Get help with medical debt and bills in California.
The state of California has a law known as the California Health and Safety Code, that protects patients by addressing hospital billing as well as ensuring fair pricing policies are in place. The law also addresses debt collection practices that could be conducted by hospitals or health care providers. It protects consumers from aggressive, maybe even illegal medical debt collectors. This 2006 law addresses the items below:
Protections from medical debt collectors in California
- Medical providers and hospitals may not charge families without health insurance, and whose household incomes are less than 350 percent of the federal government poverty level and that have few financial assets, more than the public price for health care services. Or the provider can’t bill more than an amount that is set by California’s Medicaid program (Medi-Cal), Medicare, or another federal or state government-sponsored health care program in which the medical provider or hospital participates, whichever is greatest. So there is a cap in place.
- If you are an underinsured or uninsured patient and if you meet the above guidelines and thresholds, then you will also be eligible for hospital charity care per the state of California law. To be considered uninsured, patients either will not have health insurance or they will also be considered underinsured if they have high out-of-pocket medical costs, which is usually defined as expenses that are greater than 10 percent of their income.
- If a hospital and patient agree to a payment plan for unpaid medical debts, which may be offered for low-income, uninsured or underinsured patients, then the hospital can’t charge the patient interest on what is owed.
- Hospitals need to both must write up their charity care policies and make them visible to the public. The notices for these these charity care policies need to be posted in easy to find locations throughout the hospital or doctor’s office. In addition, health care providers need to also provide patients with notice of their financial options and consumer rights. This includes notifying patients of their right to apply for public health coverage, how to access discounted or charity care, medical debt settlement, and other forms of health care assistance.
- All medical providers and hospitals in California must make reasonable efforts to determine if a patients health insurance will cover their expenses, and they also need to inform patients about public health care and coverage programs for which they may be eligible for assistance. Information needs to be provided on options such as Medicaid and the Children’s Health Insurance Program (CHIP). They need to provide update information for these programs and tell people how to apply.
- Hospitals need to provide underinsured and uninsured families with a 150-day period in which debt collection efforts will not occur. This timeframe is to allow patients time to negotiate their hospital bills and medical debts if they so choose. The goal is to find some type of solution before their medical bills are sent to debt collectors.
Regulations for California medical collection agencies
- If a medical bill or debt does get sent to a private third party debt collection agency, the medical debt collector is not allowed by California law to garnish a patient’s wages or income except by court order. Many of the municipal courts will also not give this approval very easily
- If a medical debt collector does decide to seek such an order from the court, then the court must consider the patient’s ability to pay for the outstanding bill, including the patient’s likely future medical expenses and income before allowing garnishment of wages. In addition, the collector or hospital cannot force the sale of the patient’s primary residence or home to get funds to pay a medical debt during the patient or their spouse’s lifetime or while a dependent child is living in the patients home. Learn how to sue debt collectors.
- Health insurance plans in California are required by law to pay for emergency care without prior authorization. If the patient received the health care at an out of network provider, the insurance plan needs to transfer the patient to an in-network health care provider for further medical care once the patient is stabilized. If that is not done then another solution to this issue is that the insurance company must agree to pay for the health care at the out-of-network facility or hospital, so the person will not have any responsibility for any costs in these instances.
- California will also generally make it illegal for a hospital to bill patients any more than their plan’s copayments, co-insurance, or deductibles. This is known as protecting consumers from the practice of balance billing. In addition, if there is a dispute between a health insurance plan and a contracting medical provider about payment on the bills or medical debts, the hospital or debt collection agency cannot attempt to collect the unpaid bills from the patient for any money that is owed by the insurance plan.