BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 171|
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THIRD READING
Bill No: AB 171
Author: Jones (D)
Amended: 7/15/09 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM : 7-0, 6/8/09
AYES: Negrete McLeod, Aanestad, Corbett, Correa, Romero,
Walters, Yee
NO VOTE RECORDED: Wyland, Florez, Oropeza
SENATE JUDICIARY COMMITTEE : 4-0, 6/23/09
AYES: Corbett, Florez, Leno, Walters
NO VOTE RECORDED: Harman
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/11/09 - See last page for vote
SUBJECT : Dental services: credit
SOURCE : Western Center on Law and Poverty
DIGEST : This bill prohibits a person providing dental
services, or an employee or agent of that person, from
charging treatment or costs to an open-end credit, that is
extended by a third party and that is arranged for or
established in a dental office, before the date upon which
the treatment is rendered or costs are incurred, without
first providing the patient a list of the treatment and
services to be rendered, the estimated costs of the
CONTINUED
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treatment and services, and which treatment and services
are being charged in advance of rendering or incurring of
costs, and ensuring that the patient has received a
treatment plan, as required. In addition this bill
requires a written notice to be signed by a patient before
any credit is extended or arranged.
ANALYSIS : Existing law:
1. 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.
2. Establishes the Medi-Cal program, administered by the
Department of Health Care Services, which provides
comprehensive health benefits to low-income children,
their parents or caretaker relatives, pregnant women,
elderly, blind or disabled persons, nursing home
residents, and refugees who meet specified eligibility
criteria.
3. Establishes the Knox-Keene Health Care Service Plan
Act of 1975 to regulate and license health care
service plans and specialized plans by the Department
of Managed Health Care.
4. Provides for the regulation of health insurers by the
Department of Insurance.
This bill:
1. Prohibits a person providing dental services, or an
employee or agent of a dentist, from charging
treatment or costs to an open-end credit, that is
extended by a third party and that is arranged for or
established in a dental office before the date upon
which the treatment is rendered or costs are incurred
without first providing the patient a list of the
treatment and services to be rendered, the estimated
costs of the treatment and services, and which
treatment and services are being charged in advance of
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rendering or incurring of costs, and ensuring that the
patient has received a treatment plan, as required.
2. Requires a dentist to, within 15 business days of a
patient's request, refund to the lender any payment
received through a credit extended by a third part
that is arranged for or established in a dental office
for treatment that has not been rendered or costs that
have not been incurred.
3. Prohibits a dentist, or an employee or agent of that
dentist, from arranging for or establishing credit
extended by a third party for a patient without first
providing a written notice on one page in at least
14-point type and obtain a signature from the patient.
Specifies the written notice that must be provided.
4. Requires a dentist to give a patient a written
treatment plan prior to arranging for or establishing
credit extended by a third party. Requires the
written treatment plan to include each anticipated
service to be provided, and the estimated cost of each
service. States that if a patient is covered by a
private or government dental benefit plan or dental
insurance, from which the dentist takes assignment of
benefits, the treatment plan must indicate the
patient's private or government-estimated share of
cost for each service. States that if the dentist
does not take assignment of benefits from a patient's
dental benefit plan or insurance, the treatment plan
must indicate that the treatment may or may not be
covered by a patient's dental benefit or insurance
plan, and that the patient has the right to confirm
dental benefit or insurance information from the
patient's plan, insurer, or employer before beginning
treatment.
5. Prohibits a dentist, an employee or agent of that
dentist, from arranging for, or establishing credit
extended by a third party for a patient with whom the
dentist, or an employee or agent of that dentist,
communicates primarily in language other than English
that is one of the Medi-Cal threshold languages,
unless the written notice information required in item
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#3) above is also provided in that language.
6. Prohibits a dentist, or an employee or agent of that
dentist from arranging for or establishing credit 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.
7. Allows 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 provisions of
this bill to seek relief under the Consumer Legal
Remedies Act.
8. States that the rights, remedies and penalties
established by this bill are cumulative and does
supersede the rights, remedies or penalties
established under other laws.
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. Defines patient to
include the patient's parent or other legal
representative.
10. Requires a staff-model dental health care service
plan that arranges for or establishes credit extended
by a third party, to establish and comply with
policies and procedures that ensure that its dentists,
employees and agents, and employees of agents of its
dentists comply with this bill.
11. Requires a staff-model dental health care service
plan that arranges for or establishes credit extended
by a third party, to establish and comply with
policies and procedures that ensure that, within 15
business days of an enrollee's request, the plan
refunds to a lender any payment received through that
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credit for treatment that has not been rendered or
costs that have not been incurred.
12. Requires a staff-model dental health care service
plan that directly extends credit or establishes a
payment plan shall, at a minimum, establish and comply
with policies and procedures that ensure that, within
15 business days of an enrollee's request, the plan
refunds to the enrollee any payment received through
that credit or payment plan for treatment that has not
been rendered or costs that have not been incurred.
13. Defines the following terms:
A. Staff-model dental health care service plan"
means a specialized health care service plan that
contracts to provide coverage for dental care
services and retains dentists as employees to care
for its enrollees.
B. Enrollee includes, but is not limited to, an
enrollee's parent or other legal representative.
Background
Background information provided by the sponsor to the
Senate Business, Professions and Economic Development
Committee, including newspaper articles, indicates that the
practice of hospitals, medical, and dental offices
arranging credit for their patients started proliferating
with the growth of the uninsured and underinsured
population. Typically, the practice involves a patient who
has a medical or dental condition that is not covered by a
health or dental plan or policy, and the medical or dental
provider or its employee or agent arranges a credit or loan
for the patient to assist in paying for the services.
According to a November 2007 Business Week article entitled
"Fresh Pain for the Uninsured," financial institutions such
as General Electric, U.S. Bancorp, Capital One, and
Citigroup are examples of medical creditors. General
Electric owns Care Credit, and according to Care Credit's
website, it has 6 million customers and is marketed to
dentists, plastic surgeons, and some hospitals. U.S. Bank,
a U.S. Bancorp unit, finances about $2 million in patient
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debt per month through a medical-benefit firm, charging
most customers annual interest of 13.5 percent, and as much
as 24 percent on late bills. The article points out that
many patients across the country do not realize their
medical debts are being shifted to credit card companies by
their providers.
Prior Legislation
SB 1633 (Kuehl, 2008) is similar to the provisions of this
bill and would have prohibited a person providing dental
services, or an employee or agent of that person, from
charging to a line of credit or other extension of credit,
or accept payment from loan funds for services that the
patient, client, or customer has not yet received.
Governor Schwarzenegger summarily vetoed SB 1633 because of
the budget crisis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 7/15/09)
Western Center on Law and Poverty (source)
American Federation of State, County, and Municipal
Employees
Asian Pacific American Legal Center of Southern California
California Dental Association
California Immigrant Policy Center
California Primary Care Association
California Rural Legal Assistance
Congress of California Seniors
Consumers Union
Having Our Say
Health Access California
Health Rights Hotline
Neighborhood Legal Services of Los Angeles County
ARGUMENTS IN SUPPORT : According to the Western Center on
Law and Poverty, healthcare providers are increasingly
offering to facilitate their patients' ability to obtain
loans to pay for medical services. They state that its
office received numerous complaints from low-income
consumers who have fallen victim to credit cards for dental
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care without appropriate protections. They also point out
that this bill does not intend to prohibit dentists from
arranging credit cards or loans for their patients but aims
to protect low-income consumers from unfair practices in
the marketing of dental credit cards and loans. They
indicate this bill is important especially in the current
environment where low-income consumers are facing
foreclosures, check cashing abuses, and other forms of
predatory lending.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nava, Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Bass
NO VOTE RECORDED: Duvall, Yamada
JA:nl 7/15/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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