates, or pays the indebtedness of a debtor, unless there is no charge to the debtor, or the pooling or liquidation is done pursuant to court order or under the supervision of a creditor’s committee;
- unless an exemption in the law exists, violate Code of Federal Regulations, title 12, part 1006, while attempting to collect on any account, bill, or other indebtedness. For purposes of this section, Public Law 95-109 and Code of Federal Regulations, title 12, part 1006, apply to collecting parties other than health care providers collecting medical debt in the health care provider’s own name;
- communicate with a debtor about medical debt by use of an automatic telephone dialing system or an artificial or prerecorded voice after the debtor expressly informs the collecting party to cease communication utilizing an automatic telephone dialing system or an artificial or prerecorded voice. For purposes of this clause, an automatic telephone dialing system or an artificial or prerecorded voice includes but is not limited to (i) artificial intelligence chat bots, and (ii) the usage of the term under the Telephone Consumer Protection Act, United States Code, title 47, section 227(b)(1)(A);
- in collection letters or publications, or in any oral or written communication, imply or suggest that medically necessary health treatment or services are denied as a result of a medical debt;
- when a debtor has a listed telephone number, enlist the aid of a neighbor or third party to request that the debtor contact the collecting party, except a person who resides with the debtor or a third party with whom the debtor has authorized with the collecting party to place the request. This clause does not apply to a call-back message left at the debtor’s place of employment which is limited solely to the collecting party’s telephone number and name;
- when attempting to collect a medical debt, fail to provide the debtor with the full name of the collecting party, as registered with the secretary of state;
- fail to return any amount of overpayment from a debtor to the debtor or to the state of Minnesota pursuant to the requirements of chapter 345;
- accept currency or coin as payment for a medical debt without issuing an original receipt to the debtor and maintaining a duplicate receipt in the debtor’s payment records;
- except for court costs for filing a civil action with the court and service of process, attempt to collect any interest, fee, charge, or expense incidental to the charge-off obligation from a debtor unless the amount is expressly authorized by the agreement creating the medical debt or is otherwise permitted by law;
- falsify any documents with the intent to deceive;
- when initially contacting a Minnesota debtor by mail to collect a medical debt, fail to include a disclosure on the contact notice, in a type size or font which is equal to or larger than the largest other type of type size or font used in the text of the notice, that includes and identifies the Office of the Minnesota Attorney General’s general telephone number, and states: “You have the right to hire your own attorney to represent you in this matter.”;
- commence legal action to collect a medical debt outside the limitations period set forth in section 541.053;
- report to a credit reporting agency any medical debt that the collecting party knows or should know is or was originally owed to a health care provider, as defined in section 62J.805, subdivision 4; or
- challenge a debtor’s claim of exemption to garnishment or levy in a manner that is baseless, frivolous, or otherwise in bad faith.
