Assembly bill would curtail aggressive medical‑debt collection: protect wages, homes and credit reporting

Assemblymember Max Carter introduced Assembly Bill 204 as a package of consumer protections that would restrict several aggressive collection practices for medical debt, including reporting medical debt to credit reporting agencies, arrest for medical debt, liens and foreclosures on a consumer’s primary residence, garnishment of wages or seizure of tax refunds and bank accounts in many cases, and other “extraordinary collection actions.”

Carter told the Assembly Committee on Commerce and Labor the bill aims to give patients more time to resolve insurance appeals, enroll in financial assistance, or set up payment plans before a provider or collector takes extreme collection steps. “These are common sense solutions that help patients pay back their debt while still allowing hospitals and doctors to collect payments,” Carter said in his presentation.

Patient advocates, nonprofits and several labor and community groups testified in support. Adam Zarin of the Leukemia & Lymphoma Society said medical debt is fundamentally different because illness is involuntary and high out‑of‑pocket costs can exceed families’ ability to pay; he said the measure protects patients’ financial stability without stopping collection entirely. Carissa Pierce of the Children’s Advocacy Alliance and callers from organizations including NAMI Nevada, the Nevada AFL‑CIO, Make the Road Nevada and others described personal and community harms from medical debt, including blocked access to housing or credit and stress that deters care.

Hospitals, creditors and other industry representatives testified in opposition or expressed concerns. Patrick Kelly for the Nevada Hospital Association said many hospitals already offer hardship programs and discounted care and warned that broad prohibitions on collection and credit reporting could shift costs to other patients and undermine providers’ ability to recoup legitimate charges. Other opponents included the Nevada Rural Hospital Partners, receivables industry groups, the Nevada Credit Union League and the Nevada State Medical Association; attorneys and trade groups urged narrowing definitions and expressed concerns about impacts on settlements and existing statutory exemptions (for example, homestead exemptions cited by a witness).

Committee members questioned scope and practical effects. Some members asked whether removing lien or garnishment tools could discourage providers or collectors and exacerbate provider shortages; sponsor and advocates pointed to other states (Texas, New York) that have limited garnishment with continued functioning health systems. Several members asked about timing elements in the bill: AB 204 would require a provider to wait 180 days after sending a first bill and provide a 30‑day written notice before taking extraordinary collection actions, and would require that patients be informed about financial assistance programs and that refunds be returned within 60 days where due.

The bill assigns enforcement authority to the Nevada Attorney General rather than creating a private right of action; supporters said this reduces the risk of large numbers of private lawsuits and concentrates enforcement with the state. Opponents asked for precise definitions (the receivables industry and credit reporting trade group recommended adopting a CFPB‑aligned definition of medical debt) and warned of federal preemption issues tied to the Fair Credit Reporting Act if states attempt to regulate elements already covered by federal law.

Ending: The committee did not vote on AB 204. The sponsor and his staff said they would continue stakeholder discussions to narrow definitions and address concerns about unintended consequences for hospitals, lenders and the credit system.