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SB 1223

FAIR PATIENT BILLING

104th Regular Session Introduced by Laura Fine and 2 co-sponsors

Protect patients by barring collection and lawsuits on disputed charges during insurance appeals, limit interest on payment plans, and clarify debt forgiveness.

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Bill Summary · SB 1223

SB 1223 — Fair Patient Billing (Summary)

Status: Rule 3-9(a) / Re-referred to Assignments
Introduced: February 11, 2025 (filed Jan. 24, 2025; sponsor: Sen. Laura Fine)
Related: HB 1234 (companion)

Purpose
- Amend the Illinois Fair Patient Billing Act to restrict collection activity on medical bills while insurance appeals are pending, limit interest on medical payment plans and judgments, clarify the effect of medical debt forgiveness on contracts between providers and payors, and strengthen patient protections before debt collection begins.

Key provisions
1. Revised limits on pursuing collection (amends Section 30)
- Hospitals may pursue collections against uninsured patients only after meeting specified pre-collection requirements, which include:
- Complying with screening/eligibility requirements under the Hospital Uninsured Patient Discount Act;
- Offering available discounts and giving the patient opportunity to (a) assess bill accuracy, (b) apply for financial assistance, and (c) request a reasonable payment plan;
- Allowing at least 90 days after discharge/outpatient care to submit an application for financial assistance where charity care appears possible;
- Requiring reasonable verification if a patient indicates inability to pay in full; and
- Offering and documenting reasonable payment plans and following the hospital’s financial assistance policies.
- For insured patients, hospitals cannot refer bills to collections without compliance with Section 16 and offering the patient a 90‑day opportunity to request a reasonable payment plan.

  1. Protections while insurance appeals are pending (new subsection)

    • A medical creditor or debt collector that knows (or should know) an internal/external appeal of an insurance decision is pending—or was pending within the previous 180 days—must not:
      • Communicate with the patient to collect the disputed charges; or
      • Initiate lawsuit or arbitration against the patient over those charges.
    • Such creditors may not refer, place, send, or sell those unpaid charges to a medical debt collector (including debt buyers) while the appeal is pending or within 180 days after.

  2. Medical debt interest (new Section 38)

    • If a patient eligible for financial assistance enters a reasonable payment plan: no interest may be added to the medical expenses.
    • If a patient is ineligible for financial assistance but enters a reasonable payment plan: interest is capped at 2% annually.
    • The same rates apply to judgments on medical debt, notwithstanding any contract to the contrary.
    • Applies to payment plans entered, amended, or renewed on or after the Act’s effective date.

  3. Debt forgiveness and insurer/payor contracts (new Section 42)

    • Forgiveness by a medical creditor of deductibles, facility fees, out‑of‑network charges, or other cost-sharing is not a breach of contract or other violation between the medical creditor and the insurer/payor.
    • Applies to contracts entered, amended, or renewed on or after the Act’s effective date.

Who is affected
- Uninsured and insured patients (greater protections, more time to apply for assistance/request payment plans).
- Hospitals and health care providers (additional administrative steps before collection; limits on selling/referring debts).
- Medical creditors, collection agencies, debt buyers, and law firms (new restrictions on communications, sales, and litigation tied to insurance appeals).
- Insurers/payors (clarified that provider forgiveness of patient cost‑sharing does not breach provider–insurer contracts).

Procedural / timeline notes
- Interest and debt‑forgiveness provisions explicitly apply to payment plans and contracts entered, amended, or renewed on or after the effective date of the amendatory Act.
- No new enforcement mechanism or penalties are set out in the text provided; compliance would rely on existing enforcement paths in the Fair Patient Billing Act and related statutes.
- Legislative activity: multiple readings and committee referrals in early 2025; currently re‑referred to Assignments (Rule 3‑9(a)).

Potential impacts (observations)
- Aims to reduce aggressive medical debt collection and protect patients during insurance disputes.
- Could reduce interest revenue from medical debt and constrain debt sale markets for recently appealed claims.
- May increase administrative burden on hospitals to document compliance with assistance and payment‑plan requirements.

Compiled from official sources — confirm details with the bill’s official record.

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