[co-author: Stephanie Kozol]

Colorado Attorney General Phil Weiser recently released a press release, supporting new Senate Bill 23-093 called “Increase Consumer Protections Medical Transactions.” Specifically, the bill would reduce medical debt for Colorado residents and make health care more affordable and accessible, protecting Coloradans from “high interest rates for medical debt and confusing debt collection practices that lead to long-lasting debt and financial instability.”

According to the press release, the Consumer Financial Protection Bureau reported that Coloradans held more than $1.3 billion in medical debt and over 12% had medical debt in collections. Also, a Colorado Health Institute survey found that 46.2% of individuals with medical debt had accumulated credit card debt for medical expenses. As such, the proposed bill includes requirements for hospitals and medical debt collectors.

• Under the bill, hospitals must provide self-pay patients cost estimates for medical procedures and services before treatment and upon written request, so patients can make more informed decisions about their health care and potentially avoid unexpected and unmanageable medical bills. The bill also makes it a deceptive trade practice to violate laws, such as the federal “No Surprises Act” and other laws concerning billing practices (e.g., balance billing).
• Medical Debt Collectors. Medical debt collectors would have a 3% annual cap on medical debt interest rates to prevent accumulating excessive debt that patients may be unable to pay off. They must also verify the total debt owed upon request and provide an itemized debt statement before debt collection, including the amount due when generating the statement, “reflecting interest, fees, payments, and credits.”

The proposed bill also sets out requirements for medical debt collectors to follow if entering into a payment plan, including providing notice before accelerating or declaring the plan in default. Further, collectors must stop debt collection if a patient appeals the debt, and they cannot report the debt to a consumer reporting agency until after a specified period if the patient fails to comply with a payment plan.

Lastly, the bill would expand the Colorado AG’s authority to protect consumers from deceptive billing practices. This follows AG Weiser’s recent investigation against medical billing company Flatirons for sending deceptive billing notices, stating they were “not a bill,” but expected consumers to pay. Further, Flatirons sent the notices on behalf of surgical assistants not covered by patients’ insurance. As part of the settlement, Flatirons refunded the 40 patients who paid on these misleading bills.

Why It Matters

The Colorado AG’s support for a bill requiring hospitals and medical debt collectors to adhere to the strict requirements shows his deep investment in holding bad industry actors accountable through regulatory oversight expansion.