Monday, Maine Governor Janet Mills signed into law LD 2115 as Chapter 663 of the Laws of 2024. This new law places limitations on the collection and litigation of medical debt. The law takes effect 90 days after the legislature adjourns. The Maine Legislature has not adjourned yet but will likely do so within a week. Based on this, the law will likely take effect in the last week in July. RMAI will provide an update when the actual date can be identified.
The law defines “medical debt” as “debt arising from health care services, including dental services, or health care goods, including products, devices, durable medical equipment and prescription drugs.” This is a broad definition which, by itself, had the potential to pull in general-purpose credit cards and other credit and loan instruments. However, RMAI, on behalf of the industry, retained a lobbyist and was able to add language to exempt from this definition: (1) general-purpose credit cards, (2) home equity loans, (3) general-purpose lines of credit, (4) secured debt, and (5) veterinary debt. However, there is an exception that will pull into the definition of “medical debt” credit cards that were issued solely for the payment of health care services.
The law amends the Maine Fair Debt Collection Practices Act to prohibit debt collectors from charging interest and fees on medical debt as well as any false, deceptive, or misleading representation or implication that interest and fees will accumulate on the debt principal when the debt collector knows the debt is medical debt.
The law also prohibits debt collectors from pursuing litigation to compel payment of a medical debt without first sending a consumer notice indicating that litigation will not be pursued when the debt collector knows the consumer’s income is at or lower than 300 percent of the federal poverty guidelines, as defined by the federal Office of Management and Budget. The debt collector must allow the consumer at least 30 days to provide such proof.
Provisions that were deleted from earlier bill versions included a prohibition on credit reporting and requiring hospitals to offer consumers the opportunity to purchase their account for the same price that the hospital was seeking to sell their account to a debt buyer.
RMAI encourages its members to share this member alert with their legal, operations, and compliance personnel.