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OLR Bill Analysis
SB 683
AN ACT CONCERNING HOSPITAL BILLING AND COLLECTION
EFFORTS BY HOSPITALS AND COLLECTION AGENCIES.
SUMMARY
This bill extends certain hospital collection laws to cover entities
that are owned by, or affiliated with, hospitals, and expands the scope
of these laws. Among other things, it:
1. prohibits these related entities, and not just hospitals, from
collecting from an uninsured patient more than the cost of
providing the services;
2. prohibits hospitals or related entities from collecting from an
underinsured patient more than the cost of providing the
services plus interest, capped at a maximum of 5% annually;
3. prohibits referrals to collection agencies for underinsured
patients, not just uninsured patients, who are eligible for the
hospital bed fund;
4. limits or restricts when hospitals, related entities, and collection
agents may refer patients to credit rating agencies, foreclose a
lien on a patient’s primary residence, or garnish a patient’s
wages; and
5. requires hospitals, related entities, and collection agents to
discontinue collection activities if they become aware that a
hospital debtor is awaiting a decision on a final adverse
determination (i.e., a final review to determine whether a
specific service is reimbursable by the patient’s health insurance
coverage).
The bill specifies that these provisions apply to all hospitals licensed 2021SB-00683-R000447-BA.DOCX
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with the Department of Public Health. It also makes various minor,
technical, and conforming changes.
EFFECTIVE DATE: October 1, 2021
§ 1 — COLLECTION LIMITS
Uninsured Patients
Current law prohibits hospitals from collecting from an uninsured
patient more than the cost of providing the services. The bill extends
this prohibition to (1) all licensed hospitals, not just short-term general
hospitals, and (2) entities owned by or affiliated with hospitals.
For these purposes, existing law generally defines an “uninsured
patient” as someone with an income at or below 250% of the federal
poverty level (FPL) who (1) applied but did not qualify for Medicaid
and (2) is not eligible for coverage under Medicare or another
governmental or private insurance plan.
Underinsured Patients
Beginning with health care services provided on or after October 1,
2021, the bill prohibits hospitals, or entities owned by or affiliated with
them, from collecting from an underinsured patient more than the cost
of providing the health care plus interest (see below).
The bill defines an underinsured patient as someone insured under
a high deductible health plan with a maximum income of 600% FPL
($131,760 for a family of 3 in 2021).
Under the bill, when the hospital or other entity is collecting from
an underinsured patient, the maximum annual interest they may
charge is the lesser of:
1. the weekly average one-year constant maturity yield of U.S.
Treasury securities, as published by the Federal Reserve for the
week before the patient first received a bill, if that average is at
least 2%;
2. a rate set by the Office of Health Strategy executive director and 2021SB-00683-R000447-BA.DOCX
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in effect when the patient first received a bill, if the Federal
Reserve discontinued the rate described above; or
3. 5%.
Current law requires collection agents, when collecting on behalf of
hospitals, to notify patients in writing as to whether the hospital deems
them to be insured or uninsured. The bill makes a conforming change
by requiring this notice to also indicate whether the hospital deems the
patient underinsured.
§ 2 — INITIATION OF DEBT C OLLECTION AND OTHER
ACTIVITIES
Current law prohibits a hospital from referring a patient’s unpaid
bill to a collection agent or initiating an action against a patient or his
or her estate, unless it determined that the individual is uninsured and
not eligible for a bed fund. (Generally, a hospital bed fund refers to
gifts of money, stock, or other property to a hospital to provide free
patient care.) The bill extends these provisions to (1) entities owned by
or affiliated with hospitals and (2) underinsured patients ineligible for
a bed fund.
Additionally, the bill prohibits these collection referrals or actions
involving such underinsured patients who have requested review of
an adverse insurance determination and are still awaiting a final
adverse determination.
The bill also prohibits hospitals, entities owned by or affiliated with
them, and collection agents who receive their referrals from taking the
following actions related to a health care debt for services provided on
or after October 1, 2021:
1. reporting a patient to a credit rating agency until at least a year
after the patient receives a bill;
2. bringing an action to foreclose a lien that was filed on the
patient’s primary residence (see BACKGROUND); or
3. if the patient is eligible for the hospital bed fund, attempting to 2021SB-00683-R000447-BA.DOCX
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garnish his or her wages to collect payment.
Current law specifies that the restriction on hospital collection
activities does not affect a hospital’s ability to bring an action against a
patient or an estate in certain circumstances. The bill extends these
provisions to (1) entities owned by, or affiliated with, hospitals and (2)
the provisions described above (e.g., the provisions on collection
referrals involving underinsured patients). As a result, hospitals and
other entities may bring an action against a patient or an estate:
1. to collect coinsurance, deductibles, or fees, provided they may
be eligible for reimbursement through awards, settlements, or
judgments; or
2. when payment or reimbursement has been made, or likely will
be made, directly to the patient.
§ 3 — SUSPENSION OF DEBT COLLECTION
Current law requires hospitals and collection agencies to
discontinue collection efforts when they become aware that a hospital
debtor received information that he or she is eligible for hospital bed
funds, free or reduced-price hospital care, or any other program that
would eliminate or reduce debt liability. They must refer the collection
file to the hospital for an eligibility determination, and collection
cannot resume until the determination is made.
The bill extends these provisions to entities owned by or affiliated
with hospitals. It also requires hospitals, these entities, and collection
agents to similarly discontinue collection efforts if they become aware
that a patient is awaiting a final adverse insurance determination.
BACKGROUND
Homestead Exemption
Connecticut law exempts certain property from court judgment. The
law generally permits a debtor to exclude his or her home from
execution of a judgment up to the value of $75,000, but there is a
higher threshold of $125,000 for debt arising out of hospital services.
This homestead exemption is based upon the equity value of a primary 2021SB-00683-R000447-BA.DOCX
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residence (CGS § 52-352b(t)).
COMMITTEE ACTION
Public Health Committee
Joint Favorable
Yea 22 Nay 11 (03/29/2021)