BILL ANALYSIS Senate Committee on Labor and Industrial Relations Mark DeSaulnier, Chair Date of Hearing: August 30, 2010 2009-2010 Regular Session Consultant: Alma Perez Fiscal:Yes Urgency: Yes Bill No: AB 2780 Author: Solorio Version: As amended August 19, 2010 SUBJECT Workers' compensation: individually identifiable information KEY ISSUE Should the Legislature authorize the Department of Health Care Services to review individually identifiable information relating to a Medi-Cal claim in order to determine if this claim was actually a result of an 'on-the job injury' that should have been paid by a workers' compensation insurer rather than the Medi-Cal program? PURPOSE To authorize the Department of Industrial Relations (DIR) to share workers' compensation individually identifiable claims data with the Department of Health Care Services (DHCS). ANALYSIS Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services (DHCS), under which basic health care services are provided to qualified low-income persons. Existing law provides that when benefits are provided or will be provided to a beneficiary under the Medi-Cal program because of an injury for which another person or insurance carrier is liable, the Director of DHCS may recover from that person or carrier the reasonable value of benefits provided. Existing law establishes a workers' compensation system, administered by the Administrative Director of the Division of Workers' Compensation (DWC), to compensate an employee for injuries sustained in the course of his or her employment. Existing law provides that a person or public or private entity who is not a party to a claim for workers' compensation benefits may not obtain individually identifiable information, as defined, that is obtained or maintained by the Division of Workers' Compensation of the Department of Industrial Relations on that claim, except as specified. Existing law expresses the intent of the Legislature to comply with federal law requiring that when a beneficiary has other available health coverage or insurance, the Medi-Cal Program shall be the payer of last resort. (Section 14124.795 of the Welfare and Institutions Code) Existing law requires the DHCS to enter into contracts to recover Medi-Cal costs that are payable as workers' compensation claims, including matters on file with the Workers' Compensation Appeals Board. (Section 14124.82 of the Welfare and Institutions Code) This Bill would authorize the state Department of Health Care Services to obtain and use individually identifiable information from the Department of Industrial Relations for the purpose of seeking recovery of Medi-Cal costs incurred by the state for treatment provided to injured workers that should have been incurred by employers and insurance carriers pursuant to existing law governing workers' compensation claims. Specifically, this bill would: Require the DIR to furnish individually identifiable information to the DHCS and allows the DHCS to furnish the information to its designated agent, provided that the information is disclosed only for the purpose noted above. Authorize the Administrative Director of the Division of Workers' Compensation to adopt regulations solely for the Hearing Date: August 30, 2010 AB 2780 Consultant: Alma Perez Page 2 Senate Committee on Labor and Industrial Relations purpose of governing access by the DHCS or its designated agents to individually identifiable information. Specify that this authorization shall remain in effect only until January 1, 2017, and as of that date is repealed, unless a later enacted statue deletes or extends that date. Declare that the provisions of this bill are to take effect immediately as an urgency statute. COMMENTS 1. Need for this bill? Existing law requires workers' compensation insurance carriers to provide claimant information to Medi-Cal to facilitate state recovery of funds where appropriate. This information is currently obtained from the insurance carrier using a case-by-case process. Currently, if a Medi-Cal beneficiary files a workers' compensation claim, Medi-Cal has already paid for medical services for the accident. The only way for Medi-Cal to recover funds that they should not have paid is by accessing workers' compensation claims data to see if the Medi-Cal patient was actually injured on the job. The Department of Health Care Services (DHCS) has been able to recover monies for the State of California via a program which identifies, and undertakes to recover, the cost of Medi-Cal claims that should have been paid by private insurers or other government programs. Currently, DHCS contracts with a private company, Health Management Systems (HMS), to assist in the administration of this recovery program. Under existing law, Medi-Cal has access to workers' compensation claims data when it is made public either by being denied or if it is in the process of being adjudicated. The author states recoveries would be more efficient if the DHCS could review workers' compensation claims directly for the sole purpose of determining if Medi-Cal claims should have been paid by a workers' compensation insurer. This bill would Hearing Date: August 30, 2010 AB 2780 Consultant: Alma Perez Page 3 Senate Committee on Labor and Industrial Relations authorize DIR to share workers' compensation claims data with the DHCS for this purpose. 2. Proponent Arguments : According to the author, the DHCS has been able to recover millions for the State of California by instituting a third party liability program which recovers the cost of Medi-Cal claims that should have been paid by private insurers or other government programs. DHCS contracts with a private company, Health Management Systems (HMS), to assist the department in these recoveries. The author argues that, unfortunately, DHCS currently does not have the ability to review workers' compensation claims - unless they are being adjudicated - to see if Medi-Cal claims should have been paid by a workers' compensation insurer. The author states that typically when a Medi-Cal beneficiary files a workers' compensation claim, Medi-Cal has already paid for medical services associated with the accident. The author argues that the only way for Medi-Cal to recover funds that they should not have paid is to access workers' compensation claims data to see if the Medi-Cal patient was actually injured on the job. In addition, proponents argue that currently, because only denials are shared with third party liability programs, only denied cases are worked. Proponents argue that having access to the full DIR workers' compensation file, including both accepted and denied claims, could save millions. According to the author, this bill would authorize the Department of Industrial Relations to share workers' compensation claims data with the Department of Health Care Services and, thereby, enhance the ability of DHCS to recover Medi-Cal costs that should have been paid by a workers' compensation insurer. 3. Opponent Arguments : None received to date. 4. Prior Legislation : Hearing Date: August 30, 2010 AB 2780 Consultant: Alma Perez Page 4 Senate Committee on Labor and Industrial Relations AJR 42 (Solorio) of 2010: Chaptered This resolution requests that the Congress and the President of the United States enact the Medicare Secondary Payer Enhancement Act of 2010 which is designed to protect the Medicare Trust Fund and ensure that Medicare pays only for medical expenses for which it is responsible. SUPPORT Health Management Systems (HMS) OPPOSITION None received * * * Hearing Date: August 30, 2010 AB 2780 Consultant: Alma Perez Page 5 Senate Committee on Labor and Industrial Relations