BILL NUMBER: SB 1276 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Hernandez
FEBRUARY 21, 2014
An act to amend Sections 127400, 127420, 127425, 127450, 127454,
and 127455 of the Health and Safety Code, relating to health care
billing.
LEGISLATIVE COUNSEL'S DIGEST
SB 1276, as introduced, Hernandez. Health care: fair billing
policies.
(1) Existing law requires each hospital, as a condition of
licensure, to maintain an understandable written policy regarding
discount payments for financially qualified patients as well as a
written charity care policy. Existing law requires uninsured patients
or patients with high medical costs who are at or below 350% of the
federal poverty level to be eligible for charity care or a discount
payment policy from a hospital, as specified, and requires that
specified patients be eligible for discount payments to an emergency
physician. Existing law defines a patient with high medical costs as
a person whose family income does not exceed 350% of the federal
poverty level and who does not receive a discounted rate from the
hospital or physician as a result of his or her 3rd-party coverage.
This bill would change the definition of a person with high
medical costs to include those persons who do receive a discounted
rate from the hospital as a result of 3rd-party coverage.
(2) Existing law requires a hospital or emergency physician to
make a reasonable effort to obtain from the patient, or his or her
representative, information about whether private or public health
insurance or sponsorship may fully or partially cover the charges for
care, including private health insurance, and requires the hospital
or emergency physician to provide a patient who has not shown proof
of 3rd-party coverage with specified information, including a
statement that he or she may be eligible for specified health
coverage programs, including Medi-Cal and the California Children's
Services Program, and applications for those programs.
This bill would require the hospital or emergency physician to
obtain information as to whether the patient may be eligible for the
California Health Benefit Exchange and to include in the information
provided to a patient that has not shown proof of 3rd-party coverage
a statement that the consumer may be eligible for coverage through
the California Health Benefit Exchange or other state- or
county-funded health coverage programs. The bill would also specify
that, when a patient applies, or has a pending application, for
another health coverage program at the same time he or she applies
for charity care or a discount payment program, that neither
application precludes eligibility for the other program.
(3) Existing law requires a hospital or an emergency physician to
have a written policy defining standards and practices for the
collection of debt, and a written agreement from any agency that
collects debt that it will adhere to the standards and practices.
This bill would require the affiliate, subsidiary, or external
collection agency that is collecting hospital or emergency physician
receivables to comply with the definition and application of a
reasonable payment plan, as defined.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 127400 of the Health and Safety Code is amended
to read:
127400. As used in this article, the following terms have the
following meanings:
(a) "Allowance for financially qualified patient" means, with
respect to services rendered to a financially qualified patient, an
allowance that is applied after the hospital's charges are imposed on
the patient, due to the patient's determined financial inability to
pay the charges.
(b) "Federal poverty level" means the poverty guidelines updated
periodically in the Federal Register by the United States Department
of Health and Human Services under authority of subsection (2) of
Section 9902 of Title 42 of the United States Code.
(c) "Financially qualified patient" means a patient who is both of
the following:
(1) A patient who is a self-pay patient, as defined in subdivision
(f) , or a patient with high medical costs, as defined in
subdivision (g).
(2) A patient who has a family income that does not exceed 350
percent of the federal poverty level.
(d) "Hospital" means a facility that is required to be licensed
under subdivision (a), (b), or (f) of Section 1250, except a facility
operated by the State Department of State Hospitals or the
Department of Corrections and Rehabilitation.
(e) "Office" means the Office of Statewide Health Planning and
Development.
(f) "Self-pay patient" means a patient who does not have
third-party coverage from a health insurer, health care service plan,
Medicare, or Medicaid, and whose injury is not a compensable injury
for purposes of workers' compensation, automobile insurance, or other
insurance as determined and documented by the hospital. Self-pay
patients may include charity care patients.
(g) "A patient with high medical costs" means a person whose
family income does not exceed 350 percent of the federal poverty
level, as defined in subdivision (b) , if that individual
does not receive a discounted rate from the hospital as a result of
his or her third-party coverage . For these purposes, "high
medical costs" means any of the following:
(1) Annual out-of-pocket costs incurred by the individual at the
hospital that exceed 10 percent of the patient's family income in the
prior 12 months.
(2) Annual out-of-pocket expenses that exceed 10 percent of the
patient's family income, if the patient provides documentation of the
patient's medical expenses paid by the patient or the patient's
family in the prior 12 months.
(3) A lower level determined by the hospital in accordance with
the hospital's charity care policy.
(h) "Patient's family" means the following:
(1) For persons 18 years of age and older, spouse, domestic
partner, as defined in Section 297 of the Family Code, and dependent
children under 21 years of age, whether living at home or not.
(2) For persons under 18 years of age, parent, caretaker
relatives, and other children under 21 years of age of the parent or
caretaker relative.
(i) "Reasonable payment plan" means monthly payments that are not
more than 5 percent of a patient's family income for a month,
excluding deductions for essential living expenses.
SEC. 2. Section 127420 of the Health and Safety Code is amended to
read:
127420. (a) Each hospital shall make all reasonable efforts to
obtain from the patient or his or her representative information
about whether private or public health insurance or sponsorship may
fully or partially cover the charges for care rendered by the
hospital to a patient, including, but not limited to, any of the
following:
(1) Private health insurance , including coverage offered
through the California Health Benefit Exchange .
(2) Medicare.
(3) The Medi-Cal program, the Healthy Families Program, the
California Childrens' Children's
Services Program, or other state-funded programs designed to provide
health coverage.
(b) If a hospital bills a patient who has not provided proof of
coverage by a third party at the time the care is provided or upon
discharge, as a part of that billing, the hospital shall provide the
patient with a clear and conspicuous notice that includes all of the
following:
(1) A statement of charges for services rendered by the hospital.
(2) A request that the patient inform the hospital if the patient
has health insurance coverage, Medicare, Healthy Families, Medi-Cal,
or other coverage.
(3) A statement that , if the consumer does not have
health insurance coverage, the consumer may be eligible for Medicare,
Healthy Families, Medi-Cal, coverage offered through the
California Health Benefit Exchange, California
Childrens' Children's Services Program,
other state- or county-funded health coverage, or charity care.
(4) A statement indicating how patients may obtain applications
for the Medi-Cal program and the Healthy Families Program ,
coverage offered through the California Health Benefit Exchange, or
other state- or county-funded health coverage programs and that
the hospital will provide these applications. The hospital
shall also provide patients with a referral to a local consumer
assistance center housed at legal services offices. If the
patient does not indicate coverage by a third-party payer specified
in subdivision (a), or requests a discounted price or charity care
then the hospital shall provide an application for the Medi-Cal
program, the Healthy Families Program or other governmental
program to the patient state- or county-funded health
coverage programs . This application shall be provided prior to
discharge if the patient has been admitted or to patients receiving
emergency or outpatient care.
(5) Information regarding the financially qualified patient and
charity care application, including the following:
(A) A statement that indicates that if the patient lacks, or has
inadequate, insurance, and meets certain low- and moderate-income
requirements, the patient may qualify for discounted payment or
charity care.
(B) The name and telephone number of a hospital employee or office
from whom or which the patient may obtain information about the
hospital's discount payment and charity care policies, and how to
apply for that assistance.
(C) If a patient applies, or has a pending application, for
another health coverage program at the same time that he or she
applies for a hospital charity care or discount payment program,
neither application shall preclude eligibility for the other program.
SEC. 3. Section 127425 of the Health and Safety Code is amended to
read:
127425. (a) Each hospital shall have a written policy about when
and under whose authority patient debt is advanced for collection,
whether the collection activity is conducted by the hospital, an
affiliate or subsidiary of the hospital, or by an external collection
agency.
(b) Each hospital shall establish a written policy defining
standards and practices for the collection of debt, and shall obtain
a written agreement from any agency that collects hospital
receivables that it will adhere to the hospital's standards and scope
of practices. This agreement shall require the affiliate,
subsidiary, or external collection agency of the hospital that
collects the debt to comply with the hospital's definition and
application of a reasonable payment plan, as defined in subdivision
(i) of Section 127400. The policy shall not conflict with other
applicable laws and shall not be construed to create a joint venture
between the hospital and the external entity, or otherwise to allow
hospital governance of an external entity that collects hospital
receivables. In determining the amount of a debt a hospital may seek
to recover from patients who are eligible under the hospital's
charity care policy or discount payment policy, the hospital may
consider only income and monetary assets as limited by Section
127405.
(c) At time of billing, each hospital shall provide a written
summary consistent with Section 127410, which includes the same
information concerning services and charges provided to all other
patients who receive care at the hospital.
(d) For a patient that lacks coverage, or for a patient that
provides information that he or she may be a patient with high
medical costs, as defined in this article, a hospital, any assignee
of the hospital, or other owner of the patient debt, including a
collection agency, shall not report adverse information to a consumer
credit reporting agency or commence civil action against the patient
for nonpayment at any time prior to 150 days after initial billing.
(e) If a patient is attempting to qualify for eligibility under
the hospital's charity care or discount payment policy and is
attempting in good faith to settle an outstanding bill with the
hospital by negotiating a reasonable payment plan or by making
regular partial payments of a reasonable amount, the hospital shall
not send the unpaid bill to any collection agency or other assignee,
unless that entity has agreed to comply with this article.
(f) (1) The hospital or other assignee which is an affiliate or
subsidiary of the hospital shall not, in dealing with patients
eligible under the hospital's charity care or discount payment
policies, use wage garnishments or liens on primary residences as a
means of collecting unpaid hospital bills.
(2) A collection agency or other assignee that is not a subsidiary
or affiliate of the hospital shall not, in dealing with any patient
under the hospital's charity care or discount payment policies, use
as a means of collecting unpaid hospital bills, any of the following:
(A) A wage garnishment, except by order of the court upon noticed
motion, supported by a declaration filed by the movant identifying
the basis for which it believes that the patient has the ability to
make payments on the judgment under the wage garnishment, which the
court shall consider in light of the size of the judgment and
additional information provided by the patient prior to, or at, the
hearing concerning the patient's ability to pay, including
information about probable future medical expenses based on the
current condition of the patient and other obligations of the
patient.
(B) Notice or conduct a sale of the patient's primary residence
during the life of the patient or his or her spouse, or during the
period a child of the patient is a minor, or a child of the patient
who has attained the age of majority is unable to take care of
himself or herself and resides in the dwelling as his or her primary
residence. In the event a person protected by this paragraph owns
more than one dwelling, the primary residence shall be the dwelling
that is the patient's current homestead, as defined in Section
704.710 of the Code of Civil Procedure or was the patient's homestead
at the time of the death of a person other than the patient who is
asserting the protections of this paragraph.
(3) This requirement does not preclude a hospital, collection
agency, or other assignee from pursuing reimbursement and any
enforcement remedy or remedies from third-party liability
settlements, tortfeasors, or other legally responsible parties.
(g) Any extended Extended payment
plans offered by a hospital to assist patients eligible under the
hospital's charity care policy, discount payment policy, or any other
policy adopted by the hospital for assisting low-income patients
with no insurance or high medical costs in settling outstanding past
due hospital bills, shall be interest free. The hospital extended
payment plan may be declared no longer operative after the patient's
failure to make all consecutive payments due during a 90-day period.
Before declaring the hospital extended payment plan no longer
operative, the hospital, collection agency, or assignee shall make a
reasonable attempt to contact the patient by phone and, to give
notice in writing, that the extended payment plan may become
inoperative, and of the opportunity to renegotiate the extended
payment plan. Prior to the hospital extended payment plan being
declared inoperative, the hospital, collection agency, or assignee
shall attempt to renegotiate the terms of the defaulted extended
payment plan, if requested by the patient. The hospital, collection
agency, or assignee shall not report adverse information to a
consumer credit reporting agency or commence a civil action against
the patient or responsible party for nonpayment prior to the time the
extended payment plan is declared to be no longer operative. For
purposes of this section, the notice and phone call to the patient
may be made to the last known phone number and address of the
patient.
(h) Nothing in this section shall be construed to diminish or
eliminate any protections consumers have under existing federal and
state debt collection laws, or any other consumer protections
available under state or federal law. If the patient fails to make
all consecutive payments for 90 days and fails to renegotiate a
payment plan, this subdivision does not limit or alter the obligation
of the patient to make payments on the obligation owing to the
hospital pursuant to any contract or applicable statute from the date
that the extended payment plan is declared no longer operative, as
set forth in subdivision (g).
SEC. 4. Section 127450 of the Health and Safety Code is amended to
read:
127450. As used in this article, the following terms have the
following meanings:
(a) "Allowance for financially qualified patient" means, with
respect to emergency care rendered to a financially qualified
patient, an allowance that is applied after the emergency physician's
charges are imposed on the patient, due to the patient's determined
financial inability to pay the charges.
(b) "Emergency care" means emergency medical services and care, as
defined in Section 1317.1, that is provided by an emergency
physician in the emergency department of a hospital.
(c) "Emergency physician" means a physician and surgeon licensed
pursuant to Chapter 2 (commencing with Section 2000) of the Business
and Professions Code who is credentialed by a hospital and either
employed or contracted by the hospital to provide emergency medical
services in the emergency department of the hospital, except that an
"emergency physician" shall not include a physician specialist who is
called into the emergency department of a hospital or who is on
staff or has privileges at the hospital outside of the emergency
department.
(d) "Federal poverty level" means the poverty guidelines updated
periodically in the Federal Register by the United States Department
of Health and Human Services under authority of subsection (2) of
Section 9902 of Title 42 of the United States Code.
(e) "Financially qualified patient" means a patient who is both of
the following:
(1) A patient who is a self-pay patient or a patient with high
medical costs.
(2) A patient who has a family income that does not exceed 350
percent of the federal poverty level.
(f) "Hospital" means a facility that is required to be licensed
under subdivision (a) of Section 1250, except a facility operated by
the State Department of State Hospitals or the Department of
Corrections and Rehabilitation.
(g) "Office" means the Office of Statewide Health Planning and
Development.
(h) "Self-pay patient" means a patient who does not have
third-party coverage from a health insurer, health care service plan,
Medicare, or Medicaid, and whose injury is not a compensable injury
for purposes of workers' compensation, automobile insurance, or other
insurance as determined and documented by the emergency physician.
Self-pay patients may include charity care patients.
(i) "A patient with high medical costs" means a person whose
family income does not exceed 350 percent of the federal poverty
level if that individual does not receive a discounted rate
from the emergency physician as a result of his or her third-party
coverage . For these purposes, "high medical costs" means
any of the following:
(1) Annual out-of-pocket costs incurred by the individual at the
hospital that provided emergency care that exceed 10 percent of the
patient's family income in the prior 12 months.
(2) Annual out-of-pocket expenses that exceed 10 percent of the
patient's family income, if the patient provides documentation of the
patient's medical expenses paid by the patient or the patient's
family in the prior 12 months. The emergency physician may waive the
request for documentation.
(3) A lower level determined by the emergency physician in
accordance with the emergency physician's discounted payment policy.
(j) "Patient's family" means the following:
(1) For persons 18 years of age and older, spouse, domestic
partner, as defined in Section 297 of the Family Code, and dependent
children under 21 years of age, whether living at home or not.
(2) For persons under 18 years of age, parent, caretaker
relatives, and other children under 21 years of age of the parent or
caretaker relative.
(k) "Reasonable payment plan" means monthly payments that are not
more than 5 percent of a patient's family income for a month,
excluding deductions for essential living expenses.
SEC. 5. Section 127454 of the Health and Safety Code is amended to
read:
127454. (a) Each emergency physician shall make all reasonable
efforts to obtain from the patient, or his or her representative,
information about whether private or public health insurance or
sponsorship may fully or partially cover the charges for emergency
care rendered by the emergency physician to a patient, including, but
not limited to, any of the following:
(1) Private health insurance , including coverage offered
through the California Health Benefit Exchange .
(2) Medicare.
(3) The Medi-Cal program, the Healthy Families Program, the
California Children's Services Program, or other publicly
funded state- or county-funded programs designed
to provide comprehensive health coverage.
(b) If the emergency physician or his or her representative bills
a patient who has not provided proof of coverage by a third party at
the time the care is provided or upon discharge, as a part of that
billing, the emergency physician shall provide the patient with a
clear and conspicuous notice that includes all of the following:
(1) A statement of charges for services rendered by the emergency
physician.
(2) A request that the patient inform the emergency physician if
the patient has health insurance coverage, Medicare, Healthy
Families, Medi-Cal, or other coverage.
(3) A statement that if the consumer does not have health
insurance coverage, the consumer may be eligible for Medicare,
Healthy Families, Medi-Cal, coverage through the California
Health Benefit Exchange, California Children's Services
Program, other state- or county-funded health coverage, or
discounted payment care.
(4) Information regarding the financially qualified patient and
discounted payment application, including the following:
(A) A statement that indicates that if the patient lacks, or has
inadequate, insurance, and meets certain low-and moderate-income
requirements, the patient may qualify for discounted payment.
That statement shall also provide patients with a referral
to a local consumer assistance center housed at legal services
offices.
(B) The name and telephone number of the emergency physician's
employee or office from whom or which the patient may obtain
information about the emergency physician's discount payment policy,
and how to apply for that assistance.
(C) If a patient applies, or has a pending application for,
another health coverage program at the same time that he or she
applies for a hospital charity care or discount payment program,
neither application shall preclude eligibility for the other program.
(c) (1) In addition to the statement of the charges, if the
emergency physician's uses the following notice in any billing, that
emergency physician shall be deemed to have complied with the notice
requirements of this section: "If you are uninsured or have high
medical costs, please contact ____ (name of person responsible for
discount payment policy) at ____ (area code and phone number) for
information on discounts and programs for which you may be eligible,
including the Medi-Cal program. If you have coverage, please tell us
so that we may bill your plan."
(2) If the emergency physician or the assignee of the emergency
physician lacks the capacity to provide the notice specified in
paragraph (1), the emergency physician or his or her assignee shall
be deemed to have complied with the notice requirements of this
section if the information required under this section is provided
upon request and if the following is printed on the bill in 14-point
bold type: "If uninsured or high medical bill, call re: discount."
SEC. 6. Section 127455 of the Health and Safety Code is amended to
read:
127455. (a) Each emergency physician shall have a written policy
about when and under whose authority patient debt is advanced for
collection.
(b) Each emergency physician shall establish a written policy
defining standards and practices for the collection of debt, and
shall obtain a written agreement from any agency that collects
emergency physician receivables that it will adhere to the emergency
physician's standards and scope of practice. This agreement
shall require the affiliate, subsidiary, or external collection
agency of the physician that collects the debt to comply with the
physician's definition and application of a reasonable payment plan,
as defined in subdivision (k) of Section 127450. The
policy shall not conflict with other applicable laws and shall not
be construed to create a joint venture between the emergency
physician and the external entity, or otherwise to allow physician
and surgeon governance of an external entity that collects physician
and surgeon receivables. In determining the amount of a debt the
emergency physician may seek to recover from patients who are
eligible under the emergency physician's charity care policy or
discount payment policy, the emergency physician may consider only
income and monetary assets as limited by Section 127452.
(c) For a patient that lacks coverage, or for a patient that
provides information that he or she may be a patient with high
medical costs, the emergency physician, any
an assignee of the emergency physician, or other owner of the
patient debt, including a collection agency, shall not report adverse
information to a consumer credit reporting agency or commence civil
action against the patient for nonpayment at any time prior to 150
days after initial billing.
(d) If a patient is attempting to qualify for eligibility under
the emergency physician's discount payment policy and is attempting
in good faith to settle an outstanding bill with the physician and
surgeon by negotiating a reasonable payment plan or by making regular
partial payments of a reasonable amount, the emergency physician or
his or her assignee, including a collection agency, shall not report
adverse information to a consumer credit agency or commence a civil
action unless that entity has agreed to comply with this article.
(e) (1) The emergency physician or other assignee shall not, in
dealing with patients eligible under the emergency physician's
discount payment policies, use wage garnishments or liens on primary
residences as a means of collecting unpaid emergency physician bills.
(2) A collection agency or other assignee shall not, in dealing
with any patient under the emergency physician's discount payment
policy, use as a means of collecting unpaid emergency physician
bills, any of the following:
(A) A wage garnishment, except by order of the court upon noticed
motion, supported by a declaration filed by the movant identifying
the basis for its belief that the patient has the ability to make
payments on the judgment under the wage garnishment, that the court
shall consider in light of the size of the judgment and additional
information provided by the patient prior to, or at, the hearing
concerning the patient's ability to pay, including information about
probable future medical expenses based on the current condition of
the patient and other obligations of the patient.
(B) Notice or conduct a sale of the patient's primary residence
during the life of the patient or his or her spouse, or during the
period a child of the patient is a minor, or a child of the patient
who has attained the age of majority is unable to take care of
himself or herself and resides in the dwelling as his or her primary
residence. In the event a person protected by this paragraph owns
more than one dwelling, the primary residence shall be the dwelling
that is the patient's current homestead, as defined in Section
704.710 of the Code of Civil Procedure or was the patient's homestead
at the time of the death of a person other than the patient who is
asserting the protections of this paragraph.
(3) This requirement does not preclude the emergency physician,
collection agency, or other assignee from pursuing reimbursement and
any enforcement remedy or remedies from third-party liability
settlements, tortfeasors, or other legally responsible parties.
(f) Any extended Extended payment
plans offered by an emergency physician to assist patients eligible
under the emergency physician's discount payment policy or any other
policy adopted by the emergency physician for assisting low-income
patients with no insurance or high medical costs in settling
outstanding past due emergency physician bills, shall be interest
free. The emergency physician's extended payment plan may be declared
no longer operative after the patient's failure to make all
consecutive payments due during a 90-day period. Before declaring the
emergency physician's extended payment plan no longer operative, the
emergency physician, collection agency, or assignee shall make a
reasonable attempt to contact the patient by telephone, if the
telephone number is known, and to give notice in writing that the
extended payment plan may become inoperative, and of the opportunity
to renegotiate the extended payment plan. Prior to the emergency
physician's extended payment plan being declared inoperative, the
emergency physician, collection agency, or assignee shall attempt
to renegotiate
the terms of the defaulted extended payment plan, if requested by the
patient. The emergency physician, collection agency, or assignee
shall not report adverse information to a consumer credit reporting
agency or commence a civil action against the patient or responsible
party for nonpayment prior to the time the extended payment plan is
declared to be no longer operative. For purposes of this section, the
notice and telephone call to the patient may be made to the last
known telephone number and address of the patient.
(g) Nothing in this section shall be construed to diminish or
eliminate any protections consumers have under existing federal and
state debt collection laws, or any other consumer protections
available under state or federal law. If the patient fails to make
all consecutive payments for 90 days and fails to renegotiate a
payment plan, this subdivision does not limit or alter the obligation
of the patient to make payments on the obligation owing to the
emergency physician pursuant to any contract or applicable statute
from the date that the extended payment plan is declared no longer
operative, as set forth in subdivision (f).