A.B. 204
- *AB204*
ASSEMBLY BILL NO. 204–ASSEMBLYMEMBER CARTER
PREFILED FEBRUARY 3, 2025
____________
Referred to Committee on Commerce and Labor
SUMMARY—Revises provisions relating to medical debt.
(BDR 52-135)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: No.
~
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to medical debt; prohibiting collection agencies
and certain entities that provide health care from reporting
medical debt to a consumer reporting agency; requiring a
contract for the purchase or collection of medical debt
between certain entities that provide health care and a
collection agency to include certain provisions;
prohibiting certain actions by certain entities that provide
health care and collection agencies to collect a medical
debt; providing requirements for engaging in
extraordinary collection actions to collect a medical debt;
authorizing the Attorney General to institute legal
proceedings against violators; and providing other matters
properly relating thereto.
Legislative Counsel’s Digest:
Existing law provides requirements governing the collection of medical debt by 1
a collection agency, including a requirement to provide certain notice to a medical 2
debtor before taking action to collect and prohibiting certain actions to collect a 3
medical debt. (NRS 649.366, 649.368) Section 13 of this bill prohibits a health care 4
entity, which includes a medical facility, provider of health care or provider of 5
emergency medical services, or a collection agency from reporting a medical debt 6
to a consumer reporting agency and renders any portion of a medical debt that is so 7
reported void. Section 13 requires a health care entity to include in any contract 8
entered into with a collection agency for the purchase or collection of a medical 9
debt provisions prohibiting the reporting of medical debt to a consumer reporting 10
agency, voiding any portion of a medical debt that is reported to a consumer 11
reporting agency and prohibiting certain collection actions that are prohibited by 12
section 14 of this bill. Sections 14 and 19 of this bill prohibit a health care entity or 13
collection agency from engaging in certain actions, or threatening to engage in 14
– 2 –
- *AB204*
certain actions, to collect a medical debt, including: (1) causing the arrest of a 15
consumer; (2) obtaining a lien or foreclosing on real property of a consumer that 16
includes the consumer’s primary residence; (3) garnishing the wages of a consumer 17
or any refund of federal income taxes due to a consumer; or (4) garnishing, 18
attaching or seizing the bank account of a consumer. 19
Section 15 of this bill prohibits a health care entity or collection agency from 20
engaging in extraordinary collection actions until at least 180 days after the first bill 21
for a medical debt is sent to a consumer and requires a notice that includes certain 22
information to be sent to the consumer at least 30 days before any extraordinary 23
collection action is taken. Section 6 of this bill defines the term “extraordinary 24
collection action” to mean: (1) selling a medical debt to a collection agency; (2) 25
deferring, denying or requiring payment before providing medically necessary care; 26
or (3) any action that requires a legal or judicial process. Section 15 prohibits a 27
health care entity or collection agency from engaging in extraordinary collection 28
actions during a state of emergency, declaration of disaster or public health 29
emergency or other health event with respect to the geographic area in which a 30
consumer resides. 31
Section 16 of this bill provides additional requirements for the collection of 32
medical debts incurred for health care services, products or devices provided by a 33
medical facility, including: (1) a prohibition on engaging in extraordinary collection 34
actions unless such actions are described in the billing and collection policy of the 35
medical facility; (2) a requirement to reverse any extraordinary collection actions if 36
it is determined that the consumer is eligible for financial assistance that eliminates 37
or would have eliminated the debt; and (3) requiring a consumer to be refunded 38
within 60 days if, after the application of any financial assistance, a consumer had 39
paid an amount in excess of the amount of the medical debt. 40
Section 17 of this bill provides that the protections provided by sections 13-16 41
cannot be waived. 42
Section 18 of this bill authorizes the Attorney General to institute legal 43
proceedings against a person who has violated, is violating or is about to violate the 44
provisions of sections 2-18 of this bill. Section 18 authorizes a district court to 45
grant certain remedies in such a proceeding. 46
Sections 3-12 define terms related to the collection of medical debts and 47
section 2 makes those terms applicable to sections 13-18. 48
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 597 of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 to 18, inclusive, of this 2
act. 3
Sec. 2. As used in sections 2 to 18, inclusive, of this act, 4
unless the context otherwise requires, the words and terms defined 5
in sections 3 to 12, inclusive, of this act have the meanings 6
ascribed to them in those sections. 7
Sec. 3. “Collection agency” includes: 8
1. A collection agency, as defined in NRS 649.020. 9
2. A collection agent, as defined in NRS 649.025. 10
Sec. 4. “Consumer” means a natural person. 11
– 3 –
- *AB204*
Sec. 5. “Consumer reporting agency” has the meaning 1
ascribed to it in NRS 686A.640. 2
Sec. 6. “Extraordinary collection action” means: 3
1. Selling the medical debt of a consumer to a collection 4
agency; 5
2. Deferring, denying or requiring payment before providing 6
medically necessary care; or 7
3. Any action that requires a legal or judicial process, 8
including, without limitation, placing a lien or commencing a civil 9
action. 10
Sec. 7. “Financial assistance policy” means a written 11
financial assistance policy of a health care entity which includes: 12
1. Eligibility criteria for financial assistance, including, 13
without limitation, when such assistance includes free or 14
discounted care. 15
2. The basis for calculating amounts charged to patients. 16
3. The method for applying for financial assistance. 17
4. The billing and collections policy, including, without 18
limitation, the actions the health care entity may take in the event 19
of nonpayment. 20
5. Measures to widely publicize the policy within the 21
community to be served by the health care entity. 22
Sec. 8. “Health care entity” means: 23
1. A medical facility; 24
2. A provider of emergency medical services; or 25
3. A provider of health care. 26
Sec. 9. 1. “Medical debt” means any obligation for the 27
payment of money arising out of any agreement or contract, 28
express or implied, for the provision of health care services, 29
products or devices. 30
2. The term does not include: 31
(a) Debt charged to a credit card, as defined in NRS 97A.050, 32
unless the credit card is issued for the sole purpose of purchasing 33
health care services, products or devices; or 34
(b) An open-end or closed-end extension of credit made by a 35
financial institution to a borrower, unless the open-end or closed-36
end extension of credit is for the sole purpose of purchasing 37
health care services, products or devices. 38
Sec. 10. “Medical facility” has the meaning ascribed to it in 39
NRS 449.0151. 40
Sec. 11. “Provider of emergency medical services” has the 41
meaning ascribed to it in NRS 649.041. 42
Sec. 12. “Provider of health care” has the meaning ascribed 43
to it in NRS 629.031. 44
– 4 –
- *AB204*
Sec. 13. 1. A health care entity or collection agency shall 1
not report any information to a consumer reporting agency 2
regarding a medical debt. Any portion of a medical debt that is 3
reported to a consumer reporting agency in violation of this 4
section shall be void. 5
2. A health care entity shall include in any contract entered 6
into with a collection agency, whether located within or outside of 7
this State, for the purchase or collection of medical debt a 8
provision that: 9
(a) Prohibits the collection agency from reporting any portion 10
of the medical debt to a consumer reporting agency. 11
(b) Provides that any portion of the medical debt reported to a 12
consumer reporting agency is void. 13
(c) Prohibits the collection agency from engaging in any of the 14
actions prohibited by section 14 of this act. 15
3. Any contract for the purchase or collection of medical debt 16
that does not comply with the provisions of this section is void and 17
unenforceable. 18
Sec. 14. A health care entity or collection agency shall not 19
engage in any of the following actions to collect a medical debt: 20
1. Causing or threatening the arrest of a consumer, 21
including, without limitation, an arrest pursuant to NRS 31.470 to 22
31.730, inclusive; 23
2. Obtaining or threatening to obtain a lien against any real 24
property of a consumer which consists, in whole or in part, of the 25
primary residence of the consumer; 26
3. Foreclosing or threatening to foreclose on any real 27
property of a consumer which consists, in whole or in part, of the 28
primary residence of the consumer; 29
4. Garnishing or threatening to garnish the wages of a 30
consumer or any refund of federal income taxes due to a 31
consumer; or 32
5. Garnishing, attaching or seizing, or threatening to garnish, 33
attach or seize, a bank account of a consumer. 34
Sec. 15. 1. A health care entity or collection agency shall 35
not engage in any extraordinary collection action until at least 180 36
days after the first bill for a medical debt has been sent to a 37
consumer. 38
2. At least 30 days before taking any extraordinary collection 39
action to collect a medical debt, a health care entity or collection 40
agency shall provide to the consumer a notice: 41
(a) Identifying the extraordinary collection action that will be 42
initiated in order to obtain payment; 43
– 5 –
- *AB204*
(b) Providing a deadline after which such extraordinary 1
collection action will be initiated, which must be not earlier than 2
30 days after the date of the notice; and 3
(c) If the medical debt was incurred for health care services, 4
products or devices provided by a medical facility, stating whether 5
the medical facility offers financial assistance to eligible 6
consumers and providing a plain-language summary of any 7
financial assistance policy of the medical facility. 8
3. A health care entity or collection agency shall not engage 9
in any extraordinary collection action against a consumer for a 10
medical debt during any period in which, with respect to the 11
geographic area in which the consumer resides, there exists: 12
(a) A state of emergency or declaration of disaster proclaimed 13
pursuant to NRS 414.070; 14
(b) A public health emergency or other health event pursuant 15
to NRS 439.970; or 16
(c) A state of emergency, declaration of disaster or public 17
health emergency as declared pursuant to federal law or the laws 18
of another state. 19
Sec. 16. 1. If a medical debt was incurred for health care 20
services, products or devices provided by a medical facility, the 21
medical facility or a collection agency shall not engage in any 22
extraordinary collection action to recover the medical debt unless 23
such extraordinary collection action is described in the billing and 24
collections policy of the medical facility. 25
2. If a medical facility, or a collection agency acting to collect 26
a medical debt incurred for health care services, products or 27
devices provided by a medical facility, initiates an extraordinary 28
collection action against a consumer to collect a medical debt and 29
the consumer is later found to be eligible under the financial 30
assistance policy of the medical facility for financial assistance 31
that eliminates or would have eliminated the medical debt, the 32
medical facility or collection agency shall reverse any such 33
extraordinary collection action, including, without limitation, 34
dismissing or vacating any suit or other legal proceeding brought 35
against the consumer and removing any lien, attachment or 36
garnishment against the property of the consumer. 37
3. If, after the application of any financial assistance for 38
which a consumer is eligible, the consumer has paid, to a medical 39
facility, a collection agency or both, an amount in excess of the 40
amount of the medical debt, the medical facility or collection 41
agency shall refund any excess amount to the consumer within 60 42
days. 43
– 6 –
- *AB204*
Sec. 17. The protections set forth in sections 13 to 16, 1
inclusive, of this act are for the benefit of consumers and cannot 2
be waived. 3
Sec. 18. If the Attorney General has reason to believe that a 4
person has violated, is violating or is about to violate any of the 5
provisions of sections 2 to 18, inclusive, of this act, the Attorney 6
General may institute an appropriate legal proceeding against the 7
person. The district court, upon a showing that the person has 8
violated, is violating or is about to violate any provision of sections 9
2 to 18, inclusive, of this act may grant any of the following 10
remedies, as appropriate: 11
1. Issue a temporary or permanent injunction. 12
2. Impose a civil penalty not to exceed: 13
(a) For a first violation, $10,000; and 14
(b) For any subsequent violation, $25,000. 15
3. Issue a declaratory judgment. 16
4. Order restitution for the consumer. 17
5. Order the payment of attorney’s fees and costs. 18
6. Order such relief as the court deems just. 19
Sec. 19. NRS 649.368 is hereby amended to read as follows: 20
649.368 A collection agency, or its compliance manager, 21
agents or employees, shall not, for any medical debt: 22
1. Take any confession of judgment or any power of attorney 23
running to the collection agency or to any third person to confess 24
judgment or to appear for the debtor in a judicial proceeding. 25
2. Commence a civil action to collect the medical debt if the 26
amount of the medical debt, excluding interest, late fees, collection 27
costs, attorney’s fees and any other fees or costs, is less than the 28
maximum jurisdictional amount set forth in subsection 1 of NRS 29
73.010. Nothing in this subsection shall be construed to prohibit the 30
commencement of a small claims action in justice court to collect 31
the medical debt. 32
3. Charge or collect a fee of more than 5 percent of the amount 33
of the medical debt, excluding interest, late fees, collection costs, 34
attorney’s fees and any other fees or costs, as a collection fee or as 35
an attorney’s fee for the collection of the medical debt. 36
4. Perform an action prohibited by sections 2 to 18, inclusive, 37
of this act. 38
Sec. 20. 1. The amendatory provisions of this act apply to: 39
(a) Any contract between a health care entity and a collection 40
agency for the purchase or collection of medical debt entered into 41
before, on or after October 1, 2025, but do not apply to any action 42
taken under such a contract before October 1, 2025. 43
– 7 –
- *AB204*
(b) Medical debt incurred before, on or after October 1, 2025, 1
but do not apply to any action taken to collect a medical debt before 2
October 1, 2025. 3
2. As used in this section: 4
(a) “Collection agency” has the meaning ascribed to it in section 5
3 of this act. 6
(b) “Health care entity” has the meaning ascribed to it in section 7
8 of this act. 8
(c) “Medical debt” has the meaning ascribed to it in section 9 of 9
this act. 10
H