A bill to prohibit healthcare providers from reporting unpaid medical debt to a collection or credit reporting facility is working its way through the New Jersey Legislature.

Assembly Bill 3802 (and its companion S2428) define “medical creditor” as any healthcare provider that provides healthcare services and to whom the consumer owes money for healthcare services, or any person who purchases a debt arising from the receipt of healthcare services. Healthcare provider includes a physician, dentist and other licensed healthcare professionals, and a hospital and other licensed healthcare facilities.

The bill comes on the heels of an announcement from reporting agencies that they are curtailing the inclusion of medical debt in credit reports. The three nationwide credit reporting agencies – Equifax, Experian, and TransUnion – announced in March that effective July 1, 2022 they would no longer include paid medical collection debt, and unpaid medical collection debt would only appear after one year instead of six months. In the first half of 2023, they will no longer include medical collection debt under $500 on credit reports.

This legislation, if signed into law, would go a step further and prohibit the unpaid amounts from even being reported to the credit agencies. The companion bills have been referred to the Assembly Financial Institutions and Insurance Committee and the Senate Commerce Committee, respectively.

 

 

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Photo of Neil M. Sullivan Neil M. Sullivan

Counsel, Corporate and Healthcare Departments

Mr. Sullivan concentrates his practice in healthcare and insurance law, with a particular emphasis on the intersection of healthcare finance and delivery. He regularly represents and counsels health plans and healthcare providers in regulatory compliance and filings, and…

Counsel, Corporate and Healthcare Departments

Mr. Sullivan concentrates his practice in healthcare and insurance law, with a particular emphasis on the intersection of healthcare finance and delivery. He regularly represents and counsels health plans and healthcare providers in regulatory compliance and filings, and alternative financial models for healthcare delivery, including Organized Delivery Systems (ODS), Accountable Care Organizations (ACO), Multiple Employer Welfare Arrangements (MEWA), and health system equity ownership or participation in insurance organizations.

As Assistant Commissioner of the New Jersey Department of Banking and Insurance (DOBI) from 2010-2014, Mr. Sullivan oversaw the Office of Life and Health during a period of fundamental change in both the healthcare and insurance sectors. This encompassed the implementation of the Affordable Care Act (ACA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act; the emergence of alternative financial models for health care delivery, including CO-OPs, ACOs, and health system equity ownership or participation in insurance organizations; and the transition to electronic health records and implementation of the ICD-10 mandate.

In his role at DOBI, Mr. Sullivan had overall responsibility for the implementation of insurance reforms under the ACA, including the establishment of a high-risk pool and feasibility study of health insurance exchanges, and rationalizing conflicting points of state and federal law. He served as the DOBI Commissioner’s designee on the NJ Individual Health Coverage (IHC) and Small Employer Health (SEH) program boards, the Mandated Health Benefits Advisory Commission, and the NAIC Regulatory Framework Task Force and Senior Issues Committee, and acted as liaison with the Centers for Medicare & Medicaid Services (CMS) over ACA implementation.

Contact information:

nsullivan@greenbaumlaw.com | 973.577.1804 | vCard  | LinkedIn

For more information visit the Greenbaum, Rowe, Smith & Davis LLP website.