Senate Bill No. 1256

Introduced by Senator Mitchell

February 21, 2014

An act to add Section 654.4 to the Business and Professions Code, relating to health care services.

LEGISLATIVE COUNSEL’S DIGEST

SB 1256, as introduced, Mitchell. Medical services: credit.

Existing law prohibits a healing arts licensee, including physicians and surgeons, psychologists, acupuncturists, optometrists, dentists, podiatrists, and chiropractic practitioners, from referring a person for certain health care services if the licensee has a financial interest, as defined, with the person or entity that receives the referral. Existing law provides specified exemptions from this prohibition. Under existing law, a violation of the provisions governing referrals is a crime.

Existing law prohibits a dentist, or an employee or agent of that dentist, from arranging for or establishing credit extended by a 3rd party for a patient without first providing a written notice and a written treatment plan, as specified. Existing law prohibits a dentist, or employee or agent of a dentist, from charging treatment not yet rendered or costs not yet incurred to an open-end credit extended by a 3rd party that is arranged for or established in the dental office without first providing the patient with specified information regarding the treatment and services to be rendered and ensuring the patient’s receipt of the treatment plan. A person who willfully violates these provisions is subject to specified civil liability.

This bill would similarly prohibit a healing arts licensee, or an employee or agent of that licensee, from arranging for or establishing credit extended by a 3rd party for a patient without first providing a written notice and a written treatment plan, and would prohibit that arrangement or establishment of credit with regard to a patient who has been administered or is under the influence of general anesthesia, conscious sedation, or nitrous oxide. The bill would prohibit a healing arts licensee, or employee or agent of a licensee, from charging treatment not yet rendered or costs not yet incurred to an open-end credit extended by a 3rd party that is arranged for or established in the licensee’s office without first providing the patient with specified information regarding the treatment and services to be rendered and ensuring the patient’s receipt of the treatment plan. The bill would require a healing arts licensee to refund to the lender any payment received for treatment that has not been rendered or costs that have not been incurred, as specified, within 15 business days upon the patient’s request. The bill would provide that a person who willfully violates these provisions is subject to specified civil liability.

Because a violation of these provisions would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 654.4 is added to the Business and
Professions Code, to read:

654.4.  

(a) For purposes of this section, the following
definitions shall apply:

(1) “Licensee” means an individual, firm, partnership,
association, corporation, limited liability company, or cooperative
association licensed under this division or under any initiative act
or division referred to in this division.

(2) “Licensee’s office” means either of the following:

(A) An office of a licensee in solo practice.

(B) An office in which services or goods are personally provided
by the licensee or by employees in that office, or personally by
independent contractors in that office, in accordance with law.
Employees and independent contractors shall be licensed or
certified when licensure or certification is required by law.

(3) “Open-end credit” means 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.

(4) “Patient” includes, but is not limited to, the patient’s parent
or other legal representative.

(b) It is unlawful for a licensee to charge treatment or costs to
an open-end credit, that is extended by a third party and that is
arranged for, or established in, a licensee’s 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
rendering or incurring of costs, and ensuring that the patient has
received the treatment plan required by subdivision (e).

(c) A licensee shall, within 15 business days of a patient’s
request, refund to the lender any payment received through credit
extended by a third party that is arranged for, or established in, a
licensee’s office for treatment that has not been rendered or costs
that have not been incurred.

(d) A licensee, or an employee or agent of that licensee, shall
not arrange for or establish credit extended by a third party for a
patient without first providing the following written notice, on one
page in at least 14-point type, and obtaining a signature from the
patient:

“Credit for Medical Services

The attached application and information is for a credit card/line
of credit or loan to help you finance your medical treatment. You
should know that:

You are applying for a ____ credit card/line of credit or a ____
loan for $____.

You do not have to apply for the credit card/line of credit or
loan. You may pay your medical provider for treatment in another
manner.

This credit card/line of credit or loan is not a payment plan with
the provider’s office; it is credit with [name of company issuing
the credit card/line of credit or loan]. Your medical provider does
not work for this company.

Before applying for this credit card/line of credit or loan, you
have the right to a written treatment plan from your medical
provider that includes the anticipated treatment to be provided and
the estimated costs of each service.

If you are approved for a credit card/line of credit, your medical
provider can only charge treatment and laboratory costs to that
credit card/line of credit when you get the treatment or the medical
provider incurs costs unless your medical provider has first given
you a list of treatments that you are paying for in advance and the
cost for each treatment or service.

You have the right to receive a credit to your credit card/line of
credit or loan account refunded for any costs charged to the credit
card/line of credit or loan for treatment that has not been rendered
or costs that your medical provider has not incurred. Your medical
provider must refund the amount of the charges to the lender within
15 business days of your request, after which the lender will credit
your account.

Please read carefully the terms and conditions of this credit
card/line of credit or loan, including any promotional offers.

You may be required to pay interest rates on the amount charged
to the credit card/line of credit or the amount of the loan. If you
miss a payment or do not pay on time, you may have to pay a
penalty on the entire cost of your procedure and/or a higher interest
rate.

If you do not pay the money that you owe the company that
provides you with a credit card/line of credit or loan, your missed
payments can appear on your credit report and could hurt your
credit rating. You could also be sued.

[Patient’s Signature]”

(e) A licensee shall give a patient a written treatment plan prior
to arranging for or establishing credit extended by a third party.
The treatment plan shall include each anticipated service to be
provided and the estimated cost of each service. If a patient is
covered by a private or government medical benefit plan or medical
insurance, from which the licensee takes assignment of benefits,
the treatment plan shall indicate the patient’s private or
government-estimated share of cost for each service. If the licensee
does not take assignment of benefits from a patient’s medical
benefit plan or insurance, the treatment plan shall indicate that the
treatment may or may not be covered by a patient’s medical benefit
or insurance plan, and that the patient has the right to confirm
medical benefit or insurance information from the patient’s plan,
insurer, or employer before beginning treatment.

(f) A licensee, or an employee or agent of that licensee, shall
not arrange for or establish credit extended by a third party for a
patient with whom the licensee, or an employee or agent of that
licensee, communicates primarily in a language other than English
that is one of the Medi-Cal threshold languages, unless the written
notice information required by subdivision (d) is also provided in
that language.

(g) A licensee, or an employee or agent of that licensee, shall
not arrange for or establish 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.

(h) 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 this section may seek the relief provided by
Chapter 4 (commencing with Section 1780) of Title 1.5 of Part 4
of Division 3 of the Civil Code.

(i) The rights, remedies, and penalties established by this article
are cumulative, and shall not supersede the rights, remedies, or
penalties established under other laws.

SEC. 2.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.