A Senate committee in the Washington state legislature has advanced a medical debt collection bill that could significantly change how medical debt is reported and enforced. Senate Bill 5480, introduced in the 69th Legislature, aims to void and make unenforceable any medical debt that is reported to a consumer credit reporting agency or credit bureau.
The Details:
- The bill does not eliminate medical debt itself, but it prohibits reporting such debt to credit agencies. If reported, the debt becomes legally void and cannot be collected.
- Hospitals, healthcare providers, and licensed collection agencies would be barred from furnishing information about medical debt to credit bureaus.
- The legislation also states that any contract creating medical debt must include a provision ensuring compliance with this rule — otherwise, the contract itself is void and unenforceable.
- Violating the law would be considered an unfair or deceptive act under Washington’s Consumer Protection Act.
Key Provisions:
- Medical debt definition expanded: The bill broadens the definition to include debts owed for medical services, products, or devices — even if not overdue or if already paid.
- No impact on cosmetic procedures: The law specifically excludes debts related to cosmetic surgery, unless the procedure was reconstructive following trauma, infection, or disease.
- Mandatory patient notification: Healthcare providers must notify patients before providing services that reported medical debt is unenforceable.
Legislative Status:
- The bill passed out of the Senate Law & Justice Committee and now moves to the Senate Rules Committee, where it could be scheduled for further debate or a full Senate vote.
- Amendments have been considered, including one that exempts cosmetic procedures from eligibility for debt forgiveness under the law.
What’s Next:
- If passed, Washington would join other states enacting measures to limit the impact of medical debt on credit scores.
- The bill faces opposition from industry groups, who argue that restricting medical debt collection could increase costs for providers and reduce access to care.
- Supporters say it will protect consumers from financial hardship and prevent medical debt from negatively impacting credit scores.
The debate continues as lawmakers weigh the consumer protection benefits against potential unintended consequences for healthcare providers and creditors.
