Consumer Protection for Medical Debt Collections Act

To amend the Fair Debt Collection Practices Act to provide a timetable for the collection of medical debt by debt collectors, to amend the Fair Credit Reporting Act to prohibit consumer reporting agencies from issuing consumer reports containing information about debts related to medically necessary procedures, and for other purposes. 1. Short title This Act may be cited as the Consumer Protection for Medical Debt Collections Act 2. Amendments to the Fair Debt Collection Practices Act (a) Definition Section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a (9) The term medical debt . (b) Unfair practices Section 808 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692f (9) Engaging in activities to collect or attempting to collect a medical debt owed or due or asserted to be owed or due by a consumer, before the end of the 2-year period beginning on the date that the first payment with respect to such medical debt is due. . 3. Prohibition on consumer reporting agencies reporting certain medical debt (a) Definition Section 603 of the Fair Credit Reporting Act ( 15 U.S.C. 1681a (bb) Medical debt The term medical debt (cc) Medically necessary procedure The term medically necessary procedure (1) health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine; and (2) health care to prevent illness or detect illness at an early stage, when treatment is likely to work best (including preventive services such as pap tests, flu shots, and screening mammograms). . (b) In general Section 605(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a) (9) Any information related to a debt arising from a medically necessary procedure. (10) Any information related to a medical debt, if the date on which such debt was placed for collection, charged to profit or loss, or subjected to any similar action antedates the report by less than 365 calendar days. . 4. Requirements for furnishers of medical debt information (a) Additional notice requirements for medical debt Section 623 of the Fair Credit Reporting Act ( 15 U.S.C. 1681s–2 (f) Additional notice requirements for medical debt Before furnishing information regarding a medical debt of a consumer to a consumer reporting agency, the person furnishing the information shall send a statement to the consumer that includes the following: (1) A notification that the medical debt— (A) may not be included on a consumer report made by a consumer reporting agency until the later of the date that is 365 days after— (i) the date on which the person sends the statement; (ii) with respect to the medical debt of a borrower demonstrating hardship, a date determined by the Director of the Bureau; or (iii) the date described under section 605(a)(10); and (B) may not ever be included on a consumer report made by a consumer reporting agency, if the medical debt arises from a medically necessary procedure. (2) A notification that, if the debt is settled or paid by the consumer or an insurance company before the end of the period described under paragraph (1)(A), the debt may not be reported to a consumer reporting agency. (3) A notification that the consumer may— (A) communicate with an insurance company to determine coverage for the debt; or (B) apply for financial assistance. . (b) Furnishing of medical debt information Section 623 of the Fair Credit Reporting Act ( 15 U.S.C. 1681s–2 (g) Furnishing of medical debt information (1) Prohibition on reporting debt related to medically necessary procedures No person shall furnish any information to a consumer reporting agency regarding a debt arising from a medically necessary procedure. (2) Treatment of other medical debt information With respect to a medical debt not described under paragraph (1), no person shall furnish any information to a consumer reporting agency regarding such debt before the end of the 365-day period beginning on the later of— (A) the date on which the person sends the statement described under subsection (f) to the consumer; (B) with respect to the medical debt of a borrower demonstrating hardship, a date determined by the Director of the Bureau; or (C) the date described in section 605(a)(10). (3) Treatment of settled or paid medical debt With respect to a medical debt not described under paragraph (1), no person shall furnish any information to a consumer reporting agency regarding such debt if the debt is settled or paid by the consumer or an insurance company before the end of the 365-day period described under paragraph (2). (4) Borrower demonstrating hardship defined In this subsection, and with respect to a medical debt, the term borrower demonstrating hardship . 5. Effective date This Act and the amendments made by this Act shall take effect on the date that is 180 days after the date of enactment of this Act.

Summary: Consumer Protection for Medical Debt Collections Act This bill restricts the inclusion of medical debt on a consumer credit report. A consumer reporting agency is prohibited from including on a consumer credit report, and a person is prohibited from reporting to such agency (1) medical debt arising from a medically necessary procedure, or (2) other medical debt less than a year old. A person reporting medical debt to a consumer reporting agency must first provide notice to that consumer regarding the restrictions on including medical debt on credit reports. Furthermore, a debt collector is prohibited from collecting a medical debt less than two years old.