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Bill on medical debt awaits governor’s action

Copyright © 2021 Albuquerque Journal

SANTA FE – A trip to the emergency room two years ago left Genevieve Romero with $1,500 in medical debt and a hit to her credit score.

Romero has insurance, and she says she never saw a bill before hearing from a collection agency.

She’s now urging Gov. Michelle Lujan Grisham to sign legislation that would prohibit litigating, garnishing wages or taking other collection action against low-income New Mexicans who have incurred medical debt.

The proposal, Senate Bill 71, won approval in the final week of the legislative session this month, giving Lujan Grisham until April 9 to act on it.

Romero, a student at the University of New Mexico, said her medical debt was triggered by a rapid test for strep throat at an emergency room. She provided her insurance card at the time and was surprised later to receive a notice from a collection agency seeking $1,500 – a bill she’s still dealing with two years later.

“I’ve lost count of the times I’ve not sought health care I needed because of fear of incurring more medical debt,” Romero, 22, said in a recent interview.

The legislation would prohibit collection action against patients who make less than 200% of the federal poverty level, or about $25,800 for an individual. Among the restrictions would be bans on selling a person’s debt to a third-party collection agency or placing a lien on their property.

The bill would also require hospitals to screen patients for public insurance coverage and eligibility for assistance programs before seeking payment for emergency or medically necessary care. The measure also proposes new transparency requirements for medical bills.

The proposal was passed by the Senate 27-12 and by the House 42-28, largely along party lines, with Democrats in favor. It picked up support from three Republicans in the Senate and one independent in the House.

Sen. Katy Duhigg

“Medical debt is one of the leading causes of bankruptcy,” said Sen. Katy Duhigg, an Albuquerque Democrat and co-sponsor of the bill. “It can be crippling for people’s credit and really dangerous for their health.”

Duhigg said the bill’s requirement to screen for insurance and assistance eligibility is intended to reduce the cost of uncompensated care for medical facilities. Much of their bad debt, she said, is for patients who would otherwise have qualified for insurance or an assistance program.

Hospitals would screen and offer help to fill out an application for, say, Medicaid, although patients could decline if they didn’t want to enroll.

Co-sponsoring the bill with Duhigg were Sen. Martin Hickey and Rep. Deborah Armstrong, Albuquerque Democrats.

Troy Clark, president and CEO of the New Mexico Hospital Association, said the proposed law wouldn’t substantially change what most hospitals already have in place, although many would have to add a few items to their billing statements or payment receipts.

The legislation, he said, calls for “processes that most, if not all, of our hospital members already do to assist patients in seeking funding sources for their emergent or medically necessary care.”

Opponents of the bill said it would increase costs for the patients who can afford to pay, because medical debt would be absorbed by the broader pool of patients.

Senate Minority Whip Craig Brandt, R-Rio Rancho, said he was pleased the bill was revised during the session to narrow its focus and emphasize providing information to patients.

He voted against at least one version of the bill, however, citing concern over its potential impact on hospital finances.

“The big concern,” he said, was whether “it would drive the hospitals into bankruptcy.”

As for Romero, she said her debt still lingers as she prepares to graduate and apply to law school. One question on an application, she said, was about outstanding financial obligations.

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