A proposal in the Colorado Senate would limit how much medical bills can exceed estimates, cap the interest rate on medical debt and make it easier for patients to dispute charges.

Senate Bill 23-93 would limit a provider, such as a hospital, to charging 15% above the estimate it gave to a patient paying out of pocket. It includes exceptions for emergencies or unexpected services that end up being necessary, though it doesn’t outline what might qualify for the exception.

It would also lower the cap on annual interest rates for medical debt from 8% to 3%. How much that would save depends on both the size of the debt and how quickly someone was paying it off.

Sen. Lisa Cutter, a Jefferson County Democrat and one of the bill’s sponsors, said at a news conference Tuesday that limiting the interest charged on medical debt gives patients a chance to get their finances back under control.

“For many families, these debts are insurmountable,” she said.

The federal Consumer Financial Protection Bureau estimated Coloradans have a combined $1.3 billion in medical debt, affecting about 12% of adults. The median debt was $711, meaning half owed more and half owed less.

The bill would also:

Require a debt collector to provide an itemized bill within 30 days, if requested, and allow the patient to dispute charges on the bill
Prohibit collecting on the debt while the patient is appealing it
Require that patients be given a written explanation of their payment plan
Give patients an opportunity to renegotiate the payment plan before the creditor can sue, sell the debt to a buyer, take the patient to arbitration, or report the patient to credit monitoring agencies
Designate violations of surprise billing laws as a “deceptive trade practice”

In a statement, the Colorado Hospital Association said many of the protections in the bill already exist, with federal law requiring a “good faith estimate” and state law requiring hospitals to check if patients qualify for discounted care.

“Colorado hospitals and health systems recognize that health care affordability is a top concern and have been focused on improving both pricing transparency and affordability of health care in the state,” the statement said. “CHA is actively working with the bill sponsors and the attorney general’s office to align the legislation with the multitude of existing protections available to Colorado patients in hospitals.”

The provisions don’t apply to loans or credit card debt taken out to finance surgeries or other health care. Colorado Attorney General Phil Weiser, whose office would be tasked with enforcing the rules if they pass, said his staff will consider how to assist people who’ve paid their medical bills with credit cards. Going forward, hopefully fewer people would be in that situation if they get accurate estimates upfront, he said.

“We want to stop that from happening,” he said.

The bill’s fiscal note said the Attorney General’s Office might have an increased workload from investigating deceptive trade practices, and that state courts might receive a small bump in revenue from fees as more cases are filed. It didn’t give a specific estimate, however.

Last session, the legislature passed a bill allowing patients to sue if the hospital where they received care hadn’t posted its prices and took certain actions against the patient, such as suing them or sending the debt to collections. The current proposal would apply to settings other than hospitals and give the state a role in enforcing it, rather than requiring individuals to hire an attorney. It also would take the onus off patients to look up prices, which most people don’t do.

Sen. Sonya Jaquez Lewis, a Democrat who represents Broomfield and part of Boulder County, said she co-sponsored the bill because, as a pharmacist, she’s seen people forced to make sacrifices to afford their medication and other treatments.

“Every day, Coloradans are forced to choose between paying for necessities like food, heat, rent and paying for medical care,” she said.

Sharon Cravitz, a breast cancer survivor who spoke at the news conference Tuesday, said the protections would have been helpful when she received a notice about a bill that already had been paid.

The billing company, Flatirons, wanted her to file a complaint against her insurance company with the state, and threatened to send the bill to collections when she refused. Flatirons ultimately sent refunds to about 40 people after the Attorney General’s Office determined the patients never owed what they were charged.

“I was really just lucky that I asked certain questions and I saved the paperwork,” she said. “Some of this medical debt is bologna.”

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