House Bill 4148, by Rep. Suzanne Schreiber, D-Tulsa, and Rep. Mark Lepak, R-Claremore, would require healthcare providers or thirdparty debt collectors to tell the court they made the patient aware of the costs of care before a debt-collection lawsuit can proceed.

Schreiber’s proposal came after she held an interim study in October on medical debt. Lawmakers from both parties attending that hearing shared their own frustrations with medical bills and the wide variation in costs for similar services or procedures.

In an interview Thursday, Schreiber said HB 4148 was just one of several proposals that could help Oklahomans facing medical debt collections and lawsuits. The bill would give some enforcement powers to an existing state law, the Transparency in Health Care Prices Act, passed in 2021. That law requires health-care providers to post the cash price for the top 20 services offered by that provider.

One in five Oklahomans had some type of medical debt in collections in 2022, according to The Urban Institute. The median amount in collections was close to $900.

“This is one way that we can help the person incurring the debt to have a small bit of protection if it is taken to the judgment level,” Schreiber said of HB 4148, which passed a House Civil Judiciary panel by a vote of 10-0. It now goes to the House floor for consideration. Sen. Julie Daniels, R-Bartlesville, is the Senate author.

Schreiber said Oklahoma has one of the highest rates of medical debts in the country. Many times, patients facing past-due bills will delay or skip medical appointments because they don’t want to see additional bills. Schreiber said she and Lepak spent time talking to doctors, hospitals, insurance providers and legal experts about ideas to connect the issues of medical debt and price transparency.

“Oklahomans are suffering from medical debt, and it’s impeding our economy,” Schreiber said. “It’s impeding their ability to take care of their families and thrive.”

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Oklahoma Access to Justice Foundation reviewed more than 340,000 debt collection cases filed in Oklahoma courts between 2018 and 2022. More than 8% of those cases involved medical debt, according to the data analysis done in partnership with the Legal Services Corp. and the Pew Charitable Trust.

Katie Dilks, the foundation’s executive director, said in most of the counties across the state, proof of the debt is not required by the court to obtain a default judgment if the defendant doesn’t participate in the case.

Dilks said 40% of cases are in small claims court where defendants rarely have an attorney. Some customers simply stop opening the mail and stop answering the phone because they’re tired of calls from debt collectors, she said. It’s a risky avoidance strategy because more than half of the cases end in default judgments in favor of the medical provider.

“Our rural debt cases are really being driven by medical debt,” Dilks said at Schreiber’s legislative study in October.

Last month, KFF Health News looked into medical debt collection cases filed in Pittsburg County and found McAlester hospital officials weren’t aware of how frequently the hospital’s attorneys and debt collection companies pursued the debts from local residents.

Rich Rasmussen, president of the Oklahoma Hospital Association, said hospitals try to work with uninsured or underinsured patients on their bills. But insurance companies also have a responsibility to educate their customers on what a patient’s portion of the bill might be, he said.

“Most of the time for hospitals, we’ll work with the patient so they can develop a payment plan or if they will share the necessary information so we can classify them as charity care so there is no cost,” Rasmussen said.

Rasmussen said hospitals already have to follow a federal law, the No Surprises Act, to give an estimate of care. Many consumers aren’t aware of the co-insurance requirements or their financial responsibilities under high-deductible health insurance plans.

“It becomes very complicated for the patient,” Rasmussen said. “The federal government has laid out how we handle pricing transparency. But because the licensing of insurance falls at the state level, let’s focus on how to make the process as consumer-friendly as possible so that patients know what their responsibility is going to be.”

A bill by Rep. John Waldron, D-Tulsa, would require any debt cases that involve wage garnishment to provide the notices in plain language. HB 3179 has not yet been heard in committee. The deadline to hear bills in committee in their chamber of origin is Feb. 29.

Putting legal notices and documents in plain language helps people navigate the legal system who can’t afford an attorney. Lawmakers last year approved HB 2792, which required eviction summonses to be in plain language.

Once past-due medical debts make it to collections or court, the system is stacked against patients, said Eva Stahl, vice president of public policy of RIP Medical Debt. Her organization uses donations to buy medical debt on the secondary market and erase it for qualifying consumers.

“We pool funds together to purchase that bad debt,” Stahl said at the interim study. “We use those fundraising dollars or governmentfunded programs to send these people letters to let them know their debt has been abolished and there is no tax liability.”

Stahl said consumers many times aren’t aware they have fewer rights if they use a credit card to pay for a medical procedure or service.

“When individuals put their medical bills on a credit card, that is no longer medical debt,” Stahl said. “Once they put anything on their credit cards, that becomes financial debt and shows on your credit report in a different way than an unpaid medical bill.”

The federal Consumer Financial Protection Bureau is studying consumer use of medical credit cards or installment loans, which are sometimes offered at doctor’s offices, dental practices or emergency rooms as an option for patients worried about the cost of medical care. But they can have hidden fees or deferred interest payments that can sneak up on consumers.

“In some cases, medical payment products may allow patients to access care they would otherwise have to forgo,” the agency said in its request for information. “However, these payment products can also lead to patients paying more out of pocket if patients use medical payment products to pay bills that should have been covered by insurance or financial assistance, to pay inaccurate bills which they then have difficulty disputing post-payment, or to pay bills in full whose balances they would otherwise have been able to negotiate pre-payment.”