ST PAUL, Minn. — Minnesota lawmakers are proposing an array of fixes to help consumers overcome the burden of medical debt, including changes in the way providers and collectors target patients.
The legislation, dubbed the Minnesota Debt Fairness Act, is aimed at lifting families out of the debt spiral that can begin with one trip to the hospital.
"Credit card debt to buy a television is one thing. Debt because you had a heart attack or were hit by a car or have an illness is an entirely different thing," Gov. Tim Walz told reporters at a joint press conference with Attorney General Keith Ellison.
"And the idea that we’re charging massive interest on that, reporting it to the credit bureau and we’re destroying lives over it makes absolutely no sense."
The exact language of the bill hasn't been published yet, but the authors say it would make the following changes:
- Ban medical debt from being reported to credit bureaus
- Reduce interest on medical debts from 8 to 0 percent
- Ban the withholding of medical services due to unpaid debt
- Remove all medical debt creditors’ ability to intercept tax refunds through revenue recapture
- Repeal statutory liability for one’s spouse’s medical debt
- Require insurers to count copay assistance towards annual deductible and out-of-pocket limits
- Prohibit charging patients fees for coding errors
Anne St. Martin, of Inver Grove Heights, received a $250,000 bill from UMR because the medical team treating her son used the wrong billing code when they sought pre-authorization for a new drug. UMR is a third-party insurance administrator owned by United Healthcare.
"We discovered that the insurance denied the claim because there was a billing code error from our doctors," St. Martin told reporters.
"The genetics team that I entrusted to get proper documentation, prior authorization for my insurance made a mistake. And now they were billing me for their error."
St. Martin's 7-year-old son Leo was born with Pompe Disease, a rare ailment that causes an enlarged heart, muscle weakness, and breathing issues. He started enzyme replacement therapy as soon as the diagnosis was confirmed at the age of four months, and will need that drug for the rest of his life.
The treatment team recommended switching him to a new drug, Nexviazyme which is billed at $34,000 per month. UMR gave the green light for using that drug, but after Leo had received five doses, the insurance company said it wouldn't be covered due to a billing error.
"The insurance company then went back and denied all the payments for the previous five doses we had received," St. Martin explained.
"On top of all this, the insurance company dragged their feet, putting him on any other type of medication, leaving my son with an aggressive disease with no treatment for three months."
Months later, the insurer agreed to the new drug but Anne and her husband are still on the hook for the first five doses.
DFL Rep. Liz Reyer, the lead author of the House bill, said coding errors shouldn't become the responsibility of patients and their families.
"If a restaurant charges us the wrong price for dinner, they fix the bill and charge us the right amount," Rep. Reyer remarked.
"Charging patients for coding errors is a real issue contributing to medical debt and we’re going to stop it."
Walt Myers, of Lakeville, also spoke in support of the bill because of his experience inheriting the medical debt of his late wife Sue. After Sue lost her 23-year battle with cancer, Myers received a bill for $135,000 because the in-home hospice care provider the family had been referred to was out of network in their insurance plan.
He turned to Cancer Legal Care, a legal aid program that a social worker at the cancer treatment service had mentioned to him.
"We contested the billings, and after a few tense weeks, we got word from the insurance company that the entire bill was forgiven, $135,000 of surprise out-of-network medical bills were gone," Myers recalled.
"I can only imagine looking back what my life would be like if I hadn’t remembered that social worker’s seemingly random comment that day. I would probably still be making monthly payments on a six-figure medical bill that I didn’t owe."
Attorney General Ellison said medical debt is an exception to the general rule about consumer debt owed by a spouse.
"No other kind of debt can automatically be transferred between married couples without their consent, but Minnesota law currently allows that to happen. It’s unfair, and I believe it’s immoral."
The lead author of the Senate bill, Sen. Liz Boldon of Rochester, said she sees medical debt anxiety often in her other job as registered nurse in a hospital.
Sen. Boldon recalled treating a female patient who had severe injuries from a snowmobile accident. The nurse on the previous shift warned her that the injured woman's husband was stressing out about the cost of his wife's care.
"More than anything else he was incredibly anxious, fearful, about how they would pay for the essential care they needed without going bankrupt," Boldon told reporters. "He should've been able to focus on caring for his wife, but the fear of being entrapped in debt was all encompassing."
Reporters also heard from Katy Drahos, who leads the Access to Justice program at the Minnesota Bar Association.
The organization published a comprehensive study of consumer debt litigation in Minnesota last year. The study found that debt claims are filed against Black and Latino Minnesotans at double the rate they're filed against non-Hispanic, white Minnesotans. And families in lower income neighborhoods are more likely to be taken to court over debt.
Drahos said the actual number of medical debt claims is probably higher than what's visible at the surface because they may appear as other types of cases.
"That debt has been sold to collectors, or individuals put medical debt on their credit cards and then default on those cards, or they prioritize paying their medical bills at the cost of other debts they owe."
As a parent of a child with cystic fibrosis, she's personally familiar with navigating bumps in the road when it comes to billing and insurance.
"I’ve seen how one small mistake, or one small fine print policy can cause incredible confusion, stress and anxiety."
Lt. Gov. Peggy Flanagan said she was hospitalized often for asthma as a child and the medical debt created financial hardships for her family.
"That was a really big struggle for my mom just to have her baby who was sick and struggled to breathe and hospitalized, but the financial impact on our family was significant. My mom needed to file for bankruptcy because of medical debt and that really took us a long time to recover," Flanagan recalled.
"I remember feeling guilty that I got sick. And there are kids, there are families who feel that, too. They shouldn’t have to."