Effective January 1, 2022, AB 532 and AB 1020 update financial aid, disclosure, and debt collection requirements for GACHs.
Financial Aid Qualifications and Patient Maximum Annual Out-of-Pocket Costs
Effective January 1, 2022, the income level used to qualify for financial aid under the Hospital Fair Pricing Policies Article ("Article") [Health and Safety Code (HSC) sections 127400 - 127446] will increase from 350 percent to 400 percent of the federal poverty level.
AB 1020 updates the meaning of a patient with high medical costs to a person whose family income is less than or equal to 400 percent of the federal poverty level and the patient can document that the patient or the patient's family has paid more than 10 percent of the patient's current income or family income in the prior 12 months.
Additionally, hospitals will no longer need to consider the amount of payment the hospital might expect from the Healthy Families Program or another government-sponsored health program of health benefits in which the hospital participates. Instead, the hospital should only consider expected payments from Medicare or Medi-Cal, whichever is greater. If the hospital provides a service for which there is no established payment by Medicare or Medi-Cal, the hospital must establish an appropriate discounted payment.
The hospital cannot require patients eligible under the Article to undergo an independent dispute resolution process.
Mandatory Forms and Information
Hospitals currently provide a person without insurance a written estimate of the amount the hospital will require the person to pay for health care services when the patient asks for it. Starting January 1, 2022, hospitals must provide every uninsured patient an estimate along with the hospital's policies on financial aid, discount payments, and charity care opportunities. The form must include the web address for the hospital's shoppable services that the hospital must publish on its web page. The hospital must also inform patients that there are organizations that will help the patient understand the billing and payment process and provide the web address for Health Consumer Alliance (healthconsumer.org). Hospitals must provide patients information about Covered California and Medi-Cal presumptive eligibility if the hospital participates.
AB 532 requires the hospital to provide the written forms related to the hospital's financial assistance and charity care policies to uninsured and self-pay patients at the time of service if the patient is able to receive them. If the patient is unable to receive the form(s), the hospital must provide them at the time the patient leaves the facility or within 72 hours by mail.
Hospitals are currently required to post these written notices in emergency departments, billing office, admissions offices, and outpatient settings. Beginning January 1, 2022 hospitals are also required to post the written notices discussed in this AFL, including the estimate of costs and information about financial assistance, discount payments, and charity care options, in observation units.
The legislation also specifies that a hospital must not sell patient debt to a debt buyer, as defined in Civil Code section 1788.50, unless all of the following apply:
- The hospital determines the patient ineligible for financial assistance, or the patient has not responded in 180 days.
- The hospital and debt buyer agree that any account in which the balance has been determined to be incorrect due to the availability of a third-party payer will be accepted back by the hospital.
- The debt buyer has agreed not to resell or transfer the patient's debt, except:
- back to the hospital
- to a tax-exempt organization as described in HSC section 127444
- the debt buyer is sold or merged with another entity
- The debt buyer has agreed not to charge interest or fees on the patient's debt.
- The debt buyer is licensed as a debt collector by the Department of Financial Protection and Innovation.
Before assigning a bill to collections or selling the debt to a debt buyer, the hospital must provide the patient with all of the following:
- The date(s) of service of the bill.
- The name of the entity the bill is being assigned or sold to.
- A statement informing the patient how to obtain an itemized hospital bill from the hospital.
- Information about the patient's health insurance on record with the hospital.
- An application for the hospital's charity care and financial assistance.
- The date(s) the patient was sent the notices about financial aid including an application and any decision on the application.
AB 1020 also extends the number of days the hospital billing department must wait before reporting adverse information to the credit bureaus from 150 to 180 days.
CDPH will continue to be the regulatory authority for any violations of the statutes and regulations included in the Article and the matters discussed in this letter until January 1, 2024. After that date the regulatory enforcement will transfer to the California Department of Health Care Access and Information (HCAI), formerly known as the Office of Statewide Health Planning and Development (OSHPD).
CDPH's failure to expressly notify facilities of statutory or regulatory requirements does not relieve facilities of their responsibility for following all laws and regulations. Facilities should refer to the full text of all applicable sections of HSC and the California Code of Regulations to ensure compliance.
If you have any questions about this AFL, please contact your local district office.
Original signed by Cassie Dunham
Acting Deputy Director