Bill Text: CA AB2297 | 2023-2024 | Regular Session | Amended
Bill Title: Hospital and Emergency Physician Fair Pricing Policies.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Enrolled) 2024-08-29 - Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 60. Noes 0.). [AB2297 Detail]
Download: California-2023-AB2297-Amended.html
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Amended
IN
Senate
August 23, 2024 |
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Amended
IN
Senate
August 05, 2024 |
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Amended
IN
Senate
June 17, 2024 |
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Amended
IN
Assembly
April 11, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2297
| Introduced by Assembly Member Friedman (Coauthors: Assembly Members Kalra, McKinnor, and Wood) |
February 12, 2024 |
An act to amend Sections 127400, 127401, 127405, 127425, 127435, 127436, 127440, 127450, 127452, and 127455 of, and to add Section 127400.5 to, the Health and Safety Code, relating to health care.
LEGISLATIVE COUNSEL'S DIGEST
AB 2297, as amended, Friedman.
Hospital and Emergency Physician Fair Pricing Policies.
Existing law requires a hospital to maintain a written charity care policy and a discount payment policy for uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level. Existing law requires the written policy regarding discount payments to also include a statement that an emergency physician who provides emergency medical services in a hospital that provides emergency care is also required by law to provide discounts to uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level. Existing law authorizes an emergency physician to choose to grant eligibility for a discount payment policy to patients with incomes over 350% of the federal poverty level. Existing law defines “high medical costs” for these purposes to mean, among other things, specified annual out-of-pocket costs
incurred by the individual at the hospital or a hospital that provided emergency care.
This bill would authorize an emergency physician to choose to grant eligibility for a discount payment policy to patients with incomes over 400% of the federal poverty level. The bill would also clarify that out-of-pocket costs for the above-described definition of “high medical costs” means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing.
Existing law requires a hospital’s discount payment policy to clearly state the eligibility criteria based upon income, and authorizes a hospital to consider the income and monetary assets of the patient or the patient’s family, as defined, in determining eligibility under its charity care policy.
This bill would prohibit a hospital from considering the monetary
assets of the patient in determining eligibility for both the charity care and the discount payment policies, but would authorize the hospital to consider the availability of a patient’s health savings account held by the patient or the patient’s family, as specified. The bill would revise the definition of patient’s family, as specified. The bill would instead require that the eligibility for charity care or discounted payments be determined at any time the hospital is in receipt of of, among other things, recent pay stubs or income tax returns. The bill would prohibit a hospital or an emergency physician from imposing time limits for applying for charity care or discounted payments, and would prohibit a hospital or emergency physician from denying eligibility based on the timing of a patient’s application. The bill
would authorize a hospital or emergency physician to waive or reduce Medi-Cal and Medicare cost-sharing amounts as part of its charity care program or discount payment program. program, as specified.
Existing law requires a hospital or an emergency physician to establish a written policy defining standards and practices for the collection of debt. Existing law authorizes a hospital or emergency physician to consider only income and monetary assets, as specified, in determining the amount of debt a hospital or emergency physician may seek to recover from patients who are eligible under the hospital’s or emergency physician’s charity care or discount payment policy.
This bill would eliminate the authorization for a hospital or an
emergency physician to consider monetary assets in determining the amount of debt the hospital or emergency physician may seek to recover from patients who are eligible under these policies.
Existing law prohibits a hospital, in dealing with patients eligible under the hospital’s charity care or discount payment policies, or emergency physician, in dealing with patients eligible under the emergency physician’s discount payment policies, from using liens on primary residences as a means of collecting unpaid hospital or emergency physician bills. Existing law prohibits a collection agency, in dealing with a patient under a hospital’s charity care or discount payment policies or in dealing with a patient under the emergency physician’s discount payment policy, from conducting a sale of a patient’s primary residence, as specified, as a means of collecting unpaid hospital or emergency physician bills.
This bill would prohibit a
hospital or emergency physician from using liens on any real property as a means of collecting unpaid hospital or emergency physician bills, and would prohibit a collection agency from conducting a sale of any real property owned, in part or completely, by a patient or placing a lien on any real property as a means of collecting unpaid hospital or emergency physician bills.
The bill would define “charity care” and “discount payment” for the purposes described above.
Existing law requires a hospital to reimburse a patient any amount actually paid in excess of the amount due, including interest. Under existing law, a hospital is not required to reimburse the patient or pay interest if the amount due is less than $5.
This bill would authorize the hospital to reimburse the patient, but is not required to do so, if the hospital or the department determines that a patient qualified for
financial assistance at the time the patient was first billed and it has been 7 5 years or more since the last payment to the hospital, hospital assignee, or debt buyer or the patient debt was sold to a debt buyer in accordance with state law in effect at the time the debt was sold, if sold before January 1, 2022.
Existing law requires the State Department of Public Health to be responsible for the enforcement of the hospital pricing policy provisions for violations occurring prior to January 1, 2024. Existing law requires the Department of Health Care Access and Information to be responsible for the enforcement of these provisions for violations occurring on or after January 1, 2024.
This bill would require the Department of Health
Care Access and Information to also have enforcement authority to assess penalties for violations that occurred on or after January 1, 2022, that arise out of the same investigation for investigations involving hospital actions occurring on or after January 1, 2024.
2024, as specified.
This bill would incorporate additional changes to Section 127425 of the Health and Safety Code proposed by Senate Bill 1061, to be operative only if this bill and Senate Bill 1061 are enacted and this bill is enacted last.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
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 400 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, the State Department of Developmental Services, or the Department of Corrections and Rehabilitation.
(e) “Department” means the Department of Health Care Access and Information.
(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 400 percent of the federal poverty level, as defined in subdivision (b). 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 the lesser of 10 percent of the patient’s current family income or family income in the prior 12 months. Out-of-pocket costs means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing.
(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. Out-of-pocket expenses means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing.
(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, or any age if disabled, consistent with Section 1614(a) of Part A of Title XVI of the Social Security Act, whether living at home or not.
(2) For persons under 18 years of age or for a dependent child 18 to 20 years of age, inclusive, parent, caretaker relatives, and parent’s or caretaker relatives’ other dependent children under 21 years of age, or any age if disabled, consistent with Section 1614(a) of Part A of Title XVI of the Social Security Act.
(i) “Reasonable payment plan” means monthly payments that are not more than 10 percent of a patient’s family income for a month, excluding deductions for essential living expenses. “Essential living expenses” means, for purposes of this subdivision, expenses for any of the following: rent or house payment and maintenance, food and household supplies, utilities and telephone, clothing, medical and dental payments, insurance, school or child care, child or spousal support, transportation and auto expenses, including insurance, gas, and repairs, installment payments, laundry and cleaning, and other extraordinary expenses.
(j) “Guarantor” means a person who has legal financial responsibility for the patient’s health care
services.
SEC. 2.
Section 127400.5 is added to the Health and Safety Code, to read:127400.5.
For purposes of this chapter, the following terms have the following meanings:(a) “Charity care” means free care.
(b) “Discounted payment” or “discount payment” means any charge for care that is reduced but not free.
SEC. 3.
Section 127401 of the Health and Safety Code is amended to read:127401.
(a) The State Department of Public Health shall be responsible for the enforcement of the provisions of this article for violations occurring prior to January 1, 2024. The Department of Health Care Access and Information shall be responsible for the enforcement of the provisions of this article for violations occurring on or after January 1, 2024.(b) For investigations involving hospital actions required by this article occurring on or after January 1, 2024, the Department of Health Care Access and Information shall also have enforcement authority to assess penalties for violations that occurred on or after January 1, 2022, that arise out of the same investigation.
The State Department of Public Health and the Department of Health Care Access and Information shall not impose a penalty for any violation for which the other department has imposed a penalty. Any action brought by the Director of the Department of Health Care Access and Information against a hospital shall not abate by reason of a sale or other transfer of ownership of the hospital that is a party to the action except with the express written consent of the director.
SEC. 4.
Section 127405 of the Health and Safety Code is amended to read:127405.
(a) (1) (A) Each hospital shall maintain an understandable written policy regarding discount payments for financially qualified patients as well as an understandable written charity care policy. Uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level, as defined in subdivision (b) of Section 127400, shall be eligible for participation under a hospital’s charity care policy or discount payment policy. Notwithstanding any other provision of this article, a hospital may choose to grant eligibility for its discount payment policy or charity care policies to patients with incomes over 400 percent of the federal poverty level. Both the charity care policy and the discount payment policy shall state the process used by the hospital to determine whether a patient is eligible for charity care or discounted payment. In the event of a dispute, a patient may seek review from the business manager, chief financial officer, or other appropriate manager as designated in the charity care policy and the discount payment policy.(B) The written policy regarding discount payments shall also include a statement that an emergency physician, as defined in Section 127450, who provides emergency medical services in a hospital that provides emergency care is also required by law to provide discounts to uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level. This statement shall not be construed to impose any additional responsibilities upon the
hospital.
(2) Rural hospitals, as defined in Section 124840, may establish eligibility levels for financial assistance and charity care at less than 400 percent of the federal poverty level as appropriate to maintain their financial and operational integrity.
(b) (1) A hospital’s discount payment policy and charity care policy shall clearly state eligibility criteria based upon income consistent with the application of the federal poverty level. In determining eligibility under its discount payment policy or charity care policy, a hospital shall not consider the monetary assets of the patient. A
(2) A hospital shall not require a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided, discount payment.
When screening for eligibility for discount payment, a hospital may require the patient to participate in a screening for Medi-Cal eligibility.
(c) A discount payment policy shall include an extended payment plan to allow payment of the discounted price over time. The policy shall provide that the hospital and the patient shall negotiate the terms of the payment plan, and take into consideration the patient’s family income and essential living expenses. A hospital may also consider the availability of a patient’s health savings account held by the patient or the patient’s family. If the hospital and the patient cannot agree on the payment plan, the hospital shall use the formula described in subdivision (i) of Section 127400 to create a reasonable payment plan.
(d) (1) A hospital shall limit expected payment for services it provides to a patient at or below 400 percent of the federal poverty level, as defined in subdivision (b) of Section 127400, eligible under its discount payment policy to the amount of payment the hospital would expect, in good faith, to receive for providing services from Medicare or Medi-Cal, whichever is greater. If the hospital provides a service for which there is no established payment by Medicare or Medi-Cal, the hospital shall establish an appropriate discounted payment. Patients eligible under this article shall not be required to undergo an independent dispute resolution process.
(2) The hospital may require a patient or guarantor to pay the hospital the entire amount of any reimbursement sent directly to the patient or guarantor by a third-party payer for that hospital’s services.
(3) If the patient receives a legal settlement, judgment, or award under a liable third party action that includes payment for health care services or medical care related to the injury, the hospital may require the patient or guarantor to reimburse the hospital for the related health care services rendered up to the amount reasonably awarded for that purpose.
(e) A patient, or patient’s legal representative, who requests a discounted payment, charity care, or other assistance in meeting their financial obligation to the hospital shall make every reasonable effort to provide the hospital with documentation of income
and health benefits coverage. If the person requests charity care or a discounted payment and fails to provide information that is reasonable and necessary for the hospital to make a determination, the hospital may consider that failure in making its determination.
(1) For purposes of determining eligibility for discounted
payment or charity care, documentation of income shall be limited to recent pay stubs or income tax returns. The hospital may accept other forms of documentation of income but shall not require those other forms. If a patient does not submit an application or documentation of income, a hospital may presumptively determine that a patient is eligible for charity care or discounted payment based on information other than that provided by the patient or based on a prior eligibility determination.
(2) Information obtained pursuant to paragraph (1) shall not be used for collections activities. This paragraph does not prohibit the use of information obtained by the hospital, collection agency, or assignee independently of the eligibility process for charity care or discounted
payment.
(3) Eligibility for discounted payments or charity care shall be determined at any time the hospital is in receipt of information specified in paragraph (1). A hospital shall not impose time limits for applying for charity care or discounted
payments, nor deny eligibility based on the timing of a patient’s application.
(f) (1) A hospital may waive or reduce Medi-Cal and Medicare cost-sharing amounts as part of its charity care program or discount payment program.
(2) In waiving or reducing Medicare cost-sharing amounts, the hospital may consider the patient’s monetary assets to the extent required for the hospital to be reimbursed under the Medicare program for Medicare bad debt without seeking to collect cost-sharing amounts from the patient as required by federal law, including, but not limited to, Section 413.89 of Title 42 of the Code of Federal
Regulations. Monetary assets include only assets that are convertible to cash and do not include retirement or deferred compensation plans qualified under the Internal Revenue Code, nonqualified deferred compensation plans, or assets below the maximum community spouse resource allowance under Section 1396r–5(d) of Title 42 of the United States Code.
SEC. 5.
Section 127425 of the Health and Safety Code is amended to read:127425.
(a) A hospital shall not sell patient debt to a debt buyer, as defined in Section 1788.50 of the Civil Code, unless all of the following apply:(1) The hospital has found the patient ineligible for financial assistance or the patient has not responded to any attempts to bill or offer financial assistance for 180 days.
(2) The hospital includes contractual language in the sales agreement in which the debt buyer agrees to return, and the hospital agrees to accept, any account in which the balance has been determined to be incorrect due to the availability of a third-party payer, including a health plan or government health
coverage program, or the patient is eligible for charity care or financial
assistance.
(3) The debt buyer agrees to not resell or otherwise transfer the patient debt, except to the originating hospital or a tax-exempt organization described in Section 127444, or if the debt buyer is sold or merged with another entity.
(4) The debt buyer agrees not to charge interest or fees on the patient debt.
(5) The debt buyer is licensed as a debt collector by the Department of Financial Protection and Innovation.
(b) A 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, or debt buyer.
(c) A 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, debt buyer, 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 as limited by Section 127405.
(d) At time of billing, a 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.
(e) Before assigning a bill to collections, or selling patient debt to a debt buyer, a hospital shall send a patient a notice with all of the following information:
(1) The date or dates of service of the bill that is being assigned to
collections or sold.
(2) The name of the entity the bill is being assigned or sold to.
(3) A statement informing the patient how to obtain an itemized hospital bill from the hospital.
(4) The name and plan type of the health coverage for the patient on record with the hospital at the time of services or a statement that the hospital does not have that information.
(5) An application for the hospital’s charity care and financial assistance.
(6) The date or dates the patient was originally sent a notice about applying for financial assistance, the date or dates the patient was sent a financial assistance
application, and, if applicable, the date a decision on the application was made.
(f) A hospital, any assignee of the hospital, or other owner of the patient debt, including a collection agency or debt buyer, shall not report adverse information to a consumer credit reporting agency or commence civil action against the patient for nonpayment before 180 days after initial billing.
(g) 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, debt buyer, or other assignee, unless
that entity has agreed to comply with this article.
(h) (1) The hospital or other assignee that 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 any real property as a means of collecting unpaid hospital bills.
(2) A collection agency, debt buyer, 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 before 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 any real property owned, in part or completely, by the patient.
(C) Liens on any real property.
(3) This requirement does not preclude a hospital, collection agency, debt buyer,
or other assignee from pursuing reimbursement and any enforcement remedy or remedies from third-party liability settlements, tortfeasors, or other legally responsible parties.
(i) 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, debt buyer, or assignee shall make a reasonable attempt to contact the patient
by telephone and, to give notice in writing, that the extended payment plan may become inoperative, and of the opportunity to renegotiate the extended payment plan. Before the hospital extended payment plan being declared inoperative, the hospital, collection agency, debt buyer, or assignee shall attempt to renegotiate the terms of the defaulted extended payment plan, if requested by the patient. The hospital, collection agency, debt buyer, 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 before 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.
(j) This section does not 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 (i).
SEC. 5.5.
Section 127425 of the Health and Safety Code is amended to read:127425.
(a) A hospital shall not sell patient debt to a debt buyer, as defined in Section 1788.50 of the Civil Code, unless all of the following apply:(1) The hospital has found the patient ineligible for financial assistance or the patient has not responded to any attempts to bill or offer financial assistance for 180 days.
(2) The hospital includes contractual language in the sales agreement in which the debt buyer agrees to return, and the hospital agrees to accept, any account in which the balance has been determined to be incorrect due to the availability of a third-party payer, including a health plan or government health coverage program, or the patient is eligible for charity care or financial
assistance.
(3) The debt buyer agrees to not resell or otherwise transfer the patient debt, except to the originating hospital or a tax-exempt organization described in Section 127444, or if the debt buyer is sold or merged with another entity.
(4) The debt buyer agrees not to charge interest or fees on the patient debt.
(5) The debt buyer is licensed as a debt collector by the Department of Financial Protection and Innovation.
(b) A 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, or debt buyer.
(c) A 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, debt buyer, 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.
(d) At time of billing, a 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.
(e) Before assigning a bill to collections, or selling patient debt to a debt buyer, a hospital shall send a patient a notice with all of the following information:
(1) The date or dates of service of the bill that is being assigned to collections or sold.
(2) The name of the entity the bill is being assigned or sold to.
(3) A statement informing the patient how to obtain an itemized hospital bill from the
hospital.
(4) The name and plan type of the health coverage for the patient on record with the hospital at the time of services or a statement that the hospital does not have that information.
(5) An application for the hospital’s charity care and financial assistance.
(6) The date or dates the patient was originally sent a notice about applying for financial assistance, the date or dates the patient was sent a financial assistance application, and, if applicable, the date a decision on the application was made.
(f) A hospital, any assignee of the hospital, or other owner of the patient debt, including a collection agency or debt buyer, shall not report adverse information to a consumer credit reporting agency or commence civil action against the patient for nonpayment before 180 days after initial billing.
do either of the following:
(1) Report adverse information to a consumer credit reporting agency.
(2) Commence civil action against the patient for nonpayment before 180 days after initial billing.
(g) 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, debt buyer, or other assignee, unless that entity has agreed to comply with this article.
(h) (1) The hospital or other assignee that 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
any real property as a means of collecting unpaid hospital bills.
(2) A collection agency, debt buyer, 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,
before or at,
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 the patient’s 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 themselves and resides in the dwelling as their 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. any real property owned, in part or completely, by the patient.
(C) Liens on any real property.
(3) This requirement does not preclude a hospital, collection agency, debt buyer, or other assignee from pursuing reimbursement and any enforcement remedy or remedies from third-party liability settlements, tortfeasors, or other legally responsible parties.
(i) 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, debt buyer, or assignee shall make a reasonable attempt to contact the patient by telephone 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 Before the hospital extended payment plan being
declared inoperative, the hospital, collection agency, debt buyer, or assignee shall attempt to renegotiate the terms of the defaulted extended payment plan, if requested by the patient. The hospital, collection agency, debt buyer, 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 before 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.
(j) (1) A hospital shall maintain all records relating to money owed to the hospital by a patient or a patient’s guarantor for five years, including, but not limited to, all of the following:
(A) Documents related to litigation filed by the hospital.
(B) A contract and significant related records by which a hospital assigns or sells medical debt to a third party.
(C) A list, updated at least annually, of every person, including the person’s name and contact information, that meets at least one of the following criteria:
(i) The person is a debt collector to whom the hospital sold or assigned a debt that a patient of the hospital owed the hospital.
(ii) The person is retained by the hospital to pursue litigation for debts owed by patients on behalf of the hospital.
(2) Any contract entered into by a hospital related to the assignment or sale of medical debt shall require the assignee or buyer and any subsequent assignee or buyer to maintain records related to litigation for five years.
(3) For purposes of this subdivision, “debt collector” and “person” have the same meanings as defined in Section 1788.2 of the Civil Code.
(j)
(k) This section does not 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 (i).
SEC. 6.
Section 127435 of the Health and Safety Code is amended to read:127435.
(a) A hospital shall provide to the department a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, as well as a copy of its debt collection policy. The department may determine whether the information is to be provided electronically or in some other similar manner. The information shall be provided at least biennially on January 1, or when a significant change is made. If no significant change has been made by the hospital since the information was previously provided, notifying the department of the lack of change shall meet the requirements of this section. The department shall make this information available to the public on its internet website.(b) The department shall review a hospital’s policy for compliance with this article by January 1, 2023, and whenever a significant change is made and submitted to the department.
(c) A patient shall not be denied financial assistance that would be available pursuant to the policy published on the department’s internet website at the time the patient was first billed.
SEC. 7.
Section 127436 of the Health and Safety Code is amended to read:127436.
(a) Upon promulgation of regulations as required in subdivisions (b) and (c) no later than January 1, 2024, the Director of the Department of Health Care Access and Information shall impose an administrative penalty for each violation against a hospital that fails to comply with this article, unless the administrative penalty is waived or reduced by the department in the interest of fairness. For purposes of this section, multiple violations identified during the same investigation shall constitute a single violation for purposes of assessing an administrative penalty.(b) Upon receipt of a complaint by a patient that a hospital has not followed the requirements of Sections 127405
to 127435, inclusive, the director shall do all of the following:
(1) Review the patient’s eligibility for charity care or financial assistance under the hospital’s published financial assistance policy in effect at the time the patient was first billed.
(2) Review the hospital’s compliance with this article.
(3) If, after completing the actions in paragraphs (1) and (2), the director believes that the hospital may have violated this article, issue a notice to the hospital describing the alleged violation. The notice shall state all of the facts supporting the alleged violation. The hospital shall have 30 days after issuance of the notice to file a response with the director.
(4) If, after considering all of the information included in any response filed by the hospital, the director determines that a violation has occurred, assess an administrative penalty. The administrative penalty may be up to forty thousand dollars ($40,000), which amount shall be adjusted every five years to reflect the percentage change in the calendar year average, for the five-year period, of the medical care index of the Consumer Price Index, as published by the United States Bureau of Labor Statistics. The department shall promulgate regulations establishing criteria to determine the amount of an administrative penalty. The criteria shall include, at a minimum, all of the following:
(A) The actual financial harm to patients, if any.
(B) The nature, scope, and severity of the
violation, including whether the hospital’s policies, postings, and screening practices are in compliance with Sections 127405 to 127435, inclusive, or whether the violation was a mistake that resulted in a violation of those policies and practices.
(C) The facility’s history of compliance with related state and federal statutes and regulations.
(D) Factors beyond the facility’s control that restrict the facility’s ability to comply with this chapter or the rules and regulations promulgated thereunder.
(E) The demonstrated willfulness of the violation.
(F) The extent to which the facility detected the violation and took steps to immediately correct the
violation and prevent the violation from recurring.
(G) The special circumstances of small and rural hospitals, as defined in Section 124840, if that consideration is needed to protect access to quality care in those hospitals.
(5) Notify the patient of the violation and the patient’s right to reimbursement pursuant to Section 127440.
(6) Begin collection efforts for the penalty after the deadline to appeal pursuant to subdivision (c) has passed, or, if the hospital files an appeal, when all appeals have been exhausted and the department’s findings have been upheld.
(c) The department shall promulgate regulations to establish a process whereby a hospital may
appeal the director’s determination that a violation has occurred or the amount of any penalty assessed, subject to the following requirements:
(1) A hospital shall have 30 days from issuance to appeal any determination or penalty.
(2) A hospital may submit any relevant evidence during the appeal process.
(3) The department shall provide the patient who filed a complaint with timely notice of the appeal and a copy of any evidence submitted by the hospital, and offer the patient 30 days to submit a response, including any additional evidence in support of the complaint.
(4) The department shall consider all relevant evidence.
(5) The department may reduce or waive an assessment in the interest of fairness.
(6) The department may reduce or waive a penalty if a violation was due to factors beyond the hospital’s control, such as a patient failing to provide accurate information or an unauthorized person removing signage from hospital walls.
SEC. 8.
Section 127440 of the Health and Safety Code is amended to read:127440.
(a) The hospital shall reimburse the patient or patients any amount actually paid in excess of the amount due under this article, including interest. Interest owed by the hospital to the patient shall accrue at the rate set forth in Section 685.010 of the Code of Civil Procedure, beginning on the date payment by the patient is received by the hospital. However, a hospital is not required to reimburse the patient or pay interest if the amount due is less than five dollars ($5.00). The hospital shall refund the patient within 30 days.(b) The hospital may reimburse the patient, but is not required to do so, if the hospital or the department determines that a patient qualified for
financial assistance at the time the patient was first billed and either of the following has occurred:
(1) It has been seven five years or more since the last payment to the hospital, hospital assignee, or debt buyer.
(2) The patient debt was sold to a debt buyer in accordance with state law in effect at the time the debt was sold, if sold before January 1, 2022.
(c) This section does not diminish or eliminate any rights or responsibilities a hospital may have, nor any rights that a patient may have under existing federal and state laws, including, but not limited
to, 26 CFR Sec. 1.501(r)-6.
SEC. 9.
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 5 (commencing with Section 2000) of Division 2 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 400 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, the State Department of Developmental Services, or the Department of Corrections and Rehabilitation.
(g) “Department” means the Department of Health Care Access and Information.
(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 400 percent of the federal poverty level if that individual does not receive a discounted rate from the emergency physician as a result of their 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. Out-of-pocket costs means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing.
(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. Out-of-pocket expenses means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing. 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, or any age if disabled, consistent with Section 1614(a) of Part A of Title XVI of the Social Security Act, whether living at home or not.
(2) For persons under 18 years of age or for a dependent child 18 to 20 years of age, inclusive, parent, caretaker relatives, and parent’s or caretaker relatives’ other dependent children under
21 years of age, or any age if disabled, consistent with Section 1614(a) of Part A of Title XVI of the Social Security Act.
(k) “Reasonable payment formula” means monthly payments that are not more than 10 percent of a patient’s family income for a month, excluding deductions for essential living expenses. “Essential living expenses” means, for purposes of this subdivision, expenses for all of the following: rent or house payment and maintenance, food and household supplies, utilities and telephone, clothing, medical and dental payments, insurance, school or child care, child or spousal support, transportation and auto expenses, including insurance, gas, and repairs, installment payments, laundry and cleaning, and other extraordinary expenses.
SEC. 10.
Section 127452 of the Health and Safety Code is amended to read:127452.
(a) Uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level shall be eligible to apply to an emergency physician for a discount payment pursuant to a discount payment policy. Notwithstanding any other provision of this article, an emergency physician may choose to grant eligibility for a discount payment policy to patients with incomes over 400 percent of the federal poverty level.(b) An emergency physician shall limit expected payment for services provided to a patient at or below 400 percent of the federal poverty level and who is eligible under the emergency physician’s discount payment policy to an amount that is no greater
than 50 percent of the median of billed charges based on a 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 physician and surgeons 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 physicians and surgeons 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.
(c) (1) If an emergency physician seeks reimbursement from the Maddy Fund pursuant to Section 1797.98c, then the emergency physician shall,
at that time, cease any further billing or collection activity for that patient.
(2) If the emergency physician does not receive reimbursement from the Maddy Fund after attempting to obtain reimbursement from the Maddy Fund, then the provisions of this article shall apply.
(3) If the emergency physician does not attempt to seek reimbursement from the Maddy Fund, the provisions of this article shall apply.
(d) A patient, or patient’s legal representative, who requests a discounted payment or other assistance in meeting their financial obligation to the emergency physician shall make every reasonable effort to provide the emergency physician with documentation of income and health benefits coverage, if the emergency
physician requests the documentation. If the patient, or the patient’s legal representative, requests a discounted payment and fails to provide information that is reasonable and necessary for the emergency physician to make a determination, the emergency physician may consider that failure in making its determination.
(1) For purposes of determining eligibility for discounted payment, the emergency physician may rely on the determination made by the hospital at which emergency care was provided. If the emergency physician chooses to make a separate determination of eligibility for discounted payment, documentation of income shall be limited to recent pay stubs or income tax returns. The emergency physician, at their discretion, may accept self-attestation by a patient, or a patient’s legal representative, but shall not request documentation
of income other than that authorized in this paragraph.
(2) Information obtained pursuant to paragraph (1) shall not be used for collections activities. This paragraph does not prohibit the use of information obtained by the emergency physician, collection agency, or assignee independent of the eligibility process for discounted payment.
(3) Eligibility for discounted payments shall be determined at any time the emergency physician is in receipt of information specified in paragraph (1). An emergency physician shall not impose time limits for applying for discount payments, nor deny eligibility based on the timing of a patient’s application.
(e) An emergency physician may waive or reduce Medi-Cal and
Medicare cost-sharing amounts as part of their discount payment program.
SEC. 11.
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 formula, 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 as limited by Section 127452.
(c) For a patient that lacks coverage, or for a patient that provides information that they may be a patient with high medical costs, the emergency physician, 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 before 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 an extended payment plan, the emergency physician or their assignee, including a collection agency, shall not report adverse information to a consumer credit agency or commence a civil action.
(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 any real property 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 before 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 any real property owned, in part or completely, by the patient.
(C) Liens on any real property.
(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) 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. Before 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. If the patient wishes to renegotiate the terms of the defaulted extended payment plan but no agreement can be reached on the amount of the payment, the emergency physician or their assignee shall apply the reasonable payment formula in subdivision (k) of Section 127450 to determine a monthly payment amount for a subsequent extended payment plan. If the reasonable payment formula would result in a payment of less than ten dollars ($10) a month, the subsequent extended payment plan shall be ten dollars ($10) per month. 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 before the time the extended payment plan is declared to be no longer
operative. If after having defaulted on an extended payment plan the patient has entered into another extended payment plan with payments in the amount of either the reasonable payment formula or ten dollars ($10) per month and the patient fails to make all consecutive payments due during a 90-day period, that extended payment plan is inoperative. 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) For purposes of determining the reasonable payment formula in subdivision (k) of Section 127450, the emergency physician or their assignee may rely on the determination of family income and essential living expenses made by the hospital at which emergency care was provided. The emergency physician or their assignee, at their discretion, may accept
self-attestation of family income and essential living expenses by a patient or a patient’s legal representative.
(h) This section shall not 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).
