Rep. Shallcross Smith bill would protect patients from harmful medical debt practices


STATE HOUSE — Rep. Mary Ann Shallcross Smith has introduced legislation that would protect vulnerable Rhode Islanders from harmful medical debt collection practices.

The bill (2024-H 7103) would prohibit credit bureau reporting of a consumer’s medical debt as well as the filing of an execution and attachment against a consumer’s principal residence for judgments based on medical debt.

“Medical debt is a growing and persistent problem that so many of our friends and family consistently face,” said Representative Shallcross Smith (D-Dist. 46, Lincoln, Pawtucket). “Unlike other types of debt, where people spend beyond their means, medical debt occurs because people have the misfortune of getting sick. This bill looks to provide compassion and relief to Rhode Islanders by instituting common sense reforms, specifically by preventing liens against people’s homes and the garnishing of wages.”

This measure would also cap the amount of interest on a judgment to 3% and provide that any medical debt furnished to a credit bureau shall be void.

Troy Peck of Cranston, whose daughter Aspen was diagnosed with leukemia just after she turned a year old, testified in favor of the bill during a meeting of the House Judiciary Committee.

With the weight of the world on our shoulders, we were forced to make life-saving decisions without regard for the cost,” Peck told the committee, as his daughter sat on his lap. “Aspen went through two 30-day inpatient rounds of chemotherapy before going to transplant where she was admitted for an additional 80 days. During her fight, Aspen endured multiple stays in the ICU. Though the use of an investigational drug, Aspen is here today, nearly two years in remission. If this sounds expensive, it is. As of Dec. 31, 2023, Aspen’s total cost of care is at $1,056,789.”

Many organizations, including the Economic Progress Institute, AARP, the American Cancer Society Cancer Action Network, and the Rhode Island Society of CPAs/Rhode Island Business Forum, testified in favor of the legislation.

Ernie Davis, director of Northeast State Government Affairs for the Leukemia & Lymphoma Society, told the committee that “The Consumer Protection Financial Bureau, in a report published in 2022, determined that one out of every five Americans has medical debt, of which $88 billion is currently in collections. In the same report, the CFPB determined that medical debt is the number one reason for individual bankruptcy and that medical debt is the least predictive debt indicator of future repayment of all debt. We thank Representative Shallcross-Smith for sponsoring this legislation and urge the members of the Committee to pass the bill to protect patients and their families from additional medical debt burden.”

Similar legislation (2024-S 2711) has been introduced in the Senate by Sen. Jacob Bissaillon (D-Dist. 1, Providence).