A new law that went into effect last week in Minnesota requires hospitals to check whether patients are eligible for charity care before sending an account to a third-party collection agency, while also placing new requirements when seeking to collect on a medical debt by garnishing wages or bank accounts of individuals.
Hospitals are prohibited from offering a payment plan or a line of credit, from placing accounts with third-party collection agencies, from denying healthcare services to patients with outstanding debts, and from accepting a credit card payment of more than $500 for a medical debt owed to a hospital.
Before placing an account with a third-party collection agency, a hospital must complete an affidavit attesting that it has:
- Conducted an eligibility assessment to determine if the patient is eligible for charity care or financial assistance
- Determined there is a reasonable basis to believe that the patient owes the debt;
- Confirmed that all known third-party payors have been properly billed by the hospital, such that any remaining debt is the financial responsibility of the patient, and the hospital will not bill the patient for any amount that an insurance company is obligated to pay;
- Given the patient a reasonable opportunity to apply for charity care; and
- Offered a reasonable payment plan if the patient has indicated an inability to pay the full amount of the debt in one payment and provided reasonable verification of the inability to pay the full amount in one payment.
Collection agencies will not be held liable for inaccuracies in an affidavit completed by a hospital.
Learn more.
