BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 774|
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THIRD READING
Bill No: AB 774
Author: Chan (D)
Amended: 8/22/06 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 6/22/05
AYES: Ortiz, Runner, Aanestad, Alquist, Chesbro, Cox,
Figueroa, Kuehl, Romero
NO VOTE RECORDED: Maldonado, Vincent
SENATE APPROPRIATIONS COMMITTEE : 8-5, 8/17/06
AYES: Murray, Alarcon, Alquist, Escutia, Florez, Ortiz,
Romero, Torlakson
NOES: Aanestad, Ashburn, Battin, Dutton, Poochigian
ASSEMBLY FLOOR : 43-34, 6/2/05 - See last page for vote
SUBJECT : Hospitals: self-pay policies
SOURCE : Health Access California
DIGEST : This bill requires hospitals to develop and
implement policies providing discounted payments or charity
care for poor uninsured or underinsured individuals.
Hospital charges for eligible patients would be limited and
required notice, reporting, compliance and collection
procedures are specified.
ANALYSIS :
CONTINUED
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Existing Law
1. Establishes the Office of Statewide Health Planning and
Development (OSHPD), which is charged with enforcement of
various provisions of law relating to health facilities,
including hospitals.
2. Requires hospitals to report financial and utilization
data to OSHPD in accordance with procedures and forms
established by OSHPD.
3. Requires every private, non-profit hospital to submit
annually to OSHPD a community benefits plan that details
how the hospital identifies and addresses community needs
within the hospital's service area.
4. Provides that a community benefits plan may include:
A. A description of the health care services rendered
to uninsured, underinsured, and individuals eligible
for public programs.
B. A description of other services rendered to the
community, such as health promotion, medical research
and medical education.
C. An accounting of the cost of providing these
services.
This bill is intended to regulate the charges and
collection procedures hospitals levy on uninsured or
underinsured patients. Nearly one fifth of Californians,
seven million people, now lack health insurance. Costs
generated by these uninsured patients may be partially
reimbursed from public sources, but hospitals do seek
recovery of their costs and are at risk for un-reimbursed
services. Hospital charges are not now regulated, and
charges and policies for services to uninsured patients
vary substantially, as do the relative financial losses
among hospitals. Among uninsured patients, the costs of
unanticipated medical care can be financially catastrophic,
and medical costs cause one half of all bankruptcies in
this state. California hospitals have recently established
voluntary charity care principals and guidelines which have
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been accepted by a large majority of hospitals. This issue
is actively litigated.
This bill requires hospitals to develop and report policies
for serving uninsured and underinsured individuals. The
bill defines eligible patients generally as self-pay
patients earning less than 350 percent of federal poverty
level, defines "inadequate insurance" as costs incurred by
the individual that exceed five percent of the patient's
annual income, requires that a hospital's discounted
charges be related to amounts paid any public program such
as Medicare or Healthy Families, requires specified notice
to patients of the availability of discounted care programs
or eligibility for public care, limits collection practices
and the use of liens on patient's property, requires filing
of a hospital's charity/discount policies, and authorizes
the Department of Health Services to enforce administrative
penalties for failure to comply with a plan.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2006-07 2007-08
2008-09 Fund
OSHPD $ 106 $ 375 $ 375
Special*
DHS enforcement $ 200 $ 400 $
400 GF
*Health Data Fund
SUPPORT : (Verified 6/16/05)
Health Access California (source)
AARP California
American Federation of State, County, and Municipal
Employees
Applied Research Center
Asian and Pacific Islander American Health Forum
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California Acorn
California Alliance for Retired Americans
California Church Impact
California Commission on the Status of Women
California Federation of Teachers
California Immigrant Welfare Collaborative
California Labor Federation
California National Organization for Women
California Public Interest Research Group
Coalition for Community Health
Coalition for Humane Immigrant Rights of Los Angeles
Congress of California Seniors
Consumer's Union
East Bay Alliance for a Sustainable Economy
Gray Panthers California
Greenlining Institute
Health Care for All - California
Insure the Uninsured Project
JERICHO
Latino Coalition for a Healthy California
Lawyers' Committee for Civil Rights
Multicultural Area Health Education Center
Screen Actors Guild
Santa Cruz Chapter of Healthcare for All
United Nurses Association of California
Union of Health Care Professionals
Valley Seniors
OPPOSITION : (Verified 6/16/05)
Adventist Health
Alliance of Catholic Health Care
Barlow Respiratory Hospital
Biggs-Gridley Memorial Hospital
California Association of Collectors
California Hospital Association
Catholic Healthcare West
Citrus Valley Health Partners
Community Hospital of the Monterey Peninsula
Continental Rehabilitation Hospital of San Diego
Lodi Memorial Hospital
Loma Linda University Medical Center
Mission Hospital
Mission Hospital Regional Medical Center
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Paradise Valley Hospital
Saddleback Memorial Medical Center
Salinas Valley Memorial Healthcare System
Seneca Healthcare District
St. Jude Medical Center
Saint Louise Regional Hospital
Scripps Health
University of California
ARGUMENTS IN SUPPORT : According to supporters, hospitals
must stabilize any patient who needs emergency care, but
hospitals can and do charge uninsured and underinsured
patients the highest prices for services they provide.
Hospitals report that they spend about one percent of their
patient revenue on charity care, but hospitals are not
required to disclose the circumstances under which a
patient may qualify for free care. Supporters further
argue that sending patients to collections 30 to 60 days
after they receive care puts the credit rating of patients
at risk if insurers fail to pay within that timeframe. For
uninsured patients, 30 to 60 days does not provide adequate
time to arrange their finances in order to make payments on
their bills. Although the major hospital associations and
systems have adopted voluntary guidelines for providing
charity and reduce price care, nothing requires them to
comply with the guidelines. Supporters further argue that
the bill protects self-pay patients from being charged more
than insured patients and reduces the chances that hospital
costs result in personal bankruptcy and is therefore an
important step in improving the equity of California's
health care system. Supporters finally argue that the bill
provides necessary protections to ensure that uninsured and
underinsured patients are not discouraged from seeking
hospital services when they need them.
ARGUMENTS IN OPPOSITION : Opponents argue that although
this bill incorporates many of the provisions of the
hospital industry's voluntary guidelines for providing
charity and reduced price care, the guidelines provide
necessary flexibility for hospitals to tailor their
policies to account for the characteristics of their
patient populations and resources. In particular,
hospitals need flexibility to determine whether they can
offer charity and reduced price care to patients with
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incomes in excess of 300 percent of the federal poverty
level, the level required under CHA's guidelines.
Opponents also argue that this bill unfairly places the
burden of a dysfunctional healthcare system on hospitals,
which provide care to anyone who need help and operate
emergency rooms and trauma centers around the clock.
Opponents further argue that the bill imposes rigid and
punitive requirements on hospitals to provide free care
without addressing any of the underlying factors that
created the growing problem of the uninsured in the first
place. Opponents further point out that hospitals face
numerous unfunded mandates and that this bill will make it
increasingly difficult to provide care and operate
emergency rooms and trauma centers to serve those who need
help. The University of California argues that this bill
creates a new public benefit for a sizable population who
may have some ability to pay for services rendered or
otherwise afford health insurance coverage and contends
that they already have an established commitment to provide
free care and payment assistance to a disproportionate
share of the state's uninsured patients. The California
Association of Collectors opposes provisions of the bill
that impose a blanket prohibition on the use of wage
garnishments or liens to obtain payment of hospital bills
irrespective of the debtor's ability to pay the debt, and
states that existing requirements governing the use of wage
garnishments and judgment liens provide substantial
consumer protections to debtors.
ASSEMBLY FLOOR :
AYES: Baca, Bass, Berg, Bermudez, Canciamilla, Chan,
Chavez, Chu, Cohn, Coto, De La Torre, Dymally, Evans,
Frommer, Goldberg, Hancock, Jerome Horton, Jones,
Karnette, Klehs, Koretz, Laird, Leno, Levine, Lieber,
Liu, Matthews, Montanez, Mullin, Nava, Negrete McLeod,
Oropeza, Pavley, Ridley-Thomas, Ruskin, Saldana, Salinas,
Torrico, Umberg, Vargas, Wolk, Yee, Nunez
NOES: Aghazarian, Benoit, Blakeslee, Bogh, Cogdill,
Daucher, DeVore, Emmerson, Garcia, Harman, Haynes,
Shirley Horton, Houston, Huff, Keene, La Malfa, La Suer,
Leslie, Maze, McCarthy, Mountjoy, Nakanishi, Nation,
Niello, Parra, Plescia, Richman, Sharon Runner, Spitzer,
Strickland, Tran, Villines, Walters, Wyland
NO VOTE RECORDED: Arambula, Calderon, Gordon
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CTW:do 8/22/06 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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