BILL ANALYSIS
AB 1503
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1503 (Lieu)
As Amended August 19, 2010
Majority vote
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|ASSEMBLY: |74-0 |(May 28, 2010) |SENATE: |23-13|(August 24, |
| | | | | |2010) |
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Original Committee Reference: HEALTH
SUMMARY : Requires emergency physicians who provide emergency
medical services in a hospital to provide discounts to uninsured
patients, establishes limits on the expected payment for
emergency medical services as specified, limits debt collection
activities and requires hospitals to include a written
description of the discount policy with the hospital discount
policy.
The Senate amendments :
1)Require hospitals to include, in its written policy regarding
discounted payments and charity care, information regarding
the obligation of an emergency physician who provides
emergency medical care to provide discounts to patients with
high medical costs and who have income at or below 350% of the
federal poverty level.
2)Require emergency physicians to limit the expected payment for
services from financially qualified patients to an amount that
is no greater than 50% of the median of billed charges based
on a nationally recognized database 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 service in the same or similar geographic region.
3)Require emergency physicians, after the implementation of FAIR
Health, Inc makes the rate of payment in 2) above available,
to limit the expected the rate of payment to be no greater
than 50% of the median or average of rates paid to physicians
by commercial insurers for the same service in the same or
similar geographic region.
4) Delete the requirement that until FAIR Health, Inc contains
AB 1503
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information for care provided in California, all physicians
providing emergency medical services shall limit payment to
the higher of the amount the physician would expect to receive
from Medicare, Medi-Cal, the Healthy Families Program, or
another governmental program.
5)Delete requirements on a physician billing for payment from
the Maddy Emergency Medical Services Fund (Maddy Fund)
relating to seeking payment from the patient.
6)Delete requirements on physicians to provide patients
receiving emergency care with specified written notice
describing the availability of a discount program and the
eligibility standards for that program.
7)Make other clarifying and conforming changes.
EXISTING LAW :
1)Authorizes each county to establish a Maddy Fund supported by
penalty assessments on criminal and traffic violations and
specifies that the fund be used to reimburse hospitals and
physicians for uncompensated emergency medical services.
2)Requires each hospital, as a condition of licensure, to
maintain policies providing reduced cost care, as defined, to
uninsured and low-income individuals.
AS PASSED BY THE ASSEMBLY , this bill required physicians
providing emergency services to adopt and implement a discount
payment policy for uninsured and specified low-income patients,
revised the conditions under which the physician could seek
uncompensated care payments through a Maddy Fund, limited the
amount of payment the physician could seek and prohibited
specified debt collection activities.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : The Senate amendments have essentially the same
purpose as the Assembly-approved version and respond to the
opposition by revising limits on discount pricing and by
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limiting the scope to emergency physicians. The amendments
require the pricing to be based on the FAIR Health Database.
FAIR Health is a new independent database that will make public
payment rates to out-of-network physicians and is from
information collected by a not-for-profit company in partnership
with a research consortium based at Syracuse University. It is
funded by a nearly $100 million settlement with major health
insurers reached by New York Attorney General Andrew Cuomo in
January 2009. Cuomo secured the funding agreements after suing
over use the use of a private database that had been developed
by a UnitedHealth subsidiary, Ingenix, Inc. According to news
reports, Cuomo alleged that the Ingenix data base intentionally
skewed "usual and customary" rates downward through faulty data
collection, poor pooling procedures and lack of audits. Cuomo's
investigation found that Ingenix had a vested interest in
helping set rate low, allowing health insurance companies to
underpay for out-of-network services by as much as 28%.
Previous legislation: AB 774 (Chan), Chapter 755, Statutes of
2006 requires hospitals to provide discounted services to
uninsured and underinsured consumers in a program. Under AB
774, hospitals may charge eligible patients the higher rates of
Medicare, Medi-Cal, or another government program. The Senate
amendments deleted the requirement that an emergency physician
provide the patient with its written discount policy as
impracticable and replaced it with a requirement that the policy
be included in the written materials that hospitals are required
to provide under AB 774.
Analysis Prepared by : Marjorie Swartz/ HEALTH / (916)
319-2097
FN: 0006552