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More Patient Protections for Hospital Billing in 2022

Many Californians, whether insured, underinsured, or uninsured, are carrying the burdens of medical debt in their lives. This year, Western Center co-sponsored AB 1020 (Friedman) to address this problem. AB 1020 strengthens the existing Hospital Fair Pricing Act, which requires California hospitals to provide free or discounted care to uninsured and underinsured patients who are low income; and the Rosenthal Fair Debt Collection Practices Act and Fair Debt Buying Practices Act, which require debt collectors and debt buyers to follow fair debt collection procedures.

The amendments aim to inform more people of the availability of financial assistance when receiving hospital services and hold hospitals, debt collectors, and debt buyers accountable to this assistance. Since the Hospital Fair Pricing Act was passed 15 years ago, legal services advocates have navigated an opaque application process with their clients who should have qualified for charity care but never received notice or an application. Patients were left in murky negotiating situations when they had to deal with accounts that had been assigned or sold to debt collectors and debt buyers. Patients needed a clearer application process. AB 1020 does the following:

  • Requires hospitals to provide patients with notices about their charity care and discounted payment policies and actual applications at specific points in the billing and collections cycle;
  • Requires hospital contracts with debt buyers to include patient protection provisions;
  • Imposes additional requirements for collection of medical debt;
  • Authorizes the Department of Health Care Access and Information to penalize hospitals for non-compliance (coming in 2024); and
  • To keep up with the higher cost of living, increases the income eligibility threshold to 400% of the federal poverty level.

Our Health Care Practice Tip this month details these changes and more. One common unlawful provision found in many hospitals’ fair pricing policies is a specific time period to apply, often set at 150 days. These deadlines violate the Hospital Fair Pricing Act, which allows patients to apply for charity care or discounted payments at any time, without time limit.  Meanwhile, hospitals may still commence collection activity after the statutory time period has passed. The Health Care Practice Tip explains this issue.

Even in the pandemic, the accumulation and collection of medical debt have not stopped. Our state’s charity care and collections laws still require rigorous enforcement by advocates.

Here is the full report: Health Care Practice Tip – December 2021

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