BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 93
                                                                  Page  1


           (Without Reference to File)
           
          SENATE THIRD READING
          SB 93 (Corbett)
          As Amended September 6, 2007
          Majority vote 

           SENATE VOTE  :Vote not relevant

           SUMMARY  :  Prohibits the amount paid by Medi-Cal from being  
          considered as evidence of past medical damages for the purpose  
          of reducing third-party liability to a Medi-Cal beneficiary in  
          any third-party action. 

           FISCAL EFFECT  :  Unknown potential increase in Medi-Cal cost  
          recoveries from third-party settlements in which Medi-Cal  
          beneficiaries receive less than 100 percent of the amount  
          determined as full medical damages. The Department of Health  
          Care Services estimates that recoveries from third-party  
          settlements will total $22 million (General Fund) in 2007-08.  
          Depending on how many settlements are for partial damages, the  
          increased cost recovery due to this bill could be up to several  
          million dollars annually.

           COMMENTS  :

          1)The language of this bill was included in SB 83-the Budget  
            Trailer Bill for Health passed by the Assembly on July 20,  
            2007.  However, this language was not included in AB 203-the  
            final Budget Trailer Bill for Health that was enacted in  
            August.

          2)Medi-Cal payment rates are notoriously low.  Limiting the  
            medical damages of Medi-Cal beneficiaries to Medi-Cal costs  
            can result in awards to Medi-Cal beneficiaries that are  
            substantially less than awards received in comparable  
            situations by other individuals because other components of  
            awards, such as pain and suffering, often are based on the  
            size of the medical damages.

          3)Many actions are settled for less than 100% of estimated  
            damages. Federal and state laws limit Medi-Cal to recovering  
            costs solely from the medical damages portion of settlements.  
            Consequently, limiting medical damages for Medi-Cal  








                                                                  SB 93
                                                                  Page  2


            beneficiaries to only the Medi-Cal costs would result in  
            Medi-Cal recovering less than its full costs whenever a  
            settlement provided less than 100% of the damages.  For  
            example, if the beneficiary is awarded 75% of the damages,  
            then Medi-Cal would not recover its full costs unless the  
            total amount of medical damages was determined to be at least  
            133% of Medi-Cal costs (plus a portion of attorney fees and  
            costs).  Under the language of this bill, medical damages  
            would be determined based on other factors, such as prevailing  
            charges for medical treatment.


           Analysis Prepared by  : Daniel Rabovsky/BUDGET/ (916) 319-2099
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