Limitations on Collection Actions for Medical Debt

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED HOUSE BILL 26-1267 LLS NO. 26-0023.01 Shelby Ross x4510 HOUSE SPONSORSHIP Joseph and Mabrey, SENATE SPONSORSHIP Jodeh and Weissman, House Committees Senate Committees Health & Human Services A BILL FOR AN ACT CONCERNING LIMITATIONS ON COLLECTION ACTIONS FOR MEDICAL DEBT.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) The bill adds to the list of impermissible collection actions that a medical creditor is prohibited from using when collecting on a medical debt. Current law requires a medical creditor to comply with certain conditions and notify a patient with medical debt 30 days before taking any permissible extraordinary collection actions. In addition to providing notice before taking any permissible extraordinary collection actions, the Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

bill requires a medical creditor to notify a patient 30 days before collecting, transferring, selling, or assigning a medical debt, and to verify the patient has been screened for public health insurance programs and discounted care. The bill requires a medical creditor to offer a reasonable payment plan to each patient with medical debt. If the medical creditor violates the requirements for selling, transferring, or assigning medical debt, or undertaking collection activities, the patient is entitled to damages in the amount of $3,000 or actual damages, whichever is greater.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 25.5-3-501, amend (6) as follows:

25.5-3-501. Definitions.

As used in this part 5, unless the context otherwise requires:

(6) "Screen" or "screening" means a process identified in rule by the state department whereby health-care facilities assess a patient's circumstances related to eligibility criteria and determine whether the patient is likely to qualify for public health-care coverage HEALTH INSURANCE PROGRAMS or discounted care, inform the patient of the health-care facility's determination, and provide information to the patient about how the patient can enroll in A public health-care coverage HEALTH INSURANCE PROGRAM.

SECTION 2. In Colorado Revised Statutes, amend 25.5-3-502 as follows: 25.5-3-502. Requirement to screen patients for eligibility for public health-care programs and discounted care - rules.

(1) Beginning September 1, 2022, A health-care facility shall screen, unless a patient declines, each uninsured patient for eligibility for:

(a) Public health insurance programs, including, but not limited to, medicare; the state medical assistance program, articles 4, 5, and 6 of this title 25.5; emergency medicaid; and the children's basic health plan, article 8 of this title 25.5; and

(b) Repealed.

(c) Discounted care, as described in section 25.5-3-503.

(1.5) IF REQUESTED BY AN INSURED PATIENT, A HEALTH-CARE FACILITY SHALL SCREEN THE PATIENT FOR DISCOUNTED CARE, AS DESCRIBED IN SECTION 25.5-3-503.

(2) Health-care facilities shall use a single uniform application developed by the state department when screening a patient pursuant to subsection (1) SUBSECTIONS (1) AND (1.5) of this section.

(3) If a health-care facility determines that a patient is ineligible for discounted care, the facility shall provide the patient notice of the determination and an opportunity for the patient to appeal the determination in accordance with state department rules.

(4) If the patient declines the screening described in subsection (1) of this section, the health-care facility shall document the patient's decision in accordance with state department rules. A patient's decision to decline the screening that is documented and complies with state department rules is a complete defense to a claim brought by a patient under PURSUANT TO section 25.5-3-506 (2) for a violation of section 25.5-3-506 (1)(a) or (1)(b) OR (1)(c).

(5) If requested by the patient, a health-care facility shall screen an insured patient for discounted care pursuant to subsections (1)(b) and (1)(c) of this section.

SECTION 3. In Colorado Revised Statutes, 25.5-3-503, amend (1) introductory portion and (1)(b) as follows: 25.5-3-503. Discounted care for qualified patients - definition.

(1) Beginning September 1, 2022, If a patient is screened pursuant to section 25.5-3-502 and is determined to be a qualified patient, a health-care facility and a licensed health-care professional shall, for emergency hospital and other health-care services:

(b) Collect amounts charged, not including amounts owed by third-party payers, in monthly installments such that the patient is not paying more than:

(I) Four percent of the patient's monthly household income on a bill from a health-care facility; not paying more than

(II) Two percent of the patient's monthly household income on a bill from each licensed health-care professional; and not paying more than (III) Six percent of the patient's household income on a comprehensive bill containing all health-care facility and licensed health-care professional charges; and

SECTION 4. In Colorado Revised Statutes, 25.5-3-504, amend (1) introductory portion and (1)(a) as follows:

25.5-3-504. Notification of patients' rights.

(1) Beginning September 1, 2022, A health-care facility shall make information developed by the state department about patients' rights under this part 5 PURSUANT TO SECTION 25.5-3-505 (5)(a) and the uniform application developed by the state department pursuant to section 25.5-3-505 (2)(i) available to the public and to each patient. At a minimum, the health-care facility shall:

(a) Post the information in all required languages pursuant to this subsection (1) IN ALL REQUIRED LANGUAGES conspicuously on the health-care facility's website, including a link to the information on the health-care facility's main landing page;

SECTION 5. In Colorado Revised Statutes, 25.5-3-505, amend (1), (2) introductory portion, (2)(a), (2)(b), (2)(c) introductory portion, (2)(c)(I), (2)(e), (2)(g), (2)(h), (3), (4), (5) introductory portion, and (5)(a) as follows:

25.5-3-505. Reporting requirements - rules.

Beginning September 1, 2023, and each September 1 thereafter, each health-care facility and licensed health-care professional shall report to the state department data ACROSS RACE, ETHNICITY, AGE, AND PRIMARY-LANGUAGE-SPOKEN PATIENT GROUPS department determines is necessary to evaluate compliance across race, ethnicity, age, and primary-language-spoken patient groups with the screening, discounted care, payment plan, and collections practices required pursuant to this part 5. If a health-care facility or licensed health-care professional is not capable of disaggregating the data required pursuant to this subsection (1) by race, ethnicity, age, and primary language spoken, the health-care facility or licensed health-care professional shall report to the state department the steps the HEALTH-CARE facility or licensed health-care professional is taking to improve race, ethnicity, age, and primary-language-spoken data collection and the date by which the HEALTH-CARE facility or licensed health-care professional will be able to disaggregate the reported data.

that the state

(2) No later than April 1, 2022, The state board shall promulgate ADOPT rules necessary for the administration and implementation of this part 5. At a minimum, the rules must:

(a) Outline a process for an insured patient to request a screening pursuant to section 25.5-3-502 (5) SECTION 25.5-3-502 (1.5); (b) Outline a process for documenting pursuant to section 25.5-3-502 (4), that a patient has made an informed decision to decline the screening PURSUANT TO SECTION 25.5-3-502 (4), including procedures for retaining such THE documentation;

(c) Establish the A process for A HEALTH-CARE FACILITY TO, and ESTABLISH the maximum number of days that a health-care facility has to, DO THE FOLLOWING:

(I) Initiate a screening after a patient receives HEALTH-CARE GOODS OR services;

(e) Establish guidelines for A patient appeals regarding TO APPEAL THE DETERMINATION FOR eligibility for discounted care pursuant to section 25.5-3-503;

(g) Identify the documents, USING THE MINIMUM AMOUNT OF INFORMATION NEEDED, that may be required to establish income eligibility for discounted care; using the minimum amount of information needed to determine eligibility;

(h) Identify the steps a health-care facility and licensed health-care professional must take before sending patient A PATIENT'S MEDICAL debt to collections, DESCRIBED IN PART 2 OF ARTICLE 20 OF TITLE 6;

INCLUDING COMPLYING WITH THE REQUIREMENTS

(3) In promulgating ADOPTING rules pursuant to this section, the state department shall consider potential limitations relating to the federal "Emergency Medical Treatment and Labor Act", 42 U.S.C. sec. 1395dd.

(4) Prior to promulgating ADOPTING rules pursuant to this section, the state department shall hold at least one stakeholder meeting with hospital representatives, health-care consumers, and health-care consumer advocates that is accessible to individuals whose primary language is not English, if requested.

(5) No later than April 1, 2022, The state department shall:

(a) Using feedback from hospital health-care consumers and health-care consumer advocate stakeholders ADVOCATES, develop a written explanation of a patient's rights under PURSUANT TO this section that is written in plain language at a sixth-grade reading level and translated into all languages spoken by ten percent or more of the population in each county of the state and post the written explanation in all required languages on the state department's website. Each health-care facility shall make the explanation available to the public and each patient as provided in section 25.5-3-504.

SECTION 6. In Colorado Revised Statutes, 25.5-3-506, amend (1) as follows: 25.5-3-506.

Limitations on collection actions - private enforcement.

(1) Beginning September 1, 2022, before assigning, or selling patient debt, to a collection agency, as defined in section 5-16-103 (3)(a), or a debt buyer, as defined in section 5-16-103 (8.5) BEFORE ASSIGNING, SELLING, OR OTHERWISE TRANSFERRING MEDICAL DEBT, AS DEFINED IN

SECTION 6-20-201, TO A MEDICAL CREDITOR, AS DEFINED IN SECTION 6-20-201, or before pursuing, either directly or indirectly, any permissible extraordinary collection action, as defined in section 6-20-201 (7)

SECTION 6-20-201:

(a) A health-care facility shall meet the screening requirements in section 25.5-3-502;

(b) A health-care facility and licensed health-care professional shall provide discounted care to THE PATIENT IF THE PATIENT IS a QUALIFIED patient pursuant to section 25.5-3-503, IF APPLICABLE;

(c) A health-care facility and licensed health-care professional shall provide a plain language explanation of the health-care services and fees being billed and notify the patient of potential collection actions COMPLY WITH THE REQUIREMENTS DESCRIBED IN PART 2 OF ARTICLE 20 OF TITLE 6, INCLUDING THE NOTICE REQUIREMENT AND REQUIREMENT TO OFFER THE PATIENT A REASONABLE PAYMENT PLAN, IN RELATION TO THE MEDICAL DEBT BEING SOLD, ASSIGNED, TRANSFERRED, OR COLLECTED; and

(d) A health-care facility and LICENSED health-care professional shall bill any third-party payer that is responsible for providing health-care HEALTH INSURANCE coverage to the patient. If a health-care professional is an out-of-network provider OUT OF NETWORK under a qualified patient's health insurance plan, the health-care professional and health insurance carrier shall comply with the out-of-network billing requirements described in sections 10-16-704 (3) and 12-30-113.

SECTION 7. In Colorado Revised Statutes, amend part 2 of article 20 of title 6 as follows:

PART 2 LIMITATIONS ON MEDICAL DEBT COLLECTION

6-20-201. Definitions.

For the purposes of AS USED IN this part 2, unless the context otherwise requires:

(1) "Collection activity" means only those activities provided or performed by a licensed collection agency, using a business name other than the name of the health-care provider, MEDICAL CREDITOR for purposes of collecting a MEDICAL debt. The term does not include any standard billing procedures used by the health-care provider or its agent in the normal course of business on current, nondelinquent accounts.

(2) "Collection agency" shall have the same meaning as in section 5-16-103 (3). "HEALTH-CARE GOODS OR SERVICES" MEANS HEALTH-CARE GOODS OR HEALTH-CARE SERVICES, AS DEFINED IN SECTION 10-16-102.

(3) "Health-care provider" includes a health-care facility licensed pursuant to article 3 of title 25, C.R.S., and any other health-care provider MEANS A HEALTH-CARE PROFESSIONAL REGISTERED, CERTIFIED, OR LICENSED PURSUANT TO TITLE 12; A HEALTH-CARE FACILITY, AS DEFINED IN SECTION HEALTH-CARE GOODS OR SERVICES TO A PATIENT.

25.5-3-501; OR ANY OTHER FACILITY THAT PROVIDES

(4) "Hospital services" means health-care services, as defined in section 10-16-102 (33) provided by a health-care facility, as defined in section 25.5-3-501 (1), or a licensed health-care professional, as defined in section 25.5-3-501 (3).

(5) (4) "Impermissible extraordinary collection action" means:

(a) Initiating OR THREATENING TO INITIATE foreclosure on, OR ASSERTING A LIEN ON, ATTACHING, OR SEIZING, OR THREATENING TO ATTACH OR SEIZE, an individual's primary residence or homestead, including a mobile home, as defined in section 38-12-201.5 (5) SECTION (b) INITIATING OR THREATENING TO INITIATE COLLECTION ACTIVITY AGAINST AN INDIVIDUAL WHO IS NOT A PATIENT;

(c) INITIATING OR THREATENING TO INITIATE ATTACHMENT OR FORECLOSURE ON AN INDIVIDUAL'S TANGIBLE PERSONAL PROPERTY;

(d) THREATENING AN INDIVIDUAL WITH DEPORTATION, OR CONTACTING AUTHORITIES, IMMIGRATION STATUS; WITHHOLDING DOCUMENTS REQUIRED FOR IMMIGRATION; OR THREATENING TO INTERFERE WITH AN ACTIVE BASED ON PERCEIVED OR ACTUAL IMMIGRATION APPLICATION OR PROCESS;

(e) SEEKING OR SUPPORTING A WARRANT FOR, OR OTHERWISE PROMOTING, THE ARREST OR DETAINMENT OF AN INDIVIDUAL IN ANY LEGAL ACTION AGAINST THE INDIVIDUAL IN CONNECTION WITH AN ACTION TO COLLECT OR ATTEMPT TO COLLECT MEDICAL DEBT, INCLUDING ON MOTIONS RELATED TO DISCOVERY OR CONTEMPT OF COURT;

(f) GARNISHING OR THREATENING TO GARNISH AN INDIVIDUAL'S WAGES;

(g) ASSERTING A LIEN ON, ATTACHING, OR SEIZING, OR THREATENING TO ATTACH OR SEIZE, ANY AMOUNTS IN OR INCOME FROM A RETIREMENT ACCOUNT; A PENSION FUND; AN EDUCATIONAL SAVINGS OR EXPENSE ACCOUNT; A STOCK BONUS; A PROFIT-SHARING PLAN; ANNUITY BENEFITS; OR AN ACHIEVING A BETTER LIFE EXPERIENCE SAVINGS ACCOUNT, CREATED IN ACCORDANCE WITH SECTION 23-3.1-311, OR A SIMILAR TYPE OF SAVINGS ACCOUNT FOR AN INDIVIDUAL WITH A DISABILITY; OR (h) IN ADDITION TO AMOUNTS EXEMPTED PURSUANT TO SUBSECTION (4)(g) OF THIS SECTION, ASSERTING A LIEN ON, ATTACHING, OR SEIZING, OR THREATENING TO ATTACH OR SEIZE, ANY AMOUNT IN AN INDIVIDUAL'S ACCOUNT AT A BANK OR OTHER FINANCIAL INSTITUTION, UNLESS:

(I) THE ACCOUNT BELONGS TO THE PATIENT;

(II) THE LIEN, ATTACHMENT, OR SEIZURE DOES NOT REDUCE THE OVERALL BALANCE IN THE PATIENT'S ACCOUNTS WITH THE BANK OR OTHER FINANCIAL INSTITUTION BELOW THIRTY THOUSAND DOLLARS; AND

(III) A JUDGE ISSUES AN ORDER AGAINST A BANK OR OTHER FINANCIAL INSTITUTION THAT HOLDS A PATIENT'S ACCOUNT INSTRUCTING THE BANK OR OTHER FINANCIAL INSTITUTION THAT THE LIEN, ATTACHMENT, OR SEIZURE APPLIES ONLY TO AN AMOUNT THAT THE PATIENT HOLDS IN ACCOUNTS WITH THE BANK OR OTHER FINANCIAL INSTITUTION THAT EXCEEDS THIRTY THOUSAND DOLLARS; EXCEPT THAT THIS SUBSECTION (4)(g)(III) DOES NOT APPLY IF THE JUDGMENT CREDITOR ESTABLISHES BY A PREPONDERANCE OF EVIDENCE THAT THE PATIENT HAS ALREADY CLAIMED THE EXEMPTION FOR ACCOUNTS WITH A DIFFERENT INSTITUTION FOR THE DEBT.

(6) (5) "Medical creditor" means AN INDIVIDUAL OR ENTITY THAT CLAIMS ENTITLEMENT TO PAYMENTS ON A MEDICAL DEBT. an entity that attempts to collect on a medical debt, including:

(a) A health-care provider or health-care provider's billing office;

(b) A collection agency, as defined in section 5-16-103 (3);

(c) A debt buyer, as defined in section 5-16-103 (8.5); and

(d) A debt collector, as defined in 15 U.S.C. sec. 1692a (6).

(6) "MEDICAL DEBT" HAS THE MEANING SET FORTH IN SECTION "PATIENT" MEANS AN INDIVIDUAL WHO RECEIVES HEALTH-CARE GOODS OR SERVICES OR THE LEGAL GUARDIAN OF A MINOR WHO RECEIVES HEALTH-CARE GOODS OR SERVICES.

(7) (8) "Permissible extraordinary collection action" means an action other than an impermissible extraordinary collection action that requires a legal or judicial process including but not limited to placing a lien on an individual's real property, attaching or seizing an individual's bank account or any other personal property, or garnishing an individual's wages TO COLLECT MEDICAL DEBT FROM A PATIENT. A permissible extraordinary collection action does not include the assertion of a hospital lien pursuant to section 38-27-101.

6-20-202. Notice to patient of debt.

(1) (a) When a person has health benefit coverage to provide payment for care or treatment rendered by a health-care provider and the person has notified the health-care provider of coverage within thirty days after the date the care or treatment was rendered, and if the health coverage plan, as defined in section 10-16-102 (34), C.R.S., pays only a portion of the debt, prior to the assignment of the debt to a licensed collection agency, the health-care provider shall mail written notice to the last-known address of the person responsible for payment of the debt at least thirty days before any collection activity on any amount due and owing the health-care provider.

(b) The notice required of health-care providers by paragraph (a) of this subsection (1) shall include the amount due and owing; the name, address, and telephone number of the health-care provider; where payment may be made; the date of service; and the last date or number of days after the date of the notice the health-care provider will accept payment prior to the debt being submitted to a collection agency or reporting adverse information to a consumer reporting agency for the debt for which notice was provided.

(2) (a) If the health-care provider fails to provide the person with notice of such debt and all other information required by subsection (1) of this section, the health-care provider shall not pursue any rights to collect such outstanding amount either through a collection agency or by any further efforts of the health-care provider to collect the debt. In addition, the health-care provider may not report adverse information to a consumer reporting agency for the debt for which notice was provided without providing notice to the person pursuant to subsection (1) of this section. The health-care provider shall assist the person in correcting any adverse credit information because of the health-care provider's failure to provide notice pursuant to subsection (1) of this section.

(b) Notwithstanding any provision of this section to the contrary, a health-care provider may remedy a failure to give notice by providing a written report to the collection agency to withhold any collection activity and withholding any of the health-care provider's own collection efforts until the provider complies with the notice and time requirements pursuant to subsection (1) of this section.

(c) Nothing in this subsection (2) shall be construed to require a health-care provider to perform additional attempts to notify a person of the person's portion of the debt other than mailing the notice required pursuant to subsection (1) of this section to the person's last-known address and maintaining a record of such mailing.

(d) The failure of a health-care provider or its agent to provide the notice required by subsection (1) of this section shall not create a cause of action or remedy against a collection agency under the "Colorado Fair Debt Collection Practices Act", article 16 of title 5.

Limitations on collection actions - notice requirement - definition.

(1) Beginning June 1, 2022, A MEDICAL CREDITOR COLLECTING ON A MEDICAL DEBT FOR HEALTH-CARE GOODS OR SERVICES SHALL NOT ENGAGE IN impermissible extraordinary collection actions. may not be used by any medical creditor to collect debts owed for hospital services.

(2) Beginning June 1, 2022, no medical creditor collecting on a debt for hospital services shall engage in any permissible extraordinary collection actions until one hundred eighty-two days after the date the patient receives hospital services.

(3) (a) (2) (a) Beginning September 1, 2022, At least thirty days before SELLING, ASSIGNING, OR OTHERWISE TRANSFERRING A MEDICAL DEBT, OR taking any permissible extraordinary collection action, a medical creditor as defined in section 6-20-201 (6)(a), collecting on a debt for hospital services shall notify VERIFY THE PATIENT HAS BEEN SCREENED IN ACCORDANCE WITH SECTION 25.5-3-502 (1) AND (1.5); IF THE PATIENT IS INSURED, INFORM THE PATIENT OF THE PATIENT'S RIGHT TO REQUEST A SCREENING PURSUANT TO SECTION 25.5-3-502 (1.5); PROVIDE the patient WITH A PLAIN LANGUAGE EXPLANATION OF THE MEDICAL DEBT;

AND NOTIFY THE PATIENT of potential collection actions and shall include with the notice a statement developed by the department of health care policy and financing that explains the availability of discounted care for qualified individuals and how to apply for such care BY AT LEAST TWO MEANS OF COMMUNICATION, INCLUDING THE PATIENT'S PREFERRED METHOD OF COMMUNICATION, IF KNOWN.

(b) THE NOTICE REQUIRED PURSUANT TO SUBSECTION (2)(a) OF THIS SECTION MUST INCLUDE THE FOLLOWING INFORMATION:

(I) THE PATIENT'S NAME AND CONTACT INFORMATION;

(II) INFORMATION ABOUT THE SCREENING REQUIREMENTS AND THE AVAILABILITY OF DISCOUNTED CARE, AS DESCRIBED IN SECTIONS 25.5-3-502 AND 25.5-3-503;

(III) A DESCRIPTION OF EACH HEALTH-CARE GOOD OR SERVICE PROVIDED TO THE PATIENT, INCLUDING THE DATE EACH HEALTH-CARE GOOD OR SERVICE WAS PROVIDED TO THE PATIENT AND THE AMOUNT CHARGED FOR EACH HEALTH-CARE GOOD OR SERVICE;

(IV) THE NAME, ADDRESS, AND CONTACT INFORMATION FOR THE HEALTH-CARE PROVIDER THAT PROVIDED EACH HEALTH-CARE GOOD OR SERVICE TO THE PATIENT;

(V) A DETAILED DESCRIPTION OF ALL REDUCTIONS, ADJUSTMENTS, OFFSETS, AND PAYMENTS BY THIRD-PARTY PAYERS THAT ADJUST THE INITIAL CHARGES FOR THE HEALTH-CARE GOODS OR SERVICES, INCLUDING PAYMENTS RECEIVED FROM THE PATIENT;

(VI) THE NAME OF THE THIRD-PARTY PAYERS TO WHOM THE INITIAL CHARGES FOR HEALTH-CARE GOODS OR SERVICES WERE SUBMITTED;

(VII) INFORMATION ABOUT THE POTENTIAL AVAILABILITY OF RETROACTIVE COVERAGE IF THE PATIENT ENROLLED IN THE STATE MEDICAL ASSISTANCE PROGRAM, ARTICLES 4, 5, AND 6 OF TITLE 25.5, AFTER RECEIVING THE HEALTH-CARE GOODS OR SERVICES;

(VIII) AN ITEMIZATION OF ANY INTEREST THAT HAS ACCRUED ON THE MEDICAL DEBT AND ANY OTHER ADDITIONAL FEES OR COSTS BEING CHARGED IN ASSOCIATION WITH THE MEDICAL DEBT, INCLUDING ANY ATTORNEY FEES;

(IX) THE FINAL AMOUNT THE PATIENT IS LIABLE TO PAY, WHICH MUST BE PROMINENTLY DISPLAYED, AFTER TAKING INTO ACCOUNT ALL APPLICABLE REDUCTIONS;

(X) A PLAIN LANGUAGE EXPLANATION OF THE POTENTIAL CONSEQUENCES OF DEFAULT; AND

(XI) A CLEAR DESCRIPTION OF THE METHODS BY WHICH PAYMENT FOR THE MEDICAL DEBT CAN BE MADE, INCLUDING AN OFFER TO ENTER INTO A REASONABLE PAYMENT PLAN PURSUANT TO SECTION 6-20-204 AND HOW TO ACCEPT THE OFFER. AT LEAST ONE OF THE METHODS FOR PAYMENT MUST NOT INCLUDE ANY SERVICE CHARGE OR ADDITIONAL FEES.

(b) (I) A medical creditor as defined in section 6-20-201 (6)(b), (6)(c), or (6)(d), collecting on a debt for hospital services shall include the following statement in the notices the medical creditor provides to the patient pursuant to section 5-16-109 (1) and 15 U.S.C. sec. 1692g (a):

"Pursuant to Colorado law, discounts for hospital services are available for qualified individuals." The statement must include a link to the written explanation of the patient's rights that is posted to the department of health care policy and financing's website pursuant to section 25.5-3-505 (5)(a).

(II) (c) A medical creditor as defined section 6-20-201 (6)(b), (6)(c), or (6)(d), shall not take any permissible extraordinary collection actions until the later of thirty days from the date of sending the notice required pursuant to subsection (3)(b)(I) of this section or the completion of the validation requirements described in section 5-16-109 (2) and 15 U.S.C. sec. 1692g (b) UNLESS:

(I) THE MEDICAL CREDITOR DEMONSTRATES COMPLIANCE WITH THE NOTICE REQUIREMENT IN SUBSECTION (2)(a) OF THIS SECTION, INCLUDING THE DATE AND MANNER BY WHICH THE NOTICE WAS SENT TO THE PATIENT;

(II) LESS THAN THREE YEARS HAVE PASSED SINCE THE PATIENT INCURRED THE MEDICAL DEBT; AND

(III) THE MEDICAL CREDITOR DID NOT KNOW AND SHOULD NOT HAVE KNOWN ABOUT AN INTERNAL REVIEW, EXTERNAL REVIEW, OR OTHER APPEAL OF A HEALTH INSURANCE DECISION THAT IS PENDING OR WAS PENDING WITHIN THE PREVIOUS SIXTY-THREE DAYS.

(3) A MEDICAL CREDITOR MAY REQUEST PAYMENT OF MEDICAL DEBT ONLY IF THE MEDICAL CREDITOR:

(a) (I) VERIFIED THE PATIENT, IF THE PATIENT IS UNINSURED, HAS BEEN SCREENED FOR PUBLIC HEALTH INSURANCE PROGRAMS AND DISCOUNTED CARE IN ACCORDANCE WITH SECTION 25.5-3-502 AND IS NOT A QUALIFIED PATIENT, AS DEFINED IN SECTION 25.5-3-501; OR

(II) VERIFIED THE PATIENT, IF THE PATIENT IS INSURED, HAS BEEN NOTIFIED OF THE PATIENT'S RIGHT TO BE SCREENED FOR DISCOUNTED CARE IN ACCORDANCE WITH SECTION 25.5-3-502 (1.5); AND (b) OFFERED THE PATIENT A REASONABLE PAYMENT PLAN PURSUANT TO SECTION 6-20-204; AND

(c) GAVE THE PATIENT THIRTY DAYS TO RESPOND TO THE OFFER TO ENTER INTO A REASONABLE PAYMENT PLAN.

(4) Beginning September 1, 2022, If a medical creditor collecting on a debt for hospital services bills or initiates collection activities and it is later determined that the patient should have been screened pursuant to section 25.5-3-503 SECTION 25.5-3-502 and is determined to be a qualified patient, as defined in section 25.5-3-501 (5) 25.5-3-501, or it is determined that the patient's bill is eligible for reimbursement through a public health-care coverage HEALTH INSURANCE program, the medical creditor shall:

SECTION

(a) Delete any negative reports to consumer reporting agencies;

(b) (I) Unless prohibited by law, if the court has entered a judgment on the medical debt:

(A) Request the court vacate the judgment in any collection lawsuit over the medical debt and enter into a payment plan with the patient that meets the requirements of section 25.5-3-503 (1)(b); or (B) Request the court reduce the amount of the judgment, including any fees and costs related to the collection lawsuit, to the total amount the patient owes pursuant to the public health-care coverage HEALTH INSURANCE program or discounted care policy that the patient qualifies for, enter into a payment plan with the patient that meets the requirements of section 25.5-3-503 (1)(b), and suspend all execution on the judgment while the patient is compliant with the terms of the payment plan; or

(C) File a satisfaction of judgment such that the remaining unpaid balance of the judgment, including any fees and costs related to the collection lawsuit, is equal to the total amount the patient owes under the public health-care coverage HEALTH INSURANCE program or discounted care policy that the patient qualifies for, enter into a payment plan with the patient that meets the requirements of section 25.5-3-503 (1)(b), and suspend all execution on the judgment while the patient is compliant with the terms of the payment plan.

(II) For the purposes of subsections (4)(b)(I)(B) and (4)(b)(I)(C) SUBSECTIONS (3)(b)(I)(B) AND (3)(b)(I)(C) of this section, the court shall refund to the parties any fees and costs paid to the court in connection with the litigation of the medical debt and the health-care provider shall indemnify the medical creditor for any fees awarded as part of the judgment in connection with the medical debt.

(c) As the term "medical creditor" is defined in section 6-20-201 (6)(a), Refund any excess amount to the patient if the patient has paid any part of the medical debt or if any of the patient's money has been seized or levied in excess of the amount that the patient owes after application of required discounts;

(d) As the term "medical creditor" is defined in sections 6-20-201 (6)(b), (6)(c), and (6)(d), If the patient has paid any part of the medical debt or if any of the patient's money has been seized or levied in excess of the amount that the patient owes after application of required discounts, refund any excess amount to the patient to the extent the medical creditor has not already remitted such an THE amount to the health-care provider; and

(e) Remedy any other permissible extraordinary collection action.

(5) Beginning September 1, 2022, A medical creditor collecting on a debt for hospital services shall not sell, ASSIGN, OR TRANSFER a medical debt to another A THIRD party unless, prior to the sale, ASSIGNMENT, OR TRANSFER, the medical debt seller CREDITOR INITIATING THE SALE, ASSIGNMENT, OR TRANSFER has entered into a legally binding written agreement with the medical debt buyer of the debt pursuant to which:

(a) The medical debt buyer agrees not to pursue impermissible extraordinary collection actions to obtain payment for the care;

(b) The MEDICAL debt is returnable to or recallable by the medical debt seller CREDITOR INITIATING THE SALE, ASSIGNMENT, OR TRANSFER, upon a determination that the patient should have been screened pursuant to section 25.5-3-502 and is eligible for discounted care pursuant to section 25.5-3-503 or that the bill underlying the medical debt is eligible for reimbursement through a public health-care coverage HEALTH INSURANCE program; and

(c) If it is determined that the patient should have been screened pursuant to section 25.5-3-502 and is eligible for discounted care pursuant to section 25.5-3-503 or that the bill underlying the medical debt is eligible for reimbursement through a public health-care coverage HEALTH INSURANCE program and the MEDICAL debt is not returned to or recalled by the medical debt seller CREDITOR INITIATING THE SALE, ASSIGNMENT, OR TRANSFER, the medical debt buyer shall adhere to procedures that must be specified in the agreement that ensures the patient will not pay, and has no obligation to pay, the medical debt buyer and the medical creditor together more than the patient is personally responsible for paying.

(6) The medical debt seller shall indemnify the medical debt buyer for any amount paid for a debt that is returned to or recalled by the medical debt seller.

(7) Nothing in this section limits or affects THIS SECTION DOES NOT LIMIT OR AFFECT a health-care provider's right to pursue against any party other than the patient the collection of personal injury, liability, uninsured, underinsured, medical payment rehabilitation, disability, homeowner's, business owner's, workers' compensation, fault-based insurance, subrogated claims, or other claims not against the patient, AS LONG AS THE COLLECTION ACTIONS TAKEN ARE NOT IMPERMISSIBLE EXTRAORDINARY COLLECTION ACTIONS.

ANY SALE, ASSIGNMENT, TRANSFER, OR COLLECTION ACTIVITIES THAT DO NOT COMPLY WITH THIS PART 2 ARE VOID OR DISMISSED, AND THE MEDICAL CREDITOR INITIATING THE SALE, ASSIGNMENT, TRANSFER, OR COLLECTION ACTIVITIES IS LIABLE TO THE PATIENT FOR THREE THOUSAND DOLLARS OR ANY ACTUAL DAMAGES SUSTAINED AS A RESULT OF NONCOMPLIANCE, WHICHEVER IS GREATER, AND ANY ATTORNEY FEES OR COSTS INCURRED BY THE PATIENT.

(9) A PATIENT'S FULL OR PARTIAL PAYMENT OF A MEDICAL DEBT OR ACCEPTANCE OF A REASONABLE PAYMENT PLAN PURSUANT TO SECTION 6-20-204 DOES NOT CONSTITUTE ADMISSION THAT THE MEDICAL DEBT IS VALID. A PATIENT WHO MAKES A PAYMENT ON A MEDICAL DEBT OR ACCEPTS A REASONABLE PAYMENT PLAN RETAINS ANY LEGAL DEFENSES THAT WOULD OTHERWISE BE AVAILABLE IN A COLLECTION ACTION.

THIS SECTION DOES NOT LIMIT ANY OTHER LEGAL OR EQUITABLE REMEDIES AVAILABLE TO THE PATIENT.

6-20-204. Reasonable payment plan - conditions to require full payment of balance of medical debt. (1) (a) A MEDICAL CREDITOR SHALL OFFER A REASONABLE PAYMENT PLAN TO EACH PATIENT WITH MEDICAL DEBT. AT A MINIMUM, THE REASONABLE PAYMENT PLAN MUST:

(I) BE PAYABLE IN INSTALLMENTS SUCH THAT THE PATIENT IS NOT PAYING MORE THAN FOUR PERCENT OF THE PATIENT'S WEEKLY NET INCOME TOWARD MEDICAL DEBT;

(II) PROMINENTLY DISCLOSE THE DATE BY WHICH THE MEDICAL DEBT WILL BE PAID IN FULL IF PAYMENTS SET BY THE SCHEDULE IN THE PAYMENT PLAN ARE MADE WITHOUT DELAY OR INTERRUPTION;

(III) INCLUDE A PROVISION FOR ADJUSTING THE INSTALLMENT AMOUNTS AND DURATION TO ACCOUNT FOR SIGNIFICANT CHANGES IN THE PATIENT'S FINANCIAL CIRCUMSTANCES; AND (IV) PAYMENT.

PROVIDE A SIXTY-DAY GRACE PERIOD FOR ANY LATE

(b) THE MEDICAL CREDITOR SHALL PROVIDE A WRITTEN COPY OF THE REASONABLE PAYMENT PLAN TO THE PATIENT NO LATER THAN SEVEN DAYS AFTER ENTERING INTO THE PAYMENT PLAN.

(c) A REASONABLE PAYMENT PLAN MUST NOT INCLUDE A REQUIREMENT TO PAY PRE-JUDGMENT INTEREST.

SECTION 8. In Colorado Revised Statutes, 5-16-103, amend (3)(d) as follows:

5-16-103. Definitions.

As used in this article 16, unless the context otherwise requires:

(3) (d) (I) For the purposes of section 5-16-108 (1)(f), "collection agency" includes any person engaged in any business the principal purpose of which is the enforcement of security interests. For purposes of sections 5-16-104, 5-16-105, 5-16-106, 5-16-107, 5-16-108, and 5-16-109 only, "collection agency" includes a debt collector for the department of personnel.

(II) FOR THE PURPOSES OF SECTIONS 5-16-108 (1)(l) AND 5-16-113, "COLLECTION AGENCY" INCLUDES A MEDICAL CREDITOR, AS DEFINED IN

SECTION 6-20-201.

SECTION 9. In Colorado Revised Statutes, 5-16-108, amend (1)(l) as follows:

5-16-108. Unfair practices.

(1) A debt collector or collection agency shall not use unfair or unconscionable means to collect or attempt to collect any debt, including, but not limited to, the following conduct:

(l) An attempt to collect a debt that violates the provisions of section 6-20-203 (1), (2), (3)(b), (4)(a), (4)(b)(I), (4)(d), (4)(e), or (5)(a) to (5)(c) SECTION 6-20-203.

SECTION 10. In Colorado Revised Statutes, 5-16-111, amend (1.5)(a) as follows:

5-16-111. Legal actions by collection agencies.

(1.5) A debt collector, or collection agency that is not a creditor or debt buyer, shall not be the named plaintiff in a legal action or take any legal action on a debt against a consumer unless the debt collector or collection agency:

(a) Ensures that the name of the original creditor or assignor and the name of the debt collector or collection agency are included in the case caption of the complaint, in that order. and IF THERE ARE MULTIPLE ORIGINAL CREDITORS OR ASSIGNORS, EACH ORIGINAL CREDITOR OR ASSIGNOR MUST BE LISTED IN THE CASE CAPTION AS A SEPARATE PLAINTIFF AND THEIR INCLUSION IN THE ACTION MUST COMPLY WITH THE RULES OF PERMISSIVE JOINDER PURSUANT TO PROCEDURE. JOINDER OF ACTIONS SUA SPONTE BY A COURT DOES NOT VIOLATE THIS SUBSECTION (1.5).

COLORADO RULES OF CIVIL

SECTION 11. In Colorado Revised Statutes, 13-80-101, add (1)(q) as follows:

13-80-101. General limitation of actions - three years.

(1) The following civil actions, regardless of the theory upon which suit is brought, or against whom suit is brought, shall be commenced within three years after the cause of action accrues, and not thereafter:

(q) PERMISSIBLE EXTRAORDINARY COLLECTION ACTIONS FOR THE COLLECTION OF MEDICAL DEBT, AS DEFINED IN SECTION 6-20-201;

SECTION 12.

In Colorado Revised Statutes, 13-80-103.5, amend (1)(a) as follows:

13-80-103.5. General limitation of actions - six years.

(1) The following actions shall be commenced within six years after the cause of action accrues and not thereafter:

(a) All actions to recover a liquidated debt or an unliquidated, determinable amount of money due to the person bringing the action, all actions for the enforcement of rights set forth in any instrument securing the payment of or evidencing any debt, and all actions of replevin to recover the possession of personal property encumbered under any instrument securing any debt; except that:

(I) Actions to recover MADE pursuant to section 38-35-124.5 (3) C.R.S., shall be commenced within one year; AND (II) PERMISSIBLE EXTRAORDINARY COLLECTION ACTIONS INVOLVING MEDICAL DEBT PURSUANT TO PART 2 OF ARTICLE 20 OF TITLE 6 ARE GOVERNED BY THE LIMITATION DESCRIBED IN SECTION 13-80-101 (1)(q).

SECTION 13.

Safety clause. The general assembly finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, or safety or for appropriations for the support and maintenance of the departments of the state and state institutions.