A new bill introduced in the Illinois Senate seeks to amend the Fair Patient Billing Act, providing greater protections for patients facing medical debt. Senate Bill 1223, introduced by Senator Laura Fine, addresses several key issues related to medical debt collection and patient billing practices.

The bill focuses on preventing aggressive collection actions while patients are appealing health insurance decisions. Specifically, it prohibits medical creditors and debt collectors from contacting patients about unpaid charges or initiating lawsuits or arbitration proceedings while an appeal is pending or was pending within the previous 180 days.

Key Provisions of SB1223:

• Protection During Appeals: Medical creditors are barred from contacting patients or pursuing legal action regarding unpaid bills while a health insurance appeal is underway or has been resolved within the last 180 days.
• Limits on Interest: The bill sets guidelines for medical debt interest under reasonable payment plans. If a patient is eligible for financial assistance and has a payment plan with a hospital or healthcare provider, no interest can be charged. For patients ineligible for financial assistance but who have a payment plan, interest charges cannot exceed 2% annually. This interest rate also applies to judgments on medical debt.
• Medical Debt Forgiveness: SB1223 clarifies that if a medical creditor forgives part of an insured patient’s cost-sharing expenses (like co-pays or deductibles), it does not constitute a breach of contract between the medical creditor and the insurer or payor.

Broader Implications

SB1223 builds upon existing provisions within the Fair Patient Billing Act, which already outlines requirements for hospitals regarding collection actions against uninsured patients, including screening for discounts and financial assistance, offering reasonable payment plans, and providing assistance with financial aid applications.

SB1223 has been referred to the appropriate committee for further consideration.