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New Medical Billing Compliance Laws for Illinois Hospitals Are Officially in Effect

UPDATED:
February 29, 2024
Information on Illinois legislation on unfair medical debt bill

The Protect Illinoisans from Unfair Medical Debt bill is designed to reduce medical debt for those who receive care within the state of Illinois. It officially became law January 1, 2024, but hospitals have until June 29, 2024 to ensure compliance and adapt to new requirements. 

The next six months are an excellent time for Illinois hospitals to audit current processes and look into new patient management solutions. Here’s what your team should know in order to prepare.

America’s medical debt problem

Medical debt is the number one cause of bankruptcy in the U.S. One survey found that as many as 40$ of Americans (about 100 million people) owe medical debt in some form. Of those, 3 million people owe more than $10,000! While a wide range of Americans are burdened by this issue, medical debt disproportionately impacts people of color, low income households and women. 

There are many causes surrounding medical debt and a patient’s inability to pay, but an uninsured population of over 25.6 million individuals is one of the largest. Federal regulations have set some restrictions in place to protect patients from debt, especially those without coverage, with some states passing their own laws. Illinois is the latest state to take up the cause.

Illinois’ population reflects that of the nation, with around 40% carrying some sort of healthcare debt. Most Illinois citizens with medical debt are under 50 years of age. More than 900,000 Illinoisians are uninsured, and more than a third of the uninsured population is eligible for some form of medical coverage. These patients often struggle to navigate the complex application project due to technology or language barriers.

What is the The Protect Illinoisans from Unfair Medical Debt bill?

The Protect Illinoisans from Unfair Medical Debt bill was introduced by Illinois Representative Damara Avelar in 2023 to help consumers better manage medical debt. At a press conference to introduce the legislation, she commented that  “No one should have to choose between food or utilities and paying medical bills.”

Its ability to reduce medical debt is ideal for both patients and providers, but it introduces a series of major compliance challenges for hospitals. The legislation requires hospitals to take an active role in reducing consumer medical debt through four specific actions:

1) Screen for eligibility before collections

First, all insured patients must be screened by the hospital for public health insurance program coverage and financial assistance eligibility provided by the hospital. The screening process includes gathering patient information, assessing it, letting the patient know if they’re eligible for any coverage, helping with the application for assistance in a free and unbiased manner and, importantly, documenting everything.

Screening can occur when the patient requests it, when the hospital is contacted to pay a bill related to the patient’s care and in any other circumstances that would lead the hospital to believe a patient cannot pay. Patients must give consent to be screened. If they decline to be screened for coverage, this reason must be documented in their medical records (see point 2, below).

Under the new regulations, screening must occur at registration or as soon as reasonably possible if care must be granted immediately. The screening process must comply with the Illinois Language Assistance Services Act, which mandates interpreters for fast and efficient communication with patients. 

If a patient is found to be eligible for financial assistance and their application is approved, the hospital must bill the program and not the patient. If the patient’s application is denied, the hospital must offer to screen them again, which restarts the clock on the entire process. Only after these steps are completed can a hospital send a patient’s account to collections.

2) Track Failures to respond

If a patient declines to be screened or fails to respond to requests for screening, this must be appropriately documented in the patient’s medical records. Publicly, hospitals must also report on their website the number of uninsured patients who decline or fail to respond and list the five reasons patients cite most frequently for their declination or lack of response.

3) Provide insured patients more options

The bill also extends to insured patients, requiring hospitals to determine financial assistance eligibility for those with existing coverage. Hospitals must use financial assistance policies and internal processes to provide more opportunities for insured patients to be considered for eligibility. 

Screening an insured patient must happen when the patient requests it, but hospitals should also move forward on screening if anything in an insured patient’s file suggests an inability to pay. 

This is perhaps the murkiest of the four required actions in terms of enforcement. Learning an individual cannot pay is a case-by-case occurrence, and it’s unclear how the state of Illinois will determine a patient should have been screened. It is recommended hospitals proceed with a best effort approach and provide employee training in a way that can be demonstrated if asked for proof of effort.

4) Provide time before pursuing collections

The final guideline states hospitals must give patients impacted by medical bills time to learn, consider and act on options before moving the account to collections. Patients are entitled to more time to seek coverage or financial assistance. 

Everything mentioned above must occur before collections can occur. Hospitals must comply with screening requirements and apply all possible patient coverage options and discounts.  Documentation on the patient’s billing timeline is key to compliance. For example, if a patient is asked to provide documentation for screening within 30 days, hospitals must confirm the date of the initial bill and deadline for screening information and adequately communicate these to the patient. Hospitals must also allow patients to apply for discounts within 90 days of discharge at any point - even if it happens after the initial 30 day period of request for screening-related information. 

For insured patients, hospitals must comply with everything mentioned above, then provide the opportunity to request a reasonable payment plan for up to 90 days after the initial billing. Once all other options are exhausted, insured patient accounts can proceed with collections.

If hospitals are found to be noncompliant with any of these four requirements, the Illinois attorney general is authorized to investigate complaints and impose fines. These fines will increase each time a hospital is found to be in violation of the above guidelines.

What does this bill mean for Illinois hospitals?

Less medical debt is a win for Illinois patients and hospitals. If uninsured patients receive coverage, hospitals can reduce bad debt and send fewer accounts to collections. An improved patient experience is linked to a hospital’s financial health.

However, the bill delivers a lot to comply with in a fairly short period of time. Success will depend on interdepartmental communication and cooperation. Now is the time to bulk up or replace existing systems. There’s still plenty of time to get staff trained and ready to roll with the new bill well before the June 29 deadline.

Achieving compliance via MAPS

When it comes to compliance, technology is your team’s best friend. An all-in-one platform for screening and enrollment increases productivity while maximizing reimbursement.

The MAPS platform includes some of the most advanced management and reporting tools available in the industry—all turnkey. It uses automation, electronic application submission, workflows and reporting to track outcomes, reduce cycle time and provide accountability - all while ensuring compliance and removing human error. 

MAPS brings together all of the functionality needed to convert the self-pay patient population into either reimbursement generating programs or financial assistance in the most effective and efficient manner possible. It works with your existing, in-house team and costs far less than a fully outsourced operational model. In just 2-3 minutes it can quickly screen a patient and identify appropriate assistance programs. 

For Illinois hospitals, 2024 is shaping up to be a year focused on compliance. Use MAPS to develop, implement and manage your growing self-pay patient population. Click here to learn more about MAPS and request product information.