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OVERVIEW: Hospitals in Illinois are not required to provide free care, but they must follow certain requirements about notifying patients about their own free care policies. Hospitals must also abide by state billing and collection requirements. The Hospital Uninsured Patients Discount Act limits the amount hospitals can charge uninsured patients, and the Fair Patient Billing Act sets standards for hospital debt collection actions. In addition, hospitals are required to file community benefits reports with the state attorney general.
Community Benefits Act
210 Illinois Compiled Statutes 76/1 to 76/99
Fair Patient Billing Act (see "Other")
210 Illinois Compiled Statutes 88/1 to 88/9999
Hospital Uninsured Patient Discount Act
210 Illinois Compiled Statutes 89/5 to 89/20
The Attorney General is responsible for administering and ensuring compliance with the Fair Patient Billing Act. 210 Ill. Comp. Stat. 88/55(a). The Attorney General must develop and implement a process for handling complaints about violations of the Act and conduct all necessary investigations. Id. at (b).
DEFINITIONS AND DISTINCTIONS:
"Charity care" is defined in Illinois's Community Benefits statute as "care provided by a health care provider for which the provider does not expect to receive payment from the patient or a third -party payer." 210 Ill. Comp. Stat. 76/10.
For purposes of hospitals' financial reporting, "charity care deductions" are defined as "the aggregate of the accounts written off when it is determined that a patient is unable to pay. Charity care results from the facility's policy to provide health care services free of charge to individuals who meet certain financial criteria. Do not include costs associated with community benefits or other non-patient related services." Ill. Admin. Code tit. 77, § 2510.Appendix A (2001); see also Ill. Admin. Code tit. 77, § 2550.Appendix A for a sample worksheet.
For purposes of the Hospital Uninsured Patient Discount Act, the following definitions apply:
"Uninsured discount" means a hospital's charges multiplied by the "uninsured discount factor," which is defined in the statute as "1.0 less the product of a hospital's cost to charge ratio multiplied by 1.35." 210 Ill. Comp. Stat. 89/5.
"Uninsured patient" means a hospital patient who is an Illinois resident and is not covered by any third party insurance program. 210 Ill. Comp. Stat. 89/5.
FREE CARE AS A COMMUNITY BENEFIT:
Under Illinois' community benefit law, charity care is considered to be a community benefit, although it is not a required part of a hospital's community benefit program. 210 Ill. Comp. Stat. 76/1-99.
ELIGIBILITY REQUIREMENTS: N/A
FINANCING SOURCE: N/A
SERVICES COVERED: N/A
The Fair Patient Billing Act requires hospitals to post signs that state: "You may be eligible for financial assistance under the terms and conditions the hospital offers to qualified patients. For more information contact [hospital financial assistance representative]." 210 Ill. Comp. Stat. 88/15(a). The signs must be conspicuously posted in the hospital's admissions and registration areas in English and any other language spoken by at least five percent of the hospital's patient population. Id. at (b)-(c). Hospitals with websites must post the notice in a prominent place on their website along with a description of the application process and copy of the application. Id. at (d). Hospitals must make information about their financial assistance policies available in hard copy either as a brochure, an application, or other materials left in the administration or registration areas. Id. at (e). Finally, hospitals must provide information about their financial assistance policies on all bills sent to uninsured patients. 210 Ill. Comp. Stat. 88/20.
Similarly, the Hospital Uninsured Patient Discount Act requires that each hospital bill, invoice, or other summary of charges to uninsured patients include a prominent statement notifying patients that uninsured patients meeting certain income requirements may be eligible for an uninsured patient discount. 210 Ill. Comp. Stat. 89/10(d). This notification must also include information about how to apply for consideration under the hospital's financial assistance policy. Id.
Hospitals are free to establish their own application processes and policies for financial assistance. In order to avail themselves of the protections of the Fair Patient Billing Act, patients must comply with these policies and cooperate in providing the hospital with all reasonably requested financial and other information within 30 days of the hospital's request. 210 Ill. Comp. Stat. 88/45(a). Patients must also inform the hospital of any material changes in their financial status that might affect their ability to comply with the terms of a payment plan or eligibility for financial assistance within 30 days of the change. Id. at (b).
The Attorney General shall establish a grievance and appeals process for handling patient complaints under the Fair Patient Billing Act. 210 Ill. Comp. Stat. 88/55(a). He or she may bring an action against a hospital for violation of the Fair Patient Billing Act. 210 Ill. Comp. Stat. 88/55(d). The Attorney General may seek civil monetary penalties for violations involving a) a pattern or practice of failing to provide information to patients or b) a failure to engage in or refrain from certain activities under the Act. 210 Ill. Comp. Stat. 88/55(g). Should a court grant final relief against a hospital under this Act and all appeals be exhausted, the Attorney General may refer the hospital to the Illinois Department of Health for a potential action against its license. 210 Ill. Comp. Stat. 88/55(h).
Nonprofit hospitals are required to file an annual report of their community benefits plans, including charity care, with the Attorney General. 210 Ill. Comp. Stat. 76/20 (a)-(b). Hospitals must report charity care at cost and separately from other community benefits. 210 Ill. Comp. Stat. 76/20 (a); Ill. Admin. Code tit. 77, § 2510.Appendix A (2001); see also Ill. Admin. Code tit. 77, § 2550.Appendix A for a sample worksheet. They must include audited financial reports for their most recent fiscal year. Id. Hospitals must prepare a statement notifying the public that the annual report of their community benefits plan is on file with the Attorney General, is public information, and is available upon request from the Attorney General's office. 210 Ill. Comp. Stat. 76/20 (c).
PENALTIES FOR NONCOMPLIANCE:
The Attorney General may assess a late filing fee of $100 against hospitals that fail to timely file their annual community benefit reports. 210 Ill. Comp. Stat. 76/25.
In the event of a change of ownership in a health care facility, the facility must present a signed certification to the Department of Public Health that it will not adopt a more restrictive charity care policy for two (2) years than was in effect during the previous 12 months. 20 Ill. Comp. Stat. 3960/8.5; Ill. Admin. Code tit. 77, § 1130.520.
The Fair Patient Billing Act. Hospitals must provide patients an itemized statement of charges for services rendered upon request. 210 Ill. Comp. Stat. 88/20. Hospitals are required to implement a process whereby patients can ask about or dispute bills. 210 Ill. Comp. Stat. 88/30(a). At a minimum, they must provide a telephone number for disputes and inquiries on all bills and collection notices and respond to telephonic inquiries within two business days. Id. at (b)-(c). Hospitals are precluded from entering into a collections action against uninsured patients who demonstrate that they have insufficient income and assets to meet their financial obligations. 210 Ill. Comp. Stat. 88/35.
The Fair Patient Billing Act also sets guidelines on the process hospitals must use when proceeding to collections against both insured and uninsured patients. Hospitals and their agents may pursue collection actions against uninsured patients only if all of the following conditions have been met:
The uninsured patient has had an opportunity to assess the bill's accuracy, to apply for financial assistance, and been given the option to enter into a "reasonable" payment plan. 210 Ill. Comp. Stat. 88/30(a)(1). Hospitals may require uninsured patients to give "reasonable verification" of their inability to pay the balance in one lump-sum payment. Id. at (a)(2).
- The hospital has a financial assistance policy in place for which the uninsured patient appears to be eligible, and it has given the patient sixty (60) days from discharge or receipt of outpatient care to submit an application. 210 Ill. Comp. Stat. 88/30(a)(3).
- The patient has entered into a reasonable payment plan with the hospital and has defaulted on those payments. 210 Ill. Comp. Stat. 88/30(a)(4).
- Finally, in situations where the patient has told the hospital that he or she plans to apply for government-sponsored health care, hospitals may proceed to collections only where the patient was reasonably expected to qualify but was denied. 210 Ill. Comp. Stat. 88/30(a)(5).
Hospitals cannot send insured patients' accounts to a third party for collections without offering the patient an opportunity to set up a reasonable payment plan for the amount they still owe the hospital. 210 Ill. Comp. Stat. 88/30(b). Hospitals must make this option available within thirty (30) days of the initial bill. Id. Hospitals can proceed against an insured patient who requests a payment plan but fails to agree to its terms within thirty (30) days. Id.
No one may pursue a collection action against a patient for non-payment of a hospital bill until they receive written authorization from an authorized hospital employee who "reasonably believes" that these conditions have been met. 210 Ill. Comp. Stat. 88/30(c). Additionally, any third party with which the hospital contracts to administer its financial assistance and payment plan policies or to engage in collections actions must contractually agree to the requirements of this Act. 210 Ill. Comp. Stat. 88/30(d) and 88/40.
Hospital Uninsured Patients Discount Act. Effective September 2008, all hospitals will be required to comply with mandatory limits on the amount they charge the uninsured. The key components of the Act are as follows:
- All hospitals must limit charges for medically necessary care to 135 percent of costs for uninsured patients. See 210 Ill. Comp. Stat. 89/10(b). Note that this does not include hospital-based physician services.
- All hospitals must offer discounts to the uninsured who meet certain eligibility requirements.
- Hospitals must observe minimum income requirements. Urban hospitals must give discounts to uninsured patients whose family incomes are at or below 600 percent FPL; rural and critical access hospitals must give discounts to uninsured patients whose family incomes are at or below 300 percent FPL. 210 Ill. Comp. Stat. 89/10(a).
- Hospitals may add an additional asset requirements for eligibility. 210 Ill. Comp. Stat. 89/10(c)(4).
Hospitals must cap the amount an uninsured patient pays out of pocket per year at 25 percent of individual gross income. 210 Ill. Comp. Stat. 89/10(c)(1)-(2). Note, however, that the cap applies only to hospital services received at the hospital. Hospitals do not have to take the patient's payments to other providers into account when figuring out whether the cap has been met. Id. Also, it is the patient's responsibility-not the hospital's-to tell the hospital that he or she has previously received hospital care there and has been found eligible for the uninsured discount. 210 Ill. Comp. Stat. 89/10(c)(3); 210 Ill. Comp. Stat. 89/15(d). In effect, the patient has responsibility for making sure that the hospital is tracking whether the cap on payment has been met.
The Act also sets guidelines for application procedures, including minimum requirements for the length of time a patient has to apply for the uninsured discount (60 days). 210 Ill. Comp. Stat. 89/15(b).
It should be noted that the provisions of this Act are limited to the uninsured. They do not apply to the underinsured (e.g., people with health insurance that either does not cover a particular medically necessary service or that requires them to pay out-of-pocket costs that make the care they need unaffordable). See 210 Ill. Comp. Stat. 89/5.