COLORADO SPRINGS — Hospitals in Colorado will be prohibited from collecting debts against patients if the hospitals are not in compliance with federal price transparency laws.

House Bill 1285 is a new state law that bans hospitals from referring, assigning or selling medical debt to collection agencies if they do not adhere to federal hospital price transparency regulations. They will be prohibited from using the courts to obtain a judgment for an outstanding medical debt. The bill would award damages to patients if the courts find that the hospital has violated the provisions of the bill.

“Hospitals are required to be open and honest about what they’re changing patients, and our bill not only ensures transparency but limits the hospital’s ability to collect medical debt if they’re not in compliance,” said Majority Leader Daneya Esgar, D-Pueblo said. “Coloradans deserve to know what they’re getting when it comes to health care, and our legislation protects them against surprise medical bills that are often outrageously expensive.”

Under the bill, patients who believe a hospital was not in material compliance with price transparency laws can file a lawsuit. If a judge or jury finds the hospital guilty, the hospital will be subject to a penalty equal to the amount of debt and must refund any amount paid on the debt along with attorney fees and costs.

The bill does not prohibit hospitals from billing a patient or health insurer for items or services provided to the patient. Additionally, it will not require hospitals to refund a made payment for items or services provided to a patient.

HB22-1285 passed the House by a vote of 63 to 1. Its prime sponsors include Representatives Patrick Neville and Esgar, as well as Senators Dominick Moreno and John Cooke.

In July 2021, President Biden signed an executive order that directed the Centers for Medicare and Medicaid Services to develop detailed rules to increase hospital billing transparency. Hospitals must publicly post their “standard charges,” which include: gross charges, discounted cash prizes, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges. Consumers can now make better-informed decisions when deciding on health care services.