Senate REDW narrows back‑billing windows, sets enforcement framework for Fair Billing Practices Act

Senator Karina L. Magoffner, chair of the Senate Standing Committee on Resources, Economic Development, and Workforce (REDW), presided over a June 16 committee meeting to continue deliberations on House Bill 24-59 (HD1), the proposed CNMI Fair Billing Practices Act.

Magoffner summarized the bill as aimed at protecting consumers from surprise back-billing while allowing service providers to recover lawfully due amounts. "This bill will also require companies to explain why a back bill was issued," she said, and added that the draft limits most back-bills to four months, requires detailed billing information and at least 30 days' notice before payment is due, allows payment plans, and prevents utility shutoffs while a billing dispute is pending.

The session focused on aligning dispute and notice timelines, clarifying dispute‑resolution paths, and setting practical enforcement mechanisms. Members said the bill should protect consumers without imposing unworkable burdens on utilities and health providers.

Supporters and practical concerns

Senator Ronnie M. Calvo voiced support for the bill’s consumer‑protection intent and urged stakeholder engagement to ensure the rules are implementable. "This is a great consumer protection safeguard," Calvo said, adding that improved timelines and communication are needed so utilities and hospitals can plan financially while responding to disputes.

Several members noted that the Commonwealth Healthcare Corporation (CHCC) and the utility CUC had raised timing and systems‑capacity concerns during prior review. Members also recalled individual cases where disputes took years to resolve; the chair cited an instance where a customer's dispute took roughly a decade to settle, underscoring the need for a statutory timeline.

Key amendments the committee agreed to draft

- Align dispute and notice windows (section 109a): Members identified a contradiction between the provider notice period and the customer's dispute window. The committee agreed to amend section 109a so the dispute window mirrors the notice period (change recorded from 60 days to 30 days) to avoid confusing, conflicting deadlines for customers and providers.

- Provider response time (section 109b): The committee resolved that providers must respond in writing within 10 working (business) days after a dispute is filed, replacing the draft language that read 15 days. The change was framed as standardizing expectations and limiting opportunities to delay resolution.

- Referral trigger for unresolved disputes (section 109c): Members agreed unresolved disputes that have not been resolved at the management level after an agreed internal period (committee discussion centered on a 60‑day trigger) should be referred to the appropriate oversight body. Private companies' disputes would go to the attorney general's consumer protection division; utility and health‑care disputes would go to their respective boards (for example, CPUC for utilities, CHCC board for hospital billing matters). The committee directed staff to draft clear language identifying triggers and recipients for referrals.

- Enforcement, fines and funding (section 111): The bill's existing maximum fine—"not to exceed $5,000 per incident"—was retained. Members stressed the need for a usable enforcement mechanism and proposed that fines and fees collected be placed into a revolving fund to finance enforcement operations. The committee asked that enforcing offices be given discretion to set reasonable penalties within the statutory cap, taking into account office costs and proportionality.

- Suspension/revocation for repeated violations: The committee grappled with how to define "repeated violations." Because public utilities and the hospital serve broad populations, members discussed limiting license‑suspension language to private sector providers and granting enforcing boards discretion. Committee discussion noted models such as a three‑strike approach and also recommended language clarifying that each unlawful back bill to a separate customer account may be treated as a separate violation.

- CHCC billing‑system exemption shortened: The draft previously allowed CHCC a 24‑month exemption while it upgrades billing systems. Members supported reducing that exemption to 12 months, with the option to request an extension supported by specific justification and progress reporting. The committee noted that this aligns with many health‑care billing practices and that CHCC had signaled agreement.

Process and next steps

No final vote on the bill was taken. The committee recorded a motion earlier in the meeting to adopt the day's agenda (moved and seconded and carried by voice vote). Chair Magoffner directed legal counsel and the legislative assistant to prepare the amendment language reflecting the committee's agreed changes. The committee recessed for lunch and scheduled a 3:00 p.m. resumption to consider the drafted amendments.

Why it matters

If enacted with the committee’s proposed changes, HB 24-59 (HD1) would impose clearer timelines that limit how far back providers may bill consumers, standardize dispute and response windows to reduce long unresolved cases, and create a practicable enforcement path tied to funding for the offices that must enforce the law. Lawmakers and stakeholders said those features aim to balance consumer protections with operational realities for utilities and health‑care providers.

The committee is scheduled to reconvene at 3:00 p.m. to review and act on the drafted amendments.