87R11251 SRA-D

By: Powell S.B. No. 1684

A BILL TO BE ENTITLED

AN ACT

relating to the cost, payment, and collection of health care expenses.

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

SECTION 1. Subtitle A, Title 4, Health and Safety Code, is amended by adding Chapter 226 to read as follows:

CHAPTER 226. COST, PAYMENT, AND COLLECTION OF HEALTH CARE EXPENSES

FOR SERVICES PROVIDED BY CERTAIN HEALTH CARE FACILITIES AND

PROFESSIONALS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 226.001. PURPOSE. The purpose of this chapter is to reduce burdensome medical debt and to protect patients in their dealings with medical creditors, medical debt collectors, and medical debt buyers in connection with medical debt.

Sec. 226.002. CONSTRUCTION OF CHAPTER. This chapter shall be liberally construed to effect its purposes.

Sec. 226.003. DEFINITIONS. In this chapter:

(1) "Commission" means the Health and Human Services Commission.

(2) "Consumer report" has the meaning assigned by Section 603(d) of the Fair Credit Reporting Act (15 U.S.C. Section 1681a).

(3) "Consumer reporting agency" means a person who regularly engages wholly or partly in the practice of assembling or evaluating consumer credit information or other information on individuals to furnish consumer reports to third parties for monetary fees, for dues, or on a cooperative nonprofit basis.

(4) "Executive commissioner" means the executive commissioner of the Health and Human Services Commission.

(5) "Health care facility":

(A) means:

(i) a hospital licensed under Chapter 241;

(ii) an outpatient clinic or facility affiliated with or operating under the license of a hospital described by Subparagraph (i);

(iii) an ambulatory surgical center licensed under Chapter 243; or

(iv) a facility licensed in this state that provides outpatient health care services and has revenues of at least $20 million annually; and

(B) includes a health care professional licensed in this state who provides health care services in one or more of the facilities or other health care settings described by Paragraph (A) and who bills patients independently.

(6) "Health care services" means services for the diagnosis, prevention, treatment, cure, or relief of a physical, dental, behavioral, substance use disorder or mental health condition, illness, injury, or disease. The term includes any procedures, products, devices, or medications.

(7) "Medical creditor" means a health care facility or other entity that provides health care services and to whom an individual:

(A) owes money for those services; or

(B) previously owed money for those services if the medical debt has been purchased by a medical debt buyer.

(8) "Medical debt" means a debt arising from the receipt of health care services.

(9) "Medical debt buyer" means a person who purchases a medical debt for collection purposes from a medical creditor or other subsequent owner of the medical debt, regardless of whether the person collects the medical debt, hires a third party to collect the medical debt, or hires an attorney to pursue collection litigation in connection with the medical debt.

(10) "Medical debt collector" means a person who regularly collects or attempts to collect, directly or indirectly, a medical debt originally owed or due another or asserted to be owed or due another. The term includes a medical debt buyer.

Sec. 226.004. RULES. (a) The executive commissioner shall adopt rules to administer this chapter.

(b) In adopting rules under this section, the executive commissioner shall consult with the Texas Medical Board, the State Board of Dental Examiners, and the commissioner of insurance as appropriate and necessary.

SUBCHAPTER B. PRICE INFORMATION AND PAYMENTS

Sec. 226.051. PRICE INFORMATION ONLINE. (a) In this section, "gross charges" means a health care facility's full established price for a health care service that the facility charges patients who do not have health benefit plan coverage before applying any contractual allowances, discounts, or deductions.

(b) A health care facility shall post price information of the facility's health care services on its Internet website. The information must be accessible from a link on the website's home page, and at a minimum must:

(1) list the gross charges for each health care service provided by the facility;

(2) list the Medicare reimbursement amount for the health care service, next to the relevant gross charges; and

(3) use plain language titles or descriptions of health care services that can be understood by the average individual.

Sec. 226.052. ITEMIZED BILL. On a patient's written or oral request and without charge, a medical creditor or medical debt collector shall provide an itemized bill to the patient not later than the 60th day after the date of the request. The bill must contain:

(1) the name and address of the medical creditor;

(2) the date a health care service was provided;

(3) the date the medical debt was incurred, if different from the date of service;

(4) a detailed list of the specific health care services provided to the patient;

(5) a list of all health care professionals who treated the patient;

(6) the amount of principal for any medical debt incurred;

(7) any adjustment to the bill, such as negotiated insurance rates or other discounts;

(8) the amount of any payments received from the patient or any other person on the patient's behalf; and

(9) any interest or fees.

Sec. 226.053. INTEREST ON MEDICAL DEBT. (a) Notwithstanding any agreement to the contrary or other law, interest on medical debt is limited to the rate of interest equal to the weekly average one-year constant maturity treasury yield, but not less than two percent per year and not more than five percent per year, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date when the patient was first provided with a bill for payment of the health care services. If the Board of Governors of the Federal Reserve System ceases to publish this interest rate, the executive commissioner by rule shall substitute another measure for determining a reasonable interest rate of not more than five percent per year.

(b) Notwithstanding any agreement to the contrary or other law, the rate of interest specified by Subsection (a) applies to a judgment on medical debt.

Sec. 226.054. RECEIPT FOR PAYMENTS. Not later than the 10th business day after the date payment of a medical debt is received, the medical creditor or medical debt collector shall provide to the person making the payment a receipt showing:

(1) the amount paid;

(2) the date payment is received;

(3) the outstanding balance of the patient's account before the most recent payment;

(4) the new balance after application of the payment;

(5) the interest rate and interest accrued since the last payment;

(6) the patient's account number;

(7) the name of the current owner of the debt and, if different, the name of the medical creditor; and

(8) whether the payment is accepted as payment in full of the debt.

Sec. 226.055. LIABILITY FOR MEDICAL DEBT. (a) Parents and legal guardians are jointly liable for any medical debt incurred by a child under 18 years of age.

(b) A spouse or other person is not liable for the medical debt of a person 18 years of age or older. A person may consent to assume liability, if the consent is:

(1) on a separate document signed by the person;

(2) not solicited in an emergency room or during an emergency situation; and

(3) not required as a condition of providing emergency or nonemergency health care services.

SUBCHAPTER C. MEDICAL DEBT COLLECTIONS

Sec. 226.101. PROHIBITED COLLECTION ACTIONS. To collect a medical debt, a medical creditor or medical debt collector may not:

(1) cause an individual's arrest;

(2) cause an individual to be the subject of a capias as defined by Article 23.01, Code of Criminal Procedure; or

(3) foreclose on an individual's real property.

Sec. 226.102. EXTRAORDINARY COLLECTION ACTIONS. (a) In this section, "extraordinary collection action," with respect to a patient, means:

(1) selling the patient's medical debt to another party, unless, before the sale, the medical creditor enters into a written agreement with the medical debt buyer providing that:

(A) the medical debt buyer may not engage in an extraordinary collection action as provided by this section to obtain payment of the debt; and

(B) the medical debt collector may not charge interest on the debt at a rate in excess of the limit prescribed by Section 226.053;

(2) reporting adverse information about the patient to a consumer reporting agency; or

(3) initiating an action that requires a legal or judicial process, including:

(A) placing a lien on the patient's property;

(B) seizing the patient's bank account or any other personal property; or

(C) bringing a civil action against the patient.

(b) Except as provided by Section 226.103, a medical creditor or medical debt collector may not engage in an extraordinary collection action against a patient until the 180th day after the date the first bill for an amount owed for receipt of health care services has been sent to the patient.

(c) At least 30 days before taking an extraordinary collection action, a medical creditor or medical debt collector shall provide to the patient a notice containing:

(1) the extraordinary collection actions that will be initiated to obtain payment; and

(2) a deadline after which extraordinary collection actions will be initiated, which may not be earlier than the 30th day after the date notice is provided.

(d) A health care facility or medical debt collector collecting medical debt for services provided at a health care facility may not use any extraordinary collection action not described in the facility's billing and collections policy.

Sec. 226.103. REPORTING TO CONSUMER REPORTING AGENCY. (a) A medical creditor or medical debt collector may not communicate with or report information to a consumer reporting agency regarding a patient's medical debt during the one-year period beginning on the date when the patient was first given a bill for the health care service to which the debt pertains.

(b) After expiration of the one-year period prescribed by Subsection (a), a medical creditor or medical debt collector shall give the patient at least one additional bill before reporting the medical debt to a consumer reporting agency. The amount reported must be the same as the amount stated in the additional bill, and the bill must state that the debt is being reported to a consumer reporting agency.

(c) A medical debt collector shall also provide the notice required by 15 U.S.C. Section 1692g before reporting a medical debt to a consumer reporting agency.

Sec. 226.104. COLLECTION OF MEDICAL DEBT DURING HEALTH BENEFIT PLAN REVIEW PROHIBITED. (a) In this section:

(1) "External review" means a review of an adverse benefit determination conducted under Chapter 4201, Insurance Code, a federal external review process as described by 42 U.S.C. Section 300gg-19, a review conducted under 29 U.S.C. Section 1133, a Medicare appeals process, a Medicaid appeals process, or another applicable external appeals process.

(2) "Internal review" means a review of an adverse benefit determination conducted by a health benefit plan issuer or other insurer.

(b) A medical creditor or medical debt collector that knows or should have known about an internal review, external review, or other appeal of a health benefit plan decision that concerns a medical debt and is pending or was pending during the 60 days preceding the date of the review or appeal may not:

(1) provide information regarding unpaid charges for health care services to a consumer reporting agency;

(2) communicate with the patient regarding the medical debt for the purpose of seeking to collect the debt; or

(3) initiate a lawsuit or arbitration proceeding against the patient regarding the medical debt.

(c) If a medical debt has already been reported to a consumer reporting agency and the medical creditor or medical debt collector who reported the information learns of an internal review, external review, or other appeal of a health benefit plan decision that concerns the debt and is pending or was pending during the 60 days preceding the date of the review or appeal, the creditor or collector shall instruct the consumer reporting agency to delete information about the debt.

(d) A medical creditor described by Subsection (b) may not refer, sell, or send the medical debt to a medical debt collector, including selling the debt to a medical debt buyer.

Sec. 226.105. FORGIVEN COST-SHARING AMOUNTS RELATED TO HEALTH BENEFIT PLAN COVERAGE NOT BREACH OF CONTRACT. Forgiveness of a patient's copayment, coinsurance, deductible, facility fee, out-of-network charge, or other cost-sharing amounts related to a patient's health benefit plan coverage is not a breach of contract or other violation of an agreement between the medical creditor and the health benefit plan issuer or payor.

SUBCHAPTER D. ENFORCEMENT AND REMEDIES

Sec. 226.151. DECEPTIVE TRADE PRACTICE. A violation of this chapter constitutes a deceptive trade practice in addition to the practices described by Subchapter E, Chapter 17, Business & Commerce Code, and is actionable under that subchapter.

Sec. 226.152. INJUNCTIVE RELIEF. An individual may bring an action for injunctive relief or other appropriate equitable relief to enforce compliance with this chapter.

Sec. 226.153. WAIVER OF RIGHTS OR REMEDIES PROHIBITED. (a) An agreement between a patient and a health care facility or medical debt collector may not contain a provision that, before a dispute arises, waives or has the effect of waiving the rights of a patient to resolve the dispute by:

(1) obtaining:

(A) injunctive, declaratory, or other equitable relief;

(B) monetary damages; or

(C) attorney's fees and costs; or

(2) requesting a hearing at which the patient can present evidence in person.

(b) A provision that violates Subsection (a) is void and unenforceable.

(c) A waiver by a patient or other individual of any protection provided by or any right of the patient or other individual granted under this chapter is void and unenforceable.

(d) The remedies provided by this section are not exclusive remedies, and a patient is not required to exhaust any administrative remedies provided by this chapter or any other applicable law.

Sec. 226.154. COMPLAINT PROCESS. (a) The commission shall establish a complaint process by which a patient or other member of the public may file a complaint against a medical creditor or medical debt collector who violates this chapter.

(b) A complaint filed under this section is public information, except for the name or address of a complainant or other personal identifying information.

SECTION 2. As soon as practicable after the effective date of this Act, the executive commissioner of the Health and Human Services Commission shall adopt rules as required to administer, implement, and enforce Chapter 226, Health and Safety Code, as added by this Act, including rules relating to establishing a complaint process as required by Section 226.154, Health and Safety Code, as added by this Act.

SECTION 3. The changes in law made by this Act apply only to a health care service provided on or after the effective date of this Act. A health care service provided before the effective date of this Act is governed by the law in effect on the date the service was provided, and the former law is continued in effect for that purpose.

SECTION 4. This Act takes effect September 1, 2021.