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HB21-1198: Hospital and emergency room billing reform

Support HB21-1198

HB21-1198 One-Page Fact Sheet (PDF)

HB21-1198: Health-care Billing Requirements For Indigent Patients seeks to prohibit some of the cruelest practices of medical debt collection, breaking the cycle of debt-driven poverty and enabling more Coloradans to take part in the economy.

HB21-1198 will prevent overcharging of low-income patients, ensure hospitals screen patients for assistance, prohibit collection actions unless hospital providers take steps to protect patients, and ensure all patients have access to information about their rights in their primary language.

CCLP urges the passing of this bill and we hope you’ll join us.

Thank you to Representative Iman Jodeh, Senator Janet Buckner and Senator Chris Kolker for sponsoring this important legislation.

How HB21-1198 benefits Coloradans

Read more about how HB21-1198 repairs Colorado’s existing Hospital Financial Assistance Law below.

The case for HB21-1198

Coloradans have been at the mercy of skyrocketing hospital and ER prices for a decade. Billing practices leave Coloradans in the dark about what they are paying for and when public health coverage or legally-required discounts are available.

At CCLP we believe every Coloradan should be able to access necessary hospital care without being pushed into crushing debt. Colorado hospitals are experiencing record profits, yet fifteen percent of Coloradans have medical debt in collections. That number increases to 1 in 4 Coloradans from communities of color, a disproportionate harm resulting from racist policies and practices, and compounding the cycle of poverty for generations to come.

No Coloradan should suffer financial ruin because they or a loved one received critical care for illness or injury. High medical debt can have long-term consequences, ruining credit, and fostering poverty. More broadly, Colorado’s recovery from the pandemic and its economic consequences is jeopardized when Coloradans are forced to avoid care or take on unmanageable debt due to cost.

Why is this bill so important?

  • Payment history is one of the most important factors in determining credit scores. As a result, unaffordable medical bills that go unpaid can make it more difficult—and expensive—to purchase a home, rent an apartment, buy a car, or get a credit card.
  • The disproportionate debt burden experienced by communities of color is the result of racist policies and practices that have concentrated financial distress and higher uninsured rates in Black and Brown communities. That debt burden further restricts communities of color from fully participating in Colorado’s economy.
  • When denied more affordable forms of credit, too many Coloradans are forced to rely upon high-cost loan products known for their predatory interest rates and fees, negatively impacting generational wealth and well-being.

For a strong and equitable recovery from the pandemic and its economic consequences, crushing debt cannot be the consequence of receiving necessary hospital care.

How HB21-1198 repairs Colorado’s Hospital Financial Assistance Law

Sets an enforceable standard for discounted care

Uninsured low-income Coloradans will get a discount pegged to an established rate and monthly payments will be limited so low-income families can better manage their medical debt.

Ensures hospital providers screen patients that want assistance for public coverage and discounts

Providers will have to connect patients to the public coverage or discounted care options they qualify for but may not know about.

Prohibits collection actions unless providers take steps to protect patients

Providers will not be able to send patient debt to collections unless they screen interested patients for assistance, offer a fair payment plan, and provide critical information about the collection action.

Ensures all patients have access to information about their rights in their primary language

Providers will have to make information about patient rights to screening, discounted care, payment plans, and protections against collections available to their community in commonly spoken languages and to each patient in their primary language.

Provides for better enforcement of patient rights

Providers will have to report disaggregated data regarding their financial assistance activity to HCPF and HCPF will be required to draft regulations and establish a complaint process to aid in enforcement.

Additional Questions and Answers

What makes HB21-1198 different from other hospital billing legislation?

Colorado passed legislation with similar components in 2012. HB21-1198 moves those components from CDPHE oversight to HCPF oversight, to improve enforcement and better align similar programs. Since we are moving the provisions from Title 25 (CDPHE’s jurisdiction) to Title 25.5 (HCPF’s jurisdiction), we are taking the opportunity to make critical improvements to the law to simplify the hospital billing process for patients, and help ensure Coloradans have access to care without crushing debt.

Why move regulation of hospital billing and collections practices to HCPF?

Hospitals and hospital providers routinely send patients to collections without having screened them for financial assistance and without providing reduced rates when required. HCPF has the expertise needed to improve enforcement of patient rights. CDPHE indicates that they are not the appropriate agency for this type of “financial” regulation of hospitals. Subsequently, for the past eight years, they never took steps to pass the regulations needed for enforcement. On the other hand, HCPF oversees similar programs such as hospital community benefit and the Colorado Indigent Care Program. HB21-1198 would help align state programs that provide discounted hospital care.

Why require screening?

In 2016 an estimated 115,000 Coloradans were eligible for Medicaid or CHP+ but not enrolled and policies implemented since then have had the effect of depressing enrollment further, especially among eligible immigrants and their eligible family members. Beyond helping with immediate medical expenses, connecting people to the comprehensive coverage options they qualify for promotes health and financial well-being. For people with low incomes, just having health insurance reduces rates of depression, eviction and bankruptcy. And kids in families with low incomes, who have publicly-financed coverage, are more likely to finish high school, graduate from college and have higher incomes as adults. Connecting uninsured people to public coverage benefits hospitals too, since public coverage programs pay significantly higher rates than the 26 cents on the dollar that hospitals typically get from people who pay out-of-pocket (see CHASE report page 25). Without consistent screening of uninsured patients, Coloradans are often sent to collections for unaffordable bills when they should have had access to coverage. Finally, screening for discounts is an important safety net for our most marginalized neighbors who are excluded from public coverage. 

How will the screening requirements impact administrative burden for hospitals?

Under current law, hospitals should already be screening uninsured patients for financial assistance. If the bill passes, hospitals will have to screen for both financial assistance and public coverage. But consistent screening will benefit hospitals too, because public coverage programs pay significantly higher rates than the 26 cents on the dollar that hospitals typically get from people who pay out-of-pocket (see CHASE report page 25). In addition, some of the administrative burden of completing screening for financial assistance and CICP will be reduced because the bill mandates that HCPF create a uniform application that all hospitals will use. 

Why provide financial assistance to people with insurance?

With the proliferation of high deductible health plans, more Coloradans are struggling to pay their hospital and emergency room bills, despite having health insurance. In 2019, over $60 million in bad debt written off by hospitals was for care provided to insured patients (see Hospital Expenditure Report page 15). This is over three times higher than the bad debt attributed to Medicare patients and indicates that insured hospital patients are struggling to pay their deductibles and other cost-sharing.

 

What is the rationale for the discounted care standard?

The standard, designed with enforcement in mind, has three caps for people at or below the 250% federal poverty level: 1) hospitals can only charge 80% of the applicable Medicare rate for uninsured patients in this population, 2) hospitals must limit required monthly payments to 5% of monthly income for this population, insured or not, 3) hospitals can only collect payments from this population for a maximum of 36 months.

The standard is relatively simple and information about the elements of the standard – Medicare rates and patient income – is available to the patient. This makes the standard more enforceable. The 5% of income cap on monthly payments comes from the definition of “underinsured” developed by The Commonwealth Fund. Under that standard, an insured person is underinsured if their income is under 200 percent of the federal poverty level and if out-of-pocket costs, excluding premiums, are equal to 5 percent or more of household income. Finally, the 36-month time limit was included to ensure that the lowest-income hospital patients are not struggling to pay down crippling health care debt beyond three years. 

Why provide for a private right of action?
A private right of action provides patients a legal tool they can use to prevent the damaging effects of being sent to collections in violation of their rights to screening, discounted care, and adequate information. The language mirrors language in the Federal Debt Collection Practices Act, which has proven extremely effective in reducing non compliance with consumer protections.

Get involved

You can play a crucial role in moving this bill forward.

    • Contact your legislators and urge your support
    • Share your support for HB21-1198 across social media
    • Sign on your organization as an official supporter of the bill

Learn more on our 1198 Action Page

Supporters of hospital and emergency room billing reform

9to5 Colorado
AARP Colorado
All Families Deserve a chance Coalition
Bell Policy Center
Center for Health Progress
Chronic Care Collaborative
Clayton Early Learning
Colorado Center on Law and Policy
Colorado Children’s Campaign
Colorado Coalition for the Homeless
Colorado Consumer Health Initiative
Colorado Cross-Disability Coalition
Colorado Fiscal Institute
Colorado Organization for Latina Opportunity and Reproductive Rights (COLOR)
Colorado Social Legislation Committee
El Grupo Vida
Family Voices Colorado
Raise Coalition
Spring Institute for Intercultural Learning
Summit Family & Intercultural Resource Center
The Consortium
Towards Justice
Women’s Lobby of Colorado

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.