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