AN ACT relating to interest on medical debt.

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AN ACT relating to interest on medical debt. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 360 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section, "medical debt" means indebtedness or other obligation 5
owed by an individual, or an individual's parent, guardian, or other guarantor, 6
for the provision of health care services to the individual. 7
(2) The maximum rate of interest on medical debt shall not exceed three percent 8
(3%) per annum. 9
Section 2. KRS 360.020 is amended to read as follows: 10
(1) The taking, r eceiving, reserving, or charging a rate of interest greater than is 11
allowed by KRS 360.010 or Section 1 of this Act , when knowingly done, shall be 12
deemed a forfeiture of the entire interest which the note, bill, or other evidence of 13
debt carries with it, o r which has been agreed to be paid thereon. In case the greater 14
rate of interest has been paid, the person by whom it has been paid, or his or her 15
legal representatives, may recover, in an action in the nature of an action of debt, 16
twice the amount of the interest thus paid from the creditors taking or receiving the 17
same: provided, that such action is commenced within two (2) years from the time 18
the usurious transaction occurred. 19
(2) Partial payment on a debt bearing interest shall be first applied to the interest then 20
due. 21
Section 3. KRS 360.040 is amended to read as follows: 22
(1) Except as otherwise provided in [subsections (2), (3), and (4) of ]this section:[,] 23
(a) A judgment, including a judgment for prejudgment interest, shall bear six 24
percent (6%) interest compounded annually from the date the judgment is 25
entered, except that when a claim for unliquidated damages is reduced to 26
judgment, the judg ment may bear less than six percent (6%) interest if the 27
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court rendering that judgment, after a hearing of which all interested 1
parties received due notice, is satisfied that the rate of interest on the 2
judgment should be less than six percent (6%); and[.] 3
(b) A judgment may be for the principal and accrued interest. 4
(2) A judgment for unpaid child support payments shall bear twelve percent (12%) 5
interest compounded annually from the date the judgment is entered. 6
(3) A judgment rendered on a contract, promi ssory note, or other written obligation 7
shall bear interest at the interest rate established in that contract, promissory note, or 8
other written obligation. 9
(4) A judgment rendered in an action to collect medical debt, as defined in Section 1 10
of this Act, shall bear interest at a rate not to exceed three percent (3%) per 11
annum[When a claim for unliquidated damages is reduced to judgment, such 12
judgment may bear less interest than six percent (6%) if the court rendering such 13
judgment, after a hearing on that question, is satisfied that the rate of interest should 14
be less than six percent (6%). All interested parties must have due notice of said 15
hearing]. 16
Section 4. KRS 216B.250 is amended to read as follows: 17
(1) As used in[For purposes of] this section, "paying patient": 18
(a) Means persons receiving health care services who pay directly for services 19
rendered;[,] patients with private health insurance or health maintenance 20
organization coverage ;[,] persons receiving Medicaid or Medicaid benefits 21
under Title XVIII and Title XIX of the Social Security Act ; and persons 22
receiving veteran's health care benefits; and[. "Paying patient"] 23
(b) Does not include medically indigent persons with no source of payment 24
whatsoever. 25
(2) (a) When a copy of an itemized statement is requested by any paying patient, 26
each health facility shall furnish to the patient within thirty (30) days of the 27
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patient's discharge or within fifteen (15) days of the patient's request, 1
whichever is later, one (1) copy free of charge of the itemized statement of 2
services rendered and charges incurred by the patient. 3
(b) A summary statement of services rendered and charges incurred by the patient 4
shall be included with the invoice sent by a health facility to the patient. Each 5
invoice shall indicate that an itemized statement may be obtained upon 6
request. The Cabinet for Health and Family Services [Human Resources] 7
shall impose a civil fine of five hundred dollars ($500) for each violation by a 8
health care facility for failure to provide an itemized statement as required 9
under this section. 10
(c) The itemized statement shall be stamped "Kentucky Revised Statutes prohi bit 11
the use of this statement for insurance payment purposes where benefits have 12
been assigned." 13
(3) Each health facility shall post in a publicly visible place in its[their] admission, 14
outpatient areas, and, where applicable, emergency areas that an itemized statement 15
is available to any paying patient upon request. 16
(4) The itemized statement rendered shall: 17
(a) Be the record maintained by the health facility that details the charges made 18
for services rendered to patients;[ and shall ] 19
(b) Indicate whether an assignment of benefits has been obtained; and 20
(c) Comply with Section 1 of this Act. 21
(5) Each health facility shall designate and make available appropriate staff to provide, 22
upon patient request, an explanation of charges listed in the itemized statement. 23
(6) If a health facility knows of a discrepancy in the total charges as reported in an 24
itemized statement and that which is reported to a third party payor, or at any time 25
that a health facility becomes aware of such a discrepancy, the health facility shall 26
provide the patient and third party payor with notification, an explanation and, if 27
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applicable, any reconciliation of the discrepancy in total charges. 1