SB2579 93RD GENERAL ASSEMBLY

LRB093 16098 DRJ 41726 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2579

Introduced 2/4/2004, by Barack Obama - Iris Y. Martinez - Jeffrey M. Schoenberg - Jacqueline Y. Collins

SYNOPSIS AS INTRODUCED:

New Act
210 ILCS 85/7	from Ch. 111 1/2, par. 148

Creates the Hospital Discriminatory Pricing Reform Act and amends the Hospital Licensing Act. Requires every hospital to develop an "assistance to the uninsured" policy specifying how the hospital will determine the financial liability for services rendered to uninsured patients. Requires that the policy address charity care. Requires notice of the policy to patients. Limits debt collection activities by a hospital. Provides that a violation of the Hospital Discriminatory Pricing Reform Act may subject a hospital to suspension or revocation of its license. Also provides for civil penalties and for a private right of action. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning health facilities.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Hospital Discriminatory Pricing Reform Act.

Section 5. Definitions. In this Act:

"Chargemaster" means a list of charges for all procedures, services, and supplies.

"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 Medicaid cost report.

"Department" means the Illinois Department of Public Health.

"Federal poverty level" means the poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under authority of subsection (2) of Section 9902 of Title 42 of the United States Code.

"Financially qualified uninsured patient" means a patient who is uninsured and whose family income is less than 300% of the federal poverty level.

"Hospital" means any facility that is required to be licensed under the Hospital Licensing Act.

"Medically necessary service" means a service that is reasonably expected to prevent, diagnose, prevent the worsening of, alleviate, correct, or cure a condition that endangers life, causes suffering or pain, causes physical deformity or malfunction, threatens to cause or to aggravate a handicap, or results in illness or infirmity. Medically necessary services include inpatient and outpatient services as mandated under Title XIX of the Federal Social Security Act. Medically necessary services do not include any of the following:

(1) Non-medical services, such as social, educational, and vocational services.

(2) Cosmetic surgery.

"Underinsured" patient means a patient whose deductibles or co-payments, or medical or hospital bills after payment by third-party payers, exceed the patient's ability to pay, determined in accordance with a hospital's charity care policy.

"Uninsured allowance" means, with respect to medically necessary services rendered to a financially qualified uninsured patient, an allowance that is applied after the hospital's charges are imposed on the patient, due to the patient's determined financial inability to pay the charges.

"Uninsured patient" means a patient who does not have third-party coverage from a health insurer, health care service plan, Medicare, or Medicaid and whose injury is not a compensable injury for purposes of workers' compensation, automobile insurance, or other insurance as determined and documented by the hospital. Uninsured patients may include charity care patients.

Section 10. Assistance-to-the-uninsured policy. Every hospital must develop an assistance-to-the-uninsured policy specifying how the hospital will determine the financial liability for services rendered to uninsured patients, including financially qualified uninsured patients.

Every hospital must specify in its policy how the hospital will determine and apply uninsured allowances for services provided to financially qualified uninsured patients. An uninsured allowance, at a minimum, must be equal to the difference between the charge for medically necessary services set forth in the hospital's established charge schedule and the cost of providing services.

Uninsured allowances may be applied by the hospital to uninsured patients who do not meet the standards for financially qualified uninsured patients.

Section 15. Charity care. Each hospital must include in its assistance-to-the-uninsured policy a section addressing charity care patients. The charity care section of the policy must specify the financial criteria and the procedure used by the hospital to determine whether an uninsured or underinsured patient is eligible for charity care. The charity section of the policy must provide for discounts for uninsured and underinsured patients whose income is less than 400% of the federal poverty guidelines. The policy must include all of the following:

(1) Financial eligibility criteria.

(2) Financial information required of the patient.

(3) A review process for charity care decisions.

(4) An appeals process for charity care decisions.

Section 20. Notice of policy.

(a) Every hospital must provide each of its patients with oral and written notice of the hospital's assistance-to-the-uninsured policy at the time of admission and discharge. The notice must also be provided to patients who receive emergency or outpatient care and who may be billed for that care but who were not admitted. The notice must be in the language spoken by the patient. All written correspondence to the patient required by this Act must also be language appropriate.

(b) Notice of the hospital's assistance-to-the-uninsured policy must be clearly and conspicuously posted in locations that are visible to the public, including, but not limited to, all of the following:

(1) The emergency department, if any.

(2) The billing office.

(3) The Admissions office.

(4) Other locations that may be determined by the Department, to ensure that patients are informed of the policy.

(c) Every hospital must publicly post, in the waiting area of the emergency department (if any), the billing office, the admissions office, and other locations that may be determined by the Department, the most recent charges for the 10 most-utilized outpatient services.

(d) Every hospital must make available to any member of the public a copy of its current chargemaster.

Section 25. Application forms. Every hospital must make available, upon request by any member of the public, a copy of the uninsured-patient application used by the hospital, including the charity care section of that application. The Department, in consultation with interested parties, may also develop a uniform uninsured-patient application to be used by all hospitals. In developing the application, the Department shall consider whether the application used for the medical assistance program under Article V of the Illinois Public Aid Code can be used as or incorporated in the uniform uninsured-patient application.

Section 30. Billing.

(a) Every hospital must make all reasonable efforts to obtain from a patient or his or her representative information about whether private or public health insurance or sponsorship may fully or partially cover the charges for care rendered by the hospital to the patient, including, but not limited to, any of the following:

(1) Private health insurance.

(2) Medicare.

(3) Medicaid, FamilyCare, KidCare, or other State-funded or county-funded programs designed to provide health coverage.

(b) If a hospital bills a patient, then as a part of that billing the hospital must provide the patient with a clear and conspicuous notice that includes all of the following:

(1) An itemized statement of charges for services rendered by the hospital.

(2) A request that the patient inform the hospital if the patient has health insurance coverage, Medicare, Medicaid, or other coverage.

(3) A statement that if the patient does not have health insurance coverage, he or she may be eligible for Medicare, Medicaid, FamilyCare, KidCare, charity care, or an uninsured allowance.

(4) A statement indicating how patients may obtain applications for Medicare, Medicaid, FamilyCare, KidCare, charity care, or an uninsured allowance and that the hospital will provide these applications on request.

(c) Every hospital must make available to patients information regarding uninsured and charity care applications, including the following:

(1) The hospital contact for resources for additional information regarding charity care.

(2) A statement indicating how patients may obtain an uninsured application from the hospital, including an application for a financially qualified uninsured patient. The statement must provide information about the family income requirements for financially qualified uninsured patients as provided in Section 15 and this Section.

Section 35. Debt collection activities.

(a) In order to facilitate payment by public or private third-party payers, for at least 180 days after a patient's discharge, a hospital or its assignee or billing service is limited to the following debt collection activities:

(1) Sending a bill to the patient in accordance with existing law.

(2) Attempting to negotiate a payment plan in accordance with subsection (c).

(3) Attempting to collect payment from any responsible third-party payer, either public or private.

(4) Providing any information that may assist the patient in obtaining coverage through the Medicaid program, FamilyCare or KidCare, or any other public program for which the patient may be eligible.

(5) Attempting to make a final determination as to whether the patient may be considered an uninsured patient under the hospital's assistance-to-the-uninsured policy or is eligible for charity care under the hospital's charity care policy.

(b) The period described in subsection (a) shall be extended if the patient has a pending appeal for coverage of the services. For purposes of this subsection, "pending appeal" includes any of the following:

(1) A grievance against a health care service plan.

(2) An independent medical review.

(3) A fair hearing for a review of a Medicaid claim.

(4) An appeal regarding Medicare coverage consistent with federal law and regulations.

(5) An appeal of a workers' compensation judgment.

(c) A hospital or its assignee or billing service must use reasonable efforts to negotiate a payment plan. For purposes of this subsection, "reasonable efforts to negotiate a payment plan" means 2 efforts to contact the patient by telephone and 2 efforts to contact the patient by mail.

Section 40. Notice before collection.

(a) Before commencing collection activities against a patient, a hospital, any assignee of the hospital, or any other owner of the patient debt, including a collection agency, must provide the patient with a clear and conspicuous written notice containing both of the following:

(1) A plain-language summary of the patient's rights under this Act and the federal Fair Debt Collection Practices Act, Subchapter V (commencing with Section 1692) of Chapter 41 of Title 15 of the United States Code.

(2) Information about nonprofit credit counseling services in the area.

(b) Every collection agent engaged in collecting a debt from a patient arising from services provided at a hospital must provide written notice as to (i) whether the hospital deems the patient an insured patient, an uninsured patient, or a financially qualified uninsured patient and (ii) the reasons for the determination.

(c) The notice required by subsection (b) of Section 30 must also accompany any document indicating that the commencement of collection activities may occur.

Section 45. Availability of policy. Every hospital, upon request, must provide any member of the public and the Department with a copy of its assistance-to-the-uninsured policy, eligibility procedures, review process, and procedure for determining uninsured pricing.

Section 50. Debt collection activities report.

(a) Every hospital must annually prepare a debt collection and charity care report that includes whether the hospital uses a collection agent to assist with debt collection, the name of any collection agent used, the hospital's processes and policies for assigning a debt to a collection agent and for compensating the collection agent for services rendered, and the recovery rate on accounts assigned to collection agents (exclusive of Medicare accounts) in the most recent hospital fiscal year. The report must include the following information reported separately for Medicare patients, Medicaid patients, patients with commercial insurance, patients enrolled in a health care plan provided or arranged for by a health maintenance organization, and self-pay patients:

(1) Number of accounts referred to a collection agency.

(2) Number of accounts sold to a collection agency.

(3) Number of accounts pursued through court action.

(4) Number of charity care applications received.

(5) Number of charity care applications approved.

(b) A hospital must provide copies of its debt collection and charity care report to any member of the public and the Department upon request.

Section 55. Violations; penalties.

(a) A determination that a hospital has violated a provision of this Act may result in the suspension or revocation of the hospital's license under the Hospital Licensing Act.

(b) A hospital that fails to post a notice required under this Act is subject to a civil penalty of $500 per day for each day that the required notice is not posted. A hospital that fails to provide notification requited under this Act is subject to a civil penalty of $500 per incident.

(c) A hospital that violates Section 35 is subject to a civil penalty of $15,000 per violation.

(d) A hospital that fails to provide information to the public as required under this Act in a timely manner is subject to a civil penalty of $500 for each incident.

(e) A person or hospital that fails to report or falsifies information required to be reported under this Act, or that coerces, threatens, intimidates, or otherwise influences another person to fail to report or to falsify such information, is subject to a civil penalty of up to $15,000 for each such incident.

(f) The Department may impose a civil penalty authorized under this Section after giving written notice of the alleged violation to the hospital or other person and after an administrative hearing at which the hospital or other person has an opportunity to present oral or written evidence. The Attorney General may bring an action in the circuit court to enforce collection of a civil penalty imposed under this Section.

Section 60. Private right of action. A patient who is adversely affected by a hospital's violation of this Act may bring an action in a court of competent jurisdiction for such legal or equitable relief as may be appropriate to effectuate the purposes of this Act.

Section 90. The Hospital Licensing Act is amended by changing Section 7 as follows:

(210 ILCS 85/7) (from Ch. 111 1/2, par. 148)

Sec. 7. (a) The Director after notice and opportunity for hearing to the applicant or licensee may deny, suspend, or revoke a permit to establish a hospital or deny, suspend, or revoke a license to open, conduct, operate, and maintain a hospital in any case in which he finds that there has been a substantial failure to comply with the provisions of this Act, or the Hospital Report Card Act, or the Hospital Discriminatory Pricing Reform Act or the standards, rules, and regulations established by virtue of any either of those Acts.

(b) Such notice shall be effected by registered mail or by personal service setting forth the particular reasons for the proposed action and fixing a date, not less than 15 days from the date of such mailing or service, at which time the applicant or licensee shall be given an opportunity for a hearing. Such hearing shall be conducted by the Director or by an employee of the Department designated in writing by the Director as Hearing Officer to conduct the hearing. On the basis of any such hearing, or upon default of the applicant or licensee, the Director shall make a determination specifying his findings and conclusions. In case of a denial to an applicant of a permit to establish a hospital, such determination shall specify the subsection of Section 6 under which the permit was denied and shall contain findings of fact forming the basis of such denial. A copy of such determination shall be sent by registered mail or served personally upon the applicant or licensee. The decision denying, suspending, or revoking a permit or a license shall become final 35 days after it is so mailed or served, unless the applicant or licensee, within such 35 day period, petitions for review pursuant to Section 13.

(c) The procedure governing hearings authorized by this Section shall be in accordance with rules promulgated by the Department and approved by the Hospital Licensing Board. A full and complete record shall be kept of all proceedings, including the notice of hearing, complaint, and all other documents in the nature of pleadings, written motions filed in the proceedings, and the report and orders of the Director and Hearing Officer. All testimony shall be reported but need not be transcribed unless the decision is appealed pursuant to Section 13. A copy or copies of the transcript may be obtained by any interested party on payment of the cost of preparing such copy or copies.

(d) The Director or Hearing Officer shall upon his own motion, or on the written request of any party to the proceeding, issue subpoenas requiring the attendance and the giving of testimony by witnesses, and subpoenas duces tecum requiring the production of books, papers, records, or memoranda. All subpoenas and subpoenas duces tecum issued under the terms of this Act may be served by any person of full age. The fees of witnesses for attendance and travel shall be the same as the fees of witnesses before the Circuit Court of this State, such fees to be paid when the witness is excused from further attendance. When the witness is subpoenaed at the instance of the Director, or Hearing Officer, such fees shall be paid in the same manner as other expenses of the Department, and when the witness is subpoenaed at the instance of any other party to any such proceeding the Department may require that the cost of service of the subpoena or subpoena duces tecum and the fee of the witness be borne by the party at whose instance the witness is summoned. In such case, the Department in its discretion, may require a deposit to cover the cost of such service and witness fees. A subpoena or subpoena duces tecum issued as aforesaid shall be served in the same manner as a subpoena issued out of a court.

(e) Any Circuit Court of this State upon the application of the Director, or upon the application of any other party to the proceeding, may, in its discretion, compel the attendance of witnesses, the production of books, papers, records, or memoranda and the giving of testimony before the Director or Hearing Officer conducting an investigation or holding a hearing authorized by this Act, by an attachment for contempt, or otherwise, in the same manner as production of evidence may be compelled before the court.

(f) The Director or Hearing Officer, or any party in an investigation or hearing before the Department, may cause the depositions of witnesses within the State to be taken in the manner prescribed by law for like depositions in civil actions in courts of this State, and to that end compel the attendance of witnesses and the production of books, papers, records, or memoranda.

(Source: P.A. 93-563, eff. 1-1-04.)

Section 99. Effective date. This Act takes effect upon becoming law.