BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1503|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1503
Author: Lieu (D)
Amended: 8/19/10 in Senate
Vote: 21
ASSEMBLY VOTES NOT RELEVANT
SENATE HEALTH COMMITTEE : 6-0, 6/23/10
AYES: Alquist, Cedillo, Leno, Negrete McLeod, Pavley,
Romero
NO VOTE RECORDED: Strickland, Aanestad, Cox
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Health facilities: physicians and surgeons:
emergency
medical care: billing
SOURCE : Health Access
DIGEST : This bill requires physicians who provide
emergency medical services in hospitals to implement a
discount payment policy for financially qualified patients,
requires physicians providing emergency medical services to
limit the expected payment for services from financially
qualified patients, requires these physicians to provide
notices and information to patients, and places limits on
the collections activities of these physicians, and
clarifies that amounts paid under a physician's discounted
payment policy do not constitute a physician's customary
CONTINUED
AB 1503
Page
2
charge for purposes of establishing reimbursement amounts
under the Medicare and Medi-Cal programs.
Senate Floor Amendments of 8/19/10 restrict the scope of
physicians who are subject to the bill's limits on billing
and collections practices to physicians who provide
emergency medical services in emergency departments of
hospitals, place additional limits on collections
activities of physicians and their assignees, and make
other technical and clarifying changes.
ANALYSIS : Existing law:
1. Authorizes each county to establish a Maddy Emergency
Medical Services Fund (Maddy Fund), and provides for the
deposit of certain penalties, forfeitures, and fines
into the Fund.
2. Requires moneys in local Maddy Funds to be used for
reimbursement of physicians and surgeons and hospitals
for uncompensated emergency medical services, as
specified. Limits the patients for whom reimbursement
may be claimed to patients who do not have health
insurance coverage for emergency services and care,
cannot afford to pay for those services, and for whom
payment will not be made through any private coverage or
by any program Funded in whole or in part by the federal
government, as specified.
3. Requires physicians seeking reimbursement from Maddy
Funds to:
A. First attempt to bill the patient or a
responsible third party for payment for services;
B. Make two additional attempts to bill the patient
or third party over a three-month period without
success, unless they receive notification from the
third party that no payment will be made for the
services; and,
C. Discontinue any further collection efforts once
they receive payment from a Maddy Fund.
CONTINUED
AB 1503
Page
3
4. Requires hospitals to develop and implement written
policies for providing discounted payments or charity
care for financially qualified patients, as specified.
5. Requires hospitals to limit expected payment for
services to any patient at or below 350 percent of the
federal poverty level, who is eligible under its
discount payment policy, to the higher of the amount of
payment the hospital would receive for providing
services from Medicare, Medi-Cal, Healthy Families, or
any other government-sponsored health program of health
benefits in which the hospital participates.
6. Requires each hospital to perform various functions in
connection with its charity care and discount pay
policies, including providing patients with notice of
the policies and attempting to determine the
availability of private or public health insurance
coverage for each patient.
7. Prohibits hospitals or their assignees from engaging in
certain types of collection activities vis-?-vis
uninsured and underinsured patients who qualify, or are
attempting to qualify, for their charity care and
discount payment policies, including reporting adverse
information to a consumer credit reporting agency or
commencing civil action for nonpayment at any time prior
to 150 days after initial billing, or using wage
garnishments or placing liens on primary residences as a
means of collecting unpaid hospital bills.
This bill:
1. Requires physicians who provide emergency medical
services in a hospital to implement a discount payment
policy for financially qualified patients, defined as
patients who are uninsured or who face high medical
costs, as defined, and who have incomes below 350
percent of the federal poverty level.
2. Allows financially qualified patients to apply for a
discount payment from the physician or surgeons discount
payment policy to an amount that is no greater than 50
percent of the median of billed charges based on a
CONTINUED
AB 1503
Page
4
nationally recognized database of physician and surgeon
charges until the nonprofit FAIR Health, Inc. creates a
database that makes available the rate of payment
received by physicians from commercial insurers for the
same services in the same or similar geographic region.
When FAIR Health, Inc. makes available the rate of
payment received by the emergency physician from
commercial insurers for the same services in the same or
similar geographic region, the amount of expected
payment under this section shall be no greater than the
median or average of rates paid by commercial insurers
for the same or similar services in the same or similar
geographic region.
3. Provides that if the physician seeks reimbursement from
a local Maddy Fund, they must cease any further billing
of collection activity with respect to that patient.
4. Provides that, if the Maddy Fund does not reimburse the
physician, or if the physician does not seek
reimbursement from the Maddy Fund, the physician may
bill a patient consistent with the provisions of this
bill.
5. Provides that the physician may rely on the hospital's
determination of the patient's eligibility for a
discounted payment under its discount payment policy,
but provides that if the physician makes a separate
determination of eligibility, the information he or she
shall use to document the patient's income shall be
limited to recent pay stubs and tax returns.
6. Allows physicians to accept the patient's
self-attestation of income.
7. Requires physicians who provide emergency medical
services to provide notices and information to patients,
and places limits on the collections activities of
physicians, similar to those that apply to hospitals.
8. Requires physicians who provide emergency medical
services to:
A. Provide patients with a written notice, at the
CONTINUED
AB 1503
Page
5
time services are provided at the time of billing,
describing the availability of the physician's
discount payment policy and eligibility for discount
payments, in English and other languages, as
specified; and
B. Make reasonable efforts to obtain information
from patients about any private or public health
insurance coverage they may have and include in any
billings a description of public programs patients
may be eligible for, as well as the physician's
discount payment policy and application process.
9. Requires physicians, and any collection agency or
assignee they use to collect payments to:
A. Establish a written policy stating the
physician's standards and practices for collection of
debt and obtain agreement from any collection agency
the physician uses that it will adhere to the policy;
B. Refrain from reporting adverse information for
eligible patients to a consumer credit agency for 150
days after the initial billing;
C. Refrain from imposing wage garnishments or liens
on primary residences as a means of collecting debts
for persons eligible for the discounted payment
program, with exceptions;
D. Make any extended payment plans offered to
eligible patients interest free, and follow a
specified timeline and procedure for declaring an
extended payment plan inoperative; and,
E. Provide patients with a summary of their rights
under state and federal debt collection laws prior to
commencing collection activities against patients.
1. Specifies that this bill does not diminish or eliminate
any protections consumers have under federal or state
debt collection laws.
2. Requires physicians to reimburse the patient or patients
CONTINUED
AB 1503
Page
6
any amount paid in excess of the amount permitted under
this bill, with interest.
3. Clarifies that discounts provided under a discount
payment policy do not preclude recognition of the
physician's established charges for purposes of
establishing reimbursement levels under Medicare,
Medi-Cal, workers compensation, or other federal, state,
or local public programs.
4. Limit the scope of the bill's restrictions on billing
and collections practices to physicians who provide
emergency medical services in the emergency department
of a hospital.
5. Provides instead that a physician or their assignee,
before the 150 day waiting period is up, shall not
report adverse information to a consumer credit agency
or commence a civil action unless the assignee agrees to
comply with the restrictions on billing and collections
in the bill.
6. Provides that a patient or their assignee, after the 150
day period, shall not report adverse information to a
consumer credit reporting agency or commence a civil
action before providing the patient with the notice of
their rights under state and federal debt collection
law.
7. Make other technical and clarifying changes.
Background
In 1987, the Legislature concluded that emergency medical
services providers bear higher uncompensated costs for
their services than do providers of other medical services,
and often receive only partial or no payment from patients.
The state enacted a series of bills to compensate
physicians and medical facilities for emergency medical
services provided to patients who do not have health
insurance and cannot pay for their medical care. SB 12
(Maddy), Chapter 1240, Statutes of 1987, allows counties to
establish Maddy Emergency Medical Services Funds, also
known as Maddy Funds.
CONTINUED
AB 1503
Page
7
The Funds receive local penalty assessment funds, which are
used to reimburse physicians and hospitals for patients who
do not make payment for emergency medical services and have
no third-party or government source of payment.
Fifty-eight percent of these funds, after administrative
costs, must be distributed to physicians for emergency
services, 25 percent to hospitals providing
disproportionate levels of trauma and EMS, and 17 percent
to other emergency medical services providers, including,
but not limited to, regional poison centers, as determined
by each county. Approximately 50 counties have established
Maddy Funds.
In 1988, voters passed Proposition 99, which imposes taxes
on the distribution of cigarettes and other tobacco
products. These taxes fund a variety of programs,
including the California Healthcare for Indigents Program
and Rural Health Services Program, which fund county
indigent care. Each county is required to establish a
physician services account within its Maddy Fund to receive
revenues appropriated by the Legislature from Proposition
99 tobacco tax revenues. Physician services account funds
must be used to reimburse physicians for services provided
to patients who cannot afford to pay for those services and
for whom payment will not be made through any private
coverage or public program. Funds may be used to reimburse
losses on emergency, obstetric, and pediatric services.
Physicians can be reimbursed for up to 50 percent of the
losses submitted. However, appropriation of these funds
has been curtailed in recent budget years.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/19/10)
Health Access (source)
American Federation of State, County and Municipal
Employees, AFL-CIO
Congress of California Seniors
Western Center on Law & Poverty
CONTINUED
AB 1503
Page
8
CTW:nl 8/20/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED