Home | New Minnesota Laws Restrict Collection of Medical Debt from Patients
New Minnesota Laws Restrict Collection of Medical Debt from Patients
NEW MINNESOTA LAWS RESTRICT COLLECTION OF MEDICAL DEBT FROM PATIENTS
Published July 2024
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In May, the Minnesota Legislature enacted new laws for the collection of medical debt from patients. These laws apply to a broad swath of health care providers in Minnesota. All the laws discussed in this article become effective October 1, 2024.
Health care providers should review their current policies now and take any needed steps to make sure they are ready to comply with these laws when they become effective on October 1.
New Chapter 62J Laws Limit Treatment Denials, Require Website Posting
of Collection Policies and Steps to Correct Billing Errors
Refusal of Treatment for Outstanding Medical Debt. A health care provider may not deny medically necessary health treatment or services to a patient or their family member because of current or previous outstanding medical debt owed by the patient (or their family member) to the health care provider. Minn. Stat. § 62J.807(a). (The new laws discussed in this article are contained in Chapter 114 of the Minnesota Session Laws. For ease of reference, this article provides citations to the statutes, not the session law.) This prohibition applies regardless of whether or not the treatment is available from another health care provider. Id.
A “health care provider” means a health professional who is licensed or registered by the State of Minnesota to provide health treatment and services within the professional’s scope of practice, a group practice, or a hospital. Minn. Stat. § 62J.805, subd. 4.
As a condition of providing medically necessary health care to the patient, a health care provider may require the patient to enroll in a payment plan for the outstanding medical debt owed to the provider. Minn. Stat. § 62J.807(b). The payment plan must be reasonable and take into account any information disclosed by the patient about their ability to pay. Id. Before entering into the payment plan, the health care provider must notify the patient that if the patient is unable to make all or part of the agreed-upon installment payments, the patient must communicate their situation to the health care provider and must pay an amount the patient can afford. Id. The law does not specify any steps the provider may take if the patient does not make the installment payments.
“Medical debt” is not defined in this statute. (It is defined in another provision—Minn. Stat. § 332C.01, subd. 4—adopted as part of the same session law and discussed below, but that definition applies to Chapter 332C and does not state that it applies to Section 62J.)
“Medically necessary” means treatment that is: (1) safe and effective; (2) generally not experimental or investigative (with some exceptions); (3) furnished in accordance with acceptable medical standards of medical practice to diagnose or treat the patient’s condition; (4) furnished in a setting appropriate to the patient’s medical need and condition; (5) ordered and furnished by qualified personnel; (6) meets (but does not exceed) the patient’s medical need; and (7) is at least as beneficial as an existing and available medically appropriate alternative. Minn. Stat. § 62J.805, subd. 7.
Medical Debt Collection Policy Must Be Posted on Website. Health care providers must make available to the public their policy for collecting medical debt from patients. Minn. Stat. § 62J.806, subd. 1. The policy must be made available by (1) “clearly posting” it on the individual provider’s website or the website of the health clinic or hospital at which the provider is employed or under contract; and (2) providing it to patients on request. Id. The policy must at a minimum specify the procedures followed by the provider to: (1) communicate with patients about the outstanding medical debt and collection of the debt; (2) refer medical debt to a collection agency or law firm; and (3) identify medical debt as uncollectable or satisfied and end collection activities. Minn. Stat. § 62J.806, subd. 2.
Health Care Providers Must Take Steps to Correct Billing Errors. If a health care provider or health plan determines or receives notice from a patient (or other person) that the provider’s bill to the patient for health treatment or services may contain a billing error, the health care provider (or health plan) must review the bill and correct any billing errors. Minn. Stat. § 62J.808, subd. 1(a).
While the review is being conducted, the provider may not bill the patient for any health treatment or service that is under review for a potential billing error. Id. The provider may only bill the patient for health treatment and services that were reviewed for billing errors after: (1) the review is complete; (2) any billing errors are corrected; and (3) notice of completion of the review is sent to the patient. Id. If a health care provider or health plan determines the patient overpaid the bill, the provider must refund the overpayment to the patient within 30 days of completion of the review. Minn. Stat. § 62J.808, subd. 1(b).
If a health care provider or health plan determines or receives notice from a patient (or other person) that a health care provider’s bill to the patient for health services or treatment may contain a billing error, the provider (or health plan) must notify the patient: (1) of the potential billing error; (2) that the provider (or health plan) must review the bill and correct any billing errors; and (3) that while the review is being conducted, the provider may not bill the patient for the services being reviewed. Minn. Stat. § 62J.808 subd. 2(a).
This notice must be sent to the patient within 30 days after the provider (or health plan) determines or receives notice the bill may contain an error. Minn. Stat. § 62J.808 subd. 2(b). When the review is completed, the provider (or health plan) must: (1) notify the patient the review is complete; (2) explain in detail how any billing errors were corrected or why the bill was not modified as requested; and (3) provide applicable coding guidelines, references to health records, and other relevant information. Minn. Stat. § 62J.808 subd. 3. This notice must be sent to the patient within 30 days of completion of the review. Id.
For purposes of this statute, a “billing error” is an error in a provider’s bill to a patient for health treatment or services that affects the amount owed by the patient and includes (but is not limited to): (1) miscoding a health treatment or service; (2) an error in determining whether a health treatment or service is covered by the patient’s health plan; or (3) an error in determining the cost-share owed by the patient (e.g., co-pays, deductibles, etc.) Minn. Stat. § 62J.805, subd. 2.
New Chapter 332C Provisions Prohibit Credit Bureau Reporting of Medical Debt and Impose Other New Measures for Collecting Medical Debt
Medical Debt May Not Be Reported to Credit Bureaus. A party collecting medical debt must not report medical debt to a consumer reporting agency (i.e., a credit bureau). Minn. Stat. § 332C.03(a).
New Debt Collection Requirements. A party collecting medical debt must follow new medical debt collection requirements.
Under the new requirements, a party collecting a medical debt must, among other things:
Not imply or suggest that medically necessary health treatment or services “are denied” because of the debt. Minn. Stat. § 332C.02(11).
Provide—when first attempting to collect a medical debt by mail—a disclosure that identifies the phone number for the Minnesota Attorney General’s Office and states: “You have the right to hire your own attorney to represent you in this matter.” Minn. Stat. § 332C.02(18). The disclosure must be in a type size that is equal to or larger than the largest type size used in the text of the notice.
Not threaten wage garnishment or legal suit by a particular lawyer unless they have retained the lawyer to take the action. Minn. Stat. § 332C.02(1).
For purposes of these new Chapter 332C requirements, “medical debt” means debt primarily incurred for medically necessary health treatment or services. Minn. Stat. § 332C.01, subd. 4. “Medical debt” includes debt charged on or after October 1, 2024 to a credit card or other credit instrument or under a credit plan—if it is offered specifically to pay for health care treatment or services—but not if it is not specifically offered to pay for health care services or is taken out under a home equity line of credit. Id. “Medical debt” does not include services provided by dentists or veterinarians, for purposes of the Chapter 332C provisions. Id.
The Minnesota Attorney General’s Office has authority to enforce these new requirements. Minn. Stat. § 332C.05(a). A party collecting a medical debt that violates these requirements may also be held liable to the debtor for (1) actual damage sustained by the debtor from the violation; (2) additional damages as the court may allow, up to $1,000 per violation, and (3) potential attorneys’ fees as determined by the court in the case of a successful action by the debtor to enforce the law. Minn. Stat. § 332C.05(b).
New Chapter 519 Provision Eliminates Spousal Medical Debt Liability
Spousal Medical Debt. Minnesota law previously stated that spouses who live together are jointly and severally liable for necessary medical services provided to either spouse. Minn. Stat. § 519.05(a). The Minnesota Legislature repealed this provision effective October 1, 2024.
The law firm of Swanson Hatch, P.A. represents health care providers and health care and insurance industry clients on a wide array of regulatory, compliance, corporate, litigation, and other matters. During their 20 years of combined service as Attorneys General of the State of Minnesota, former Minnesota Attorneys General Lori Swanson and Mike Hatch provided legal representation to the Minnesota Departments of Commerce and Health and the state health care licensing boards and enforced state health care, insurance, nonprofit, and consumer protection laws. Prior to her twelve years as Minnesota Attorney General, Lori Swanson previously served as Solicitor General and Deputy Attorney General of the State of Minnesota and was the Chair of the Federal Reserve Board’s Consumer Advisory Council. Before he became Attorney General, Mike Hatch previously served as Commissioner of the Minnesota Department of Commerce for eight years. The firm’s website is www.swansonhatch.com and its phone number is 612-315-3037.
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www.swansonhatch.com
431 S Seventh Street, Suite 2545
Minneapolis, MN 55415 612-315-3037
The materials in this article are for informational purposes and do not constitute legal advice, nor does your unsolicited transmission of information to us create a lawyer-client relationship. Sending us an email will not make you a client of our firm. Until we have agreed to represent you, nothing you send us will be confidential or privileged. Readers should not act on information contained in this article without seeking professional counsel. The best way for you to inquire about possible representation is to contact an attorney of the firm. Actual results depend on the specific factual and legal circumstances of each client’s case. Past results do not guarantee future results in any matter.
In May, the Minnesota Legislature enacted new laws for the collection of medical debt from patients. These laws apply to a broad swath of health care providers in Minnesota. All the laws discussed in this article become effective October 1, 2024.
Health care providers should review their current policies now and take any needed steps to make sure they are ready to comply with these laws when they become effective on October 1.
Refusal of Treatment for Outstanding Medical Debt. A health care provider may not deny medically necessary health treatment or services to a patient or their family member because of current or previous outstanding medical debt owed by the patient (or their family member) to the health care provider. Minn. Stat. § 62J.807(a). (The new laws discussed in this article are contained in Chapter 114 of the Minnesota Session Laws. For ease of reference, this article provides citations to the statutes, not the session law.) This prohibition applies regardless of whether or not the treatment is available from another health care provider. Id.
A “health care provider” means a health professional who is licensed or registered by the State of Minnesota to provide health treatment and services within the professional’s scope of practice, a group practice, or a hospital. Minn. Stat. § 62J.805, subd. 4.
As a condition of providing medically necessary health care to the patient, a health care provider may require the patient to enroll in a payment plan for the outstanding medical debt owed to the provider. Minn. Stat. § 62J.807(b). The payment plan must be reasonable and take into account any information disclosed by the patient about their ability to pay. Id. Before entering into the payment plan, the health care provider must notify the patient that if the patient is unable to make all or part of the agreed-upon installment payments, the patient must communicate their situation to the health care provider and must pay an amount the patient can afford. Id. The law does not specify any steps the provider may take if the patient does not make the installment payments. “Medical debt” is not defined in this statute. (It is defined in another provision—Minn. Stat. § 332C.01, subd. 4—adopted as part of the same session law and discussed below, but that definition applies to Chapter 332C and does not state that it applies to Section 62J.) “Medically necessary” means treatment that is: (1) safe and effective; (2) generally not experimental or investigative (with some exceptions); (3) furnished in accordance with acceptable medical standards of medical practice to diagnose or treat the patient’s condition; (4) furnished in a setting appropriate to the patient’s medical need and condition; (5) ordered and furnished by qualified personnel; (6) meets (but does not exceed) the patient’s medical need; and (7) is at least as beneficial as an existing and available medically appropriate alternative. Minn. Stat. § 62J.805, subd. 7.
Medical Debt Collection Policy Must Be Posted on Website. Health care providers must make available to the public their policy for collecting medical debt from patients. Minn. Stat. § 62J.806, subd. 1. The policy must be made available by (1) “clearly posting” it on the individual provider’s website or the website of the health clinic or hospital at which the provider is employed or under contract; and (2) providing it to patients on request. Id. The policy must at a minimum specify the procedures followed by the provider to: (1) communicate with patients about the outstanding medical debt and collection of the debt; (2) refer medical debt to a collection agency or law firm; and (3) identify medical debt as uncollectable or satisfied and end collection activities. Minn. Stat. § 62J.806, subd. 2.
Health Care Providers Must Take Steps to Correct Billing Errors. If a health care provider or health plan determines or receives notice from a patient (or other person) that the provider’s bill to the patient for health treatment or services may contain a billing error, the health care provider (or health plan) must review the bill and correct any billing errors. Minn. Stat. § 62J.808, subd. 1(a).
While the review is being conducted, the provider may not bill the patient for any health treatment or service that is under review for a potential billing error. Id. The provider may only bill the patient for health treatment and services that were reviewed for billing errors after: (1) the review is complete; (2) any billing errors are corrected; and (3) notice of completion of the review is sent to the patient. Id. If a health care provider or health plan determines the patient overpaid the bill, the provider must refund the overpayment to the patient within 30 days of completion of the review. Minn. Stat. § 62J.808, subd. 1(b).
If a health care provider or health plan determines or receives notice from a patient (or other person) that a health care provider’s bill to the patient for health services or treatment may contain a billing error, the provider (or health plan) must notify the patient: (1) of the potential billing error; (2) that the provider (or health plan) must review the bill and correct any billing errors; and (3) that while the review is being conducted, the provider may not bill the patient for the services being reviewed. Minn. Stat. § 62J.808 subd. 2(a).
This notice must be sent to the patient within 30 days after the provider (or health plan) determines or receives notice the bill may contain an error. Minn. Stat. § 62J.808 subd. 2(b). When the review is completed, the provider (or health plan) must: (1) notify the patient the review is complete; (2) explain in detail how any billing errors were corrected or why the bill was not modified as requested; and (3) provide applicable coding guidelines, references to health records, and other relevant information. Minn. Stat. § 62J.808 subd. 3. This notice must be sent to the patient within 30 days of completion of the review. Id.
For purposes of this statute, a “billing error” is an error in a provider’s bill to a patient for health treatment or services that affects the amount owed by the patient and includes (but is not limited to): (1) miscoding a health treatment or service; (2) an error in determining whether a health treatment or service is covered by the patient’s health plan; or (3) an error in determining the cost-share owed by the patient (e.g., co-pays, deductibles, etc.) Minn. Stat. § 62J.805, subd. 2.
Medical Debt May Not Be Reported to Credit Bureaus. A party collecting medical debt must not report medical debt to a consumer reporting agency (i.e., a credit bureau). Minn. Stat. § 332C.03(a).
New Debt Collection Requirements. A party collecting medical debt must follow new medical debt collection requirements.
Under the new requirements, a party collecting a medical debt must, among other things:
For purposes of these new Chapter 332C requirements, “medical debt” means debt primarily incurred for medically necessary health treatment or services. Minn. Stat. § 332C.01, subd. 4. “Medical debt” includes debt charged on or after October 1, 2024 to a credit card or other credit instrument or under a credit plan—if it is offered specifically to pay for health care treatment or services—but not if it is not specifically offered to pay for health care services or is taken out under a home equity line of credit. Id. “Medical debt” does not include services provided by dentists or veterinarians, for purposes of the Chapter 332C provisions. Id.
The Minnesota Attorney General’s Office has authority to enforce these new requirements. Minn. Stat. § 332C.05(a). A party collecting a medical debt that violates these requirements may also be held liable to the debtor for (1) actual damage sustained by the debtor from the violation; (2) additional damages as the court may allow, up to $1,000 per violation, and (3) potential attorneys’ fees as determined by the court in the case of a successful action by the debtor to enforce the law. Minn. Stat. § 332C.05(b).
Spousal Medical Debt. Minnesota law previously stated that spouses who live together are jointly and severally liable for necessary medical services provided to either spouse. Minn. Stat. § 519.05(a). The Minnesota Legislature repealed this provision effective October 1, 2024.
www.swansonhatch.com
431 S Seventh Street, Suite 2545
Minneapolis, MN 55415
612-315-3037
The materials in this article are for informational purposes and do not constitute legal advice, nor does your unsolicited transmission of information to us create a lawyer-client relationship. Sending us an email will not make you a client of our firm. Until we have agreed to represent you, nothing you send us will be confidential or privileged. Readers should not act on information contained in this article without seeking professional counsel. The best way for you to inquire about possible representation is to contact an attorney of the firm. Actual results depend on the specific factual and legal circumstances of each client’s case. Past results do not guarantee future results in any matter.
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Swanson | Hatch, P.A.
431 S. 7th Street, Suite #2545
Minneapolis, MN 55415
612-315-3037
www.swansonhatch.com