Reform to medical debt collection proposed

Debt collection agencies may have to adapt their practices if a proposed federal bill is passed. A statement from Rep. Gary Miller's office announced that the congressman introduced the Accuracy in Reporting Medical Debt Act on May 24.

The bill would force debt collectors to delay reporting unpaid accounts to credit bureaus if a consumer can prove that he or she is working with an insurance company, is unaware of a debt or has applied for financial assistance.

"The personal and financial toll of dealing with a medical emergency or serious illness is difficult enough," Miller stated in a press release. "Unfortunately, for many patients and their families, our nation's complex and broken healthcare system inflicts additional pain by damaging their ability to access credit."

According to Consumerist, the pending legislation would give debtors 120 days to address outstanding medical accounts before they are reported to the three major consumer credit reporting bureaus. Also, collectors would be required to give debtors a 30-day period in which to respond to debt concerns. However, collectors would still be able to attempt to collect payments during that period.

The source stated that if passed, the bill would amend the regulations within the Fair Debt Collection Practices Act.