SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 2806

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 26, 2024

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 2806.

      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.

      As amended and reported by the committee, this bill is identical to Assembly Bill No. 3861 (2R).

COMMITTEE AMENDMENTS:

      The committee amended the bill to be identical to Assembly Bill No. 3861 (2R) by:

      (1)  changing certain definitions used in the bill;

      (2)  stipulating that a medical creditor or medical debt collector is prohibited from:

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

      (b)  garnishing the wages of a patient to collect medical debt owed by that patient;

      (c)  engaging in any collection actions against a patient who accepts and complies with the terms of a reasonable payment plan offered by the medical creditor or medical debt collector; or

      (d) charging an interest rate of more than three percent per year on late payments to a medical debt subject to a reasonable payment plan and is required to provide a grace period of at least 60 days for late payments;

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

      (4)  providing that communication made by a medical creditor or medical debt collector to a patient in the course of trying to collect a medical debt is required to include a statement, in at least 14-point boldface font, that the medical creditor or medical debt collector has not reported the debt to a consumer reporting agency and that if the debt, or any part of it, has been reported to a consumer reporting agency, the portion reported is void;

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

      (6)  providing that the violation of the bill is a violation of the “New Jersey Fair Credit Reporting Act,” 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 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;

      (7)  making 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

      (8)  making certain technical changes.

FISCAL IMPACT:

      This bill has not been certified as requiring a fiscal note.