When an employer or insurer denies a workers’ compensation claim, debt collectors can add additional insult to injury by attempting to collect on unpaid medical bills in the claim. This problem for injured workers is particularly serious in Nebraska.
LB 418, introduced by State Senator Machaela Kavanaugh of Omaha, would solve this problem.The bill states ‘No collection agency shall attempt to collect a debt if a case is pending in the Nebraska Workers’ Compensation Court and the debt is alleged to be subject to’ the workers’ compensation law pertaining to fee schedules and payment requirements by employers.”
This is a needed respite for injured workers in Nebraska for many reasons. First, the legislation solves the problems of civil courts not delaying collection cases where the unpaid bills are part of a workers’ compensation cases. Collection actions in civil court about workers’ compensation cases can also raise jurisdictional questions which would be clarified by this legislation.
Second, assuming an injured worker prevails in obtaining an Award in their disputed workers’ compensation case, if they have already been sued and forced to pay the full price of the medical charges in addition to paying the court filing fees and attorney fees to the collection attorneys, they cannot then recover their money paid to the collection agency. This proposed bill will rectify this situation and help injured workers alleviate the stress and financial crisis they face.
Finally, medical debt collection practices are very aggressive in Nebraska because of inexpensive filing fees in county court. An investigation by ProPublica in 2016 and 2017 showed Nebraska courts handle nearly 80,000 collection actions involving amounts as low as $60. In similarly-populated New Mexico where court filing fees are higher, only 30,000 debt collection suits were filed. One of the biggest collection agencies, Credit Management of Grand Island, was responsible for nearly 30,000 of those lawsuits. Debtor’s exams are quite common. If an injured worker misses the debtor’s exam, they can face being jailed. According to Pro Publica, one Nebraskan was jailed over missing an debtor’s examination on a $100 debt.
Our firm encourages our clients and others in Nebraska to contact their state senators and tell them to support LB 418. You can find out who your state senator is here and find their contact information here.