State Regulatory & Insurance Committee (SRIC)
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New California Laws for Review
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New California Laws for Review
The following bills were discussed during the SRIC call yesterday. While there is a brief overview, we highly encourage you to read these bills for specifics. We will provide more education for these issues in the next EDPMA newsletter.
California – SB 1061 (Signed into Law 9/24/24) This bill introduces comprehensive measures to restrict the credit reporting of medical debt.
Under this legislation, credit reporting agencies will be barred from accepting any notices related to medical debts, effectively preventing creditors from reporting such debts to consumer credit agencies. This change strengthens the existing provisions of the Consumer Credit Reporting Act (CCRA), which previously limited reporting of medical debts to those older than seven years.
The bill further stipulates that, for contracts creating medical debt entered on or after July 1, 2025, a specific clause must be included to inform patients of these reporting restrictions. This clause will clearly state that violating this prohibition by reporting medical debt to credit agencies renders the debt void and unenforceable.
Additionally, SB 1061 mandates that health insurers notify both the insured and the provider when payments are remitted, ensuring transparency. If a provider has not received payment within 60 days of the notification or within one year of initial billing, the insurer’s unpaid share may then be reported as medical debt.
California – AB2297 (Signed into Law 9/24/24) The bill establishes provisions for emergency physicians regarding the discount payment policy for uninsured patients and those with high medical costs earning up to 400% of the Federal Poverty Limit (FPL). While existing California law requires hospitals to maintain charity care and discount policies for uninsured individuals at or below 400% of the FPL, the new law extends these requirements to emergency physicians.
Under the new legislation, emergency physicians can limit expected payments for services provided to qualifying patients to no more than the 50th percentile of median billed charges, as determined by the FAIR Health database. The law prohibits EPs from pursuing collections if they have received reimbursement under the Maddy Funds and allows for the waiver or reduction of cost-sharing for Medicare and Medi-Cal patients.
Additionally, EPs may establish payment discounts for uninsured patients with incomes exceeding 400% of the FPL who incur high medical costs. The bill reinforces protections against medical debt reporting to credit agencies and prohibits the use of liens or wage garnishments for bill collection.
Finally, it mandates that emergency physicians create written policies for debt collection practices and provides for interest-free extended payment plans to assist patients in managing their medical expenses.
leginfo.legislature.ca.gov
Bill History - SB-1061 Consumer debt: medical debt.
SB 1061 Consumer debt: medical debt.
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