North Carolina SB 672: Protect North Carolinians from Medical Debt.

Bill Text

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 LARGE 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

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 672-First Edition
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 than 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 fo