The Medical Debt Relief Act, designed to remove settled and paid medical debts from consumer credit reports, was introduced in the Senate and House late last week, CollectionsCreditRisk.com reported yesterday. The legislation proposes to create permanent 180-day waiting period rules before medical debts are documented with credit bureaus. The timeframe would allow insurance payments to be applied. The credit bureaus also would remove previously reported medical collections that have been or are being paid by insurance from consumers’ credit reports. The newly introduced legislation would permanently establish the National Consumer Assistance Plan created last year as a result of a settlement between credit bureaus Equifax, Experian and TransUnion and several state attorneys general. An estimated 20 percent of consumers with credit reports had one or more medical collection item on their record, according to the Consumer Financial Protection Bureau. An estimated 43 million consumers have overdue medical debt recorded on their credit reports and 15 million have credit reports listing only medical debt, according to the CFPB’s 2014 data.
