Bill Summary for H 1039 (2021-2022)
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AN ACT TO ADOPT THE PRO-FAMILY, PRO-CONSUMER MEDICAL DEBT PROTECTION ACT TO SET TRANSPARENT PARAMETERS AROUND THE PROVISION OF FINANCIAL ASSISTANCE FOR IMPOVERISHED FAMILIES AND LIMIT THE ABILITY OF LARGE MEDICAL FACILITIES TO CHARGE UNREASONABLE INTEREST RATES AND EMPLOY UNFAIR TACTICS IN DEBT COLLECTION, AS REQUESTED BY THE NORTH CAROLINA DEPARTMENT OF STATE TREASURER.Intro. by Goodwin, Hanig, Hunter, Richardson.
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Enacts Article 11C, GS Chapter 131E, to be cited as the Medical Debt Protection Act (Act). States the Article's legislative purpose. Includes 15 defined terms. Requires all large health care facilities (defined to include licensed hospitals, outpatient clinics and facilities affiliated with licensed hospitals, licensed ambulatory surgical centers, and other practices and professionals offering specified health care services) to develop a written financial assistance policy called a medical debt mitigation policy (MDMP) pursuant to the Article and any implementing rules. Defines an MDMP to include seven components, including the basis for calculating amounts charged to patients and the method for applying for financial assistance, as well as eligibility criteria for financial assistance. Makes the requirements applicable regardless of federal law requirements. Further details required content of an MDMP and requires its approval and annual review by the owners or governing body of the health care provider.
Establishes five steps a large health care facility (facility) must take before seeking payment for any emergency or medically necessary care, including determining the patient's health care insurance status, offering to screen a patient for insurance eligibility and other public programs that assist in health care costs, determining qualifications for free or discounted care under the MDMP, and determining eligibility for financial assistance within 14 days of application with billing and collections stayed while determination is pending. Sets forth four categories of eligibility for patients to qualify for financial assistance under the MDMP based on household income and poverty level, with assistance ranging from no cost to discounted costs, applicable to any charges for health care services that are not covered by insurance and would be otherwise billed to the patient. Details acceptable methods for establishing eligibility for financial assistance, with authority for a facility to grant financial assistance notwithstanding the patient's failure to provide the acceptable documentation or can require other evidence of eligibility. Requires facilities to notify a patient in writing within 30 days of receipt of an application for financial assistance of its eligibility determination. Requires acceptance and consideration of applications submitted within one year of the date of the first bill after provision of health care services. Provides for review of applications for patients subject to collection activity by the facility or medical debt collector at any time, with medical debt collectors required to forward any application submitted within two business days and to cease activity until notified by the facility of the outcome. Bars charging late fees or interest to patients who qualify for financial assistance. Requires facilities and medical debt collectors to offer payment plans to qualifying patients of at least 24 months with payments never exceeding more than 5% of the patient's gross monthly income, with the first payment required to be at least 90 days after the services were provided. Bars prepayment and early payment fees or penalties.
Sets forth requirements of a large health care facility to publicize its MDMP, including making the policy and financial assistance application easily accessible online. Requires that the patient by informed of any financial assistance policy with every written and oral attempt by a medical creditor or debt collector to collect medical debt for health care services provided by a large health care facility. Includes translation requirements for MDMPs and other language access accommodations required by a large health care facility.
States four prohibited collection actions, including causing arrest or garnishing wages or tax refunds. Prohibits medical creditors and medical debt collectors from engaging in permissible extraordinary collection actions, as defined, until 180 days after the first bill for a medical debt has been sent, and before which specified notice requirements must be met at least 30 days prior to taking such actions. Prohibits a large health care facility or medical debt collector from taking extraordinary collection actions to collect debt for health care services provided by the facility unless the actions are described in the facility's billing and collections policy. Requires reversal of extraordinary collection actions taken when a patient is later found eligible for financial assistance.
Requires large health care facilities to post price information online as described, including using gross charges for services and listing amounts Medicare would reimburse for the service.
Deems parents and legal guardians jointly liable for any medical debts incurred by minors. Provides immunity from liability for spouses or other persons for the medical debt or nursing home debt of another adult, with requirements listed for voluntary consent to assume such liability.
Requires and described required content of itemized bills provided by medical creditors or medical debt collectors upon request, free of cost. Prohibits medical creditors and medical debt collectors from communicating with or reporting to consumer reporting agencies regarding a consumer medical debt for one year from the date of the first bill for the medical debt, whereby creditors and collectors must send one additional bill before such communications. Places restrictions on collection agency communications.
Details prohibited acts of medical creditors and medical debt collectors while health insurance decisions review or appeal is pending.
Establishes a formula to cap interest on medical debt. Establishes requirements for medical creditors and medical debt collectors relating to payment plans for medical debt, including providing a written copy of the plan to the consumer within five business days of entry that includes prominent disclosure of the interest rate and maturity date, and satisfaction of notice and negotiation requirements prior to accelerating or defaulting a plan.
Provides requirements for providing receipts of medical debt payments to consumers. Provides for debt forgiven by a medical center to not constitute a breach of contract between the medical center and the insurer or payor.
Creates a private right of action for a consumer against whom a violation of the Article occurs for up to treble the amount of damages incurred. Allows for injunction or other equitable relief. Prohibits MDMPs from waiving the patient's right to resolve a dispute by equitable relief, the award of damages, attorneys' fees and costs, or an evidentiary hearing. Deems any waiver by any patient or consumer of rights and protections under the Article void. Grants enforcement authority to the Attorney General, and requires the AG to establish a complaint process, which are deemed public records.
Requires large health care facilities to annually file its MDMP with the Department of Health and Human Services (DHHS), as specified, with DHHS required to post the reports in a searchable online database, and annually prepare a consolidated report. Creates reporting requirements for facilities that retain or initiate the process to retain a patient's State tax refund through GS Chapter 105 setoff other other state law.
Includes a severability clause.
Deems the act supersedes GS 131E-91, GS 131-99, and GS 131E-147.1 in the event of conflict.
Appropriates $100,000 in recurring funds from the General Fund to DHHS for 2022-23 to administer the collection of MDMPs and annual reports for public availability.
Applies to medical debt collection activities occurring after October 1, 2022.