Both chambers of the Rhode Island legislature have passed a bill that would prohibit credit reporting of medical debts as a means of protecting residents from the adverse credit impacts of medical debt. The bills, sponsored by Rep. Mary Ann Shallcross Smith and Sen. Melissa A. Murray, also set strict rules for communication with consumers, bans false and misleading representations by debt collectors, and prohibits collection activities during insurance appeals.
The bills — H7103A and S2709A — define “medical debt” as any obligation to pay for healthcare services, products, or devices provided by healthcare facilities or professionals.
Key Provisions of Rhode Island’s Legislation:
- Prohibition on Reporting Medical Debt: Healthcare providers and facilities are barred from furnishing information about medical debt to consumer reporting agencies. Contracts with collection entities must include provisions that prohibit the reporting of medical debt.
- Restrictions on Debt Collectors: Debt collectors cannot use deceptive practices or threaten to report medical debt to credit bureaus. They must also include specific language in correspondence to consumers, informing them that Rhode Island law prohibits the reporting of medical debt.
- Enforcement and Penalties: Non-compliance with these regulations can result in fines and legal action by the Attorney General. Consumers can notify the Attorney General if a debt collector or reporting agency fails to comply, leading to potential court actions and penalties.
Rhode Island joins a number of states that have taken action prohibiting the credit reporting of medical debts. Connecticut, Colorado, Florida, and New York have passed similar measures. At the federal level, the Consumer Financial Protection Bureau has also proposed a rule aimed at prohibiting medical debts from appearing on consumers’ credit reports.
