A Colorado medical debt collection bill that would have significantly restricted how providers and agencies pursue unpaid balances has been defeated in committee, according to a published report, marking another notable win for hospitals and a pause in the state’s push to further regulate collections. The proposal, House Bill 1267, failed on an 8-to-5 vote in the House Health and Human Services Committee, with bipartisan opposition driven largely by concerns over the financial stability of healthcare providers, particularly in rural communities.
What the bill would have done
As introduced, the legislation sought to expand restrictions on medical debt collection practices in Colorado, including:
- Requiring 30 days’ notice before collecting, transferring, selling, or assigning medical debt
- Mandating verification that patients were screened for public insurance and discounted care eligibility
- Requiring providers to offer reasonable payment plans
- Imposing damages of $3,000 or actual damages, whichever is greater, for violations
The bill also targeted certain collection practices by limiting actions considered harmful to financially vulnerable consumers.
Why the bill failed
Opposition centered less on whether medical debt is a problem and more on the downstream operational impact of restricting collections.
Key concerns raised during the hearing included:
- Revenue pressure on providers: Many hospitals, especially rural ones, are already operating on thin margins and rely on collections as a backstop.
- Access to care risks: Limiting collection options could force providers to shift toward upfront billing, potentially reducing access for uninsured or underinsured patients.
- Existing regulatory framework: Lawmakers noted Colorado has already passed multiple laws addressing medical debt, raising concerns about layering additional requirements.
Notably, several Democrats joined Republicans in opposing the bill, citing fears that further revenue constraints could lead to clinic closures or reduced services.
