SIGNED INTO LAW - "Louisa Carman Medical Debt Relief Act"

A3861, sponsored by sponsored by Assemblypersons Reynolds-Jackson (Hunterdon and Mercer), DeAngelo (Mercer and Middlesex), Verrelli (Hunterdon and Mercer), and Conaway (Burlington), “Louisa Carman Medical Debt Relief Act.” VIEW

Identical Legislation: S2806, sponsored by Senators Turner (Hunterdon and Mercer) and Ruiz (Essex and Hudson), “Louisa Carman Medical Debt Relief Act.” VIEW.

This legislation was signed into law by Governor Murphy on July 22, 2024.

NJDA Statement: This law involves medical debt incurred by patients. It limits a medical creditor or medical debt collectors’ ability to collect payment from debt incurred by a patient. The NJDA emphasized to legislators that we understand and appreciate the intent of this law, but that it should not apply to dentistry, given dentistry is different in that it is highly predictable and rarely catastrophic.

It is important to note that this does not impact your ability to collect payment or file suite to collect payment from patients, but it does impact providers:

1. Dental providers will no longer be able to report a patient’s medical debt to consumer reporting agencies for services performed after the effective date of the act. Additionally, any medical debt less than $500 cannot be reported regardless of when it was incurred.
2. Dental providers must wait 120 days after sending the first bill for a medical debt before engaging in any collection actions. This includes providing an additional bill and a notice 30 days before initiating such actions, identifying the collection methods and the deadline for payment​​.
3. Providers must offer reasonable payment plans to patients, with monthly payments not exceeding three percent of the patient’s monthly income.
4. Dental providers are prohibited from selling a patient’s medical debt to another party unless there is a legally binding written agreement preventing the debt buyer from engaging in certain collection actions.
5. Dental providers cannot garnish wages for patients with an annual income less than 600 percent of the federal poverty level.

To read the full bill, click HERE.