Study: Hospital Billing Limits Improved Access for Uninsured

A California law that limits what hospitals can bill the uninsured has led to lower costs and access to free care, according to a study by two researchers from the University of Southern California published in the journal Health Affairs.

In 2006, California passed the Hospital Fair Pricing Act, which tied hospital billing rates at Medicare reimbursement levels for uninsured patients who earn within 350 percent of the federal poverty line. The law also required hospitals to write and publicly post financial aid policies for low- to moderate-income patients who are uninsured or have out-of-pocket medical expenses exceeding 10 percent of family income.

Researchers found that after the law was enacted, 97 percent of hospitals offered free care to poverty-level patients, meaning about 4 million of California's roughly 6.5 million uninsured residents had access to free care.

"We found that in passing the law, California adopted a detailed and well-structured approach to mandating financial assistance policies and limiting the use of full billed charges as the prices that low-income uninsured patients are required to pay for hospital services," the authors wrote. "This approach offers a promising policy option for other states seeking to protect their uninsured populations from high hospital billed charges."

More Articles on Hospital Pricing:

Value-Based Contracting: From Payer and Provider Point of View
4 Ways to Cut Supply Chain Costs
Price Caps for ED and Out-of-Network Care: The Next Step to Reign in Hospital Costs?

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