Substitute Senate Bill No. 568
Public Act No. 03-266
AN ACT CONCERNING HOSPITAL BILLING PRACTICES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 19a-649 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(a) The office, in consultation with the Commissioner of Social Services, shall review annually the level of uncompensated care including emergency assistance to families provided by each hospital to the indigent. Each hospital shall file annually with the office its policies regarding the provision of free or reduced cost services to the indigent, excluding medical assistance recipients, and its debt collection practices. Each hospital shall obtain an independent audit of the level of charges, payments and discharges by primary payer related to Medicare, medical assistance, CHAMPUS and nongovernmental payers as well as the amount of uncompensated care including emergency assistance to families. The results of this audit, including the above information, with an opinion, shall be provided to the office by each hospital together with the hospital's financial statements filed on February twenty-eighth of each year. For purposes of this section, "primary payer" means the final payer responsible for more than fifty per cent of the charges on the case, or, if no payer is responsible for more than fifty per cent of the charges the payer responsible for the highest percentage of charges. The office shall evaluate the audit and may rely on the information contained in the independent audit or may require such additional audit as it deems necessary.
(b) Each hospital shall annually report, along with data submitted pursuant to subsection (a) of this section, (1) the number of applicants for free and reduced cost services, (2) the number of approved applicants, and (3) the total and average charges and costs of the amount of free and reduced cost care provided.
Sec. 2. Section 19a-509b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(a) As used in this section, (1) "hospital bed fund" means any gift of money, stock, bonds, financial instruments or other property made by any donor for the purpose of establishing a fund to provide medical care, including, but not limited to, inpatient or outpatient care, to patients at a hospital. A hospital bed fund may be established by inter vivos gift, bequest, subscription, solicitation, dedication or any other means; (2) "hospital" means hospital as defined in section 19a-490; (3) "collection agent" means any person, either employed by or under contract to, a hospital, who is engaged in the business of collecting payment from consumers for medical services provided by the hospital, and includes, but is not limited to, attorneys performing debt collection activities.
(b) (1) Each hospital which holds or administers one or more hospital bed funds shall post or cause to be posted in a conspicuous public place in each patient admitting location, including, but not limited to, the admissions office, emergency room, social services department and patient accounts or billing office, information in English and Spanish regarding the availability of its hospital bed funds, in plain language in a forty-eight to seventy-two point type size. Such information shall include: (A) Notification of the existence of hospital bed funds and the hospital's program to administer them and (B) the person to contact for application information.
(2) Each hospital which has a hospital bed fund shall train staff, including but not limited to, hospital social workers, discharge planners and billing personnel concerning the existence of such fund, the eligibility requirements and the procedures for application.
(c) Each hospital which holds or administers one or more hospital bed funds shall make available [to individual members of the public] in a place and manner allowing individual members of the public to easily obtain it, a one page summary in English and Spanish describing hospital bed funds and how to apply for them. [This summary] The summary shall also describe any other free or reduced cost policies for the indigent as reported by the hospital to the Office of Health Care Access pursuant to section 19a-649, as amended by this act, and shall clearly distinguish hospital bed funds from other sources of financial assistance. The summary shall include notification that the patient is entitled to reapply upon rejection, and that additional funds may become available on an annual basis. The summary shall be available in the patient admissions office, emergency room, social services department and patient accounts or billing office, and from any collection agent. If during the admission process or during its review of the financial resources of the patient, the hospital reasonably believes the patient will have limited funds to pay for any portion of the patient's hospitalization not covered by insurance, the hospital shall provide the summary to each such patient.
(d) Each hospital which holds or administers one or more hospital bed funds shall require its collection agents to include a summary as provided in subsection (c) of this section in all bills and collection notices sent by such collection agents.
[(d)] (e) Applicants for assistance from hospital bed funds shall be notified in writing of any award or any rejection and the reason for such rejection. Patients who cannot pay any outstanding medical bill at the hospital shall be allowed to apply or reapply for hospital bed funds.
[(e)] (f) Each hospital which holds or administers one or more hospital bed funds shall maintain and annually compile, at the end of the fiscal year of the hospital, the following information: (1) The number of applications for hospital bed funds; (2) the number of [patient accounts] patients receiving hospital bed fund grants and the actual dollar amounts provided to each patient from such fund; (3) the fair market value of the principal of each individual hospital bed fund, or the principal attributable to each bed fund if held in a pooled investment; (4) the total earnings for each hospital bed fund or the earnings attributable to each hospital bed fund; (5) the dollar amount of earnings reinvested as principal if any; and (6) the dollar amount of earnings available for patient care. The information compiled pursuant to this subsection shall be permanently retained by the hospital and made available to the Office of Health Care Access upon request.
Sec. 3. (NEW) (Effective October 1, 2003) (a) No hospital shall refer to a collection agent, as defined in section 19-509b of the general statutes, as amended by this act, or initiate an action against an individual patient or such patient's estate to collect fees arising from care provided at a hospital on or after October 1, 2003, unless the hospital has made a determination that such individual is an uninsured patient, as defined in section 19a-673 of the general statutes, as amended by this act, and is not eligible for the hospital bed fund.
(b) Nothing in this section shall effect a hospital's ability to initiate an action against an individual patient or such patient's estate to collect coinsurance, deductibles or fees arising from care provided at a hospital where such coinsurance, deductibles or fees may be eligible for reimbursement through awards, settlements or judgments arising from claims, suits or proceedings. In addition, nothing in this section shall affect a hospital's ability to initiate an action against an individual patient or such patient's estate where payment or reimbursement has been made, or likely is to be made, directly to the patient.
Sec. 4. (NEW) (Effective October 1, 2003) On or before March 1, 2004, and annually thereafter, each hospital shall file with the Office of Health Care Access a debt collection report that includes (1) whether the hospital uses a collection agent, as defined in section 19a-509b of the general statutes, as amended by this act, to assist with debt collection, (2) the name of any collection agent used, (3) the hospital's processes and policies for assigning a debt to a collection agent and for compensating such collection agent for services rendered, and (4) the recovery rate on accounts assigned to collection agents, exclusive of Medicare accounts, in the most recent hospital fiscal year.
Sec. 5. Section 19a-673 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(a) As used in this section:
(1) "Cost of providing services" means a hospital's published charges at the time of billing, [of an uninsured patient,] multiplied by the hospital's most recent relationship of costs to charges as taken from the hospital's most recently available [audited financial statements] annual financial filing with the Office of Health Care Access.
(2) "Hospital" means an institution licensed by the Department of Public Health as a short-term general hospital.
(3) "Poverty income guidelines" means the poverty income guidelines issued from time to time by the United States Department of Health and Human Services.
(4) "Uninsured patient" means any person who is liable for one or more hospital charges whose income is at or below two hundred fifty per cent of the poverty income guidelines who (A) has applied and been denied eligibility for any medical or health care coverage provided under the general assistance program or the Medicaid program due to failure to satisfy income or other eligibility requirements, and (B) is not eligible for coverage for hospital services under the Medicare or CHAMPUS programs, or under any Medicaid or health insurance program of any other nation, state, territory or commonwealth, or under any other governmental or privately sponsored health or accident insurance or benefit program including, but not limited to, workers' compensation and awards, settlements or judgments arising from claims, suits or proceedings involving motor vehicle accidents or alleged negligence.
(b) No hospital that has provided health care services to an uninsured patient may collect from the uninsured patient more than the cost of providing services.
(c) Each collection agent, as defined in section 19a-509b, as amended by this act, engaged in collecting a debt from a patient arising from services provided at a hospital shall provide written notice to such patient as to whether the hospital deems the patient an insured patient or an uninsured patient as defined in subsection (a) of this section and the reasons for such determination.
Sec. 6. (NEW) (Effective October 1, 2003) If, at any point in the debt collection process, whether before or after the entry of judgment, a hospital, a consumer collection agency acting on behalf of the hospital, an attorney representing the hospital or any employee or agent of the hospital becomes aware that a debtor from whom the hospital is seeking payment for services rendered receives information that the debtor is eligible for hospital bed funds, free or reduced price hospital services, or any other program which would result in the elimination of liability for the debt or reduction in the amount of such liability, the hospital, collection agency, attorney, employee or agent shall promptly discontinue collection efforts and refer the collection file to the hospital for determination of such eligibility. The collection effort shall not resume until such determination is made.
Sec. 7. Section 37-3a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(a) Except as provided in sections 37-3b, 37-3c and 52-192a, interest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions or arbitration proceedings under chapter 909, including actions to recover money loaned at a greater rate, as damages for the detention of money after it becomes payable. Judgment may be given for the recovery of taxes assessed and paid upon the loan, and the insurance upon the estate mortgaged to secure the loan, whenever the borrower has agreed in writing to pay such taxes or insurance or both. Whenever the maker of any contract is a resident of another state or the mortgage security is located in another state, any obligee or holder of such contract, residing in this state, may lawfully recover any agreed rate of interest or damages on such contract until it is fully performed, not exceeding the legal rate of interest in the state where such contract purports to have been made or such mortgage security is located.
(b) In the case of a debt arising out of services provided at a hospital, prejudgment and postjudgment interest shall be no more than five per cent per year. The awarding of interest in such cases is discretionary.
Sec. 8. Subsection (t) of section 52-352b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(t) The homestead of the exemptioner to the value of seventy-five thousand dollars, or, in the case of a money judgment arising out of services provided at a hospital, to the value of one hundred twenty-five thousand dollars, provided value shall be determined as the fair market value of the real property less the amount of any statutory or consensual lien which encumbers it.
Sec. 9. Subsection (a) of section 52-356a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(a) (1) On application of a judgment creditor or his attorney, stating that a judgment remains unsatisfied and the amount due thereon, and subject to the expiration of any stay of enforcement and expiration of any right of appeal, the clerk of the court in which the money judgment was rendered shall issue an execution pursuant to this section against the nonexempt personal property of the judgment debtor other than debts due from a banking institution or earnings. The application shall be accompanied by a fee of twenty dollars payable to the clerk of the court for the administrative costs of complying with the provisions of this section which fee may be recoverable by the judgment creditor as a taxable cost of the action. In the case of a consumer judgment, the application shall indicate whether, pursuant to an installment payment order under subsection (b) of section 52-356d, as amended by this act, the court has entered a stay of execution and, if such a stay was entered, shall contain a statement of the judgment creditor or his attorney as to the debtor's default on payments. In the case of a judgment arising out of services provided at a hospital, no application shall be made until the court has (A) issued an order for installment payments in accordance with section 52-356d, as amended by this act, (B) made a finding that the debtor has defaulted on payments under the order, and (C) lifted the mandatory stay issued under section 52-356d, as amended by this act. The court shall make a determination concerning noncompliance or default, and decide whether to modify the installment payment plan, continue the installment payment plan, or lift the stay. The execution shall be directed to any levying officer.
(2) The property execution shall require a proper levying officer to enforce the money judgment and shall state the names and last-known addresses of the judgment creditor and judgment debtor, the court in which and the date on which the money judgment was rendered, the original amount of the money judgment and the amount due thereon, and any information which the judgment creditor considers necessary or appropriate to identify the judgment debtor. The property execution shall notify any person served therewith that the judgment debtor's nonexempt personal property is subject to levy, seizure and sale by the levying officer pursuant to the execution and, if the judgment debtor is a natural person, shall be accompanied by a notice of judgment debtor rights as prescribed by section 52-361b and a notice to any third person of the manner, as prescribed by subdivision (4) of this subsection, for complying with the execution.
(3) A property execution shall be returned to court within four months after issuance. The untimely return of a property execution more than four months after issuance shall not of itself invalidate any otherwise valid levy made during the four-month period.
(4) The levying officer shall personally serve a copy of the execution on the judgment debtor and make demand for payment by the judgment debtor of all sums due under the money judgment. On failure of the judgment debtor to make immediate payment, the levying officer shall levy on nonexempt personal property of the judgment debtor, other than debts due from a banking institution or earnings, sufficient to satisfy the judgment, as follows:
(A) If such nonexempt personal property is in the possession of the judgment debtor, the levying officer shall take such property into his possession as is accessible without breach of the peace;
(B) With respect to a judgment debtor who is not a natural person, if such personal property, including any debt owed, is in the possession of a third person, the levying officer shall serve that person with a copy of the execution and that person shall forthwith deliver the property or pay the amount of the debt due or payable to the levying officer, provided, if the debt is not yet payable, payment shall be made when the debt matures if within four months after issuance of the execution;
(C) With respect to a judgment debtor who is a natural person, if such personal property, including any debt owed, is in the possession of a third person, the levying officer shall serve that person with two copies of the execution, required notices and claim forms. On receipt of such papers, the third person shall forthwith mail a copy thereof postage prepaid to the judgment debtor at the last-known address of record with the third person and shall withhold delivery of the property or payment of the debt due to the levying officer or any other person for twenty days. On expiration of the twenty days, the third person shall forthwith deliver the property or pay the debt to the levying officer provided (i) if an exemption claim has been filed in accordance with subsection (d) of section 52-361b, the property shall continue to be withheld subject to determination of the claim, and (ii) if a debt is not yet payable, payment shall be made when the debt matures if within four months after issuance of the execution.
(5) Levy under this section on property held by, or a debt due from, a third person shall bar an action for such property against the third person provided the third person acted in compliance with the execution.
(6) If the levying officer cannot remove any property on which he seeks to levy without the danger of injury thereto, he may levy on and take possession of the property by posting on or adjacent to the property a conspicuous notice of the levy.
(7) Subject to the provisions of section 52-328, if the property to be executed against is already subject to an attachment, garnishment or judgment lien of the judgment creditor as security for that judgment, the priority of the execution shall hold from the date of perfecting of the attachment, garnishment or other lien. A sale pursuant to the execution forecloses any interest acquired as a result of the attachment, garnishment or judgment lien.
(8) If the judgment debtor has left the state prior to service of the execution or if he cannot otherwise be found with reasonable effort at his last-known address in this state, the levying officer shall proceed with the levy after (A) making demand for payment at such last-known address and on any agent or attorney of the judgment debtor of record with the clerk of the Superior Court, and (B) making a reasonable effort to ascertain and provide notice of the execution at any forwarding address.
Sec. 10. Subsection (b) of section 52-356d of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):
(b) In the case of a consumer judgment, the court may provide that compliance with the installment payment order, other than with an order for nominal payments pursuant to subsection (c) of this section, shall stay any property execution or foreclosure pursuant to that judgment, provided such a stay is reasonable considering the nature of the debt and the financial circumstances of the judgment debtor. In the case of a judgment arising out of services provided at a hospital, the court shall provide that compliance with the installment payment order shall stay any property execution or foreclosure pursuant to that judgment, including, but not limited to, execution on wages, execution on bank accounts, and execution on or foreclosure of real property.
Approved July 9, 2003