BILL NUMBER: SB 1528 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 29, 2012
AMENDED IN ASSEMBLY AUGUST 24, 2012
AMENDED IN ASSEMBLY JUNE 27, 2012
AMENDED IN SENATE MAY 15, 2012
AMENDED IN SENATE APRIL 30, 2012
INTRODUCED BY Senator Steinberg
FEBRUARY 24, 2012
An act to add Section 3284 to the Civil Code, to amend Sections
23004.1 and 23004.2 of the Government Code, and to amend Section
14124.70 of the Welfare and Institutions Code, relating to medical
services.
LEGISLATIVE COUNSEL'S DIGEST
SB 1528, as amended, Steinberg. Medical services: damages.
Existing law establishes, as a general rule, that compensation is
the relief or remedy provided by law for a violation of private
rights. Existing law provides that a person suffering detriment from
the unlawful act or omission of another may recover damages from the
person at fault.
Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services.
The Medi-Cal program is, in part, governed and funded by federal
Medicaid Program provisions. Under existing law, when benefits are
provided or will be provided to a Medi-Cal beneficiary for which
another person or insurer is liable, the Director of Health Care
Services may recover from that person or insurer the reasonable value
of benefits provided, as defined and as prescribed.
This bill would provide that an injured person whose health care
is provided through a public or private capitated health care service
plan shall be entitled to recover as damages the reasonable and
necessary value of medical services. This bill would provide that a
Medi-Cal beneficiary shall be entitled to recover from the person or
party responsible the reasonable and necessary value of medical
services.
Existing law provides procedures under which, in any case in which
a 3rd person is liable to pay for health services provided by a
county to an injured or diseased person, the county may recover from
that 3rd person or be subrogated to any right or claim that the
injured or diseased person, including identified parties in interest,
have against that 3rd person. Under these procedures, the county's
right of action abates during the pendency of an action brought for
damages against the 3rd person by the injured or diseased person and
continues as a first lien against any judgment recovered by the
injured or diseased person.
This bill would provide that the county's right of action would
continue under this provision as a first lien against any judgment,
settlement, compromise, arbitration award, mediation settlement, or
other recovery for past medical expenses obtained by the injured or
diseased person. The bill would make that lien subject to any liens
for attorney's fees and costs incurred by the person or person's
representative, estate, or survivors.
Existing law authorizes a county to compromise, or settle and
execute a release of, any claim, as provided. Existing law also
authorizes a county to waive that claim, as provided.
This bill would require specified factors to be considered when a
county is requested to compromise or waive any claim, as provided.
This bill would also make a related statement of legislative
intent regarding damages for medical services.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legi
slature that the provisions of this act be limited to resolving an
issue not addressed in Howell v. Hamilton Meats &
Provisions, Inc. (2011) 52 Cal.4th 541, or Hanif v. Housing
Authority (1988) 200 Cal.App.3d 635, concerning how to establish the
value of damages for medical services provided through a capitated
health care system plan and to maximize the recovery of liens by the
State Department of Health Care Services and has no other effect on
the holding of those cases.
SECTION 1. SEC. 2. Section 3284 is
added to the Civil Code, to read:
3284. An injured person whose health care is provided through a
public or private capitated health care service plan , if the
health care provider is paid a set periodic amount regardless of the
number of, or nature of, services provided, and the health care
provider does not present the injured person with a bill for payment
identifying the costs of the particular services rendered,
shall be entitled to recover , as damages , the
reasonable and necessary value of medical services.
SEC. 2. SEC. 3. Section 23004.1 of
the Government Code is amended to read:
23004.1. (a) Subject to Section 23004.3, in any case in which the
county is authorized or required by law to furnish hospital,
medical, surgical, or dental care and treatment, including prostheses
and medical appliances, to a person who is injured or suffers a
disease, under circumstances creating a tort liability upon some
third person to pay damages therefor, the county shall have a right
to recover from that third person the reasonable value of the care
and treatment so furnished or to be furnished, or shall, as to this
right, be subrogated to any right or claim that the injured or
diseased person, his or her guardian, personal representative,
estate, or survivors has against that third person to the extent of
the reasonable value of the care and treatment so furnished or to be
furnished.
(b) The county may, to enforce rights established under
subdivision (a), institute and prosecute legal proceedings against
the third person who is liable for the injury or disease in the
appropriate court, either in its own name or in the name of the
injured person, his or her guardian, personal representative, estate,
or survivors. This action shall be commenced within the period
prescribed in Section 340 of the Code of Civil Procedure. In the
event that the injured person, his or her guardian, personal
representative, estate, survivors, or any of them brings an action
for damages against the third person who is liable for the injury or
disease, the county's right of action shall abate during the pendency
of that action, and continue as a first lien against any judgment,
settlement, compromise, arbitration award, mediation settlement, or
other recovery for past medical expenses obtained by the injured or
diseased person, his or her guardian, personal representative,
estate, or survivors, against the third person who is liable for the
injury or disease, to the extent of the reasonable value of the care
and treatment so furnished or to be furnished. Consistent with the
common fund doctrine, the lien shall be subject to any liens for
attorney's fees and costs incurred by the person or person's
representative, estate, or survivors. If the third person who is
liable is insured, the county shall notify the third person's
insurer, when known to the county, in writing of the lien within 30
days following the filing of the action by the injured or diseased
person, his or her guardian, personal representative, estate, or
survivors, against the third person who is liable for the injury or
disease. However, the failure to so notify the insurer shall not
prejudice the claim or cause of action of the injured or diseased
person, his or her guardian, personal representative, estate, or
survivors, or the county.
SEC. 3. SEC. 4. Section 23004.2 of
the Government Code is amended to read:
23004.2. (a) The county may (1) compromise, or settle and execute
a release of, any claim which the county has by virtue of the rights
established by Section 23004.1; or (2) waive any such claim, in
whole or in part, for the convenience of the county, or if the
governing body of the county determines that collection would result
in undue hardship upon the person who suffered the injury or disease
resulting in care or treatment described in Section 23004.1.
(b) If a request is made to compromise or waive any claim
established by Section 23004.1, the following factors shall be
considered:
(1) The total value of the damages suffered by the injured person
or the survivors in comparison to the amount actually recovered by
way of judgment, settlement, compromise, arbitration award, or
mediation settlement.
(2) Other liens being asserted against the recovery that would
reduce the final recovery to the person or survivors and whether or
not other lienholders have agreed to compromise or waive their liens.
(3) Whether or not the claim established by Section 23004.1 would
exceed 50 percent of the moneys ultimately recovered by the person or
survivor under any final judgment, compromise, or settlement
agreement after paying a prior lien.
(4) Any other factors that would be just, fair, and equitable to
consider when presented with a request to compromise or waive a claim
established by Section 23004.1.
(c) No action taken by the county in connection with the rights
afforded under Section 23004.1 or this section shall be a bar to any
action upon the claim or cause of action of the injured or diseased
person, his or her guardian, personal representative, estate, or
survivors against the third person who is liable for the injury or
disease, or shall operate to deny to the injured person the recovery
for that portion of his or her damage not covered hereunder.
SEC. 4. SEC. 5. Section 14124.70 of
the Welfare and Institutions Code is amended to read:
14124.70. (a) As used in this article:
(1) "Carrier" includes any insurer as defined in Section 23 of the
Insurance Code, including any private company, corporation, mutual
association, trust fund, reciprocal or interinsurance exchange
authorized under the laws of this state to insure persons against
liability or injuries caused to another, and also any insurer
providing benefits under a policy of bodily injury liability
insurance covering liability arising out of the ownership,
maintenance or use of a motor vehicle which provides uninsured
motorist endorsement or coverage, pursuant to Section 11580.2 of the
Insurance Code.
(2) "Beneficiary" means any person who has received benefits or
will be provided benefits under this chapter because of an injury for
which another person or party may be liable. It includes such
beneficiary's guardian, conservator or other personal representative,
his estate or survivors.
(3) "Reasonable value of benefits" means both of the following:
(A) Except in a case in which services were provided to a
beneficiary under a managed care arrangement or contract, "reasonable
value of benefits" means the Medi-Cal rate of payment, for the type
of services rendered, under the schedule of maximum allowances
authorized by Section 14106 or, the Medi-Cal rate of payment, for the
type of services rendered, under regulations adopted pursuant to
this chapter, including but not limited, to Section 14105.
(B) If services were provided to a beneficiary under a managed
care arrangement or contract, "reasonable value of benefits" means
the rate of payment to the provider by the plan for the services
rendered to the beneficiary, except in cases where the plan pays the
provider on a capitated or risk sharing basis, in which case it means
the value of the services rendered to the beneficiary calculated by
the plan as the usual customary and reasonable charge made to the
general public by the provider for similar services.
(4) "Lien" means the director's claim for recovery, from a
beneficiary's tort action or claim, of the reasonable value of
benefits provided on behalf of the beneficiary.
(b) In order to protect the director's lien right to recovery to
the fullest extent possible and consistent with Arkansas Dept. of
Health and Human Services v. Ahlborn (2006) 547 U.S. 268, the
beneficiary shall be entitled to recover from the person or party
responsible the reasonable and necessary value of medical services.