Public Health Committee
JOINT FAVORABLE REPORT
Bill No.: SB-683
AN ACT CONCERNING HOSPITAL BILLING AND COLLECTION EFFORTS BY
Title: HOSPITALS AND COLLECTION AGENCIES.
Vote Date: 3/26/2021
Vote Action: Joint Favorable
PH Date: 3/24/2021
File No.: 447
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Public Health Committee
Sen. Martin Looney
REASONS FOR BILL:
SB 683 makes numerous changes to existing laws on billing and collection efforts by
hospitals and their collections agents. This bill:
extends certain existing hospital collection laws to entities that are owned by, or
affiliated with, hospitals, such as prohibiting them from collecting from an uninsured
patient more than the cost of providing the services;
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;
limits when hospitals or related entities can refer an underinsured patients unpaid bill
to a collection agency or bring an action against the patient or his or her estate;
prohibits hospitals, related entities, and collection agents from (a) reporting a patient to
a credit reporting agency until at least a year after the patient receives the bill; (b)
bringing an action to foreclose on a patients primary residence; or (c) if the patient is
eligible for the hospital bed fund, attempting to garnish his or her wages; and
requires hospitals, related entities, and collection agents to discontinue collection
activities if they become aware that a hospital debtor has requested review of an
adverse insurance determination and has not yet received a final determination.
RESPONSE FROM ADMINISTRATION/AGENCY:
Senator Martin Looney, President Pro Tempore:
I testify in strong support of SB 683. Passage of this legislation would limit how much
hospitals or their collection agent may recover from an uninsured or underinsured patient for
unpaid cost of health care and the method by which they may go about collecting said
outstanding balance. This bill would also change provisions concerning hospital billing
practices to protect patients who receive health care at outpatient clinics that are owned by or
affiliated with hospitals.
Abusive hospital billing and collection practices were previously addressed with the passage
of PA 03-266 which included limiting the interest on debt to 5%, increasing the income level
for uninsured persons who can be billed only costs (rather than charges), increasing the
homestead exemption from $75,000 to $125,000 in the case of a money judgment,
increasing the transparency regarding free bed fund policies and availability, limiting the use
of collection agents, and increasing the reporting requirements on these activities.
Although several hospital patients have benefited from the provisions of PA 03-266, the law
should be amended to reflect the many changes that have occurred in our health system
since 2003. Many patients who receive care at out-patient care at facilities that are owned by
hospital systems are billed by the hospitals. Passage of SB 683 would guarantee patients
benefit from the protections established in the 2003 law. The site of service should not
determine whether a patient is financially protected.
Ted Doolittle, Healthcare Advocate, The Office of Healthcare Advocate (OHA):
The Office of Health Care Advocate strongly support this bill which proposes reforms that
would offer relief for thousands of Connecticut residents who are dealing with debt collection
practices arising from the lack of health insurance or from underinsurance that leaves them
with more financial liability than they can afford. Applying the billing and collections practices
to both hospitals and collection agents who may or may not be affiliated with hospitals will
prevent the forming or hiring a separate corporate entity to collect the medical debt.
Statutorily defining underinsured individuals will protect consumers by: limiting the interest
rate that a hospital or collection agent may charge an uninsured person for medical debt,
which will often be less than the 5% maximum currently in statute; protecting an uninsured
persons paycheck from garnishment, and their residence from foreclosure; requiring a
hospital to identify whether a debtor is eligible for charity care before referring the debtors
case to a collection agent or initiating legal action to collect the debt; staying collection efforts
while an underinsured patient pursues an appeal with their insurance company; and
prohibiting a hospital or collection agent from reporting an underinsured persons debt to a
credit reporting agency for at least a year.
These provisions will protect health care consumers who cannot afford the high deductibles
and out of pocket costs that are required by many health insurance plans. Consumers should
not have to worry about losing their house when they take a loved one to the hospital for
care.
We have included suggested language in our testimony that will make this bill better and
more effective at protecting consumers.
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NATURE AND SOURCES OF SUPPORT:
Universal Health Care Foundation of Connecticut:
Universal Health Care Foundation of Connecticut appreciate the goal of the proposal to
improve existing law to protect health care consumers from unaffordable and potentially
ruinous hospital bills. High hospital prices pose a major financial risk to the residents of
Connecticut, even to those with health insurance coverage.
Stipulating that these protections apply to health care services received in outpatient settings
is very important since more care is delivered in these facilities. The finding of a recent study
revealed hospital prices charged to privately insured patients tend to be much higher than
inpatient prices when compared to benchmark of Medicare rates. See the list outlined in our
testimony.
Passage of SB 683 will also provide protection for hundreds of thousands of Connecticut's
residents who are underinsured. The increasing prevalence of high deductible health plans
means consumers will be responsible for more of the cost of their care. A recent survey of
Connecticut residents showed 51% of adults experienced a health care affordability problem
in the last year, and 3 in 4 adults (74%) reported being "worried" or "very worried" about
affording some aspect of health care in the future.
Universal Health Care Foundation of Connecticut support lowering the interest rate below the
current 9%. The Committee should also consider lowering the statute of limitation on medical
debt court cases. New York decreased theirs from 6 years to 3 years in 2020.
NATURE AND SOURCES OF OPPOSITION:
Connecticut Hospital Association (CHA):
Connecticut Hospital Association appreciates this opportunity to submit testimony concerning
SB 683. Connecticut hospitals are guided by their mission of caring for patients 24 hours a
day, seven days a week, regardless of patients ability to pay, and they have a long tradition
of providing charity care and financial assistance to patients in need.
SB 683 proposes to limit the amount a hospital may collect from an individual who is insured
under a high deductible health plan (HDHP) and restrict the method by which a hospital may
collect unpaid bills for healthcare services provided. These proposed changes do not reflect
the recommendations of the 2019 task force established by the General Assembly to conduct
a study on the impact HDHPs on consumers, they are unfairly focused on hospitals, and they
create new financial restrictions that will unduly impede a hospitals ability to achieve its
mission of caring.
In February 2020, the task force issued its report and recommendations noting that the task
force heard how high deductibles prevent people from getting the healthcare services that
they need. Nowhere among the recommendations did the task force propose to limit the
amount a hospital may collect from an individual who is insured under an HDHP or prescribe
the method by which a hospital collects on unpaid medical bills. On the contrary, while the
report did acknowledge that for a certain segment of the population HDHP deductibles may
lead to unmanageable medical debt, it did not see the solution as hospital focused.
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We encourage additional review of the task forces report. On February 16, 2021 the
Insurance and Real Estate Committee raised a bill titled, An Act Implementing
Recommendations of the High Deductible Task Force. Last week the Committee heard SB
1049, An Act Concerning High Deductible Health Plans, which provides for calculating
deductibles on a calendar-year basis. This will simplify those deductibles for consumers and
is an important first step.
CHA is committed to sustaining and improving access to high quality healthcare services
across our state. We appreciate that affordability is central to that commitment and every
actor in the system. Unfortunately, this legislation will not put our state on a path to address
affordability in our healthcare system.
Reported by: Beverley Henry Date: 4-14-2021
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Statutes affected:
Committee Bill:
PH Joint Favorable:
File No. 447:
APP Joint Favorable:
Public Act No. 21-129: