The Connecticut General Assembly
OFFICE OF LEGISLATIVE RESEARCH
December 17, 1996 96-R-1404
FROM: Matthew Ranelli, Research Attorney
RE: Statute of Limitation on Collection of Medical Bills
You asked if there was a statute of limitations for the collection of medical debts, and whether such debts were the responsibility of both spouses, even if they subsequently divorce.
You also asked whether a patient is financially responsible for tests sent to a lab that is not on a Health Maintenance Organization's (HMO) approved list.
The Office of Legislative Research is not authorized to issue legal opinions and this memorandum should not be considered as one.
Connecticut law imposes a six-year statute of limitations (SOL) on actions for account. Actions for account are actions to recover money for services performed (or simple or implied contracts), such as medical services. The statute may be tolled for people legally incapable of bringing a claim. The SOL does not prevent the collection of debt beyond six years, but requires that an action for collection begin within that time. A creditor that brings an action in that time and receives a judgment can collect at any time thereafter. The policy rational for SOLs is that the occasional hardship created by barring a just claim is outweighed by the benefit of outlawing stale claims.
In the example you described, both spouses may be liable for the debt incurred even if they subsequently divorced. The parties to the divorce could allocate the liability for marital debts in the divorce decree, but in the absence of a substitute agreement from the creditors, they could not prevent the creditor from collecting from either spouse. However the spouse who paid may have an action against the other spouse if he violated the terms of the decree.
HMO members may be liable for the cost of tests sent to nonapproved labs, depending on the contracts between the HMO, the hospital, and the member. HMOs may as a matter of policy decide to pay the lab fees if the tests were sent by an HMO hospital.
STATUTE OF LIMITATIONS FOR DEBT COLLECTION
Connecticut has a six-year statute of limitations for debt collection actions resulting from simple and implied contracts (CGS § 52-576; attachment 1). Medical bills generally are simple or implied contracts and thus the SOL is six years. Creditors attempting to collect past-due debt, must bring an action in court (known as an action for account) within six years of the time the right of action accrues or the claim is barred by operation of the statute. Determining when the right accrues depends on the circumstances involved; for example, if a debtor made occasional payments for a few years and then stopped, the right accrues when the debtor defaults, not when the original debt occurred. The time limit is tolled for people legally incapable of bringing an action; they have three years from the time that they become legally capable. The statute of limitation is an affirmative defense, it must be pled.
While the action must be brought within six years, but a judgment on the action may come later. Collection of a debt evidenced by a judgment is not time-barred, except that there is common law presumption of payment after 20 years (LaBarre V. V.P.A. Quinn, 17 Conn. Sup. 134 (1950)).
In the event that such debt is turned over to or sold to a collection agency, it is still within the SOL (they must bring an action within the original six-year period). For information on the state and federal laws governing collection agency conduct and practices see OLR Report 95-R-1120 (attachment 2).
Generally, the purpose of SOLs is preventing stale claims against unexpecting defendants. Stale claims present unique issues for courts because defendants may be caught “off-guard” by lapse of time, records may have been destroyed, and memories may have faded. SOLs protect citizens from such claims and relieve the courts of these problems. The rational is that the occasional hardship of barring a just claim is outweighed by the advantage of outlawing stale claims (Lametta v. Connecticut Light & Power Co.,139 Conn. 218 (1953)).
DIVORCE DOES NOT DISMISS DEBT OBLIGATIONS
In Connecticut, husband and wife have joint liability for medical services (CGS § 46b-37). Divorce does not prohibit a creditor from recovering debt from either spouse. Parties to a divorce may agree to divide liability for debts, and that agreement may be incorporated into the court's decree, but the rights of the creditor are not affected by the agreement or decree (unless the creditor enters a substitute agreement or otherwise consents). The agreement is a court sanctioned contract between the divorcing parties, and they are legally responsible to repay the debt in accordance with it. If one party fails to repay a debt and the other party pays the creditor, the party that paid has a right of action against the nonpaying party based on the agreement. However, if the creditor never had a right to collect from both spouses, the decree would not create one.
PAYMENT FOR LAB TESTS
State law does not require hospitals to send patients' tests to labs approved by the patient's HMO. In the event that a hospital sent a patient's test to a non-HMO-approved lab, the patient may be liable for the cost unless the parties had agreed otherwise. The agreements would be private agreements not required by state law.
For example, an HMO and a member hospital could agree that the hospital would always use HMO-approved labs and if they did not or no such labs were available, the HMO or hospital would pay. Another scenario is that an HMO could include a provision in the agreement with members that the HMO would pay non-HMO approved lab fees if the patient is in an out-of-network hospital.
According to Emily Smith, of Blue Cross' Government Relations Office, a patient who goes to a network hospital has fulfilled his obligation to seek in network care. If the hospital sends the patient's lab tests to an out-of-network hospital, the patient will be billed by the automated billing system. But, if the patient brings it to Blue Cross' attention, either it or the hospital will pay the bill (depending on the contract with the hospital and the circumstances).