Consumer debt: medical debt.

Existing law, the Consumer Credit Reporting Agencies Act, defines and regulates consumer credit reports and consumer credit reporting agencies. The act prohibits a consumer credit reporting agency from making any consumer credit report containing specified items of information, including accounts placed for collection or charged to profit and loss that antedate the report by more than 7 years. Existing law, the Investigative Consumer Reporting Agencies Act, defines and regulates investigative consumer reports and investigative consumer reporting agencies. The act prohibits an investigative consumer reporting agency from making or furnishing any investigative consumer report containing specified items of information, including accounts placed for collection or charged to profit and loss that antedate the report by more than 7 years. This bill would prohibit a consumer credit reporting agency or an investigative consumer reporting agency from making a consumer credit report or an investigative consumer report containing information about medical debt, as defined. The bill would prohibit a person who uses a consumer credit report in connection with a credit transaction from using medical debt listed on the report as a negative factor when making a credit decision. The bill would prohibit a person from furnishing information regarding a medical debt to a consumer credit reporting agency, make a medical debt void and unenforceable if a person knowingly violates this provision by furnishing information regarding the medical debt to a consumer credit reporting agency, require a contract creating a medical debt entered into on or after July 1, 2025, to include a term describing these requirements, as specified, and make a violation of these provisions by a person holding a license or permit issued by the state to be deemed to be a violation of the law governing that license or permit. By providing that a violation of these provisions is deemed a violation of a licensing statute, and because the violation of some licensing statutes is a crime, this bill would impose a state-mandated local program. Existing law requires the Department of Health Care Access and Information to review a hospital's policies regarding, among other things, charity care or debt collection for compliance with the law whenever a significant change is made and submitted to the department, as specified. Existing law, among other things, prohibits a hospital from selling patient debt to a specified debt buyer unless several conditions are met and requires a hospital to have a written policy concerning patient debt, as specified. This bill would require a hospital to maintain all records relating to money owed to the hospital by a patient or a patient's guarantor, as specified. The bill would require any contract entered into by a hospital related to the assignment or sale of medical debt to require the assignee or buyer and any subsequent assignee or buyer to maintain records related to litigation for 5 years. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law authorizes a noncontracting individual health professional to advance to collections only the in-network cost-sharing amount that an insured has failed to pay, and prohibits reporting adverse information to a consumer credit reporting agency for a minimum of 150 days after the initial billing to the insured. This bill would require a health insurer to send notices, with specified information, to an insured and provider if the insurer sends payment directly to the insured and not to the provider for services provided. If the provider does not receive the payment from the insured within 60 days of the notice to the insured, or within one year after initial billing for the service, whichever is later, the bill would authorize the insurer's share of cost in possession of the insured that has not been paid to the provider to be reported to a credit reporting agency as medical debt. This bill would incorporate additional changes to Section 1788.14 of the Civil Code proposed by SB 1286 to be operative only if this bill and SB 1286 are enacted and this bill is enacted last, and to Section 127425 of the Health and Safety Code proposed by AB 2297 to be operative only if this bill and AB 2297 are enacted and this bill is enacted last. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.