The Colorado Attorney General’s office has sent a memo to licensed collection agencies in the state, making sure they are aware that a new law is going into effect on September 1 that will change how medical debts are collected in certain situations.
A copy of the entire memo can be accessed by clicking here.
The Colorado legislature last year enacted HB21-1198, which was scheduled to go into effect on June 1 of this year. The bill focuses on the healthcare billing requirements for indigent patients who are treated, but not reimbursed, through the state’s indigent care program and sets forth requirements before any collection proceeding may be initiated against an indigent patient. HB21-1198 also amended the Colorado Fair Debt Collection Practices Act to add a new unfair practice — attempting to collect a debt that violates certain requirements of HB21-1198.
Colorado Gov. Jared Polis signed another bill into law that extended the effective date of the HB21-1198 to September 1.
Prior to initiating collection actions, patients must receive a notification that details information about the debt and the date that the debt may be sent to a collection agency or start to be reported to a credit reporting agency. Healthcare providers are prohibited from collecting the debt, either on their own or through a collection agency, if the notification is not sent.
Medical creditors, which includes collection agencies and debt buyers, are also prohibited from initiating foreclosures on an individual’s primary residence and may not place a lien on a residence or individual’s bank account for 182 days after the patient receives medical services.
