The governor of Nevada has signed a bill into law that will affect how medical debts are collected in the state. The new law goes into effect on July 1.
Under the law, any debt owed for good or services provided by a medical facility, a provider of healthcare, or a provider of emergency medical services is considered a medical debt, except debts that are paid by credit cards that can be used to buy other goods and services other than medical ones.
Not less than 60 days before “taking any action” to collect on a medical debt, collection agencies are required to send a registered or certified letter to individuals detailing:
- The name of the healthcare provider to whom the debt is owed
- The date on which the goods or services were provided
- The principal amount of the debt
- The identification of the collection agency
Individuals will be able to make voluntary payments during the 60-day notification period window, as long as the debtor initiates contact and the collection agency makes certain disclosures to the individual regarding the debt. If a debtor initiates contact, that does not close the 60-day notification period window.
Collection agencies are also prohibited from initiating civil actions if the amount of the medical debt — excluding interest, fees, and other costs — is less than $10,000, which is the state threshold on filing suits in small claims court.
Collectors are also barred from charging or collecting a fee of more than 5% of the total amount of medical debt, excluding interest, late fees, collection costs, attorney’s fees, and any other fees or costs.
The provisions of Nevada’s new law mirror a number of other bills that have been introduced in state legislatures across the country that are aimed at restricting how medical debts are collected. Bills have been introduced in Oklahoma, Maryland, Ohio, Colorado, and New Mexico that take different attacks at medical debt collection. At the same time, a bill has been introduced in the House of Representatives that aims to amend the Fair Debt Collection Practices Act with respect to how medical debts are collected. The legislation in Maryland has been sent to Gov. Larry Hogan and is awaiting his signature to become law. The legislation in New Mexico has been signed into law and will go into effect on July 1.
