Legislation Related to Hospital Billing Introduced in Senate

By ACA International / August 9,2023

The bill puts more requirements on originating health care providers related to communications when collecting on a debt.

Legislation introduced in the Senate targets communications with consumers from health care providers about any medical debt owed as well as transparency on their medical debt practices.

The Strengthening Consumer Protections and Medical Debt Transparency Act (PDF), sponsored by U.S. Sens. Chris Murphy, D-Conn., and Mike Braun, R-Ind., would also mandate the U.S. Department of Health and Human Services (HHS) to create a public database to record information from health care providers about their debt collection practices, according to a news release.

Similar legislation has been introduced in past legislative sessions. It appears to build on requirements in Section 501(r) of the Affordable Care Act, including making reasonable efforts to determine if a patient is eligible for financial assistance before conducting collection actions and providing written notice of financial assistance policies as well as collection actions, according to the Internal Revenue Service.

The recent proposal from Murphy and Braun includes requirements on processing patients’ insurance as well as timing for debt collection:

• Before an entity can send a debt into collections, they should ensure that all insurance coverage appeals have been resolved and determine whether the patient qualifies for assistance.

• Health care entities, or their contracted debt collection agencies, shall not enter into extraordinary collection until 180 days after an initial bill is sent and the debtor’s identity has been confirmed.

If a health care entity or its agent fails to comply with the changes outlined in the proposed law, they are liable to the patient for actual damages and up to $1,000. In the case of a class-action suit, damages are the amount each plaintiff could have recovered, not to exceed $2 million, according to the proposal. If the patient is successful, then attorney’s fees and other costs also can be recovered.

ACA International is researching the full proposal to clarify all the requirements for members.

ACA’s Take

ACA supports the intent of the bill to improve any deficiencies in providers’ processes related to ensuring charity care is properly identified and that payor’s responsibilities are properly recorded, but has concerns regarding draconian consequences that could negatively impact provider finances for rare mistakes.

The revenue cycle contains a complex set of processes, and any legislation should be well vetted by providers, payors and collection agencies to ensure the overall goals actually get achieved. Too often we’ve seen well-intended legislation reduce access to care for the most vulnerable in our communities by not looking at downstream consequences. Placing focus on the back-end processes has proven damaging to finding true root-cause improvements needed on the front-end that would bring about meaningful change in helping patients and consumers be aware of their health care payment options.

For example, at the recent Health Care Financial Management Association (HFMA) annual conference, Dr. Thomas Fisher, author of The Emergency: A Year of Healing and Heartbreak in a Chicago ER and an emergency room physician for University of Chicago Medicine, shared an important reminder that if well-intended ideas to help patients don’t recognize the need to ensure proper funding for providers, inequities will only be exacerbated.

“Too often our systems deny, reject and defer, and bankrupt people who come to seek care. But not everyone. In these same systems, we often see the best care in the world being delivered in a timely fashion and humanely,” Fisher said during the conference, according to an article from HFMA. “The fact that these two things occur simultaneously in the same systems is not an accident. Over time I’ve learned they represent the silent transfer of the length and quality of lives from the poor to the rich and from the Black to the white.”

Fisher’s book also covers his challenges delivering care in situations where funding is not provided for services to help patients.

“Part of why the health care system is currently misorganized is because our payment system tilts toward those who pay the most. And if we balance this out and hold some things in common, we might be able to create a floor for everybody,” Fisher said in an interview with Oprah Daily following the book’s release.

ACA’s advocacy team is actively engaged in educating lawmakers on relevant congressional committees about this proposed law, as well as health care receivables in general, in concert with other trade associations, ACA members who serve the provider community and ACA’s Board Advocacy Committee.

ACA is also focused on solutions involving stakeholders so that well-intended proposals can help patients while considering larger issues in the health care revenue cycle.

In May, ACA hosted a meeting with HFMA and the American Association of Healthcare Administrative Management attended by congressional staff during the 2023 Washington Insights Fly-In.

“This discussion was part of ACA’s continual efforts to work with trade associations in the health care industry and for our members serving health care clients with the goal to advance advocacy on health care medical debt credit reporting—ensuring any regulations take into account the impact on providers and patients,” said ACA CEO Scott Purcell.

In the panel discussion, Purcell shared that health care collections are approached with a problem-solving mindset by the accounts receivable management industry.

“It’s not about having the consumer pay unnecessarily, but rather figuring out where the payment responsibility lies when an account is sent from a health care provider to their third-party debt collection agency partners,” he said.