SB 3026: Health Care Facilities; Health Care Providers; Emergency Medical Services; Medical Debt; Consumer Credit Reporting Agencies

A BILL FOR AN ACT

relating to health care.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that medical debt has grown significantly in the past few decades.  Over forty per cent of adults in the United States have medical debt, with medical debt of all United States residents totaling over $220,000,000,000.  While this figure is lower in Hawaii, with one in ten residents having outstanding medical debt on their credit report, the financial impact of medical debt is particularly burdensome in the State given the high cost of living.  This debt reduces residents' access to health care services, harms credit scores, and creates long-term economic hardship.

     The legislature further finds that California, Illinois, and New York have alleviated the impact of medical debt on health care providers by prohibiting medical debt information from being reported to consumer credit reporting agencies and several other states have considered similar measures.  A reporting prohibition would mitigate the impact of medical debt on the credit scores of health care providers.  The legislature recognizes the need for the State to follow suit and take steps to alleviate the burden of medical debt on Hawaii residents.

     Accordingly, the purpose of this Act is to prohibit:

     (1)  Health care facilities, health care providers, and emergency medical services from furnishing medical debt to a consumer credit reporting agency; and

     (2)  Consumer credit reporting agencies from reporting or maintaining medical debt in the file on a consumer.

     SECTION 2.  Chapter 487J, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§487J-     Medical debt; consumer credit reporting agencies; reporting prohibited.  (a)  No health care facility, health care provider, or emergency medical service shall furnish medical debt to a consumer credit reporting agency.

     (b)  Any contract entered into between a health care facility, health care provider, or emergency medical service and a collection agency for the purchase or collection of medical debt shall include a provision that prohibits reporting of medical debt to a consumer credit reporting agency.

     (c)  Any medical debt furnished to a consumer credit reporting agency in violation of this section shall be void.

     (d)  No consumer credit reporting agency shall report or maintain medical debt in the file on a consumer.

     (e)  As used in this section:

     "Collection agency" means a collection agency registered under chapter 443B, an out-of-state collection agency designated as exempt under section 443B-3.5, a collection agency contracted with a state agency pursuant to section 40-82.5 for the collection of medical debt, or a collection agency contracted with a county for the collection of medical debt that either purchases medical debt or collects medical debt on behalf of another entity.

     "Consumer credit reporting agency" has the same meaning as defined in section 489P-2.

     "Emergency medical service" means an emergency medical service or ambulance service provided or conducted by or under the authority of a county pursuant to part XI of chapter 46 or under the state emergency medical services system pursuant to part XVIII of chapter 321.

     "Health care facility" means a facility regulated pursuant to rules adopted under section 321-11(10).

     "Health care provider" means an individual who is licensed, certified, or otherwise authorized or permitted by the laws of the State to provide health care in the ordinary course of business or practice of the individual's profession.  "Health care provider" includes any agent, or other person employed by or under contract with the health care provider.

     "Medical debt" means an obligation or alleged obligation of a consumer to pay any amount related to the receipt of health care services, products, or devices provided to a person by a health care facility, health care provider, or emergency medical service.  "Medical debt" does not include debt charged to a credit card unless the credit card is issued as open-end credit or closed-end credit, as those terms are defined in title 12 Code of Federal Regulations section 1026.2, offered specifically for the payment of health care services, products, or devices provided to a person."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

Health Care Facilities; Health Care Providers; Emergency Medical Services; Medical Debt; Consumer Credit Reporting Agencies

Description:

Prohibits health care facilities, health care providers, and emergency medical services from furnishing medical debt to a consumer credit reporting agency.  Prohibits consumer credit reporting agencies from reporting or maintaining medical debt information in the file on a consumer.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.