Nevada Hosts Medical Debt Settlement Project Workshop

Following comments gathered as part of a small business impact statement last month, the Nevada Division of Financial Institutions (NFID) is hosting a workshop on regulations relating to the collection of medical debts and SB 248. from 10 a.m. to 1 p.m. MDT on October 26

The NFID issued draft regulations on SB 248 at the request of U.S. District Judge Richard F. Boulware II, who presided over the proceedings on an emergency motion for a temporary restraining order (TRO) in a lawsuit filed by ACA International, the Nevada Collectors Association (NCA) and 14 other plaintiffs, ACA previously reported.

The proposed regulations are only in draft form and therefore do not impose any requirements on ACA members submitted to SB 248, but they may indicate what will happen as the NFID works to finalize the regulations.

Based on the NFID timeline, final regulations would not be published until January 2022 at the earliest.

SB 248, which came into effect on July 1, requires debt collectors who collect medical debts, as defined in the law, to provide medical debtors with 60 days’ notice of placement or assignment before the Debt collector does not take action to collect a medical debt. . It also prohibits certain practices relating to the collection of medical debts, including restrictions on civil actions to collect medical debts, restrictions on credit reports on medical debts, and restrictions on collection costs (including professional fees). lawyer) that can be added to medical debt balances.

The regulatory process includes a small business impact survey and the upcoming workshop on the proposed regulations.

The NFID received 55 responses to the Small Business Impact Statement indicating concerns about SB 248.

NFID Commissioner Sandy O’Laughlin noted in the small business impact statement that the division cannot change the law, but drafted the proposed regulations in an attempt to alleviate stakeholder concerns of industry and provide clarification on the requirements of the law.

The NFID also provided responses to commentators on the Small Business Impact Statement, which are available in the meeting notice for the October 26 workshop.

Comments ranged from concerns about communications with consumers and the requirement for communication by certified mail to possible negative impacts for creditors and consumers and costs for businesses.

One commentator said: “The 60-day letter will create confusion and [a] false sense of urgency for medical debtors. The 60 day letter will be considered a communication to the medical debtor as it is a notice from a collection agency.

In response, the NFID said it could not change SB 248, but noted certain terms in the proposed regulations that might help:

“The Nevada State Legislature enacted the law, SB 248, which requires no action to be taken for a medical debt of less than 60 days. NFID cannot remove this requirement; however, the proposed regulation clarifies sections three, four and six. Section three defines “action to collect a medical debt” and section 4 states that “… such written notice to a medical debtor is not intended to be communication under the Fair Debt Collection Practices Act ”. Additionally, Section 6 also requires a 60-day letter to obtain disclosure: this is not a disclosure under the Fair Debt Collection Practices Act. “

ACA encourages members to provide public comments and attend the October 26 workshop, which will be held online or the meeting can be joined by phone. Details on meeting attendance as well as proposed regulations and comments from the Small Business Impact Assessment are available here.

Meanwhile, the ACA and other parties are awaiting Boulware’s decision on the SB 248 emergency temporary ban order motion, the ACA reported previously.

During the proceedings on the ACA’s motion for a temporary restraining order, Boulware asked the NFID to clarify its intention regarding potential regulations and to propose a timeline for the issuance of those regulations. These procedures seem to have prompted the publication of this draft regulation.

Following an evidentiary hearing in August, the plaintiffs filed an amended complaint to clarify some of the claims in the lawsuit, for example, that SB 248 violates the FDCPA by creating a false sense of urgency when an agent Collection sends written notification to a medical debtor via Certified Mail.

Boulware is on hold the order could temporarily prohibit the execution of SB 248, or it could simply find that at this point the ACA and the other complainants have not sufficiently demonstrated a likelihood of success on the merits of the case.

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