A pair of U.S. senators have introduced a bill that aims to strengthen consumer debt protections and improve transparency for medical debt practices.
The bill was introduced by Sen. Chris Murphy of Connecticut and Sen. Mike Braun of Indiana, according to a July 25 news release from Mr. Murphy's office.
Five things to know:
1. The legislation would require HHS to create a publicly available database of annual reporting from hospitals, freestanding facilities, and large provider practices with information about whether they use collection agents, the process for assigning debt to a collection agent and the number of extraordinary collection actions — as defined by the IRS — they have initiated. HHS will also keep a public list of providers that do not submit the required information each year.
2. Healthcare entities and their contracted debt collection agencies would not be allowed to enter into extraordinary debt collections until 180 days after an initial bill is sent and the debtor's identity has been confirmed.
3. Healthcare entities would be required to provide a patient with an itemized statement of debt owed as well as detailed receipts of payments made within 30 days.
4. An entity that fails to comply with the requirements would be liable to the patient for actual damages and up to $1,000. In a class action lawsuit, damages are the amount each plaintiff could have recovered, not to exceed $2 million. If the patient is successful, then attorney fees and other costs also can be recovered.
5. The Consumer Financial Protection Bureau would issue a biennial report on medical debt and review the public database for its application to its risk supervision program.