BILL REQ. #:  H-3795.1 

Read first time 01/10/2006.   Referred to Committee on Health Care.

     AN ACT Relating to hospital charity care and debt collection policies; amending RCW 70.170.020 and 70.170.060; and adding a new section to chapter 70.170 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 70.170.020 and 1995 c 269 s 2203 are each amended to read as follows:
     ((As used in)) The definitions in this section apply throughout this chapter((:)) unless the context clearly requires otherwise.
     (1) "Department" means department of health.
     (2) "Hospital" means any health care institution which is required to qualify for a license under RCW 70.41.020(((2))) (4); or as a psychiatric hospital under chapter 71.12 RCW.
     (3) "Secretary" means secretary of health.
     (4) "Charity care" means necessary hospital health care rendered to indigent persons, to the extent that the persons are unable to pay for the care or to pay deductibles or co-insurance amounts required by a third-party payer, as determined by the department.
     (5) "Sliding fee schedule" means a hospital-determined, publicly available schedule of discounts ((to charges)) for persons deemed eligible for charity care((;)). Such schedules shall be based upon discounts to payment rates that the hospital would be paid by its largest private third-party payer, and shall be established after consideration of guidelines developed by the department.
     (6) "Special studies" means studies which have not been funded through the department's biennial or other legislative appropriations.
     (7) "Federal poverty guidelines" means the poverty income guidelines established annually by the federal department of health and human services.

Sec. 2   RCW 70.170.060 and 1998 c 245 s 118 are each amended to read as follows:
     (1) No hospital or its medical staff shall adopt or maintain admission practices or policies which result in:
     (a) A significant reduction in the proportion of patients who have no third-party coverage and who are unable to pay for hospital services;
     (b) A significant reduction in the proportion of individuals admitted for inpatient hospital services for which payment is, or is likely to be, less than the anticipated charges for or costs of such services; or
     (c) The refusal to admit patients who would be expected to require unusually costly or prolonged treatment for reasons other than those related to the appropriateness of the care available at the hospital.
     (2) No hospital shall adopt or maintain practices or policies which would deny access to emergency care based on ability to pay. No hospital which maintains an emergency department shall transfer a patient with an emergency medical condition or who is in active labor unless the transfer is performed at the request of the patient or is due to the limited medical resources of the transferring hospital. Hospitals must follow reasonable procedures in making transfers to other hospitals including confirmation of acceptance of the transfer by the receiving hospital.
     (3) The department shall develop definitions by rule, as appropriate, for subsection (1) of this section and, with reference to federal requirements, subsection (2) of this section. The department shall monitor hospital compliance with subsections (1) and (2) of this section. The department shall report individual instances of possible noncompliance to the state attorney general or the appropriate federal agency.
     (4) The department shall establish and maintain by rule, consistent with the definition of charity care in RCW 70.170.020, the following:
     (a) Uniform procedures, data requirements, and criteria for identifying patients receiving charity care;
     (b) A definition of residual bad debt including reasonable and uniform standards for collection procedures to be used in efforts to collect the unpaid portions of hospital charges that are the patient's responsibility.
     (5) For the purpose of providing charity care, each hospital shall develop, implement, and maintain a charity care policy which, consistent with subsection (1) of this section, shall enable people with family income below two hundred percent of the federal poverty ((level)) guidelines access to appropriate hospital-based medical services, and a sliding fee schedule for determination of discounts ((from charges)) for persons ((who qualify for such discounts by January 1, 1990)) with family income up to four hundred percent of the federal poverty guidelines or whose family income is otherwise not sufficient to enable them to pay for their care or to pay deductibles or coinsurance amounts required by a third-party payer. The department shall develop specific guidelines to assist hospitals in setting sliding fee schedules required by this section. All persons with family income below ((one)) two hundred percent of the federal poverty ((standard)) guidelines shall be deemed charity care patients for the full amount of hospital charges, provided that such persons are not eligible for other private or public health coverage sponsorship. Persons who may be eligible for charity care shall be notified by the hospital.
     (6) Each hospital shall provide notice to patients of its charity care policies. At a minimum, each hospital must post in locations easily accessible to and visible by patients, and include in each bill sent to patients, a notice regarding the opportunity to apply for charity care. The notice must use clear language that would be easily understood by individuals with limited education.
     (7) Each hospital shall make every reasonable effort to determine the existence or nonexistence of private or public sponsorship which might cover in full or part the charges for care rendered by the hospital to a patient; the family income of the patient as classified under federal poverty ((income)) guidelines; and the eligibility of the patient for charity care as defined in this chapter and in accordance with hospital policy. An initial determination of sponsorship status shall precede collection efforts directed at the patient.
     (((7))) (8) The department shall monitor the distribution of charity care among hospitals, with reference to factors such as relative need for charity care in hospital service areas and trends in private and public health coverage. The department shall prepare reports that identify any problems in distribution which are in contradiction of the intent of this chapter. The report shall include an assessment of the effects of the provisions of this chapter on access to hospital and health care services, as well as an evaluation of the contribution of all purchasers of care to hospital charity care.
     (((8))) (9) The department shall issue a report on the subjects addressed in this section at least annually, with the first report due on July 1, 1990.

NEW SECTION.  Sec. 3   A new section is added to chapter 70.170 RCW to read as follows:
     (1) Upon a determination by a hospital that a person is eligible for a sliding fee schedule discount under RCW 70.170.060, the hospital shall offer that person the option to pay his or her bill in reasonable installments that take into account the person's income and other financial obligations. Interest rates for installment payment plans shall not exceed the consumer price index or three percent per annum, whichever is lower. Hospitals shall provide general comparative information on the difference between the interest rate it will charge and the typical credit card or consumer bank loan interest rates. The information shall be provided in writing and shall use clear language that would be easily understood by individuals with limited education.
     (2) Before contracting with any entity to act as a hospital's designated agent, assignee, or contractor for collection of its accounts receivable, or to purchase its accounts receivable, the hospital's governing board must have notice of, and affirmatively approve, the debt collection practices of the entity. The practices must include detailed information related to:
     (a) Contacts with patients who have debts to the hospital, including written, telephonic, and electronic contacts;
     (b) Policies related to the ability of debtors to make installment payments, and interest rates charged on any remaining balances;
     (c) Circumstances under which the entity files civil actions to collect debts, and undertakes any of the following collection actions to execute a judgment in connection with a debt:
     (i) Actions to foreclose on real property;
     (ii) Actions to place a lien on any property;
     (iii) Actions to garnish wages; and
     (iv) Actions to attach or seize a bank account or any other personal property.
     (3) On at least an annual basis, the governing board of every hospital shall review all collection actions taken by the entity that has a contract with the hospital under subsection (2) of this section.