Updating Colorado’s Hospital Discounted Care Law
What You Need to Know:
House Bill 21-1198 – Health-care Billing Requirements For Indigent Patients – known as Hospital Discounted Care (HDC), expanded and made several changes to Colorado’s hospital charity care statute. The law established new requirements for how hospitals screen, bill, and collect payments from low-income patients. The rules cover any medically necessary service provided in acute care and critical access hospitals, as well as freestanding emergency departments.
Rarely, if ever, does every aspect of a new law or program work perfectly right from the start, and this law is no exception. While well intentioned, since implementing the law, Colorado hospital have identified a number of issues that have made the law operationally inefficient and created undue financial burden for hospitals. Hospitals and health systems in Colorado are working with the administration to address the following through SB 24-116:
1. Medicaid: Patients who are eligible for Medicaid, but not enrolled, do not have an expedited pathway to gain access to coverage or a requirement to apply. Hospitals can serve as presumptive eligibility sites to get patients temporary coverage.
2. Physician reporting: The statutory language mandates only reporting from hospitals despite there being a significant physician billing element to HDC. This legislation would remove hospitals from an inappropriate middleman role.
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3. Inconsistent billing caps: Hospitals and providers can bill for services as a percent of gross monthly income for 36 payments. Facilities are allowed to bill up to 4%, and physicians can bill up to 2% (consistent with the HDC fee schedule). However, the statutory language does not effectively recognize instances where the hospital bills on behalf of an employed physician. This legislation would allow bills up to 6% when hospitals bill on behalf of physicians.
4. Scope of hospital services: The language applies to all services under the hospital’s license, which inappropriately includes many services outside of the scope of HDC. This legislation would exclude primary care provided in rural health clinics.
5. Colorado residency: The language requires facilities to screen all patients despite Colorado residents not being eligible for HDC. This legislation would clarify that an individual must attest to residing in Colorado to be eligible for HDC.
Colorado Hospital Perspective:
While this law is well-intended, some of the issues identified created significant, and unnecessary operational and financial burdens for hospitals. Additionally, some of the eligibility issues are creating untenable financial losses for hospitals as eligible patients are opting not to enroll in public benefit programs because HDC essentially gives them free care. Finally, the law created the potential for unintended medical tourism as patients from other states seek free care in Colorado.
Hospitals believe that these unintended consequences can be remedied legislatively while preserving the intended benefits of this law. Support SB 24-116.
CHA Contact: Joshua Ewing, CHA vice president of government affairs | [email protected]
Additional Resources
For Hospitals
CHA has developed a robust set of materials and resources to assist member hospitals with implementing and complying with Hospital Discounted Care. Visit the HDC regulatory webpage to learn more.
