Senate File 26 - Introduced SENATE FILE BY BOLKCOM and HATCH Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to hospital discounts to uninsured patients, and 2 providing civil penalties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1609XS 83 5 pf/rj/24 PAG LIN 1 1 HOSPITAL DISCOUNTS TO THE UNINSURED ACT 1 2 Section 1. NEW SECTION. 135B.35 SHORT TITLE. 1 3 This division shall be known and may be cited as the 1 4 "Hospital Discounts to the Uninsured Act". 1 5 Sec. 2. NEW SECTION. 135B.36 DEFINITIONS. 1 6 As used in this division, unless the context otherwise 1 7 requires: 1 8 1. "Cost=to=charge ratio" means the ratio of a hospital's 1 9 costs to its charges taken from its most recently filed 1 10 Medicare cost report. 1 11 2. "Critical access hospital" means a hospital designated 1 12 as a critical access hospital pursuant to 42 U.S.C. } 1395i=4. 1 13 3. "Family income" means the sum of a family's annual 1 14 earnings and cash benefits from all sources before taxes, less 1 15 payments made for child support. 1 16 4. "Federal poverty income guidelines" means the federal 1 17 poverty level as defined by the most recently revised poverty 1 18 income guidelines published by the United States department of 1 19 health and human services. 1 20 5. "Health care services" means any medically necessary 1 21 inpatient or outpatient hospital service, including 1 22 pharmaceuticals or supplies provided by a hospital to a 1 23 patient. 1 24 6. "Hospital" means a hospital licensed under this 1 25 chapter. 1 26 7. "Iowa resident" means an individual who lives in Iowa 1 27 with the intent to remain living in Iowa indefinitely. "Iowa 1 28 resident" does not include an individual who relocates to this 1 29 state for the sole purpose of receiving health care services. 1 30 8. "Medically necessary" means any inpatient or outpatient 1 31 hospital service, including pharmaceuticals or supplies 1 32 provided by a hospital to a patient, covered under Title XVIII 1 33 of the federal Social Security Act for beneficiaries with the 1 34 same clinical presentation as the uninsured patient. A 1 35 "medically necessary" service does not include any of the 2 1 following: 2 2 a. Nonmedical services such as social and vocational 2 3 services. 2 4 b. Elective cosmetic surgery, unless it is cosmetic 2 5 surgery designed to correct disfigurement caused by injury, 2 6 illness, or congenital defect or deformity. 2 7 9. "Rural hospital" means a hospital that is located 2 8 outside a federally designated metropolitan statistical area 2 9 as determined by the United States census bureau. 2 10 10. "Uninsured discount" means a hospital's charges 2 11 multiplied by the uninsured discount factor. 2 12 11. "Uninsured discount factor" means one less the product 2 13 of a hospital's cost=to=charge ratio multiplied by one and 2 14 thirty=five one=hundredths. 2 15 12. "Uninsured patient" means an Iowa resident who is a 2 16 patient of a hospital and is not covered under a policy of 2 17 health insurance and is not a beneficiary under a public or 2 18 private health insurance, health benefit, or other health 2 19 coverage program, including high deductible health insurance 2 20 plans, workers' compensation, accident liability insurance, or 2 21 other third=party liability coverage. 2 22 Sec. 3. NEW SECTION. 135B.37 UNINSURED PATIENT 2 23 DISCOUNTS. 2 24 1. ELIGIBILITY. 2 25 a. A hospital, other than a rural hospital or critical 2 26 access hospital, shall provide a discount from its charges to 2 27 any uninsured patient, who applies for a discount and has 2 28 family income of not more than six hundred percent of the 2 29 federal poverty income guidelines, for all medically necessary 2 30 health care services exceeding three hundred dollars in any 2 31 one inpatient admission or outpatient encounter. 2 32 b. A rural hospital or critical access hospital shall 2 33 provide a discount from its charges to any uninsured patient, 2 34 who applies for a discount and has annual family income of not 2 35 more than three hundred percent of the federal poverty income 3 1 guidelines, for all medically necessary health care services 3 2 exceeding three hundred dollars in any one inpatient admission 3 3 or outpatient encounter. 3 4 2. DISCOUNT. For all health care services exceeding three 3 5 hundred dollars in any one inpatient admission or outpatient 3 6 encounter, a hospital shall not collect from an uninsured 3 7 patient, deemed eligible under subsection 1, more than the 3 8 hospital's charges less the amount of the uninsured discount. 3 9 3. MAXIMUM COLLECTIBLE AMOUNT. 3 10 a. The maximum amount that may be collected in a twelve= 3 11 month period, for health care services provided by the 3 12 hospital from a patient determined by that hospital to be 3 13 eligible under subsection 1, is twenty=five percent of the 3 14 patient's family income, subject to the patient's continued 3 15 eligibility under this division. 3 16 b. The twelve=month period to which the maximum 3 17 collectible amount limitation applies shall begin on the first 3 18 date an uninsured patient receives health care services that 3 19 are determined to be eligible for the uninsured discount at 3 20 that hospital. To be eligible to have the maximum collectible 3 21 amount limitation applied to subsequent charges, the uninsured 3 22 patient shall inform the hospital in subsequent inpatient 3 23 admissions or outpatient encounters that the patient has 3 24 previously received health care services from that hospital 3 25 and was determined to be entitled to the uninsured discount. 3 26 c. (1) A hospital in a metropolitan statistical area may 3 27 adopt a policy to exclude an uninsured patient from the 3 28 application of paragraph "a" when the patient owns assets 3 29 having a value in excess of six hundred percent of the federal 3 30 poverty income guidelines. A critical access hospital or 3 31 hospital outside a metropolitan statistical area may adopt a 3 32 policy to exclude an uninsured patient from application of 3 33 paragraph "a" when the patient owns assets having a value in 3 34 excess of three hundred percent of the federal poverty income 3 35 guidelines. 4 1 (2) In determining the percentage of the uninsured 4 2 patient's assets, all of the following shall be excluded: 4 3 (a) The patient's primary residence. 4 4 (b) Personal property exempt from judgment under section 4 5 627.6. 4 6 (c) Any amounts held in a pension or retirement plan, 4 7 provided however that distributions and payments from pension 4 8 or retirement plans may be included as income for the purposes 4 9 of this division. 4 10 4. STATEMENT OF DISCOUNT. Each hospital bill, invoice, or 4 11 other summary of charges to an uninsured patient shall include 4 12 with it, or on it, a prominent statement that an uninsured 4 13 patient who meets certain income requirements may qualify for 4 14 an uninsured discount and information regarding how an 4 15 uninsured patient may apply for consideration under the 4 16 hospital's financial assistance policy. 4 17 Sec. 4. NEW SECTION. 135B.38 PATIENT AND HOSPITAL 4 18 RESPONSIBILITY. 4 19 1. APPLICATION FOR OTHER COVERAGE. A hospital may make 4 20 the availability of a discount and the maximum collectible 4 21 amount under this division contingent upon the uninsured 4 22 patient first applying for coverage under public programs or 4 23 any other program, if there is a reasonable basis to believe 4 24 that the uninsured patient may be eligible for such program. 4 25 2. APPLICATION FOR DISCOUNT. A hospital shall permit an 4 26 uninsured patient to apply for a discount within sixty days of 4 27 the date of discharge or date of service. 4 28 3. INCOME VERIFICATION. A hospital may require an 4 29 uninsured patient who is requesting an uninsured discount to 4 30 provide documentation of family income. Acceptable family 4 31 income documentation shall include any of the following: 4 32 a. A copy of the uninsured patient's most recent tax 4 33 return. 4 34 b. A copy of the uninsured patient's most recent internal 4 35 revenue service W=2 and 1099 forms. 5 1 c. Copies of the uninsured patient's most recent wage 5 2 payment stubs. 5 3 d. Written income verification from an employer if paid in 5 4 cash. 5 5 e. Another reasonable form of third=party income 5 6 verification deemed acceptable to the hospital. 5 7 4. ASSET VERIFICATION. A hospital may require an 5 8 uninsured patient who is requesting an uninsured discount to 5 9 certify the existence of assets owned by the patient and to 5 10 provide documentation of the value of such assets. Acceptable 5 11 documentation may include statements from financial 5 12 institutions or some other third=party verification of an 5 13 asset's value. If third=party verification does not exist, 5 14 the patient shall certify as to the estimated value of the 5 15 asset. 5 16 5. IOWA RESIDENT VERIFICATION. A hospital may require an 5 17 uninsured patient who is requesting an uninsured discount to 5 18 verify Iowa residency. Acceptable verification of Iowa 5 19 residency shall include any of the following: 5 20 a. Any of the documents listed in subsection 3. 5 21 b. A valid state=issued identification card. 5 22 c. A recent residential utility bill. 5 23 d. A lease agreement. 5 24 e. A vehicle registration card. 5 25 f. A voter registration card. 5 26 g. Mail addressed to the uninsured patient at an Iowa 5 27 address from a government or other credible source. 5 28 h. A statement from a family member of the uninsured 5 29 patient who resides at the same address and presents 5 30 verification of residency. 5 31 i. A letter from a homeless shelter, transitional house, 5 32 or other similar facility verifying that the uninsured patient 5 33 resides at the facility. 5 34 6. CERTIFICATION OF INFORMATION == FORFEITURE. A hospital 5 35 may require patients to certify that all of the information 6 1 provided in the application is true. The application may 6 2 state that if any of the information is untrue, any discount 6 3 granted to the patient is forfeited and the patient is 6 4 responsible for payment of the hospital's full charges. 6 5 7. DETERMINATION OF TWELVE=MONTH MAXIMUM. In order for a 6 6 hospital to determine the twelve=month maximum amount that can 6 7 be collected from a patient deemed eligible under section 6 8 135B.37, an uninsured patient shall inform the hospital in 6 9 subsequent inpatient admissions or outpatient encounters that 6 10 the patient has previously received health care services from 6 11 that hospital and was determined to be entitled to the 6 12 uninsured discount. 6 13 8. HOSPITAL OBLIGATION. A hospital's obligation toward an 6 14 individual uninsured patient under this division shall cease 6 15 if that patient unreasonably fails or refuses to provide the 6 16 hospital with information or documentation requested under 6 17 subsection 3, 4, or 5, or to apply for coverage under public 6 18 programs when requested under subsection 1, within thirty days 6 19 of the hospital's request. 6 20 Sec. 5. NEW SECTION. 135B.39 EXEMPTIONS AND LIMITATIONS. 6 21 1. A hospital that does not charge for its services is 6 22 exempt from the provisions of this division. 6 23 2. This division shall not be used by a private or public 6 24 health care insurer or plan as a basis for reducing its 6 25 payment or reimbursement rates or policies with respect to any 6 26 hospital. Notwithstanding any other provisions of law, 6 27 discounts authorized under this division shall not be used by 6 28 a private or public health care insurer or plan, regulatory 6 29 agency, arbitrator, court, or other third=party to determine a 6 30 hospital's usual and customary charges for any health care 6 31 service. 6 32 3. This division shall not be construed to require a 6 33 hospital to provide an uninsured patient with a particular 6 34 type of health care service or other service. 6 35 Sec. 6. NEW SECTION. 135B.40 ENFORCEMENT. 7 1 1. The department shall administer and ensure compliance 7 2 with this division, including adoption of any rules necessary 7 3 for the implementation and enforcement of this division. 7 4 2. The department shall develop and implement a process 7 5 for receiving and handling complaints from individuals or 7 6 hospitals regarding alleged violations of this division. 7 7 3. Each hospital shall file worksheet C part I from the 7 8 hospital's most recently filed Medicare cost report with the 7 9 department, annually, within thirty days of filing the 7 10 Medicare cost report with the hospital's Medicare fiscal 7 11 intermediary. 7 12 4. The department may conduct any investigation deemed 7 13 necessary regarding possible violations of this division by 7 14 any hospital including the issuance of subpoenas to: 7 15 a. Require the hospital to file a statement or report or 7 16 answer interrogatories in writing as to all information 7 17 relevant to the alleged violations. 7 18 b. Examine under oath any person who possesses knowledge 7 19 or information directly related to the alleged violations. 7 20 c. Examine any record, book, document, account, or paper 7 21 necessary to investigate the alleged violations. 7 22 5. If the department determines that there is reason to 7 23 believe that any hospital has violated this division, the 7 24 department may bring an action for injunctive relief for any 7 25 act, policy, or practice by the hospital that violates this 7 26 division. 7 27 6. The department may seek the assessment of a civil 7 28 penalty not to exceed five hundred dollars per violation in 7 29 any action filed under this division if a hospital, by pattern 7 30 or practice, knowingly violates section 135B.37. 7 31 7. If a hospital is found to have violated this division, 7 32 following exhaustion of all appeals, the department may 7 33 suspend or revoke the hospital's license. 7 34 EXPLANATION 7 35 This bill creates a new division in Code chapter 135B 8 1 (licensure and regulation of hospitals). The division is 8 2 entitled the "Hospital Discounts to the Uninsured Act". 8 3 The bill provides definitions including "cost=to=charge 8 4 ratio", "family income", "federal poverty income guidelines", 8 5 "Iowa resident", "medically necessary", "uninsured discount", 8 6 "uninsured discount factor", and "uninsured patient" for the 8 7 purposes of the division. 8 8 The bill specifies the formula for computing the discount. 8 9 Under the bill, eligibility of individuals for an uninsured 8 10 patient discount applies to individuals receiving medically 8 11 necessary services at a hospital, other than a critical access 8 12 hospital or a rural hospital, with family incomes of not more 8 13 than 600 percent of the federal poverty income guidelines, for 8 14 health care services exceeding $300 in any one inpatient 8 15 admission or outpatient encounter. The uninsured patient 8 16 discount also applies to uninsured patients receiving 8 17 medically necessary services at a rural hospital or critical 8 18 access hospital with annual family incomes of not more than 8 19 300 percent of the federal poverty income guidelines for all 8 20 medically necessary services exceeding $300 in any one 8 21 inpatient admission or outpatient encounter. 8 22 The bill establishes a maximum collectible amount during a 8 23 12=month period. The bill provides that a hospital may 8 24 exclude an uninsured patient from application of the discount 8 25 if the uninsured patient has a specified amount of assets. 8 26 The bill directs hospitals to provide a prominent statement of 8 27 the uninsured discount in bills, invoices, or other summaries 8 28 of charges to uninsured patients. 8 29 The bill specifies patient responsibilities and hospital 8 30 obligations. A hospital may require that an uninsured patient 8 31 first apply for public programs or other third=party coverage 8 32 if there is a reasonable basis to believe that the uninsured 8 33 patient may be eligible for such program, prior to the 8 34 patient's application for the uninsured patient discount. A 8 35 patient applying for the discount is responsible for verifying 9 1 the patient's family income, assets, and residence. The 9 2 hospitals obligation to the patient may cease if the patient 9 3 unreasonably fails or refuses to provide the information and 9 4 documentation requested with 30 days of the hospital's 9 5 request. 9 6 The bill provides that a hospital that does not charge for 9 7 its services is exempt from the provisions of the bill. The 9 8 bill also provides that nothing in the bill is to be used by 9 9 any private or public health care insurer or plan as a basis 9 10 for reducing its payment or reimbursement rates or policies 9 11 with respect to any hospital. Discounts authorized under the 9 12 bill are also not to be used by any private or public health 9 13 care insurer or plan, regulatory agency, arbitrator, court, or 9 14 other third=party to determine a hospital's usual and 9 15 customary charges for any health care service. Nothing in the 9 16 bill is to be construed to require a hospital to provide an 9 17 uninsured patient with a particular type of health care 9 18 service or other service. 9 19 The bill provides for enforcement by the department of 9 20 inspections and appeals. The bill authorizes subpoena power 9 21 on the part of the department in an investigation of possible 9 22 violations of the bill to require the hospital to file a 9 23 statement or report or answer interrogatories in writing as to 9 24 all information relevant to the alleged violations; examine 9 25 under oath any person who possesses knowledge or information 9 26 directly related to the alleged violations; and to examine any 9 27 record, book, document, account, or paper necessary to 9 28 investigate the alleged violation. If the department 9 29 determines that there is reason to believe that any hospital 9 30 has violated the bill, the department may bring an action for 9 31 injunctive relief. The department may also seek the 9 32 assessment of a civil penalty not to exceed $500 per violation 9 33 if a hospital knowingly violates the uninsured patient 9 34 discount provisions of the bill. Finally, if a hospital is 9 35 found to have violated the bill, following exhaustion of all 10 1 appeals, the department may suspend or revoke the hospital's 10 2 license. 10 3 LSB 1609XS 83 10 4 pf/rj/24.1