A new Colorado legislative enactment prohibits hospitals that are not in “material” compliance with the price transparency laws[1] from pursuing a “collection action” from a patient or guarantor. Compliance is determined as of the date the services or items[2] are provided to the patient. Collection actions include (i) referral to a collection agency, (ii) commencement of a lawsuit or arbitration, (iii) enforcement of a mediation provision, or (iv) causing a report to be made to a consumer reporting agency.

The Act contains a private right of action as follows:

If a patient believes that a hospital was not in material compliance with hospital price transparency laws on a date on or after the effective date of this section that items or services were purchased by or provided to the patient, and the hospital takes a collection action against the patient or patient guarantor, the patient or patient guarantor may file suit to determine if the hospital was materially out of compliance with the hospital price transparency laws and rules and regulations on the date of service, and the noncompliance is related to the items or services. the hospital shall not take a collection action against the patient or patient guarantor while the lawsuit is pending.

(emphasis added.) A hospital held not to be in material compliance “[s]hall refund the payer any amount of the debt the payer has paid and shall pay a penalty to the patient or patient guarantor in an amount equal to the total amount of the debt.”

Nothing in the Act “[p]rohibits a hospital from billing a patient, patient guarantor, or third-party payer, including health insurer, for items or services provided to the patient.”

The Act generally became effective on August 10, 2022 although critical access hospitals have until February 15, 2023, to comply with federal hospital price transparency laws before the provisions of the act apply.

[1] SECTION 2718(e) of the Public Health Service Act, PuB.L. 78-410, as amended and rules adopted by HHS implementing Section 2718(e).

[2] As defined in 45 CFR 180.20.