BILL ANALYSIS
AB 774
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 774 (Chan)
As Amended August 28, 2006
Majority vote
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|ASSEMBLY: |43-34|(June 2, 2005) |SENATE: |22-13|(August 31, |
| | | | | |2006) |
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Original Committee Reference: HEALTH
SUMMARY : Requires hospitals to maintain an understandable
written policy regarding discounted payments and charity care to
financially qualified patients, defined as a self-pay patient
with high medical costs (HMC) who has a family income that does
not exceed 350% of the federal poverty level (FPL) or
approximately $35,000 per individual.
The Senate amendments :
1)Replace "underinsured patient" with "a patient with high
medical cost" and define it to mean a person whose family
income does not exceed 350% of the FPL if that individual does
not receive a discounted rate from the hospital as a result of
his or her third-party coverage. Define HMC to mean any of
the following:
a) Annual out of pocket costs incurred by the individual at
the hospital that exceed 10% of the patient's family income
in prior 12 months;
b) Annual out of pocket expenses that exceed 10% of the
patient's medical paid by the patient or patient's family
in the prior 12 months; or,
c) A lower level determined by the hospital in accordance
with the hospital's charity care policy.
2)Define patient family to mean persons 18 years of age and
older, spouse, domestic partner and dependent children under
21 years of age, whether living at home or not, and for
persons under 18 years of age, parent, caretaker relatives and
other children under 21 years of age of the parent or
caretaker relative.
3) Make the provisions of this bill a condition of licensure
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enforceable by the Department of Health Services (DHS).
4)Authorize rural hospitals to establish eligibility levels for
financial assistance and charity care at less than 350% of FPL
as appropriation to maintain their financial and operational
integrity.
5)Authorize a hospital to consider income and monetary assets of
the patient in determining eligibility under its charity care
policy. State that monetary assets do not include retirement
or deferred-compensation plans qualified under the Internal
Revenue Code, nonqualified deferred-compensation plans, the
first $10,000 of a patient's monetary assets, or 50% of a
patient's monetary assets over the first $10,000 to be counted
in determining eligibility.
6)Require individuals who request financial assistance under
this bill to make every reasonable effort to provide the
hospital with documentation of income and health benefits
coverage. State that if an individual 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.
7)Limit documentation for determining eligibility for discounted
payments to recent pay stubs or income tax returns, and for
charity care, authorize the consideration of assets, as
specified in #5) above. Authorize a hospital to require
waivers or releases from the patient or the patient's family,
authorizing the hospital to obtain account information from
financial or commercial institutions, or other entities that
hold or maintain the monetary assets to verify their value.
Prohibit the asset information from being used for collections
activities.
8)Delete a requirement on hospitals to submit a copy of the
charity care and discount payment application to the Office of
Statewide Health Planning and Development (OSHPD). Require
the application to be provided prior to discharge if the
patient has been admitted or to patients receiving emergency
or outpatient care.
9)Prohibit reporting of adverse information to a consumer credit
reporting agency or commencing civil action against the
patient for nonpayment at any time prior to 150 days after
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initial billing. Delete a provision that authorizes a
hospital to sell or assign debt to another entity if that
entity does not report adverse information to a consumer
credit agency.
10)Require extended payment plans to be interest free.
11)Delete a provision that permits a private person to act in
the capacity of the Attorney General (AG) and seek recovery,
as specified, if the AG fails to determine that a violation of
this bill occurred within 90 days of receiving notice of
possible violations of this bill.
12)Delete authority for DHS (instead of OSHPD) to levy
administrative penalties. Require hospitals to reimburse the
patient or patients any amount actually paid in excess of the
amount due under this bill, including interest.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required each hospital to develop a policy specifying how the
hospital will determine the financial liability for services
rendered to both financially qualified patients and self-pay
patients.
2)Required each hospital to provide patients with oral and
written notice of the hospital's policy for financially
qualified and self-pay patients at the time of admission and
discharge. Required the notice to also be provided to patients
who receive emergency or outpatient care and who may be billed
for that care, but who were not admitted. Required the notice
to be in the language spoken by the patient, as specified.
Required all written correspondence to the patient required by
this bill to also be language appropriate.
3)Required notice of the hospital's policy for financially
qualified and self-pay patients to be clearly and
conspicuously posted in locations that are visible to the
public, including, but not limited to, the emergency
department, if any; the billing office; the admissions office;
and any other locations that may be determined by OSHPD, to
ensure that patients are informed of the policy and how to
obtain a copy of the policy and related information.
4)Required each hospital to submit to OSHPD a copy of the
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application for financially qualified patients used by the
hospital, including the charity care section of that
application. Authorized OSHPD, in consultation with interested
parties, to also develop a uniform self-pay application to be
used by all hospitals. Required OSHPD, in developing the
application, to consider whether the application used for the
Medi-Cal and Healthy Families (HF) programs can be used as, or
incorporated in, the uniform self-pay application.
5)Required each hospital to 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, private health insurance, Medicare, or Medi-Cal,
HF, the California Children's' Services (CCS), or other
state-funded programs designed to provide health coverage.
6)Required the hospital, if it 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,
to provide the patient with a clear and conspicuous notice, as
specified
7)Required a hospital, its assignee, collection agency, or
billing service, in order to facilitate payment by public or
private third-party payers, for at least 180 days after
discharge or after the final day service is provided, to be
limited to specific debt collection activities.
8)Required a hospital, its assignee, collection agency, or
billing service to use reasonable efforts to negotiate a
payment plan, as defined, unless the patient has requested
that the hospital, its assignee, collection agency, or agent
not contact the patient.
9)Authorized the hospital, its assignee, collection agency, or
billing service, after the time period specified in #7) above
has elapsed, to engage in any other debt collection activities
otherwise permitted by law, including, but not limited to,
reporting adverse information to a consumer credit reporting
agency or commencing civil action against the patient for
nonpayment.
10) Prohibited a hospital, its agent, collection agency, or
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assignee from using wage garnishment or a lien on a primary
residence as a means of debt collection from a financially
qualified patient.
11) Prohibited anything in this bill from being construed to
diminish or eliminate any protections consumers have under
existing federal and state debt protection laws.
12) Required the period described in #7) above to be extended
if the patient has a pending appeal, as specified, for
coverage of the services.
13) Required the hospital, any assignee of the hospital, or
other owner of the patient debt, including a collection
agency, prior to commencing collection activities against a
patient, to provide the patient with a clear and conspicuous
written notice containing:
a) Information about nonprofit credit counseling services
in the area; and,
b) A plain language summary of the patient's rights
pursuant to this bill, the Rosenthal Fair Debt Collection
Practices Act, and the federal Fair Debt Collection
Practices Act, and established requirements for the
summary, as specified.
14) Required each hospital to provide to OSHPD, in a format
determined by OSHPD, a copy of its self-pay policy,
eligibility procedures, review process, and procedure for
determining self-pay pricing. Required the information to be
provided at least biennially on January 1, or when a
significant change is made. Required the hospital, if no
significant change has been made by the hospital since the
information was previously provided, to notify OSHPD of the
lack of change meets the requirements. Required OSHPD to make
this information available to the public.
15) Authorized, after appropriate notice and opportunity for
hearing, OSHPD to levy civil penalties for violations of this
bill as follows:
a) A hospital that violates any provision of this bill,
except for #3 above, is liable for civil penalties of not
more than $500 per day per patient affected for each
violation; and,
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b) A hospital that bills a patient for amounts in excess of
those provided for in #2) and #3) above to be liable for a
civil penalty of three times the amount billed in error to
the patient.
16) Authorized the Attorney General to authorize an
investigation to determine whether a hospital is in compliance
with this bill. Permitted private persons to act in the
capacity of the Attorney General if the Attorney General fails
to determine that a violation of this bill occurred within 90
days of receiving notice of possible violation of this bill.
17) Prohibited the amounts paid by patients for services
resulting from the self-pay allowances or charity care
arrangements that are applied under a hospital's self-pay and
charity care policies from constituting a hospital's uniform,
published, prevailing, or customary charges, its usual fees to
the general public, or its charges to non-Medi-Cal purchasers
under comparable circumstances, for purposes of any payment
limit under federal Medicaid law, Medi-Cal law, or any other
federal or state-financed health care program.
FISCAL EFFECT : According to the Senate Appropriations Committee
analysis,
Fiscal Impact (in thousands)
Major Provisions 2006-07 2007-08
2008-09 Fund
OSHPD $ 106 $ 375
$ 375 Special Fund*
DHS enforcement $ 200 $ 400
$ 400 General Fund
*Health Data Fund
COMMENTS : With the Senate amendments the California Hospital
Association has changed their position to neutral.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0017564