BILL ANALYSIS AB 1503 Page 1 ASSEMBLY THIRD READING AB 1503 (Lieu) As Introduced February 27, 2009 Majority vote HEALTH 17-0 APPROPRIATIONS 16-0 ----------------------------------------------------------------- |Ayes:|Jones, Fletcher, Adams, |Ayes:|De Leon, Nielsen, | | |Ammiano, Block, Carter, | |Ammiano, Charles | | |Conway, De Leon, Gaines, | |Calderon, Davis, Duvall, | | |Hall, Hayashi, Hernandez, | |Krekorian, Hall, Harkey, | | |Bonnie Lowenthal, Nava, | |Miller, John A. Perez, | | |V. Manuel Perez, Salas, | |Price, Skinner, Solorio, | | |Audra Strickland | |Audra Strickland, | | | | |Torlakson | | | | | | ----------------------------------------------------------------- SUMMARY : Requires emergency room physicians (physician) to provide a discount payment policy for uninsured and specified low-income patients and revises the conditions under which physicians may seek uncompensated care payments through a Maddy Emergency Medical Services Fund (Maddy Fund). Specifically, this bill : 1)Requires physicians seeking payment for services through the Maddy Fund to have and implement a discount payment policy consistent with this bill. 2)Requires a physician to determine if a patient qualifies for a hospital's charity care payment policy, and, if the patient does qualify, authorizes the physician to bill the Maddy Fund. 3)Makes uninsured patients, and patients with incomes below 350% of the federal poverty level with medical costs exceeding 10% of their income, eligible to apply for a discount payment from the physician, and requires the physician to limit payment for services from an eligible patient to the amount the physician would receive through Medicare, Medi-Cal, the Healthy Families Program, or another governmental program, whichever is greater. 4)Requires physicians to provide patients receiving emergency care, not admitted to the hospital, with specified written AB 1503 Page 2 notice describing the availability of a discount program and the eligibility standards for that program. 5)Prohibits wage garnishments or liens, and prohibits sale of a patient's home during their lifetime, as a means of collecting debts for persons participating in the discounted cost program. Prohibits sending unpaid bills to collection if an eligible individual is making a good faith effort to settle an outstanding bill. Imposes other specified limits on collections. EXISTING LAW : 1)Authorizes each county to establish a Maddy Fund supported by penalty assessments on criminal and traffic violations and specifies that the fund be used to reimburse hospitals and physicians for uncompensated emergency medical services. 2)Requires each hospital, as a condition of licensure, to maintain policies providing reduced cost care, as defined, to uninsured and low-income individuals. FISCAL EFFECT : According to the Assembly Appropriations Committee, no direct fiscal effect to the Department of Health Care Services or to the Department of Public Health. The Appropriations Committee found unknown effects on Maddy Funds resulting from simplified access to the funds. COMMENTS : Health Access California, sponsor of this bill, states the intent of this legislation is to provide uninsured and underinsured consumers affordable physician care in emergency rooms and to provide consumer protections from overly aggressive medical collections activity. Uninsured individuals, according to Health Access, treated in emergency rooms, are frequently charged much more than insured patients are charged for the same service. Health Access also reports that debt collections from uninsured patients are routinely and vigorously employed to recover medical debt. The author notes that this bill is modeled on a very similar program instituted in hospitals last year. Existing law authorizes each county to establish a Maddy Fund. The Maddy Fund is dedicated to reimbursement of physicians and hospitals for uncompensated emergency medical care. AB 1503 Page 3 Approximately 50 counties have established Maddy Funds. Counties finance these funds principally through penalty assessments on criminal and traffic violations. The UCLA Center for Health Policy Research reports that job based health insurance coverage continues to decline in this state. More than 6.5 million Californians under age 65 (more than one in five nonelderly residents) went without health insurance at some point in 2007. Employment based coverage of adults has declined from 56.4% of employees to 54.3% in recent years. UCLA reports that the erosion of job-based insurance is most severe for low- and moderate-income adults who usually do not qualify for any public insurance programs. Previous legislation: AB 774 (Chan), Chapter 755, Statutes of 2006 requires hospitals to provide discounted services to uninsured and underinsured consumers in a program substantially similar to that required by this bill. Under AB 774, hospitals may charge eligible patients the higher rates of Medicare, Medi-Cal, or another government program. AB 774 directs hospitals to give uninsured and underinsured individuals a specified period of time to qualify for insurance coverage or to negotiate a payment plan with the hospital. The Western Center on Law and Poverty supports the bill because so many Californians, more than six million individuals, depend on emergency rooms for their health care, but pay very high charges because uninsured individuals have no insurer to negotiate rates on their behalf. The California Immigrant Policy Center notes that medical debt is the leading cause of personal bankruptcy in the United States, and that this bill will help low-income consumers avoid unmanageable levels of debt. Analysis Prepared by : John Miller/ HEALTH / (916) 319-2097 FN: 0000952