Colorado Attorney General Phil Weiser recently released a press release, supporting new Senate Bill 23-093 called “Increase Consumer Protections Medical Transactions.” Specifically, the bill would reduce medical debt for Colorado residents and make health care more affordable and accessible, protecting Coloradans from “high interest rates for medical debt and confusing debt collection practices that lead to long-lasting debt and financial instability.”
According to the press release, the Consumer Financial Protection Bureau reported that Coloradans held more than $1.3 billion in medical debt and over 12% had medical debt in collections. Also, a Colorado Health Institute survey found that 46.2% of individuals with medical debt had accumulated credit card debt for medical expenses. As such, the proposed bill includes requirements for hospitals and medical debt collectors.
- Under the bill, hospitals must provide self-pay patients cost estimates for medical procedures and services before treatment and upon written request, so patients can make more informed decisions about their health care and potentially avoid unexpected and unmanageable medical bills. The bill also makes it a deceptive trade practice to violate laws, such as the federal “No Surprises Act” and other laws concerning billing practices (e.g., balance billing).
- Medical Debt Collectors. Medical debt collectors would have a 3% annual cap on medical debt interest rates to prevent accumulating excessive debt that patients may be unable to pay off. They must also verify the total debt owed upon request and provide an itemized debt statement before debt collection, including the amount due when generating the statement, “reflecting interest, fees, payments, and credits.”
The proposed bill also sets out requirements for medical debt collectors to follow if entering into a payment plan, including providing notice before accelerating or declaring the plan in default. Further, collectors must stop debt collection if a patient appeals the debt, and they cannot report the debt to a consumer reporting agency until after a specified period if the patient fails to comply with a payment plan.
Lastly, the bill would expand the Colorado AG’s authority to protect consumers from deceptive billing practices. This follows AG Weiser’s recent investigation against medical billing company Flatirons for sending deceptive billing notices, stating they were “not a bill,” but expected consumers to pay. Further, Flatirons sent the notices on behalf of surgical assistants not covered by patients’ insurance. As part of the settlement, Flatirons refunded the 40 patients who paid on these misleading bills.
Why It Matters
The Colorado AG’s support for a bill requiring hospitals and medical debt collectors to adhere to the strict requirements shows his deep investment in holding bad industry actors accountable through regulatory oversight expansion.
Troutman Pepper State Attorneys General Team
|Ashley Taylor – Co-leader and Firm Vice Chair |
Ashley is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
|Clay Friedman – Co-leader |
Clay is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. Informed by nearly a decade in a state attorneys general office, and more than 25 years in private practice, Clay spends much of his time representing clients in singular or multistate regulatory actions. Clay has repeatedly led teams before all 50 state attorneys general and also handles matters with the Federal Trade Commission, the Consumer Financial Protection Bureau, and other local, state and federal agencies.
|Stephen Piepgrass |
Stephen represents clients interacting with, and being investigated by, state attorneys general and other enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, particularly in heavily regulated industries.
|Michael Yaghi |
Michael handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
|Ketan Bhirud |
As a former government official at the state and federal level, Ketan leverages extensive experience in the public and private sectors to skillfully represent client interests.
|Avi Schick |
A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
|Chris Carlson |
Chris represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
|Natalia Jacobo |
Natalia is an associate in the firm’s business litigation practice. She recently received her J.D from the University of California, Davis School of Law.
|Namrata Kang |
Namrata is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. Her work includes advising clients in regulatory investigations and compliance matters, in addition to representing clients in civil litigation matters.
|Susan Nikdel |
Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes. Susan also represents banks, fintechs, and financial services companies in connection with regulatory examinations and investigations brought by the CFPB, state attorneys general, and the California Department of Financial Protection and Innovation.
|Whitney Shephard |
Whitney is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
|Trey Smith |
Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement practice. His experience includes serving as a summer associate at the firm in 2021.
|Daniel Waltz |
An experienced litigator, Daniel advises and represents regional, national and international companies, financial institutions and insurers in all facets of business, complex commercial and insurance coverage litigation. He is committed to working with his clients to find creative solutions to meet their needs.
|Stephanie Kozol |
Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.