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Houghtaling & Downey Introduce Bill to Help Alleviate Medical Debt for Residents

(TRENTON) – Assembly Members Eric Houghtaling and Joann Downey introduced legislation on Monday designed to assist New Jersey residents facing debt collection for unpaid medical bills.

“Medical bills should not consume someone’s life,” said Houghtaling (D-Monmouth). “It is only fair that patients are provided with feasible methods to pay off their debt.”

The bill (A-4335) would revise several requirements for collecting outstanding debts for health care services, including delaying when debts may be referred to collection agencies, requiring the option of income-based repayment plans, providing for deferrals on repayment in the event of permanent disability and for the discharge of the debt in the event of permanent total disability or death.

“This will be a win for concerned patients across New Jersey,” said Downey (D-Monmouth). “No longer will residents have to fear paying exorbitant medical bills in an expedited fashion; they will be able to make payments that make financial sense for them.”

Specifically, the bill prohibits health care facilities and health care professionals from reporting an outstanding balance to a collection agency for legal action until at least 90 days after the date the patient was first provided a bill for the health care services.

Prior to referring the debt to a collection agency, the facility or professional will also be required to offer the patient the option to participate in an income-based repayment plan under which the patient agrees to make monthly payments in a reasonable and affordable amount that does not exceed 15 percent of the patient’s discretionary income.

If a patient elects to utilize this repayment plan, a debt cannot be referred to a collection agency for legal action as long as they are compliant with the repayment plan.

The bill also provides that health care facilities and professionals must fully discharge any outstanding balance of a medical debt in the event the patient dies or becomes totally and permanently disabled. Facilities and professionals will be required to defer repayment of medical debts in the event the patient becomes temporarily totally disabled.

The bill was referred to the Assembly Consumer Affairs Committee.