BILL ANALYSIS
AB 1142
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1142 (Price) - As Amended: April 28, 2009
Policy Committee: Health Vote:13-4
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases Medi-Cal beneficiary protections against
inappropriate and illegal billing in hospital settings.
Specifically, this bill:
1)Requires hospitals to provide proof of a person's Medi-Cal
eligibility to hospital-based providers, emergency medical
transportation providers, and other providers of professional
services including anesthesiologists, radiologists, and
pathologists.
2)Requires Medi-Cal providers to ensure that if patient accounts
are sold to a third-party collection agency, these accounts
are recalled under specified circumstances.
3)In addition to current law and regulatory penalties, this bill
establishes a provider fine that may be levied by the
Department of Health Care Services (DHCS) for up to three
times the amount a patient was billed if the provider bills a
patient or fails to pull an account back from a third-party
collection agency.
4)Prohibits a Medi-Cal provider or third-party collection agency
who receives proof of Medi-Cal coverage from reporting a
beneficiary to a consumer credit reporting agency or failing
to correct a negative credit report regarding the Medi-Cal
covered services rendered.
FISCAL EFFECT
1)No direct fiscal impact to DHCS to continue oversight of
Medi-Cal billing and the requirements and prohibitions
AB 1142
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established by this bill. Current law and regulations prohibit
providers with proof of Medi-Cal eligibility from seeking
reimbursement from a patient or sending patient billing issues
to a third-party collections agency. In addition, current
regulations provide DHCS with broad authority to impose
administrative sanctions, provider reprimands, or placement of
a provider on probationary status. The requirements and
prohibitions on providers and DHCS are generally current law
and practice.
2)Unknown, likely absorbable workload to the California
Department of Consumer Affairs to continue oversight of
California's third-party collection agency business practices.
COMMENTS
1)Rationale . This bill is a consumer protection measure
sponsored by the Western Center Law on & Poverty (WCLP) and is
supported by a variety of legal services and consumer advocacy
groups. This bill clarifies current law and practice to reduce
the frequency of providers billing Medi-Cal beneficiaries and
sending unpaid bills to third-party collection agencies.
The WCLP and the author indicate significant and long-term
consequences occur when Medi-Cal patients are billed for
thousands of dollars of medical services. Usually, the medical
care was eligible for reimbursement at the time of service or
the treatments are later eligible for Medi-Cal reimbursement
when a beneficiary becomes retroactively eligible for the
program. Hospitals indicate they generally comply with the
provider notification provisions in this bill.
This bill increases this compliance and provides patients and
advocates with recourse when accounts are sent to collections.
2)Impacts of Inappropriate Medi-Cal Billing . The author, WCLP,
and other advocates in support of this bill indicate the
consequences of wrongly billing Medi-Cal patients can be
catastrophic, destroying low-income beneficiaries' credit
ratings, generating relentless contacts from credit agencies,
increasing stress, and exacerbating access problems when the
fear of being billed prevents beneficiaries from seeking
treatment.
AB 1142
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3) Related Legislation . AB 2285 (Chu) in 2004 contained
similar features as AB 1142. AB 2285 was vetoed due to
concerns about other provisions of AB 2285.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081