Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H4274 Compare Versions

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1	1	HOUSE . . . . . . . . No. 4274
2	2	The Commonwealth of Massachusetts
3	3	________________________________________
4	4	HOUSE OF REPRESENTATIVES, January 25, 2024.
5	5	The committee on Consumer Protection and Professional Licensure to
6	6	whom was referred the petition (accompanied by bill, Senate, No. 189) of
7	7	Liz Miranda for legislation to ease the burden of medical debt, the petition
8	8	(accompanied by bill, House, No. 284) of Kip A. Diggs and Jon Santiago
9	9	relative to medical debt consumer credit reports, the petition (accompanied
10	10	by bill, House, No. 347) of John J. Lawn, Jr., and others relative to
11	11	alleviating the burden of medical debt for patients and families, and the
12	12	petition (accompanied by bill, House, No. 3564) of Bud L. Williams
13	13	relative to medical debt exclusion from creditor, reports recommending
14	14	that the accompanying bill (House, No. 4274) ought to pass.
15	15	For the committee,
16	16	TACKEY CHAN. 1 of 7
17	17	FILED ON: 1/22/2024
18	18	HOUSE . . . . . . . . . . . . . . . No. 4274
19	19	The Commonwealth of Massachusetts
20	20	_______________
21	21	In the One Hundred and Ninety-Third General Court
22	22	(2023-2024)
23	23	_______________
24	24	An Act alleviating the burden of medical debt for patients and families.
25	25	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
26	26	of the same, as follows:
27	27	1 SECTION 1. The General Laws are hereby amended by inserting after chapter 93L the
28	28	2following chapter:-
29	29	3 CHAPTER 93M.
30	30	4 MEDICAL DEBT PROTECTION ACT.
31	31	5 Section 1. As used in this chapter, the following words shall have the following meanings
32	32	6unless the context clearly requires otherwise:
33	33	7 “Commissioner”, the commissioner of banks.
34	34	8 “Consumer”, an individual or patient obligated or allegedly obligated to pay any debt.
35	35	9 “Consumer reporting agency”, a person as defined in section 50 of chapter 93.
36	36	10 “Disposable earnings”, the remaining portion of a consumer’s wages, salary or
37	37	11compensation for personal services, including bonuses and commissions, or otherwise, and 2 of 7
38	38	12includes payments pursuant to a pension or retirement program or deferred compensation plan,
39	39	13after deducting from such earnings those amounts required by law to be withheld.
40	40	14 “External review” means a review of an adverse benefit determination, including a final
41	41	15internal adverse benefit determination, and any applicable state external review process,
42	42	16conducted pursuant to section 16 of chapter 6D and chapter 176O, a federal external review
43	43	17process as described at 42 U.S.C. § 300gg-19, a review pursuant to 29 U.S.C. 1133, a Medicare
44	44	18appeals process, a Medicaid appeals process conducted pursuant to chapter 118E and the
45	45	19provisions of 103 CMR 613.00, or another applicable appeals process.
46	46	20 “Extraordinary collection action” means any of the following:
47	47	21 (a) selling a consumer’s debt to another party, except if, prior to the sale, the medical
48	48	22creditor has entered into a legally binding written agreement with the medical debt buyer of the
49	49	23debt under which all of the following apply: (1) the medical debt buyer or collector is prohibited
50	50	24from engaging in any extraordinary collection actions to obtain payment for the care; (2) the
51	51	25medical debt buyer is prohibited from charging interest on the debt; (3) the debt is returnable to
52	52	26or recallable by the medical creditor upon a determination by the medical creditor or medical
53	53	27debt buyer that the consumer is eligible for financial assistance; and (4) the medical debt buyer is
54	54	28required to adhere to procedures which must be specified in the agreement that ensure that the
55	55	29consumer does not pay, and has no obligation to pay, the medical debt buyer and the medical
56	56	30creditor together more than they are personally responsible for paying in compliance with this
57	57	31chapter.
58	58	32 (b) reporting adverse information about the consumer to a consumer reporting agency. 3 of 7
59	59	33 (c) actions that require a legal or judicial process, including any of the following: (1)
60	60	34placing a lien on an consumer’s property; (2) attaching or seizing an consumer’s bank account or
61	61	35any other personal property; (3) commencing a civil action against an consumer; or (4)
62	62	36garnishing an consumer’s wages.
63	63	37 “Health care entity”, as defined in section 1 of 6D.
64	64	38 “Health care professional”, as defined in section 1 of 176O.
65	65	39 “Health care provider”, as defined in section 1 of 176O.
66	66	40 “Health care services”, as defined in section 1 of 6D. For the purposes of this chapter,
67	67	41these services shall include, but not be limited to, any care, procedures, products, supplies,
68	68	42devices or medications.
69	69	43 “Medical creditor” means any entity that provides health care services and to whom the
70	70	44consumer owes money for health care services, or the entity that provided health care services
71	71	45and to whom the consumer owes money for health care services, or the entity that provided
72	72	46health care services and to whom the consumer previously owed money if the medical debt has
73	73	47been purchased by one or more debt buyers.
74	74	48 "Medical debt", any obligation owed directly to a medical facility, a provider of health
75	75	49care or a provider of emergency services for the payment of money arising out of any agreement
76	76	50or contract, express or implied, for the provision of health care services.
77	77	51 “Medical debt buyer” means an individual or entity that is engaged in the business of
78	78	52purchasing medical debts for collection purposes, whether it collects the debt itself or hires a
79	79	53third party for collection or an attorney for litigation in order to collect such debt. 4 of 7
80	80	54 “Medical debt collector” means any person that regularly collects or attempts to collect,
81	81	55directly or indirectly, medical debts originally owed or due or asserted to be owed or due
82	82	56another. A medical debt buyer is a medical debt collector.
83	83	57 “Patient”, a individual who received health care services, provided, that “patient” shall
84	84	58include a parent if the patient is a minor, or a legal guardian if the patient is an adult under
85	85	59guardianship.
86	86	60 “Person”, an individual, a corporation, a partnership, an association, a joint venture, a
87	87	61joint stock company, a trust, an unincorporated organization, any similar entity or combination of
88	88	62the foregoing.
89	89	63 Section 2. (a) Notwithstanding any general or special law to the contrary, the following
90	90	64extraordinary collections actions shall not be used by any medical creditor or medical debt
91	91	65collector to collect debts owed for health care services: (1) causing an consumer’s arrest; (2)
92	92	66causing an consumer to be subject to a writ of body attachment or capias; (3) foreclosing on an
93	93	67consumer’s real property.
94	94	68 (b) No medical creditor or medical debt collector shall engage in any permissible
95	95	69extraordinary collection actions until 180 days after the first bill for a medical debt has been sent.
96	96	70 (c) At least 30 days before taking any extraordinary collection actions, a medical creditor
97	97	71or medical debt collector must provide to the patient a notice: (1) identifying the extraordinary
98	98	72collection actions that will be initiated in order to obtain payment; and (2) providing a deadline
99	99	73after which such extraordinary collection actions will be initiated which may be no earlier than
100	100	74thirty days after the date of the notice. 5 of 7
101	101	75 Section 3. (a) No medical creditor or medical debt collector that knows or should have
102	102	76known about an internal review, external review, or other appeal of a health insurance decision
103	103	77that is pending now or was pending within the previous 60 days shall: (1) provide information
104	104	78relative to unpaid charges for health care services to a consumer reporting agency; (2)
105	105	79communicate with the consumer regarding the unpaid charges for health care services for the
106	106	80purpose of seeking to collect the charges; or (3) initiate a lawsuit or arbitration proceeding
107	107	81against the consumer relative to unpaid charges for health care services.
108	108	82 (b) If a medical debt has already been reported to a consumer reporting agency and the
109	109	83medical creditor or medical debt collector who reported the information learns of an internal
110	110	84review, external review, or other appeal of a health insurance decision that is pending now or
111	111	85was pending within the previous 60 days, that person shall instruct the consumer reporting
112	112	86agency to delete the information about the debt.
113	113	87 (c) No medical creditor that knows or should have known about an internal review,
114	114	88external review, or other appeal of a health insurance decision that is pending now or was
115	115	89pending within the previous 60 days shall refer, place or send the unpaid charges for health care
116	116	90services to a medical debt collector, including by selling the debt to a medical debt buyer.
117	117	91 Section 4. (a) Notwithstanding any general or special law to the contrary, interest on
118	118	92medical debt shall be limited to the lesser of 3 per cent or an annual rate equal to the weekly
119	119	93average one-year constant maturity treasury yield, as published by the Federal Reserve Board,
120	120	94for the calendar week preceding the date when the consumer was first provided with a bill for a
121	121	95medical debt. 6 of 7
122	122	96 (b) The maximum rate of interest established in subsection (a) shall also apply to any
123	123	97judgments on medical debt, notwithstanding any agreement to the contrary.
124	124	98 Section 5. (a) Notwithstanding section 34 of chapter 235, following property of a
125	125	99consumer obligated to pay any medical debt shall be exempt from seizure on execution:
126	126	100 (i) estates of homestead as defined in chapter 188, provided, that, for the purpose of this
127	127	101section, the declared homestead exemption shall be in the amount of $800,000;
128	128	102 (ii) $5,000 in cash or savings or other deposits in a banking or investment institution;
129	129	103 (iii) wages equal to the greater of 90 per cent of the debtor's disposable earnings or 60
130	130	104times the greater of the federal or the Massachusetts hourly minimum wage for each week or
131	131	105portion thereof and the full amount owing or paid to a person as public assistance; provided, that
132	132	106in a garnishment action, if the court determines by clear and convincing evidence that the 90 per
133	133	107cent calculation on disposable earnings would cause extreme economic hardship to the consumer
134	134	108or the consumer’s family, the court may reduce the amount to 5 per cent of disposable income.
135	135	109 (iv) an automobile necessary for the consumer's personal transportation or to secure or
136	136	110maintain employment, not exceeding $15,000 of wholesale resale value; provided, however, that
137	137	111the wholesale resale value of a vehicle owned or substantially used by consumer or a dependent
138	138	112who is either a disabled person or a person 60 years of age or older shall be exempt up to
139	139	113$25,000 in wholesale resale value.
140	140	114 (b) The property subject to the exemptions in this section shall be adjusted annually
141	141	115beginning on January 1, 2025 and thereafter on January 1 of each successive year by the increase
142	142	116in the cost of living as measured by the percentage increase as of August of the immediately 7 of 7
143	143	117preceding year over the level as of August of the previous year of the consumer price index for
144	144	118all urban consumers, or its successor index as published by the United States department of
145	145	119labor, bureau of labor statistics, or its successor agency, with the amount of the exemption
146	146	120rounded up to the nearest $100.
147	147	121 (c) An employer shall not take adverse action against an employee or refuse to hire an
148	148	122consumer because of one or more garnishments for medical debts or because of obligations that
149	149	123any garnishments impose against the employer. An employer who violates this section shall be
150	150	124liable in a civil action, action for contempt or other appropriate proceeding to the employee or
151	151	125consumer for the wages and employment benefits lost by the employee or consumer from the
152	152	126time of the unlawful discipline, suspension, refusal to hire or discharge to the period of
153	153	127reinstatement and an additional penalty of not more than $1,000.
154	154	128 Section 6. Failure to comply with any provision of this chapter, or any regulation
155	155	129promulgated in accordance with the provisions of this chapter, shall constitute an unfair or
156	156	130deceptive act or practice under the provisions of paragraph (a) of section 2 of chapter 93A.
157	157	131 SECTION 2. Chapter 93M of the General Laws shall apply to consumer medical debts
158	158	132incurred and contracts that take effect or are renewed on or after January 1, 2025.
159	159	133 SECTION 3. This act shall take effect on October 1, 2024.