HB 1531: Medical debt

February 6, 2019

WSHA opposes HB 1531, which places restrictions on interest for medical debt. Hospitals and health care providers must be financially stable in order to provide quality, safe, affordable health care, yet some of the proposals in this bill would significantly reduce their ability to be paid for services provided. Specifically, it would reduce the interest rate for both pre and post-judgment interest on medical debt from 12 percent to 2 points above the federally set prime rate, which would currently be about 7 percent. It also places significant limits on amounts available for garnishments. The bill was heard Wednesday, Feb. 6 in the House Committee on Civil Rights & Judiciary.

The use of pre-judgment and post-judgment interest is an important tool for creditors to collect the amounts they are owed for the services provided. If medical debt is singled out as less important, hospitals will have difficulty collecting from patients who can and should pay their portion of a bill. Hospitals, particularly those that receive taxpayer support, have a fiduciary responsibility to collect from patients who can pay.

WSHA has worked as part of a stakeholder group to explore options to ease some of the burden that medical debt places on consumers. In addition to WSHA, the workgroup included the Washington State Medical Association, Columbia Legal Services and the collections community. Together, we reached compromises that:

  • Prohibit bench warrants on medical debt
  • Prohibit sending medical debt to collections until 120 days after the first bill
  • Require collectors to provide notice before assessing prejudgment interest
  • Prohibit collectors from making adverse credit reports for 180 days after the debt is assigned
  • Require collectors to offer information about charity care collections efforts if a charity care application is pending

Though we oppose the bill, we support the use of these compromises, which are included as part of the bill. Read our issue brief on the larger issue of medical debt. (Zosia Stanley, zosias@wsha.org ).


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