A medical debt relief bill in Minnesota passed the state’s Senate unanimously Tuesday. The bill, authored by Sen. Kevin Dahle, gives consumers the right to go to court to stop a collection action on medical debt that violates federal IRS rules. 

The bill provides a patient or consumer the right of action to obtain a court injunction to keep collectors from withholding medical care, garnishing wages, causing arrest or taking other "Extraordinary Collection Actions."

It doesn’t give judges the power to reduce or eliminate medical debt, only to postpone action until the patient has information on the financial assistance policy. 

The bill now awaits a vote from the House. If passed, it will be sent to the Gov. Mark Dayton's desk for a signature.

"Right now, individual Minnesotans have absolutely no recourse when faced with a collection action, and that too often lands them in inescapable debt,” said Dahle. "Nonprofit hospitals have tools to use against these actions, and giving individuals the right to go to court will protect everyday Minnesotans from even more crushing medical debt."

This bill would apply specifically to debt accrued at nonprofit hospitals, and only to medical debt, though Dahle has coauthored other legislation to address debt on a larger scale.

Medical debt is well recognized as a top cause of personal bankruptcy in the U.S.

In Minnesota, an analysis by the Minneapolis Star Tribune last month showed 13 hospital systems reported a bad-debt increase of $15 million between 2013 and 2014 even as charity care costs - reported by 10 hospital systems - fell by about $37 million in the same period.

Lower charity care at hospitals was one of the key goals of the Affordable Care Act, said Nancy Kane, a professor of management at the Harvard T.H. Chan School of Public Health. People who rely on free care suffer from economic insecurity that can have negative consequences, she said, including delays in seeking needed care. 

One fear is that growing bad debt numbers might indicate people newly covered under the health law are facing a new form of insecurity - high deductibles that leave them with medical bills that are capped but still unaffordable.

The Minnesota Hospital Association also is collecting numbers on uncompensated care to assess the weight of the Affordable Care Act. Responses from 26 hospitals point to a decline in charity care in 2014, along with an increase in bad debt. 

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