Assembly Bill 204, introduced in the Nevada State Legislature on April 21, 2025, aims to reform the handling of medical debt collection practices in the state. The bill seeks to protect consumers from aggressive collection actions, particularly during emergencies, and mandates transparency from medical facilities regarding financial assistance options.

The key provisions of AB204 include a requirement for health care entities and collection agencies to provide consumers with a notice before initiating extraordinary collection actions, which must occur at least 30 days after the notice is issued. This notice must inform consumers if the medical facility offers financial assistance and include a plain-language summary of the assistance policy. Additionally, the bill prohibits collection actions during declared states of emergency or public health emergencies, ensuring that consumers are not subjected to financial pressure during crises.

Notably, if a consumer is later found eligible for financial assistance that could have alleviated their medical debt, any initiated collection actions must be reversed. This includes dismissing legal proceedings and removing liens or garnishments against the consumer's property. Furthermore, if a consumer has overpaid after applying for financial assistance, the medical facility or collection agency is required to refund the excess amount within 60 days.

The introduction of AB204 has sparked discussions among lawmakers and stakeholders. Proponents argue that the bill is a necessary step toward protecting vulnerable consumers from predatory practices, especially in light of the financial strain many face due to medical expenses. Critics, however, express concerns about the potential impact on medical facilities' revenue and the administrative burden of complying with the new requirements.

The implications of AB204 are significant, as it addresses the growing issue of medical debt, which has become a pressing concern for many Americans. By enhancing consumer protections and promoting transparency, the bill could lead to a shift in how medical debts are managed in Nevada, potentially influencing similar legislative efforts in other states.

As the bill moves through the legislative process, its future remains uncertain, but it has already highlighted the ongoing debate surrounding healthcare affordability and consumer rights in the state.