BILL ANALYSIS
AB 171
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Date of Hearing: March 31, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 171 (Jones) - As Introduced: January 29, 2009
SUBJECT : Dental services: credit.
SUMMARY : Establishes requirements governing the arrangement of
credit cards and loans for dental services and prohibits a
dentist, or an employee or agent of a dentist, from charging to
a third party line of credit for services that have not been
rendered, or costs that have not been incurred, unless the
patient receives a list of treatment and services to be
rendered, including the estimated costs, and a written treatment
plan, as specified. Specifically, this bill :
1)Prohibits a dentist, or an employee or agent of a dentist,
from charging to an open-end third party line of credit, where
the credit is arranged for or established in the dental
office, for services that have not been provided or costs that
have not been incurred, unless the patient receives a list of
treatment and services to be rendered, the estimated costs of
such treatment and services, including those that will be
charged in advance, and a written treatment plan, as
specified.
2)Requires the treatment plan to include the patient's private
or government estimated share of cost for each service if the
patient is covered by a private or government dental benefit
plan or dental insurance and the dentist agrees to be paid
directly by that plan.
3)Requires the treatment plan to disclose that the treatment may
or may not be covered by a patient's dental benefit or dental
insurance plan if the dentist does not agree to be paid
directly by that plan and to indicate that the patient has the
right to confirm his or her dental benefit or insurance
coverage before beginning treatment.
4)Requires a dentist to refund to the lender within 15 business
days of a patient's request any payment received for services
that have not been provided or costs that have not been
incurred when made through third party credit where the credit
is arranged for or established in the dental office.
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5)Prohibits a dentist, or his or her employee or agent, from
arranging for or establishing third party credit for a patient
unless the dentist, or his or her employee or agent, provides
a written notice containing specified disclosures regarding
credit for dental services to the patient and obtains the
patient's signature.
6)Prohibits a dentist, or his or her employee or agent, from
arranging for or establishing third party credit for a patient
whose primary language is a non-English Medi-Cal threshold
language unless the disclosure notice is provided in that
language.
7)Prohibits a dentist, or his or her employee or agent, from
arranging for or establishing third party credit for a patient
who has been administered or is under the influence of general
anesthesia, conscious sedation, or nitrous oxide.
8)Permits 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 bill to seek relief under the
Consumer Legal Remedies Act.
9)Defines "open-end credit" as 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.
EXISTING LAW prohibits unfair methods of competition and unfair
or deceptive acts or practices in the sale or lease of goods or
services. Allows a consumer who suffers any damage as a result
of unfair methods of competition and unfair or deceptive acts or
practices to bring an action to recover damages, as specified.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "AB 171
is sponsored by the Western Center on Law and Poverty (WCLP) in
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response to numerous complaints that its office has received
from elderly, low-income, and limited English-speaking consumers
who have fallen victim to credit cards for dental care without
adequate protections.
"AB 171 is not intended to prohibit dentists from helping to
arrange credit cards or loans for their patients but aims to set
forth basic standards governing these arrangements while
providing necessary consumer protections."
Background . The sponsor of this bill, WCLP, maintains that
health care providers are increasingly offering to facilitate
loans for their patients to obtain medical services. WCLP
points out that this bill is especially important in light of
the current economic climate in which low-income consumers are
increasingly facing foreclosures, check cashing abuses, and
other forms of predatory lending. A WCLP representative noted,
"Both with the foreclosures and with these dental credit cards,
people are being convinced to take on more credit than they can
afford. We have people who are living on a fixed income of
$1000 a month who are being signed up for $6000 in credit, and
there's no way they can make those payments."
According to WCLP, this bill responds to complaints that its
office received from consumers, primarily elderly, low-income,
and limited English-speaking patients, who received dental
services with out-of-pocket costs ranging from a few hundred to
thousands of dollars. Typically, these patients thought they
were signing payment plans with their providers only to realize
when they started receiving credit card statements that they had
signed credit applications. In addition, some consumers were
charged for future services they did not receive, and other
limited-English proficient consumers were given applications in
English that they did not understand.
CareCredit is one of the main sources for medical credit, with a
nationwide network of 100,000 providers offering the card. A
July 2008 article in Consumer Reports indicates that other
medical credit card providers include CapitalOne Healthcare
Finance, Chase HealthAdvance, and CitiHealth Card.
Support . The California Dental Association writes, "Nearly half
of all American adults have no form of dental insurance. For
those who do have insurance, their dental plans may not cover
all treatment they may need or want. To help patients budget
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for these out-of-pocket costs without delaying their care, many
dentists make financing options available, including loans and
lines of credit offered by commercial lenders.
"While most dentists and their patients report positive
experiences using these financing options, there are limited
reported incidents in which patients signed up for financing
products in dental offices without fully understanding the
product. There have also been reports that patients did not
receive refunds for treatment they did not receive.
"AB 171 reflects the dental profession's commitment to
maintaining the trusting relationships between dentists and
their patients, including ensuring that patients understand the
treatment they receive and how the treatment costs will be
covered. The provisions of AB 171 reflect standard ethical
business practices that protect consumers and uphold a positive
dentist-patient relationship."
Related legislation . SB 1633 (Kuehl) of 2008 was an identical
bill that the governor vetoed. The Governor vetoed a
substantial number of bills that year with the same message
that, due to the delay in passing the 2008-2009 State Budget, he
would only sign bills that were "the highest priority for
California." SB 1633 was vetoed for this reason.
Double-referred . This bill is double-referred to Assembly
Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law and Poverty (sponsor)
California Dental Association
California Immigrant Policy Center
California Rural Legal Assistance, Inc.
Congress of California Seniors
Consumers Union
Health Access California
Health Rights Hotline
Neighborhood Legal Services of Los Angeles County
Opposition
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None on file.
Analysis Prepared by : Sarah Huchel / B. & P. / (916) 319-3301