Overshadowed by the Appeals Court ruling on the CFPB’s funding structure and the enforcement action against Portfolio Recovery Associates late last week was the introduction of a bill in the House of Representatives that aims to amend the Fair Debt Collection Practices Act to institute a two-year prohibition on the collection of medical debt and amend the Fair Credit Reporting Act to exclude “medically necessary” procedures from being included on consumers’ credit reports.
A copy of H.R. 1773, introduced by Rep. Rashida Tlaib [D-Mich.], can be accessed by clicking here.
Rep. Tlaib introduced the legislation during the most recent Congressional session and the bill passed the House of Representatives, but the proposed legislation was not considered by the Senate.
“Treating medical debt the same as other debt is not right and leads to irreparable harm to residents who simply just needed health and medical care,” Rep. Tlaib said in a statement. “Medical debt is a leading cause of personal bankruptcy in our country and the pandemic has only made the medical debt crisis worse. No one chooses to get sick. Undergoing a medically necessary procedure should never haunt someone financially. It has no place on a credit report. This is commonsense legislation and we must get it signed into law.”
The bill would amend the FDCPA to define medical debt as “a debt arising from the receipt of medical services, products, or devices.” It would also add a subsection to Section 1692f of the FDCPA, prohibiting collectors from “Engaging in activities to collect or attempting to collect a medical debt owed or due or asserted to be owed or due by a consumer, before the end of the 2-year period beginning on the date that the first payment with respect to such medical debt is due.”
The bill would amend the FCRA to include the same definition of medical debt and would define “medically necessary procedures” as
- health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine, and
- health care to prevent illness or detect illness at an early stage, when treatment is likely to work best (including preventive services such as pap tests, flu shots, and screening mammograms)
Furnishers would be required to send statements to consumers prior to reporting any medical debts to the credit reporting agencies informing consumers about how the debt in question will be reported or appear on their credit reports.
Along with prohibiting the reporting of “medically necessary” debts, the bill would also institute a one-year waiting period before reporting any medical debt.
