Senate Bill No. 799

Introduced by Senator Calderon

February 22, 2013

An act to amend Section 127405 of the Health and Safety Code, relating to hospitals.

LEGISLATIVE COUNSEL’S DIGEST

SB 799, as introduced, Calderon. Hospitals: fair pricing.

Existing law requires each hospital to maintain an understandable written policy regarding discount payments for financially qualified patients as well as an understandable written charity care policy. Uninsured patients or patients with high medical costs who are at or below 350% of the federal poverty level, as defined, are eligible to apply for participation under a hospital’s charity care policy or discount payment policy.

This bill would make a technical, nonsubstantive change to that provision.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 127405 of the Health and Safety Code
is amended to read:

127405.  

(a) (1) (A) Each hospital shall maintain an
understandable written policy regarding discount payments for
financially qualified patients as well as an understandable written
charity care policy. Uninsured patients or patients with high
medical costs who are at or below 350 percent of the federal
poverty level, as defined in subdivision (b) of Section 127400,
shall be eligible to apply for participation under a hospital’s charity
care policy or discount payment policy. Notwithstanding any other
provision of this article, a hospital may choose to grant eligibility
for its discount payment policy or charity care policies to patients
with incomes over 350 percent of the federal poverty level. Both
the charity care policy and the discount payment policy shall state
the process begin delete used by end delete the hospital begin insert uses end insert to determine whether a patient
is eligible for charity care or discounted payment. In the event of
a dispute, a patient may seek review from the business manager,
chief financial officer, or other appropriate manager as designated
in the charity care policy and the discount payment policy.

(B) The written policy regarding discount payments shall also
include a statement that an emergency physician, as defined in
Section 127450, who provides emergency medical services in a
hospital that provides emergency care is also required by law to
provide discounts to uninsured patients or patients with high
medical costs who are at or below 350 percent of the federal
poverty level. This statement shall not be construed to impose any
additional responsibilities upon the hospital.

(2) Rural hospitals, as defined in Section 124840, may establish
eligibility levels for financial assistance and charity care at less
than 350 percent of the federal poverty level as appropriate to
maintain their financial and operational integrity.

(b) A hospital’s discount payment policy shall clearly state
eligibility criteria based upon income consistent with the
application of the federal poverty level. The discount payment
policy shall also include an extended payment plan to allow
payment of the discounted price over time. The policy shall provide
that the hospital and the patient may negotiate the terms of the
payment plan.

(c) The charity care policy shall state clearly the eligibility
criteria for charity care. In determining eligibility under its charity
care policy, a hospital may consider income and monetary assets
of the patient. For purposes of this determination, monetary assets
shall not include retirement or deferred compensation plans
qualified under the Internal Revenue Code, or nonqualified deferred
compensation plans. Furthermore, the first ten thousand dollars
($10,000) of a patient’s monetary assets shall not be counted in
determining eligibility, nor shall 50 percent of a patient’s monetary
assets over the first ten thousand dollars ($10,000) be counted in
determining eligibility.

(d) A hospital shall limit expected payment for services it
provides to a patient at or below 350 percent of the federal poverty
level, as defined in subdivision (b) of Section 127400, eligible
under its discount payment policy to the amount of payment the
hospital would expect, in good faith, to receive for providing
services from Medicare, Medi-Cal, the Healthy Families Program,
or another government-sponsored health program of health benefits
in which the hospital participates, whichever is greater. If the
hospital provides a service for which there is no established
payment by Medicare or any other government-sponsored program
of health benefits in which the hospital participates, the hospital
shall establish an appropriate discounted payment.

(e) A patient, or patient’s legal representative, who requests a
discounted payment, charity care, or other assistance in meeting
his or her financial obligation to the hospital shall make every
reasonable effort to provide the hospital with documentation of
income and health benefits coverage. If the person requests charity
care or a discounted payment and fails to provide information that
is reasonable and necessary for the hospital to make a
determination, the hospital may consider that failure in making its
determination.

(1) For purposes of determining eligibility for discounted
payment, documentation of income shall be limited to recent pay
stubs or income tax returns.

(2) For purposes of determining eligibility for charity care,
documentation of assets may include information on all monetary
assets, but shall not include statements on retirement or deferred
compensation plans qualified under the Internal Revenue Code,
or nonqualified deferred compensation plans. A hospital may
require waivers or releases from the patient or the patient’s family,
authorizing the hospital to obtain account information from
financial or commercial institutions, or other entities that hold or
maintain the monetary assets, to verify their value.

(3) Information obtained pursuant to paragraph (1) or (2) shall
not be used for collections activities. This paragraph does not
prohibit the use of information obtained by the hospital, collection
agency, or assignee independently of the eligibility process for
charity care or discounted payment.

(4) Eligibility for discounted payments or charity care may be
determined at any time the hospital is in receipt of information
specified in paragraph (1) or (2), respectively.