Connecticut Governor Signs Bill Limiting Hospital Billing and Collection Efforts and Revising Connecticut’s Facility Fee Laws

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On July 7, 2021, Connecticut Governor Ned Lamont signed into law Public Act 21-129 entitled “An Act Concerning Hospital Billing and Collection Efforts By Hospitals And Collection Agencies” (“the Act”). The Act expands the types of entities to which billing and collection restrictions apply, places further limitations on collection efforts by such entities, and makes several changes to Connecticut’s existing laws concerning facility fees.

New Definitions

The Act newly defines the terms “affiliated with” and “owned by” to expand the application of billing and collections laws beyond hospitals to now also include hospitals and entities “affiliated with” or “owned by” hospitals. Under the Act, “affiliated with” means (A) employed by a hospital or health system, (B) under a professional services agreement with a hospital or health system that permits such hospital or health system to bill on behalf of such entity, or (C) a clinical faculty member of a medical school who is affiliated with a hospital or health system in a manner that permits such hospital or health system to bill on behalf of such clinical faculty member. The Act defines “woned by” to mean owned by a hospital or health system when billed under the hospital’s tax identification number.

New Limitations on Billing and Collections

  • Currently, no hospital providing health care services to an uninsured patient may collect from an uninsured patient more than the “cost of providing services” (as defined in C.G.S. 19a-673) or refer to a collection agent or initiate an action against an individual patient or such patient’s estate to collect fees arising from health care provided at a hospital, unless the patient is (A) uninsured and (B) ineligible for the “hospital bed fund.” (The hospital bed fund is any gift of money, stock, bonds, financial instruments or other property made by a donor for the purpose of establishing a fund to provide medical care to patients at a hospital.) Effective October 1, 2022, these restrictions will also apply to any entity that is owned by or affiliated with a hospital.
  • Currently, when a hospital becomes aware that a patient is eligible for hospital bed funds, free or reduced price hospital services, or any other program that would reduce a patient’s responsibility for costs of services provided by the hospital, the hospital must promptly discontinue all collection efforts. Effective October 1, 2022, this restriction will also apply to any entity that is owned by or affiliated with such hospital.
  • Effective October 1, 2022, the Act prohibits hospitals, entities that are owned by or affiliated with a hospital, and collection agents that receive referrals from hospitals or such other “affiliated with” or “owned by” entities from:
    • Reporting a patient to a credit rating agency for a period of one year beginning on the date that such patient first receives a bill for health care provided;
    • Initiating an action to foreclose a lien on a patient’s primary residence if the lien was filed to secure payment for health care provided; or
    • Applying to a court for an execution against a patient’s wages or otherwise seeking to garnish a patient’s wages, to collect payment for health care, if such patient is eligible for the hospital bed fund.

Facility Fees

The Act also makes several changes to Connecticut’s laws governing facility fees. Under Connecticut law, a “facility fee” is any fee a hospital or health system charges or bills for outpatient hospital services provided in a hospital-based facility that is (1) intended to compensate the hospital or health system for its operational expenses and (2) separate from the provider’s professional fee. Among other things, the Act modifies facility fees laws as follows:

  • Effective October 1, 2022, the existing patient notice requirements applicable only to hospitals and health systems that charge a facility fee using current procedural terminology evaluation and management (CPT E/M) codes, also will be imposed on hospitals or health systems that charge a facility fee using current procedural assessment and management (CPT A/M) codes for services and expects to charge a separate fee for professional medical services. . The patient notifications must include, among other things, a statement that the facility is part of a hospital or health system that charges an additional facility fee, the amount of the patient’s potential financial liability, an explanation that costs may be greater than what would be incurred if the facility was not hospital-based, and that a patient with insurance should contact their insurance carrier for additional cost information.
  • Current Connecticut law sets forth various requirements for information that must be described on patient bills that include facility fees. Not later than October 15, 2022, the Act requires each hospital, health system, and hospital-based facility to annually submit to the Office of Healthcare Strategy’s (OHS) Health Systems Planning Unit a sample of its billing statement that patients receive exhibiting its compliance with Connecticut’s facility fee bill requirements.
  • Under existing law, a hospital-based facility must prominently display a written notice in locations that are readily accessible and visible to patients. The Act specifically requires facilities to post the notice in appointment check-in areas. It also requires each hospital-based facility, starting by October 1, 2022, to annually submit a copy of this notice to OHS’s Health Systems Planning Unit. The notice must inform patients that (1) the facility is part of a hospital or health system (named on the notice) and (2) if the facility charges a facility fee, patients may incur a greater financial liability than if the facility was not hospital-based. Additionally, the notice must have “tag lines,” in at least the top 15 languages spoken in the state, indicating that the notice is available in those languages. Under the Act, a “tag line” is a short statement written in a non-English language, indicating the availability of free language assistance services.
  • The Act expands the notice requirement for transactions that will change the structure of a physician group practice to hospital-based where a facility fee will be billed. Currently, the notice requirement applies when facility fees are likely. Under the Act the notice will be required whenever the new hospital-based facility “may” bill facility fees and the notice must include the purchased facility’s full legal and business name and the acquisition date in addition to a statement that the facility is now hospital-based and part of a health system. Under current law, the notice must include a statement that the facility is now hospital-based and part of a health system. Additionally, by July 1, 2023, and annually thereafter, the Act requires each hospital-based facility that was subject to such a transaction during the prior calendar year to report on patient volume. These facilities must annually report to the Health System Planning Unit on the number of patients they served in the prior three years.
  • The Act also prohibits hospitals, health systems, and hospital-based facilities from collecting facility fees for outpatient services that use a CPT A/M code. Currently, such prohibition applies to CPT E/M codes. This prohibition is effective October 1, 2022.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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