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
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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
FN: 0003349