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April 13, 2023

House Advances Bill to Protect Patients from Harmful Medical Billing Practices

DENVER, CO - The House today passed legislation in a preliminary vote to cap interest rates on medical debt and protect Colorado patients from deceptive medical billing practices.

“Medical debt is a barrier that prevents Coloradans from seeking the health care they need to stay alive and improve their health and wellbeing,” said Rep. Mike Weissman, D-Aurora. “The average Coloradan with medical debt owes over $2,000, which is an insurmountable cost for those that are already struggling to put food on the table or afford necessities. By improving patient protections, Colorado patients can make health care decisions that are best for their health.”

“Debt collectors shouldn’t be able to excessively profit off the health care that Colorado patients need to survive,” said Rep. Kyle Brown, D-Louisville. “People are often surprised when they’re served hospital bills after receiving life-saving health care and can’t pay off the amount in full. Setting a ceiling for medical debt interest rates means that Coloradans can seek the care they need without worrying about snowballing debt impacting every part of their budget.”

SB23-093 boosts patient protections from high interest rates for medical debt and confusing debt collection practices that lead to long-lasting debt and financial instability. It establishes new protections for Colorado consumers burdened with medical debt by:

  • Capping the medical debt interest rate at three percent.

  • Prohibiting reporting the debt to a consumer reporting agency until a certain amount of time after an individual fails to fulfill the terms of a payment plan. 

  • Pausing collections on medical debt during any appeal proceedings. 

  • Requiring medical debt creditors or debt collectors to verify total debt owed upon request by a patient and to provide a copy of a payment plan, thereby helping consumers know how much to properly budget for debt payments. 

  • Requiring a health care provider or health care facility to provide, upon request, an estimate of the total cost of medical services to a person who intends to self-pay for the service, and

  • Reinstating the attorney general’s authority to protect consumers from deceptive trade practices related to billing practices and surprise billing.

Debt incurred from medical costs can be financially devastating for patients. When combined with high interest rates and complicated collections practices, consumers may never be able to pay off their medical debt. According to a 2022 report from the federal Consumer Financial Protection Bureau, Coloradans overall held more than $1.3 billion in medical debt and over 12 percent of Coloradans have medical debt in collections. 

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