Bill Text: NJ A3861 | 2024-2025 | Regular Session | Introduced
Bill Title: "Louisa Carman Medical Debt Relief Act."
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced) 2024-02-27 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A3861 Detail]
Download: New_Jersey-2024-A3861-Introduced.html
Sponsored by:
Assemblywoman VERLINA REYNOLDS-JACKSON
District 15 (Hunterdon and Mercer)
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
Assemblyman ANTHONY S. VERRELLI
District 15 (Hunterdon and Mercer)
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
Co-Sponsored by:
Assemblyman Sampson, Assemblywomen Quijano, McCoy, Donlon and Speight
SYNOPSIS
"Louisa Carman Medical Debt Relief Act."
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the report and collection of medical debt and supplementing Title 56 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and may be cited as the "Louisa Carman Medical Debt Relief Act."
2. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Collection action" means any of the following:
(1) selling an individual's debt to another party;
(2) reporting adverse information about the patient to a consumer reporting agency; or
(3) actions related to the collection of an individual's debt to another party that require a legal or judicial process, including but not limited to placing a lien on an individual's property, attaching or seizing an individual's bank account or any other personal property, commencing a civil action against an individual, or garnishing an individual's wages.
"Consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility for the purpose of preparing or furnishing consumer reports.
"Health care service" means the preadmission, outpatient, inpatient, and post discharge care provided in or by a health care facility, and such other items or services as are necessary for such care, including but not limited to medical devices, which are provided for the purpose of health maintenance, diagnosis, or treatment of human disease, pain, injury, disability, deformity, or physical condition, including, but not limited to, nursing service, home care nursing, and other paramedical service, ambulance service, dental and vision services, service provided by an intern, resident in training or physician whose compensation is provided through agreement with a health care facility, laboratory service, medical social service, drugs, biologicals, supplies, appliances, equipment, bed and board, including services provided by a health care professional in private practice.
"Medical creditor" means any entity that provides health care services and to whom a patient owes money for health care services, or the entity that provided health care services and to whom the patient previously owed money if the medical debt has been purchased by one or more debt buyers.
"Medical debt" means a debt arising from the receipt of health care services. "Medical debt" does not include debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered specifically for the payment of health care services or goods.
"Medical debt buyer" means a person or entity that is engaged in the business of purchasing medical debts for collection purposes, whether it collects the debt itself or hires a third party for collection or an attorney-at-law for litigation in order to collect such debt.
"Medical debt collector" means any person that regularly collects or attempts to collect, directly or indirectly, medical debts originally owed or due or asserted to be owed or due to another. A medical debt buyer is considered to be a medical debt collector for all purposes.
"Patient" means the person who received health care services, and for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill) includes a parent or legal guardian if the patient is a minor, or a legal guardian if the patient is an adult under guardianship.
3. No consumer reporting agency may make any consumer report containing a patient's paid medical debt or a medical debt of less than $500 regardless of the date it was incurred. A medical creditor or medical debt collector shall not report a patient's medical debt to any consumer reporting agency for health care services performed on and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. a. Notwithstanding any provision of law or regulation to the contrary, except as otherwise provided in subsection c. of this section, a medical creditor or medical debt collector shall not engage in any permissible collection actions until 180 days after the first bill for a medical debt has been sent.
b. At least 30 days before taking any collection actions, a medical creditor or medical debt collector shall provide to the patient at least one additional bill and a notice containing the following:
(1) identifying the collection actions that will be initiated in order to obtain payment; and
(2) providing a deadline after which such collection actions will be initiated, which date is no earlier than 30 days after the date of the notice.
c. A medical debtor may sell an individual's debt to another party unless, prior to the sale, the medical creditor has entered into a legally binding written agreement with the medical debt buyer of the debt pursuant to which the medical debt buyer or collector is prohibited from engaging in any actions in paragraphs (2) and (3) of the definition of "collection action" in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) and from otherwise seeking to obtain payment for the health care service.
5. a. A medical creditor or medical debt collector that knows or reasonably should know that an internal review, external review, or other appeal of a health insurance decision which provides the basis for a medical debt is pending now or was pending within the previous 60 days shall not:
(1) communicate with the patient regarding the unpaid charges for health care services for the purpose of seeking to collect the charges; or
(2) initiate a lawsuit or arbitration proceeding against the patient relative to unpaid charges for health care services.
b. If a medical debt has already been reported to a consumer reporting agency and the medical creditor or medical debt collector who reported the information learns of an internal review, external review, or other appeal of a health insurance decision which provides the basis for a medical debt is pending now or was pending within the previous 60 days, or learns that the medical debt has been paid, the medical creditor or medical debt collector shall instruct the consumer reporting agency to delete the information about the debt.
c. A medical creditor that knows or reasonably should know about an internal review, external review, or other appeal of a health insurance decision that is pending now or was pending within the previous 60 days shall not refer, place, or send the unpaid charges for health care services to a medical debt collector, including by selling the debt to a medical debt buyer.
6. a. Any portion of a medical debt that is furnished to a consumer reporting agency in violation of the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be void.
b. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for a medical creditor or medical debt collector to undertake a collection action in violation of the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
7. The provisions of this act shall be severable; and if any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of this act shall be enforceable. The provisions of this act shall be liberally construed to effectuate its purposes.
8. This act shall take
effect immediately.
STATEMENT
This bill, titled the "Louisa Carman Medical Debt Relief Act," prohibits a consumer reporting agency from creating a consumer report containing a patient's paid medical debt or a medical debt worth less than $500, regardless of the date the medical debt was incurred. The bill prohibits a medical creditor or medical debt collector from reporting a patient's medical debt to any consumer reporting agency. The bill provides certain protections to patients with medical debt from collection actions by medical creditors and medical debt collectors.
The bill also provides that any portion of a medical debt furnished to a consumer reporting agency in violation of the bill will be void, and that it will be a violation of the "consumer fraud act" for a medical debt collector or creditor to violate the medical debt provisions of the bill.
