Debt collection bill for workers’ comp claims advanced

Lawmakers gave first-round approval April 24 to a bill meant to assist individuals facing collection of certain medical debts.

LB418, as originally sponsored by Omaha Sen. Machaela Cavanaugh, would prohibit collection of a debt incurred for treatment of a work-related injury while the matter is pending in the Nebraska Workers’ Compensation Court.

The bill would not prevent the eventual collection of the debt or lower the amount of the debt, Cavanaugh said, but it would give some peace of mind to employees going through worker’s compensation proceedings.

“It’s a stressful time for the employee and their family,” she said. “Medical bills start piling up, calls from debt collectors are coming with no end in sight and with no way to pay them because all of this is happening before the claim has made its way through the workers’ compensation system.”

A Business and Labor Committee amendment, adopted 32-0, replaced the bill.

Under the amended bill, written notice would be provided to collection agencies seeking to collect on a debt that the matter is pending. A second notice would be sent within 30 days of the initial notice, including specific details of the debt.

The state attorney general would be authorized to investigate collection agencies that do not comply with the bill’s provisions.

The committee amendment incorporated provisions of LB360, sponsored by Lincoln Sen. Matt Hansen. These would allow the Nebraska Workers’ Compensation Court to appoint a power of attorney for a claim, settlement or disbursement of money for nonresident alien dependents if the court believes the dependents would be better served by someone other than the consular officer of their resident country, or if no consular officer exists.

Provisions of LB178, sponsored by Lincoln Sen. Mike Hilgers, also were incorporated into the bill. These would update and change references to the state Department of Administrative Services’ risk manager and make changes to allow for a more efficient claims process.

The bill advanced to select file on a 32-0 vote.