The Growing Push to Ban Medical Debt Credit Reporting
State legislatures are in session and the topic of medical debt credit reporting continues to be a focus. As we highlighted in prior posts, California passed a law last year (SB 1061) that prohibited medical debt credit reporting and required medical providers to update their contracts to include language informing consumers of that prohibition (note: that contractual requirement will go into effect July 1, 2025). Now, a version of that same bill has been proposed in both Washington (SB 5480) and Oregon (SB 605).
While industry stakeholders in Washington have been able to work with proponents of the bill to reach an agreement regarding the removal of the contractual requirements, it appears that the portions prohibiting medical debt credit reporting are likely to pass. The Oregon bill has not progressed quite as quickly as its Washington counterpart, but there are similar negotiations taking place. That means there is still time for Oregon medical providers (including hospitals, physicians, dentists, and chiropractors) to get involved and contact their state legislators.
Even for those medical providers that do not allow their collection agency partners to credit report their accounts, the potential legal prohibition on credit reporting could have a significant impact on revenue from self-pay collections. Industry stakeholders fear that the prohibition on medical debt credit reporting may influence patients’ decisions regarding whether to pay for their medical bills. In other words, by removing potential consequences that can often be associated with nonpayment (e.g. having information about an unpaid debt furnished to a consumer reporting agency), there is a risk that consumers will not have any reason to pay for their share of medical care. This reduction in revenue for medical providers would likely result in the cost of care going up for all patients, which could have further unintended consequences like increased insurance premiums and deductibles.
For any of our industry partners who are interested in getting involved, but who need a little assistance doing so, please do not hesitate to contact us.