HB5867 98TH GENERAL ASSEMBLY

LRB098 15808 DRJ 50845 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5867

Introduced , by Rep. Emily McAsey

SYNOPSIS AS INTRODUCED:

New Act

Creates the Health Care Credit Card Act. Regulates contracts between a creditor and a provider of health care services that permits the provider to accept health care credit cards issued by the creditor as financing for health care services purchased by consumers from the provider. Provides that covered health care services include medical, chiropractic, podiatric, hospital, dental, ophthalmological, optometric, optical, audiological, cosmetic, and veterinary services. Provides protections for consumers, including provisions for resolving consumer complaints concerning disputes about a health care credit card account.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Health Care Credit Card Act.

Section 5. Definitions. In this Act:

"Consumer" means an individual who purchases or is considering purchasing health care services from an enrolled provider.

"Creditor" means a person who extends credit to a consumer for the purpose of financing the consumer's purchase of health care services from an enrolled provider.

"Enrolled provider" means a provider of health care services that has a contract with a creditor permitting the provider to accept health care credit cards issued by the creditor as financing for health care services purchased by consumers from the provider.

"Health care credit card" means a card or other device issued and marketed by a creditor allowing the cardholder or other authorized user to obtain health care services from an enrolled provider on credit on terms specified by the creditor.

"Health care services" means any of the following:

(1) Medical, chiropractic, podiatric, hospital, dental, ophthalmological, optometric, optical, audiological, or cosmetic services.

(2) Other services related to preventing, alleviating, curing, or healing human illness, injury, or physical disability.

(3) Veterinary services.

Section 10. Contract between creditor and enrolled provider.

(a) A contract between a creditor and an enrolled provider that permits the provider to accept health care credit cards issued by the creditor as financing for health care services purchased by consumers from the provider shall include, but need not be limited to, the following provisions to ensure that applicants for a health care credit card are aware of key attributes of the creditor's health care credit card program:

(1) The provider shall ensure that personnel in the provider's office who discuss the creditor's health care credit card program with applicants take and pass training provided by the creditor and receive certification by the creditor based on that training.

(2) The provider shall retain the signature page from each consumer's application for a health care credit card for 6 years after the date of the application. The provider's failure to retain the signature page, and, upon request, to produce the signature page to the creditor, may expose the provider to an automatic charge-back if a consumer files a complaint under this Act.

(3) The provider or the provider's staff shall inform every applicant for a health care credit card of the following:

(A) A health care credit card issued by the creditor is a credit card and is not an in-house credit program of the provider. A health care credit card is not an interest-free credit card.

(B) If the creditor's health care credit card program includes a deferred-interest promotion under which no interest is owed by the consumer if the original balance is paid in full within a specified promotional period, (i) the annual percentage rate of interest applicable to the outstanding balance and (ii) finance charges can be avoided only if the promotional balance is paid off before the end of the promotional period.

(C) A cardholder's account shall be charged only for costs incurred or services actually rendered within 30 days after the charge. If no services are rendered within those 30 days, the consumer is entitled to an automatic refund from the provider for services not yet rendered. Additional services may be billed as the provider provides those services to the consumer. These provisions do not apply, however, to charges for orthodontic services or for custom products ordered by the consumer.

(D) For all new applications submitted to a provider at the provider's office for dental or audiology services with initial charges over $1,000, the provider must require the consumer to apply directly with the creditor using a toll-free telephone number established by the creditor for that purpose. This provision does not apply, however, to (i) a transaction that occurs more than 3 days after the consumer completes an in-office application or (ii) a situation involving a consumer who has an existing account with the provider. If the provider does not comply with this provision, the consumer has a right to reverse the charge from his or her account, even if services are rendered. If the consumer exercises this right, the creditor may charge back the transaction.

(E) The provider must respond to an inquiry from the creditor regarding a consumer complaint within 21 days after the date of the inquiry.

(4) The provider shall maintain a fair refund policy, which the creditor has the right to review.

(5) The requirements set forth in paragraphs (1) through (4) are designed to provide transparency for patient cardholders. The creditor reserves the right to monitor the provider's adherence to these requirements and other policies of the creditor. A provider who violates any of these requirements or policies is subject to charge-backs and to termination from the creditor's health care credit card program.

(b) A contract between a creditor and an enrolled provider that permits the provider to accept health care credit cards issued by the creditor as financing for health care services purchased by consumers from the provider shall prohibit charges for services not yet rendered, unless those services (i) include orthodontic services or are custom products ordered by the consumer or (ii) are intended to be and are completed, or out-of-pocket costs are incurred, within 30 days of the applicable charge. For all services other than those described in item (i), if the services are not completed within 30 days, the consumer is entitled to a refund or account credit for all such services not yet completed.

Section 15. Cooling-off period.

(a) In the case of a consumer who submits a new health care credit card application to an enrolled provider at the provider's office, the provider must give the consumer a 3-day cooling-off period, such that no transaction shall be charged on a health care credit card within 3 days of an initial application.

(b) Notwithstanding the provisions of subsection (a), an enrolled provider may charge a consumer no more than $1,000 within 3 days of the consumer's initial application for a health care credit card for services completed in a single visit at the consumer's request. For any charge for services ordered in excess of $1,000 within 3 days of a consumer's initial application, the creditor shall provide the consumer with an unqualified right to reverse the transaction from the consumer's health care credit card account, even if the services are in fact rendered.

(c) This Section does not apply in the case of vision-related services or veterinary services.

Section 20. Dental or audiology charges over $1,000.

(a) In the case of a consumer who wishes to submit a new health care credit card application for dental or audiology charges that exceed $1,000, an enrolled provider shall require the consumer to apply directly with the creditor and shall provide the consumer with the toll-free telephone number established by the creditor for that purpose. This requirement does not apply to the following:

(1) A transaction that occurs more than 3 days after an application is completed and submitted to the provider.

(2) An application submitted to the provider for services other than dental or audiology services.

(3) An application submitted online directly with the creditor.

(b) A creditor shall provide to every enrolled provider in its health care card credit program a toll-free telephone number for use by consumers in applying for a health care credit card directly with the creditor.

(c) During the telephone application process, a creditor shall inform the consumer of the terms and conditions of financing the purchase of health care services using the creditor's health care credit card program.

(d) If an enrolled provider fails to follow the procedure required under subsection (a) for a newly enrolled consumer, the creditor shall provide that consumer with an unqualified right to reverse the covered dental or audiology transaction from the consumer's health care credit card account, even if the services are in fact rendered.

Section 25. Disclosures to consumers. Before a consumer submits an application for a health care credit card, whether the application is submitted to an enrolled provider or to the creditor, the creditor (and the provider, if the application is submitted to the provider) shall ensure that the following information is disclosed to the consumer:

(1) If the creditor's health care credit card program includes a deferred-interest promotion under which no interest is owed by the consumer if the original balance is paid in full within a specified promotional period, (i) the annual percentage rate of interest applicable to the outstanding balance and (ii) that finance charges can be avoided only if the promotional balance is paid off before the end of the promotional period.

(2) The right to a cooling-off period as provided in Section 15.

(3) The ban on charges for services not yet rendered, unless those services (i) include orthodontic services or are custom products ordered by the consumer or (ii) are intended to be and are completed, or out-of-pocket costs are incurred, within 30 days of the applicable charge.

(4) For all services other than those described in item (i) of paragraph (3), if the services are not completed within 30 days, the consumer's right to a refund or account credit for all such services not yet completed.

The creditor shall also use its best efforts to ensure that the information described in paragraphs (1) through (4) is prominently displayed on the creditor's web site along with the application form.

Section 30. Call to consumers. Other than for consumers who incur charges described in Section 15, a creditor shall use its best efforts to call a consumer within 48 hours, and in no event later than 72 hours, after the consumer submits a new health care credit card application to an enrolled provider resulting in a same-day charge on a new account. This telephone call shall provide the consumer with all of the following:

(1) The amount of the initial transaction, and the way in which the consumer can find additional details about his or her account.

(2) Notice that, for the services charged, those services must be performed within 30 days.

(3) For consumers who applied for an interest-free promotional option, that interest at the applicable rate then in effect will be incurred from the date of purchase and charged to the consumer if the original balance is not paid in full by the end of the promotional period.

Section 35. Billing statement warning of promotional period expiration.

(a) This Section applies in the case of a consumer who applied for an interest-free promotional option if offered by the creditor.

(b) In each of the 2 billing statements that are sent before the end of the promotional period, there shall be a clear and prominent warning of the promotional period's expiration.

(c) In the case of a consumer who opts out of paper billing statements, the creditor shall use its best efforts to send an email in each of the 2 billing cycles before the end of the promotional period, clearly advising in the text of the email that the promotional period is expiring. In addition, in those same 2 billing cycles, the billing statements available to consumers who opt out of paper billing statements shall contain a clear and prominent warning of the promotional period's expiration.

Section 40. Enrolled provider training.

(a) A creditor shall provide training for the enrolled providers in its health care credit card program. The provider or the provider's staff who are responsible for discussing the creditor's health care credit card program with consumers must complete the training. The training shall include, but need not be limited to, a web-based training program that explains the terms and conditions of the health care credit card issued by the creditor and applicable provisions of this Act, including the matters set forth in items (1) through (5) of subsection (a) of Section 10. The web-based training program shall prevent a person taking the training from skipping pages and shall include post-training testing, which the person must pass in order for the provider to qualify to participate in the creditor's health care credit card program.

(b) A creditor shall obtain a written certification or digital acknowledgement that a person took the training required under this Section. The creditor shall retain the certification or acknowledgement for 4 years.

(c) A creditor shall require retraining of appropriate employees of an enrolled provider every 2 years. The creditor shall obtain a written certification or digital acknowledgement of the retraining and shall retain the certification or acknowledgement for 4 years.

(d) If an enrolled provider fails to have at least one employee complete the required training within 120 days after the effective date of this Act, the creditor shall suspend the enrolled provider's ability to process health care credit card applications until the training is completed.

Section 45. Rebates to enrolled providers prohibited.

(a) A creditor may not give a rebate, a kickback, compensation, or in-kind services to an enrolled provider in exchange for the provider's generation of new-loan volume.

(b) This Section does not prohibit a creditor from basing prospective pricing in an enrolled provider's contract on historical loan-generation volume.

Section 50. Paid endorsements prohibited. A creditor may not use any paid endorsement to any professional association in any marketing or related materials directed toward consumers.

Section 55. Discipline of enrolled providers.

(a) Except for enrolled providers described in subsection (b), a creditor shall terminate from participation in the creditor's health care credit card program any enrolled provider that has a charge-back rate of more than 5% of its financing transactions within a one-year period.

(b) In the case of an enrolled provider with fewer than 20 health care credit card program transactions every 6 months and more than one charge-back in the same period, a creditor shall monitor the provider and take appropriate action, up to and including termination of the provider's participation in the creditor's health care credit card program, when warranted.

Section 60. Consumer complaints.

(a) As used in this Section, "consumer complaint" or "complaint" means a dispute initiated by a health care credit cardholder about his or her account.

(b) A creditor shall accept complaints from consumers by telephone or in writing, at the consumer's option.

(c) A creditor may require a complaint to be filed within 60 months after the date of the consumer's transaction but may not otherwise impose any time limit for filing a complaint.

(d) An enrolled provider shall respond to a creditor's inquiry concerning a consumer complaint within 21 days after the date of the inquiry. If a provider does not respond within that time, the creditor shall issue a refund or account credit in favor of the consumer.

(e) A creditor shall use its best efforts to resolve a consumer complaint within 30 days after receiving the complaint. A creditor shall use its best efforts to issue a refund, credit, or charge-back, when appropriate, within 45 days after receiving a complaint.

(f) While a balance is being carried on a complaining consumer's account, a creditor may not impose any fee or interest on the disputed balance and may not send an account to collection as a result of a consumer's failure to pay a disputed balance while a complaint is pending.

(g) If a consumer claims that an enrolled provider omitted or misrepresented the health care credit card's terms and conditions in connection with the opening of an account through an application submitted to the provider in the provider's office, the creditor shall require the provider to forward to the creditor the consumer's signature page from the application and a signed sales receipt. If the provider does not forward these materials to the creditor, the creditor shall close the consumer's account, rescind the transaction, and charge back any amount incurred on the account. If the provider forwards a signature page but no sales receipt, the creditor shall refund any disputed amount charged on the account.

(h) A creditor shall implement and maintain standardized procedures for tracking all consumer complaints. A creditor may use consumer complaints, whether written or oral, to assess and monitor enrolled providers' adherence to their health care credit card program contracts.