New Mexico Law Targets Healthcare Collections

On April 5, 2021, New Mexico Governor Michelle Lujan Grisham signed the Patients Debt Collection Practices Act (Act) into law. The Act lays out several new requirements for healthcare providers, debt buyers, and collection agencies that collect medical debt. The full text of the Act, which goes into effect July 1, 2021, can be found here.

New collections requirements

Among other requirements, the Act requires healthcare facilities to offer certain services to patients regarding insurance verification and provide options and assistance if the patient is uninsured. In addition to other data points, Healthcare facilities will be required to include information about these services in billing statements sent to patients and must provide billing statements to debt collectors and debt buyers before the debt collector or debt buyer can communicate with a patient or otherwise take any collection action. “Collection action” includes selling a medical debt, as well as filing a lawsuit, lien, or garnishment to collect a medical debt. 

Further, the Act requires debt buyers and debt collectors to apply payments on the date they were received or the next business day (if received after business hours) and send a receipt to the person who made the payment.  Medical debt collectors are prohibited under the Act from entering into agreements with patients which have the practical effect of patients waiving their rights to resolve a dispute.

Finally, the Act prohibits health care facilities and other medical creditors from pursuing collection action on indigent patients (defined as those making less than 200% above the poverty limit). 

insideARM Perspective

Entities collecting medical debt should continue to watch for similar laws as healthcare collections seem to be a hot topic for state legislatures right now.  Healthcare facilities’ ability to comply with these requirements will directly impact debt buyers and debt collectors’ capacity to pursue medical debt in New Mexico.  Any stakeholders with New Mexico medical accounts receivable should be sure to read the Act in its entirety with legal counsel in order to begin discussing the new requirements internally and with clients.