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