HB4087 94TH GENERAL ASSEMBLY

LRB094 12771 DRJ 47615 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4087

Introduced 7/7/2005, by Rep. Mary E. Flowers

SYNOPSIS AS INTRODUCED:

New Act
110 ILCS 330/5	from Ch. 23, par. 1375
210 ILCS 85/7	from Ch. 111 1/2, par. 148
735 ILCS 5/12-701.5 new
735 ILCS 5/12-801.5 new

Creates the Hospital Billing and Collection Practices Act, which applies only to hospitals that receive public moneys. Provides that a hospital may not give a collection agency or attorney blanket authorization to take legal action against the hospital's patients for the collection of medical debt, including by means of garnishment or wage deduction, and requires a hospital to verify certain information before taking such action. Imposes other limitations in connection with a hospital's debt collection practices, including the referral of patients' accounts to a collection agency. Requires a hospital to train collection agencies and attorneys with whom it contracts for the collection of medical debt concerning the hospital's charity care policy. Requires a hospital to adopt and implement policies and procedures to ensure the timely and accurate submission of claims to third party payors. Requires a hospital to adopt a process for patients to question or dispute bills, and requires implementation of a system to record patient complaints received by a hospital's billing office. Contains provisions concerning billing uninsured patients. Amends the University of Illinois Hospital Act, the Hospital Licensing Act, and the Code of Civil Procedure to make conforming changes. Effective January 1, 2006.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

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

Article 1. General Provisions

Section 1-1. Short title. This Act may be cited as the Hospital Billing and Collection Practices Act.

Section 1-5. Legislative findings. The General Assembly finds as follows:

(1) A hospital bill should never get in the way of a resident of Illinois receiving essential health services, and this message should be conveyed to patients and the communities served by a hospital.

(2) Financial aid policies should be consistent with the mission and values of the hospital and take into account each individual's ability to contribute to the cost of his or her care and the hospital's financial ability to provide the care.

(3) Financial aid policies should be clear, understandable, and communicated in a dignified manner.

(4) Debt collection policies, by both hospital staff and external collection agencies, should reflect the mission and values of the hospital.

(5) The General Assembly intends that hospitals employ high standards when collecting medical debt from their patients and intends to lead reform efforts in the manner in which uninsured hospital patients are charged.

Section 1-10. Construction of Act. This Act shall not be construed to provide an incentive for persons who can afford health insurance coverage to voluntarily choose to go without such coverage.

Section 1-15. Definitions. In this Act:

"Charity care" means the provision of free or discounted care to a patient pursuant to financial assistance policies approved by the hospital's governing body.

"Collection agency" or "agency" means an individual or entity that is required to be registered under the Collection Agency Act.

"Department" means the Department of Public Health.

"Hospital" means a hospital licensed under the Hospital Licensing Act or subject to the University of Illinois Hospital Act that receives public moneys.

"Medical debt" means moneys owed by a patient to a hospital in connection with services provided to the patient by the hospital.

Article 5. Litigation Practices

Section 5-5. Authority to take legal action against patient.

(a) A hospital may not give a collection agency or attorney blanket authorization to take legal action against its patients for the collection of medical debt. A hospital may not file a lawsuit against a particular patient to collect medical debt until a hospital employee with the appropriate level of authority authorizes the litigation after verifying all of the following:

(1) There is a reasonable basis to believe that the patient owes the debt.

(2) All known third party payors have been properly billed by the hospital, so that any remaining debt is the financial responsibility of the patient. The hospital may not bill a patient for any amount that an insurance company is obligated to pay.

(3) If a patient has indicated an inability to pay the full amount of the debt in one payment, the hospital has offered the patient a reasonable payment plan. The hospital may require the patient to provide reasonable verification of his or her inability to pay the full amount of the debt in one payment.

(4) The patient has been given a reasonable opportunity to submit an application for charity care, if the facts and circumstances suggest that the patient may be eligible for charity care, including, for example, if the patient is uninsured or receives medical assistance under the Illinois Public Aid Code or other assistance based on need.

(b) The hospital shall set forth in the policy adopted pursuant to paragraph (2) of Section 30-10 the level of employee (for example, supervisor, manager, or chief financial officer) who is authorized to make the determinations required under subsection (a). The level of employee may vary based on the amount of the debt.

Section 5-10. Review of debt collection attorney contract by hospital CEO. On at least an annual basis, a hospital's chief executive officer shall review and determine whether or not to issue to or renew any contract with an attorney for the purpose of collecting medical debt. In determining whether to issue or renew any such contract, the chief executive officer shall consider whether the attorney has acted in a manner consistent with this Act and with the hospital's mission and policies and applicable laws.

Section 5-15. No subcontracting. A hospital must enter into a written contract directly with any attorney or law firm utilized by the hospital to collect medical debt from its patients and may not subcontract or delegate the selection of any such attorney or law firm to a collection agency with whom the hospital has contracted for the collection of medical debt. Any contract between the hospital and the attorney or law firm must require the attorney or law firm to act in accordance with this Act, applicable laws, and the hospital's policies adopted under Section 30-10.

Section 5-20. No payment of bonus. A hospital may not pay any debt collection attorney or law firm any performance bonus, contingency bonus, or other similar payment that is calculated on the basis of the amount or percentage of debt collected from 2 or more patients. This Section does not prohibit a hospital from paying an attorney a percentage of the debt collected from a particular patient, provided that the hospital establishes adequate contractual controls to ensure that the attorney acts in a manner consistent with this Act and the hospital's mission.

Section 5-25. Oversight. A hospital's general counsel's office or, if the hospital has no such office, a hospital employee with suitable experience and authority shall oversee the conduct of every attorney retained by the hospital to collect medical debt from its patients and shall oversee all debt collection litigation.

Section 5-30. Required actions by debt collection attorney.

(a) A hospital shall require every attorney with whom the hospital has contracted for the collection of medical debt to take the following actions with respect to the collection of medical debt from patients:

(1) File any lawsuits brought against the hospital's patients for the collection of medical debt with the applicable court no later than 7 days after the summons and complaint have been served on the patient.

(2) Sign and date all pleadings, including, but not limited to, all complaints and garnishment or wage deduction pleadings and related documents.

(3) Ensure that all affidavits of service that purport to document the service of any pleading or legal papers state the following:

(A) If the pleading is served by mail, the affidavit of service shall state the address to which it was mailed.

(B) If the pleading is served personally, the affidavit of service shall state the name of the person to whom the pleading was delivered. Generalized statements, such as that the pleading was delivered to "a person of suitable age", shall not suffice for purposes of this paragraph.

(4) Serve, along with any summons and complaint, an information sheet as set forth in subsection (c) or a substantially similar information sheet approved in advance by the Department.

(5) List in the case caption of all pleadings the county where the lawsuit is or will be filed.

(b) A hospital shall instruct its attorneys not to petition any court to have any debtor arrested or to have any arrest warrant or body attachment issued, or to cause such an action, as a result of the debtor's failure to appear in court, to complete paperwork, or to otherwise respond to any request or action by the hospital in connection with its efforts to collect medical debt from the patient.

(c) The information sheet required to be served under subdivision (a)(4) shall be in substantially the following form:

(HOSPITAL NAME) LAWSUIT INFORMATION SHEET

You are receiving this information sheet because you have been served with a Summons and Complaint (lawsuit) by (HOSPITAL NAME). (HOSPITAL NAME) cannot give you legal advice. Therefore, this document provides only basic information, and you should immediately discuss this matter with an attorney.

Start of the Lawsuit. To start a lawsuit against you, (HOSPITAL NAME) has served a Summons and Complaint on you either: (1) by delivering it to you personally or leaving it at your home; or (2) by mail, if you agree in writing to accept "service" of the Summons and Complaint by mail and sign a form that so indicates. The Summons informs you that you must provide a formal, written legal "answer" to the complaint. The Complaint explains why (HOSPITAL NAME) is suing you and asks a court to make you pay money. The Summons and Complaint may not include a court file number. They are, however, the legal documents that begin the lawsuit. It is very important that you do not ignore the documents, or you will be in "default." No court hearing is required for a default judgment to be entered against you if you do not respond to the Complaint.

Answering a Complaint. The "Answer" is the formal legal name for your response to the Complaint. The Answer must meet certain requirements of the Code of Civil Procedure. Contacting (HOSPITAL NAME) or its attorney by telephone or written correspondence is not "answering" the Complaint. While (HOSPITAL NAME) encourages you to call if you have questions regarding the bill that was sent to collections, doing so is not a formal "Answer." Some court clerks have form "Answers" which may be of assistance to you. You must serve a copy of your Answer on (HOSPITAL NAME)'s attorney by mail, fax, or hand delivery and complete an Affidavit of Service that explains who was served, how, and on what date. The Affidavit of Service form must be signed in accordance with the Code of Civil Procedure. If you want a judge to hear the dispute, you should file the original Answer and Affidavit of Service with the court in the county in which you are being sued after you have served your Answer on (HOSPITAL NAME). You will be required to pay a court filing fee. (If you meet certain financial guidelines, however, you may not be required to pay the court filing fee. You may obtain more information regarding a waiver of the fee by contacting the court clerk.)

Failure to Answer. If you do not "answer" the Complaint, (HOSPITAL NAME) may get a "default" judgment entered against you requiring you to pay money. By getting a default judgment, (HOSPITAL NAME) may be able to initiate a separate garnishment or wage deduction action against you.

Section 5-35. Limitation on default judgment. A hospital may not obtain a default judgment against any particular patient without the specific, case-by-case approval of its general counsel's office or, if the hospital has no such office, a hospital employee with suitable experience and authority. Before authorizing a default judgment, the general counsel's office or the hospital employee shall determine: (i) whether there is a reasonable basis to believe that the patient may already believe that he or she has adequately answered the complaint by calling or writing to the hospital, its debt collection agency, or its attorney; (ii) whether the patient is sick, disabled, infirm, or elderly so as to potentially render the patient unable to answer the complaint; or (iii) whether the patient may not have received service of the complaint. The hospital shall serve any motion for default judgment on the patient at the patient's last known address.

Section 5-40. Patient represented by attorney. If a hospital has knowledge of the identity of an attorney representing a patient in connection with the hospital's debt collection efforts, the hospital shall notify every attorney, law firm, and collection agency with whom it has contracted for the collection of medical debt of the identity of any attorney who represents the patient. Neither the hospital nor any collection agency or attorney retained by the hospital for the purpose of collecting medical debt may directly contact any patient known to be represented by an attorney with regard to the collection of that debt without the permission of the patient's attorney.

Article 10. Garnishment and Wage Deductions

Section 10-5. Authority to pursue garnishment or wage deduction.

(a) A hospital may not give a collection agency or attorney blanket authorization to pursue garnishment or a wage deduction against its patients for the collection of medical debt. A hospital may not authorize a collection agency or attorney to proceed with garnishment or a wage deduction against a particular patient for the collection of medical debt until a hospital employee with the appropriate level of authority authorizes the garnishment or wage deduction for that particular patient after verifying all of the following:

(1) The hospital has no reasonable basis to believe that the patient's wages or funds at a financial institution are likely to be exempt from garnishment. Factors that my indicate a reasonable basis for such a belief include the patient's receipt of benefits under the Social Security Act or receipt of medical assistance under the Illinois Public Aid Code or other assistance based on need.

(2) There is a reasonable basis to believe that the patient owes the debt.

(3) All known third party payors have been properly billed by the hospital, so that any remaining debt is the financial responsibility of the patient. The hospital may not bill a patient for any amount that an insurance company is obligated to pay.

(4) If the patient has indicated an inability to pay the full amount of the debt in one payment, the hospital has offered the patient a reasonable payment plan. The hospital may require the patient to provide reasonable verification of his or her inability to pay the full amount of the debt in one payment.

(5) The patient has been given a reasonable opportunity to submit an application for charity care, if the facts and circumstances suggest that the patient may be eligible for charity care, including, for example, if the patient is uninsured or receives medical assistance under the Illinois Public Aid Code or other assistance based on need.

(b) The hospital shall set forth in the policies adopted under Section 30-10 the level of employee (for example, supervisor, manager, or chief financial officer) who is authorized to make the determinations required under subsection (a). The level of employee may vary based on the amount of the debt.

Section 10-10. Limitation on garnishment or wage deduction. A hospital may not pursue garnishment or a wage deduction against any patient unless the hospital has first obtained a judgment against the patient in court for the amount of the debt.

Section 10-15. Information sheet.

(a) A hospital must include, with the initial notice of a garnishment or wage deduction that it sends to any patient, an information sheet as set forth in subsection (b) or a substantially similar information sheet approved in advance by the Department.

(b) The information sheet required to be sent under subsection (a) shall be in substantially the following form:

(HOSPITAL NAME) GARNISHMENT OR WAGE DEDUCTION INFORMATION SHEET

You are receiving this information sheet because (HOSPITAL NAME) has started a process to get money from you by sending a "garnishment summons" to a "garnishee" (typically your bank) or a "wage deduction summons" to your employer. These proceedings are called "garnishment" or "wage deduction" proceedings. (HOSPITAL NAME) cannot provide you with legal advice. Therefore, this document provides only basic information. You should immediately discuss this matter with an attorney.

Taking Money From Your Wages. If (HOSPITAL NAME) is trying to take money from your wages, you should receive notice before your wages are taken. Under Illinois law, (HOSPITAL NAME) cannot take more than 15% of your gross weekly wages or more than the amount by which your disposable earnings for a week exceed 45 times the federal minimum hourly wage, whichever is less. Under federal law, (HOSPITAL NAME) cannot take more than 25% of your disposable earnings for a week or more than the amount by which your disposable earnings for a week exceed 30 times the federal minimum hourly wage, whichever is less. To find out how to claim that wages cannot be taken (that is, that they are "exempt"), you should immediately discuss this matter with an attorney. Calling (HOSPITAL NAME) is not sufficient.

Taking Money From Your Bank Accounts. If (HOSPITAL NAME) is trying to take money from your bank account, the bank will "freeze" enough money in your account to pay off your debt to (HOSPITAL NAME). You will not receive notice of the bank garnishment until after your funds are already "frozen". You will not have access to your funds while they are "frozen". Your checks may "bounce," and you may incur overdraft charges during this time. You may want to contact your bank or discuss this matter with an attorney immediately.

Section 10-20. Claim of exemption from garnishment or wage deduction. If a patient submits a written claim that the patient's property or wages are exempt from garnishment or wage deduction, the hospital's debt collection attorney may not object to the claim of exemption without receiving the specific, case-by-case approval of the hospital's general counsel's office or, if the hospital has no such office, a hospital employee with suitable experience and authority. In deciding whether to grant such approval in a particular case, the general counsel's office or hospital employee shall review all information submitted by the patient in support of the patient's claim of exemption.

Article 15. Collection Agencies

Section 15-5. Review of collection agency contract by hospital CEO. On at least an annual basis, a hospital's chief executive officer shall review and determine whether or not to issue to or renew a contract with a collection agency for the purpose of collecting medical debt. In determining whether to issue or renew any such contract, the chief executive officer shall consider whether the collection agency has acted in a manner consistent with this Act and with the hospital's mission and policies and applicable laws.

Section 15-10. Written contract. A hospital must enter into a written contract with any collection agency utilized by the hospital to collect medical debt from its patients. The contract shall require the collection agency to act in accordance with this Act, applicable laws, and the hospital's policies adopted under in Section 30-10.

Section 15-15. Referral of patient's account.

(a) A hospital may not refer any patient's account to a collection agency for collection of medical debt owed by the patient unless the hospital has verified all of the following:

(1) There is a reasonable basis to believe that the patient owes the debt.

(2) All known third party payors have been properly billed by the hospital, so that any remaining debt is the financial responsibility of the patient. The hospital may not bill a patient for any amount that an insurance company is obligated to pay.

(3) If the patient has indicated an inability to pay the full amount of the debt in one payment, the hospital has offered the patient a reasonable payment plan. The hospital may require the patient to provide reasonable verification of his or her inability to pay the full amount of the debt in one payment.

(4) The patient has been given a reasonable opportunity to submit an application for charity care, if the facts and circumstances suggest that the patient may be eligible for charity care, including, for example, if the patient is uninsured or receives medical assistance under the Illinois Public Aid Code or other assistance based on need.

(b) The hospital shall set forth in the policies adopted under Section 30-10 the level of employee (for example, supervisor, manager, or chief financial officer) who is authorized to make the determinations required under subsection (a). The level of employee may vary based on the amount of the debt.

Section 15-20. Patient's previous payment plan. A hospital may not refer any medical debt to a collection agency or attorney for the purposes of collection if the patient has made payments on that debt in accordance with the terms of a payment plan previously agreed to by the hospital.

Section 15-25. Patient's application for charity care. If a patient has submitted an application for charity care after the hospital has referred his or her account for collection activity, the hospital shall suspend all collection activity until the patient's charity care application has been processed by the hospital and the hospital has notified the patient of its decision concerning the charity care application.

Section 15-30. No payment of bonus. A hospital may not pay any debt collection agency any performance bonus, contingency bonus, or other similar payment that is calculated on the basis of the amount or percentage of debt collected from 2 or more patients. This Section does not prohibit a hospital from paying a collection agency a percentage of the debt collected from a particular patient, provided that the hospital establishes adequate contractual controls to ensure that the collection agency acts in a manner consistent with this Act and the hospital's mission.

Section 15-35. Log of patient complaints. A hospital shall require every collection agency or attorney utilized by the hospital for the purpose of collecting medical debt to keep a log of all oral and written complaints received from any patient concerning the conduct of the collection agency or attorney. For purposes of this Section, a "complaint" is any communication from a patient or a patient's representative in which the patient or representative expresses concerns about the conduct of the collection agency or attorney in connection with the collection of the medical debt owed to the hospital by the patient. The hospital shall obtain a complete copy of the log at least 6 times per year. The hospital's contract with the collection agency or attorney shall state that failure by the agency or attorney to log and provide all patient complaints in the manner required by this Section may result in termination of the hospital's contract with the agency or attorney.

Section 15-40. Record of communications with patients. A hospital shall require every collection agency and attorney utilized by the hospital for the purpose of collecting medical debt to keep a record of the date, time, and purpose of all communications to or from the hospital's patients in connection with medical debt collection activities.

Section 15-45. Hospital contact information. If a patient asks a collection agency or attorney with whom the hospital has contracted for the collection of medical debt for the contact information for a hospital, the hospital shall instruct the agency or attorney to provide the patient with the phone number and address described in Section 20-10. The hospital shall not refuse to supply information to or speak with any of its patients on the basis that a patient's account has been placed with a collection agency or attorney for collection of medical debt.

Section 15-50. Charity care. A hospital shall train the employees of the collection agencies with which it contracts for the collection of medical debt, and the attorneys with whom it contracts for the collection of medical debt, concerning the hospital's charity care policy and how a patient may obtain more information about the hospital's charity care policy or submit an application for charity care. The hospital shall require those collection agencies and attorneys to refer patients who may be eligible for charity care to the hospital.

Section 15-55. Department of Public Health contact information. A hospital shall include the following statement (i) in every collection notice sent to a patient by the hospital or by any collection agency or attorney with whom the hospital has contracted for the collection of medical debt and (ii) in every cover letter sent in connection with service of a summons and complaint and garnishment or wage deduction papers in connection with the collection of medical debt:

You have the option to address any concerns with the Illinois Department of Public Health, which can be reached at (insert telephone number or numbers).

The hospital shall print this statement with the prominence required for notices under the federal Fair Debt Collection Practices Act.

Section 15-60. No report to credit reporting agency. Neither a hospital nor any collection agency or attorney with whom it contracts for the collection of medical debt may report any patient to a credit reporting agency as a result of that patient's failure to pay a medical bill owed to the hospital.

Article 20. Hospital Central Billing Office

Section 20-5. Billing practices generally.

(a) A hospital shall adopt and implement policies and procedures to ensure the timely and accurate submission of claims to third party payors.

(b) If a hospital timely receives from a patient information about the patient's third party payor but does not timely submit a claim to the third party payor, the hospital may not bill the patient for any amount in excess of that for which the patient would have been responsible had the third party payor paid the claim.

(c) A hospital may not refer any bill to a debt collection agency or attorney for collection activity while a claim for payment of the bill is pending with a third party payor with which the hospital has a contract. A hospital may refer a bill to a collection agency or attorney following an initial denial of the claim by the third party payor. A hospital may not refer a bill to a collection agency or attorney for collection activity if a claim is denied by a third party payor due to the hospital's error and that error results in the patient becoming liable for the debt if the patient would not otherwise be liable.

(d) The General Assembly recognizes that, in order for a hospital to properly bill a patient's insurance company, the hospital may need the patient's cooperation and that the hospital may not be able to properly bill the patient's insurance company without the patient's cooperation.

(e) If a hospital believes that a private third party payor has improperly delayed or denied payment of a claim, the hospital may file a complaint with the Department, which may provide assistance to the hospital or its patient in attempting to get the claim paid.

Section 20-10. Questioning or disputing bills. A hospital shall implement a streamlined process for patients to question or dispute bills, including a toll-free phone number that patients may call and an address to which they may write. The phone number and address shall be listed on all patient bills and collection notices sent by the hospital. The hospital shall return telephone calls made by patients to this number as promptly as possible, but in no event later than one business day after the call is received. For purposes of this Section, "business day" means a day on which the hospital's billing office is open for regular business. The hospital shall respond to correspondence sent to this address by patients within 10 days after the correspondence is received.

Section 20-15. Documenting claim. If a patient advises a hospital or a collection agency or attorney with whom the hospital has contracted for the collection of medical debt that (i) the patient does not owe all or part of a bill, (ii) a third party payor should pay the bill, or (iii) the patient needs documentation concerning the bill, the hospital, the collection agency, and the attorney must cease further collection efforts until the hospital or the agency provides the patient with documentation establishing that, as applicable, (A) the patient owes the debt or (B) the applicable third party payor has already paid all amounts for which it is obligated. The hospital or the collection agency must provide this documentation in writing within 10 days after it is requested and may not pursue further collection activity for a period of 30 days after providing proof that the debt is owed, so as to give the patient further opportunity to pay the bill or to challenge the documentation supplied by the hospital. If the hospital provides the required documentation and the patient does not respond within 30 days, the hospital may resume collection activity.

Section 20-20. Log of patient complaints. A hospital shall develop a system to record and log all patient complaints received by the hospital's billing office, including at the addresses identified by the hospital under Section 20-10, regarding the collection of medical debt by the hospital or by any collection agency or attorney with whom the hospital has contracted for the collection of medical debt. The hospital may maintain such records at more than one location.

Article 25. Billing to the Uninsured

Section 25-5. Provision of itemized bill. If a hospital demands that an uninsured patient pay a medical bill, the hospital must provide to that patient a detailed, itemized bill as part of the billing process.

Section 25-10. Limitation on amount charged.

(a) In this Section:

"Most favored insurer" means the nongovernmental third party payor that provided the most revenue to the hospital during the previous calendar year.

"Uninsured treatment" means any treatment or services that are not covered by a plan, contract, or policy that provides coverage to a patient through or is issued to a patient by (i) a self-funded employee benefit plan, (ii) any governmental program, including, but not limited to, Medicare, medical assistance under the Illinois Public Aid Code, or the Children's Health Insurance Program, (iii) any other type of health insurance, health maintenance, or health plan coverage, or (iv) any other type of insurance coverage, including but not limited to no-fault automobile coverage, workers' compensation coverage, or liability coverage.

(b) A hospital may not charge a patient whose annual household income is less than $125,000 for any uninsured treatment in an amount greater than the amount that the hospital would be reimbursed for that service or treatment from its most favored insurer. The total charge for uninsured treatment may not be more than the hospital would be reimbursed directly from its most favored insurer and from that insurer's policyholder under any applicable and allowable copayments, deductibles, or coinsurance.

A hospital shall apply the same percentage discount to its charge description master for uninsured treatment that it would apply to charges incurred by a policyholder of its most favored insurer. Beginning on the effective date of this Act, each year a hospital and the Department may agree in advance, by a confidential letter agreement, on the percentage discount from the charge description master that the hospital provides to its most favored insurer and that a hospital shall provide for uninsured treatment under this Section. A hospital shall provide to the Department, pursuant to Section 30-25, any information requested by the Department for purposes of calculating this discount. The hospital shall utilize the same initial charge description master prices for uninsured treatment that it utilizes for treatment provided to a policyholder of its most favored insurer.

(c) If a hospital inadvertently sends a bill to a patient in an amount that exceeds the amount that is allowed by this Section because the hospital is not aware that the treatment or service constitutes uninsured treatment, and if the hospital thereafter learns that the treatment or service constitutes uninsured treatment, the hospital shall promptly adjust its charges so as not to exceed the amount allowable under this Section and shall promptly notify the patient of the new amount of the bill.

(d) This Section applies only to medically necessary health care treatment and does not apply to cosmetic procedures that are not medically necessary.

Section 25-15. Hospital staff training. In recognition that some patients express their financial concerns directly to their treatment providers (for example, doctors or nurses), a hospital shall train its staff responsible for admissions, billing, and providing direct patient treatment concerning the existence of the hospital's charity care policy and how a patient may obtain more information about the hospital's charity care policy or submit an application for charity care.

Article 30. Miscellaneous Provisions

Section 30-5. No approval of collection by Department or State. Neither a hospital nor its agents may state or imply, directly or indirectly, that the State of Illinois or the Department has approved of, condones, or agrees with any lawsuit, garnishment, wage deduction, or other attempt by the hospital to collect medical debt from a patient.

Section 30-10. Required hospital policies. A hospital's governing body shall adopt all of the following policies, which shall not be inconsistent with this Act:

(1) A zero tolerance policy for abusive, harassing, oppressive, false, deceptive, or misleading language or collections conduct by any collection agency or attorney with whom the hospital has contracted for the collection of medical debt, any agent or employee of such a collection agency or attorney, or any hospital employee who participates in the collection of medical debt from patients.

(2) A debt collection litigation policy, which shall include a policy permitting the garnishment of a patient's bank accounts or deductions from a patient's wages only after entry of a judgment.

(3) A policy establishing the procedures to be utilized by every collection agency with whom the hospital contracts for the collection of medical debt.

(4) A policy establishing the procedures to be utilized by the hospital's employees who participate in the collection of medical debt.

(5) A charity care policy that takes into consideration the financial ability of the patient to pay a medical bill.

Section 30-15. Required hospital practices. At least once each year, a hospital's governing body shall review the hospital's practices in each of the following areas:

(1) The filing of debt collection litigation against hospital patients, including the garnishment of a patient's bank accounts or deductions from a patient's wages after entry of a default judgment.

(2) The debt collection activities of each collection agency with which the hospital contracts for the collection of medical debt.

(3) The debt collection activities of the hospital's employees who participate in the collection of medical debt.

(4) The hospital's compliance with this Act and the policies adopted under Section 30-10.

(5) The results of the reviews conducted by the hospital's chief executive officer under Sections 5-10 and 15-5.

(6) The results of the audits required by Section 30-20.

(7) The hospital's charity care practices.

Section 30-20. Audit. At least once each year, a hospital shall audit (i) the practices of every collection agency and attorney with whom it has contracted for the collection of medical debt and (ii) its internal medical debt collection practices. At a minimum, the audits shall review compliance with this Act and the hospital's policies.

Section 30-25. Cooperation with Department. A hospital shall cooperate with, respond to inquires of, and provide information to the Department in a timely manner as necessary for the enforcement of this Act.

Section 30-30. Deferral of Department action against hospital. The Department shall defer enforcement action against a hospital as it relates to the prices charged by the hospital to uninsured patients, the hospital's medical debt collection practices, and the hospital's charity care practices while this Act is in effect, except to enforce the provisions of this Act.

Article 90. Amendatory Provisions

Section 90-5. The University of Illinois Hospital Act is amended by changing Section 5 as follows:

(110 ILCS 330/5) (from Ch. 23, par. 1375)

Sec. 5.

(a) The University may establish and collect charges for hospital services rendered in the University of Illinois Hospital or in connection with a University health care program. However, with respect to health care professional services rendered in connection with a University health care program at the University of Illinois Hospital or elsewhere by the Doctors of Medicine, the Doctors of Dentistry, or other health care professionals who are members of the University faculty, charges for such professional services shall not be established or collected by the University or the University of Illinois Hospital but may be by said members of said faculty who render such services under a plan or plans organized and administered by them. All such charges shall be deposited in a special fund or funds in the treasury of the University. The billing, collecting and disbursing of any such fund shall remain exclusively under the supervision and control of such faculty under a plan or plans established by them for the general benefit and support of University programs and activities related to the health professions, provided no charges may be made or collected until such plan has been approved by the University. However, no person shall make or collect a personal or professional charge for his own account for treating, caring for or nursing a patient in the University of Illinois Hospital (other than health care professional services provided at the University of Illinois Hospital by non-salaried adjunct University faculty who are licensed dentists or physicians licensed to practice medicine in all its branches members) or in connection with a University health care program. Nothing herein shall prevent the University from approving a plan under which any such fund in the University treasury may be utilized in paying the University salaries of such faculty members, or from assisting in the billing and collection of professional charges if all University costs in connection therewith are paid from the charges so collected.

(b) The University's collection of charges under this Section is subject to the Hospital Billing and Collection Practices Act.

(Source: P.A. 91-206, eff. 7-20-99; 92-760, eff. 8-2-02.)

Section 90-10. The Hospital Licensing Act is amended by changing Section 7 as follows:

(210 ILCS 85/7) (from Ch. 111 1/2, par. 148)

Sec. 7. (a) The Director after notice and opportunity for hearing to the applicant or licensee may deny, suspend, or revoke a permit to establish a hospital or deny, suspend, or revoke a license to open, conduct, operate, and maintain a hospital in any case in which he finds that there has been a substantial failure to comply with the provisions of this Act, or the Hospital Report Card Act, or the Hospital Billing and Collection Practices Act or the standards, rules, and regulations established by virtue of any either of those Acts.

(b) Such notice shall be effected by registered mail or by personal service setting forth the particular reasons for the proposed action and fixing a date, not less than 15 days from the date of such mailing or service, at which time the applicant or licensee shall be given an opportunity for a hearing. Such hearing shall be conducted by the Director or by an employee of the Department designated in writing by the Director as Hearing Officer to conduct the hearing. On the basis of any such hearing, or upon default of the applicant or licensee, the Director shall make a determination specifying his findings and conclusions. In case of a denial to an applicant of a permit to establish a hospital, such determination shall specify the subsection of Section 6 under which the permit was denied and shall contain findings of fact forming the basis of such denial. A copy of such determination shall be sent by registered mail or served personally upon the applicant or licensee. The decision denying, suspending, or revoking a permit or a license shall become final 35 days after it is so mailed or served, unless the applicant or licensee, within such 35 day period, petitions for review pursuant to Section 13.

(c) The procedure governing hearings authorized by this Section shall be in accordance with rules promulgated by the Department and approved by the Hospital Licensing Board. A full and complete record shall be kept of all proceedings, including the notice of hearing, complaint, and all other documents in the nature of pleadings, written motions filed in the proceedings, and the report and orders of the Director and Hearing Officer. All testimony shall be reported but need not be transcribed unless the decision is appealed pursuant to Section 13. A copy or copies of the transcript may be obtained by any interested party on payment of the cost of preparing such copy or copies.

(d) The Director or Hearing Officer shall upon his own motion, or on the written request of any party to the proceeding, issue subpoenas requiring the attendance and the giving of testimony by witnesses, and subpoenas duces tecum requiring the production of books, papers, records, or memoranda. All subpoenas and subpoenas duces tecum issued under the terms of this Act may be served by any person of full age. The fees of witnesses for attendance and travel shall be the same as the fees of witnesses before the Circuit Court of this State, such fees to be paid when the witness is excused from further attendance. When the witness is subpoenaed at the instance of the Director, or Hearing Officer, such fees shall be paid in the same manner as other expenses of the Department, and when the witness is subpoenaed at the instance of any other party to any such proceeding the Department may require that the cost of service of the subpoena or subpoena duces tecum and the fee of the witness be borne by the party at whose instance the witness is summoned. In such case, the Department in its discretion, may require a deposit to cover the cost of such service and witness fees. A subpoena or subpoena duces tecum issued as aforesaid shall be served in the same manner as a subpoena issued out of a court.

(e) Any Circuit Court of this State upon the application of the Director, or upon the application of any other party to the proceeding, may, in its discretion, compel the attendance of witnesses, the production of books, papers, records, or memoranda and the giving of testimony before the Director or Hearing Officer conducting an investigation or holding a hearing authorized by this Act, by an attachment for contempt, or otherwise, in the same manner as production of evidence may be compelled before the court.

(f) The Director or Hearing Officer, or any party in an investigation or hearing before the Department, may cause the depositions of witnesses within the State to be taken in the manner prescribed by law for like depositions in civil actions in courts of this State, and to that end compel the attendance of witnesses and the production of books, papers, records, or memoranda.

(Source: P.A. 93-563, eff. 1-1-04.)

Section 90-15. The Code of Civil Procedure is amended by adding Sections 12-701.5 and 12-801.5 as follows:

(735 ILCS 5/12-701.5 new)

Sec. 12-701.5. Hospital Billing and Collection Practices Act. In a garnishment proceeding that is subject to the Hospital Billing and Collection Practices Act, to the extent that there is a conflict between a provision of that Act and a provision of this Part 7, the provision of the Hospital Billing and Collection Practices Act controls.

(735 ILCS 5/12-801.5 new)

Sec. 12-801.5. Hospital Billing and Collection Practices Act. In a wage deduction proceeding that is subject to the Hospital Billing and Collection Practices Act, to the extent that there is a conflict between a provision of that Act and a provision of this Part 8, the provision of the Hospital Billing and Collection Practices Act controls.

Article 99. Effective Date

Section 99-99. Effective date. This Act takes effect January 1, 2006.