BILL NUMBER: AB 542 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 22, 2009
INTRODUCED BY Assembly Member Feuer
FEBRUARY 25, 2009
An act to amend Sections 1279.1 and 1279.2 of, to add Sections
1279.4 and 1371.6 to, to add and repeal Chapter 2.32 (commencing with
Section 1414.10) to Division 2 of, and to add Chapter 4
Part 5.5 (commencing with Section 128870)
of Part 5 of to Division 107 of, the
Health and Safety Code, to add Sections 10191.5, 12693.56, 12699.06,
and 12739.5 to the Insurance Code, and to add Article 5.4 (commencing
with Section 14182) to Chapter 7 of Part 3 of Division 9 of the
Welfare and Institutions Code, relating to public health.
LEGISLATIVE COUNSEL'S DIGEST
AB 542, as amended, Feuer. Adverse medical events.
Existing law establishes various programs for the prevention of
disease and the promotion of health, including, but not limited to,
the licensing and regulation of health facilities to be administered
by the State Department of Public Health. Existing law requires
specified health facilities to report patient adverse events to the
department within 5 days.
This bill would expand the specified adverse events requiring
reporting to include, among others, manifestations of poor glycemic
control, catheter-associated urinary tract infection, and
surgical-site infection, and would require a surgical clinic to
comply with these health facility adverse event reporting
requirements. The bill would require the department to collect
adverse event information, and investigate adverse events.
This bill would require the medical director or the director of
specified facilities to annually report adverse events to its
governing board and would require a contract between a health care
provider and a health care services plan to be consistent with
policies of nonbilling for, and nonpayment of, substantiated adverse
events.
This bill would require the State Public Health Officer to
establish an Office of Quality Improvement and Reporting
the Office of Patient Safety within the
department to provide leadership in reducing adverse events and
improving patient safety and quality of care. The bill would require
a health facility or clinic to conduct a root cause analysis of an
adverse event and to report to the office and the patient, as
prescribed.
This bill would require the Secretary of California Health and
Human Services to establish a Health Care Quality Improvement
Committee for the purpose of developing recommendations for
nonbilling and nonpayment policies and practices for substantiated
adverse events, and would require the committee to report its initial
recommendations by September 1, 2010. The
This bill would require the Department of Managed Health
Care, in collaboration with the State Department of Public Health,
the State Department of Health Care Services, the Managed Risk
Medical Insurance Board, the California Public Employees' Retirement
System, and the Department of Insurance, to adopt and implement
regulations that establish uniform policies and practices governing
the nonpayment of health care providers for substantiated adverse
events by state public health programs. The bill would require, after
the adoption of these regulations, that the State Department of
Public Health, the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, the California Public Employees'
Retirement System, and the Department of Insurance, adopt and
implement similar regulations. The bill would prohibit a health
care provider from billing for services related to a substantiated
adverse event.
Existing law provides for the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board, under which
health care services are provided to qualified low-income children.
Existing law provides for the Medi-Cal program, administered by
the State Department of Health Care Services under which health care
services are provided to qualified low-income persons.
This bill would require that contracts between a health care
provider and health care service plan, an insurer, the Healthy
Families Program, or the Medi-Cal program be consistent with those
nonbilling and nonpayment policies for substantiated adverse events.
By changing the definition of existing crimes, this bill would impose
a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Patients seeking medical treatment have a right to quality
medical care delivered in a timely, safe, and appropriate manner.
(b) Licensed health facilities and health care providers are vital
community resources that perform life-saving procedures and ensure
the health and welfare of the general public.
(c) Despite the best intentions of health care providers, when an
adverse event occurs, a patient can be harmed, potentially leading to
serious disability or even death.
(d) Most adverse events can be prevented through ongoing health
care provider education and established safety plans and procedures.
It is the policy of the State of California to encourage constant
monitoring and continuous improvement in health care quality
processes to ensure patient safety.
(e) It is the policy of the State of California that patients and
purchasers of health care services should not be billed for
substantiated adverse events. It is also the policy of the State of
California that adverse events, when substantiated, should not be
reimbursed by patients or purchasers of health care services.
(f) Patients who have been harmed by an adverse event must receive
the medically necessary followup care to correct or treat the
complications or consequences of the adverse event, to the extent
possible. Medically necessary followup care and services should be
reimbursed.
(g) The development of policies and procedures for the nonbilling
and nonpayment of adverse events is a complex process that requires
expertise from many sectors of the health care delivery system. While
these policies and procedures are being established, the State of
California encourages private sector solutions that bring improvement
in the delivery of health care services and a reduction in the
occurrence of adverse events.
SEC. 2. Section 1279.1 of the Health and Safety Code is amended to
read:
1279.1. (a) A health facility licensed pursuant to subdivision
(a), (b), or (f) of Section 1250 or a surgical clinic licensed
pursuant to paragraph (1) of subdivision (b) of Section 1204 shall
report an adverse event to the licensing and certification division
of the department no later than five days after the adverse event has
been detected, or, if that event is an ongoing urgent or emergent
threat to the welfare, health, or safety of patients, personnel, or
visitors, not later than 24 hours after the adverse event has been
detected. Disclosure of individually identifiable patient information
shall be consistent with applicable law.
(b) For purposes of this section, "adverse event" includes any of
the following:
(1) Surgical events, including the following:
(A) Surgery performed on a wrong body part that is inconsistent
with the documented informed consent for that patient. A reportable
event under this subparagraph does not include a situation requiring
prompt action that occurs in the course of surgery or a situation
that is so urgent as to preclude obtaining informed consent.
(B) Surgery performed on the wrong patient.
(C) The wrong surgical procedure performed on a patient, which is
a surgical procedure performed on a patient that is inconsistent with
the documented informed consent for that patient. A reportable event
under this subparagraph does not include a situation requiring
prompt action that occurs in the course of surgery, or a situation
that is so urgent as to preclude the obtaining of informed consent.
(D) Retention of a foreign object in a patient after surgery or
other procedure, excluding objects intentionally implanted as part of
a planned intervention and objects present prior to surgery that are
intentionally retained.
(E) Death during or up to 24 hours after induction of anesthesia
after surgery of a normal, healthy patient who has no organic,
physiologic, biochemical, or psychiatric disturbance and for whom the
pathologic processes for which the operation is to be performed are
localized and do not entail a systemic disturbance.
(2) Product or device events, including the following:
(A) Patient death or serious disability associated with the use of
a contaminated drug, device, or biologic provided by the health
facility when the contamination is the result of generally detectable
contaminants in the drug, device, or biologic, regardless of the
source of the contamination or the product.
(B) Patient death or serious disability associated with the use or
function of a device in patient care in which the device is used or
functions other than as intended. For purposes of this subparagraph,
"device" includes, but is not limited to, a catheter, drain, or other
specialized tube, infusion pump, or ventilator.
(C) Patient death or serious disability associated with
intravascular air embolism that occurs while being cared for in a
facility, excluding deaths associated with neurosurgical procedures
known to present a high risk of intravascular air embolism.
(3) Patient protection events, including the following:
(A) An infant discharged to the wrong person.
(B) Patient death or serious disability associated with patient
disappearance for more than four hours, excluding events involving
adults who have competency or decisionmaking capacity.
(C) A patient suicide or attempted suicide resulting in serious
disability while being cared for in a health facility due to patient
actions after admission to the health facility, excluding deaths
resulting from self-inflicted injuries that were the reason for
admission to the health facility.
(4) Care management events, including the following:
(A) A patient death or serious disability associated with a
medication error, including, but not limited to, an error involving
the wrong drug, the wrong dose, the wrong patient, the wrong time,
the wrong rate, the wrong preparation, or the wrong route of
administration, excluding reasonable differences in clinical judgment
on drug selection and dose.
(B) A patient death or serious disability associated with a
hemolytic reaction due to the administration of ABO-incompatible
blood or blood products.
(C) Maternal death or serious disability associated with labor or
delivery in a low-risk pregnancy while being cared for in a facility,
including events that occur within 42 days postdelivery and
excluding deaths from pulmonary or amniotic fluid embolism, acute
fatty liver of pregnancy, or cardiomyopathy.
(D) Patient death or serious disability directly related to
manifestations of poor glycemic control, the onset of which occurs
while the patient is being cared for in a health facility. For the
purposes of this section, "manifestations of poor glycemic control"
include, but are not limited to, hypoglycemia, diabetic ketoacidosis,
nonketotic hyperosmolar coma, hypoglycemic coma, secondary diabetes
with ketoacidosis, or secondary diabetes with hyperosmolarity.
(E) Death or serious disability, including kernicterus, associated
with failure to identify and treat hyperbilirubinemia in neonates
during the first 28 days of life. For purposes of this subparagraph,
"hyperbilirubinemia" means bilirubin levels greater than 30
milligrams per deciliter.
(F) A Stage 3 or 4 ulcer, acquired after admission to a health
facility, excluding progression from Stage 2 to Stage 3 if Stage 2
was recognized upon admission.
(G) A patient death or serious disability due to spinal
manipulative therapy performed at the health facility.
(H) Patient death or serious disability due to a
catheter-associated urinary tract infection (UTI).
(I) Vascular catheter-associated infection.
(J) Mediastinitis after coronary bypass graft.
(K) Surgical site infection following orthopedic procedures, as
defined in subparagraph (O).
(L) Surgical site infection following bariatric surgery for
obesity.
(M) Deep vein thrombosis following orthopedic procedures, as
defined in subparagraph (O).
(N) Pulmonary embolism following orthopedic procedures, as defined
in subparagraph (O).
(O) For the purposes of subparagraphs (K), (M), and (N),
"orthopedic procedures" means one or more of the following
procedures: atlas-axis fusion, other cervical fusion, dorsal/dorsulum
fusion, lumbar/lumbosac fusion, arthrodesis of shoulder, arthrodesis
of elbow, refusion of atlas-axis, refusion of cervical spine,
refusion of dorsal spine, refusion of lumbar spine, shoulder
arthroplast, or elbow arthroplast.
(5) Environmental events, including the following:
(A) A patient death or serious disability associated with an
electric shock while being cared for in a health facility, excluding
events involving planned treatments, such as electric countershock.
(B) Any incident in which a line designated for oxygen or other
gas to be delivered to a patient contains the wrong gas or is
contaminated by a toxic substance.
(C) A patient death or serious disability associated with a burn
incurred from any source while being cared for in a health facility.
(D) A patient death associated with a fall while being cared for
in a health facility.
(E) A patient death or serious disability associated with the use
of restraints or bedrails while being cared for in a health facility.
(6) Criminal events, including the following:
(A) Any instance of care ordered by or provided by someone
impersonating a physician, nurse, pharmacist, or other licensed
health care provider.
(B) The abduction of a patient of any age.
(C) The sexual assault on a patient within or on the grounds of a
health facility.
(D) The death or significant injury of a patient or staff member
resulting from a physical assault that occurs within or on the
grounds of a facility.
(7) An adverse event or series of adverse events that cause the
death or serious disability of a patient, personnel, or visitor.
(c) The facility shall inform the patient or the party responsible
for the patient of the adverse event by the time the report is made.
(d) "Serious disability" means a physical or mental impairment
that substantially limits one or more of the major life activities of
an individual, or the loss of bodily function, if the impairment or
loss lasts more than seven days or is still present at the time of
discharge from an inpatient health care facility, or the loss of a
body part.
(e) Nothing in this section shall be interpreted to change or
otherwise affect hospital reporting requirements regarding reportable
diseases or unusual occurrences, as provided in Section 70737 of
Title 22 of the California Code of Regulations. The department shall
review Section 70737 of Title 22 of the California Code of
Regulations requiring hospitals to report "unusual occurrences" and
consider amending the section to enhance the clarity and specificity
of this hospital reporting requirement.
(f) (1) Notwithstanding any other provision of law, the licensing
and certification division of the department shall collect
information regarding substantiated adverse events. The information
shall include, but need not be limited to, patient name and payer
source, and shall be provided to state government payers, including,
but not limited to, the State Department of Health Care Services and
the Managed Risk Medical Insurance Board.
(2) State payers shall maintain the confidentiality of the
information obtained and only use the information for program
administration. The information shall not be disclosed further,
except to consultants and contractors with whom the payers share the
information for the purposes of program administration, including the
purposes of this section and of Chapter 5
Part 5.5 (commencing with Section 128872) of Part 5
128870) of Division 107.
(3) Any costs associated with the compilation and distribution of
information gathered pursuant to this subdivision shall be shared on
a pro rata basis by the state agencies receiving this information.
SEC. 3. Section 1279.2 of the Health and Safety Code is amended to
read:
1279.2. (a) (1) In any case in which the department receives a
report from a facility pursuant to Section 1279.1, or a written or
oral complaint involving a health facility licensed pursuant to
subdivision (a), (b), or (f) of Section 1250, that indicates an
ongoing threat of imminent danger of death or serious bodily harm,
the department shall make an onsite inspection or investigation
within 48 hours or two business days, whichever is greater, of the
receipt of the report or complaint and shall complete that
investigation within 45 days.
(2) Until the department has determined by onsite inspection that
the adverse event has been resolved, the department shall, not less
than once a year, conduct an unannounced inspection of any health
facility that has reported an adverse event pursuant to Section
1279.1.
(b) In any case in which the department is able to determine from
the information available to it that there is no threat of imminent
danger of death or serious bodily harm to that patient or other
patients, the department shall complete an investigation of the
report within 45 days.
(c) (1) The department shall notify the complainant and licensee
in writing of the department's determination as a result of an
inspection or report.
(2) In concluding the investigation of a reported adverse event,
the department shall determine whether the adverse event was
substantiated or not.
(d) For purposes of this section, "complaint" means any oral or
written notice to the department, other than a report from the health
facility, of an alleged violation of applicable requirements of
state or federal law or an allegation of facts that might constitute
a violation of applicable requirements of state or federal law.
(e) The costs of administering and implementing this section shall
be paid from funds derived from existing licensing fees paid by
general acute care hospitals, acute psychiatric hospitals, and
special hospitals.
(f) In enforcing this section and Sections 1279 and 1279.1, the
department shall take into account the special circumstances of small
and rural hospitals, as defined in Section 124840, in order to
protect the quality of patient care in those hospitals.
(g) In preparing the staffing and systems analysis required
pursuant to Section 1266, the department shall also report regarding
the number and timeliness of investigations of adverse events
initiated in response to reports of adverse events.
SEC. 4. Section 1279.4 is added to the Health and Safety Code, to
read:
1279.4. (a) The medical director and the director of nursing of
each health facility, as defined by subdivision (a), (b), or (f) of
Section 1250, shall report annually to the board of directors or
other similar governing body the following:
(1) The number of adverse events that occurred in the facility in
the most recent 12-month period.
(2) The outcomes for each patient involved.
(3) A comparison to comparable institutions of rates of adverse
events, if this data exists and is publicly available.
(b) No communication of data or information pursuant to this
section by an officer or employee of the corporation to the governing
body shall constitute a waiver of privileges preserved by Section
1156, 1156.1, or 1157 of the Evidence Code or Section 1370.
SEC. 5. Section 1371.6 is added to the Health and Safety Code, to
read:
1371.6. (a) A contract between a health care provider and a
health care service plan shall be consistent with the adoption,
implementation, and exercise of nonpayment and nonbilling policies
and practices for substantiated adverse events, as defined by the
federal Centers for Medicare and Medicaid Services and the
recommendations of the Health Care Quality Improvement Committee as
accepted by the Secretary of California Health and Human Services
pursuant to Chapter 5 (commencing with Section 128872) of Part 5 of
Division 107. regulations adopted pursuant to Section
128871.
(b) A health care provider shall not bill a patient for care and
services for which payment is denied by a health care service plan
pursuant to nonpayment policies and practices for substantiated
adverse events pursuant to this section.
(c) The director may require additional documentation from a
health care service plan to ensure that any contract authorized under
this section shall provide medically necessary care and
reimbursement for patients in compliance with this section.
(d) Nothing in this section shall be construed to impair or impede
the application of any other provision of this chapter, including,
but not limited to, Sections 1367, 1371, 1371.37, and 1375.7.
(e) For the purposes of this section, "health care provider" means
any health facility licensed pursuant to subdivision (a), (b), or
(f) of Section 1250, and a surgical clinic licensed pursuant to
paragraph (1) of subdivision (b) of Section 1204.
SEC. 6. Chapter 2.32 (commencing with Section 1414.10) is added to
Division 2 of the Health and Safety Code, to read:
CHAPTER 2.32. ADVERSE EVENTS
1414.10. For purposes of this chapter, the following definitions
apply:
(a) "Department" means the State Department of Public Health.
(b) "Director" means the State Public Health Officer or his or her
designee.
(c) "Health care provider" means an individual or entity licensed
or certified under state or federal law to provide health care
services.
(d) "Health facility" means a health care entity licensed pursuant
to subdivision (a), (b), or (f) of Section 1250.
(e) "Office" means the Office of Quality Improvement and
Reporting Patient Safety established pursuant to
Section 1414.15.
(f) "Patient" means a person who receives or should have received
health care or treatment from a health facility or clinic.
(g) "Root cause analysis" means a step-by-step method that leads
to the discovery of an adverse event's first or primary cause. There
is a definite progression of actions and consequences that lead to an
adverse event. A root cause analysis investigation traces the cause
and effect trail from the end event back to the root cause.
(h) "Patient safety work product" means all data, reports,
records, memoranda, analyses, including root cause analyses, and
written and oral statements that are assembled or developed by a
health care provider and are reported to a quality improvement
organization.
(i) "Surgical clinic" means an individual or entity licensed
pursuant to paragraph (1) of subdivision (b) of Section 1204.
1414.15. (a) The director shall establish the Office of
Quality Improvement and Reporting Patient Safety
as a distinct program within the State Department of Public Health
to provide state leadership in reducing adverse events and
improve improving patient safety and quality of
care.
(b) The office shall establish or utilize a reporting system
designed to receive adverse event reports in order to promote patient
safety and facilitate quality improvement in the health care system.
The reporting system shall consist of mandatory reports from the
licensing and certification division of the department of information
and data on surgical clinic and health facility submitted reports of
adverse events as required by Section 1279.1.
1414.20. (a) Any document or oral statement that constitutes the
disclosure provided to a patient or the patient's family member or
guardian pursuant to section 1414.30 shall not be used in an adverse
employment action.
(b) All information and records, reports, analyses, and corrective
action plans obtained or produced in connection with the operation
of the office pursuant to this chapter shall be confidential and
shall only be used to carry out the duties of the office and shall
not be further disclosed. This limitation, however, does not apply to
the department's independent investigatory authority with regard to
licensing of health facilities and clinics. In no case shall the
information or documents prepared or produced in accordance with this
chapter be admissible to prove negligence or culpable conduct.
1414.25. Following the occurrence of an adverse event as
described in Section 1279.1, a health facility or a surgical clinic
shall conduct a root cause analysis of the event. Following the
analysis, the facility or clinic may develop and implement a
corrective action plan to address the findings of the analysis. The
findings of the root cause analysis and a copy of the corrective
action plan must be filed with the office within 60 calendar days of
the event. If the facility or clinic conducts an analysis and then
chooses not to develop or implement a corrective action plan, it
shall report to the office the reasons for not taking corrective
action within 60 calendar days of the event.
1414.30. (a) A health facility or surgical clinic shall ensure
that the patient affected by an adverse event as described in Section
1279.1, or in the case of a minor or a patient who is incapacitated,
the patient's parent or guardian or other family member, as
appropriate, is informed of the adverse event by the time the report
is made to the department pursuant to subdivision (a) of Section
1279.1.
(b) The time, date, and participants involved in informing the
patient of the adverse event shall be documented.
(c) Notification required by subdivision (a) shall not constitute
an acknowledgment or admission of liability.
1414.35. (a) The office shall analyze both of the following:
(1) Adverse event reports, corrective action plans, and the root
cause analyses submitted to the office pursuant to Section 1414.25.
(2) Patient safety work product submitted by health care
providers.
(b) The analysis required under subdivision (a) shall be utilized
to identify patterns of systemic failure in the health care system
and include successful methods to correct these failures.
(c) The office shall communicate with the health facilities and
surgical clinics involved in the adverse event any recommendations
for corrective action resulting from the office's analysis required
under subdivision (a) so as to stimulate adoption of patient safety
practices to improve health care quality.
(d) The office shall establish the means by which to develop,
evaluate, and disseminate educational programs and best practices for
both providers and the public.
1414.40. The office may, on an annual basis, survey a
representative sample of health care facilities, clinics, and the
public for the purpose of obtaining information on the effectiveness
of the office's activities. The results of the surveys may be
utilized to evaluate and modify the office's activities.
1414.45. Moneys collected by the department as a result of
administrative penalties imposed under Sections 1280.1 and 1280.3
shall be deposited into the Licensing and Certification Program Fund
established pursuant to Section 1266.9. These moneys shall be tracked
and available for expenditure, upon appropriation by the
Legislature, to support the office as well as additional departmental
quality activities.
SEC. 7. Chapter 4 (commencing with Section
128870) is added to Part 5 of Division 107 of the Health and Safety
Code, to read:
CHAPTER 4. ADVERSE EVENTS
128870.
SEC. 7. Part 5.5 (commencing with Section 128870) is
added to Division 107 of the Health and Safety Code, to read:
PART 5.5. Adverse Events
128870. For the purposes of this chapter
part , the following definitions shall apply:
(a) "Adverse event" shall have the same meaning as described in
subdivision (b) of Section 1279.1 except that it shall not include
events described in paragraph (7) of subdivision (b) of Section
1279.1.
(b) "Committee" means the Health Care Quality Improvement
Committee established pursuant to Section 128871.
(c)
(a) "Health care provider" means a health facility
licensed pursuant to subdivision (a), (b), or (f) of Section 1250 or
a surgical clinic licensed pursuant to paragraph (1) of subdivision
(b) of Section 1204.
(d)
(b) "Patient" means a person who receives or should
have received health care or treatment from a health facility or
clinic regardless of insurance status or health benefits.
(e)
(c) "Payer" means all health care insurers, health care
service plans, Medi-Cal managed care plans contracting with the
State Department of Health Care Services pursuant to Chapter 7
(commencing with Section 14000), Chapter 8 (commencing with Section
14200), or Chapter 8.75 (commencing with Section 14590) of Part 3 of
Division 9 of the Welfare and Institutions Code, self-insured
employers, and any state or local government entity that pays claims
for the provision of health care services by a health care provider.
(f)
(d) "Serious disability" shall have the same meaning as
described in subdivision (d) of Section 1279.1.
128871. (a) The Secretary of California Health and Human Services
shall establish the Health Care Quality Improvement Committee within
a specified department of the California Health and Human Services
Agency for the purpose of developing recommendations for nonbilling
and nonpayment policies and practices for substantiated adverse
events defined in Section 1279.1.
(b) The committee shall be composed of members appointed as
follows:
(1) The secretary shall appoint:
(A) Two academic researchers whose experience and focus of study
include health care quality and safety.
(B) One representative with experience in medical payment systems,
including claims, billing, and information technology.
(C) One representative with experience in private hospital
financing.
(D) One representative with experience in public hospital
financing.
(E) One chief nursing officer of a hospital in current practice as
a licensed nurse or nurse practitioner licensed in California.
(F) One representative of health insurers or health care service
plans.
(G) One chief medical officer (CMO) or patient safety officer
(PSO) of a hospital in current practice as a patient care physician
licensed in California.
(H) One representative of nonnursing, nonphysician hospital
support staff.
(I) One representative of large employers that purchase group
health care coverage for employees and that is not also a supplier
or broker of health care
coverage.
(J) One consumer or patient advocate.
(K) One pharmacist with a hospital leadership role, licensed in
California.
(2) The committee shall also include one representative from each
of the following who will participate on the committee in an ex
officio, nonvoting capacity:
(A) State Department of Public Health.
(B) State Department of Health Care Services.
(C) Managed Risk Medical Insurance Board (MRMIB).
(D) California Public Employees Retirement System (CalPERS).
(E) Department of Managed Health Care.
(F) Department of Insurance.
(c) The secretary shall designate the committee chair and cochair.
The chair or cochair may be a representative who is an ex officio,
nonvoting member of the committee.
(d) The committee may establish technical or clinical advisory
subcommittees as necessary to develop its recommendations.
(e) The committee shall meet within 90 days of the operative date
of this section and shall meet at least every other month.
(f) (1) Committee recommendations shall include:
(A) Policies and practices for determining the care or services
related to the adverse event that should not be billed or paid.
(B) Policies and practices for health care providers and payers
regarding the presence of adverse events on admission.
(C) Methodologies to monitor and enforce policies and practices to
ensure compliance with nonbilling or nonpayment policies for
substantiated adverse events.
(D) Processes through which health care providers may appeal
payments denied pursuant to this chapter for the care and services
related to a substantiated adverse event.
(E) Guidelines for health care providers and payers to
distinguish, for each type of adverse event, services and charges
directly related to the adverse event from those services that
constitute medically necessary followup care to correct or treat the
complications or consequences of the adverse event or for the care
originally sought by the patient.
(F) Methodologies to synchronize, to the extent feasible,
definitions, coding, and practices with the federal Centers for
Medicare and Medicaid Services regarding nonbilling and nonpayment
policies and practices developed pursuant to the events listed in
paragraph (1) of subdivision (g).
(2) In developing its recommendations, the committee shall review
state and national policies and practices of public and private
payers and health care providers that have implemented nonbilling and
nonpayment policies for adverse events.
(g) (1) (A) The committee shall make initial recommendations to
the Secretary of California Health and Human Services by September 1,
2010. These initial recommendations may be limited to nonpayment and
nonbilling policies for substantiated adverse events as defined in
all of the following:
(i) Subparagraphs (A), (B), (C), and (D) of paragraph (1) of
subdivision (b) of Section 1279.1.
(ii) Subparagraph (C) of paragraph (2) of subdivision (b) of
Section 1279.1.
(iii) Subparagraphs (B), (F), (H), (I), and (J) of paragraph (4)
of subdivision (b) of Section 1279.1.
(iv) Subparagraphs (A), (C), and (D) of paragraph (5) of
subdivision (b) of Section 1279.1.
(B) If so limited, the committee shall thereafter recommend
nonbilling and nonpayment policies and practices for the remaining
adverse events defined under Section 1279.1. Subsequent
recommendations shall be provided to the secretary within 12 months
of the initial recommendations but no later than October 1, 2011.
(2) Nothing in this section shall preclude the committee from
determining in its recommendations to the secretary that nonbilling
and nonpayment policies and practices are not appropriate for a
particular adverse event.
(3) Within 90 days of receipt of committee recommendations, the
secretary shall do one of the following:
(A) Refer the recommendations back to the committee and request
additional or modified recommendations in specific areas.
(B) Advise the committee as to which recommendations will be
considered in the development of regulations or other actions to
implement this section.
(C) Adopt the recommendations and seek regulatory or statutory
changes or take other actions necessary to implement the approved
polices for the nonpayment and/or nonbilling practices for
substantiated adverse events.
(h) Committee and subcommittee members shall serve on a volunteer
basis without compensation but shall be reimbursed for necessary
expenses incurred in the performance of their committee-specific
activities. Reimbursements for such expenses shall be consistent with
existing state policies for travel regulations and rates.
(i) The committee shall provide opportunities for interested
consumers, patients, purchasers, and providers to participate in
committee meetings.
(j) The State Department of Health Care Services, the State
Department of Public Health, and MRMIB shall share reasonable costs
associated with the committee and will provide the necessary
administrative and staffing support for the committee activities
contingent upon each department receiving an appropriation from the
Legislature for that support.
(k) To the extent appropriate, the State Department of Health Care
Services, the State Department of Public Health, and MRMIB will seek
federal financial participation to support committee activities.
(l) The secretary may seek partnership with an independent
nonprofit group, foundation, or academic institution or governmental
entity for purposes of carrying out the necessary activities of the
committee.
(m) This chapter shall be implemented only to the extent funds are
appropriated for purposes of this section in the annual Budget Act
or in another statute.
(n) The California Health and Human Services Agency may accept and
expend private funds that are received by the agency for the
purposes of this section.
128871. (a) The Department of Managed Health Care, in
collaboration with the State Department of Public Health, the State
Department of Health Care Services, the Managed Risk Medical
Insurance Board, the California Public Employees' Retirement System,
and the Department of Insurance, shall adopt and implement
regulations that establish uniform policies and practices governing
the nonpayment of health care providers for substantiated adverse
events by state public health programs as follows:
(1) On or before September 1, 2010, adopt payment policies and
practices regarding nonpayment for substantiated adverse events that
are consistent with those developed by the federal Centers for
Medicare and Medicaid Services (CMS) pursuant to Section 5001(c) of
the Deficit Reduction Act of 2005 (42 U.S.C. Sec. 1395ww(d)(4)).
(2) Synchronize definitions, coding, and practices, to the extent
feasible, with CMS regarding nonpayment for substantiated adverse
events.
(3) On or before October 1, 2011, establish a process for
identifying and designating additional events as adverse events for
purposes of nonpayment policies and practices for state public health
programs. These regulations shall include, but not be limited to,
one or more criteria or other characteristics of an event that
demonstrate that a health care provider should not be permitted to
bill or receive payment for the event because it resulted in placing
the safety of a patient at risk.
(b) The Department of Managed Health Care, in collaboration with
the State Department of Public Health, the State Department of Health
Care Services, the Managed Risk Medical Insurance Board, the
California Public Employees' Retirement System, and the Department of
Insurance, may consult with individuals with relevant clinical and
other health care expertise to assist in the development of the
regulations adopted pursuant to this section.
(c) After the Department of Managed Health Care has adopted the
regulations required pursuant to this section, the State Department
of Public Health, the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, the California Public Employees'
Retirement System, and the Department of Insurance shall adopt
regulations that are identical or substantially similar to those
regulations adopted pursuant to subdivision (a).
128872. In accordance with the nonbilling and nonpayment policies
and practices recommended by the committee and accepted by
the Secretary of California Health and Human Services
adopted by regulation pursuant to Section 128871, a health care
provider shall not bill, nor is a patient or payer required to pay,
for substantiated adverse events. When a substantiated adverse event
occurs, the health care provider shall disclose the occurrence of the
event to the applicable payer.
128873. (a) This chapter part shall
not be interpreted or implemented in a way that would limit patient
access to needed health care services or payment to health care
providers for medically necessary followup care to correct or treat
the complications or consequences of the adverse event or for the
care originally sought by the patient.
(b) For state and local government health care programs that
receive federal funds, this chapter part
shall be implemented only to the extent that federal financial
participation for those programs is not jeopardized.
128874. This chapter shall become inoperative on July 1, 2013,
and, as of January 1, 2004, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2014, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 8. Section 10191.5 is added to the Insurance Code, to read:
10191.5. (a) A contract between a health care provider and an
insurer shall be consistent with the adoption, implementation, and
exercise of nonpayment policies and practices for substantiated
adverse events as defined by the federal Centers for Medicare and
Medicaid Services and the recommendations made by the Health
Care Quality Improvement Committee and accepted by the Secretary of
California Health and Human Services regulations
adopted pursuant to Section 128871 of the Health and Safety
Code.
(b) Pursuant to this section, a health care provider shall not
bill a patient for care and services for which payment is denied by
an insurer pursuant to nonpayment policies and practices for
substantiated adverse events.
(c) The commissioner may require additional documentation from an
insurer to ensure that any contract authorized under this section
shall provide medically necessary care and reimbursement for patients
in compliance with this section.
(d) For the purposes of this section, "health care provider" means
any health facility licensed pursuant to subdivision (a), (b), or
(f) of Section 1250 of the Health and Safety Code, and a surgical
clinic licensed pursuant to paragraph (1) of subdivision (b) of
Section 1204 of the Health and Safety Code.
SEC. 9. Section 12693.56 is added to the Insurance Code, to read:
12693.56. (a) For the purposes of this section, "health care
provider" means a health facility licensed pursuant to subdivision
(a), (b), or (f) of Section 1250 of the Health and Safety Code, and a
surgical clinic licensed pursuant to paragraph (1) of subdivision
(b) of Section 1204 of the Health and Safety Code.
(b) The board shall implement nonbilling or nonpayment policies
and practices, alone or in combination, consistent with the
recommendations made by the Health Care Quality Improvement Committee
and accepted by the Secretary of California Health and Human
Services regulations adopted pursuant
to Section 128871 of the Health and Safety Code, for the program.
This subdivision shall be implemented only if, and to the extent
that, federal financial participation is available and is not
jeopardized.
(c) A health care provider shall not bill a patient for care and
services for which payment is denied by the program, including its
participating health, dental, and vision plans.
(d) The board may contract with a review organization that meets
all applicable state and federal requirements, including Sections
1320c-1 and 1320c-3 of Title 42 of the United States Code, in terms
of composition and function, for the purposes of carrying out the
recommendations of the Health Care Quality Improvement
Committee and accepted by the Secretary of California Health and
Human Services regulations adopted pursuant to
Section 128871 of the Health and Safety Code, for the Healthy
Families Program and to the extent feasible, for all other programs
administered by the board.
SEC. 10. Section 12699.06 is added to the Insurance Code, to read:
12699.06. (a) For the purposes of this part, "health care
provider" means a health facility licensed pursuant to subdivision
(a), (b), or (f) of Section 1250 of the Health and Safety Code, and a
surgical clinic licensed pursuant to paragraph (1) of subdivision
(b) of Section 1204 of the Health and Safety Code.
(b) The board shall implement nonbilling or nonpayment policies
and practices, alone or in combination, consistent with the
recommendations made by the Health Care Quality Improvement Committee
and accepted by the Secretary of California Health and Human
Services regulations adopted pursuant to Section
128871 of the Health and Safety Code, for the program. This
subdivision shall be implemented only if, and to the extent that,
federal financial participation is available and is not jeopardized.
(c) A health care provider shall not bill a patient for care and
services for which payment is denied by the program, including its
participating health plans.
(d) The board may contract with a review organization that meets
all applicable state and federal requirements, including Sections
1320c-1 and 1320c-3 of Title 42 of the United States Code, in terms
of composition and function, for the purposes of carrying out the
recommendations of the Health Care Quality Improvement
Committee and accepted by the Secretary of California Health and
Human Services regulations adopted pursuant to
Section 128871 of the Health and Safety Code, for the Healthy
Families Program and to the extent feasible, for all other programs
administered by the board.
SEC. 11. Section 12739.5 is added to the Insurance Code, to read:
12739.5. (a) For the purposes of this part, "health care provider"
means a health facility licensed pursuant to subdivision (a), (b),
or (f) of Section 1250 of the Health and Safety Code, and a surgical
clinic licensed pursuant to paragraph (1) of subdivision (b) of
Section 1204 of the Health and Safety Code.
(b) The board shall implement nonbilling or nonpayment policies
and practices, alone or in combination, consistent with the
recommendations made by the Health Care Quality Improvement Committee
and accepted by the Secretary of California Health and Human
Services regulations adopted pursuant to Section
128871 of the Health and Safety Code, for the program.
(c) A health care provider shall not bill a patient for care and
services for which payment is denied by the program, including its
participating health plans.
(d) The board may contract with a review organization that meets
all applicable state and federal requirements, including Sections
1320c-1 and 1320c-3 of Title 42 of the United States Code, in terms
of composition and function, for the purposes of carrying out the
recommendations of the Health Care Quality Improvement Committee and
accepted by the Secretary of California Health and Human Services
pursuant to Section 128871 of the Health and Safety Code, for the
Healthy Families Program and to the extent feasible, for all other
programs administered by the board.
SEC. 12. Article 5.4 (commencing with Section 14182) is added to
Chapter 7 of Part 3 of Division 9 of the Insurance
Welfare and Institutions Code, to read:
Article 5.4. Adverse Events
14182. (a) The department shall implement the nonbilling and
nonpayment policies and practices recommended by the Health
Care Quality Improvement Committee and accepted by the Secretary of
California Health and Human Services adopted by
regulations pursuant to Section 128871 of the Health and Safety
Code, for the fee-for-service Medi-Cal program, and to the extent
feasible, for all other programs administered by the department.
Medi-Cal managed care plans contracting with the department pursuant
to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing
with Section 14200), or Chapter 8.75 (commencing with Section 14590)
of Part 3 of Division 9, shall be required to implement similar
nonbilling and nonpayment policies and practices through their
contracts with health care providers.
(b) A health care provider shall not bill a patient for care and
services for which payment is denied by the Medi-Cal program or any
other program administered by the department pursuant to this
article.
(c) Notwithstanding any other provision of law, and subject to
applicable federal requirements, a health care provider shall exclude
its costs related to adverse events subject to the nonbilling and
nonpayment policies implemented pursuant to subdivision (a) from both
of the following:
(1) The Annual Disclosure Report submitted by the health care
provider to the Office of Statewide Health Planning and Development
and which is used in the calculation of payment adjustments under the
Disproportionate Share Hospital Program pursuant to Article 5.2
(commencing with Section 14166).
(2) The Medi-Cal 2552-96 cost report, and any other data,
submitted by the health care provider to the department and which is
used for claiming reimbursement from the Safety Net Care Pool
pursuant to Article 5.2 (commencing with Section 14166).
(d) This section shall be implemented only if, and to the extent
that, federal financial participation is available and is not
jeopardized for programs receiving federal funds.
(e) The department may contract with a review organization that
meets all applicable state and federal requirements, including
Sections 1320c-1 and 1320c-3 of Title 42 of the United States Code,
in terms of composition and function, for the purposes of carrying
out the recommendations of the Health Care Quality
Improvement Committee and accepted by the Secretary of California
Health and Human Services regulations adopted
pursuant to Section 128871 of the Health and Safety Code, for the
Medi-Cal program and to the extent feasible, for all other programs
administered by the department.
(f) For the purposes of this article, "health care provider" means
a health facility licensed pursuant to subdivision (a), (b), or (f)
of Section 1250 of the Health and Safety Code, and a surgical clinic
licensed pursuant to paragraph (1) of subdivision (b) of Section 1204
of the Health and Safety Code.
SEC. 13. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.