A new ordinance approved by LA County supervisors will require some hospitals to inform the Department of Public Health before they go after patients for unpaid medical debt.
New Hospital Rules
If certain hospitals in LA County want to pursue their patient’s unpaid medical bills, they now have to let the county know first, according to a new medical debt ordinance.
Helping Patients
Using the ordinance, county supervisors seek to ensure that struggling patients in the county can receive financial assistance if needed and to ensure that hospital debt collection practices remain transparent.
Waiting for the Second Vote
The ordinance was passed by the Los Angeles County Board of Supervisors on August 6, but it will need to pass a second vote before it can be adopted.
Seven Unincorporated Hospitals
If it passes again, seven hospitals in unincorporated areas of the county will have to give the Los Angeles County Department of Public Health atleast a month’s notice before they can begin the debt collection process against any patient.
Local Cities Can Opt-In
While the requirements will focus on these seven hospitals, cities will also be given the option to adopt the ordinance for hospitals in their jurisdictions.
Additional Obligations
Hospitals will also need to report the amount of patients’ medical debt four times a year, and any additional information on financial assistance that they offer for indebted patients.
The Medical Debt Problem
Medical debt is a significant issue for hundreds of thousands of people in LA County, with County estimates reporting that 1 in 10 residents had accumulated a combined $2.9 million in medical debt.
“A Crucial Public Health Issue”
“Medical debt does remain a crucial public health issue in LA County that’s affected approximately one in 10 adults,” said Barbara Ferrer, the county’s director of public health, in a statement on the new ordinance.
Relieving the Burden
High medical bills have become an excessive burden for low and middle-income families across the county, so county officials are seeking to relieve this burden, particularly from working-class people who are disproportionately affected by medical debt.
Disproportionately Affecting Low-Income People
Ferrer also confirmed that close to half of all people with outstanding medical debt also lived “below 200% of the federal poverty level.”
Federal Poverty Level
A family of 4 in the US who have a household income of $31,200 per year or lower are living at or below the poverty level, according to data from the Department of Health and Human Services (HHS) for 2024.
Connecting With Those Who Need Financial Assistance
This new ordinance will give the county more room to prevent medical debt where possible and to connect with individuals or households who qualify for financial assistance but have not applied for it.
Dollar For Survey
A recent survey from Dollar For, a national non-profit that seeks to eliminate medical debt, found that less than 30% of people who struggle to pay hospital bills were able to apply for and receive financial assistance.
Director of the County Department of Health
Dr. Anish Mahajan, chief deputy director of the L.A. County Department of Public Health, reiterated the inaccessibility of financial assistance for patients to the LA Times.
Helping Hospitals “Do Better”
“There is just so much medical debt — and that debt is disproportionately carried by poor people,” she said. “The goal is to help hospitals do better.”
Providing More Insight
Gaining new information and data about debt recollection and repayment rates should give the county more insight into where the financial assistance is going, and who it is failing to reach.
Some Critics Speak Up
However, critics like George Green of the Hospital Association of Southern California have argued that changing the reporting system for these hospitals would place unfair stress on “overworked” hospital staff.
“Under-resourced, Understaffed, Overworked”
“It would take the reconstructing of medical reporting systems in a lot of cases in hospitals,” Green claimed. “For hospitals that are already under-resourced, understaffed, overworked, this could mean additional resources for every single time that a patient is placed into collections.”
Six Months to Comply
If it passes the second vote, which is expected to take place in September, hospitals will have six months to begin submitting reports. Failures to comply could result in fines as high as $5,000 or legal action.
Wider County Initiative
The new ordinance is part of a wider county initiative to ease medical debt for good. In June, LA County announced $5 million in funding for Undue Medical Debt, another national non-profit that helps to erase medical debt across the country.
$5 Million to Undue Medical Debt
County officials and UMD believe that $5 million in funding could impact as many as 150,000 residents by relieving $500 million in medical debt.
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