Protecting Our Patients

 Last summer, a young woman experienced a pregnancy-related health issue. Rightfully, she immediately visited the emergency room where she was promptly sent in for a critical surgical procedure. She was admitted by hospital staff under the assumption that she was insured and she was told her procedure would be covered. The surgery was successful and she returned home without further complications – or at least without medical ones.

Just a few months after her hospital stay, she received two bills in the mail: one for the emergency room visit totaling several hundred dollars and one for the surgical procedure, exceeding $25,000. Prior to her surgery, she was never told that she might not be covered. Like all-too-many patients in California, she also wasn’t told about an important option to which all patients with financial needs have access – charity care.

This is just one story, one example, of thousands in which a patient requiring medical attention is not provided clear information about the financial costs of that care, nor offered the financial aid they to which they are legally entitled. If you found yourself in the emergency room, scared and sick, would you know your rights? Would you to ask about charity care options? Patients shouldn’t need a law degree to take advantage of the consumer protections they are guaranteed under California law. This is the problem.

When I first heard this story, and many others like it, I knew I had to take action. In response, I’ve proposed AB 1020, a bill to strengthen consumer protections for hospital patients by building upon existing healthcare consumer protection laws, increasing transparency, limiting the sale of debt and increasing the availability of financial assistance.

Fifteen years ago, the Legislature passed two key reforms to protect Californians at risk of financial devastation. Both the Hospital Fair Pricing Act and the Fair Debt Collection Practices Act were designed to provide basic consumer protections in debt collection and to increase patient access to free and discounted medical care.

Hospitals in California must provide charity care to patients who receive medical services and are uninsured or underinsured. Charity care ranges from full or partial discounts of medical bills to payment plans that allow patients to pay their bills over a longer period of time. The Hospital Fair Pricing Act outlines the minimum guidelines that hospitals must follow in offering charity care to patients and collecting unpaid accounts. Debt collectors, too, must follow these rules.

The Hospital Fair Pricing Act also provides protections to patients throughout the collections process. These protections include a 150-day time period before a hospital or collections agency may report a patient account to a consumer credit reporting agency or commence civil action against the patient, and an opportunity for the patient to apply for charity care at any time.  

However, despite these protections, patients are still not benefitting from the law.

Kaiser Health News reported in 2019 that nonprofit hospitals in California could have ­– but did not – provide $135 million in charity care to patients. Patients report being discharged and receiving medical bills without knowing they were actually eligible for Medi-Cal or charity care. Worse, hospitals often sell patient accounts to collections agencies, which further neglect to inform patients they could apply for charity care. Consequently, patients face negative credit reporting and, finally, collection lawsuits. 

AB 1020 will be a big step towards addressing these issues. In this measure, I’m proposing a number of solutions, including strengthening state enforcement and oversight of the Hospital Fair Pricing Act, by levying penalties for noncompliance; requiring patients to be provided clear and detailed information about their bills and how to apply for charity care at the time of discharge and when a bill is sent to collections; prohibiting hospitals from selling patient debt; extending the period that adverse credit reporting can take place from 150 to 180 days after the first billing; requiring debt collectors to certify that patients have been screened for public programs and financial assistance before filing a lawsuit; and by raising the income level for financial assistance from 350% to 400% of the poverty line.

It’s hard to imagine a time when people are more vulnerable than when they are patients in a hospital yet the system, as it now works, can expose patients to astonishing levels of financial devastation – all for simply seeking medical attention.

Fortunately for the woman mentioned earlier, she reached out and sought the help of a non-profit dedicated to providing free legal services for medical patients – Mental Health Advocacy Services (MHAS). Given the personally traumatic reason for her hospital visit, she was hesitant to engage with the hospital on the matter, but with the help of MHAS staff she was able to confront the hospital on its failure to provide information on charity care. The hospital quickly realized its error and the client has since received notice that her billing balance is $0.00, and the hospital has returned all payments she made on the debt before it was resolved. 

While her story has a happy ending, this is unfortunately the exception. Taking meaningful action on these abuses is long overdue. I believe we eventually need to enact greater healthcare reform, such as universal coverage, but it’s also critical that we do everything we can to protect patients today. So far, my colleagues have agreed with me about the need for better safeguards. Last week, AB 1020 passed out the Assembly Judiciary Committee with bipartisan support. I hope the rest of the Legislature will stand with us, and our patients, by passing AB 1020 into law this year.

What do you think about this measure? Do you have an experience around hospital billing that you would like to share? Do you have any suggestions, including legislative ideas? As always, please reach out to me with any comments, questions or concerns through my District Office at (818) 558-3043 or Assemblymember.Friedman@Assembly.ca.gov.