If a Colorado hospital attempts to collect medical debt from patients but has not been complying with CMS' price transparency rule, the facility would face financial penalties.
A bill seeking to prohibit hospitals from pursuing debt collections against patients if the organization does not comply with the CMS hospital price transparency rule was recently passed in Colorado.
According to the court document, the bill prohibits a hospital from initiating or pursuing collection actions against a patient for debt incurred by the patient on the date(s) of service when the hospital was not in compliance with federal hospital price transparency laws.
A hospital that pursues prohibited collection is subject to a penalty equal to the amount of the debt and must refund any amount paid on the debt and pay attorney fees and costs, the bill says. The bill makes attempting to collect the debt an unfair practice under the "Colorado Fair Debt Collections Act."
The bill authorizes the department of public health and environment to consider whether a hospital is following federal hospital price transparency laws.
According to the court document, nothing in the bill prohibits a hospital from billing a patient or health insurer for items or services provided to the patient. The bill also does not require a hospital to refund a payment made to the hospital for items or services provided to a patient.
The bill unanimously passed third reading in the Senate, positioning it to be signed into law.
Although this bill affects only Colorado hospitals, future national implications are not out of the question as recent studies have shown poor price transparency adherence across the country along with a crackdown on harmful medical debt billing and collection practices.
A study published by PatientRightsAdvocate.org shows that most organizations are still not fully complying with the hospital price transparency rule even though we are now in year two of the legal requirement.
The report assessed the compliance with the law by reviewing 1,000 U.S. hospitals out of the over 6,000 accredited hospitals in the country.
Of the 1,000 total hospitals reviewed in the study, only 14.3% were fully complying with the rule. The study also found that only 37.9% of the hospitals posted a sufficient amount of negotiated rates, but over half were not compliant in other criteria of the rule, such as rates by each insurer and named plan.
Amanda Norris is the Director of Content for HealthLeaders.
KEY TAKEAWAYS
Although this bill affects only Colorado hospitals, future national implications are not out of the question as recent studies have shown poor price transparency adherence across the country along with a crackdown on harmful medical debt billing and collection practices.