• Assembly ratifies pact with hospitals to ban practice of gouging uninsured patients;
  • Health advocates score other major wins this year, including universal health care;
  • Full list of bills of interest to health advocates to come Friday, September 1.

In the waning and dizzying hours of the 2005-06 session, lawmakers approved a number of major health reforms, including a prohibition against the hospitals for charging low-income patients prices four times higher than what insurance companies pay.

AB774 (Chan) passed on a party-line vote, 41-25 in the preliminary tally, with five hours to spare before the close of session. The bill had cleared the Senate earlier today, with a 22-13 preliminary tally.

The issue has been in the making for five years as lawmakers and advocates have sought to relieve uninsured and underinsured patients from taking on crushing debt, avoiding medical care and getting sicker.

Earlier this week, negotiations broke through with hospitals who had been opposing the bill. The California Hospital Association on Tuesday declared it was neutral on AB774, paving the way for it to pass.

“We’ve worked on this issue for a long time. Hospital bills are the leading cause of bankruptcy. We negotiated what I think is a fair bill,’’ said author Wilma Chan.

While this issue has prompted Congressional hearings, voluntary guidelines by hospitals, class-action lawsuits and multi-million dollar settlements, and national media attention, only New York has passed a similar measure, earlier this year.

AB774 would provide self-pay hospital patients a range of consumer protections, most notably that for families whose income is less than 350% of the federal poverty level ($34,300 for an individual; $58,100 for a family of three), they would not have to pay more for hospital care than the Medi-Cal, Medicare, or worker’s compensation rate. Hospitals would also need to provide notice about their rights and the hospital’s financial policies for uninsured and underinsured. Patients would be given 150 days to negotiate payments and payment plans before their bills are sent to collections.

While nothing in the bill requires hospitals to provide free care, it does ensure than Californians get a fair price; Previously, uninsured patients had gotten hospital bills that were multiple times what insurance companies or government programs paid for exactly the same service.

This victory is the result of a five year campaign by many consumer, health, low-income and community advocacy organizations. AB774 is sponsored by Health Access California and has been strongly supported by a wide range of organizations representing health care consumers, including Consumers Union, Western Center for Law and Poverty, ACORN, Latino Coalition for a Healthy California, California Alliance for Retired Americans, California Church IMPACT, Latino Issues Forum, California Immigrant Welfare Collaborative and many others.

The California Hospital Association had adopted a set of “voluntary guidelines” in February 2004 on issues of hospital pricing, billing, collections, and financial assistance. When vetoing an earlier version of this bil, SB379(Ortiz) later that year, Governor Arnold Schwarzenegger stated that “the voluntary guidelines must be given time to be implemented and reviewed.” In his veto message, the Governor left open the possibility of revisiting legislation if the guidelines were not followed, saying, “Nevertheless, it is my expectation that all hospitals in the state uphold their important commitment to the voluntary guidelines and that they are applied evenly, consistently and without hesitation.”

Studies indicate that the guidelines have not been followed. In late 2004, Health Access worked with volunteers and community organizations to survey 40 hospitals around the state, and found only one hospital met all the criteria; just half met the modest effort of posting a sign in the emergency room to alert patients to the possibility of financial assistance.

Late last year, the independent California HealthCare Foundation reported on the result of its broader and more comprehensive “mystery shopper” survey, entitled “Price Check: The Mystery of Hospital Pricing.” Among the findings, over half the hospitals (57%) did not have a sign in the emergency room about financial assistance policies, as described in the hospitals guidelines adopted nearly two years ago. Only 7.3 percent of “mystery shoppers” were offered written information about financial assistance policies.
The preliminary results of a study by the Western Center for Law and Poverty found that fewer than half of 137 hospital sites visited had notices about their discount policies posted in either the administration area or emergency room

In addition to these studies, the issue of hospital billing and collections has received renewed attention in recent months, with:

  • Passage of a similar law to AB774(Chan) in New York state;
  • Congressional and IRS scrutiny of nonprofit hospitals’ tax status;
  • Settlement of class-action lawsuits against two California hospital corporations, Catholic Healthcare West and Sutter Health. Both hospital systems were ordered to reimburse patients for hundreds of millions of dollars in refunds or bill adjustments.

The bill now goes to the Governor’s desk.


As reported earlier, Sen. Sheila Kuehl sent SB840, her single-payer, publicly funded health care system bill to the governor’s desk earlier Thursday. In an historic vote, the California Senate falling along party lines, voted 24-12 to support SB840, the California Health Insurance Reliability Act (CHIRA), to guarantee health coverage to all Californians, with comprehensive benefits, and the right to choose one’s own doctor, and save on health care costs.


The Legislature is expected to continue meeting and voting on bills until midnight Thursday – or later. Health Access will provide a roundup of all bills of interest to health advocates and their fate in this last week of the legislature, for tomorrow, Friday, September 1st.

Health Access California promotes quality, affordable health care for all Californians.
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