A new bill introduced in the Illinois Senate seeks to amend the Fair Patient Billing Act, providing additional protections for patients facing medical debt. Senate Bill 1223, sponsored by state Sen. Laura Fine, introduces key restrictions on medical debt collection practices, particularly in cases where patients are appealing health insurance decisions.
SB 1223 builds upon existing provisions in the Fair Patient Billing Act, which already regulates how hospitals and medical creditors pursue collections against uninsured patients. Under current law, hospitals must screen patients for discounts, offer financial assistance programs, and provide reasonable payment plans before pursuing collection actions.
Why it matters: The bill aims to prevent medical creditors and debt collectors from pursuing collection actions while a patient’s appeal of a health insurance decision is pending or was pending within the previous 180 days. This includes prohibiting direct communication with the patient about the unpaid debt, initiating lawsuits, or sending the debt to a collection agency.
What it does:
Protection During Appeals
- Medical creditors and debt collectors cannot contact patients or take legal action regarding unpaid medical bills if a health insurance appeal is still being reviewed or was resolved within the last 180 days.
- Medical creditors are also barred from selling or transferring the debt to a collection agency during this period.
Limits on Interest for Medical Debt
- If a patient qualifies for financial assistance and enters into a reasonable payment plan, no interest can be added to their medical debt.
- If a patient does not qualify for financial assistance but agrees to a payment plan, the interest rate is capped at 2% annually.
- This interest cap applies to court judgments on medical debt, preventing creditors from imposing higher rates.
Clarification on Medical Debt Forgiveness
- The bill states that if a medical provider forgives part of a patient’s co-pay, deductible, or out-of-network charges, this does not violate any contractual agreement between the medical provider and the patient’s insurer.
- This provision applies to contracts entered into, amended, or renewed after the bill takes effect.
