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Senate Bill 283 (Montoya-1985)

Chapter 263, Statutes of 1985

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The analysis prepared by the Senate Committee on Insurance, Claims and Corporations summarizes Senate Bill 283, stating:

This bill would authorize health care providers to offer discounts to payors of third party claims for payment within a time period specified by the provider. The bill includes a finding that the Legislature finds that this is a worthwhile practice.
(See Exhibit #3)

In his July 22, 1985 letter to the Governor, Senator Montoya notes that Senate Bill 283 was sponsored by the California Chiropractic Association, then goes on to provide the following commentary:

This legislation will give specific authorization to a health care provider to offer a discount from his or her fee, when the fee is paid within a specified period of time. Passage of Senate Bill 283 will formalize the procedure, and will encourage prompt payment of bills by insurers and other third party payors, resolving the frequent problem of delays in payment in a manner satisfactory to both parties.

Senate Bill 283 does not require a provider to discount his or her fee; neither does the bill require an insurer or other third party payor to honor the request for prompt payment or accept the discount. It merely encourages a practice which has long worked effectively in the business world to meet operational cash flow problems.
(See Exhibits #11a, document A-16 and #12, document PE-3)

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