Assembly committee advances bill to stop post‑release NDOC medical debt collections

At an Assembly Judiciary Committee hearing, lawmakers advanced Senate Bill 88, which would limit the Nevada Department of Corrections’ (NDOC) practice of billing and collecting outside medical costs from people after they are released from custody. The bill was introduced by Sen. Melanie Scheibel (D‑Dist. 9) and presented by advocates from the Fines and Fees Justice Center.

SB 88 would bar NDOC from delivering full medical‑debt collection demands to people immediately upon release, a practice sponsors and witnesses said leaves formerly incarcerated people with steep bills, damaged credit reports and little chance to reestablish financial stability. The sponsor and supporters said the change is intended to reduce a barrier to reentry and to avoid the social harms that can increase recidivism.

The bill’s proponents described the current process: outside health providers bill NDOC; NDOC pays providers from an internal “inmate welfare” account; NDOC then seeks reimbursement from the incarcerated person’s account and, after release, by mailing a demand letter. Nick Shepach, Nevada state director of the Fines and Fees Justice Center, testified that public‑records requests showed roughly $13 million in outstanding debt for people who received outside care while incarcerated, and about $2 million added each year for people leaving prison. He said total collections over recent years were only about $6,000–$7,000 annually while NDOC spends “as much as $5,400 or so a year” attempting to collect the debt, not counting staff time.

Formerly incarcerated witness Frank Macias described receiving an $8,000 bill for outside care after a wrist injury and surgery while in NDOC custody. Macias said the department took most of the modest funds his family sent while he was incarcerated and later reported the debt to all three major credit bureaus after his release. "You owe $8,000. You got 30 days to pay this back, or we're gonna send you to collections," Macias said, describing the letter he received within 30 days of release.

NDOC Director James Dzurenda testified in neutral. He said NDOC’s mission is to give people tools to succeed on release and that collection practices can undermine that mission. He described the inmate welfare fund as a self‑sustaining account paid by commissary markups, phone and tablet revenues, and deductions from inmate accounts. Director Dzurenda also explained that Medicaid generally does not cover inpatient outside hospital care unless specific federal requirements or waivers apply, and that incarcerated people are not able to use personal insurance while in custody.

Committee members asked about tax consequences of forgiving debt, whether debt could be deferred rather than discharged, caps on debt, and how NDOC’s inmate welfare fund operates. Legal counsel Carly O'Krent said she would confirm whether federal tax rules (Form 1099‑C) would apply when a government entity discharges debt and that deferral was legally feasible; she also said tax rules may exempt discharged obligations for insolvent debtors. Sponsors said they had considered deferral but favored discharge to remove barriers that contribute to recidivism.

Several advocacy groups testified in support: the ACLU of Nevada, the Washoe County Public Defender’s Office, Return Strong, Clark County Public Defender’s Office, Food Bank of Northern Nevada and family members and advocates calling in from the public. Callers described the debt as a barrier to housing, employment and successful reentry and urged passage.

After testimony, the committee later returned in a work session and moved SB 88 to pass. Vice Chair Marzola made the motion and Assembly Member Dalia seconded. A roll‑call count is not specified in the transcript; the record shows the motion passed. Assembly Member Urich stated he would vote "yes with a reservation" and asked for follow‑up amendments and conversations on tax and policy details.

Why this matters: Sponsors and supporters said the practice of billing people after release creates a financial and credit‑report burden for people trying to reenter society and that NDOC’s collections bring little revenue while imposing administrative cost and hindering rehabilitation.

What happens next: The committee advanced the bill. The sponsor and legal staff said they would continue follow‑up on tax implications and other technical details raised in questioning.