Part I.

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 providing specified services with revenues of at least $20 million annually, and professionals offering services in one of these locations) 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 seven 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 under the facility’s Presumptive Eligibility Policy. Requires the facility to accept and consider a patient's application for financial assistance submitted within one year of the date of the first bill; however, if the patient is the subject of collection activity by the facility or a medical debt collector and the patient submits an application for financial assistance, the large health care facility must accept and process the application at any time. Provides that for applicants eligible for financial assistance, no initial monthly payment is due within the first 90 days after the health care services were provided. Requires the creation of an appeals process for those denied financial assistance.

Sets the following terms for patients who qualify for financial assistance under the MDMP, applicable to charges for health care services not covered by insurance and would be billed to the patient: (1) patients with household incomes of 0%-300% of the federal poverty level shall receive free care; (2) patients with household income of more than 300% up to 400% of the federal poverty level will be charged no more than an amount calculated in the following manner: a. recalculate the patient's bill using the Medicare reimbursement rate applicable on the dates of service, b. the patient shall be charged no more 25% of the recalculated bill; (3) patients with household incomes of more than 400% up to 600% of the federal poverty level shall receive the same discount listed in (2) if the patient or the patient's household has incurred medical expenses during the previous 12 months which in total exceed 5% of the household's income; and (4) in addition to other financial assistance provided under this Article, no patient with a household income at or below 400% of the federal poverty level shall be required to pay more than $2,300 in cumulative medical bills to large health care facilities in any 12-month period. Upon patient request and documentation, any health care services that have been delivered by one or more large health care facilities after the $2,300 limit has been met must be provided as free care.

Requires the facility to adopt a process to screen for presumptive eligibility for financial assistance and establish a process for determining non-presumptive eligibility. Prohibits billing a patient until the patient has been screened for presumptive eligibility and notified if eligible. Sets out requirements for the presumptive eligibility screening. Requires patients found to not be presumptively eligible for financial assistance to be given a process to apply to financial assistance that meets the listed requirements.

Sets out ways in which the large health care facility must publicize its MDMP, including making the policy and financial assistance application easily accessible online. Requires that the patient be 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. 

Provides immunity from liability for spouses or other persons for the medical debt or nursing home debt of another adult, and prohibits a person from voluntarily consenting to assume such liability.

Requires providing an itemized bill before requesting payment, or within 60 days of a patient's request. Sets out what must be included in the bill. Prohibits a medical creditor or medical debt collector that knows or should have known about an internal review, external review, or other appeal of a health insurance decision that is pending now or within the previous 180 days from: (1) communicating with the consumer regarding the unpaid charges for health care services for the purpose of seeking to collect the charges or (2) initiating a lawsuit or arbitration proceeding against the consumer relative to unpaid charges for health care services.

Sets limits on the interest that may be charged on medical debt and on judgments on such debt. Requires medical creditors and medical debt collectors to offer patients qualifying for financial assistance or owning over $5000 a payment plan no less than 36 months, with payments limited to 5% of the patient’s household income. Sets out additional provisions governing such payment plans.

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 the greater of up to treble the amount of damages incurred, or civil penalties of $500-$4,000 per violation. Allows for injunction or other equitable relief. Allows a consumer to bring an action for violations within four years from the occurrence of the violation. 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 is deemed a public record.

Requires large health care facilities to annually file their 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. Requires DHHS to consult with specified entities to develop materials to inform the public about MDMP policies.

Includes a severability clause.

Exempts federally qualified health centers from several of the above provisions.

Effective June 1, 2025, and applies to medical debt collection activities occurring after that date and to agreements and contracts entered into, amended, or renewed on or after that date.

Part II.

Repeals GS Chapter 44, Article 9A (liens for ambulance service) and Article 9B (attachment or garnishment and lien for ambulance service in certain counties).

Part III.

Amends GS 105A-2 by amending the definition of debt as it applies to the Setoff Debt Collection Act by removing the provisions concerning debt for UNC constituent institutions schools of medicine, clinical programs, or affiliated practices that provide care to the general public and for the UNC Health Care System and those under the System’s control.

Part IV.

Provides that this act controls over GS 131E-91, GS 131-99, and GS 131E-147.1 in the event of conflict.