BILL NUMBER: AB 542 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 15, 2010
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 Section 1279.4 to the Health and Safety Code, to add
Sections 12693.56, 12699.06, and 12739.5 to the Insurance Code, and
to add Article 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.
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.
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 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.
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 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 care
facilities , as defined .
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.
(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 that are reasonably preventable by the
adoption and implementation of evidence-based guidelines . It
is also the policy of the State of California that hospital acquired
conditions that are reasonably preventable by the adoption and
implementation of evidence-based guidelines should not be
reimbursed by patients or purchasers of health care services.
(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.
(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 health facility in the most recent
12-month period.
(2) The outcomes for each patient involved , if
known .
(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 12693.56 is added to the Insurance Code, to read:
12693.56. (a) For purposes of this section, "health care
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.
means a health care entity that is subject to the
federal regulations promulgated pursuant to Section 2702 of Subtitle
I of T itle II of the Patient Protection and Affordable
Care Act (Public Law 111-148).
(b) The board shall implement nonpayment policies and 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 care 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 care facility shall not charge a patient
any applicable cost-sharing amounts 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
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. 4. Section 12699.06 is added to the Insurance Code, to read:
12699.06. (a) For purposes of this part, "health care
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.
a health care entity that is subject to the federal
regulations promulgated pursuant to Section 2702 of Subtitle I of
Title II of the Patient Protection and Affordable Care Act (Public
Law 111-148).
(b) The board shall implement nonpayment policies and 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 care 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 care facility shall not charge a patient
any applicable cost-sharing amounts 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
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. 5. Section 12739.5 is added to the Insurance Code, to read:
12739.5. (a) For purposes of this part, "health care
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.
a health care entity that is subject to the federal
regulations promulgated pursuant to Section 2702 of Subtitle I of
Title II of the Patient Protection and Affordable Care Act (Public
Law 111-148).
(b) The board shall implement nonpayment policies and 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 care facilities.
(c) A health care facility shall not charge a patient
any applicable cost-sharing amounts 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
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. 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 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 (Public Law 111-148) .
(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.
(M) Representatives of hospitals operated by the University of
California.
(3) Each member appointed to the technical working group pursuant
to paragraph (2) shall have expertise in hospital reimbursement.
(3)
(4) 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)
(5) The technical working group shall provide an
opportunity for members of the public to submit comments to the
technical working group.
(5)
(6) (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 care facilities.
(d) A health care facility shall not charge a patient
any applicable cost-sharing amounts 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.
(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 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).
(f)
(e) 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.
(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 nonpayment policies and practices adopted pursuant to this
article.
(h) (1)
(f) 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 care 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)
(g) 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)
(h) (1) 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 by the department that has been properly
mailed or otherwise properly transmitted to the
department pursuant to the requirements of this article.
(3)
(2) 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)
(3) 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.
(k)
(i) For purposes of this article, "health care
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.
care entity that is subject to the federal regulations
promulgated pursuant to Section 2702 of Subtitle I of Title II of
the Patient Protection and Affordable Care Act (Public Law 111-148).
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.