BILL NUMBER: AB 542 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 23, 2010
AMENDED IN SENATE JUNE 18, 2009
AMENDED IN ASSEMBLY MAY 5, 2009
AMENDED IN ASSEMBLY APRIL 22, 2009
INTRODUCED BY Assembly Member Feuer
FEBRUARY 25, 2009
An act to add Sections Section
1279.4 and 1371.6 to, and to add Part 5.5 (commencing with
Section 128870) to Division 107 of, to 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)
5.5 (commencing with Section 14183) 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. Hospital acquired conditions.
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. A violation of these provisions is a
misdemeanor.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
administered by the Department of Managed Health Care, regulates
health care service plans. A willful violation of these provisions is
a crime.
This bill would require the medical director and the director of
nursing of a hospital to annually report adverse events and hospital
acquired conditions to its governing board.
By changing the definition of an existing crime, this bill would
impose a state-mandated local program.
The bill would require a contract between a hospital or licensed
surgical clinic and a health care service plan to be consistent with
policies of nonpayment for hospital acquired conditions.
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 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 a hospital or licensed surgical clinic for hospital
acquired conditions 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
hospital or licensed surgical clinic from charging for services
related to a hospital acquired condition. t
he State Department of Health Care Services to convene a technical
working group to evaluate options for implementing nonpayment
policies and practices for hospital acquired conditions for the
fee-for-service Medi-Cal program, as specified. This bill would
require the technical working group to provide the best options to
the Director of Health Care Services, the Secretary of California
Health and Human Services, and the Legislature by February 1, 2011.
This bill would also require the department to implement nonpayment
policies and procedures for hospital acquired conditions for the
fee-for-service Medi-Cal program by July 1, 2011, as specified.
By changing the definition of existing crimes, this bill would
impose a state-mandated local program.
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.
Existing law imposes various functions and duties on the Managed
Risk Medical Insurance Board with respect to the regulation and
administration of various insurance programs, including the Healthy
Families Program.
This bill would require that contracts between a hospital
or licensed surgical clinic and a health care service plan, an
insurer, the Healthy Families Program, or the Medi-Cal program be
consistent with those nonpayment policies for hospital acquired
conditions certain managed care plans contracting with
the board to implement nonpayment policies and practices for
hospital acquired conditions that are consistent with those adopted
by the Medi-Cal program through their contracts with health
facilities .
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 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 a health facility, when a
hospital acquired condition occurs, a patient can be harmed,
potentially leading to serious disability or even death.
(d) Most hospital acquired conditions 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) The recently enacted federal Patient Protection and Affordable
Care Act (Public Law 111-148) established as a national policy that
state Medicaid programs should no longer pay for hospital acquired
conditions.
(e)
(f) It is the policy of the State of California that
patients and purchasers of health care services should not be billed
for hospital acquired conditions. It is also the policy of the State
of California that hospital acquired conditions should not be
reimbursed by patients or purchasers of health care services.
(f)
(g) Patients who have been harmed by a hospital
acquired condition must receive the medically necessary followup care
to correct or treat the complications or consequences of the
hospital acquired condition, to the extent possible. Medically
necessary followup care and services should be reimbursed.
(g)
(h) The development of policies and procedures for the
nonbilling and nonpayment of hospital acquired conditions 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 hospital acquired
conditions.
SEC. 2. 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 and hospital acquired conditions
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 and hospital acquired conditions, 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. 3. Section 1371.6 is added to the Health
and Safety Code, to read:
1371.6. (a) A contract between a health facility and a health
care service plan shall be consistent with the adoption,
implementation, and exercise of nonpayment policies and practices for
hospital acquired conditions, as defined by the regulations adopted
pursuant to Section 128871.
(b) A health facility shall not charge a patient for care and
services for which payment is denied by a health care service plan
pursuant to nonpayment policies and practices for hospital acquired
conditions 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 facility" means a
health care entity 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. 4. Part 5.5 (commencing with Section
128870) is added to Division 107 of the Health and Safety Code, to
read:
PART 5.5. HOSPITAL ACQUIRED CONDITIONS
128870. For purposes of this part, the following definitions
shall apply:
(a) "Health facility" means a health care entity 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.
(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.
(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.
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 a health facility for hospital acquired conditions
by state public health programs as follows:
(1) On or before September 1, 2010, adopt payment policies and
practices regarding nonpayment for hospital acquired conditions 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)) and
that have the following characteristics, as defined by CMS:
(A) High cost or high volume, or both.
(B) Not present on admission.
(C) Reasonably could have been prevented through the application
of evidence-based guidelines.
(2) Synchronize definitions, coding, practices, and payment
methodologies, to the extent feasible, with CMS regarding nonpayment
for hospital acquired conditions.
(3) On or before January 1, 2012, and annually thereafter, update
payment policies and practices regarding nonpayment for hospital
acquired conditions to reflect changes made to those developed and
implemented by CMS.
(4) Establish guidelines and procedures for health facilities to
report the occurrence of hospital acquired conditions to the State
Department of Public Health, the Office of Statewide Health Planning
and Development, or any other appropriate agency or department.
(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 nonpayment policies and practices
adopted by regulation pursuant to Section 128871, a health facility
shall not charge, nor is a patient or payer required to pay, for
hospital acquired conditions. When a hospital acquired condition
occurs, the health facility shall disclose the occurrence of the
hospital acquired condition to the applicable payer.
128873. (a) This part shall not be interpreted or implemented in
a way that would limit patient access to needed health care services
or payment to a health facility for medically necessary followup care
to correct or treat the complications or consequences of the
hospital acquired condition or for the care originally sought by the
patient.
(b) For state and local government health care programs that
receive federal funds, this part shall be implemented only to the
extent that federal financial participation for those programs is not
jeopardized.
SEC. 5. Section 10191.5 is added to the
Insurance Code, to read:
10191.5. (a) A contract between a health facility and an insurer
shall be consistent with the adoption, implementation, and exercise
of nonpayment policies and practices for hospital acquired conditions
as defined by the federal Centers for Medicare and Medicaid Services
and the regulations adopted pursuant to Section 128871 of the Health
and Safety Code.
(b) Pursuant to this section, a health facility shall not charge a
patient for care and services for which payment is denied by an
insurer pursuant to nonpayment policies and practices for hospital
acquired conditions.
(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 purposes of this section, "health facility" means any
health care entity 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. 6. SEC. 3. Section 12693.56 is
added to the Insurance Code, to read:
12693.56. (a) For purposes of this section, "health facility"
means a health care entity 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 nonpayment policies and
practices, alone or in combination, consistent with the regulations
adopted pursuant to Section 128871 of the Health and Safety Code,
practices consistent with those adopted by the
Medi-Cal program pursuant to Article 5.5 (commencing with
Section 14183) of Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, for the program , by requiring
managed care plans contracting with the board to implement nonpayment
policies and practices through their contracts with
health facilities . This subdivision shall be implemented only
if, and to the extent that, federal financial participation is
available and is not jeopardized.
(c) A health facility shall not charge 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
regulations adopted pursuant to Section 128871 of the Health
and Safety nonpayment policies and practices adopted
pursuant to Article 5.5 (commencing with Section 14183) of Chapter 7
of Part 3 of Division 9 of the Welfare and Institutions Code,
for the Healthy Families Program and to the extent feasible, for all
other programs administered by the board.
SEC. 7. SEC. 4. Section 12699.06 is
added to the Insurance Code, to read:
12699.06. (a) For purposes of this part, "health facility" means
a health care entity 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 nonpayment policies and
practices, alone or in combination, consistent with the regulations
adopted pursuant to Section 128871 of the Health and Safety Code,
practices consistent with those adopted by the
Medi-Cal program pursuant to Article 5.5 (commencing with
Section 14183) of Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, for the program , by requiring
managed care plans contracting with the board to implement nonpayment
policies and practices through their contracts with health
facilities . This subdivision shall be implemented only if, and
to the extent that, federal financial participation is available and
is not jeopardized.
(c) A health facility shall not charge 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
regulations adopted pursuant to Section 128871 of the Health
and Safety nonpayment policies and practices adopted
pursuant to Article 5.5 (commencing with Section 14183) of Chapter 7
of Part 3 of Division 9 of the Welfare and Institutions Code,
for the Healthy Families Program and to the extent feasible, for all
other programs administered by the board.
SEC. 8. SEC. 5. Section 12739.5 is
added to the Insurance Code, to read:
12739.5. (a) For purposes of this part, "health facility" means a
health care entity 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 nonpayment policies and
practices, alone or in combination, consistent with the regulations
adopted pursuant to Section 128871 of the Health and Safety Code,
practices consistent with those adopted by the
Medi-Cal program pursuant to Article 5.5 (commencing with
Section 14183) of Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, for the program , by requiring
managed care plans contracting with the board to implement nonpayment
policies and practices through their contracts with health
facilities .
(c) A health facility shall not charge 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
regulations adopted pursuant to Section 128871 of the Health
and Safety nonpayment policies and practices adopted
pursuant to Article 5.5 (commencing with Section 14183) of Chapter 7
of Part 3 of Division 9 of the Welfare and Institutions Code,
for the Healthy Families Program and to the extent feasible, for all
other programs administered by the board.
SEC. 9. Article 5.4 (commencing with Section
14182) is added to Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, to read:
Article 5.4. Hospital Acquired Conditions
14182. (a)
SEC. 6. Article 5.5 (commencing with Section
14183) is added to Chapter 7 of Part 3 of Division 9 of the
Welfare and Institutions Code , to read:
Article 5.5. Hospital Acquired Conditions
14183. (a) (1)
The department shall implement the nonpayment policies
and practices 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 convene a technical working
group to evaluate options for implementing nonpayment policies and
procedures for hospital acquired conditions for the fee-for-service
Medi-Cal program consistent with federal laws and regulations,
including, but not limited to, Section 2702 of Subtitle I of Title II
of the federal Patient Protection and Affordable Care Act (Public
Law 111-148). By February 1, 2011, the technical working group shall
provide recommendations to the Director of Health Care Services, the
Secretary of California Health and Human Services, and the
Legislature on the best options for implementing nonpayment policies
and procedures for hospital acquired conditions for the
fee-for-service Medi-Cal program consistent with federal laws and
regulations, including, but not limited to, Section 2702 of Subtitle
I of Title II of the federal Patient Protection and Affordable Care
Act.
(2) The technical working group convened pursuant to paragraph (1)
shall include, but not be limited to, all of the following:
(A) Consumer advocates.
(B) Experts the department deems necessary for the technical
working group to effectively carry out its functions.
(C) Pediatricians or physicians in current practice in California
who have relevant experience in reducing the incidence of hospital
acquired conditions or adverse events.
(D) Representatives of children's or other specialty hospitals.
(E) Representatives of the department.
(F) Representatives of the Department of Managed Health Care.
(G) Representatives of health care service plans or health
insurers.
(H) Representatives of large employers that purchase group health
care coverage for their employees and that are neither suppliers nor
brokers of health care coverage.
(I) Representatives of nonnursing, nonphysician hospital support
staff.
(J) Representatives of the Office of Statewide Health Planning and
Development.
(K) Representatives of private hospitals.
(L) Representatives of public hospitals.
(3) The technical working group may consult with individuals
possessing relevant clinical or other health care expertise to assist
in the development of the recommendations provided pursuant to this
section.
(4) The technical working group shall provide an opportunity for
members of the public to submit comments to the technical working
group.
(5) (A) The requirement for submitting a report imposed under this
subdivision is inoperative on February 1, 2015, pursuant to Section
10231.5 of the Government Code.
(B) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
(b) The department shall implement nonpayment policies and
procedures for hospital acquired conditions for the fee-for-service
Medi-Cal program by July 1, 2011, that are consistent with federal
regulations promulgated pursuant to Section 2702 of Subtitle I of
Title II of the federal Patient Protection and Affordable Care Act
(Public Law 111-148). In implementing the nonpayment policies and
procedures the department shall strongly consider the recommendations
submitted pursuant to subdivision (a) by the technical working
group.
(c) 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 nonpayment policies and
practices through their contracts with health facilities.
(b)
(d) A health facility shall not charge 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)
(e) Notwithstanding any other law, and subject to
applicable federal requirements, a health facility shall exclude its
costs related to hospital acquired conditions subject to the
nonpayment policies implemented pursuant to subdivision (a)
this article from both of the following:
(1) The Annual Disclosure Report submitted by the health facility
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 facility 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
(f) This article 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)
(g) 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 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. carrying
out nonpayment policies and practices adopted pursuant to this
article.
(h) (1) This article shall not be interpreted or implemented in a
way that would limit patient access to needed health care services or
payment to a health facility for medically necessary followup care
to correct or treat the complications or consequences of a hospital
acquired condition or for the care originally sought by the patient.
(2) For state and local government health care programs that
receive federal funds, this article shall be implemented only to the
extent that federal financial participation for those programs is not
jeopardized.
(i) Nothing in this article shall be construed to authorize the
disclosure of confidential information concerning contracted rates
between health care providers and payers or another date source.
Nothing in this article shall be construed to prevent the disclosure
of information on the relative or comparative cost to payers or
purchasers of health care services, consistent with the requirements
of this article.
(j) (1) Patient social security numbers and other data elements
that the department determines may be used to determine the identity
of an individual patient shall not be deemed public records for
purposes of the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
(2) No person reporting data pursuant to this article shall be
liable for damages in an action based on the use or misuse of
patient-identifiable data that has been mailed or otherwise
transmitted to the department pursuant to the requirements of this
article.
(3) No communication of data or information to the department
pursuant to this article shall constitute a waiver of privileges
preserved pursuant to Sections 1156, 1156.1, and 1157 of the Evidence
Code, and Section 1370 of the Health and Safety Code.
(4) Information, documents, and records from original sources
subject to discovery or introduction into evidence shall not be
immune from discovery or evidence because the information, document,
or record was also provided to the department pursuant to this
article.
(f)
(k) For purposes of this article, "health facility"
means a health care entity 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. 10. SEC. 7. 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.