[Approved by Governor August 22, 2014. Filed with Secretary of State August 22, 2014.]
SB 1256, 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 would delete those provisions pertaining to a dentist or an employee or agent of a dentist, and instead would prohibit a healing arts licensee, including a dentist, or an employee or agent of that licensee, from arranging for or establishing credit or a loan extended by a 3rd party for a patient without first providing a written notice or electronic notice, as specified, and a written treatment plan, and would prohibit that arrangement or establishment of credit or a loan 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 or a loan 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.
The people of the State of California do enact as follows:
Section 654.3 of the Business and Professions Code is repealed.
Section 654.3 is added to the Business and Professions Code, to read:
(a) For purposes of this section, the following definitions shall apply:
(1) “Licensee” means an individual, firm, partnership, association, corporation, limited liability company, or cooperative association licensed under this division or under any initiative act or division referred to in this division.
(2) “Licensee’s office” means either of the following:
(A) An office of a licensee in solo practice.
(B) An office in which services or goods are personally provided by the licensee or by employees in that office, or personally by independent contractors in that office, in accordance with law. Employees and independent contractors shall be licensed or certified when licensure or certification is required by law.
(3) “Open-end credit” means credit extended by a creditor under a plan in which the creditor reasonably contemplates repeated transactions, the creditor may impose a finance charge from time to time on an outstanding unpaid balance, and the amount of credit that may be extended to the debtor during the term of the plan, up to any limit set by the creditor, is generally made available to the extent that any outstanding balance is repaid.
(4) “Patient” includes, but is not limited to, the patient’s parent or other legal representative.
(b) It is unlawful for a licensee, or employee or agent of that licensee, to charge treatment or costs to an open-end credit or loan, that is extended by a third party and that is arranged for, or established in, that licensee’s office, before the date upon which the treatment is rendered or costs are incurred, without first providing the patient with a treatment plan, as required by subdivision (e) and a list of which treatment and services are being charged in advance of rendering or incurring of costs.
(c) A licensee shall, within 15 business days of a patient’s request, refund to the lender any payment received through credit or a loan extended by a third party that is arranged for, or established in, that licensee’s office for treatment that has not been rendered or costs that have not been incurred.
(d) A licensee, or an employee or agent of that licensee, shall not arrange for or establish credit or a loan extended by a third party for a patient without first providing the following written or electronic notice, on one page or screen, respectively, in at least 14-point type, and obtaining a signature from the patient:
“Credit or Loan for Health Care Services
The attached application and information is for a credit card/line of credit or loan to help you finance your health care treatment. You should know that:
You are applying for a ____credit card/line of credit or a ____loan for $____.
You do not have to apply for the credit card/line of credit or loan. You may pay your health care provider for treatment in another manner.
This credit card/line of credit or loan is not a payment plan with the provider’s office; it is credit with, or a loan made by, [name of company issuing the credit card/line of credit or loan]. Your health care provider does not work for this company.
Before applying for this credit card/line of credit or loan, you have the right to a written treatment plan from your health care provider that includes the anticipated treatment to be provided and the estimated costs of each service.
If you are approved for a credit card/line of credit or loan, your health care provider can only charge treatment and laboratory costs to that credit card/line of credit or loan when you get the treatment or the health care provider incurs costs unless your health care provider has first given you a list of treatments that you are paying for in advance and the cost for each treatment or service.
You have the right to receive a credit to your credit card/line of credit or loan account refunded for any costs charged to the credit card/line of credit or loan for treatment that has not been rendered or costs that your health care provider has not incurred. Your health care provider must refund the amount of the charges to the lender within 15 business days of your request, after which the lender will credit your account.
Please read carefully the terms and conditions of this credit card/line of credit or loan, including any promotional offers.
You may be required to pay interest rates on the amount charged to the credit card/line of credit or the amount of the loan. If you miss a payment or do not pay on time, you may have to pay a penalty on the entire cost of your procedure and a higher interest rate.
You may use this credit card/line of credit or loan for payments toward subsequent health care services.
If you do not pay the money that you owe the company that provides you with a credit card/line of credit or loan, your missed payments can appear on your credit report and could hurt your credit rating. You could also be sued.
[Patient’s Signature]”
(e) Prior to arranging for or establishing credit or a loan extended by a third party, a licensee shall give a patient a written treatment plan. The treatment plan shall include each anticipated service to be provided and the estimated cost of each service. If a patient is covered by a private or government medical benefit plan or medical insurance, from which the licensee takes assignment of benefits, the treatment plan shall indicate the patient’s private or government-estimated share of cost for each service. If the licensee does not take assignment of benefits from a patient’s medical benefit plan or insurance, the treatment plan shall indicate that the treatment may or may not be covered by a patient’s medical benefit or insurance plan, and that the patient has the right to confirm medical benefit or insurance information from the patient’s plan, insurer, or employer before beginning treatment.
(f) A licensee, or an employee or agent of that licensee, shall not arrange for or establish credit or a loan extended by a third party for a patient with whom the licensee, or an employee or agent of that licensee, communicates primarily in a language other than English that is one of the Medi-Cal threshold languages, unless the written notice information required by subdivision (d) is also provided in that language.
(g) A licensee, or an employee or agent of that licensee, shall not arrange for or establish credit or a loan that is extended by a third party for a patient who has been administered or is under the influence of general anesthesia, conscious sedation, or nitrous oxide.
(h) A patient who suffers any damage as a result of the use or employment by any person of a method, act, or practice that willfully violates this section may seek the relief provided by Chapter 4 (commencing with Section 1780) of Title 1.5 of Part 4 of Division 3 of the Civil Code.
(i) The rights, remedies, and penalties established by this article are cumulative, and shall not supersede the rights, remedies, or penalties established under other laws.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
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