On May 9, Connecticut Governor Lamont signed into law Senate Bill 395 restricting the furnishing of “medical debt” by certain covered entities. The law defines medical debt as “an obligation or alleged obligation of a consumer to pay any amount related to the receipt by the consumer of health care goods or health care services.” The law is effective July 1, 2024. It prohibits any “health care provider” or any “collection entity” doing business in in Connecticut from furnishing information concerning a “medical debt . . . or any portion of a medical debt to a credit rating agency for use in a credit report.” Further, it requires that a health care provider doing business in Connecticut “include in any contract entered into with a collection entity on and after July 1, 2024, for the purchase or collection of medical debt a provision that prohibits” the furnishing of “of any portion of . . . medical debt to a credit rating agency.” The law also provides that “[a]ny portion of a medical debt that is reported to a credit rating agency shall be void.”
The law excludes from the definition of “[m]edical debt . . . debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered specifically for the payment of charges related to health care goods or health care services.”
Members should be mindful of the definitions of “medical debt,” “health care provider” and “collection entity,” and consult with counsel as to the applicability of the law to their activities.
This Member Alert is intended for members of the Receivables Management Association International, is for informational purposes only, and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.