text:
(a) (1) (A) Each hospital shall maintain an understandable written policy regarding discount payments for financially qualified patients as well as an understandable written charity care policy. Uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level, as defined in subdivision (b) of Section 127400, shall be eligible for participation under a hospital’s charity care policy or discount payment policy. Notwithstanding any other provision of this article, a hospital may choose to grant eligibility for its discount payment policy or charity care policies to patients with incomes over 400 percent of the federal poverty level. Both the charity care policy and the discount payment policy shall state the process used by the hospital to determine whether a patient is eligible for charity care or discounted payment. In the event of a dispute, a patient may seek review from the business manager, chief financial officer, or other appropriate manager as designated in the charity care policy and the discount payment policy.

(B) The written policy regarding discount payments shall also include a statement that an emergency physician, as defined in Section 127450, who provides emergency medical services in a hospital that provides emergency care is also required by law to provide discounts to uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level. This statement shall not be construed to impose any additional responsibilities upon the hospital.

(2) Rural hospitals, as defined in Section 124840, may establish eligibility levels for financial assistance and charity care at less than 400 percent of the federal poverty level as appropriate to maintain their financial and operational integrity.

(b) (1) A hospital’s discount payment policy and charity care policy shall clearly state eligibility criteria based upon income consistent with the application of the federal poverty level. In determining eligibility under its discount payment policy or charity care policy, a hospital shall not consider the monetary assets of the patient.

(2) A hospital shall not require a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided, discount payment. When screening for eligibility for discount payment, a hospital may require the patient to participate in a screening for Medi-Cal eligibility.

(c) A discount payment policy shall include an extended payment plan to allow payment of the discounted price over time. The policy shall provide that the hospital and the patient shall negotiate the terms of the payment plan, and take into consideration the patient’s family income and essential living expenses. A hospital may also consider the availability of a patient’s health savings account held by the patient or the patient’s family. If the hospital and the patient cannot agree on the payment plan, the hospital shall use the formula described in subdivision (i) of Section 127400 to create a reasonable payment plan.

(d) (1) A hospital shall limit expected payment for services it provides to a patient at or below 400 percent of the federal poverty level, as defined in subdivision (b) of Section 127400, eligible under its discount payment policy to the amount of payment the hospital would expect, in good faith, to receive for providing services 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 shall establish an appropriate discounted payment. Patients eligible under this article shall not be required to undergo an independent dispute resolution process.

(2) The hospital may require a patient or guarantor to pay the hospital the entire amount of any reimbursement sent directly to the patient or guarantor by a third-party payer for that hospital’s services.

(3) If the patient receives a legal settlement, judgment, or award under a liable third party action that includes payment for health care services or medical care related to the injury, the hospital may require the patient or guarantor to reimburse the hospital for the related health care services rendered up to the amount reasonably awarded for that purpose.

(e) A patient, or patient’s legal representative, who requests a discounted payment, charity care, or other assistance in meeting their financial obligation to the hospital shall make every reasonable effort to provide the hospital with documentation of income and health benefits coverage. If the person requests charity care or a discounted payment and 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.

(1) For purposes of determining eligibility for discounted payment or charity care, documentation of income shall be limited to recent pay stubs or income tax returns. The hospital may accept other forms of documentation of income but shall not require those other forms. If a patient does not submit an application or documentation of income, a hospital may presumptively determine that a patient is eligible for charity care or discounted payment based on information other than that provided by the patient or based on a prior eligibility determination.

(2) Information obtained pursuant to paragraph (1) shall not be used for collections activities. This paragraph does not prohibit the use of information obtained by the hospital, collection agency, or assignee independently of the eligibility process for charity care or discounted payment.

(3) Eligibility for discounted payments or charity care shall be determined at any time the hospital is in receipt of information specified in paragraph (1). A hospital shall not impose time limits for applying for charity care or discounted payments, nor deny eligibility based on the timing of a patient’s application.

(f) (1) A hospital may waive or reduce Medi-Cal and Medicare cost-sharing amounts as part of its charity care program or discount payment program.

(2) In waiving or reducing Medicare cost-sharing amounts, the hospital may consider the patient’s monetary assets to the extent required for the hospital to be reimbursed under the Medicare program for Medicare bad debt without seeking to collect cost-sharing amounts from the patient as required by federal law, including, but not limited to, Section 413.89 of Title 42 of the Code of Federal Regulations. Monetary assets include only assets that are convertible to cash and do not include retirement or deferred compensation plans qualified under the Internal Revenue Code, nonqualified deferred compensation plans, or assets below the maximum community spouse resource allowance under Section 1396r–5(d) of Title 42 of the United States Code.

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 4. (AB 2297) Effective January 1, 2025.)

article: 1. Hospital Fair Pricing Policies


kind: section

code: HSC

text:
(a) For purposes of this section, the following terms shall have the following meanings:

(1) “Presumptively determine” means a determination made by a hospital that a patient who did not submit an application or documentation of income, as described in paragraph (1) of subdivision (e) of Section 127405, is eligible to participate in the charity care or discounted payment programs maintained by the hospital pursuant to this article.

(2) “Screen” or “screening” means the process a hospital uses to identify if a patient may be eligible for charity care or discounted payment. This process shall serve as an alternative to requiring an application for eligibility determination.

(b) (1) Commencing July 1, 2027, a hospital shall screen patients to determine if they meet any of the following criteria and, if so, presumptively determine that a patient is eligible for participation under the hospital’s charity care policy or discount payment policy, subject to verification pursuant to paragraph (2):

(A) The patient or any member of the patient’s family, as defined in subdivision (h) of Section 127400, is enrolled in CalFresh, CalWORKs, or Tribal Temporary Assistance for Needy Families (Tribal TANF), Women, Infants, and Children (WIC), California Alternate Rates for Energy (CARE), the Low-Income Home Energy Assistance Program (LIHEAP), Housing Choice Voucher (HCV) program, and any other programs as determined by the department and any additional programs determined by each hospital that would reasonably reflect the approximate patient household income. Enrollment in any program listed in this subparagraph shall be considered sufficient evidence that a patient is financially qualified under Section 127400.

(B) The patient or a member of the patient’s family, as defined in Section 127400, was determined to be eligible for participation under the hospital’s charity care policy or discount payment policy for services billed or provided during the previous six-month period. However, the hospital may ask the patient if their income or insurance has changed during the last six months.

(i) If the patient attests that their income and insurance has not changed since last being approved for charity care or discounted payment, the hospital shall provide the patient charity care or discounted payment based on their previous determination of eligibility.

(ii) If the patient attests that their income and insurance has changed since last being approved for charity care or discounted payment, the hospital may reevaluate their eligibility.

(iii) A patient that is approved for charity care or discounted payment based on a determination of eligibility within the prior six months shall not be considered a new determination of eligibility.

(C) The patient is experiencing homelessness.

(2) If a hospital is unable to automatically or independently verify the circumstances described in subparagraph (A) or (B) of paragraph (1), the hospital may require verification from the patient. The patient shall make every reasonable effort to provide the requested verification and the hospital shall assist the patient in obtaining verification when feasible. A hospital shall accept a self-attestation of eligibility for the circumstances described in subparagraph (C) of paragraph (1).

(3) A hospital shall not require a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided with, discounted payment. However, a hospital may require the patient to participate in a screening for Medi-Cal eligibility when screening for discounted payment pursuant to this subdivision.

(c) (1) Commencing July 1, 2027, a hospital shall screen a patient for eligibility for participation under the hospital’s charity care policy and discount payment policy if the patient is any of the following:

(A) Uninsured.

(B) Enrolled in Medi-Cal with cost sharing or eligible for Medi-Cal under the Hospital Presumptive Eligibility (HPE) program.

(C) Enrolled in a Covered California health plan.

(2) (A) A hospital shall inform a patient of its intent to screen the patient for eligibility for discounted payment or charity care and that any personal and financial information provided by the patient will be used solely for those purposes.

(B) The hospital shall inform the patient of their right to opt out of screening. The hospital shall provide the patient with a form to sign to opt out of screening. The form shall clearly state that screening was offered, that the patient may revoke their decision to opt out of screening at any time, and that opting out of screening will not affect the patient’s ability to apply for charity care or discounted payment at any time in the future. The signed form shall be placed in the patient’s medical record.

(3) A hospital shall not require a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided with, discounted payment. However, a hospital may require the patient to participate in a screening for Medi-Cal eligibility when screening for discounted payment pursuant to this subdivision.

(4) If the screening concludes that a patient is financially qualified, as defined in Section 127400, the hospital shall determine if the patient is eligible for participation under the hospital’s charity care policy or discount payment policy without requiring the patient to complete a separate application.

(5) A hospital may verify a patient’s eligibility as part of or after the screening to determine if a patient is financially qualified.

(A) A hospital that chooses to verify eligibility may attempt to independently verify the patient’s information before billing the patient.

(B) If the hospital is unable to independently verify eligibility pursuant to subparagraph (A), the hospital shall request verification from the patient before billing the patient. The verification request shall be in writing and include the documentation necessary to determine eligibility under the hospital’s charity care and discount payment policy.

(C) The hospital may collect all of the information required to verify eligibility before discharge.

(d) A hospital may, at its discretion or as established in its charity care policy or discount payment policy, do any of the following:

(1) Presumptively determine that a patient who does not meet the criteria described in subdivision (b) is eligible for charity care or discounted payment.

(2) Screen a patient who does not meet the criteria described in subdivision (c) for eligibility for charity care or discounted payment.

(e) Consistent with paragraph (2) of subdivision (a) of Section 127405, this section shall not preclude a rural hospital’s ability to establish eligibility levels for charity care and discounted payment at less than 400 percent of the federal poverty level, as appropriate to maintain their financial and operational integrity.

(f) Effective July 1, 2027, each hospital shall establish a written process for screening patients consistent with this section within its charity care policy and discount payment policy pursuant to Section 127405 that is accessible to the public pursuant to subdivision (c) of Section 127410 and is provided to the department pursuant to Section 127435. The names of any software products and any other third-party services used to presumptively determine, or determine, eligibility for charity care and discounted payment shall be disclosed with the written process.

(g) Screening conducted pursuant to this section shall not be considered a request or application for charity care or a discounted payment and shall not disqualify a patient, or patient’s legal representative, from requesting charity care or discounted payment, or submitting an application or documentation of income for the purposes of determining eligibility for charity care or discounted payment.

(h) A hospital may accept voluntary submission of information or documentation that would assist the hospital in the screening process as long as the hospital does not compel the patient to provide the information as a condition of screening.

(i) A hospital may use existing patient information in the screening process for the sole purpose of determining eligibility for charity care or discounted payment. A hospital may incorporate the use of this information into its standard intake, registration, or billing workflows. This information may include, but is not limited to, any of the following:

(1) Existing patient medical or billing records.

(2) Information routinely collected during patient registration or admission.

(3) Information voluntarily supplied by the patient.

(4) Prior eligibility determination for charity care or discounted payment.

(5) Any other information routinely collected or maintained by a hospital that reasonably indicates financial hardship or eligibility for charity care or discount payment under the hospital’s charity care policy or discount payment policy.

(j) A hospital may, but is not required to, use third-party software tools or services, or contract with a third party, including a public agency, to conduct screening. However, a hospital that elects to conduct screening using third-party software tools or services, or by contracting with a third party, shall ensure all of the following conditions are met:

(1) The process shall not cause any negative impact on a patient’s credit score.

(2) Evaluations are based on eligibility criteria established in the hospital’s written charity care policy and discount payment policy pursuant to subdivision (b) of Section 127405. Evaluations shall not consider any assessment, evaluation, or score that predicts the patient’s propensity to pay.

(3) The third-party software tool or service is used in a way that is reasonably calculated to lead to an accurate result.

(4) In the event a third-party service or software tool fails to return information about the patient, or specifies the patient’s income is unknown, the hospital shall make a good faith effort to evaluate the patient’s eligibility status based on information available to the hospital or voluntarily provided by the patient.

(k) A hospital shall document any information or methods it utilized pursuant to subdivisions (i) and (j) to screen a patient.

(l) (1) A hospital shall provide a written notice to patients presumptively determined to be eligible, pursuant to subdivision (b), or determined to be eligible, pursuant to subdivision (c), for charity care or discounted payment. This written notice may be sent prior to, or in conjunction with, a billing notice. In no event shall a billing statement be sent to a patient who is presumptively determined to be eligible, pursuant to subdivision (b), or determined to be eligible, pursuant to subdivision (c), for charity care or discounted payment, prior to the issuance of this notice.

(2) Any billing statement sent to a patient who is presumptively determined to be eligible, pursuant to subdivision (b), or determined to be eligible, pursuant to subdivision (c), for charity care or discounted payment, shall reflect the adjustments made to the patient’s hospital charges under the hospital’s charity care policy or discount payment policy.

(m) If the screening process described in subdivision (b) or (c) determines that a patient may be eligible for charity care or discounted payment, but is later determined to be ineligible, or if the hospital is unable to verify a patient’s eligibility, the hospital shall promptly provide the patient with written notice of the hospital’s charity care policy and discount payment policy, as required by Section 127410.

(n) Written notices required by this section shall be provided in English and the language spoken by the patient, consistent with Section 12693.30 of the Insurance Code and applicable state and federal law.

history: (History: Added by Stats. 2025, Ch. 450, Sec. 1. (AB 1312) Effective January 1, 2026.)

division: 107. HEALTH CARE ACCESS AND INFORMATION

part: 2. HEALTH POLICY AND PLANNING

chapter: 2.5. Fair Pricing Policies

article: 1. Hospital Fair Pricing Policies

path: 107. HEALTH CARE ACCESS AND INFORMATION > 2. HEALTH POLICY AND PLANNING > 2.5. Fair Pricing Policies > 1. Hospital Fair Pricing Policies


text:
(a) Each hospital shall provide patients with a written notice that shall contain information about availability of the hospital’s discount payment and charity care policies, including information about eligibility, as well as contact information for a hospital employee or office from which the person may obtain further information about these policies. The notice shall also include the internet address for the Health Consumer Alliance (https://healthconsumer.org), and shall explain that there are organizations that will help the patient understand the billing and payment process, as well as information regarding Covered California and Medi-Cal presumptive eligibility, if the hospital participates in the presumptive eligibility program. The notice shall also include the internet address for the hospital’s list of shoppable services, pursuant to Section 180.60 of Title 45 of the Code of Federal Regulations. This written notice shall be provided in addition to the estimate provided pursuant to Section 1339.585. The notice shall also be provided to patients who receive emergency or outpatient care and who may be billed for that care, but who were not admitted. The notice shall be provided in English, and in languages other than English. The languages to be provided shall be determined in a manner similar to that required pursuant to Section 12693.30 of the Insurance Code. Written correspondence to the patient required by this article shall also be in the language spoken by the patient, consistent with Section 12693.30 of the Insurance Code and applicable state and federal law.

(b) The written notice shall be provided at the time of service if the patient is conscious and able to receive written notice at that time. If the patient is not able to receive notice at the time of service, the notice shall be provided during the discharge process. If the patient is not admitted, the written notice shall be provided when the patient leaves the facility. If the patient leaves the facility without receiving the written notice, the hospital shall mail the notice to the patient within 72 hours of providing services.

(c) Notice of the hospital’s policy for financially qualified and self-pay patients shall be clearly and conspicuously posted in locations that are visible to the public, including, but not limited to, all of the following:

(1) Emergency department, if any.

(2) Billing office.

(3) Admissions office.

(4) Other outpatient settings, including observation units.

(5) Prominently displayed on the hospital’s internet website, with a link to the policy itself.

(d) With the exception of emergency room visits, a hospital may provide the written notice described in this section in either hard copy or using the patient’s preferred electronic notification method if the patient has previously consented to receive clinical or nonclinical electronic communications about their health care services. The written notice related to an emergency room visit shall be provided to the patient in hard copy. If the notice is provided electronically, the notice shall be sent separately from any other electronic communications sent to the patient and shall prominently indicate in the subject line that the notice is related to the hospital’s discount payment and charity care policies.

history: (History: Amended by Stats. 2025, Ch. 243, Sec. 6. (SB 862) Effective January 1, 2026.)

article: 1. Hospital Fair Pricing Policies


text:
(a) Each hospital shall make all reasonable efforts to obtain from the patient or the patient’s 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, any of the following:

(1) Private health insurance, including coverage offered through the California Health Benefit Exchange.

(2) Medicare.

(3) The Medi-Cal program, the California Children’s Services program, or other state-funded programs designed to provide health coverage.

(b) If a hospital 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, the hospital shall provide the patient with a clear and conspicuous notice that includes all of the following:

(1) A statement of charges for services rendered by the hospital.

(2) A request that the patient inform the hospital if the patient has health insurance coverage, Medicare, Medi-Cal, or other coverage.

(3) A statement that, if the consumer does not have health insurance coverage, the consumer may be eligible for Medicare, Medi-Cal, coverage offered through the California Health Benefit Exchange, California Children’s Services program, other state- or county-funded health coverage, or charity care.

(4) A statement indicating how patients may obtain applications for the Medi-Cal program, coverage offered through the California Health Benefit Exchange, or other state- or county-funded health coverage programs and that the hospital will provide these applications. The hospital shall also provide patients with a referral to a local consumer assistance center housed at legal services offices. If the patient does not indicate coverage by a third-party payer specified in subdivision (a) or requests a discounted price or charity care, then the hospital shall provide an application for the Medi-Cal program or other state- or county-funded health coverage programs. This application shall be provided prior to discharge if the patient has been admitted or to patients receiving emergency or outpatient care.

(5) Information regarding the financially qualified patient and charity care application, including the following:

(A) A statement that indicates that if the patient lacks, or has inadequate, insurance, and meets certain low- and moderate-income requirements, the patient may qualify for discounted payment or charity care.

(B) The name and telephone number of a hospital employee or office from whom or which the patient may obtain information about the hospital’s discount payment and charity care policies, and how to apply for that assistance.

(C) If a patient applies, or has a pending application, for another health coverage program at the same time that the patient applies for a hospital charity care or discount payment program, neither application shall preclude eligibility for the other program.

history: (History: Amended by Stats. 2021, Ch. 473, Sec. 9. (AB 1020) Effective January 1, 2022.)

article: 1. Hospital Fair Pricing Policies


text:
(a) A hospital shall not sell patient debt to a debt buyer, as defined in Section 1788.50 of the Civil Code, unless all of the following apply:

(1) The hospital has found the patient ineligible for financial assistance or the patient has not responded to any attempts to bill or offer financial assistance for 180 days.

(2) The hospital includes contractual language in the sales agreement in which the debt buyer agrees to return, and the hospital agrees to accept, any account in which the balance has been determined to be incorrect due to the availability of a third-party payer, including a health plan or government health coverage program, or the patient is eligible for charity care or financial assistance.

(3) The debt buyer agrees to not resell or otherwise transfer the patient debt, except to the originating hospital or a tax-exempt organization described in Section 127444, or if the debt buyer is sold or merged with another entity.

(4) The debt buyer agrees not to charge interest or fees on the patient debt.

(5) The debt buyer is licensed as a debt collector by the Department of Financial Protection and Innovation.

(b) A hospital shall have a written policy about when and under whose authority patient debt is advanced for collection, whether the collection activity is conducted by the hospital, an affiliate or subsidiary of the hospital, or by an external collection agency, or debt buyer.

(c) A hospital shall establish a written policy defining standards and practices for the collection of debt, and shall obtain a written agreement from any agency that collects hospital receivables that it will adhere to the hospital’s standards and scope of practices. This agreement shall require the affiliate, subsidiary, debt buyer, or external collection agency of the hospital that collects the debt to comply with the hospital’s definition and application of a reasonable payment plan, as defined in subdivision (i) of Section 127400. The policy shall not conflict with other applicable laws and shall not be construed to create a joint venture between the hospital and the external entity, or otherwise to allow hospital governance of an external entity that collects hospital receivables. In determining the amount of a debt a hospital may seek to recover from patients who are eligible under the hospital’s charity care policy or discount payment policy, the hospital may consider only income as limited by Section 127405.

(d) At time of billing, a hospital shall provide a written summary consistent with Section 127410, which includes the same information concerning services and charges provided to all other patients who receive care at the hospital.

(e) Before assigning a bill to collections, or selling patient debt to a debt buyer, a hospital shall send a patient a notice with all of the following information:

(1) The date or dates of service of the bill that is being assigned to collections or sold.

(2) The name of the entity the bill is being assigned or sold to.

(3) A statement informing the patient how to obtain an itemized hospital bill from the hospital.

(4) The name and plan type of the health coverage for the patient on record with the hospital at the time of services or a statement that the hospital does not have that information.

(5) An application for the hospital’s charity care and financial assistance.

(6) The date or dates the patient was originally sent a notice about applying for financial assistance, the date or dates the patient was sent a financial assistance application, and, if applicable, the date a decision on the application was made.

(f) A hospital, any assignee of the hospital, or other owner of the patient debt, including a collection agency or debt buyer, shall not do either of the following:

(1) Report adverse information to a consumer credit reporting agency.

(2) Commence civil action against the patient for nonpayment before 180 days after initial billing.

(g) If a patient is attempting to qualify for eligibility under the hospital’s charity care or discount payment policy and is attempting in good faith to settle an outstanding bill with the hospital by negotiating a reasonable payment plan or by making regular partial payments of a reasonable amount, the hospital shall not send the unpaid bill to any collection agency, debt buyer, or other assignee, unless that entity has agreed to comply with this article.

(h) (1) The hospital or other assignee that is an affiliate or subsidiary of the hospital shall not, in dealing with patients eligible under the hospital’s charity care or discount payment policies, use wage garnishments or liens on any real property as a means of collecting unpaid hospital bills.

(2) A collection agency, debt buyer, or other assignee that is not a subsidiary or affiliate of the hospital shall not, in dealing with any patient under the hospital’s charity care or discount payment policies, use as a means of collecting unpaid hospital bills, any of the following:

(A) A wage garnishment, except by order of the court upon noticed motion, supported by a declaration filed by the movant identifying the basis for which it believes that the patient has the ability to make payments on the judgment under the wage garnishment, which the court shall consider in light of the size of the judgment and additional information provided by the patient before or at the hearing concerning the patient’s ability to pay, including information about probable future medical expenses based on the current condition of the patient and other obligations of the patient.

(B) Notice or conduct a sale of any real property owned, in part or completely, by the patient.

(C) Liens on any real property.

(3) This requirement does not preclude a hospital, collection agency, debt buyer, or other assignee from pursuing reimbursement and any enforcement remedy or remedies from third-party liability settlements, tortfeasors, or other legally responsible parties.

(i) Extended payment plans offered by a hospital to assist patients eligible under the hospital’s charity care policy, discount payment policy, or any other policy adopted by the hospital for assisting low-income patients with no insurance or high medical costs in settling outstanding past due hospital bills, shall be interest free. The hospital extended payment plan may be declared no longer operative after the patient’s failure to make all consecutive payments due during a 90-day period. Before declaring the hospital extended payment plan no longer operative, the hospital, collection agency, debt buyer, or assignee shall make a reasonable attempt to contact the patient by telephone and, to give notice in writing, that the extended payment plan may become inoperative, and of the opportunity to renegotiate the extended payment plan. Before the hospital extended payment plan being declared inoperative, the hospital, collection agency, debt buyer, or assignee shall attempt to renegotiate the terms of the defaulted extended payment plan, if requested by the patient. The hospital, collection agency, debt buyer, or assignee shall not commence a civil action against the patient or responsible party for nonpayment before the time the extended payment plan is declared to be no longer operative. For purposes of this section, the notice and telephone call to the patient may be made to the last known telephone number and address of the patient.

(j) (1) A hospital shall maintain all records relating to money owed to the hospital by a patient or a patient’s guarantor for five years, including, but not limited to, all of the following:

(A) Documents related to litigation filed by the hospital.

(B) A contract and significant related records by which a hospital assigns or sells medical debt to a third party.

(C) A list, updated at least annually, of every person, including the person’s name and contact information, that meets at least one of the following criteria:

(i) The person is a debt collector to whom the hospital sold or assigned a debt that a patient of the hospital owed the hospital.

(ii) The person is retained by the hospital to pursue litigation for debts owed by patients on behalf of the hospital.

(2) Any contract entered into by a hospital related to the assignment or sale of medical debt shall require the assignee or buyer and any subsequent assignee or buyer to maintain records related to litigation for five years.

(3) For purposes of this subdivision, “debt collector” and “person” have the same meanings as defined in Section 1788.2 of the Civil Code.

(k) This section does not diminish or eliminate any protections consumers have under existing federal and state debt collection laws, or any other consumer protections available under state or federal law. If the patient fails to make all consecutive payments for 90 days and fails to renegotiate a payment plan, this subdivision does not limit or alter the obligation of the patient to make payments on the obligation owing to the hospital pursuant to any contract or applicable statute from the date that the extended payment plan is declared no longer operative, as set forth in subdivision (i).

history: (History: Amended by Stats. 2024, Ch. 520, Sec. 10.5. (SB 1061) Effective January 1, 2025.)

article: 1. Hospital Fair Pricing Policies


text:
(a) The period described in Section 127425 shall be extended if the patient has a pending appeal for coverage of the services, until a final determination of that appeal is made, if the patient makes a reasonable effort to communicate with the hospital about the progress of any pending appeals.

(b) For purposes of this section, “pending appeal” includes any of the following:

(1) A grievance against a contracting health care service plan, as described in Chapter 2.2 (commencing with Section 1340) of Division 2, or against an insurer, as described in Chapter 1 (commencing with Section 10110) of Part 2 of Division 2 of the Insurance Code.

(2) An independent medical review, as described in Section 10145.3 or 10169 of the Insurance Code.

(3) A fair hearing for a review of a Medi-Cal claim pursuant to Section 10950 of the Welfare and Institutions Code.

(4) An appeal regarding Medicare coverage consistent with federal law and regulations.

history: (History: Added by Stats. 2006, Ch. 755, Sec. 1. Effective January 1, 2007.)

article: 1. Hospital Fair Pricing Policies


text:
(a) Prior to commencing collection activities against a patient, the hospital, any assignee of the hospital, or other owner of the patient debt, including a collection agency, shall provide the patient with a clear and conspicuous written notice containing both of the following:

(1) A plain language summary of the patient’s rights pursuant to this article, the Rosenthal Fair Debt Collection Practices Act (Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code), and the federal Fair Debt Collection Practices Act (Subchapter V (commencing with Section 1692) of Chapter 41 of Title 15 of the United States Code). The summary shall include a statement that the Federal Trade Commission enforces the federal act.

The summary shall be sufficient if it appears in substantially the following form: “State and federal law require debt collectors to treat you fairly and prohibit debt collectors from making false statements or threats of violence, using obscene or profane language, and making improper communications with third parties, including your employer. Except under unusual circumstances, debt collectors may not contact you before 8:00 a.m. or after 9:00 p.m. In general, a debt collector may not give information about your debt to another person, other than your attorney or spouse. A debt collector may contact another person to confirm your location or to enforce a judgment. For more information about debt collection activities, you may contact the Federal Trade Commission by telephone at 1-877-FTC-HELP (382-4357) or online at www.ftc.gov.”

(2) A statement that nonprofit credit counseling services may be available in the area.

(b) The notice required by subdivision (a) shall also accompany any document indicating that the commencement of collection activities may occur.

(c) The requirements of this section shall apply to the entity engaged in the collection activities. If a hospital assigns or sells the debt to another entity, the obligations shall apply to the entity, including a collection agency, engaged in the debt collection activity.

history: (History: Amended by Stats. 2007, Ch. 347, Sec. 4. Effective January 1, 2008.)

article: 1. Hospital Fair Pricing Policies


text:
(a) A hospital shall provide to the department a copy of its discount payment policy, charity care policy, eligibility procedures for those policies, review process, and the application for charity care or discounted payment programs, as well as a copy of its debt collection policy. The department may determine whether the information is to be provided electronically or in some other similar manner. The information shall be provided at least biennially on January 1, or when a significant change is made. If no significant change has been made by the hospital since the information was previously provided, notifying the department of the lack of change shall meet the requirements of this section. The department shall make this information available to the public on its internet website.

(b) The department shall review a hospital’s policy for compliance with this article by January 1, 2023, and whenever a significant change is made and submitted to the department.

(c) A patient shall not be denied financial assistance that would be available pursuant to the policy published on the department’s internet website at the time the patient was first billed.

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 6. (AB 2297) Effective January 1, 2025.)

article: 1. Hospital Fair Pricing Policies


text:
(a) Upon promulgation of regulations as required in subdivisions (b) and (c) no later than January 1, 2024, the Director of the Department of Health Care Access and Information shall impose an administrative penalty for each violation against a hospital that fails to comply with this article, unless the administrative penalty is waived or reduced by the department in the interest of fairness. For purposes of this section, multiple violations identified during the same investigation shall constitute a single violation for purposes of assessing an administrative penalty.

(b) Upon receipt of a complaint by a patient that a hospital has not followed the requirements of Sections 127405 to 127435, inclusive, the director shall do all of the following:

(1) Review the patient’s eligibility for charity care or financial assistance under the hospital’s published financial assistance policy in effect at the time the patient was first billed.

(2) Review the hospital’s compliance with this article.

(3) If, after completing the actions in paragraphs (1) and (2), the director believes that the hospital may have violated this article, issue a notice to the hospital describing the alleged violation. The notice shall state all of the facts supporting the alleged violation. The hospital shall have 30 days after issuance of the notice to file a response with the director.

(4) If, after considering all of the information included in any response filed by the hospital, the director determines that a violation has occurred, assess an administrative penalty. The administrative penalty may be up to forty thousand dollars ($40,000), which amount shall be adjusted every five years to reflect the percentage change in the calendar year average, for the five-year period, of the medical care index of the Consumer Price Index, as published by the United States Bureau of Labor Statistics. The department shall promulgate regulations establishing criteria to determine the amount of an administrative penalty. The criteria shall include, at a minimum, all of the following:

(A) The actual financial harm to patients, if any.

(B) The nature, scope, and severity of the violation, including whether the hospital’s policies, postings, and screening practices are in compliance with Sections 127405 to 127435, inclusive, or whether the violation was a mistake that resulted in a violation of those policies and practices.

(C) The facility’s history of compliance with related state and federal statutes and regulations.

(D) Factors beyond the facility’s control that restrict the facility’s ability to comply with this chapter or the rules and regulations promulgated thereunder.

(E) The demonstrated willfulness of the violation.

(F) The extent to which the facility detected the violation and took steps to immediately correct the violation and prevent the violation from recurring.

(G) The special circumstances of small and rural hospitals, as defined in Section 124840, if that consideration is needed to protect access to quality care in those hospitals.

(5) Notify the patient of the violation and the patient’s right to reimbursement pursuant to Section 127440.

(6) Begin collection efforts for the penalty after the deadline to appeal pursuant to subdivision (c) has passed, or, if the hospital files an appeal, when all appeals have been exhausted and the department’s findings have been upheld.

(c) The department shall promulgate regulations to establish a process whereby a hospital may appeal the director’s determination that a violation has occurred or the amount of any penalty assessed, subject to the following requirements:

(1) A hospital shall have 30 days from issuance to appeal any determination or penalty.

(2) A hospital may submit any relevant evidence during the appeal process.

(3) The department shall provide the patient who filed a complaint with timely notice of the appeal and a copy of any evidence submitted by the hospital, and offer the patient 30 days to submit a response, including any additional evidence in support of the complaint.

(4) The department shall consider all relevant evidence.

(5) The department may reduce or waive an assessment in the interest of fairness.

(6) The department may reduce or waive a penalty if a violation was due to factors beyond the hospital’s control, such as a patient failing to provide accurate information or an unauthorized person removing signage from hospital walls.

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 7. (AB 2297) Effective January 1, 2025.)

article: 1. Hospital Fair Pricing Policies


text: The Hospital Fair Pricing Penalties Fund is created in the State Treasury. Any moneys collected from administrative penalties pursuant to this article shall be deposited into the fund. Upon appropriation by the Legislature, the department may use moneys from the fund to carry out this article.

history: (History: Added by Stats. 2026, Ch. 27, Sec. 40. (SB 164) Effective June 29, 2026.)

article: 1. Hospital Fair Pricing Policies


text:
(a) The hospital shall reimburse the patient or patients any amount actually paid in excess of the amount due under this article, including interest. Interest owed by the hospital to the patient shall accrue at the rate set forth in Section 685.010 of the Code of Civil Procedure, beginning on the date payment by the patient is received by the hospital. However, a hospital is not required to reimburse the patient or pay interest if the amount due is less than five dollars ($5.00). The hospital shall refund the patient within 30 days.

(b) The hospital may reimburse the patient, but is not required to do so, if the hospital or the department determines that a patient qualified for financial assistance at the time the patient was first billed and either of the following has occurred:

(1) It has been five years or more since the last payment to the hospital, hospital assignee, or debt buyer.

(2) The patient debt was sold to a debt buyer in accordance with state law in effect at the time the debt was sold, if sold before January 1, 2022.

(c) This section does not diminish or eliminate any rights or responsibilities a hospital may have, nor any rights that a patient may have under existing federal and state laws, including, but not limited to, 26 CFR Sec. 1.501(r)-6.

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 8. (AB 2297) Effective January 1, 2025.)

article: 1. Hospital Fair Pricing Policies


text: The rights, remedies, and penalties established by this article are cumulative, and shall not supersede the rights, remedies, or penalties established under other laws.

article: 1. Hospital Fair Pricing Policies


text:
(a) This article does not prohibit a hospital from uniformly imposing charges from its established charge schedule or published rates or preclude the recognition of a hospital’s established charge schedule or published rates for purposes of applying any payment limit, interim payment amount, or other payment calculation based upon a hospital’s rates or charges under the Medi-Cal program, the Medicare Program, workers’ compensation, or other federal, state, or local public program of health benefits.

(b) This article does not prohibit a hospital, debt collector, or debt buyer from selling or otherwise transferring patient debt to an organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code for the explicit purpose of the tax-exempt organization abolishing the patient debt by cancellation of the indebtedness, or otherwise prohibit payment of the patient’s debt by a third party.

(c) A health care service plan, insurer, or any other person shall not reduce the amount it would otherwise reimburse a claim for hospital services because a hospital has waived, or will waive, collection of all or a portion of a patient’s bill for hospital services in accordance with the hospital’s charity care or discount payment policy, notwithstanding any contractual provision.

history: (History: Amended by Stats. 2021, Ch. 473, Sec. 14. (AB 1020) Effective January 1, 2022.)

article: 1. Hospital Fair Pricing Policies


text: Notwithstanding any other provision of law, the amounts paid by parties for services resulting from reduced or waived charges under a hospital’s discounted payment or charity care policy shall not constitute 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, and shall not be used to calculate a hospital’s median non-Medicare or Medi-Cal charges, for purposes of any payment limit under the federal Medicare Program, the Medi-Cal program, or any other federal or state-financed health care program.

article: 1. Hospital Fair Pricing Policies


text: To the extent that any requirement of Section 127400, 127401, or 127405 results in a federal determination that a hospital’s established charge schedule or published rates are not the hospital’s customary or prevailing charges for services, the requirement in question shall be inoperative for all general acute care hospitals, including, but not limited to, a hospital that is licensed to and operated by a county or a hospital authority established pursuant to Section 101850. The State Department of Public Health shall seek federal guidance regarding modifications to the requirement in question. All other requirements of this article shall remain in effect.

history: (History: Amended by Stats. 2007, Ch. 483, Sec. 36. Effective January 1, 2008.)

article: 1. Hospital Fair Pricing Policies


text:
As used in this article, the following terms have the following meanings:

(a) “Allowance for financially qualified patient” means, with respect to emergency care rendered to a financially qualified patient, an allowance that is applied after the emergency physician’s charges are imposed on the patient, due to the patient’s determined financial inability to pay the charges.

(b) “Emergency care” means emergency medical services and care, as defined in Section 1317.1, that is provided by an emergency physician in the emergency department of a hospital.

(c) “Emergency physician” means a physician and surgeon licensed pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code who is credentialed by a hospital and either employed or contracted by the hospital to provide emergency medical services in the emergency department of the hospital, except that an “emergency physician” shall not include a physician specialist who is called into the emergency department of a hospital or who is on staff or has privileges at the hospital outside of the emergency department.

(d) “Federal poverty level” means the poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under authority of subsection (2) of Section 9902 of Title 42 of the United States Code.

(e) “Financially qualified patient” means a patient who is both of the following:

(1) A patient who is a self-pay patient or a patient with high medical costs.

(2) A patient who has a family income that does not exceed 400 percent of the federal poverty level.

(f) “Hospital” means a facility that is required to be licensed under subdivision (a) of Section 1250, except a facility operated by the State Department of State Hospitals, the State Department of Developmental Services, or the Department of Corrections and Rehabilitation.

(g) “Department” means the Department of Health Care Access and Information.

(h) “Self-pay patient” means a patient who does not have third-party coverage from a health insurer, health care service plan, Medicare, or Medicaid, and whose injury is not a compensable injury for purposes of workers’ compensation, automobile insurance, or other insurance as determined and documented by the emergency physician. Self-pay patients may include charity care patients.

(i) “A patient with high medical costs” means a person whose family income does not exceed 400 percent of the federal poverty level if that individual does not receive a discounted rate from the emergency physician as a result of their third-party coverage. For these purposes, “high medical costs” means any of the following:

(1) Annual out-of-pocket costs incurred by the individual at the hospital that provided emergency care that exceed 10 percent of the patient’s family income in the prior 12 months. Out-of-pocket costs means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing.

(2) Annual out-of-pocket expenses that exceed 10 percent of the patient’s family income, if the patient provides documentation of the patient’s medical expenses paid by the patient or the patient’s family in the prior 12 months. Out-of-pocket expenses means any expenses for medical care that are not reimbursed by insurance or a health coverage program, such as Medicare copays or Medi-Cal cost sharing. The emergency physician may waive the request for documentation.

(3) A lower level determined by the emergency physician in accordance with the emergency physician’s discounted payment policy.

(j) “Patient’s family” means the following:

(1) For persons 18 years of age and older, spouse, domestic partner, as defined in Section 297 of the Family Code, and dependent children under 21 years of age, or any age if disabled, consistent with Section 1614(a) of Part A of Title XVI of the Social Security Act, whether living at home or not.

(2) For persons under 18 years of age or for a dependent child 18 to 20 years of age, inclusive, parent, caretaker relatives, and parent’s or caretaker relatives’ other dependent children under 21 years of age, or any age if disabled, consistent with Section 1614(a) of Part A of Title XVI of the Social Security Act.

(k) “Reasonable payment formula” means monthly payments that are not more than 10 percent of a patient’s family income for a month, excluding deductions for essential living expenses. “Essential living expenses” means, for purposes of this subdivision, expenses for all of the following: rent or house payment and maintenance, food and household supplies, utilities and telephone, clothing, medical and dental payments, insurance, school or child care, child or spousal support, transportation and auto expenses, including insurance, gas, and repairs, installment payments, laundry and cleaning, and other extraordinary expenses.

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 9. (AB 2297) Effective January 1, 2025.)

path: 107. HEALTH CARE ACCESS AND INFORMATION > 2. HEALTH POLICY AND PLANNING > 2.5. Fair Pricing Policies > 2. Emergency Physician Fair Pricing Policies


text: A violation of this article shall not constitute a violation of the terms of a physician and surgeon’s licensure.

history: (History: Added by Stats. 2010, Ch. 445, Sec. 4. (AB 1503) Effective January 1, 2011.)

article: 2. Emergency Physician Fair Pricing Policies


text:
(a) Uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level shall be eligible to apply to an emergency physician for a discount payment pursuant to a discount payment policy. Notwithstanding any other provision of this article, an emergency physician may choose to grant eligibility for a discount payment policy to patients with incomes over 400 percent of the federal poverty level.

(b) An emergency physician shall limit expected payment for services provided to a patient at or below 400 percent of the federal poverty level and who is eligible under the emergency physician’s discount payment policy to an amount that is no greater than 50 percent of the median of billed charges based on a nationally recognized database of physician and surgeon charges until the nonprofit FAIR Health, Inc. creates a database that makes available the rate of payment received by physician and surgeons from commercial insurers for the same services in the same or similar geographic region. When FAIR Health, Inc. makes available the rate of payment received by physicians and surgeons from commercial insurers for the same services in the same or similar geographic region, the amount of expected payment under this section shall be no greater than the median or average of rates paid by commercial insurers for the same or similar services in the same or similar geographic region.

(c) (1) If an emergency physician seeks reimbursement from the Maddy Fund pursuant to Section 1797.98c, then the emergency physician shall, at that time, cease any further billing or collection activity for that patient.

(2) If the emergency physician does not receive reimbursement from the Maddy Fund after attempting to obtain reimbursement from the Maddy Fund, then the provisions of this article shall apply.

(3) If the emergency physician does not attempt to seek reimbursement from the Maddy Fund, the provisions of this article shall apply.

(d) A patient, or patient’s legal representative, who requests a discounted payment or other assistance in meeting their financial obligation to the emergency physician shall make every reasonable effort to provide the emergency physician with documentation of income and health benefits coverage, if the emergency physician requests the documentation. If the patient, or the patient’s legal representative, requests a discounted payment and fails to provide information that is reasonable and necessary for the emergency physician to make a determination, the emergency physician may consider that failure in making its determination.

(1) For purposes of determining eligibility for discounted payment, the emergency physician may rely on the determination made by the hospital at which emergency care was provided. If the emergency physician chooses to make a separate determination of eligibility for discounted payment, documentation of income shall be limited to recent pay stubs or income tax returns. The emergency physician, at their discretion, may accept self-attestation by a patient, or a patient’s legal representative, but shall not request documentation of income other than that authorized in this paragraph.

(2) Information obtained pursuant to paragraph (1) shall not be used for collections activities. This paragraph does not prohibit the use of information obtained by the emergency physician, collection agency, or assignee independent of the eligibility process for discounted payment.

(3) Eligibility for discounted payments shall be determined at any time the emergency physician is in receipt of information specified in paragraph (1). An emergency physician shall not impose time limits for applying for discount payments, nor deny eligibility based on the timing of a patient’s application.

(e) An emergency physician may waive or reduce Medi-Cal and Medicare cost-sharing amounts as part of their discount payment program.

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 10. (AB 2297) Effective January 1, 2025.)


text:
(a) Each emergency physician shall 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 emergency care rendered by the emergency physician to a patient, including, but not limited to, any of the following:

(1) Private health insurance, including coverage offered through the California Health Benefit Exchange.

(2) Medicare.

(3) The Medi-Cal program, the Healthy Families Program, the California Children’s Services program, or other state- or county-funded programs designed to provide comprehensive health coverage.

(b) If the emergency physician or his or her representative 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, the emergency physician shall provide the patient with a clear and conspicuous notice that includes all of the following:

(1) A statement of charges for services rendered by the emergency physician.

(2) A request that the patient inform the emergency physician if the patient has health insurance coverage, Medicare, Healthy Families Program, Medi-Cal, or other coverage.

(3) A statement that if the consumer does not have health insurance coverage, the consumer may be eligible for Medicare, Healthy Families Program, Medi-Cal, coverage through the California Health Benefit Exchange, California Children’s Services program, other state- or county-funded health coverage, or discounted payment care.

(4) Information regarding the financially qualified patient and discounted payment application, including the following:

(A) A statement that indicates that if the patient lacks, or has inadequate, insurance, and meets certain low- and moderate-income requirements, the patient may qualify for discounted payment. That statement shall also provide patients with a referral to a local consumer assistance center housed at legal services offices.

(B) The name and telephone number of the emergency physician’s employee or office from whom or which the patient may obtain information about the emergency physician’s discount payment policy, and how to apply for that assistance.

(C) If a patient applies, or has a pending application for, another health coverage program at the same time that he or she applies for charity care or a discount payment program, neither application shall preclude eligibility for the other program.

(c) (1) In addition to the statement of the charges, if the emergency physician uses the following notice in any billing, that emergency physician shall be deemed to have complied with the notice requirements of this section: “If you are uninsured or have high medical costs, please contact ____ (name of person responsible for discount payment policy) at ____ (area code and phone number) for information on discounts and programs for which you may be eligible, including the Medi-Cal program. If you have coverage, please tell us so that we may bill your plan.”

(2) If the emergency physician or the assignee of the emergency physician lacks the capacity to provide the notice specified in paragraph (1), the emergency physician or his or her assignee shall be deemed to have complied with the notice requirements of this section if the information required under this section is provided upon request and if the following is printed on the bill in 14-point bold type: “If uninsured or high medical bill, call re: discount.”

history: (History: Amended by Stats. 2014, Ch. 758, Sec. 6. (SB 1276) Effective January 1, 2015.)


text:
(a) Each emergency physician shall have a written policy about when and under whose authority patient debt is advanced for collection.

(b) Each emergency physician shall establish a written policy defining standards and practices for the collection of debt, and shall obtain a written agreement from any agency that collects emergency physician receivables that it will adhere to the emergency physician’s standards and scope of practice. This agreement shall require the affiliate, subsidiary, or external collection agency of the physician that collects the debt to comply with the physician’s definition and application of a reasonable payment formula, as defined in subdivision (k) of Section 127450. The policy shall not conflict with other applicable laws and shall not be construed to create a joint venture between the emergency physician and the external entity, or otherwise to allow physician and surgeon governance of an external entity that collects physician and surgeon receivables. In determining the amount of a debt the emergency physician may seek to recover from patients who are eligible under the emergency physician’s charity care policy or discount payment policy, the emergency physician may consider only income as limited by Section 127452.

(c) For a patient that lacks coverage, or for a patient that provides information that they may be a patient with high medical costs, the emergency physician, an assignee of the emergency physician, or other owner of the patient debt, including a collection agency, shall not report adverse information to a consumer credit reporting agency or commence civil action against the patient for nonpayment at any time before 150 days after initial billing.

(d) If a patient is attempting to qualify for eligibility under the emergency physician’s discount payment policy and is attempting in good faith to settle an outstanding bill with the physician and surgeon by negotiating an extended payment plan, the emergency physician or their assignee, including a collection agency, shall not report adverse information to a consumer credit agency or commence a civil action.

(e) (1) The emergency physician or other assignee shall not, in dealing with patients eligible under the emergency physician’s discount payment policies, use wage garnishments or liens on any real property as a means of collecting unpaid emergency physician bills.

(2) A collection agency or other assignee shall not, in dealing with any patient under the emergency physician’s discount payment policy, use as a means of collecting unpaid emergency physician bills, any of the following:

(A) A wage garnishment, except by order of the court upon noticed motion, supported by a declaration filed by the movant identifying the basis for its belief that the patient has the ability to make payments on the judgment under the wage garnishment, that the court shall consider in light of the size of the judgment and additional information provided by the patient before or at the hearing concerning the patient’s ability to pay, including information about probable future medical expenses based on the current condition of the patient and other obligations of the patient.

(B) Notice or conduct a sale of any real property owned, in part or completely, by the patient.

(C) Liens on any real property.

(3) This requirement does not preclude the emergency physician, collection agency, or other assignee from pursuing reimbursement and any enforcement remedy or remedies from third-party liability settlements, tortfeasors, or other legally responsible parties.

(f) Extended payment plans offered by an emergency physician to assist patients eligible under the emergency physician’s discount payment policy or any other policy adopted by the emergency physician for assisting low-income patients with no insurance or high medical costs in settling outstanding past due emergency physician bills, shall be interest free. The emergency physician’s extended payment plan may be declared no longer operative after the patient’s failure to make all consecutive payments due during a 90-day period. Before declaring the emergency physician’s extended payment plan no longer operative, the emergency physician, collection agency, or assignee shall make a reasonable attempt to contact the patient by telephone, if the telephone number is known, and to give notice in writing that the extended payment plan may become inoperative, and of the opportunity to renegotiate the extended payment plan. Before the emergency physician’s extended payment plan being declared inoperative, the emergency physician, collection agency, or assignee shall attempt to renegotiate the terms of the defaulted extended payment plan, if requested by the patient. If the patient wishes to renegotiate the terms of the defaulted extended payment plan but no agreement can be reached on the amount of the payment, the emergency physician or their assignee shall apply the reasonable payment formula in subdivision (k) of Section 127450 to determine a monthly payment amount for a subsequent extended payment plan. If the reasonable payment formula would result in a payment of less than ten dollars ($10) a month, the subsequent extended payment plan shall be ten dollars ($10) per month. The emergency physician, collection agency, or assignee shall not report adverse information to a consumer credit reporting agency or commence a civil action against the patient or responsible party for nonpayment before the time the extended payment plan is declared to be no longer operative. If after having defaulted on an extended payment plan the patient has entered into another extended payment plan with payments in the amount of either the reasonable payment formula or ten dollars ($10) per month and the patient fails to make all consecutive payments due during a 90-day period, that extended payment plan is inoperative. For purposes of this section, the notice and telephone call to the patient may be made to the last known telephone number and address of the patient.

(g) For purposes of determining the reasonable payment formula in subdivision (k) of Section 127450, the emergency physician or their assignee may rely on the determination of family income and essential living expenses made by the hospital at which emergency care was provided. The emergency physician or their assignee, at their discretion, may accept self-attestation of family income and essential living expenses by a patient or a patient’s legal representative.

(h) This section shall not be construed to diminish or eliminate any protections consumers have under existing federal and state debt collection laws, or any other consumer protections available under state or federal law. If the patient fails to make all consecutive payments for 90 days and fails to renegotiate a payment plan, this subdivision does not limit or alter the obligation of the patient to make payments on the obligation owing to the emergency physician pursuant to any contract or applicable statute from the date that the extended payment plan is declared no longer operative, as set forth in subdivision (f).

history: (History: Amended by Stats. 2024, Ch. 511, Sec. 11. (AB 2297) Effective January 1, 2025.)


text:
(a) The period described in Section 127455 shall be extended if the patient has a pending appeal for coverage of the services, until a final determination of that appeal is made, if the patient makes a reasonable effort to communicate with the emergency physician about the progress of any pending appeals.

(b) For purposes of this section, “pending appeal” includes any of the following:

(1) A grievance against a contracting health care service plan, as described in Chapter 2.2 (commencing with Section 1340) of Division 2, or against an insurer, as described in Chapter 1 (commencing with Section 10110) of Part 2 of Division 2 of the Insurance Code.

(2) An independent medical review, as described in Section 10145.3 or 10169 of the Insurance Code.

(3) A fair hearing for a review of a Medi-Cal claim pursuant to Section 10950 of the Welfare and Institutions Code.

(4) An appeal regarding Medicare coverage consistent with federal law and regulations.


text:
(a) After the period described in Section 127455, and upon the completion of appeals consistent with Section 127456, prior to commencing further collection activities against a patient, the emergency physician, any assignee of the emergency physician, or other owner of the patient debt, including a collection agency, shall not report adverse information to a consumer credit reporting agency or commence a civil action, until after the patient has been provided with a clear and conspicuous written notice containing both of the following:

(1) A plain language summary of the patient’s rights pursuant to this article, the Rosenthal Fair Debt Collection Practices Act (Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code), and the federal Fair Debt Collection Practices Act (Subchapter V (commencing with Section 1692) of Chapter 41 of Title 15 of the United States Code). The summary shall include a statement that the Federal Trade Commission enforces the federal act. The summary shall be sufficient if it appears in substantially the following form: “State and federal law require debt collectors to treat you fairly and prohibit debt collectors from making false statements or threats of violence, using obscene or profane language, and making improper communications with third parties, including your employer. Except under unusual circumstances, debt collectors may not contact you before 8 a.m. or after 9 p.m. In general, a debt collector may not give information about your debt to another person, other than your attorney or spouse. A debt collector may contact another person to confirm your location or to enforce a judgment. For more information about debt collection activities, you may contact the Federal Trade Commission by telephone at 1-877-FTC-HELP (382-4357) or online at www.ftc.gov.”

(2) A statement that nonprofit credit counseling services may be available in the area.

(b) The notice required by subdivision (a) shall also accompany any document indicating that the commencement of collection activities may occur.

(c) The requirements of this section shall apply to the entity engaged in reporting adverse information to a consumer credit reporting agency or commencing a civil action against the patient. If an emergency physician assigns or sells the debt to another entity, the obligations shall apply to the entity, including a collection agency, engaged in the debt collection activity.


text: The emergency physician shall reimburse the patient or patients any amount actually paid in excess of the amount due under this article, including interest. Interest owed by the emergency physician to the patient shall accrue at the rate set forth in Section 685.010 of the Code of Civil Procedure, beginning on the date payment by the patient is received by the emergency physician. However, an emergency physician is not required to reimburse the patient or pay interest if the amount due is less than five dollars ($5). The emergency physician shall give the patient a credit for the amount due for at least 60 days from the date the amount is due.


text: Nothing in this article shall be construed to prohibit the emergency physician from uniformly imposing charges from its established charge schedule or published rates, nor shall this article preclude the recognition of an emergency physician’s established charge schedule or published rates for purposes of applying any payment limit, interim payment amount, or other payment calculation based upon an emergency physician’s rates or charges under the Medi-Cal program, the Medicare Program, workers’ compensation, or other federal, state, or local public program of health benefits. No health care service plan, insurer, or any other person shall reduce the amount it would otherwise reimburse a claim for emergency physician services because an emergency physician has waived, or will waive, collection of all or a portion of a patient’s bill for emergency physician services in accordance with the emergency physician’s discount payment policy, notwithstanding any contractual provision.


text: Notwithstanding any other provision of law, the amounts paid by parties for services resulting from reduced or waived charges under an emergency physician’s discounted payment policy shall not constitute an emergency physician’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, and shall not be used to calculate an emergency physician’s median non-Medicare or non-Medi-Cal charges, for purposes of any payment limit under the federal Medicare Program, the Medi-Cal program, or any other federal or state-financed health care program.


text: To the extent that any requirement of this article results in a federal determination that an emergency physician’s established charge schedule or published rates are not the physician and surgeon’s customary or prevailing charges for services, the requirement in question shall be inoperative for all emergency physicians. The State Department of Public Health shall seek federal guidance regarding modifications to the requirement in question. All other requirements of this article shall remain in effect.


text:
For purposes of this article:

(a) “Covered drug” means a drug purchased by a covered entity that is subject to the federal pricing requirements set forth in Section 256b of Title 42 of the United States Code.

(b) “Covered entity” means a provider defined as a covered entity in Section 256b of Title 42 of the United States Code.

(c) “Pharmacy benefit manager” has the same meaning as defined in Section 4430 of the Business and Professions Code and includes a wholly or partially owned or controlled subsidiary of a pharmacy benefit manager.

(d) “Specified pharmacy” means a pharmacy owned by, or under contract with, a covered entity that is registered with the 340B discount drug purchasing program to dispense covered drugs on behalf of the covered entity, whether in person or via mail.

history: (History: Added by Stats. 2023, Ch. 414, Sec. 1. (SB 786) Effective January 1, 2024.)

path: 107. HEALTH CARE ACCESS AND INFORMATION > 2. HEALTH POLICY AND PLANNING > 2.5. Fair Pricing Policies > 3. Prescription Drug Pricing for Covered Entities


text:
(a) A pharmacy benefit manager shall not impose any requirements, conditions, or exclusions that do either of the following:

(1) Discriminate against a covered entity or a specified pharmacy in connection with dispensing covered drugs.

(2) Prevent a covered entity from retaining the benefit of discounted pricing for the purchase of covered drugs.

(b) Discrimination prohibited pursuant to subdivision (a) includes, but is not limited to, all of the following:

(1) Payment terms, reimbursement methodologies, or other terms and conditions that distinguish between covered drugs and other drugs, account for the availability of discounts under the 340B discount drug purchasing program described in Section 256b of Title 42 of the United States Code in determining reimbursement, or are less favorable than the payment terms or reimbursement methodologies for similarly situated entities that are not furnishing or dispensing covered drugs.

(2) Terms or conditions applied to covered entities or specified pharmacies based on the furnishing or dispensing of covered drugs or their status as a covered entity or specified pharmacy, including restrictions or requirements for participation in specialty, standard, or preferred pharmacy networks, or requirements related to the frequency or scope of audits.

(3) Refusing to contract with or terminating a contract with a covered entity or specified pharmacy, or otherwise excluding a covered entity or specified pharmacy from a specialty, standard or preferred network, on the basis that the entity or pharmacy is a covered entity or a specified pharmacy or for reasons other than those that apply equally to entities or pharmacies that are not covered entities or specified pharmacies.

(4) Retaliation against a covered entity or specified pharmacy based on its exercise of any right or remedy under this article.

(5) Interfering with an individual’s choice to receive a covered drug from a covered entity or specified pharmacy, whether in person or via direct delivery, mail, or other form of shipment.

(6) Restricting or prohibiting a covered entity from raising a grievance or speaking publicly about any pharmacy benefit manager that violates this subdivision or from filing a legal action against a pharmacy benefit manager for violating this subdivision.

(c) This section does not apply to the Medi-Cal program or the federal Medicare Program but does apply to pharmacy benefit managers that contract with managed care organizations that serve Medi-Cal or Medicare members.

(d) The provisions of this section shall not be waived, voided, or nullified by contract.

(e) This article shall only be implemented to the extent that it is consistent with Section 256b of Title 42 of the United States Code or any rules or regulations adopted thereunder.

article: 3. Prescription Drug Pricing for Covered Entities


text: This chapter shall be known, and may be cited, as the California Health Care Quality and Affordability Act.

history: (History: Added by Stats. 2022, Ch. 47, Sec. 19. (SB 184) Effective June 30, 2022.)

chapter: 2.6. Health Care Affordability

article: 1. General Provisions and Definitions

path: 107. HEALTH CARE ACCESS AND INFORMATION > 2. HEALTH POLICY AND PLANNING > 2.6. Health Care Affordability > 1. General Provisions and Definitions


text:
As used in this chapter, the following definitions apply:

(a) (1) “Administrative costs and profits” means the total sum of all expenses not included in the numerator of the medical loss ratio calculation under state or federal law, including, but not limited to, all of the following:

(A) All categories of administrative expenditures.

(B) Net additions to reserves.

(C) Rate dividends or rebates.

(D) Profits or losses.

(E) Taxes and fees.

(2) For purposes of this chapter, “administrative costs and profits” for a fully integrated delivery system means those associated with its nonprofit health care services plan.

(b) “Affordability for consumers” means considering the totality of costs paid by consumers for covered benefits, including the enrollee share of premium and cost-sharing amounts paid towards the maximum out-of-pocket amount, including deductibles, copays, coinsurance, and other forms of cost sharing for public and private health coverage.

(c) “Affordability for purchasers” means considering the cost to purchasers, including, but not limited to, health plans and health insurers, employers purchasing group coverage, and the state, for health coverage and shall include premium costs, actuarial value of coverage for covered benefits, and the value delivered on health care spending in terms of improved quality and cost efficiency.

(d) “Alternative payment model” means a state or nationally recognized payment approach that financially incentivizes high-quality and cost-efficient care.

(e) “Board” means the Health Care Affordability Board established by Section 127501.10.

(f) “Director” means the Director of the Department of Health Care Access and Information.

(g) (1) “Exempted provider” means a provider that meets standards established by the board for exemption from either of the following:

(A) The statewide health care target.

(B) Specific targets set for health care sectors, including fully integrated delivery systems, geographic regions, and for individual health care entities.

(2) The factors used in setting standards for exemption may include, but are not limited to, annual gross and net revenues, patient volume, and high-cost outliers in a given service or geographic region.

(3) In determining whether a provider is an exempted provider, the board shall also consider any affiliates, subsidiaries, or other entities that control, govern, or are financially responsible for the provider or that are subject to the control, governance, or financial control of the provider.

(4) A physician practice that does not meet the definition in subdivision (r) is an exempted provider.

(h) “Fully integrated delivery system” means a system that includes a physician organization, health facility or health system, and a nonprofit health care service plan that provides health care services to enrollees in a specific geographic region of the state through an affiliate hospital system and an exclusive contract between the nonprofit health care service plan and a single physician organization in each geographic region to provide those medical services.

(i) “Geographic region” may either be the regions specified in Section 1385.01 or may be otherwise defined by the board.

(j) “Health care cost target” means the target percentage for the maximum annual increase in per capita total health care expenditures.

(k) “Health care entity” means a payer, provider, or a fully integrated delivery system.

(l) “Hedge fund” means a pool of funds managed by investors for the purpose of earning a return on those funds, regardless of the strategies used to manage the funds. Hedge funds include, but are not limited to, a pool of funds managed or controlled by private limited partnerships or other types of private corporate or partnership formations. A hedge fund does not include either of the following:

(1) Natural persons or other entities that contribute, or promise to contribute, funds to the hedge fund, but otherwise do not participate in the management of the hedge fund or the fund’s assets, or in any change in control of the hedge fund or the fund’s assets.

(2) Entities that solely provide or manage debt financing secured in whole or in part by the assets of a health care facility, including, but not limited to, banks and credit unions, commercial real estate lenders, bond underwriters, and trustees.

(m) “Insurance market” means the public and private health insurance markets.

(n) “Line of business” means the different individual, small, and large group business lines, as defined in Section 1348.95 of this code and Section 10127.19 of the Insurance Code, as well as Medi-Cal, Medicare, Covered California, or self-insured public employee health plans.

(o) “Management services organization” means an entity that provides management and administrative support services for a provider in support of the delivery of health care services, excluding the direct provision of health services. Management and administrative support services shall include provider rate negotiation, revenue cycle management, or both. A management services organization does not include entities that own one or more health facilities, as defined in subdivision (a) or (b) of Section 1250.

(p) “Material change” means any change in ownership, operations, or governance for a health care entity, involving a material amount of assets of a health care entity.

(q) “Payer” means private and public health care payers, including all of the following:

(1) A health care service plan or a specialized mental health care service plan, as defined in the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2) or a Medi-Cal managed care plan contracted with the State Department of Health Care Services to provide full scope benefits to a Medi-Cal enrollee pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of, Part 3 of Division 9 of the Welfare and Institutions Code.

(2) A health insurer licensed to provide health insurance or specialized behavioral health-only policies, as defined in Section 106 of the Insurance Code.

(3) A publicly funded health care program, including, but not limited to, Medi-Cal and Medicare.

(4) A third-party administrator.

(5) Any other public or private entity, other than an individual, that pays for or arranges for the purchase of health care services on behalf of employees, dependents, or retirees.

(r) “Physician organization” includes any of the following:

(1) An organization described in paragraph (2) of subdivision (g) of Section 1375.4.

(2) A risk-bearing organization, as defined in Section 1375.4.

(3) A restricted health care service plan and limited health care service plan under subdivision (a) of Section 1300.49 of Title 28 of the California Code of Regulations. The inclusion of restricted health care service plans and limited health care service plans in the definition of “physician organization” does not narrow, abrogate, or otherwise alter the regulatory authority of the Department of Managed Health Care over these entities.

(4) A medical foundation exempt from licensure pursuant to subdivision (l) of Section 1206.

(5) A medical group practice, a professional medical corporation, a medical partnership, or any lawfully organized group of physicians and surgeons that provides, delivers, furnishes, or otherwise arranges for health care services and is comprised of 25 or more physicians.

(6) Notwithstanding paragraph (5), an organization of less than 25 physicians, but that is a high-cost outlier whose costs for the same services provided are substantially higher compared to the statewide average, as identified through data sources that include, but are not limited to, data from state and federal agencies, other relevant supplemental data, such as financial data on providers that is submitted to state agencies, or data reported to HCAI under the Health Care Payments Data Program, established pursuant to Chapter 8.5 (commencing with Section 127671). The cost of delivering the same services in a geographic region shall be considered to the extent that cost substantially deviates from the statewide average and reflects higher costs in that region unrelated to the market dominance of providers in that region or unrelated to the ownership, management, or asset structure chosen by the organization.

(s) “Private equity group” means an investor or group of investors who primarily engage in the raising or returning of capital and who invest, develop, dispose of, or purchase any equity interest in assets, either as a parent company or through another entity the investor or investors completely or partially own or control. A private equity group does not include natural persons or other entities that contribute or promise to contribute funds to the private equity group, but otherwise do not participate in the management of the private equity group or the group’s assets, or in any change in control of the private equity group or the group’s assets.

(t) “Provider” means any of the following that delivers or furnishes health care services:

(1) A physician organization.

(2) A health facility, as defined in Section 1250, including a general acute care hospital.

(3) A clinic conducted, operated, or maintained as an outpatient department of a hospital, as described in subdivision (d) of Section 1206.

(4) A clinic described in subdivision (l) of Section 1206.

(5) A clinic described in subdivision (a) of Section 1204.

(6) A specialty clinic, as described in paragraphs (1) to (3), inclusive, of subdivision (b) of Section 1204.

(7) An ambulatory surgical center or accredited outpatient setting.

(8) A clinical laboratory licensed or registered with the State Department of Public Health under Chapter 3 (commencing with Section 1200) of the Business and Professions Code.

(9) An imaging facility that employs or contracts with persons that are subject to the Radiation Control Law (Chapter 8 (commencing with Section 114960) of Part 9 of Division 104), or the Radiologic Technologists Act (Article 5 (commencing with Section 106955) of Chapter 4 of Part 1, or Article 6 (commencing with Section 107150) of Chapter 4 of Part 1 of Division 104).

(u) “Purchaser” means an individual, organization, or business entity that purchases health care services, including, but not limited to, trust funds, trade associations, and private and public employers who provide health care benefits to their employees, members, and dependents.

(v) “Total health care expenditures” means all health care spending in the state by public and private sources, including all of the following:

(1) All claims-based payments and encounters for covered health care benefits.

(2) All non-claims-based payments for covered health care benefits, such as capitation, salary, global budget, other alternative payment methods, or supplemental provider payments pursuant to the Medi-Cal program.

(3) All cost sharing for covered health care benefits paid by residents of this state, including, but not limited to, copayments, coinsurance, and deductibles.

(4) Administrative costs and profits.

(5) Pharmacy rebates and any inpatient or outpatient prescription drug costs not otherwise included in this subdivision.

history: (History: Amended by Stats. 2025, Ch. 641, Sec. 1. (AB 1415) Effective January 1, 2026.)

article: 1. General Provisions and Definitions