Starting Wednesday, hospitals in Colorado are prohibited from pursuing debt collections against patients if they don’t comply with federal price transparency laws.
A new state law created by House Bill 1285 prohibits non-compliant hospitals from using debt collectors, filing negative credit reports against patients and obtaining state court judgments for outstanding debts. Hospitals can still bill patients, but if they follow collection measures, they must repay any debt owed by the patient along with all legal fees.
“This is a great step forward in reforming the health care system to ensure affordable, high-quality care for all Coloradans and save people money,” said Governor Jared Polis. “People will see what all their medical bills look like and finally we will have better price transparency, which will empower the marketplace to do better in health care and empower patients to take control of their own health care needs.”
Federal law requires hospitals to post procedure prices on a public website to increase transparency and allow patients to compare costs between hospitals. Under Colorado’s new law, patients who believe a hospital is not in compliance with federal law can sue to have their debt forgiven and cover other charges.
According to a February report by PatientRightsAdvocate.org, a year after it took effect, only 6% of Colorado hospitals are fully compliant with the federal price transparency law. That is lower than the national average of 14.3% compliance.
“Our law puts patients above profits and puts us one step closer to a health care system that is open and honest about medical costs,” said House Majority Leader Daneya Esgar, D-Pueblo, who sponsored HB 1285. “Under our law, Coloradans will save money on health care because they know the costs up front and because hospitals have to follow the rules when it comes to their billing.”
For small, critical access hospitals with fewer than 25 beds, Colorado’s new law doesn’t go into effect until February 2023. The law specifies that patients can only complain about the price transparency of procedures related to their own care.
The bipartisan-sponsored bill overwhelmingly passed the Legislature earlier this year, receiving just one “no” vote in the House and unanimous approval in the Senate.