Massachusetts Governor Proposes Medical Debt Rules

Massachusetts Governor Maura Healey has proposed regulations that would stop certain companies in the state from reporting medical debt to consumer credit agencies. 

The proposal would prohibit licensed medical care providers and debt collectors working for them from reporting medical debt to credit bureaus, intending to help patients avoid long-term financial harm after an unexpected illness or medical emergency. 

Providers that don’t comply could lose their license to practice, according to state officials.

“Getting sick is hard enough. It shouldn’t ruin your credit,” Governor Maura Healeysaid. “No one should have to worry that seeing a doctor, filling a prescription or taking their child to the emergency room will damage their financial future. Medical debt shouldn’t make it harder to buy a home, rent an apartment or get a loan years after you’ve recovered and when you’re working hard to make your payments. This action will help protect patients while we continue our work to lower health care costs and ensure all Massachusetts residents can afford to get the care they need when they need it.” 

“Medical debt can have long-lasting consequences that extend well beyond a hospital bill,” according to state officials. “A serious illness, cancer diagnosis, complicated pregnancy or trip to the emergency room can leave people with bills they never anticipated and often cannot afford.”

“Unlike most forms of consumer debt, medical debt is often unavoidable,” they added. “These proposed regulations recognize that patients shouldn’t face years of financial consequences simply because they needed medical care.”

The Department of Public Health developed the proposed regulations and all 23 of the Department’s licensing boards voted to advance them for public comment. The Department is accepting written public comments and will hold public hearings on July 27 and 28. After that, the Department will evaluate all comments received and finalize the proposed regulations. 

During the Biden Administration, the CFPB supported banning medical debt from credit reports. The CFPB adopted a rule to impose such a ban, but the rule was vacated by a federal district court..

Reportedly, at least 17 other states have banned medical debt from appearing on credit reports. Those states are: California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Oregon, Rhode Island, Vermont, Virginia and Washington. (See our blog about the bans on medical debt reporting in Colorado and New York here.)

At least some of the state laws, such as the Colorado law, are being challenged in court. Those challenges have been bolstered by a CFPB interpretive rule advising that such laws are preempted by the FCRA.