BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2013-2014 Regular Session


          SB 282 (Yee)
          As Introduced
          Hearing Date: May 7, 2013
          Fiscal: No
          Urgency: No
          NR


                                        SUBJECT
                                           
             Confidential medical information: required authorization to  
                                      disclose

                                      DESCRIPTION  

          Existing law requires that a pre-litigation demand for  
          settlement or offer to compromise issued on a patient's behalf  
          in any action arising out of the professional negligence of a  
          physician or surgeon be accompanied by an authorization to  
          disclose medical information, as specified, to the persons or  
          organizations insuring, responsible for, or defending the  
          professional liability of the physician or surgeon. 

          This bill would extend these provisions to require that the  
          authorization to disclose medical information also accompany a  
          demand for settlement or offer to compromise issued prior to the  
          service of a complaint in any action arising out of the  
          professional negligence of a person holding a valid license as a  
          marriage and family therapist. 

                                      BACKGROUND  

          The Confidentiality of Medical Information Act (CMIA) protects  
          the privacy of medical records by specifying how and to whom the  
          information they contain may be released. Under the CMIA, no  
          healthcare provider may disclose medical information without  
          first obtaining an authorization, except in specified  
          circumstances, including when compelled to do so by a party to a  
          proceeding before a court or administrative agency. 

          SB 1229 (Keene, Ch. 484, Stats. 1985) required that  
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          pre-litigation demands for settlement or offers to compromise  
          based on a physician's or surgeon's alleged professional  
          negligence be accompanied by an authorization to disclose to an  
          insurer any medical information necessary to investigate the  
          issue of liability and the extent of potential damages in  
          evaluating the merits of the demand.  This bill would extend the  
          same requirement to prelitigation demands based on the alleged  
          professional negligence of a licensed marriage and family  
          therapist. 

                                CHANGES TO EXISTING LAW
           
           Existing law  defines "medical information" to mean any  
          individually identifiable information, in electronic or physical  
          form, in possession of or derived from a provider of health  
          care, health care service plan, pharmaceutical company, or  
          contractor regarding a patient's medical history, mental or  
          physical condition, or treatment.  Existing law defines  
          "individually identifiable" to mean that the medical information  
          includes or contains any element of personal identifying  
          information sufficient to allow identification of the  
          individual, such as the patient's name, address, electronic mail  
          address, telephone number, or social security number, or other  
          information that, alone or in combination with other publicly  
          available information, reveals the individual's identity.  (Civ.  
          Code Sec. 56.05(g).)

           Existing law  provides that an authorization for the release of  
          medical information by a provider of health care, health care  
          service plan, pharmaceutical company, or contractor is valid  
          only if specified conditions are met, including: 
           the authorization is clearly separate from any other language  
            present on the same page and is executed by a signature which  
            serves no other purpose than to execute the authorization;
           the authorization is signed and dated by the patient, the  
            patient's representative, or the spouse of the patient, as  
            specified;
           the authorization states the specific uses and limitations on  
            the types of medical information to be disclosed;
           the authorization states the name or functions of the provider  
            of health care, health care service plan, pharmaceutical  
            company, or contractor that may disclose the medical  
            information;
           the authorization states the name or functions of the persons  
            or entities authorized to receive the medical information; and
           the authorization states the specific uses and limitations on  
                                                                      



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            the use of the medical information by the persons or entities  
            authorized to receive the medical information. (Civ. Code Sec.  
            56.11.)

           Existing law  requires that whenever, prior to the service of a  
          complaint upon a defendant in an action arising out of the  
          professional negligence against a surgeon or physician, a demand  
          for settlement or offer to compromise is made on a patient's  
          behalf shall be accompanied by an authorization to disclose  
          medical information to persons or organizations insuring,  
          responsible for, or defending professional liability that the  
          physician or surgeon may incur. Existing law further provides  
          that the authorization shall authorize disclosure of information  
          which is necessary to investigate issues of liability and the  
          extent of potential damages in evaluating the merits of the  
          demand or offer. (Civ. Code Sec. 56.105.)
          
           This bill  would add licensed marriage and family therapists  
          (MFT) to the above provision, thus requiring that any settlement  
          demand or offer to compromise served on a MFT shall be  
          accompanied by an authorization to disclose medical information,  
          as specified. 
           
                                        COMMENT
           
           1.Stated need for the bill
           
          According to the author: 

            In the case that an [licensed marriage and family therapist]  
            LMFT is sued for malpractice there is currently no requirement  
            that the LMFT's insurer be granted access to the medical  
            records of the patient before a settlement is made.  The  
            medical records are an essential element in determining  
            whether or not to agree to a settlement, and without the  
            information necessary to fully evaluate the claim it is unfair  
            to expect an insurer to respond to a claim in a timely manner.  


           2.Limited permissive release
           
          This bill would require pre-litigation demands for settlement or  
          offers to compromise based on a marriage and family therapist's  
          (MFT) alleged professional negligence  to be accompanied by an  
          authorization to disclose to an insurer any medical information  
          necessary to investigate the issue of liability and the extent  
                                                                      



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          of potential damages in evaluating the merits of the demand.   
          This would parallel existing law as applied to physicians and  
          surgeons. 

          The legal definitions of "health care providers" and "medical  
          information" encompass wide variety of practitioners and the  
          spectrum of information related to patients that practitioners  
          may hold.  To that end, while physicians or surgeons who attend  
          to the physical wellbeing of patients are required to guard a  
          patient's privacy under the CMIA, mental health practitioners  
          who look to a patient's psychological and emotional wellbeing  
          are bound by the same laws. (See Civ. Code Sec. 56 et seq.)  
          Existing law, in relevant part, provides that with regards to a  
          prelitigation malpractice demand, the patient (or his or her  
          representative) must authorize the physician or surgeon to share  
          with his insurer the "information that is necessary to  
          investigate issues of liability and extent of potential damages  
          in evaluating the merits of the demand for settlement or offer  
          to compromise." (Civ. Code Sec. 56.105.)

          Authorizations for medical disclosures under California law  
          require specific and limiting information in order to be valid.   
          These authorizations must specify the type of information to be  
          disclosed, who may disclose it, how it should be used, who may  
          receive it, and the entire document must be executed by a  
          signature which serves no other purpose than to execute the  
          authorization.  Individuals or organizations who thus receive  
          the medical information, are subject to the same disclosure and  
          confidentiality restrictions as the original provider, plan, or  
          company. 

          Thus, the same protections that apply when a patient authorizes  
          disclosure with regards to a pre-litigation settlement demand or  
          offer to compromise based on the alleged professional negligence  
          of a surgeon or physician apply to the provisions of this bill  
          as well.  In either situation, the patient, and his or her  
          representative, ultimately control what information is permitted  
          to be shared with the practitioner's insurance, for the limited  
          purpose of evaluating the merits of the demand.  In the case of  
          a demand against a physician or surgeon, the medical information  
          may be related to prior injuries, preexisting conditions,  
          medications, or otherwise.  In the case of a demand against a  
          marriage and family therapist (MFT), the medical information  
          would arguably be limited to the therapist's notes.  

           3.Facilitates fair settlements 
                                                                      



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           This bill would allow the insurers of MFTs to have access to  
          specified medical information when evaluating a pre-litigation  
          settlement demand or offer to compromise.  This parallels  
          existing law, enacted by SB 1229 (Keene, Ch. 484, Stats. 1985),  
          which requires that necessary information is available to the  
          insurers of physicians and surgeons for the purposes of  
          evaluating a pre-litigation demand.  In its analysis of SB 1229,  
          this Committee argued that comprehensive medical information is  
          often necessary to effectively evaluate settlement offers, and  
          thus requiring disclosure of specified medical information to  
          accompany settlement demands would allow more reasonable  
          settlement negotiations. (Sen. Com. on Judiciary, Analysis of  
          Sen. Bill No. 1229 (1985-86 Reg. Sess.) as amended May 15,  
          1895.) That assessment has not been proven inaccurate, as there  
          have been no attempts to amend the law enacted by SB 1229 since  
          its enactment in 1985.  

          Staff notes that the information needed to evaluate a  
          pre-litigation settlement demand or offer to compromise against  
          an MFT would, on its face, be very different than the  
          information needed to evaluate a claim against a physician.   
          Unlike medical malpractice claims where a practitioner's  
          treatment of physical ailments prevail, professional negligence  
          cases against MFTs typically involve a breach of  
          confidentiality.  This may happen in high conflict family law  
          cases, where the therapist is accused of breaching of  
          confidentiality by one of the family members.  Therapists are  
          also accused of professional negligence for creating a conflict  
          of interest by, for example, evaluating a clinical patient in a  
          separate custody action.  There are also lawsuits stemming from  
          sexual relations with patients.  

          In support of this bill, the California Association of Marriage  
          and Family Therapists writes, "[existing law] should also apply  
          to clients who make claims against licensed Marriage and Family  
          Therapists, and other psychotherapists licensed under the  
          Healing Arts Section of the Business and Professions Code, so  
          that these practitioners have the freedom to work toward  
          resolving malpractice cases without fear of having to later  
          defend breach of confidentiality claims asserted by their  
          clients."  

           
          Support  :  American Association for Marriage and Family  
          Therapy-California Division
                                                                      



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          Opposition  :  None Known

                                        HISTORY
           
           Source  :  California Association of Marriage and Family  
          Therapists

           Related Pending Legislation  : None Known 

           Prior Legislation  : SB 1229 (Keene, Ch. 484, Stats. 1985) see  
          Background.

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