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OLR Bill Analysis
sSB 683 (File 447, as amended by Senate "A")*
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. By doing so, it
prohibits these related entities, and not just hospitals, from (1)
collecting from an uninsured patient more than the cost of providing
the services, (2) referring certain patients to collection agencies, and (3)
continuing collection efforts in certain situations until they determine
whether the patient is eligible for debt reduction or elimination.
It also limits or restricts when hospitals, these 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.
Additionally, the bill makes several changes to laws on facility fees
for outpatient services at hospital-based facilities. For example, it (1)
expands the type of procedural codes for which hospitals, health
systems, and hospital-based facilities may not charge facility fees in
certain circumstances, (2) requires various patient notices to include
information in 15 languages on free language assistance services, (3)
expands certain existing reporting requirements, and (4) establishes
new reporting requirements.
The bill requires the Office of Health Strategy (OHS) to (1) within
available appropriations, study certain matters regarding physician
practices and oversight of practice mergers and acquisitions and (2)
report to the Public Health Committee by February 1, 2023.
It also makes various minor, technical, and conforming changes.
*Senate Amendment “A” replaces the underlying bill. It (1) removes 2021SB-00683-R01-BA.DOCX
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provisions in the underlying bill extending certain hospital debt
collection laws to underinsured patients, (2) adds certain related
definitions, and (3) delays the underlying bill’s effective date by one
year. It also adds the provisions on facility fees and the OHS study.
EFFECTIVE DATE: October 1, 2022, except the OHS reporting
provisions take effect upon passage.
§§ 1-3 — HOSPITAL DEBT COLLECTION
Definitions
The bill extends certain hospital debt collection laws to cover
entities that are owned by, or affiliated with, hospitals. For these
purposes, the bill defines “owned by” as owned by a hospital or health
system when billed under the hospital’s tax identification number. It
defines “affiliated with” as:
1. being employed by a hospital or health system,
2. being under a professional services agreement with a hospital
or health system that allows the hospital or health system to bill
on the entity’s behalf, or
3. a clinical faculty member of a medical school who is affiliated
with a hospital or health system in a manner that allows the
hospital or health system to bill on the faculty member’s behalf.
Collection Limits (§ 1)
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) (currently $32,300 for an individual) who (1)
applied for Medicaid but did not qualify and (2) is not eligible for
coverage under Medicare or another governmental or private
insurance plan. 2021SB-00683-R01-BA.DOCX
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Initiation of Debt Collection and Other Activities (§ 2)
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 entities owned by or
affiliated with hospitals.
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, 2022:
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
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 garnishing
wages). As a result, hospitals and other entities may bring an action
against a patient or an estate:
1. to collect coinsurance, deductibles, or fees that are 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.
Suspension of Debt Collection (§ 3) 2021SB-00683-R01-BA.DOCX
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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, but it removes the specific references to collection
agencies for these purposes.
§ 4 — FACILITY FEES
The bill makes several changes to facility fee laws. By law, a “facility
fee” is any fee a hospital or health system charges or bills for
outpatient hospital services provided in a hospital-based facility that is
(1) intended to compensate the hospital or health system for its
operational expenses and (2) separate from the provider’s professional
fee.
Patient Notification Requirements (§ 4(b))
Under existing law, hospitals or health systems that charge facility
fees must notify patients receiving outpatient services, in writing,
about their potential financial liability. The notice must provide
additional information when the hospital or health system (1) uses
current procedural terminology evaluation and management (CPT
E/M) codes for these services and (2) expects to charge a separate fee
for professional medical services. The bill also applies the additional
notice requirements if the hospital or health system uses current
procedural assessment and management (CPT A/M) codes in these
situations.
Generally, the notice must include, among other things, (1) the
amount of the patient’s potential financial liability or (2) an estimate,
based on the facility’s typical or average charges, if the type and extent
of services are unknown or the terms of the patient’s insurance
coverage are not known with reasonable certainty. 2021SB-00683-R01-BA.DOCX
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As under existing law, the above notice requirements do not apply
to Medicare and Medicaid patients or those receiving services under a
workers’ compensation plan.
Initial Billing Statements (§ 4(d))
By law, initial billing statements that include a facility fee generally
must contain certain information, such as clearly identifying the
facility fee as separate from the provider’s professional fee, if any.
These requirements do not apply to billing statements for Medicare or
Medicaid patients or those receiving services under a workers’
compensation plan.
Starting by October 15, 2022, the bill requires each hospital, health
system, and hospital-based facility to annually submit to OHS’s Health
Systems Planning Unit a sample of its billing statement with the
required information. The sample must (1) represent the statement
format that patients receive and (2) not contain patient identifying
information.
Posted Notice (§ 4(h))
Under existing law, a hospital-based facility must prominently
display a written notice (see below) in locations that are readily
accessible and visible to patients, including patient waiting areas. The
bill specifically requires these facilities to post the notice in
appointment check-in areas. It also requires each hospital-based
facility, starting by October 1, 2022, to annually submit a copy of this
notice to OHS’s Health Systems Planning Unit.
By law, the notice must inform patients that (1) the facility is part of
a hospital or health system (named on the notice) and (2) if the facility
charges a facility fee, patients may incur a greater financial liability
than if the facility was not hospital-based.
Tag Lines for Patient Notices, Billing Statements, and Posted
Notices (§ 4(e), (h))
Starting October 1, 2022, the bill requires the above notices (the
facility fee notices, initial billing statement patient notices, and posted 2021SB-00683-R01-BA.DOCX
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notices) to include tag lines in at least the top 15 languages spoken in
the state, indicating that the notice is available in those languages.
Under the bill, a “tag line” is a short statement written in a non-English
language, indicating the availability of free language assistance
services.
In choosing which languages to include, the hospital or heath
system must use either:
1. the list published by the federal Department of Health and
Human Services, in connection with specified non -
discrimination provisions under the Patient Protection and
Affordable Care Act, or
2. the top 15 languages spoken in the facility’s geographic area, as
determined by the hospital or health system.
Notice of Certain Transactions (§ 4(k))
Under current law, if a transaction materially changes the business
or corporate structure of a physician group practice and establishes a
hospital-based facility at which facility fees will likely be billed, the
hospital or health system purchasing the practice must notify each
patient the practice served in the previous three years.
The bill adds to the notice contents the (1) purchased facility’s full
legal and business name and (2) acquisition date.
Starting by July 1, 2023, the bill requires each hospital-based facility
that was subject to such a transaction during the prior calendar year to
report on patient volume. Specifically, these facilities must annually
report to the Health System Planning Unit on the number of patients
they served in the prior three years.
Facility Fee Limits (§ 4(l))
In some circumstances, existing law limits the facility fees that
hospitals, health systems, and hospital-based facilities may charge for
outpatient services provided off-site from a hospital campus. This
includes a general prohibition on facility fees for outpatient services 2021SB-00683-R01-BA.DOCX
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that use a CPT E/M code. This bill extends this prohibition to such
services that use a CPT A/M code.
As under existing law, these limits do not apply to (1) freestanding
emergency departments or (2) Medicare and Medicaid patients or
patients receiving services under a workers’ compensation plan.
Under existing law and the bill, a facility that violates these fee
prohibitions has committed an unfair trade practice (see
BACKGROUND).
Under current law, if an insurance contract in effect on July 1, 2016,
provides reimbursement for facility fees that are otherwise prohibited
by law, the hospital or health system may continue to collect
reimbursement from insurers for these fees until the contract expires.
The bill instead specifies that they may continue to collect this
reimbursement until the earlier of the contract’s expiration, renewal, or
amendment.
Reporting (§ 4(m))
Existing law requires each hospital and health system to annually
report to OHS on the facility fees it charged or billed the prior year at
hospital-based facilities outside a hospital campus. The bill specifies
that they must report on a form prescribed by the OHS executive
director.
The bill also modifies the required information for these reports.
Current law requires the reports to include the number, total
amount, and range of allowable facility fees paid at each facility by
Medicare, Medicaid, and private insurance policies. The bill instead
requires this information to be disaggregated by payer mix, including
not just the payment sources listed above but also other government-
provided insurance and self-pay patients.
Existing law requires the reports to include the amount of the
hospital’s or health system’s facility fee revenue from these facilities,
per facility and in the aggregate. The bill requires the reports to 2021SB-00683-R01-BA.DOCX
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include the amount of facility fees charged, in addition to the revenue.
Currently, the reports must describe the 10 procedures or services
that generated the most facility fee revenue. The bill (1) specifies that
this applies to gross revenue and (2) requires this information to be
disaggregated by CPT code for each of these procedures or services.
Current law requires the reports to include the total revenue
derived from these fees for each such procedure or service. The bill
requires this for both gross and net revenue, and additionally requires
reporting on patient volume for these procedures and services.
The bill also requires the report to include the (1) top 10 procedures
or services, not just procedures, for which facility fees are charged,
based on patient volume, and (2) gross and net revenue for them.
As under existing law, the OHS executive director must publish the
reported information, or post a link to it, on OHS’s website.
§ 5 — OHS STUDY ON PHYSICIAN PRACTICES
The bill requires OHS to do the following, within available
appropriations:
1. study ways to improve oversight and regulation of physician
practice mergers and acquisitions to improve health care quality
and choice in the state, including reviewing laws on (a)
transaction notice and reporting and (b) certificate of need
guidelines and definitions;
2. study ways to ensure the viability of physician practices; and
3. develop legislative recommendations to improve reporting and
oversight of physician practice mergers and acquisitions,
including whether any of the above related laws need to be
amended.
By February 1, 2023, the OHS executive director must report to the
Public Health Committee on the study’s outcome and any legislative
recommendations. 2021SB-00683-R01-BA.DOCX
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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
residence (CGS § 52-352b(t)).
Connecticut Unfair Trade Practices Act (CUTPA)
The law prohibits businesses from engaging in unfair and deceptive
acts or practices. CUTPA allows the consumer protection
commissioner to issue regulations defining what constitutes an unfair
trade practice, investigate complaints, issue cease and desist orders,
order restitution in cases involving less than $10,000, enter into consent
agreements, ask the attorney general to seek injunctive relief, and
accept voluntary statements of compliance. It also allows individuals
to sue. Courts may issue restraining orders; award actual and punitive
damages, costs, and reasonable attorney’s fees; and impose civil
penalties of up to $5,000 for willful violations and $25,000 for a
violation of a restraining order.
COMMITTEE ACTION
Public Health Committee
Joint Favorable
Yea 22 Nay 11 (03/29/2021)
Appropriations Committee
Joint Favorable
Yea 32 Nay 16 (05/17/2021)