Amended in Assembly June 11, 2014

Amended in Senate April 29, 2014

Senate BillNo. 1256


Introduced by Senator Mitchell

February 21, 2014


An act tobegin insert repeal andend insert add Sectionbegin delete 654.4 toend deletebegin insert 654.3 ofend insert the Business and Professions Code, relating to health care services.

LEGISLATIVE COUNSEL’S DIGEST

SB 1256, as amended, Mitchell. Medical services: credit.

Existing law prohibits a healing arts licensee, including physicians and surgeons, psychologists, acupuncturists, optometrists, dentists, podiatrists, and chiropractic practitioners, from referring a person for certain health care services if the licensee has a financial interest, as defined, with the person or entity that receives the referral. Existing law provides specified exemptions from this prohibition. Under existing law, a violation of the provisions governing referrals is a crime.

Existing law prohibits a dentist, or an employee or agent of that dentist, from arranging for or establishing credit extended by a 3rd party for a patient without first providing a written notice and a written treatment plan, as specified. Existing law prohibits a dentist, or employee or agent of a dentist, from charging treatment not yet rendered or costs not yet incurred to an open-end credit extended by a 3rd party that is arranged for or established in the dental office without first providing the patient with specified information regarding the treatment and services to be rendered and ensuring the patient’s receipt of the treatment plan. A person who willfully violates these provisions is subject to specified civil liability.

This bill wouldbegin delete similarlyend deletebegin insert delete those provisions pertaining to a dentist or an employee or agent of a dentist, and instead wouldend insert prohibit a healing arts licensee, or an employee or agent of that licensee,begin insert including a dentist,end insert from arranging for or establishing creditbegin insert or a loanend insert extended by a 3rd party for a patient without first providing a writtenbegin insert printedend insert noticebegin insert or electronic notice, as specified,end insert and a written treatment plan, and would prohibit that arrangement or establishment of creditbegin insert or a loanend insert with regard to a patient who has been administered or is under the influence of general anesthesia, conscious sedation, or nitrous oxide. The bill would prohibit a healing arts licensee, or employee or agent of a licensee, from charging treatment not yet rendered or costs not yet incurred to an open-end credit extended by a 3rd party that is arranged for or established in the licensee’s office without first providing the patient with specified information regarding the treatment and services to be rendered and ensuring the patient’s receipt of the treatment plan. The bill would require a healing arts licensee to refund to the lender any payment received for treatment that has not been rendered or costs that have not been incurred, as specified, within 15 business days upon the patient’s request. The bill would provide that a person who willfully violates these provisions is subject to specified civil liability.

Because a violation of these provisions would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 654.3 of the end insertbegin insertBusiness and Professions
2Code
end insert
begin insert is repealed.end insert

begin delete
3

654.3.  

(a) A dentist, or an employee or agent of a dentist, shall
4not charge treatment or costs to an open-end credit, that is extended
5by a third party and that is arranged for or established in a dental
6office, before the date upon which the treatment is rendered or
7costs are incurred, without first providing the patient a list of the
8treatment and services to be rendered, the estimated costs of the
P3    1treatment and services, and which treatment and services are being
2charged in advance of rendering or incurring of costs, and ensuring
3that the patient has received the treatment plan required by
4subdivision (d).

5(b) A dentist shall, within 15 business days of a patient’s request,
6refund to the lender any payment received through credit extended
7by a third party that is arranged for or established in a dental office
8for treatment that has not been rendered or costs that have not been
9incurred.

10(c) A dentist, or an employee or agent of that dentist, shall not
11arrange for or establish credit extended by a third party for a patient
12without first providing the following written notice, on one page
13in at least 14-point type, and obtaining a signature from the patient:

14

15“Credit for Dental Services

16The attached application and information is for a credit card/line
17of credit or loan to help you finance your dental treatment. You
18should know that:

19You are applying for a ____ credit card/line of credit or a ____
20loan for $____.

21You do not have to apply for the credit card/line of credit or
22loan. You may pay your dentist for dental treatment in another
23manner.

24This credit card/line of credit or loan is not a payment plan with
25the dental office; it is credit with [name of company issuing the
26credit card/line of credit or loan]. Your dentist does not work for
27this company.

28Before applying for this credit card/line of credit or loan, you
29have the right to a written treatment plan from your dentist that
30includes the anticipated treatment to be provided and the estimated
31costs of each service.

32If you are approved for a credit card/line of credit, your dentist
33can only charge treatment and lab costs to that credit card/line of
34credit when you get the treatment or the dentist incurs costs unless
35your dentist has first given you a list of treatments that you are
36paying for in advance and the cost for each treatment or service.

37You have the right to receive a credit to your credit card/line of
38credit or loan account refunded for any costs charged to the credit
39card/line of credit or loan for treatment that has not been rendered
40or costs that your dentist has not incurred. Your dentist must refund
P4    1the amount of the charges to the lender within 15 business days
2of your request, after which the lender will credit your account.

3Please read carefully the terms and conditions of this credit
4card/line of credit or loan, including any promotional offers.

5You may be required to pay interest on the amount charged to
6the credit card/line of credit or the amount of the loan. If you miss
7a payment or do not pay on time, you may have to pay a penalty
8and/or a higher interest rate.

9If you do not pay the money that you owe the company that
10provides you with a credit card/line of credit or loan, your missed
11payments can appear on your credit report and could hurt your
12credit rating. You could also be sued.

13[Patient’s Signature]”
14

15(d) A dentist shall give a patient a written treatment plan prior
16to arranging for or establishing credit extended by a third party.
17The treatment plan shall include each anticipated service to be
18provided and the estimated cost of each service. If a patient is
19covered by a private or government dental benefit plan or dental
20insurance, from which the dentist takes assignment of benefits,
21the treatment plan shall indicate the patient’s private or
22government-estimated share of cost for each service. If the dentist
23does not take assignment of benefits from a patient’s dental benefit
24plan or insurance, the treatment plan shall indicate that the
25treatment may or may not be covered by a patient’s dental benefit
26or insurance plan, and that the patient has the right to confirm
27dental benefit or insurance information from the patient’s plan,
28insurer, or employer before beginning treatment.

29(e) A dentist, or an employee or agent of that dentist, shall not
30arrange for or establish credit extended by a third party for a patient
31with whom the dentist, or an employee or agent of that dentist,
32communicates primarily in a language other than English that is
33one of the Medi-Cal threshold languages, unless the written notice
34information required by subdivision (c) is also provided in that
35language.

36(f) A dentist, or an employee or agent of that dentist, shall not
37arrange for or establish credit that is extended by a third party for
38a patient who has been administered or is under the influence of
39general anesthesia, conscious sedation, or nitrous oxide.

P5    1(g) A patient who suffers any damage as a result of the use or
2employment by any person of a method, act, or practice that
3willfully violates this section may seek the relief provided by
4Chapter 4 (commencing with Section 1780) of Title 1.5 of Part 4
5of Division 3 of the Civil Code.

6(h) The rights, remedies, and penalties established by this article
7are cumulative, and shall not supersede the rights, remedies, or
8penalties established under other laws.

9(i) For purposes of this section, the following definitions shall
10apply:

11(1) “Dentist” includes, but is not limited to, a dental corporation,
12as defined in Section 1800.

13(2) “Open-end credit” means credit extended by a creditor under
14a plan in which the creditor reasonably contemplates repeated
15transactions, the creditor may impose a finance charge from time
16to time on an outstanding unpaid balance, and the amount of credit
17that may be extended to the debtor during the term of the plan (up
18to any limit set by the creditor) is generally made available to the
19extent that any outstanding balance is repaid.

20(3) “Patient” includes, but is not limited to, the patient’s parent
21or other legal representative.

end delete
22begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 654.3 is added to the end insertbegin insertBusiness and Professions
23Code
end insert
begin insert, to read:end insert

begin insert
24

begin insert654.3.end insert  

(a) For purposes of this section, the following
25definitions shall apply:

26(1) “Licensee” means an individual, firm, partnership,
27association, corporation, limited liability company, or cooperative
28association licensed under this division or under any initiative act
29or division referred to in this division.

30(2) “Licensee’s office” means either of the following:

31(A) An office of a licensee in solo practice.

32(B) An office in which services or goods are personally provided
33by the licensee or by employees in that office, or personally by
34independent contractors in that office, in accordance with law.
35Employees and independent contractors shall be licensed or
36certified when licensure or certification is required by law.

37(3) “Open-end credit” means credit extended by a creditor
38under a plan in which the creditor reasonably contemplates
39repeated transactions, the creditor may impose a finance charge
40from time to time on an outstanding unpaid balance, and the
P6    1amount of credit that may be extended to the debtor during the
2term of the plan, up to any limit set by the creditor, is generally
3made available to the extent that any outstanding balance is repaid.

4(4) “Patient” includes, but is not limited to, the patient’s parent
5or other legal representative.

6(b) It is unlawful for a licensee, or employee or agent of that
7licensee, to charge treatment or costs to an open-end credit or
8loan, that is extended by a third party and that is arranged for, or
9established in, that licensee’s office, before the date upon which
10the treatment is rendered or costs are incurred, without first
11providing the patient with a treatment plan, as required by
12subdivision (e) and a list of which treatment and services are being
13charged in advance of rendering or incurring of costs.

14(c) A licensee shall, within 15 business days of a patient’s
15request, refund to the lender any payment received through credit
16or a loan extended by a third party that is arranged for, or
17established in, that licensee’s office for treatment that has not been
18rendered or costs that have not been incurred.

19(d) A licensee, or an employee or agent of that licensee, shall
20not arrange for or establish credit or a loan extended by a third
21party for a patient without first providing the following written or
22electronic notice, on one page or screen, respectively, in at least
2314-point type, and obtaining a signature from the patient:


25“Credit or Loan for Medical Services

26The attached application and information is for a credit card/line
27of credit or loan to help you finance your medical treatment. You
28should know that:

29You are applying for a ____credit card/line of credit or a
30____loan for $____.

31You do not have to apply for the credit card/line of credit or
32loan. You may pay your medical provider for treatment in another
33manner.

34This credit card/line of credit or loan is not a payment plan with
35the provider’s office; it is credit with, or a loan made by, [name
36of company issuing the credit card/line of credit or loan]. Your
37medical provider does not work for this company.

38Before applying for this credit card/line of credit or loan, you
39have the right to a written treatment plan from your medical
P7    1provider that includes the anticipated treatment to be provided
2and the estimated costs of each service.

3If you are approved for a credit card/line of credit or loan, your
4medical provider can only charge treatment and laboratory costs
5to that credit card/line of credit or loan when you get the treatment
6or the medical provider incurs costs unless your medical provider
7has first given you a list of treatments that you are paying for in
8advance and the cost for each treatment or service.

9You have the right to receive a credit to your credit card/line of
10credit or loan account refunded for any costs charged to the credit
11card/line of credit or loan for treatment that has not been rendered
12or costs that your medical provider has not incurred. Your medical
13provider must refund the amount of the charges to the lender within
1415 business days of your request, after which the lender will credit
15your account.

16Please read carefully the terms and conditions of this credit
17card/line of credit or loan, including any promotional offers.

18You may be required to pay interest rates on the amount charged
19to the credit card/line of credit or the amount of the loan. If you
20miss a payment or do not pay on time, you may have to pay a
21penalty on the entire cost of your procedure and a higher interest
22rate.

23You may use this credit card/line of credit or loan for payments
24toward subsequent medical services.

25If you do not pay the money that you owe the company that
26provides you with a credit card/line of credit or loan, your missed
27payments can appear on your credit report and could hurt your
28credit rating. You could also be sued.

29
30[Patient’s Signature]”


32(e) Prior to arranging for or establishing credit or a loan
33extended by a third party, a licensee shall give a patient a written
34treatment plan. The treatment plan shall include each anticipated
35service to be provided and the estimated cost of each service. If a
36patient is covered by a private or government medical benefit plan
37or medical insurance, from which the licensee takes assignment
38 of benefits, the treatment plan shall indicate the patient’s private
39or government-estimated share of cost for each service. If the
P8    1licensee does not take assignment of benefits from a patient’s
2medical benefit plan or insurance, the treatment plan shall indicate
3that the treatment may or may not be covered by a patient’s
4medical benefit or insurance plan, and that the patient has the
5right to confirm medical benefit or insurance information from
6the patient’s plan, insurer, or employer before beginning treatment.

7(f) A licensee, or an employee or agent of that licensee, shall
8not arrange for or establish credit or a loan extended by a third
9party for a patient with whom the licensee, or an employee or
10agent of that licensee, communicates primarily in a language other
11than English that is one of the Medi-Cal threshold languages,
12unless the written notice information required by subdivision (d)
13is also provided in that language.

14(g) A licensee, or an employee or agent of that licensee, shall
15not arrange for or establish credit or a loan that is extended by a
16third party for a patient who has been administered or is under
17the influence of general anesthesia, conscious sedation, or nitrous
18oxide.

19(h) A patient who suffers any damage as a result of the use or
20employment by any person of a method, act, or practice that
21willfully violates this section may seek the relief provided by
22Chapter 4 (commencing with Section 1780) of Title 1.5 of Part 4
23of Division 3 of the Civil Code.

24(i) The rights, remedies, and penalties established by this article
25are cumulative, and shall not supersede the rights, remedies, or
26penalties established under other laws.

end insert
27begin insert

begin insertSEC. end insertbegin insert3.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
28Section 6 of Article XIII B of the California Constitution because
29the only costs that may be incurred by a local agency or school
30district will be incurred because this act creates a new crime or
31infraction, eliminates a crime or infraction, or changes the penalty
32for a crime or infraction, within the meaning of Section 17556 of
33the Government Code, or changes the definition of a crime within
34the meaning of Section 6 of Article XIII B of the California
35Constitution.

end insert
begin delete
36

SECTION 1.  

Section 654.4 is added to the Business and
37Professions Code
, to read:

38

654.4.  

(a) For purposes of this section, the following
39definitions shall apply:

P9    1(1) “Licensee” means an individual, firm, partnership,
2association, corporation, limited liability company, or cooperative
3association licensed under this division or under any initiative act
4or division referred to in this division.

5(2) “Licensee’s office” means either of the following:

6(A) An office of a licensee in solo practice.

7(B) An office in which services or goods are personally provided
8by the licensee or by employees in that office, or personally by
9independent contractors in that office, in accordance with law.
10Employees and independent contractors shall be licensed or
11certified when licensure or certification is required by law.

12(3) “Open-end credit” means credit extended by a creditor under
13a plan in which the creditor reasonably contemplates repeated
14transactions, the creditor may impose a finance charge from time
15to time on an outstanding unpaid balance, and the amount of credit
16that may be extended to the debtor during the term of the plan, up
17to any limit set by the creditor, is generally made available to the
18extent that any outstanding balance is repaid.

19(4) “Patient” includes, but is not limited to, the patient’s parent
20or other legal representative.

21(b) It is unlawful for a licensee to charge treatment or costs to
22an open-end credit, that is extended by a third party and that is
23arranged for, or established in, that licensee’s office, before the
24date upon which the treatment is rendered or costs are incurred,
25without first providing the patient a list of the treatment and
26services to be rendered, the estimated costs of the treatment and
27services, and which treatment and services are being charged in
28advance of rendering or incurring of costs, and ensuring that the
29patient has received the treatment plan required by subdivision
30(e).

31(c) A licensee shall, within 15 business days of a patient’s
32request, refund to the lender any payment received through credit
33extended by a third party that is arranged for, or established in,
34that licensee’s office for treatment that has not been rendered or
35costs that have not been incurred.

36(d) A licensee, or an employee or agent of that licensee, shall
37not arrange for or establish credit extended by a third party for a
38 patient without first providing the following written notice, on one
39page in at least 14-point type, and obtaining a signature from the
40patient:


P10   2“Credit for Medical Services

3The attached application and information is for a credit card/line
4of credit or loan to help you finance your medical treatment. You
5should know that:

6You are applying for a ____ credit card/line of credit or a ____
7loan for $____.

8You do not have to apply for the credit card/line of credit or
9loan. You may pay your medical provider for treatment in another
10manner.

11This credit card/line of credit or loan is not a payment plan with
12the provider’s office; it is credit with [name of company issuing
13the credit card/line of credit or loan]. Your medical provider does
14not work for this company.

15Before applying for this credit card/line of credit or loan, you
16have the right to a written treatment plan from your medical
17provider that includes the anticipated treatment to be provided and
18the estimated costs of each service.

19If you are approved for a credit card/line of credit, your medical
20provider can only charge treatment and laboratory costs to that
21credit card/line of credit when you get the treatment or the medical
22provider incurs costs unless your medical provider has first given
23you a list of treatments that you are paying for in advance and the
24cost for each treatment or service.

25You have the right to receive a credit to your credit card/line of
26credit or loan account refunded for any costs charged to the credit
27card/line of credit or loan for treatment that has not been rendered
28or costs that your medical provider has not incurred. Your medical
29provider must refund the amount of the charges to the lender within
3015 business days of your request, after which the lender will credit
31your account.

32Please read carefully the terms and conditions of this credit
33card/line of credit or loan, including any promotional offers.

34You may be required to pay interest rates on the amount charged
35to the credit card/line of credit or the amount of the loan. If you
36miss a payment or do not pay on time, you may have to pay a
37penalty on the entire cost of your procedure and/or a higher interest
38rate.

P11   1You may use this credit card/line of credit for payments toward
2subsequent medical services.

3If you do not pay the money that you owe the company that
4provides you with a credit card/line of credit or loan, your missed
5payments can appear on your credit report and could hurt your
6credit rating. You could also be sued.

7
8[Patient’s Signature]”

9


10(e) Prior to arranging for or establishing credit extended by a
11third party, a licensee shall give a patient a written treatment plan.
12The treatment plan shall include each anticipated service to be
13provided and the estimated cost of each service. If a patient is
14covered by a private or government medical benefit plan or medical
15insurance, from which the licensee takes assignment of benefits,
16the treatment plan shall indicate the patient’s private or
17government-estimated share of cost for each service. If the licensee
18 does not take assignment of benefits from a patient’s medical
19benefit plan or insurance, the treatment plan shall indicate that the
20treatment may or may not be covered by a patient’s medical benefit
21or insurance plan, and that the patient has the right to confirm
22medical benefit or insurance information from the patient’s plan,
23insurer, or employer before beginning treatment.

24(f) A licensee, or an employee or agent of that licensee, shall
25not arrange for or establish credit extended by a third party for a
26patient with whom the licensee, or an employee or agent of that
27licensee, communicates primarily in a language other than English
28that is one of the Medi-Cal threshold languages, unless the written
29notice information required by subdivision (d) is also provided in
30that language.

31(g) A licensee, or an employee or agent of that licensee, shall
32not arrange for or establish credit that is extended by a third party
33for a patient who has been administered or is under the influence
34of general anesthesia, conscious sedation, or nitrous oxide.

35(h) A patient who suffers any damage as a result of the use or
36employment by any person of a method, act, or practice that
37willfully violates this section may seek the relief provided by
38Chapter 4 (commencing with Section 1780) of Title 1.5 of Part 4
39of Division 3 of the Civil Code.

P12   1(i) The rights, remedies, and penalties established by this article
2are cumulative, and shall not supersede the rights, remedies, or
3penalties established under other laws.

4

SEC. 2.  

No reimbursement is required by this act pursuant to
5Section 6 of Article XIII B of the California Constitution because
6the only costs that may be incurred by a local agency or school
7district will be incurred because this act creates a new crime or
8infraction, eliminates a crime or infraction, or changes the penalty
9for a crime or infraction, within the meaning of Section 17556 of
10the Government Code, or changes the definition of a crime within
11the meaning of Section 6 of Article XIII B of the California
12Constitution.

end delete


O

    97