ASSEMBLY FINANCIAL INSTITUTIONS AND INSURANCE COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 3861

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 13, 2024

      The Assembly Financial Institutions and Insurance Committee reports favorably and with committee amendments Assembly Bill No. 3861 (1R).

      As amended, this bill, titled the “Louisa Carman Medical Debt Relief Act,” prohibits a medical creditor or medical debt collector from:

      (1)  reporting a patient’s medical debt to any consumer reporting agency for health care services performed on or after the effective date of the bill;

      (2)  making a consumer report containing a patient’s paid medical debt or a medical debt worth less than $500, regardless of the date the medical debt was incurred;

      (3)  charging an interest rate on a medical debt of more than three percent per year;

      (4)  garnishing the wages of a patient with an annual income of less than 600 percent of the federal poverty level to collect medical debt owed by that patient; or

      (5)  engaging in any collection actions against a patient who accepts and complies with the terms of a reasonable payment plan.

      The bill also provides certain protections to patients with medical debt from collection actions by medical creditors and medical debt collectors and provides that any portion of a medical debt furnished to a consumer reporting agency in violation of the bill will be void.

      Lastly, the bill provides that the Office of the Attorney General is the sole and exclusive authority to enforce violations of the bill.  A medical creditor or medical debt collector that violates a provision of the bill may be subject to a civil penalty and may be ordered by the Attorney General to restore to interested parties any moneys or property acquired by means in violation of the bill.  The bill clarifies that nothing in the bill provides the basis for a private right of action arising solely from a violation of the bill.

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

      (1)  change certain definitions used in the bill;

      (2)  stipulate that the prohibition on medical creditors and medical debt collectors engaging in collection actions is not limited to collection actions that are “permissible”;

      (3)  make changes to how medical creditors and medical debt collectors are allowed to handle pending medical debt;

      (4)  provide that the Office of the Attorney General is the sole and exclusive authority to enforce violations of the bill;

      (5)  provide that the violation of the bill is a violation of the “New Jersey Fair Credit Reporting Act” rather than the consumer fraud act, stipulate that a medical creditor or medical debt collector in violation of the bill may be subject to a civil penalty and may be ordered by the Attorney General to restore to interested parties any moneys or property acquired by means in violation of the bill, and clarify that the violation of the bill does not provide the basis for a private right of action arising solely from a violation of the bill;

      (6)  make the provisions of the bill prohibiting medical creditors and medical debt collectors from reporting a patient’s medical debt to a consumer reporting agency or creating a consumer report containing certain medical debt and establishing the penalties and enforcement of the bill effective immediately and the remainder of the bill effective one year following enactment; and

      (7)  make certain technical changes.