Amended in Senate March 26, 2014

Senate Bill No. 1124

Introduced by Senator Hernandez

February 19, 2014

An act to amend Section begin delete 1367.23 of the Health and Safety Code, relating to health care service plans end delete begin insert 14009.5 of the Welfare and Institutions Code, relating to Medi-Cal end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 1124, as amended, Hernandez. begin delete Health care service plans. end delete begin insert Medi-Cal: estate recovery. end insert

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Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.

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Existing law, with certain exceptions, requires the department to claim against the estate of a decedent, or against any recipient of the property of that decedent by distribution or survival, an amount equal to the payments for Medi-Cal services received or the value of the property received by any recipient from the decedent by distribution or survival, whichever is less. Existing law provides for certain exemptions that restrict the department from filing a claim against a decedent’s property, including when there is a surviving spouse during his or her lifetime. Existing law requires the department, however, to make a claim upon the death of the surviving spouse, as prescribed. Existing law, which has been held invalid by existing case law, provides that the exemptions shall only apply to the proportionate share of the decedent’s state or property that passes to those recipients, by survival or distribution, who qualify for the exemptions.

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This bill would instead provide that the department shall make these claims only in specified circumstances and would define health care services for these purposes. The bill would additionally provide that health care services that federal law or guidance authorizes the state to eliminate from recovery shall also be exempted. The bill would delete the proportionate share provision and would delete the requirement that the department make a claim upon the death of the surviving spouse. The bill would provide that in meeting these requirements the department shall only collect amounts identified as being spent by either the department or a Medi-Cal managed care plan for health care services actually received by the decedent, or the per member per month payment, whichever is less in that month. The bill would also require the department to provide a current or former beneficiary, or his or her authorized representative, upon request and free of charge, with the total amount of Medi-Cal expenses that have been paid on his or her behalf that would be recoverable under these provisions, as specified.

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Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law requires that every group health care service plan contract, issued, amended, or renewed, include a provision requiring the health care service plan to notify the group contractholders in writing of the cancellation of the plan contract and shall include in their contract with group contractholders a provision requiring the group contractholder to mail promptly to each subscriber a legible, true copy of any notice of cancellation of the plan contract that may be received from the plan and to provide promptly to the plan proof of that mailing and the date of that mailing.

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This bill would authorize those contract provisions to allow those mailings to be made by email.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 14009.5 of the end insert begin insert Welfare and Institutions
Code end insert begin insert is amended to read: end insert

14009.5.  

(a) Notwithstanding any other provision of this
chapter, the department shall claim against the estate of the
decedent, or against any recipient of the property of that decedent
by distribution or survival an amount equal to the payments for
the health care services received or the value of the property
received by any recipient from the decedent by distribution or
survival, whichever is begin delete less. end delete begin insert less, only in either of the following
circumstances: end insert

begin delete

(b) The department may not claim in any of the following
circumstances:

end delete begin delete

(1) The decedent was under 55 when services were received,
except in the case of an individual who had been an inpatient in a
nursing facility.

end delete begin delete

(2) Where there is any of the following:

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(1) Notwithstanding paragraph (2), against the real property
of a decedent who was an inpatient in a nursing facility in
accordance with Section 1396p(b)(1)(A) of Title 42 of the United
States Code.

end insert begin insert

(2) (A) The decedent was 55 years of age or older when the
individual received health care services.

end insert begin insert

(B) The department shall not claim under this paragraph when
there is any of the following:

end insert begin delete

(A)

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begin insert (i) end insert  A surviving spouse begin delete during his or her lifetime. However, upon
the death of a surviving spouse, the department shall make a claim
against the estate of the surviving spouse, or against any recipient
of property from the surviving spouse obtained by distribution or
survival, for either the amount paid for the medical assistance
given to the decedent or the value of any of the decedent’s property
received by the surviving spouse through distribution or survival,
whichever is less. Any statute of limitations that purports to limit
the ability to recover for medical assistance granted under this
chapter shall not apply to any claim made for reimbursement end delete .

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(B)

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begin insert (ii) end insert  A surviving child who is under age 21.

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(C)

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begin insert (iii) end insert  A surviving child who is blind or permanently and totally
disabled, within the meaning of Section 1614 of the federal Social
Security Act (42 begin delete U.S.C.A. end delete begin insert U.S.C. end insert Sec. 1382c).

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(3) Any exemption described in paragraph (2) that restricts the
department from filing a claim against a decedent’s property shall
apply only to the proportionate share of the decedent’s estate or
property that passes to those recipients, by survival or distribution,
who qualify for an exemption under paragraph (2).

end delete begin insert

(iv) Any health care services that federal law or guidance
authorizes the state to eliminate from recovery. The department
shall adopt emergency regulations as necessary to implement this
clause in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
If emergency regulations are adopted pursuant to this clause, the
department shall proceed under subdivision (e) of Section 11346.1
of the Government Code for adoption of final regulations. If the
process has not been completed within 180 days, the department
shall readopt the emergency regulations in accordance with Section
11346.1 of the Government Code, but no more than two times. The
initial adoption and any readoptions of emergency regulations
shall be deemed to be an emergency and necessary for immediate
preservation of the public peace, health and safety, or general
welfare, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the department is hereby exempted for that
purpose from the requirements of subdivision (b) of Section
11346.1 of the Government Code.

end insert begin delete

(c)

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begin insert (b) end insert  (1) The department shall waive its claim, in whole or in
part, if it determines that enforcement of the claim would result in
substantial hardship to other dependents, heirs, or survivors of the
individual against whose estate the claim exists.

(2) The department shall notify individuals of the waiver
provision and the opportunity for a hearing to establish that a
waiver should be granted.

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(c) In meeting the requirement in subdivision (a), the department
shall only collect amounts identified as being spent by either the
department or a Medi-Cal managed care plan for health care
services actually received by the decedent, or the per member per
month payment, whichever is less in that month.

end insert begin insert

(d) (1) The department shall provide a current or former
beneficiary, or his or her authorized representative designated
under Section 14014.5, upon request and free of charge, with the
total amount of Medi-Cal expenses that have paid on behalf of
that beneficiary that would be recoverable under this section.

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(2) The department shall permit a beneficiary to request the
information described in paragraph (1) via the Internet, by
telephone, by mail, in person, or through other commonly available
electronic means.

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(3) The department shall conspicuously post on its Internet Web
site, a description of the methods by which a request under this
subdivision may be made, including, but not limited to, the
department’s telephone number and any addresses that may be
used for this purpose. The department shall also include this
information in its pamphlet for the Medi-Cal Estate Recovery
Program and any other notices the department distributes to
beneficiaries regarding estate recovery.

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(d)

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begin insert (e) end insert  The following definitions shall govern the construction of
this section:

(1) “Decedent” means a beneficiary who has received health
care under this chapter or Chapter 8 (commencing with Section
14200) and who has died leaving property to others either through
distribution or survival.

(2) “Dependents” includes, but is not limited to, immediate
family or blood relatives of the decedent.

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(3) “Health care services” means only those services required
to be recovered under Section 1396p(b)(1)(B)(i) of Title 42 of the
United States Code and shall not include services provided to the
decedent through the In-Home Supportive Services program.

end insert begin insert

(f) The amendments made to this section by the act that added
this subdivision apply only to individuals who die on or after
January 1, 2015.

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SECTION 1.  

Section 1367.23 of the Health and Safety Code
is amended to read:

1367.23.  

(a)  Every group health care service plan contract,
which is issued, amended, or renewed, shall include a provision
requiring the health care service plan to notify the group
contractholders in writing of the cancellation of the plan contract
and shall include in their contract with group contractholders a
provision requiring the group contractholder to mail promptly or
email to each subscriber a legible, true copy of any notice of
cancellation of the plan contract which may be received from the
plan and to provide promptly to the plan proof of that mailing or
emailing and the date of that mailing or emailing.

(b)  The notice of cancellation from the group contractholder
to the subscriber required by subdivision (a) shall include
information regarding the conversion rights of persons covered
under the plan contract upon termination of the plan contract. This
information shall be in clear and easily understandable language.

end delete