A healthcare collection bill that would establish new patient billing requirements for healthcare facilities and place new restrictions on medical debt collection activity is progressing through the South Carolina legislature and appears to be on its way to becoming law.
Why it matters: The proposed legislation would require healthcare facilities to provide patients with itemized medical bills in electronic form, establish new notice requirements surrounding those bills, and require collection activity to stop if billing inaccuracies are identified.
The latest: Lawmakers recently advanced a revised version of the bill that changes several provisions from the original proposal, including delaying the effective date and narrowing some collection-related language.
The details:
- The bill would add Section 44-7-327 to South Carolina law.
- Beginning Jan. 1, 2027, covered healthcare facilities requesting payment from patients after providing healthcare services or supplies would be required to:
- Provide an electronic itemized bill to patients; and
- Provide a written copy upon request.
The proposal defines “healthcare facility” broadly to include:
- Acute care hospitals
- Psychiatric hospitals
- Ambulatory surgical facilities
- Hospice facilities
- Rehabilitation facilities
- Radiation therapy facilities
- Residential treatment facilities for children and adolescents
- Narcotic treatment programs
- Several other licensed facility types
Under the bill, healthcare facilities would also have to:
- Notify patients in “clear and conspicuous language” that itemized bills are available electronically or in writing;
- Allow patients to indicate their preferred delivery method;
- Inform patients they may later request an itemized bill even if they initially waived that right.
The itemized bill itself would have to include:
- Plain-language descriptions of services and supplies;
- The amount allegedly owed by the patient; and
- If a third-party payer was involved, the patient responsibility amount reflected in the electronic remittance advice.
The bill specifically authorizes healthcare facilities to issue itemized bills electronically, including through patient portals.
Collection agency language: One of the more notable provisions states that a collection agency “must not attempt to collect on a medical bill if provided notice of billing inaccuracies” by the healthcare facility, patient, or debtor. If inaccuracies are determined to exist, the bill says the collection agency must:
- Cease collection activities; and
- Return the account to the healthcare facility.
What’s changed from the original bill:
- The original bill would have prohibited healthcare facilities from pursuing debt collection unless they complied with the statute. That language has been removed.
- The original version stated collection agencies would not be liable for billing inaccuracies provided by healthcare facilities. The revised bill removes that liability protection language.
- The earlier proposal required itemized billing for “each service and supply provided.” The revised bill changes that standard to a more general “general department or service level.”
- The original bill also required disclosure of billing codes and more detailed insurance explanation-of-benefits information. Those requirements were removed in the newer version.
- The original proposal required itemized bills to be made available within 30 days after final third-party payment. That timing requirement was removed.
