Health care coverage: hospital billing.

Existing law provides for the licensure and regulation of health facilities by the State Department of Public Health. Existing law requires hospitals to maintain a written policy regarding discount payments for financially qualified patients as well as a written charity care policy. Existing law requires a hospital to limit the expected payment for services it provides to certain low-income patients to the highest amount the hospital would expect to receive for providing services from a government-sponsored program of health benefits in which the hospital participates. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. This bill would, until January 1, 2019, require a diagnosis and billing outlier hospital, as defined, and a hospital that is part of a diagnosis and billing outlier health system, as defined, to notify the patient and all payers of that status and that the hospital's total billed charges may be subject to adjustment as described below. The bill would make a failure to provide that notification a felony or a misdemeanor. By expanding the definition of a crime, this bill would impose a state-mandated local program. The bill would require the Office of Statewide Health Planning and Development, until January 1, 2019, to assign each hospital, as defined, a separate diagnosis and billing indicator rate for 4 specified disorders and to calculate a hospital's diagnosis and billing indicator rate for each of those disorders, as specified. The bill would require the office to post specified information on its Internet Web site by January 15, 2014, including those diagnosis and billing indicator rates and a list of diagnosis and billing outlier hospitals. The bill would require the State Department of Public Health, by July 1, 2014, and until January 1, 2019, to contract with one or more independent medical review organizations, or the Department of Managed Health Care, to conduct reviews that a patient or payer could request within one year of receiving a bill from a diagnosis and billing outlier hospital or a hospital in a diagnosis and billing outlier health system, on and after January 15, 2014. The bill would require the review, among other things, to address the appropriateness of diagnostic codes, whether the billed services were actually provided to the patient, whether provided services were medically necessary or appropriate, and what adjustments, if any, should be made to the bills to decrease the total charges. The bill would require, upon receipt of the final report, the State Public Health Officer to immediately adopt the findings of the independent medical review organization, and promptly issue a written decision to the patient, other payers, and the hospital that would be binding on the hospital. The bill would require a hospital to adjust any charges necessary in accordance with the written decision within 30 days. The bill would subject a hospital that fails to provide the above-described adjusted bill or reimbursement of excess charges to a $100 civil penalty each day until it complies. The bill would authorize the State Department of Public Health to adopt regulations to implement these provisions. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.