Colorado hospitals could soon be prevented from collecting debts from patients if they don’t post their rates online, thanks to a law passed by lawmakers on Tuesday.
If enacted, House Bill 1285 would ban hospitals that do not comply with federal price transparency laws from using collection agencies, filing negative credit reports against patients and obtaining state court judgments for outstanding debts. Non-compliant hospitals could still bill patients, but if they undertake debt collection actions, they must reimburse any debt paid by the patient, in addition to any legal fees.
“If you’re going to a hospital, you should know beforehand what the cost will be,” bill sponsor Sen. John Cooke told R-Greeley. “You can look at different hospitals and say, ‘I want to have the procedure here because it’s cheaper than over here.'”
The state Senate unanimously passed the law on Tuesday following last month’s 63-1 vote in the House of Representatives. The bill will now be sent back to the House of Representatives to approve changes made by the Senate, and then to Gov. Jared Polis for final consideration.
The bill brought both sides of the aisle together and was sponsored by two Democrats and two Republicans, in addition to near-unanimous support from both houses.
Supporters of the bill said the state must take action because more than a year after it went into effect, only 6% of Colorado hospitals are fully compliant with the Price Transparency Act, which allows patients to compare costs between hospitals, according to a report by PatientRightsAdvocate.org. That’s below the national average of 14.3% compliance.
“This is consumer protection legislation,” said the bill’s sponsor, Rep. Daneya Esgar, D-Pueblo. “It’s good legislation to steer people in the right direction and to protect those who are looking for healthcare and to make sure they know exactly what’s going on in terms of pricing.”
Hospitals strongly opposed the law, arguing that it would lead to frivolous lawsuits for large hospital systems and threaten the businesses of smaller hospitals that currently do not have the resources to comply with price transparency.
Republican Sens. Paul Lundeen of Monument and Bob Gardner of Colorado Springs raised similar concerns during Monday’s Senate debate, saying the bill could result in even lower hospital capacity as Colorado hospitals struggle during the COVID-19 pandemic .
“In short, this is well-intentioned and ill-considered legislation,” Gardner said. “HB-1285 chooses a mechanism to enforce what the federal government did not intend to do. … It’s draconian. It’s not a carving knife, it’s a meat cleaver, it’s not an enforcement scalpel, it’s a club.”
The Senate voted to amend the bill to limit patient complaints about non-compliant hospitals, specifying that patients can only complain about price transparency for procedures relevant to their own care.
Last month, the House of Representatives also amended the bill to give small critical-access hospitals with fewer than 25 beds more time to comply. For these hospitals, the law would come into force in February 2023 and not in August of this year as it did for all other hospitals.
These changes appear to have won over most opposition, earning the bill a 35-0 vote in the Senate. In the House of Representatives, the lone “no” vote against the bill came from Grand Junction Republican Rep. Janice Rich, who said she opposes the measure because she is “satisfied with the government’s interference in the deal.”