New Illinois Protections Against Patient Medical Debt May Also Help Reduce Hospital Bad Debt

The Protect Illinoisans from Unfair Medical Debt bill (the Bill), signed by Governor J.B. Pritzker on July 28, 2023, amends the Fair Patient Billing Act (the Billing Act), the Hospital Uninsured Patient Discount Act (the Discount Act) and the Community Benefits Act (the Benefits Act).  The Bill, effective January 1, 2024, has four primary requirements for Illinois hospitals, all of which apply to services provided on or after June 29, 2024, and all of which must be taken before hospitals may lawfully pursue collection efforts:

1. Hospitals must request consent from uninsured patients to screen for eligibility for public health insurance program coverage (e.g., Medicaid) and financial assistance eligibility as soon as reasonably practicable and before pursuing any collection action
2. Hospitals must track all declinations or failures to respond in the uninsured patients’ medical records and the reasons for declining the same, the total number of which, along with the top five reasons, are to be publicly reported on each hospital’s website
3. Hospitals must provide insured patients more opportunities to be considered for eligibility under a hospital’s financial assistance policy
4. Beyond the screening obligations, Illinois hospitals must give uninsured patients and certain insured patients more time to act on their financial options before pursuing collection actions

UNINSURED PATIENTS: PUBLIC HEALTH INSURANCE PROGRAM AND HOSPITAL FINANCIAL ASSISTANCE ELIGIBILITY SCREENING OBLIGATIONS

As rewritten, the Billing Act will require hospitals to screen each uninsured patient who agrees to be screened for potential eligibility for public health insurance programs and for any financial assistance offered by a hospital. Patient consent to screening is a threshold decision that will implicate the subsequent next steps under each of the Billing Act, Discount Act and Benefits Act.

The Billing Act defines “screen” or “screening” as “a process whereby a hospital engages with a patient to review and assess the patient’s potential eligibility for any financial assistance offered by the hospital, public health insurance program, or other discounted care known to the hospital; informs the patient of the hospital’s assessment; documents in the patient’s record the circumstances of the screening; and assists with the application for hospital financial assistance.” The Billing Act requires that all such screening activities and all follow-ups be provided in compliance with the Illinois Language Assistance Services Act, which require interpreters to ensure adequate and speedy communication with patients and staff. Ensuring access to language assistance services is also required of hospitals to comply with Section 1557 of the Affordable Care Act, so hospitals would be well served to review their interpretation services agreements.

Uninsured Patients Who Decline To Be Screened

Hospitals must document when and why uninsured patients decline screening. Specifically, if a patient declines or fails to respond to the offer to be screened, the hospital must make note of this in the uninsured patient’s medical record, confirming the date and method by which the patient declined or failed to respond. Hospitals should also inquire as to the reason(s) why uninsured patients decline screening, because the changes to the Benefits Act require hospitals 1) to separately track the number of uninsured patients who decline to consent to the screening and those that fail to respond and 2) to report the five most frequent reasons that patients provide for declining to consent. These data points must be noted on the hospital’s website in the same location where the hospital posts its annual reports or on a prominent location on the homepage of the hospital’s website.

Uninsured Patients Who Consent To Be Screened

If an uninsured patient consents to be screened for eligibility for public health insurance programs and financial assistance offered by a hospital, then a hospital must complete the screening during registration or at the earliest reasonable moment if screening would cause an untenable delay of care to the patient.

If the screening indicates that the uninsured patient may be eligible for a public health insurance program, then the hospital must provide information to the uninsured patient about how to apply to said program(s), including but not limited to, referring the patient to:

1. Healthcare navigators who can provide free and unbiased eligibility and enrollment assistance, including those at federally qualified health centers
2. Local, state or federal government agencies
3. Any other resources that Illinois recognizes as designed to assist uninsured individuals in obtaining health coverage

If an uninsured patient’s application for public health program insurance is approved, then the hospital must bill the relevant program and not pursue the patient for any aspect of the bill, other than applicable and required cost-sharing amounts. If the uninsured patient’s application for public health program insurance is denied, then the hospital must once again offer to screen the uninsured patient for eligibility under the hospital’s financial assistance policy, which restarts the clock for the patient to provide relevant information to the hospital in connection with the hospital’s financial assistance policy to reduce the amount the uninsured patient owes. Only after all of these steps have been taken may a hospital pursue collection actions against the uninsured patient.

INSURED PATIENTS: HOSPITAL FINANCIAL ASSISTANCE ELIGIBILITY SCREENING OBLIGATIONS

Under the new requirements of the Billing Act, hospitals must offer to screen insured patients for hospital financial assistance in the following four circumstances:

1. If an insured patient specifically requests such screening
2. If the hospital is contacted in response to a bill
3. If the hospital learns of information that suggests an insured patient’s inability to pay
4. If circumstances otherwise suggest the patient’s inability to pay

While the first circumstance is straightforward, the remaining three are trickier to operationalize. In the second scenario, every time a hospital’s billing department receives a call from an insured patient inquiring about a bill, the hospital should ask whether the individual would like to be screened for eligibility under the hospital’s financial assistance policy. In the third and fourth circumstances, the touchpoints whereby the hospital could learn of a patient’s financial hardship are far greater and varied. These requirements are onerous especially in the current environment, where the hospital workforce is already very challenged by the increased demands on their time. It is also unclear how the state will enforce compliance with these happenstances, as the enforcement provisions were not amended as part of the Bill. Until and unless further guidance is promulgated, we recommend a “best efforts” approach and training workforce on the Billing Act obligations.

COLLECTION ACTIONS

Uninsured Patients

Hospitals cannot pursue collections against uninsured patients without complying with the above-mentioned screening requirements. Also, the updates to the Billing Act and the Discount Act regarding hospital collection actions against uninsured patients create an extended process for uninsured patients to seek coverage and/or financial assistance and therefore prolong the period before a hospital can send the uninsured patient’s bills to collection agencies.

Starting in mid-2024, hospitals and their billing agents may not pursue collection actions against uninsured patients if the hospital 1) does not comply with the screening requirements for uninsured patients described above and 2) does not exhaust the discounts available to a patient under Section 10 of the Discount Act, which are not revised by the Bill but do have changes effective January 1, 2024, and are set forth in the Appendix below. If a patient does not submit relevant information that a hospital requests in connection with a completed screening, application for financial assistance or other payment plan documentation within 30 days, then a hospital must document this much, confirming the date of the screening and the 30-day timeline for responding to the hospital’s request(s). That said, hospitals must allow uninsured patients to apply for a discount at any point within 90 days of discharge, date of service, completion of the screening under the Billing Act or denial of an application for a public health insurance program—even if it occurs after the initial 30-day period noted above.

In addition, the Bill amended Section 15 of the Discount Act to acknowledge that if a hospital makes the availability of its discount programs contingent on an uninsured patient first applying for coverage under public health insurance programs, the hospital may nevertheless screen the patient for financial assistance eligibility if the patient declines to first apply for a public health insurance program out of concern for immigration-related consequences. In that case, the hospital may—but is not required—to direct those patients to a free, unbiased resource such as an Immigration Family Resource Program, to address the uninsured patient’s immigration-related concerns and assist in enrolling the patient in a public health insurance program. This reason should be cited in the patient’s medical record and included in the hospital’s tracking of reasons why patients decline to be screened for public health insurance program eligibility.

Insured Patients

Before referring an insured patient’s bill to collections, the Billing Act also requires hospitals to ensure compliance with these requirements and offer the implicated patient the opportunity to request a reasonable payment plan for the amount personally owned. Patients will have 90 days to request a payment plan after receiving an initial bill (up from 30 days), and if the patient does not agree to an offered reasonable payment plan within 90 days of the request (up from 30 days), the hospital may proceed with collection actions.

ENFORCEMENT

The Bill did not amend the enforcement provisions of the Billing Act, the Discount Act or the Benefits Act. Accordingly, under the Billing Act the Illinois Attorney General remains empowered to investigate complaints of noncompliance with the aforementioned screening obligations and to obtain injunctive relief or impose a corrective action plan as deemed appropriate. Furthermore, the Attorney General may seek civil monetary penalties of up to $500 for knowing violations involving a pattern or practice of not providing obligatory information to patients. If a hospital subsequently fails to engage in or refrain from certain activities, the penalty may grow to $1,000 per violation. Potential penalties are similar under the Discount Act for failing to make available discounts to eligible patients. The Benefits Act does not have an enforcement schema.

CONCLUSION

Hospital compliance with these new obligations will require interdepartmental coordination and open communication so that patients are availed of these opportunities, hospitals bring down their bad debt caused by uninsured individuals, and hospitals can pursue collections for outstanding patient obligations.

Given the six-month delay between the Bill’s effective date and the true date by which the hospital obligations under the Bill become legal requirements, Illinois hospitals have time to operationalize their compliance approach. Existing legal requirements—such as the Affordable Care Act requirement to provide language assistance services and the No Surprises Act requirement to provide uninsured and self-pay patients who are scheduling services with an estimate of their expected charges—provide some existing infrastructure for hospitals to build out their compliance workplans.

For more information or for assistance regarding the Bill, please contact one of the authors.