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Pulse Magazine

Texas Enacts healthcare Measures Impacting Credit Reporting and “Surprise” Medical Billing

The state of Texas recently enacted new healthcare measures related to medical billing and credit reporting of out-of-network care. While neither of the bills are specifically targeted at collection agencies, there are some implications regarding the billing of consumers for out-of-network care as well as the reporting of debts related to out-of-network care.

Senate Bill 1037 prohibits a consumer reporting agency from furnishing consumer report information related to “a collection account with a medical industry code, if the consumer was covered by a health benefit plan at the time of the event giving rise to the collection and the collection is for an outstanding balance, after copayments, deductibles, and coinsurance, owed to an emergency care provider or a facility-based provider for an out-of-network benefit claim. . .” 

Though the bill does not technically prohibit a data furnisher from reporting debts arising from out-of-network care, debt collector’s may nevertheless want to consider refraining from reporting such debts in order to avoid claims by devious consumer attorneys that even furnishing such information to a CRA violates the FDCPA or state law. Senate Bill 1037 is effective immediately.

Senate Bill 1246 prohibits a nonnetwork physician, provider “or a person asserting a claim as an agent” from billing a patient covered out of network and receiving emergency care in any amount greater than the patient’s responsibility under the patient’s health care plan, including applicable copayment, coinsurance, or deductible. 

The new law also requires a health maintenance organization to provide written notice of billing prohibitions in each explanation of benefits provided to an enrollee or physician or provider in connection with a health care service that is subject to the prohibitions. Notably, the bill allows the attorney general to bring a civil action against any individual or entity believed to be violating a law prohibiting balance billing. Senate Bill 1246 takes effect on Sept. 1, 2019.

Other Debt Collection Measures

ACA members should also be aware that Texas recently enacted House Bill 996, which requires certain notices to be provided when collecting debts that are beyond the applicable state statute of limitations. Bill 996 takes effect on Sept. 1, 2019.

For more information on those requirements, members can review ACA SearchPoint #1119, Statute of Limitations:

Collecting Out-of-Statute Debts.  ACA recommends members review these measures with clients and their own legal counsel to determine if any changes are required to current billing or credit reporting practices.

To track legislation in Texas, visit https://capitol.texas.gov/Texas

 

 

The State of Medical Collections

Medical debt accounts for one of the largest markets in collections.  While the Fair Debt Collection Practices Act regulates debt collection in general, the American Hospital Association (AHA), the national organization that represents and serves hospitals, health care networks and their patients, created a set of guidelines for member hospitals to follow regarding their billing and collection practices.

Other state hospital associations have implemented their own guidelines as well. ACA members who collect medical debt should be aware of both state and federal guidelines for hospital billing and collections.  The guidelines introduced by AHA include several objectives member hospitals are to set into practice to better serve their patients. The guidelines include substantive criteria under the following headlines:

Communicating Effectively

Helping Patients Qualify for Coverage

Ensuring Hospital Policies are Applied Accurately and Consistently 

Making Care More Affordable for Patients with Limited Means

Ensuring Fair Billing and Collection Practices

In addition to the AHA guidelines, state hospital associations have adopted their own guidelines for their members to follow. While the state association guidelines tend to mirror those of the AHA, each has added its own specific language or requirements. Not to be left out, some states have even enacted legislation governing hospital billing practices.

A few states have robust legislation concerning hospital billing. One state’s hospital billing act requires each hospital in the state to establish a written policy about when and under whose authority patient debt is advanced for recovery efforts. 

Any debt collectors who contract with the hospital must follow its policy. Among other things, debt collectors in this particular state must have a written agreement with the hospital for which they are collecting.  The law also limits the ability of the hospital and its agents to use wage garnishments or liens on primary residences as a means of collecting unpaid hospital bills.  Other states with hospital billing requirements are not as robust as the one previously mentioned. 

These states have requirements that can include things such as giving notice to the patient as to whether the hospital deems her to be insured or uninsured, and the reason for such determination; not employing a third-party to use physical or legal means to compel the patient or responsible party to appear in court; and not furnishing a negative consumer report or filing suit until 120 days have passed.

It’s imperative that debt collectors who collect medical debt ensure they are aware of the state laws concerning hospital billing. ACA SearchPoint document #2805, State Hospital Billing and Collection Practices, provides an analysis of state and federal laws that deal with state medical billing and collection practices.

News & Notes

Mark Your Calendars: Pelosi Expects Drug Pricing Bill in September

A top aide to Speaker Nancy Pelosi (D-Calif.) said House Democrats will unveil their long-awaited bill to lower drug prices in September. Wendell Primus, Pelosi’s top health care adviser, in July said House leadership was almost ready to release the proposal but opted to hold off so that drug companies could not attack it during the August recess, according to a news report published by Kaiser Health News. To read more Kaiser Health News, visit https://khn.org/ or click here: https://tinyurl.com/y4ocquwp

Senate Health Committee Continues to Work on Lower Healthcare Costs

Senate health committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) in late July released the following statement on the bipartisan Lower Health Care Costs Act of 2019: “The Senate does not have time before the August recess to consider the bipartisan Lower Health Care Costs Act, which the Senate’s health committee approved 20-3 on June 26, and includes proposals from 74 of our colleagues—35 Republican and 39 Democratic Senators.” To read more from the Senate Health, Education, Labor and Pensions Committee, visit its website at https://www.help.senate.gov.

For more health care collections news, visit ACA’s Health Care Collections page at www.acainternational.org/pulse.

 

 

JAMA Study Finds 36% of Virginia Hospitals Garnishing Wages Over Unpaid Bills

Not every hospital sues over unpaid bills, but a few sue a lot, according to an article published by NPR.  While admitting there “are no good national data on the practice,” NPR writer Selena Simmons-Duffin notes journalists have reported on hospitals suing patients all over the United States– from North Carolina to Nebraska to a hospital in Missouri that sued 6,000 patients over a four-year period.

Simmons-Duffin’s article titled, “When Hospitals Sue for Unpaid Bills, It Can be ‘Ruinous’ for Patients,” focuses on a study published by JAMA: The Journal ofAmerican Medical Association that looks into 2017 Virginia court records on completed warrant-in-debt lawsuits filed by hospitals resulting in garnishment of a patient’s wages.

The JAMA study, led by Martin A. Makary, MD, MPH, of Johns Hopkins University in Baltimore, identified 20,054 warrant-in-debt lawsuits and 9,232 garnishment cases in 2017. Garnishing was conducted by 48 of 135 Virginia hospitals (36%), of which 71% were nonprofit and 75% urban, compared with 53% nonprofit and 91% urban among hospitals that did not garnish, according to the study titled, “Prevalence and Characteristics of Virginia Hospitals Suing Patients and Garnishing Wages for Unpaid Medical Bills.”

“Thirty-six percent of Virginia hospitals garnished wages in 2017, with a small number of hospitals accounting for most cases,” the Johns Hopkins researcher said. “Some characteristics suggest that hospitals with greater financial need (nonprofit, lower annual gross revenue) may be pursuing debt collection to the final stage of garnishment.”

The most common employers of those having wages garnished were Walmart, Wells Fargo, Amazon and Lowes, accounting for 8% of patients whose wages were garnished, the study said. This point was central to Simmons-Duffin’s article, which focused heavily on Mary Washington Hospital, a Fredericksburg, Va.-based hospital that’s part of the Mary Washington Healthcare network. (The JAMA study found that five hospitals accounted for more than half of the lawsuits, with Mary Washington suing the most.)

In response to NPR’s report, Mary Washington officials noted that lawsuits are rare (less than 1% of their patients go to litigation). Lisa Henry, communications director for the health care system, said: “It’s important to us, as a small community, and a safety net hospital, that we’re doing everything we can for our patients to avoid aggressive collections.”

Mary Washington has a months-long process for trying to reach patients before it takes legal action. “By phone, by mail, by email — any access point we’re given from them when they register.  “Unfortunately, if we don’t hear back from folks or they don’t make a payment we’re assuming that they’re not prepared to pay their bill, so we do issue papers to the court.

Because court records are public, Mary Washington officials noted that they are subject to more scrutiny than hospitals that use collection agencies.  “We’re really unclear as to why Mary Washington Healthcare in particular has become the face of this,” Henry says. “I don’t think we’re alone — all hospitals are struggling with, ‘How do we collect appropriately from our patients to stay open as a safety net hospital?’”

Meanwhile, Makary, the corresponding author on the JAMA study who is also a surgeon at Johns Hopkins, was so “outraged” over Mary Washington’s efforts to recoup unpaid debt that he formed an advocacy campaign to encourage the hospital to “stop suing low-income patients for bills that they simply can’t afford,” the NPR article stated.

In defense of Mary Washington, Henry noted that most patients who are eligible sign up for financial assistance and payment plans, the article said. According to its website, [Mary Washington Healthcare’s] “not-for-profit status drives us to be the kind of organization that provides care to those in need, regardless of their ability to pay. We provide significant financial assistance.”

 

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