Los Angeles County supervisors have backed a new ordinance mandating hospitals to report their medical debt collection efforts to the County Department of Public Health. This initiative aims to boost transparency and ensure patients receive the necessary financial assistance.
Hospitals must notify the county within one to two months of initiating debt collection actions, including phone calls, letters, selling debt to collections agencies, garnishing wages, seizing bank accounts, or informing credit reporting agencies. Additionally, hospitals are required to submit quarterly reports on patient debt and provide financial assistance. Non-compliance could result in fines and legal action.
Public health officials believe these measures will reveal hospital practices and missed opportunities for financial aid. Dr. Anish Mahajan, Chief Deputy Director of the L.A. County Department of Public Health, highlighted that less than 30% of patients unable to afford their hospital bills had applied for and received financial aid, according to a survey by national nonprofit Dollar For.
In 2022, medical debt in Los Angeles County was estimated at over $2.9 billion, impacting 1 in 10 adults, primarily low-income individuals. The public health department plans to address this by purchasing and forgiving existing debt, with $5 million allocated to a nonprofit agreement potentially eliminating $500 million of debt for 150,000 residents. The ordinance aims to prevent new medical debt by tracking hospital efforts in providing financial assistance.
Collected data will help identify patients whose bills were sent to collections but may have been eligible for aid, allowing the county to collaborate with hospitals for improvement. The goal is to enhance hospital performance and address disparities in aid distribution among different demographic groups.
Dr. Elaine Batchlor, CEO of MLK Community Healthcare, shared her hospital's proactive approach using software tools to assess patient needs and write off debt when necessary, emphasizing the ease of using such tools.
Initially, the new requirements will apply to seven hospitals in unincorporated areas of L.A. County, including MLK Community Hospital, with local cities potentially adopting similar measures. Hospitals will have a six-month grace period post-implementation before facing penalties for non-compliance. The county will reassess the data collection burden after a year, ensuring compliance with federal patient privacy laws.
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