USA- California | New Health Care Debt and Fair Billing Rules for Hospitals, comes into force

California Government had passed Assembly Bill 1020, which was signed by the Governor on October 4, 2021. The new law will impose new limitations on hospital debt collections and raise the income level for hospital charity care eligibility.

 

Key highlights of the Act are:

  • The new legislation has revised the definition of “high medical costs” to include a patient who has a family income that does not exceed 400 percent of the federal poverty level.
  • The law also requires that hospitals to display charity care and discount payment notices regarding the hospital’s policy for financially qualified and self-pay patients on the hospital’s internet website. However, hospitals will be required to give patients financial assistance in accordance with the policy published on the California Department of Public Health (CDPH)/Department of Health Care Access and Information website.
  • The legislation also imposes new requirements on debt collectors in terms of what must be alleged in a complaint in action to collect general acute care hospital debt, which among other things must include copies of the application for hospital assistance that was provided to the debtor by the hospital and the notice that was provided to the debtor by the hospital about applying for financial assistance (which may take the form of a redacted or sample hospital bill).
  • Lastly, the legislation creates a new civil penalty regime and shifts responsibility for enforcement of the law to the Department of Health Care Access effective January 1, 2024. Prior to this date, CDPH will be responsible for enforcement of the requirements, which will go into effect January 1, 2022.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

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