Breakdown of Four New Requirements for Collecting Medical Debt in the State of Washington

Yesterday, Washington’s governor signed H.B. 1531 into law, amending the state's current requirements for collection of medical debts. The new requirements become effective in mid-July (90 days after it was passed in the state Senate on April 15).

Below is a breakdown of the new requirements.

1. New Disclosures in Initial Letters and Requirements to Cease Collection Activities

The amended law requires that the first written notice related to a medical debt discloses the consumer’s right to request the original (or redacted) account number, the date of last payment, and an itemized statement free of charge. If the consumer submits a request, collection efforts must cease until the requested information is provided. The amendment includes a breakdown the requirements of an itemized statement, including a notice whether or not the patient was eligible for charity care or other reductions and the total amount of such benefits.

If the debt was a hospital debt, then the first written notice must inform the consumer whether or not he or she is eligible for charity care from the hospital and the contact information for the hospital. If the debt collector receives notice of the patient’s application for charity care, it must cease collection activity during the pendency of the application and any appeal of the final determination.

2. Credit Reporting Medical Accounts

The amendment requires a 180-day waiting period after the original obligation was received or assigned to the debt collector prior to reporting any adverse information to consumer credit reporting agencies.

3. No Warrants for Arrest on Judgment Debtors for Medical Debt

The amended law prohibits a plaintiff from seeking a warrant for arrest on a judgment debtor related to a medical debt “unless the act or failure to act constitutes a crime under state law.”

4. Pre-Judgment Interest for Medical Debt

The amended law caps pre-judgment interest for medical debt at 9%.

insideARM Perspective

Collecting medical debt is a unique process in the industry and requires a different approach than other debts due to its nature. A close reading of the bill and the specific sections it amends is a must for anyone collecting medical debt in Washington. For example, an important thing to note is the difference in disclosure requirements regarding charity care depending on whether or not the account is for a hospital debt. With the law becoming effective in a few short months, now is the time to review these requirements with your counsel and start preparing these changes.