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House Bill 778 — Idaho patient act

House Bill 778 — Idaho patient act

by
Parrish Miller
March 17, 2022
Parrish Miller
March 17, 2022

Bill Description: House Bill 778 would make changes and clarifications to the "Idaho patient act" (House Bill 515, 2020).

Rating: -1

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?


In 2020, House Bill 515 created a new chapter of Idaho Code defining, regulating, and limiting the use of "extraordinary collection actions" to collect on overdue medical bills. There were many problems with the original bill, and House Bill 778 makes very little headway in correcting them.

House Bill 778 adds a clarification that an "extraordinary collection action" does not include "an action pursuant to and in compliance with section 28-22-105, Idaho Code." This section deals with overdrawn checks. It is a testament to how overburdening this law is that new language is required to allow a service provider to take action against a customer who writes a bad check. 

(+1)

The current "Idaho patient act" says that if a provider is not listed on the billing summary a hospital gives to a patient and the error is not fixed within 90 days, the provider has no recourse to collect the money owed. House Bill 778 recognizes this fundamental error but fails to repeal it, instead merely amending Section 48-306, Idaho Code, to extend the period for correction to 180 days. Unfortunately, this change still leaves providers in limbo because the most minuscule paperwork error is sufficient to deny them any payment whatsoever for the valuable services they have rendered to customers who contractually agreed to pay for these services.

(+1) 

Current law requires that before a service provider can try to collect on overdue bills, "at least 90 days" must pass after a customer has received a final statement. The provider must also wait until "final resolution of all internal reviews, good faith disputes, and appeals of any charges or third-party payor obligations or payments." As you can imagine, a customer who doesn't want to pay the amount due can drag out this disputes-and-appeals process indefinitely, making it all but impossible for service providers to collect payment for the services they rendered. 

House Bill 778 adds a strange provision that allows a provider to report customers who have not paid their bills to a consumer reporting agency (a credit bureau) after 45 days rather than the 90 days currently stated in law. But the provider who wants to take advantage of this new provision could do so only after giving up all rights to engage in judicial or legal action against the customer who has not paid his bills. 

This provision is deeply concerning because reporting the nonpayment of a bill to a credit bureau is an act of seeking or receiving payment. It is not a collection method at all, extraordinary or otherwise. Rather, these reports are an important way for the business community as a whole to protect itself against customers who don't pay their bills. 

No service provider should ever have to choose between using legal remedies to seek payment for services rendered and conveying truthful information that will make the market work more efficiently.

(0)

Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?

House Bill 778 creates Section 48-315, Idaho Code, to add language regarding "legislative intent regarding applicability." It says, "The legislature finds and affirms that the legislative intent of including the effective date of January 1, 2021, in the original enactment of this chapter by chapter 139, laws of 2020, was and is to apply the requirements of this chapter, including the limitations on costs, expenses, and fees, including attorney's fees, set forth in section 48-305, Idaho Code, on any and all extraordinary collection actions commenced on or after January 1, 2021, regardless of the date of the provision of goods or delivery of services to a patient."

That last part, "regardless of the date of the provision of goods or delivery of services to a patient" is particularly concerning. Many service providers are owed payment for services they rendered many years ago, before any of the requirements of the original "Idaho patient act" went into effect. There is no way these providers could have complied with the notification requirements (and other demands) of this law before it existed. The retroactive application called for by House Bill 778 would make it, in many cases, impossible for providers to take any steps to secure payment on outstanding debts. 

Fundamentally, this is an unconstitutional impairment of existing contracts that predate the regulations imposed on service providers by the "Idaho patient act".

(-1)

House Bill 778 makes several changes to existing law about the patients’ private information that must be included on statements. It strikes one provision requiring that the patient's group and membership numbers be included on a final billing statement. It adds a provision requiring that "the patient's group number and last four (4) digits of the patient's membership number," be included on a "final notice" in most cases. This provision largely negates any benefit of removing the other information the rest of the language provides. 

Additionally, the bill amends Section 48-307, Idaho Code, when it addresses the burden of proof services providers must satisfy. It says that service providers seeking legal remedy to unpaid debts must "specifically identify the name, group, and policy numbers of the third-party payor to which the health care provider submitted the charges in connection with the provision of goods or delivery of services, along with the date of each submission."

This requirement represents yet another regulatory impediment to the provider's constitutional right to seek legal redress when customers fail to abide by their contractual obligation. Perhaps even more concerning, this mandate would force providers to disclose personal information in a legal complaint, which would then become a matter of public record. (By contrast, this does not happen when the information is included in a statement or notice sent to the customer.) Revealing insurance policy numbers compromises both privacy and security and will inevitably create opportunities for insurance fraud. 

(-1)

Does it directly or indirectly create or increase penalties for victimless crimes or non-restorative penalties for nonviolent crimes? Conversely, does it eliminate or decrease penalties for victimless crimes or non-restorative penalties for non-violent crimes?

Under existing law, the provisions of the "Idaho patient act" do not apply to collection actions taken after January 1, 2021, for services rendered before that date. 

Due to the retroactive provisions added to Section 48-315, Idaho Code, by House Bill 778, legal collection actions that have taken place since January 1, 2021, would be invalidated and would be subject to a $1,000 penalty per instance. 

This penalty would apply both to service providers who initiated collection actions and to attorneys and other entities who provide collection services. The fines are onerous and impair contracts, as discussed above. But worse, this penalty violates the constitutional prohibition against ex post facto laws. 

Finally, this retroactive provision would, for the first time, apply the regulations of the "Idaho patient act" to any new efforts undertaken to collect on outstanding debts for services rendered before January 1, 2021. Under current law, these collection efforts are legal. Under House Bill 778, these collection efforts would be prohibited and subject to a $1,000 penalty per instance. 

Because these debts predate the original "Idaho patient act," providers have no way of complying with the byzantine regulations it imposes. The retroactive provision called for in this legislation will make these debts uncollectible, leaving providers to absorb millions of dollars in unpaid debts and allowing thousands of customers to violate their contracts with impunity. 

(-1)

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