BILL ANALYSIS �
SB 1276
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SENATE THIRD READING
SB 1276 (Ed Hernandez)
As Amended June 26, 2014
Majority vote
SENATE VOTE :23-10
HEALTH 14-4
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|Ayes:|Pan, Ammiano, Bonilla, | | |
| |Bonta, Chesbro, Gomez, | | |
| |Gonzalez, | | |
| |Roger Hern�ndez, | | |
| |Lowenthal, Nazarian, | | |
| |Waldron, Ridley-Thomas, | | |
| |Rodriguez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Maienschein, Ch�vez, | | |
| |Mansoor, Wagner | | |
| | | | |
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SUMMARY : Defines a "reasonable payment plan" for purposes of
hospital and emergency physician charity care programs, as
monthly payments that do not exceed 10% of a patient's income
after deducting essential living expenses, and expands
eligibility for the hospital charity care and discount payment
programs to patients with insurance, when the out-of-pocket
expenses exceed 10% of the patient's income. Specifically, this
bill :
1)Requires, if a hospital and patient cannot agree on a payment
plan, that the hospital use that definition to create a
reasonable payment plan.
2)Revises the notice that hospitals and emergency physicians are
required to provide patients under their charity care programs
to inform patients that they may be eligible for various
public insurance programs by including references to the
California Health Benefit Exchange (Exchange) and other state-
or county-funded health coverage programs.
3)Requires an affiliate, subsidiary, or external collection
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agency of a hospital or emergency physician that collects debt
to comply with the hospital's definition and application of a
reasonable payment plan.
4)Requires hospitals and emergency physicians, in addition to
the existing notice requirements under charity care programs,
to also provide patients with a referral to a local consumer
assistance center housed at legal services offices.
5)Specifies that 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 precludes
eligibility for the other program.
EXISTING LAW requires hospitals and emergency physicians to
maintain an understandable written policy regarding discount
payment for financially qualified patients, as well as an
understandable written charity care policy.
FISCAL EFFECT : None
COMMENTS : According to the author, with the passage of the
federal Patient Protection and Affordable Care Act, the number
of people without insurance has been significantly reduced, and
hopefully fewer people will need the protections of the charity
care and discounted payment programs. The author states that in
spite of this, many of the newly insured have very
high-deductible plans, and a single trip to the emergency room,
even for someone with insurance, can lead to bills that exceed
10% of their family income and can cause significant economic
hardship and this bill will ensure these individuals qualify for
an extended payment program. Finally, the author states, there
is no definition of a reasonable payment plan and there have
been reports, particularly when collection agencies are
involved, of demands for unaffordable payment amounts.
As the author noted above, many more Californians now have
health insurance, however, many of those people are responsible
for a high share of cost. Data from Covered California
enrollment numbers show that between October 1, 2013, and March
13, 2014, of subsidy eligible enrollees at less than 400% of the
federal poverty level (FPL) indicate that 91% (809,082) have
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enrolled in a Silver or Bronze plan, 5% (61,505) enrolled in a
Gold plan, and only 4% (47,746) enrolled in the Platinum plan.
For most Silver, Bronze, and Gold plans the annual individual
out of pocket maximum is $6,350 and annual family out of pocket
maximum is $12,700 unless the individual has co-insurance and
income less than 250% of the FPL.
The Western Center on Law and Poverty (WCLP) is the sponsor of
this bill and writes that, even with the current protections in
place for consumers, there will still be cases where patients
incur high costs and need reasonable payment options for their
hospital or emergency room bills. The WCLP cites the example of
a pregnant woman who is married and has a joint family income
with her spouse of $43,257 (275% FPL) and chooses a Silver Copay
plan in the Exchange. For her birth and delivery, she would pay
20% of whatever the delivery and inpatient services are billed
at, including the hospital and physician fees. The WCLP notes
that, although her annual out of pocket maximum payment is
$12,700, a complicated birth and delivery could put her very
close to that annual maximum, nearly 30% of her total annual
income, and a payment plan of 10% a month would help her
significantly in continuing to pay off her bill and provide for
her family.
The California Hospital Association supports this bill stating,
hospitals have recognized that an individual's share of the
costs of coverage may be an impediment to obtaining needed
health care services, even with a federal subsidy and this bill
would provide qualified individuals with options for financial
relief, while continuing to provide hospitals with the needed
flexibility to design charity care and discount payment policies
that meet the unique needs of the populations they serve.
There is no opposition to this bill.
Analysis Prepared by : Lara Flynn / HEALTH / (916) 319-2097
FN: 0004098
SB 1276
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