BILL ANALYSIS
AB 542
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 542 (Feuer)
As Amended August 17, 2010
Majority vote
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|ASSEMBLY: | |(June 1, 2009) |SENATE: |22-13|(August 23, |
| | | | | |2010) |
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(vote not relevant)
Original Committee Reference: HEALTH
SUMMARY : Requires the Department of Health Care Services (DHCS)
to convene a technical working group to evaluate options for
implementing non-payment policies and procedures for hospital
acquired conditions (HACs) for the fee-for-service Medi-Cal
program consistent with federal laws and regulations. Requires
DHCS to implement non-payment policies and procedures for HACs
for the fee-for-service Medi-Cal program by July 1, 2011 that
are consistent with the Patient Protection and Affordable Care
Act (PPACA) and to consider the recommendations of the technical
working group.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Makes legislative findings and declarations that HACs are
reasonably preventable by the adoption and implementation of
evidence-based guidelines and that patients and purchasers of
health care services should not be expected to pay for HACs
and that necessary follow-up care to correct or treat the
complications or consequences a HAC should be reimbursed.
2)Require the medical director and the director of nursing of
each health facility, as defined, to report annually to the
board of directors or other similar governing body the
following:
a) The number of adverse events and HACs that occurred in
the facility in the most recent 12-month period;
b) The outcomes for each patient involved, if known; and,
c) A comparison to comparable institutions of rate of
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adverse events and HACs, if this data exists and is
publicly available.
3)Prohibit communication of data or information pursuant to the
provisions of this bill by an officer or employee of the
corporation of the governing body from constituting a waiver
of privileges preserved by existing law, as specified.
4)Define "health care facility," for the purposes of this bill,
as a health care entity that is subject to the federal
regulations promulgated, as specified.
5)Require the Managed Risk Medical Insurance Board (MRMIB) to
implement nonpayment policies and practices consistent with
those adopted by the Medi-Cal program pursuant to existing
law, for the programs it administers, by requiring managed
care plans contracting with MRMIB to implement nonpayment
policies and practices through their contracts with health
care facilities. Requires the provisions in this bill to be
implemented only if, and to the extent that, federal financial
participation is available and is not jeopardized.
6)Prohibit a health care facility from accepting and retaining
payment from a patient for any applicable cost-sharing amounts
for care and services for which payment is denied by MRMIB,
including its participating health, dental, and vision plans.
7)Prohibit the implementation of guidelines or other standards
pursuant to the provisions of this bill from being construed
as establishing or altering in any way the standard of care or
duty of care owed by a health care provider to his or her
patient in a medical malpractice action or claim.
8)Require DHCS to convene a technical working group to evaluate
options for implementing nonpayment policies and procedures
for HACs for the Medi-Cal program consistent with federal laws
and regulations, as specified. Requires, by February 1, 2011,
the technical working group to provide recommendations to the
Director of DHCS, the Secretary of the California Health and
Human Services, and the Legislature on the best options for
implementing nonpayment policies and procedures for HACs for
the Medi-Cal program consistent with federal laws and
regulations, as specified.
9)Requires the HACs considered by the workgroup to include those
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referenced by PPACA and the federal Deficit Reduction Act of
2005 (DRA).
10)Require the technical working group to include, but not be
limited to, all of the following:
a) Consumer advocates;
b) Experts DHCS 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 HACs or adverse events;
d) Representatives of children's or other specialty
hospitals specialty hospitals and children's or other
hospitals that are exempt from the Medicare Inpatient
Prospective Payment System;
e) Representatives of DHCS;
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;
aa) Representatives of private hospitals;
bb) Representatives of public hospitals;
cc) Representatives of hospitals operated by the University
of California; and,
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dd) Representatives of MRMIB.
11)Require each member appointed to the technical working group
to have expertise in hospital reimbursement.
12)Permit the technical working group to consult with
individuals possessing relevant clinical or other health care
expertise to assist in the development of the recommendations
provided pursuant to the provisions of this bill.
13)Require the technical working group to provide an opportunity
for members of the public to submit comments to the technical
working group.
14)Sunset any reporting requirements imposed by the provisions
of this bill on February 1, 2015.
15)Require a report to be submitted pursuant to the provisions
of this bill in compliance with existing law.
16)Require DHCS to implement nonpayment policies and procedures
for HACs for the fee-for-service Medi-Cal program that are
consistent with federal regulations promulgated pursuant to
existing law. Requires DHCS, in implementing the nonpayment
policies and procedures to strongly consider the
recommendations submitted by the technical working group.
17)Require Medi-Cal managed care plans contracting with DHCS to
be required to implement similar nonpayment policies and
practices through their contracts with health care facilities.
18)Prohibit a health care facility from accepting and retaining
payment from a patient for 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
DHCS.
19)Require the provisions of this bill to be implemented only
if, and to the extent that, federal financial participation is
available and is not jeopardized for programs receiving
federal funds.
20)Prohibit the provisions of this bill from being interpreted
or implemented in a way that would limit patient access to
needed health care services or payment to a health care
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facility for medically necessary follow-up care to correct or
treat the complications or consequences of a HAC or for the
care originally sought by the patient.
21)Prohibit the provisions in this bill from being construed to
authorize the disclosure of confidential information
concerning contracted rates between health care providers and
payers or another date source.
22)Prohibit a person reporting data, pursuant to the provisions
of this bill, from being liable for damages in an action based
on the use or misuse of patient-identifiable data by DHCS that
has been properly mailed or otherwise properly transmitted to
DHCS pursuant to the requirements established in this bill.
23)Prohibit communication of data or information to DHCS,
pursuant to the provisions in this bill, from constituting a
waiver of privileges preserved in existing law.
24)Prohibit information, documents, and records from original
sources subject to discovery or introduction into evidence
from being immune from discovery or evidence because the
information, document, or record was also provided to DHCS,
pursuant to the provisions of this bill.
EXISTING FEDERAL LAW :
1)Requires, under the DRA, the Secretary of the Department of
Health and Human Services (HHS) to select Medicare diagnosis
codes associated with at least two HACs that are: a) high cost
or high volume, or both; b) result in the assignment of a
patient to a diagnosis-related group (Diagnosis-related groups
are generally how Medicare pays hospitals) that has a higher
payment when the code is present as a secondary diagnosis;
and, c) are conditions that could reasonably have been
prevented through the application of evidence-based
guidelines.
2)Provides, pursuant to regulations adopted by the Centers for
Medicare and Medicaid Services (CMS), for the non-payment
under the Medicare program for specified categories of HACs,
when they are present on the admission of the patient.
Instead, the case is paid as though the secondary diagnosis
was not present. This requirement applies to hospital
discharges on or after October 1, 2008.
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3)Requires, under PPACA, the Secretary of HHS to adopt
regulations that are effective July 1, 2011, that prohibit
payment for HACs in the Medicaid program. Directs the
Secretary of HHS to apply to state Medicaid plans the Medicare
non-payment requirements as appropriate for the Medicaid
program, and to exclude certain conditions if the Secretary
finds them to be inapplicable to Medicaid beneficiaries.
EXISTING STATE LAW :
1)Establishes the Medi-Cal program as California's Medicaid
program, administered by DHCS, which provides comprehensive
health care coverage for low-income individuals and their
families; pregnant women; elderly, blind, or disabled persons;
nursing home residents; and refugees who meet specified
eligibility criteria.
2)Establishes various programs, including the Healthy Families
program, the Major Risk Medical Insurance Program, the Access
for Infants and Mothers program and the Medi-Cal program,
which provide health coverage to individuals meeting specified
eligibility criteria, and which are administered by MRMIB.
3)Requires the Department of Public Health to license and
inspect health facilities, including general acute care
hospitals, acute psychiatric hospitals, and special hospitals
(hospitals).
4)Requires hospitals to report an adverse event to DHCS no later
than five days after the adverse event has been detected, or,
if the event is an ongoing urgent or emergency threat to the
welfare, health, or safety of patients, personnel, or
visitors, not later than 24 hours after the adverse event has
been detected. Existing state law defines an "adverse event"
to include any of 27 specified occurrences.
AS PASSED BY THE ASSEMBLY , this bill required DMHC to adopt
regulations establishing uniform policies and practices
governing the nonpayment of hospitals for substantiated adverse
events by public and private payers, consistent with those
developed by CMS, and revises and expands the existing
requirements for hospitals to report specified adverse events.
FISCAL EFFECT : According to the Senate Appropriations
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Committee:
1)DHCS workgroup staff and contracts will result in $100,000
(50% General Fund (GF)/50% federal funds) in fiscal year (FY)
2010-2011.
2)DHCS and MRMIB implementation recommendations to cost likely
in the hundreds of thousands to millions of dollars (35%
GF/65% federal funds) commencing in FY 2011-2012 and going
through FY 2012-2013 to the extent exceeds federal
requirements.
3)Potential GF and federal savings potentially in the hundreds
of thousands of dollars commencing after reforms are in place
due to non-payment.
COMMENTS : According to the author, this bill will improve the
quality of health care in California hospitals by ensuring that
the most effective systems and safeguards are in place to
protect patients from preventable errors and other HACs. These
events include severe pressure ulcers, burns, and retention of
foreign objects (e.g., a sponge) inside a patient after surgery,
among other tragic events. The author states that this bill
ensures that there are incentives for improving patient safety,
and patients who are the victims of such tragic events are not
also subjected to the added indignity of having to pay for them
as well.
While this bill was substantially amended and the
Assembly-approved version of this bill was deleted, the bill is
still consistent with Assembly actions.
Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097
FN: 0006099