BILL ANALYSIS
AB 171
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Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 171 (Jones) - As Introduced: January 29, 2009
Policy Committee: Business &
Professions Vote: 11-0
Judiciary 10-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes requirements for the use of third-party
credit lines for dental services unless specified requirements
are met. Specifically, this bill:
1)Prohibits charging services to open-ended credit unless a
patient is provided with, prior to treatment, the services to
be rendered, the costs of treatment, any charges to be made in
advance of treatment, and the provision of a written treatment
plan.
2)Specifies the contents of a written notice to be provided to
patients.
3)Prohibits the use of third-party credit for patient whose
primary language is other than English unless the patient is
given a notice in one of the Medi-Cal threshold languages.
4)Prohibits for the arrangement of third-party credit if a
patient is anesthetized.
FISCAL EFFECT
No direct fiscal impact to the California Department of Consumer
Affairs (DCA) to continue oversight of professionals under the
jurisdiction of the California Dental Board.
COMMENTS
1)Rationale . This bill is sponsored by the Western Center on Law
AB 171
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and Poverty (WCLP) to limit the use of lines of credit for
funding dental services without patients' knowledge or consent
and to establish standards for when such credit lines are
used. According to author, low-income dental patients have
been enrolled in credit card arrangements unknowingly when
presented with documents they think are a part of a payment
plan. WCLP has received several complaints from elderly,
low-income, and limited English-speaking patients, who
received dental services with out-of-pocket costs of several
thousand dollars. These charges were applied to lines of
credit with annual interest rates as high as 25%.
2)Background . The American Dental Association (ADA) indicates
that in addition to accepting insurance, cash, checks, and
major credit cards, most dental practices today also offer
monthly payment plans through third-party creditors arranged
in the dental practice setting. The ADA endorses CareCredit, a
medical credit card provider owned by GE Money and used by a
majority of dental offices. Other medical credit card
providers include CapitalOne Healthcare Finance, Chase
HealthAdvance, and Citi Health Card. The interest rates on
these credit cards range from 24% to 28% and have credit card
limits as high as $40,000.
Uninsured and underinsured Californians are at-risk for medical
debt which may lead to medical bankruptcy, one of the most
common reasons individuals declare bankruptcy. Medical credit
card debt is a significant factor contributing to escalating
rates of medical bankruptcy for a variety of Californians.
Individuals accumulate these various kinds of debt when
significant health services are required and coverage is
either not available or not robust enough to fully cover
costs. This bill reduces the risks created by third-party
credits cards in connection with dental services.
3)Related Legislation . SB 1633 (Kuehl) in 2008 was similar to
this bill. SB 1633 was vetoed with a generic message about the
delay in budget enactment.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081