BOISE — A bill to put some limits on medical debt collection has been introduced into the Idaho Legislature.
Sponsored by House Assistant Majority Leader Jason Monks, R-Nampa, it would require medical providers to provide patients with a statement listing all services provided and the providers who rendered them, give patients some time before a medical provider could sue or refer a bill to collections, and set caps on legal fees in most medical debt cases. Melaleuca CEO Frank VanderSloot has been pushing for legislation to limit medical debt cases since last year, after an East Idaho News series on local debt collection company Medical Recovery Associates and associated law firm Smith, Driscoll and Associates.
Monks said he thinks the process is weighted too heavily in favor of hospitals and collection companies, and his bill would balance it out more.
“It was the right thing to do,” Monks said. “Our citizens out there deserve more transparency in the health care system ... and through no fault of their own often had been taken advantage of (by) a legal process.”
Monks’ bill would give medical providers 45 days from when a patient is discharged to submit a bill to a patient or his or her insurance and 60 days to provide the patient a summary of all services. After that, the patient couldn’t be charged interest for 60 days and the hospital or other medical provider couldn’t sue a patient or refer a bill to collections for 180 days.
Legal fees would be capped at $350 or 100% of the principal for an uncontested judgment and $750 or 100% for a contested one, although judges could tack on additional fees if they determine a patient was trying to avoid paying a legitimate debt. Patients who prevail in a contested judgment would also be entitled to collect legal fees.
Smith, Driscoll and Associates is co-owned by Bryan Smith, who is active in both the state and Bonneville County Republican parties, and Rep. Bryan Zollinger, R-Idaho Falls, works for the firm as a lawyer. Smith is a partner in Medical Recovery Services and Zollinger is its registered agent, according to publicly available documents. VanderSloot is reportedly the richest man in Idaho and has been a generous donor to Republican candidates and causes over the years. The East Idaho News series came out after Medical Recovery Services sued Melaleuca over an original $294 debt owed by one of its employees that ended up at more than $5,000 with legal fees. Medical Recovery Services had first sued the employee and then tried to garnish her wages. But Melaleuca wouldn’t garnish the employee’s wages since Medical Recovery Services had the employee’s name wrong, East Idaho News reported.
Last year, VanderSloot created a legal fund to represent people in some medical debt cases, most of them in Bonneville County and involving Medical Recovery Services.
VanderSloot and Monks have talked to some statewide medical and hospital groups about the bill. Monks told the House Business Committee they have gotten closer on some issues as a result but haven’t reached total agreement.
The committee voted unanimously to introduce the bill. Rep. Brooke Green, D-Boise, said she was “thrilled to see this come forward,” adding that many people end up going bankrupt due to medical debt.
“This truly does add transparency and help our Idaho families,” she said.
Monks said most medical debt cases are resolved amicably and this bill wouldn’t affect them. If there is a full hearing on the bill, he said he would bring data showing the number of people affected by medical debt, and he could bring hundreds of people with stories about how they suffered negative effects such as having their credit ruined, often by small bills they didn’t know about.
“There are plenty of examples of where people have unknowingly been subjected to predatory practices on the collections side of it … for very small bills,” Monks said.
Editor's note: This article has been updated to clarify that Zollinger is Medical Recovery Services' registered agent.