June 13, 2013

Center Researchers Cite CA Hospital Implementation of “Fair Pricing” Legislation

Millions of uninsured Americans rely on hospital emergency departments (EDs). Throughout the U.S., uninsured patients treated in or admitted to the hospital through the ED receive hospital bills based on what hospitals call “billed charges.”

These charges are much higher than those paid by insured patients. In 2006 California approved “fair pricing” legislation to protect uninsured patients from having to pay full billed charges. A new study by Center director Dr. Glenn Melnick and affiliated researcher Dr. Katya Fonkych published in Health Affairs found that by 2011 most California hospitals had responded to the law by adopting financial assistance policies to make care more affordable for the State’s 6.8 million uninsured. The study shows 97% of California hospitals reported offering free care to uninsured patients with incomes at or below 100% of the federal poverty level. California’s approach offers a promising policy option to other states seeking to protect the uninsured from receiving bills based on full charges. Citation: Melnick, Glenn and Katya Fonkych, “Fair Pricing Law Prompts Most California Hospitals to Adopt Policies to Protect Uninsured Patients from High Charges,” Health Affairs, Vol. 32, No. 6, June 2013, pp. 1101-1108.