A new medical debt law went into effect in Minnesota this week, and following the lead of that state’s Attorney General, it might be helpful to review the details of the Debt Fairness Act to make sure nobody overlooks anything that they need to be doing.
The Debt Fairness Act, which took effect on October 1, introduces significant changes to debt collection practices, particularly regarding medical debt. Among the key provisions of the bill are:
- Credit reporting ban: Medical debt can no longer be reported to credit reporting agencies.
- Care protection: Medical providers are prohibited from withholding necessary care due to unpaid debt.
- Spousal protection: The automatic transfer of medical debt to a patient’s spouse has been eliminated.
- New collection rights:
- Robo dialers are banned for medical debt collection.
- Collectors cannot threaten to withhold services for unpaid debt.
- Third-party contact for debt collection is prohibited.
- Collectors must inform patients of their right to legal representation.
- Legal protections: Successful defendants in medical debt lawsuits must be reimbursed for attorney fees.
- Transparency: Medical providers must publish their debt collection practices.
- Dispute process: A new system for patients to contest incorrect medical billing or coding.
Enforcement:
- The Attorney General’s office and private individuals can enforce these rights.
- Violations can result in attorney fee-shifting and statutory damages tied to the Consumer Price Index.
What they’re saying: Attorney General Keith Ellison: “We can all agree that you should pay back what you borrow. We can also agree that debt should not drag you into poverty.”
What’s next:
- The Attorney General’s office is holding a free legal clinic on October 5 in Minneapolis to educate the public about the new law.
- Additional provisions, including income-based limits on wage garnishment, will take effect on April 1, 2025.
