Connecticut Governor Ned Lamont recently signed into law An Act Concerning Credit Cards and Health and Veterinary Care Services (PA 26-6; the Act). The Act restricts how health care providers may offer third-party financing products to patients and limits when health care providers can charge patients’ credit cards. The Act is effective January 1, 2027.
The Act broadly applies to all Connecticut-licensed health care providers and facilities (including their employees, agents, and independent contractors) that provide health care services to patients in Connecticut. The term “health care services” is similarly broadly defined and includes hospital, medical, surgical, dental, vision, and pharmaceutical products and services.
The Act covers loans, lines of credit, and credit cards offered by third parties (“third-party financing”). Notably, third-party financing does not include lines of credit or loans offered by a health care provider where the health care provider is the creditor.
Under the Act, health care providers may not advertise, market, solicit, promote, or offer third-party financing to a patient by:
- Including the provider’s branding on any materials used to advertise, market, solicit, promote, offer, or extend the third-party financing;
- Giving patients access to software, internet addresses, hyperlinks, or QR codes maintained by a third party that offers third-party financing and includes provider branding;
- Offering third-party financing while the patient is under anesthesia or other sedation;
- Offering third-party financing while the health care provider is providing health care services to the patient or in any area of a facility that is used to provide health care services, except in limited circumstances; or
- Completing or submitting a third-party financing application on behalf of a patient.
Once the Act is effective, health care providers are also prohibited from receiving financial incentives in exchange for advertising, marketing, soliciting, promoting, or offering any third-party financing.
The Act includes a notable provision that prohibits a health care provider from charging a third-party financing account “for the cost of a health care service or … any portion of the cost of such service, before the date on which such service is provided to the patient,” unless the provider has already incurred costs related to the service prior to the date of service. This section appears to limit the ability of providers to charge patient credit cards in advance of a date of service, a relatively common practice in regard to self-pay patients or those receiving cosmetic or elective procedures.
The Act also prohibits health care providers charging a third-party financing account for products ancillary to a health care service, unless the patient receives a separate receipt identifying the ancillary product and separately consents in writing to the product. If a patient does purchase an ancillary product with third-party financing, health care providers must offer a 30-day return and refund option, except in limited circumstances, such as damage to the product or customization.
To the extent a health care provider decides to discuss third-party financing with patients outside of the restrictions set forth above, the provider must provide patients with a detailed disclosure as specifically set forth in Section 1(c)(1) of the Act (PA 26-6). Among other things, the disclosure explains third-party financing, that it is optional and encourages patients to carefully review the terms of the third-party financing.
Any violations of the Act will be an unfair and deceptive trade practice under Connecticut law.
Health care provider relationships with third-party financing vendors may need adjustments in order to comply with the Act, specifically related to how providers are promoting those third-party financing products, along with a review of policies and procedures related to credit card processing. Health care providers would be well served to review financing-related signage, update financing disclosure and consent documents, examine patient-facing materials, scripts, and vendor arrangements before January 1, 2027, and provide appropriate training to staff. We expect practices in violation of the Act will face increased scrutiny from Connecticut regulators given the legislature’s opposition to co-branded health care financing products.