HB3593 104TH GENERAL ASSEMBLY

LRB104 09784 BAB 19850 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3593

Introduced 2/18/2025, by Rep. Dagmara Avelar

SYNOPSIS AS INTRODUCED:

210 ILCS 88/5
210 ILCS 88/10
210 ILCS 88/40
210 ILCS 89/5
210 ILCS 89/10

Amends the Fair Patient Billing Act. Requires that a hospital's obligation to patients under the Act shall cover all health care services, including, but not limited to, on-site health care services provided by a non-hospital entity. Provides that, in the event the hospital outsources health care services to an individual or entity that is separate from the hospital within the hospital facility or otherwise on the hospital site, the hospital's obligations under the Act continue as though the hospital had provided the health care services. Requires a hospital to ensure that the individual or entity contracted to provide health care services agrees in writing to operate under the hospital's financial assistance policy, screening obligations, collections provisions, and all other provisions of the Act, and requires a hospital to ensure that a hospital agent or on-site provider of outsourced health care services complies with the Act. Amends the Hospital Uninsured Patient Discount Act to establish similar requirements for hospitals. Provides that a hospital shall include charges from the third-party individual or entity when calculating the charge, discount, or collectible amount applicable under the Act.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Fair Patient Billing Act is amended by changing Sections 5, 10, and 40 as follows:

(210 ILCS 88/5)

Sec. 5. Purpose; findings.

(a) The purpose of this Act is to advance the prompt and accurate payment of health care services through fair and reasonable billing and collection practices of hospitals.

(b) The General Assembly finds that:

(1) Medical debts are the cause of an increasing number of bankruptcies in Illinois and are typically associated with severe financial hardship incurred by bankrupt persons and their families.

(2) Patients, hospitals, and government bodies alike will benefit from clearly articulated standards regarding fair billing and collection practices for all Illinois hospitals.

(3) Hospitals should employ responsible standards when collecting debt from their patients.

(4) Patients should be provided sufficient billing information from hospitals to determine the accuracy of the bills for which they may be financially responsible.

(5) Patients should be given a fair and reasonable opportunity to discuss and assess the accuracy of their bill.

(6) Hospitals should provide patients with timely and meaningful access to any financial assistance available through the hospital and any public health insurance programs for which patients may be eligible to prevent patients from ending up with avoidable medical debt. Hospitals should assist patients who need financial assistance to access it. Patients who are deemed eligible for hospital financial assistance or public health insurance programs should not be improperly billed, steered into payment plans, or sent to collections.

(7) Hospitals should offer patients the opportunity to enter into a reasonable payment plan for their hospital care.

(8) Patients have an obligation to pay for the hospital services they receive subject to any discounts or free care for which they are eligible under Illinois law.

(9) Hospitals have an obligation to screen uninsured patients before pursuing collection action. To promote the general welfare and to mitigate the negative impact that medical debt has on accessing and using needed health care, hospitals should not attempt to collect a debt from an uninsured patient without first adequately screening the patient for public health insurance programs and financial assistance available to the patient and assisting the patient in obtaining the hospital financial assistance for which they are eligible.

(10) Hospitals are increasingly outsourcing on-site health care services to third-party individuals or entities without extending the screening, billing, and collections protections afforded to hospital patients under this Act. A hospital's obligation to patients under this Act should continue when a hospital has outsourced or otherwise contracted with a third-party individual or entity to provide specific health care services within the hospital building, or otherwise on the hospital site.

(Source: P.A. 103-323, eff. 1-1-24.)

(210 ILCS 88/10)

Sec. 10. Definitions. As used in this Act:

"Collection action" means any referral of a bill to a collection agency or law firm to collect payment for services from a patient or a patient's guarantor for hospital services.

"Health care plan" means a health insurance company, health maintenance organization, preferred provider arrangement, or third party administrator authorized in this State to issue policies or subscriber contracts or administer those policies and contracts that reimburse for inpatient and outpatient services provided in a hospital. Health care plan, however, does not include any government-funded program such as Medicare or Medicaid, workers' compensation, and accident liability insurers.

"Insured patient" means a patient who is insured by a health care plan.

"Medical debt" means a debt arising from the receipt of health care services, products, or devices.

"Outsource" or "outsourcing" means a business arrangement where the hospital has contracted services or functions to be performed by an external individual or entity on a contract basis, although the services or functions may still be performed on the hospital site. "Outsourced" or "outsourcing" is distinct from an in-network or out-of-network contracted relationship with an insurer described in Section 50.

"Patient" means the individual receiving services from the hospital and any individual who is the guarantor of the payment for such services.

"Public health insurance program" means Medicare; Medicaid; medical assistance under the Non-Citizen Victims of Trafficking, Torture and Other Serious Crimes program; Health Benefit for Immigrant Adults; Health Benefit for Immigrant Seniors; All Kids; or other medical assistance programs offered by the Department of Healthcare and Family Services.

"Reasonable payment plan" means a plan to pay a hospital bill that is offered to the patient or the patient's legal representative and takes into account the patient's available income and assets, the amount owed, and any prior payments.

"Screen" or "screening" means a process whereby a hospital engages with a patient to review and assess the patient's potential eligibility for any financial assistance offered by the hospital, public health insurance program, or other discounted care known to the hospital; informs the patient of the hospital's assessment; documents in the patient's record the circumstances of the screening; and assists with the application for hospital financial assistance.

"Uninsured patient" means a patient who is not insured by a health care plan and is not a beneficiary under a government-funded program, workers' compensation, or accident liability insurance.

(Source: P.A. 103-323, eff. 1-1-24.)

(210 ILCS 88/40)

Sec. 40. Hospital agents; outsourced health care services on-site.

(a) The hospital must ensure that any external collection agency, law firm, or individual engaged by the hospital to obtain payment of outstanding bills for hospital services agrees in writing to comply with the collections provisions of this Act.

(b) The hospital's obligation to patients under this Act shall cover all health care services, including, but not limited to, on-site health care services provided by a non-hospital entity.

(c) In the event the hospital outsources health care services to an individual or entity that is separate from the hospital within the hospital facility or otherwise on the hospital site, the hospital's obligations under this Act continue as though the hospital had provided the health care services.

(d) The hospital must ensure that the individual or entity contracted to provide health care services agrees in writing to operate under the hospital's financial assistance policy, screening obligations, collections provisions, and all other provisions of this Act.

(e) The hospital is responsible for ensuring a hospital agent or on-site provider of outsourced health care services complies with this Act.

(Source: P.A. 94-885, eff. 1-1-07.)

Section 10. The Hospital Uninsured Patient Discount Act is amended by changing Sections 5 and 10 as follows:

(210 ILCS 89/5)

Sec. 5. Definitions. As used in this Act:

"Community health center" means a federally qualified health center as defined in Section 1905(l)(2)(B) of the federal Social Security Act or a federally qualified health center look-alike.

"Cost to charge ratio" means the ratio of a hospital's costs to its charges taken from its most recently filed Medicare cost report (CMS 2552-96 Worksheet C, Part I, PPS Inpatient Ratios).

"Critical Access Hospital" means a hospital that is designated as such under the federal Medicare Rural Hospital Flexibility Program.

"Family income" means the sum of a family's annual earnings and cash benefits from all sources before taxes, less payments made for child support.

"Federal poverty income guidelines" means the poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under authority of 42 U.S.C. 9902(2).

"Financial assistance" means a discount provided to a patient under the terms and conditions a hospital offers to qualified patients or as required by law.

"Free and charitable clinic" means a 501(c)(3) tax-exempt health care organization providing health services to low-income uninsured or underinsured individuals that is recognized by either the Illinois Association of Free and Charitable Clinics or the National Association of Free and Charitable Clinics.

"Guaranteed income program" means a publicly or privately funded program that provides one-time or recurring unconditional cash transfers or payments, or gifts to individuals or households, for a defined number of months or years for the purposes of reducing poverty, promoting economic mobility, or increasing the financial stability of Illinois residents.

"Health care services" means any medically necessary inpatient or outpatient hospital service, including pharmaceuticals or supplies provided by a hospital to a patient.

"Hospital" means any facility or institution required to be licensed pursuant to the Hospital Licensing Act or operated under the University of Illinois Hospital Act.

"Illinois resident" means any person who lives in Illinois and who intends to remain living in Illinois indefinitely. Relocation to Illinois for the sole purpose of receiving health care benefits does not satisfy the residency requirement under this Act.

"Medically necessary" means any inpatient or outpatient hospital service, including pharmaceuticals or supplies provided by a hospital to a patient, covered under Title XVIII of the federal Social Security Act for beneficiaries with the same clinical presentation as the uninsured patient. A "medically necessary" service does not include any of the following:

(1) Non-medical services such as social and vocational services.

(2) Elective cosmetic surgery, but not plastic surgery designed to correct disfigurement caused by injury, illness, or congenital defect or deformity.

"Outsource" or "outsourcing" means a business arrangement where the hospital has contracted services or functions to be performed by an external individual or entity on a contract basis, although the services or functions may still be performed on the hospital site.

"Rural hospital" means a hospital that is located outside a metropolitan statistical area.

"Uninsured discount" means a hospital's charges multiplied by the uninsured discount factor.

"Uninsured discount factor" means 1.0 less the product of a hospital's cost to charge ratio multiplied by 1.35.

"Uninsured patient" means an Illinois resident who is a patient of a hospital and is not covered under a policy of health insurance and is not a beneficiary under a public or private health insurance, health benefit, or other health coverage program, including high deductible health insurance plans, workers' compensation, accident liability insurance, or other third party liability.

(Source: P.A. 102-581, eff. 1-1-22; 103-492, eff. 1-1-24.)

(210 ILCS 89/10)

Sec. 10. Uninsured patient discounts.

(a) Eligibility.

(1) A hospital, other than a rural hospital or Critical Access Hospital, shall provide a discount from its charges to any uninsured patient who applies for a discount and has family income of not more than 600% of the federal poverty income guidelines for all medically necessary health care services exceeding $150 in any one inpatient admission or outpatient encounter.

(2) A hospital, other than a rural hospital or Critical Access Hospital, shall provide a charitable discount of 100% of its charges for all medically necessary health care services exceeding $150 in any one inpatient admission or outpatient encounter to any uninsured patient who applies for a discount and has family income of not more than 200% of the federal poverty income guidelines.

(3) A rural hospital or Critical Access Hospital shall provide a discount from its charges to any uninsured patient who applies for a discount and has annual family income of not more than 300% of the federal poverty income guidelines for all medically necessary health care services exceeding $300 in any one inpatient admission or outpatient encounter.

(4) A rural hospital or Critical Access Hospital shall provide a charitable discount of 100% of its charges for all medically necessary health care services exceeding $300 in any one inpatient admission or outpatient encounter to any uninsured patient who applies for a discount and has family income of not more than 125% of the federal poverty income guidelines.

(5) In determining eligibility under this Act, a hospital subject to this Act shall exclude from consideration any unconditional cash transfers, payments, or gifts received under a guaranteed income program if:

(A) such cash transfers, payments, or gifts are excluded from consideration for determining eligibility under public health insurance programs administered by the State in which the State has the authority to waive guaranteed income; and

(B) the guaranteed income program is a program for a defined number of months or years designed to reduce poverty, promote social mobility, or increase financial stability for program participants and if there is an explicit plan to collect data.

This paragraph is inoperative on and after July 1, 2026.

(b) Discount. For all health care services exceeding $300 in any one inpatient admission or outpatient encounter, a hospital shall not collect from an uninsured patient, deemed eligible under subsection (a), more than its charges less the amount of the uninsured discount.

(c) Maximum Collectible Amount.

(1) The maximum amount that may be collected in a 12-month period for health care services provided by the hospital from a patient determined by that hospital to be eligible under subsection (a) is 20% of the patient's family income, and is subject to the patient's continued eligibility under this Act.

(2) The 12-month period to which the maximum amount applies shall begin on the first date, after the effective date of this Act, an uninsured patient receives health care services that are determined to be eligible for the uninsured discount at that hospital.

(3) To be eligible to have this maximum amount applied to subsequent charges, the uninsured patient shall inform the hospital in subsequent inpatient admissions or outpatient encounters that the patient has previously received health care services from that hospital and was determined to be entitled to the uninsured discount. The availability of the maximum collectible amount shall be included in the hospital's financial assistance information provided to uninsured patients.

(4) Hospitals may adopt policies to exclude an uninsured patient from the application of subdivision (c)(1) when the patient owns assets having a value in excess of 600% of the federal poverty level for hospitals in a metropolitan statistical area or owns assets having a value in excess of 300% of the federal poverty level for Critical Access Hospitals or hospitals outside a metropolitan statistical area, not counting the following assets: the uninsured patient's primary residence; personal property exempt from judgment under Section 12-1001 of the Code of Civil Procedure; or any amounts held in a pension or retirement plan, provided, however, that distributions and payments from pension or retirement plans may be included as income for the purposes of this Act.

(d) Each hospital bill, invoice, or other summary of charges to an uninsured patient shall include with it, or on it, a prominent statement that an uninsured patient who meets certain income requirements may qualify for an uninsured discount and information regarding how an uninsured patient may apply for consideration under the hospital's financial assistance policy. The hospital's financial assistance application shall include language that directs the uninsured patient to contact the hospital's financial counseling department with questions or concerns, along with contact information for the financial counseling department, and shall state: "Complaints or concerns with the uninsured patient discount application process or hospital financial assistance process may be reported to the Health Care Bureau of the Illinois Attorney General.". A website, phone number, or both provided by the Attorney General shall be included with this statement.

(e) In the event the hospital contracts with a third-party individual or entity that is separate from the hospital to provide health care services within the hospital facility or otherwise on the hospital site, the hospital's obligations under this Act continue as though the hospital itself provided the health care services. The hospital shall include charges from the third-party individual or entity when calculating the charge, discount, or collectible amount applicable under this Act.

(f) The hospital's obligation to patients under this Act covers all health care services, including, but not limited to, outsourced on-site health care services provided by a non-hospital entity.

(g) The hospital must ensure that the individual or entity contracted to provide health care services agrees in writing to operate under the hospital's uninsured patient discount and all other provisions of this Act.

(h) The hospital is responsible for ensuring a hospital agent or on-site provider of outsourced health care services complies with this Act.

(Source: P.A. 102-581, eff. 1-1-22; 103-492, eff. 1-1-24.)