The new law outlines credit reporting changes, including in health care providers’ contracts with debt collectors, effective July 1.
05/15/2024 11:40 A.M.
3 minute read
Connecticut’s legislation on medical debt and credit reporting will take effect July 1, following suit of other states like Florida and Maine.
Gov. Ned Lamont signed the bill (PDF) on May 9.
It prohibits health care providers and hospitals from reporting a patient’s medical debt to consumer reporting agencies (CRAs) for their credit report on and after July 1, 2024. It also voids any portion of such medical debt that is reported to the CRAs.
Health care providers in Connecticut must include a provision prohibiting credit reporting in any contract with a collection agency set on and after July 1, 2024.
As defined in the bill, “’Medical debt’ means an obligation or alleged obligation of a consumer to pay any amount related to the receipt by the consumer of health care goods or 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 charges related to health care goods or health care services.”
Through Gov. Lamont, Connecticut has also pursued other avenues to address medical debt.
Earlies this year, Lamont said in an interview on “Good Morning America” that the state will remove about $1 billion in medical debt using $6.5 million in funds from the American Rescue Plan Act, ACA International previously reported.
Eligible residents include families with medical debt at 5% or more of their annual income or residents with a household income of up to 400% of Federal Poverty Level. The relief is expected to impact roughly 250,000 Connecticut residents.
Residents will not have to apply for aid. Connecticut is contracting with a nonprofit organization that will automatically remove the debt, and residents should expect to see relief or notifications of the relief this summer.
Meanwhile, several other states are going the legislative route to address medical debt credit reporting mentioned earlier.
Virginia’s bill, HB 1370, prohibits “certain medical care facilities, certain health care professionals, and emergency medical services agencies from reporting any portion of a medical debt, defined in the bill, to a consumer reporting agency. The bill prohibits collection entities collecting or attempting to collect a medical debt from reporting such collection or attempts to collect to a consumer reporting agency,” ACA previously reported.
It also takes effect July 1, as does recent legislation in Florida that sets a three-year statute of limitations for hospitals, urgent care and ambulatory surgery center debt, among other changes.
Illinois, California and Minnesota also have legislation on medical debt credit reporting in under consideration with updates expected in the coming months.
ACA members can also get valuable updates on changes to state laws and compliance requirements by subscribing to ACA’s State Guide Cohort and joining the monthly webinar series. The next webinar is Tuesday, June 11 at 1 p.m. CT.
Already a State Guide subscriber? View your online State Guide and find registration information for the monthly webinars here. This is also where you can access past webinar recordings and session slides.
Members can attend the weekly ACA Huddle at 11 a.m. CT for more timely updates.
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