BILL ANALYSIS
AB 1503
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1503 (Lieu) - As Introduced: February 27, 2009
Policy Committee: Health Vote:17-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill adapts fair pricing provisions established for
hospitals by AB 774 (Chan), Chapter 755, Statutes of 2006, to
emergency physicians. Specifically, this bill:
1)Requires a physician billing for payment from the Maddy Fund
(Fund) to seek specified patient financial information prior
to billing the Fund.
2)Requires uninsured patients and patients with incomes below
350% of the Federal Poverty Level (FPL) and medical costs of
more than 10% of their income to eligible to apply for a
discount payment for physician charges. Requires discount
pricing to be limited to Medicare, Medi-Cal, the Healthy
Families Program or another government reimbursement levels.
3)Requires a patient requesting a discounted payment to provide
the billing physician with necessary and reasonable
information to make an eligibility determination, and
prohibits the use of this information for collection
activities.
4)Establishes numerous other requirements and prohibitions for
patients and providers.
FISCAL EFFECT
1)No direct fiscal impact to the Department of Health Care
Services (DHCS) or the California Department of Public Health
(DPH). Neither department appears to have direct oversight of
the fair pricing requirements established in this bill.
AB 1503
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2)Unknown impacts on county Maddy Funds. 50 counties rely on
county-administered Maddy Funds to provide reimbursement for
emergency services for the uninsured. This bill changes the
eligibility for Maddy reimbursements to reduce the billing of
patients if specified physician and patient criteria are met.
This bill may result in Maddy Funds being accessed more
directly and quickly than under current law.
COMMENTS
1)Rationale . This bill is sponsored by Health Access California
to increase consumer protections and provide uninsured and
underinsured patients with fair pricing for emergency care.
According to the author and sponsor, under current law
physicians can charge uninsured patients many times what
Medicare or private insurance pays for the same care. For
emergency physicians, current law requires they bill patients
three times prior to requesting reimbursement from the Maddy
Fund. This bill establishes a fair pricing framework and
changes Maddy Fund reimbursement processes.
2)The Maddy Fund is available to reimburse physicians and
hospitals for uncompensated emergency medical care and for
other emergency medical services. Maddy Funds are supported by
penalty assessments in 50 counties on criminal and traffic
violations and some of the fees from students at traffic
schools. Current law authorizes counties to levy an additional
penalty assessment until January 1, 2014 for Maddy Funds.
3)Hospital Fair Pricing and Medical Debt . AB 774 created a set
of consumer financial protections to provide health care
access to underinsured and uninsured residents without these
families facing financial ruin. Hospitals are required to
maintain written policies regarding discounted payments and
charity care to patients with family income of less than 350 %
of FPL or about $35,000 annual income for an individual.
Research indicates more than 6 million Californians lack health
insurance. Both insured and uninsured residents face
significant barriers to basic health care treatment,
especially with regard to financial risk. Prior to the passage
of AB 774, uninsured and underinsured patients were sometimes
charged three to 10 times what insurance companies and
government programs would reimburse for the same services.
Information reported in a recent study by the Commonwealth
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Fund indicates more than 26 % of insured people report recent
trouble with medical bills and more than half of uninsured
adults report payment problems.
4)Related Legislation . AB 774 (Chan), Chapter 755, Statutes of
2006 requires hospitals to provide discounted services to
uninsured and underinsured consumers in a program like the one
established by this bill. According to AB 774, hospitals may
charge eligible patients the rates of Medicare, Medi-Cal, or
another government program. AB 774 directs hospitals to give
uninsured and underinsured individuals a specified period of
time to qualify for insurance coverage or to negotiate a
payment plan with the hospital.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081