Medical Debt Relief Bill Passes Senate

A bill passed by the Senate Tuesday would give consumers the right to go to court to stop a collection action on medical debt that violates federal IRS rules. The bill passed unanimously, and is awaiting a vote from the House.

Medical debt is well recognized as the top cause of personal bankruptcy in America, and accounts for more collections than credit cards. In an attempt to reverse this growing trend, the bill provides a patient or consumer the right of action to get a court injunction to keep collectors from withholding medical care, garnishing wages, causing arrest or taking other “Extraordinary Collection Actions” that collection agents often employ against consumers. This policy would apply specifically to debt accrued at nonprofit hospitals, and only to medical debt, though the Senator has coauthored other legislation to address debt on a broader scale.

The bill provides this private right of action to get an injunction if the hospital has failed to notify the patient of the financial assistance policy and has taken steps to determine eligibility for any charity care or payment plan available. The bill doesn’t give judges the power to reduce or eliminate medical debt, only to postpone action until the patient has information on the financial assistance policy. If passed by the House, it will be sent to the Governor’s desk for signature. (S.F. 1741)

Senate DFL Media