Protect North Carolinians from Medical Debt.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 672

Short Title: Protect North Carolinians from Medical Debt. (Public)
Sponsors: Senator Burgin (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S672-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ADOPT THE PRO-FAMILY, PRO -CONSUMER MEDICAL DEBT 2
PROTECTION ACT TO LIMIT THE ABILITY OF L ARGE MEDICAL FACILITIES TO 3
CHARGE UNREASONABLE INTEREST RATES AND EMPLOY UNFAIR TACTICS IN 4
DEBT COLLECTION. 5
The General Assembly of North Carolina enacts: 6
7
PART I. MEDICAL DEBT PROTECTION ACT 8
SECTION 1. Chapter 131E of the General Statutes is amended by adding a new 9
Article to read: 10
"Article 11C. 11
"Medical Debt Protection Act. 12
"§ 131E-214.21. Short title and purpose. 13
This Article may be cited as the "Medical Debt Protection Act." The purpose of this Article 14
is to reduce burdensome medical debt and to protect patients in their dealings with medical 15
creditors, medical debt buyers, and medical debt collectors with respect to such debt. This Article 16
is a consumer protection statute and shall be liberally and remedially construed to effectuate its 17
purposes. 18
"§ 131E-214.22. Definitions. 19
The following definitions apply in this Article: 20
(1) Consumer. – A natural person who has incurred a debt or alleged debt for 21
primarily personal, family, or household purposes. 22
(2) Consumer reporting agency. – Any person, which, for monetary fees, dues, or 23
on a cooperative nonprofit basis, regularly engages in whole or in part in the 24
practice of assembling or evaluating consumer credit information or other 25
information on consumers for the purpose of furnishing consumer reports to 26
third parties. 27
(3) External review. – Review of an adverse benefit determination, including a 28
final internal adverse benefit determination, conducted pursuant to an 29
applicable State external review process as described in Part 4 of Article 50 30
of Chapter 58 of the General Statutes, a federal external review process as 31
described in 42 U.S.C. § 300gg-19, a review pursuant to 29 U.S.C. § 1133, a 32
Medicare appeals process, a Medicaid appeals process, or another applicable 33
appeals process. 34
(4) Extraordinary collection action. – An extraordinary collection action includes 35
any of the following: 36
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a. Selling an individual's debt to another party, except if prior to the sale, 1
the medical creditor enters into a legally binding written agreement 2
with the medical debt buyer which includes the following provisions: 3
1. The medical debt buyer or collector is prohibited from 4
engaging in any extraordinary collection actions to obtain 5
payment for the care. 6
2. The medical debt buyer is prohibited from charging interest on 7
the debt in excess of that described in G.S. 131E-214.35. 8
3. The debt is returnable to or recallable by the medical creditor 9
upon a determination by the medical creditor or medical debt 10
buyer that the individual is eligible for financial assistance. 11
4. If the individual is determined to be eligible for financial 12
assistance for emergency or medically necessary care and the 13
debt is not returned to or recalled by the medical creditor, the 14
medical debt buyer is required to adhere to procedures which 15
ensure that the individual does not pay, and has no obligation 16
to pay, the medical debt buyer and the medical creditor 17
together more tha n he or she is personally responsible for 18
paying in compliance with this Article. Such procedures shall 19
be specified in any agreement between a medical creditor and 20
a medical debt buyer. 21
b. Taking a confession of judgment or allowing a borrower to execute a 22
power of attorney to confess a judgment. 23
c. Actions that require a legal or judicial process, including, but not 24
limited to: 25
1. Attaching or seizing an individual's bank account or any other 26
personal property. 27
2. Commencing a civil action or arbitration against an individual. 28
(5) Gross charges. – A covered health care provider 's full, established price for 29
health care services that the covered health care provider charges uninsured 30
patients before applying any contractual allowances, discounts, or deductions. 31
(6) Health care services. – Services for the diagnosis, prevention, treatment, cure, 32
or relief of a physical, dental, behavioral, substance use disorder or mental 33
health condition, illness, injury, or disease. These services include, but are not 34
limited to, any procedures, products, devices, or medications. 35
(7) Household income. – Income calculated by using the methods used to 36
calculate Medicaid eligibility, as set forth in 42 C.F.R. 435.603. 37
(8) Internal review or internal appeal. – Review by a health insurance plan or other 38
insurer of an adverse benefit determination. 39
(9) Large health care facility. – Includes any of the following entities: 40
a. Any hospital licensed under this Chapter or Chapter 122C of the 41
General Statutes, whether a nonprofit subject to 26 U.S.C. § 501(c)(3), 42
a hospital owned by a county, municipality, the State, or a for -profit 43
entity. 44
b. Any outpatient clinic or facility affiliated with a hospital or operating 45
under the license of a hospital described in sub -subdivision a. of this 46
subdivision. 47
c. Any ambulatory surgical center licensed under this Chapter. 48
d. Any practice which provides outpatient medical, behavioral, optical, 49
radiology, laboratory, dental, or other health care services with 50
revenues of at least twenty million dollars ($20,000,000) annually and 51
General Assembly Of North Carolina Session 2025
Senate Bill 672-First Edition Page 3
is licensed under this Chapter or has medical providers performing 1
health care services pursuant to a license issued under Chapter 90 of 2
the General Statutes. 3
e. Any licensed health care professional who provides health ca re 4
services in one or more of the settings listed in sub -subdivisions a. 5
through d. of this subdivision and bills patients independently. 6
(10) Medical creditor. – Any entity that provides health care services and to whom 7
the consumer owes money for health care services, or the entity that provided 8
health care services and to whom the consumer previously owed money if the 9
medical debt has been purchased by one or more debt buyers. 10
(11) Medical debt. – A debt arising from the receipt of health care services. 11
(12) Medical debt buyer. – A person or entity that is engaged in the business of 12
purchasing medical debts for collection purposes, whether it collects the debt 13
itself or hires a third party for collection or an attorney-at-law for litigation in 14
order or other collection activity to collect such debt. 15
(13) Medical debt collector. – Any person that regularly collects or attempts to 16
collect, directly or indirectly, medical debts originally owed or due or asserted 17
to be owed or due another. A medical debt buyer is considered to be a medical 18
debt collector for all purposes. 19
(14) Medical debt mitigation policy (MDMP). – A financial assistance policy 20
which shall be written in accordance with this Article. 21
(15) Patient. – The person who received health care services and, for the purposes 22
of this Article, as context requires, the person legally obligated to pay for the 23
provision of the health care services. 24
"§ 131E-214.23. Medical debt mitigation policy for large health care facilities. 25
(a) All large health care facilities are required to develop a written MDMP that complies 26
with this Article and any implementing rules. This requirement shall apply whether or not the 27
large health care facility is required to develop a financial assistance policy under 26 U.S. C. § 28
501(r)(4) and implementing regulations. 29
(b) The MDMP must, at a minimum, include the following: 30
(1) A written financial assistance policy that applies to all emergency and other 31
medically necessary health care services offered by the covered health ca re 32
provider. 33
(2) The basis for calculating amounts charged to patients. 34
(3) A plain language summary of the financial assistance policy, which shall not 35
exceed two pages in length. 36
(4) The eligibility criteria for financial assistance including when such assistance 37
includes free or discounted care. 38
(5) A summary of the type of financial assistance that is available as set forth in 39
this Article. 40
(6) The method and application process that patients are to use to apply for 41
financial assistance. 42
(7) The information and documentation the large health care facility may require 43
an individual to provide as part of the application. 44
(8) The reasonable steps that the provider will take to determine whether a patient 45
is eligible for financial assistance. 46
(9) The billing and collections policy, including the actions that may be taken in 47
the event of nonpayment, which shall comply with all applicable parts of this 48
Article and other applicable municipal, State, or federal laws. 49
(10) Information about available payment plans for patients, including available 50
time periods for repayment and caps on payment amount. 51
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(11) Measures the f acility will take to widely publicize the policy within the 1
community to be served by the facility in accordance with G.S. 131E-214.27. 2
(c) The MDMP must be approved by the owners or governing body of a health care 3
provider and shall be reviewed by the owners or governing board annually. 4
"§ 131E-214.24. Implementation of the medical debt mitigation policy. 5
(a) In addition to any other actions required by applicable municipal, State, or federal 6
law, large health care facilities must take the following steps before seeking payment for any 7
emergency or medically necessary care: 8
(1) Determine whether the patient has health insurance. 9
(2) If the patient is uninsured, offer to screen the patient for public or private 10
insurance eligibility and offer assistance if the patient chooses to apply for 11
public or private insurance, however, a patient 's refusal to be screene d shall 12
not be grounds for denying financial assistance. 13
(3) Offer to screen the patient for other public programs which may assist with 14
health care costs; however, a patient 's refusal to be screened shall not be 15
grounds for denying financial assistance. 16
(4) If available, use information in the possession of the large health care facility 17
to determine if the patient is qualified for free or discounted care as set forth 18
in G.S. 131E-214.25. 19
(5) Determine whether the patient is eligible for assistance under the large health 20
care facility 's Presumptive Eligibility Policy adopt pursuant to 21
G.S. 131-214.26(b). 22
(6) If a patient submits an application or eligibility documentation pursuant to 23
G.S. 131E-214.26(c), the large health care facility shall issue a determination 24
of eligibility on the application or eligibility documentation within 14 days of 25
receipt of the application or eligibility documentation. The facility shall 26
suspend all billing and collection actions while an eligibility determination is 27
pending. 28
(7) A large health care facility shall provide a patient all of the following 29
notifications: 30
a. When an application for financial assistance is received. 31
b. During review of the application, if the application is found to be 32
missing any components or needs to be updated. This notice shall 33
include details about the information the patient needs to provide to 34
complete the application. 35
c. If the application is denied, a notice of the denial including the basis 36
for the denial and information on how to appeal the decision. 37
d. If the application is approved, notice of the approval including a 38
detailed explanation of the costs charged to the patient, how the 39
financial aid policy has been applied to the costs charged to the patient, 40
and a detailed explanation of w hat the patient does or will owe. This 41
notice shall also explain how to apply for additional financial 42
assistance for any remaining balance. 43
(c) A large health care facility shall accept and consider a patient 's application for 44
financial assistance if it is submitted within one year of the date of the first bill after the provision 45
of the health care services. However, if the patient is the subject of collection activity by the 46
facility or a medical debt collector, including a lawsuit to collect a medical debt, and the patient 47
submits, or updates by providing eligibility documentation for, an application for financial 48
assistance, the large health care facility shall accept and process the application at any time. If 49
the patient submits a financial assistance application to a medical debt collector, the medical debt 50
collector shall forward the application to the large health care facility within two business days 51
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and shall cease collection activity until notified by the large health care facility of the outcome 1
of the application and any debt forgiven or new repayment terms. 2
(d) For a patient who has been found to be eligible for financial assistance, no initial 3
payment on a monthly payment plan shall be due within the first 90 days after the health care 4
services were provided. 5
(e) The large health care facility shall create an appeals process under which it will 6
evaluate denials of financial assistance upon request of a patient. Any denial of financial 7
assistance shall inform a patient of the right to appeal the denial. 8
"§ 131E-214.25. Eligibility for medical debt mitigation policy financial assistance. 9
(a) A large health care facility 's financial assistance policy adopt ed as required by this 10
Article shall be available, at a minimum, to any patient meeting the eligibility criteria i n this 11
section. 12
(b) The following patients shall qualify for financial assistance under the MDMP in 13
accordance with the following terms , which applies to any charges for health care services that 14
are not covered by insurance and would otherwise be billed to the patient: 15
(1) Patients with household income of zero percent (0%) to three hundred percent 16
(300%) of the federal poverty level shall receive free care. 17
(2) Patients with household income of more than t hree hundred percent (300%) 18
up to four hundred percent (400%) of the federal poverty level shall be 19
charged no more than an amount calculated in the following manner: 20
a. Recalculate the patient 's bill using the Medicare reimbursement rate 21
applicable on the dates of service. 22
b. The patient shall be charged no more than twenty-five percent (25%) 23
of the recalculated bill. 24
(3) Patients with household income of more than four hundred percent (400%) up 25
to six hundred percent (600%) of the federal poverty level shall receive the 26
same discount listed in subdivision (2) of subsection (b) of this section if the 27
patient or the patient 's household has incurred medical expenses during the 28
previous 12 months which in total exceed t five percent ( 5%) of the 29
household's income. For purposes of this section, medical expenses inclu des 30
all bills for medically necessary health care services received by a household 31
member during the previous 12 months, including the bill the large health care 32
facility is currently seeking payment on. 33
(4) In addition to other financial assistance provided under this Article, no patient 34
with household income at or below four hundred percent (400%) of the federal 35
poverty level shall be required to pay more than two thousand three hundred 36
dollars ($2,300) in cumulative medical bills to large health care facili ties in 37
any 12 month period. Upon patient request and documentation, any health care 38
services that have been delivered by one or more large health care facilities 39
after the two thousand three hundred dollar ($2,300) limit has been met must 40
be provided as free care. A large health care facility may require a patient to 41
provide proof of payment showing the payment cap has been reached except 42
for payments made to that large health care facility which should have record 43
of the payment. 44
(c) If a patient is approved for financial assistance, the patient shall remain qualified for 45
the same level of financial assistance for at least one year from the date the financial assistance 46
is approved, with the opportunity to renew. 47
"§ 131E -214.26 Determining eligibilit y for medical debt mitigation policy financial 48
assistance. 49
(a) As part of a large health care facility 's MDMP, the facil ity shall adopt a process to 50
screen for presumptive eligibility for financial assistance and establish a process for determining 51
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non-presumptive eligibility. The facility shall not issue a bill to a patient until the patient has 1
been screened for presumptive eligibility and notified if found presumptively eligible. 2
(b) The presumptive eligibility screening policy shall comply with all of the following: 3
(1) Shall not require a patient to provide documentation or other verification of 4
meeting presumptive eligibility criteria. 5
(2) Shall require patients to be screened for presumptive eligibility prior to or at 6
check-in for non-emergency services and as soon as reasonably possible and 7
prior to discharge, if feasible, for emergency services. 8
(3) Shall allow patients to attest to their qualifications for Medicaid, with an 9
understanding that the patient will not be financially penalized for 10
misreporting qualifications if the report was made in good faith and the patient 11
is later determined to be ineligible. 12
(4) Shall deem a patient presumptively eligible for financial assistance if the 13
patient meets any one or more of the following criteria: 14
a. Experiencing homelessness. 15
b. Is mentally incapacitated with no legal guardian to act on their behalf. 16
c. The patient or someone in the patient 's household is enrolled in 17
Medicaid. 18
d. The patient or someone in the patient 's household is enroll ed in any 19
means-tested public assistance program, including S upplemental 20
Security Income, Medicare Low Income Subsidy, Low Income Energy 21
Assistance Program, Temporary Assistance to Needy Families, 22
Women, Infants and Children Nutrition Program, o r Supplemental 23
Nutrition Assistance Program. 24
e. The patient is enrolled in an organized community -based program 25
providing access to medical care that assess es and documents limited 26
low-income financial status as criteria. 27
f. By income. A large health care f acility may use third -party software 28
tools or services to determine patient eligibility for income -based 29
presumptive eligibility only if they are unable to determine a patient's 30
eligibility through other means. If the facility is unable to determine a 31
patient's eligibility through other means, it may choose to use a 32
consumer report, as defined in section 603(a) of the Fair Credit 33
Reporting Act, 15 U.S.C.1681a(d), or any score or rating based on a 34
consumer report information. Before obtaining any consum er 35
information to determine income eligibility, a facility must obtain 36
consent for the credit check from the patient. Th e patient 's consent 37
must be given in writing on a standalone document and shall be 38
effective for no more than 30 days. 39
(5) A large health c are facility may grant financial assistance based on a 40
determination of presumptive eligibility relying on any information obtained 41
by the facility or in the facility's possession, but shall not use that information 42
to deny financial assistance. 43
(c) If a patient is found to not be presumptively eligible for financial assistance after 44
being screened in accordance with subsection (b) of this section, then the large health care facility 45
must provide a process for patients to apply for financial assistance that complies with all of the 46
following: 47
(1) Allows patients to apply by phone, online, by mail, or in-person. 48
(2) May require patients to provide proof of income. Patients may prove income 49
by submitting any of the following: 50
a. Most recent tax return. 51
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b. A pay stub. 1
c. Documentation of public assistance or participation in any 2
means-tested program, including those listed in sub-subdivision (4) of 3
subsection (b) of this section. 4
d. Any documentation of household income which the Office of the State 5
Treasurer has identified as a valid form of documentation for the 6
purposes of this Article. 7
(3) A large health care facility may grant financial assistance notwithstanding a 8
patient's failure to pro vide proof of income and may rely on, but not require 9
other evidence of eligibility. 10
"§ 131E-214.27 Medical debt mitigation policy public education and information. 11
(a) A large health care facility must publicize its MDMP widely by: 12
(1) Making the policy and the financial assistance application form easily 13
accessible online, through the large health care facility's website and through 14
any patient portal or other online communication portal used by patients of 15
the health care provider. As part of the information available online related to 16
the MDMP, the large health care facility shall also identify prohibited 17
collection actions and unlawful debt collection practices that the medical 18
creditor or medical debt collector cannot take under state and federal law, 19
including causing an individual 's arrest, holding a spouse liable for an 20
individual's medical debt, foreclosing on an individual 's real property, and 21
garnishing wages or state income tax refunds and shall provide information 22
about filing a complaint with the Attorney General if the patient 's rights are 23
violated. 24
(2) In addition to any other requirements in this Article, making paper copies of 25
the MDMP and application form available upon request and without charge, 26
both by mail and in the large health care facility's office. For hospitals, copies 27
should be available, at a minimum, in the emergency room, if any, billing and 28
financial assistance application areas, and admissions areas. 29
(3) Notifying and informing members of the community served by the large 30
health care facility about the MDMP in a manner reasona bly calculated to 31
reach those members who are most likely to require financial assistance with 32
such efforts commensurate to the size and income of the provider. 33
(4) Notifying and informing individuals who receive care from the large health 34
care facility about the MDMP by: 35
a. Offering a paper copy of the MDMP to patients as part of the patient's 36
first visit, or in the case of a hospital facility, during the intake and 37
discharge process. 38
b. Including a conspicuous written notice on billing statements, whether 39
sent by the large health care facility or a medical debt collector, that 40
notifies and informs recipients about the availability of financial 41
assistance and payment plans and includes the telephone number of 42
the large health care facility 's office or depar tment that can provide 43
information about the financial assistance policy and application 44
process and the direct website address where copies of the MDMP and 45
application may be obtained. 46
c. Setting up conspicuous public displays or other measures reasonably 47
calculated to attract patients ' attention that notify and inform patients 48
about the MDMP in public locations in the large health care facility 's 49
office. For hospitals, displays should be posted in the emergency room, 50
General Assembly Of North Carolina Session 2025
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if any, billing and financial assistan ce application areas, and 1
admissions areas, at a minimum. 2
(b) In all written attempts by a medical creditor or medical debt collector to collect a 3
medical debt for health care services provided by a large health care facility, the patient must be 4
informed of any financial assistance policy available through the large health care facilit y and 5
given the same information about prohibited debt collection practices as required under 6
subdivision (a)(1) of this section. 7
(c) In all oral attempts by a medical credi tor or debt collector to collect a medical debt 8
for health care services provided by a large health care facility, the patient must be informed of 9
any financial assistance policy available through the large health care facility and the website 10
address where the information on prohibited debt collection practices required under subdivision 11
(a)(1) of this section, and given the same information about prohibited debt collection practices 12
as required under subdivision (a)(1) of this section, as well as the phon e number and website 13
address where such information can be accessed. 14
(d) Medical creditors and medical debt collectors shall notify all patients about the risks 15
of paying for medical services with a credit card, including at the point of transaction when a 16
patient attempts to pay a medical creditor or debt collect or with a credit card. The notification 17
must inform the patient that by using a credit card to pay for medical services , the patient may 18
be forgoing state and federal protections regarding medical debt and financial assistance policies. 19
Before accepting a credit card payment fro m a patient, a medical creditor or medical debt 20
collector shall obtain a signed, written waiver f rom the patient acknowledging that the patient 21
has received the notice required by this subsection. 22
(e) A large healthcare provider may not require a credit card pre -authorization or for a 23
patient to have a credit card on file prior to providing emergency or medically necessary services 24
to a patient. 25
"§ 131E-214.28. Medical debt mitigation policy language access. 26
(a) Notices sent by large health care facilities shall include the following language: "This 27
document contains important information about financial assistance for your bill. Contact [insert 28
name and phone number of large health care facility] for free translation assistance," translated 29
in the 1 5 languages most frequently spoken by limited English proficient households as 30
determined by U.S. Census Bureau data in the large health care facility 's service area. This 31
language is required to be included on all of the following: 32
(1) The large health care facility's MDMP. 33
(2) Financial assistance application forms, documents, and notices required under 34
G.S. 131E-214.24. 35
(3) Any document seeking payment from a patient, including bills, invoices, and 36
collections communications. 37
(4) Any document or notice related to a credit card payment under 38
G.S. 131E-214.27. 39
(5) Any document or notice related to a facility fee, including those described in 40
G.S. 131E-274. 41
(b) A large health care facility must accommodate all significant populations that have 42
limited English proficiency by translating the MDMP , application form, and related documents 43
into the primary languages spoken by such populations. A large health care facility will satisfy 44
this translation requirement if it makes available translations of these documents in the language 45
spoken by each limited English proficiency language group that constitutes the lesser of 1,000 46
individuals or five percent (5%) of the community served by the large health care facility or the 47
population likely to be affected or encountered by the large health care facility. A large health 48
care facility may determine the percentage or number of limited English proficiency individuals 49
in the large health care facility's community or likely to be affected or encountered by the hospital 50
facility. 51
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(c) A large health care facility must accommodate any patient with limited English 1
proficiency, who is part of a population which falls below the numerical thresholds estab lished 2
in subsection (b) of this section, by providing oral interpretation services to the patient upon 3
request and at no cost to the patient to explain the MDMP and its application. 4
(d) A large health care facility must accommodate any patient with limite d English 5
proficiency to answer questions from the patient regarding the MDMP, the application form, any 6
written determination of eligibility, any communication regarding financial assistance from the 7
large health care facility , and any notice sent to patients. A large health care facility may 8
accommodate these patients by providing oral interpretation services to the patient upon request 9
and at no cost to the patient. 10
"§ 131E-214.29. Prohibited acts in collecting medical debt. 11
(a) The following prohibited collection actions may not be used by any medical creditor 12
or medical debt collector to collect debts owed for health care services: 13
(1) Causing an individual's arrest. 14
(2) Causing an individual to be held in civil contempt or imprisoned under 15
G.S. 5A-21 or G.S. 1-302 if the only reason supporting the contempt is the 16
debtor's failure to pay a judgment for medical debt. 17
(3) Foreclosing on an individual's real property. 18
(4) Placing a lien on an individual 's real property or engaging in any action that 19
would result in a lien being placed on an individual's real property. 20
(5) Acquiring a security interest or lien in the individual 's real property, by 21
agreement or otherwise. 22
(6) Garnishing wages or State income tax refunds. 23
(b) No medical creditor or medical debt collector may communicate with or report any 24
information to any consumer reporting agency regarding a consumer 's medical debt, unless the 25
communication is made to resolve an erroneous reporting. 26
(c) Any medical debt or portion of medical debt that is reported to a consumer reporting 27
agency in violation of this section shall be void. 28
(d) Nothing in this Article shall be construed as exempting a medical creditor or medical 29
debt collector from the provisions of Chapter 75 or Chapter 58 of the General Statutes, as those 30
Chapters are applicable. 31
"§ 131E-214.30. Limitations on extraordinary collection actions. 32
(a) No medical creditor or medical debt collector shall engage in any permissible 33
extraordinary collection actions until 180 days after the first bill for a medical debt has been sent. 34
(b) If a patient is eligible for financial assistance under the large health care facility 's 35
MDMP, a medical creditor or medical de bt collector shall not engage in any extraordinary 36
collection actions against the eligible patient. 37
(c) Medical creditors and medical debt collectors shall not engage in any extraordinary 38
collection actions during a state or federally declared state of emergency or a public health 39
emergency in the area where the patient lives. 40
(d) At least 30 days before taking any extraordinary collection actions, a medical creditor 41
or medical debt collector must provide to the patient a notice containing the following: 42
(1) In the case of large health care facilities and medical debt collectors collecting 43
debt for health care services provided by such facilities, stating that financial 44
assistance and payment plans are available for eligible individuals and 45
providing a plain-language summary of the MDMP. 46
(2) Identifying the extraordinary collection actions that will be initiated in order 47
to obtain payment. 48
(3) Providing a deadline after which such extraordinary collection actions will be 49
initiated, which date is no earlier than 30 days after the date of the notice. 50
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(4) Identifying unlawful debt colle ction actions and practices that the medical 1
creditor or debt collector are barred from taking or conducting under state and 2
federal law, including causing an individual 's arrest, holding a spouse liable 3
for an individual's medical debt, foreclosing on an individual's property, and 4
garnishing wages or state income tax refunds and shall provide information 5
about filing a complaint with the Attorney General if a patient 's rights are 6
violated. 7
(e) A large health care facility or a medical debt collector collecting debt for health care 8
services provided by such a facility shall not use any extraordinary collection actions unless these 9
actions are described in the large health care facility's billing and collections policy. 10
(f) If a large health care facility or a medical debt collector collecting debt for health care 11
services provided by such a facility bills or initiates collection activities and the patient is later 12
found eligible for financial assistance, within 90 days from the date eligibility is determined the 13
large health care facility or medical debt collector shall reverse any extraordinary collection 14
actions, includin g d ismissing or vacating any collection lawsuits over the medical debt and 15
returning any funds or property taken as part of judgment enforcement. 16
(g) If the patient has paid any part of the medical debt or any of the patient 's funds have 17
been seized or levied in excess of the amount that the patient owes after application of financial 18
assistance, within 90 days from the date eligibility is determined the large health care facility or 19
medical debt collector shall refund any excess amount to the patient with interest. Interest shall 20
accumulate beginning the day eligibility is determined. 21
"§ 131E-214.31. Price information. 22
(a) All large health care facilities must post price information on their internet websites. 23
This information must be accessible via a link from the website 's homepage and at a minimum 24
must include the following: 25
(1) A list of gross charges for all health care services. 26
(2) Next to the relevant gross charge, a list of the amounts that Medicare would 27
reimburse for the health care service. 28
(3) Next to the relevant gross charge, the amount a patient would be required to 29
pay under each level of financial assistance. 30
(4) Plain-language titles or descriptions of health care services that can be 31
understood by the average patient. 32
(b) A large health care facility that is not in compliance with this section on the date that 33
items or services were provided to a patient shall not initiate or pursue a collection action against 34
the patient for a debt owed for the items or services. 35
"§ 131E-214.32. Liability for medical debt. 36
No spouse or other person shall be liable for the medical debt or nursing home debt of any 37
other person age 18 or older, or any other damages related to the collection of the patient 's bill. 38
A person may not voluntarily consent to assume liability, and any such agreement shall be 39
unenforceable. 40
"§ 131E-214.33. Verification. 41
Before requesting payment from a pati ent, or within 60 days of a patient 's written or oral 42
request, a medical creditor or medical debt collector shall provide a patient with an itemized bill 43
at no cost to the patient. The itemized bill shall state: 44
(1) The name and address of the medical creditor. 45
(2) The dates of service. 46
(3) The dates the medical debts were incurred, if different from the dates of 47
service. 48
(4) A detailed list of the specific health care services provided to the patient. 49
(5) A list of all health care professionals who treated the patient. 50
(6) The amount of principal for any medical debts incurred. 51
General Assembly Of North Carolina Session 2025
Senate Bill 672-First Edition Page 11
(7) Any adjustment to the bill, including negotiated insurance rates or other 1
discounts. 2
(8) The amount of any payments received, whether from the patient or any other 3
party. 4
(9) Any interest or fees. 5
(10) Whether the patient was screened for financial assistance. 6
(11) Whether the patient was found eligible for financial assistance and, if so, the 7
amount due after all financial assistance has been applied to the itemized bill. 8
(12) That financial assistance may be available and instructions on how to apply 9
for it. 10
(13) Information about payment plans available, including the duration of plans 11
and caps on payments. 12
"§ 131E -214.34. Prohibition against collection of medical debt during health insurance 13
appeals. 14
(a) A medical creditor or medical debt collector that knows or should have known about 15
an internal review, external review, or other appeal of a health insurance decision that is pending 16
now or was pending within the previous 180 days shall not do any of the following: 17
(1) Communicate with the consumer regarding the unpaid charges for health care 18
services for the purpose of seeking to collect the charges. 19
(2) Initiate a lawsuit or arbitration proceeding against the consumer relative to 20
unpaid charges for health care services. 21
(b) No medical creditor that knows or should have known about an internal review, 22
external review, or other appeal of a health insurance decision that is pending now or was pending 23
within the previous 180 days shall refer, place, or send the unpaid charges for health care services 24
to a medical debt collector, including by selling the debt to a medical debt buyer. 25
"§ 131E-214.35. Interest on medical debt. 26
(a) Interest on medical debt shall be limited to no more than two percent (2%) per annum. 27
Late payments shall not result in a default interest rate. If a patient is charged a late fee, that fee 28
shall not exceed the lesser of twenty-five dollars ($25.00) or one percent (1%). Patients eligible 29
for financial assistance shall not be charged any interest or late fees. 30
(b) The rate of interest provided in subsection (a) of this section shall also apply to any 31
judgments on medical debt, notwithstanding any other provision of law or agreement to the 32
contrary. 33
"§ 131E-214.36. Medical debt payment plans. 34
(a) Medical creditors and medical debt collectors shall offer any patient that qualifies for 35
financial assistance or who owes a medical debt over five hundred dollars ($500) a payment plan 36
of not less than 36 months and shall not require the patient to make monthly payments exceeding 37
five percent (5%) of the patient's household income. 38
(b) Any medical creditor or medical debt collector that agrees to a payment plan for a 39
medical debt shall provide a written co py of the payment plan to the consumer within five 40
business days of entering into the payment plan. This plan shall prominently disclose the rate of 41
any interest being applied to the debt in compliance with G.S. 131E-214.35 and the date by which 42
the account will be paid off in full, assuming the payments set by the schedule are made without 43
interruption. 44
(c) A consumer need not make a payment on the payment plan until the written copy has 45
been provided. 46
(d) A medical debt payment plan may be accelerated or declared in default or no longer 47
operative due to nonpayment only after the patient fails to make scheduled payments on the 48
payment plan for at least three consecutive months. Before declaring the payment plan no longer 49
operative, the medical creditor or medical debt collector shall make at least three reasonable 50
attempts to contact the patient by telephone or other method preferred by the patient. 51
General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 672-First Edition
Additionally, notice must be provided in writing that the payment plan may become inoperative 1
and informing the patient of the opportunity to renegotiate the payment plan. Prior to the payment 2
plan being declared inoperative, the medical creditor shall attempt to renegotiate the terms of the 3
defaulted payment plan, if requested by the patient. The medical creditor shall not commence a 4
civil action against the patient or responsible party for nonpayment until at least 90 days after the 5
payment plan is declared to be no longer operative. For purposes of this section, the notice and 6
telephone call to the patient may be made to the last known telephone number and address of the 7
patient. 8
(e) A payment plan shall not include any penalties or fees for prepayment, early payment, 9
or early payoff. 10
"§ 131E-214.37. Receipts for payments. 11
Within 10 business days of receipt of a payment on a medical debt, the medical creditor or 12
medical debt collector, or any of their agents receiving the payment, shall furnish a receipt to the 13
person that made the payment. All receipts shall include the following information: 14
(1) The amount paid. 15
(2) The date payment was received. 16
(3) The account's balance before the most recent payment. 17
(4) The new balance after application of the payment. 18
(5) The interest rate and interest accrued since the consumer's last payment. 19
(6) The consumer's account number. 20
(7) The name of the current owner of the debt and, if different, the name of the 21
medical creditor. 22
(8) Whether the payment is accepted as payment in full of the debt. 23
(9) The date of service when the health care services were provided. 24
"§ 131E-214.38. Debt forgiven by medical center. 25
Forgiveness of any part of an insured patient 's copayment, coinsurance, deductible, facility 26
fees, out-of-network charges, or other cost -sharing shall not be a breach of contract or other 27
violation of an agreement between the medical creditor and the insurer or payor. 28
"§ 131E-214.39. Private remedy. 29
(a) Any medical creditor or medical debt collector who violates this Article, regardless 30
of whether the violation was committed knowingly, shall be liable to the consumer against whom 31
the violation occurred in a private right of action for the greater of (i) up to treble the amount 32
fixed by a damages verdict in favor of the plaintiff, or (ii) civil penalties as the court may allow, 33
but not less than five hundred dollars ($500) nor greater than four thousand dollars ($4,000) for 34
each violation. 35
(b) If judgment is entered in favor of a plaintiff for a claim for violation of this Article, 36
the defendant shall be liable for the costs of the action together with reasonable attorney fees as 37
determined by the court. 38
(c) This section applies to any medical creditor or medical debt collector that seeks to 39
avoid its application by any device, subterfuge, or pretense whatsoever. 40
(d) A consumer may bring an action for violation of this Article within four years from 41
the date on which the violation occurred. 42
(e) Any consumer may sue for injunctive or other appropriate equitable relief to enforce 43
this Article. 44
(f) The remedies provided in this section are not intended to be the exclusive remedies 45
available to a consumer nor must the consumer exhaust any administrative remedies provided 46
under this Article or any other applicable law. 47
(g) No MDMP or agreement be tween the patient and a large health care provider or 48
medical debt collector shall contain a provision that, prior to a dispute arising, waives or has the 49
practical effect of waiving the rights of a patient to resolve that dispute by obtaining: 50
(1) Injunctive, declaratory, or other equitable relief. 51
General Assembly Of North Carolina Session 2025
Senate Bill 672-First Edition Page 13
(2) Multiple or minimum damages as specified by statute. 1
(3) Attorney's fees and costs as specified by statute or as available at common 2
law. 3
(4) A hearing at which that party can present evidence in person. 4
Any provision in a financial assistance policy or other written agreement violating this 5
subsection shall be void and unenforceable. A court may refuse to enforce other provisions of 6
the financial assistance policy or other written agreement as equity may require. 7
"§ 131E-214.40. Prohibition of waiver of rights. 8
Any waiver by any patient or other consumer of any protection provided by or any right of 9
the patient or other consumer under this Article is void and may not be enforced by any court or 10
any other person. 11
"§ 131E-214.41. Enforcement. 12
(a) The Attorney General shall have the authority to enforce this Article and may adopt 13
any rules believed to be necessary or appropriate to effectuate the purpose of this Article, to 14
provide for the protection of patient s and their families, and to assist market participants in 15
interpreting this Article. 16
(b) The Attorney General shall establish a complaint process allowing an aggrieved 17
patient or any member of the public to file a complaint against a medical creditor or debt collector 18
who violates any provision of this Article. All complaints shall be considered public records 19
pursuant to Chapter 132 of the General Statutes with the exception of the complainant 's name, 20
address, or other personal identifying information. 21
"§ 131E-214.42. Annual reports and database. 22
(a) On or before July 1 of each year each large health care facility shall file its MDMP 23
and an annual report with the Department of Health and Human Services pursuant to procedures 24
that the Department shall esta blish. If the health care facility is required to report to the 25
Department under G.S. 131E-214.14, that health care facility does not need to submit separate 26
reports to satisfy each reporting requirement; the health care facility may submit one report, so 27
long as the report contains all of the information required under this Article and 28
G.S. 131E-214.14. 29
(b) The Department shall post each report and MDMP in a searchable database accessible 30
on the internet. 31
(c) The Department shall consult with North Carolina 's Medical Care Advisory 32
Committee, Beneficiary Advisory Council, and Medicaid Advisory Council to develop materials 33
to inform the public about MDMP policies. The materials shall include, at a minimum, the 34
following information: 35
(1) How to find a facility's MDMP. 36
(2) How to apply for financial assistance and appeal assistance decisions. 37
(3) How to submit a complaint to the Attorney General or the Department. 38
(4) Any deadlines patients should be aware of related to the MDMP. 39
(5) The statutory eligibility and requirements for financial assistance and payment 40
plans. 41
(d) Each l arge health care facility shall prepare an annual report to submit to the 42
Department no later than August 1 of each year. The report shall include: 43
(1) The total number of patients who applied for financial assistance. 44
(2) The total number of patients who received financial assistance. 45
(3) The total number of patients that were denied financial assistance, categorized 46
by the specific reason for denial. 47
(4) De-identified demographic information for patients who received financial 48
assistance, including zip code, race, language, gender, and disability status, to 49
the extent such information is available. 50
General Assembly Of North Carolina Session 2025
Page 14 Senate Bill 672-First Edition
(5) The total amount of financial assistance provided to patients based on a cost 1
to charge ratio and Medicare reimbursement rates. 2
(6) The types of collection practices used by the large health care facility against 3
patients. 4
(7) The amount of money collected with each of these collection practices, in 5
dollars and by percentage of the large health care provider's annual revenue. 6
(e) An annual consolidated report shall be prepared by the Department and a copy of the 7
report provided to the Senate Committee on Health Care and the House Committee on Health. 8
The report shall also be made available to the public on the Department's website no later than 9
September 1 of each year . These reports shall include the following information for the time 10
period of July of the prior year to July of th e current year, for each large health care provider in 11
aggregate: 12
(1) The total number of patients who applied for financial assistance. 13
(2) The total number of patients who received financial assistance. 14
(3) The total number of patients that were denied financial assistance, categorized 15
by the specific reason for denial. 16
(4) De-identified demo graphic information for patients who received finan cial 17
assistance, including zip code, race, language, gender, and disability status, to 18
the extent such information is available. 19
(5) The total amount of financial assistance provided to patients based on a cost 20
to charge ratio and Medicare reimbursement rates. 21
(6) The types of col lection practices used by large health care providers against 22
patients. 23
(7) The amount of money collected w ith each of these collection practices, in 24
dollars and by percentage of the large health care provider's annual revenue. 25
"§ 131E-214.43. Severability. 26
Should a court decide that any provision of this Article is unconstitutional, preempted, or 27
otherwise invalid, that provision shall be severed and shall not affect the validity of the Article 28
other than the part severed. 29
"§ 131E-214.44. Exemptions. 30
Federally qualified health centers, as defined by section 1396d (i)(2)(B) of Title 42 of the 31
United States Code, are exempt from G.S. 131E-214.23 through 131E-214.26, 131E-214.28, and 32
131E-214.40." 33
34
PART II. REMOVE LIENS FOR AMBULANCE SERVICES 35
SECTION 2. Article 9A and Article 9B of Chapter 44 of the General Statutes are 36
repealed. 37
38
PART III. REMOVE UNC ABILITY TO GARNISH TAX RE FUNDS FOR MEDICAL 39
DEBT 40
SECTION 3. G.S. 105A-2(2) reads as rewritten: 41
"(2) Debt. – Any of the following, except as limited in sub-subdivision (f.) of this 42
subdivision:following: 43
… 44
f. For any school of medicine, clinical program, facility, or practice 45
affiliated with one of the constituent institutions of The University of 46
North Carolina that provides medical care to the general public and for 47
The University of North Carolina Health Car e System and other 48
persons or entities affiliated with or under the control of The 49
University of North Carolina Health Care System, the term "debt" is 50
limited to the sum owed to one of these entities by law or by contract 51
General Assembly Of North Carolina Session 2025
Senate Bill 672-First Edition Page 15
following adjudication of a claim resulting from an individual's receipt 1
of hospital or medical services at a time when the individual was 2
covered by commercial insurance, Medicaid, Medicare, Medicare 3
Advantage, a Medicare supplement plan, or any other government 4
insurance." 5
6
PART IV. CONFLICTS AND EFFECTIVE DATE 7
SECTION 4.(a) To the extent this act is in conflict with G.S. 131E-91, 131E-99, or 8
131E-147.1, this act shall control. 9
SECTION 4.(b) Section 1 of this act becomes effective June 1, 2025, and applies to 10
medical debt collection act ivities occurring after that date and to agreements and contracts 11
entered into, amended, or renewed on or after that date. The remainder of this act is effective 12
when it becomes law. 13