BILL ANALYSIS
AB 1142
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 1142 (Price) - As Amended: April 14, 2009
SUBJECT : Medi-Cal: proof of eligibility.
SUMMARY : Requires hospitals to provide proof of a person's
Medi-Cal eligibility to hospital-based providers, ambulance, and
other providers of professional services; requires Medi-Cal
providers to ensure that patient debts that are sold to a
collection agency will be recalled under specified
circumstances; makes providers subject to a fine of up to three
times the amount the provider could have obtained from billing
Medi-Cal if the provider has proof of Medi-Cal eligibility and
seeks payment from the beneficiary or fails to recall a debt;
and, prohibits a Medi-Cal provider or third-party collection
agency who receives proof of Medi-Cal coverage from reporting
the rendering of Medi-Cal covered services to a consumer credit
reporting agency or failing to correct a negative credit report
regarding the Medi-Cal covered services rendered. Specifically,
this bill :
1)Makes it the responsibility of a hospital, as soon as proof of
Medi-Cal eligibility is supplied by a person presenting
himself or herself as a Medi-Cal beneficiary, to provide all
information regarding that person's Medi-Cal eligibility to
all hospital-based providers, ambulance transportation
services providers, providers of ambulance transportation
services through the "911" emergency response system, and
other providers of professional services that bill separately
for services rendered to that person during the same time
period for which the hospital is submitting a claim.
2)Defines, for purposes of this bill:
a) "Hospital-based provider" as an anesthesiologist,
radiologist, pathologist, emergency room physician, or
other physician or a group of physicians providing medical
services at the hospital.
b) "Professional services" to include, but not be limited
to, diagnostic, laboratory, therapeutic, and radiologic
services.
3)Requires each Medi-Cal provider to ensure that patient debts
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that are sold or assigned to a third-party collection agency
can and will be recalled in the event that the services were
covered by the Medi-Cal Program and evidence of Medi-Cal
coverage could have been obtained by the provider.
4)Requires the Department of Health Care Services (DHCS) to
impose a fine on a health care provider who obtains a label or
copy from the Medi-Cal card or other proof of Medi-Cal
eligibility and who attempts to seek reimbursement or to
obtain payment for the cost of covered services from the
Medi-Cal-eligible applicant or recipient, or who fails to
recall a debt, as required in 3) above, in an amount not to
exceed three times the amount the provider could otherwise
have obtained, had the provider billed the Medi-Cal Program.
This penalty is in addition to any applicable penalties set
forth in current law or regulation.
5)Requires, if a Medi-Cal provider or third-party collection
agency receives proof of Medi-Cal coverage for services
rendered, the Medi-Cal provider or third-party collection
agency to be deemed to be in violation of the prohibition
against furnishing information on a specific transaction or
experience to any consumer credit reporting agency if the
person knows or should know the information is incomplete or
inaccurate if they do either of the following:
a) Reports the rendering of the Medi-Cal covered services
to a consumer credit reporting agency; or,
b) Fails to correct a negative credit report regarding the
Medi-Cal covered services the Medi-Cal provider or
third-party collection agency reported to a consumer credit
reporting agency.
EXISTING LAW :
1)Prohibits any provider of health care services, who obtains a
label or copy from the Medi-Cal card or other proof of
eligibility of a Medi-Cal beneficiary, from seeking
reimbursement or attempting to obtain payment for the cost of
those covered health care services from the eligible applicant
or recipient, or any person other than the DHCS or a
third-party payor who provides a contractual or legal
entitlement to health care services.
2)Deems, through regulation, any violation of any Medi-Cal
statute, rule or regulation relating to the provision of
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health care services under Medi-Cal, as contrary to public
health, safety, welfare, morals, and grounds for DHCS to:
a) Issue a reprimand;
b) Place the provider on probationary status; or,
c) Suspend the provider from participation in the Medi-Cal
Program.
3)Prohibits, under the Civil Code, a person from furnishing
information on a specific transaction or experience to any
consumer credit reporting agency if the person knows or should
know the information is incomplete or inaccurate.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . This bill is sponsored by Western
Center Law on & Poverty (WCLP) to address the longstanding
problem of Medi-Cal beneficiaries who are wrongly billed for
services covered by Medi-Cal. WCLP states that even though it
is against the law for a health care provider to bill a
Medi-Cal beneficiary for covered services, such situations
occur for a variety of reasons, and this bill would address
several of the underlying causes. If a provider does not know
a patient has Medi-Cal (such as when a patient arrives at a
hospital via ambulance and is unconscious and does not have
their beneficiary identification card (BIC), or a patient is
taken to the emergency room and provides their BIC to the
hospital, but not directly to the emergency room doctor or
laboratory), this bill would require hospitals to pass on
proof of Medi-Cal eligibility to all hospital-based providers,
ambulances, and first responders. Additionally, this bill
would address the problem of a Medi-Cal beneficiary having his
or her account sent to collections. WCLP indicates an
advocate is sometimes able to have the Medi-Cal provider "pull
back" the account from collections, but providers sometimes
refuse to do so, even when they are shown proof of Medi-Cal
eligibility on the date of service. Additionally, in the case
of a constituent of the author, a collection agency argued the
ban against billing Medi-Cal patients did not apply to them
because they are not "providers." This bill would address
this problem by requiring Medi-Cal providers that sell or
reassign accounts to collection agencies to recall those
accounts if they find out that the patient had Medi-Cal, and
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would require collection agencies to retract any negative
report to the credit bureaus if it has been proven that the
person was covered by Medi-Cal during the time period for
which they were billed.
WCLP indicates it has seen multiple cases where pharmacists or
dentists tell a Medi-Cal patient that a service or medication
is not covered by Medi-Cal and that the patient must pay
out-of-pocket when the service or medication could have been
covered if the provider submitted the required authorization
to Medi-Cal. In other instances, the provider made an error
in billing and is denied payment through Medi-Cal, so the
provider bills the patient even though they know Medi-Cal
would have paid had the claim been billed timely and
accurately. This bill would require DHCS to fine a provider
up to the three times the amount payable by Medi-Cal. WCLP
states, by definition, Medi-Cal beneficiaries have very low
incomes and cannot afford to pay for services that are covered
by the program. When they are billed, some go without needed
services for which a provider could get authorization, others
incur medical debt and may even have their credit ruined.
WCLP argues this measure will help protect Medi-Cal
beneficiaries from being wrongly billed.
2)BACKGROUND . Existing law prohibits any provider of health
care services, who obtains a label or copy from the BIC or
other proof of eligibility of a Medi-Cal beneficiary, from
seeking reimbursement or attempting to obtain payment for the
cost of those covered health care services from any person
other than DHCS or a third-party payer who provides a
contractual or legal entitlement to health care services.
Existing regulations deem any violation of any Medi-Cal
statute, rule, or regulation relating to the provision of
health care services under Medi-Cal to constitute grounds for
issuing a reprimand, placing the provider on probationary
status, or suspension from participation in the Medi-Cal
program. DHCS indicates its Audits and Investigations Program
is responsible for pursuing an action under existing law, and
DHCS indicates it is unaware of any sanctions imposed.
3)SUPPORT . Supporters of this bill include legal services
groups, immigrant rights advocates and consumer groups, who
write in support that this bill would address the longstanding
problem of Medi-Cal beneficiaries who were wrongly billed for
services covered by Medi-Cal. The Health Rights Hotline
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writes in support that it has had many clients over the years
that experienced the problem of being billed for Medi-Cal
covered services. Health Access California writes in support
that requiring hospitals to tell other providers that the
patient is covered by Medi-Cal seems a simple step toward
correcting a real and persistent problem. The Legal Aid
Society of San Mateo County (LASSMC) writes in support that it
has assisted many patients who receive bills from the
ambulance company that transported them to the hospital and
the physicians who cared for the patient in the hospital
emergency department. LASSMC states that, although the
hospital obtained the patient's Medi-Cal information after the
patient's medical condition was stabilized, neither the
ambulance company nor the physician obtained that information,
resulting in bills to the patient. LASSMC writes that this
bill will prevent this situation from occurring because it
requires the hospital to share the patient's Medi-Cal
information with affiliated providers.
4)OPPOSE UNLESS AMENDED . The California Medical Association
(CMA) indicates it has three concerns with the bill: a)
Existing regulations already include appropriate remedies for
punishing providers who knowingly bill Medi-Cal beneficiaries,
and allowing DHCS to unilaterally fine physicians who may have
inadvertently broken the rules is punitive and unnecessary; b)
If Medi-Cal providers are going to be required to recall debts
from collection agencies, there must a mechanism in place that
will guarantee that the physician actually can get that debt
back once proof of eligibility is provided; and, c) If a
patient receives a notice from a collection agency, the
patient will most likely correspond with the collection agency
and not the treating provider, and CMA argues the treating
provider should be held harmless if the collection agency
receives proof of Medi-Cal eligibility but fails to notify the
provider.
The California Children's Hospital Association (CCHA) writes to
oppose this bill unless it is amended, stating this bill would
impose a significant administrative burden on hospitals by
requiring they disseminate Medi-Cal eligibility information to
numerous other providers. CCHA recommends this bill be
amended to allow for the exchange of Medi-Cal eligibility
information among providers without putting the responsibility
for disseminating it on hospitals.
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5)PROPOSED AUTHOR'S AMENDMENTS . In response to concerns raised
by health care providers, the author is proposing to amend
this bill to: a) Allow, rather than require, DHCS to levy the
fine in this bill; b) Require a Medi-Cal provider that has
referred an unpaid bill to a collection agency to promptly
withdraw the matter from collections, upon proof of a
patient's Medi-Cal eligibility, in lieu of the language
currently in the bill on this point; c) Require all contracts
between collection agencies and Medi-Cal providers to include
a provision allowing a provider to immediately recall a debt
from collection, in lieu of the language currently in the bill
on this point; and, d) State that if a patient provides proof
of Medi-Cal eligibility to a collection agency and the
collection agency fails to notify the provider, the provider
is not responsible for recalling the debt until the provider
is provided proof by either the patient or the collection
agency.
6)PREVIOUS LEGISLATION . AB 2285 (Chu) among other provisions,
would have made it the responsibility of a hospital that has
provided medical services to a person to provide to any
hospital-based provider of services, who provided services at
the hospital, all Medi-Cal eligibility documentation necessary
for that provider to obtain reimbursement from the Medi-Cal
Program. AB 2285 was vetoed by the Governor, but his veto
message did not address this provision of AB 2285.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law & Poverty (sponsor)
100% Campaign
American Federation of State, County and Municipal Employees,
AFL-CIO (prior version)
California Society for Clinical Social Work (prior version)
California Immigrant Policy Center
Health Access California
Health Rights Hotline
Legal Aid Society of San Mateo County
Neighborhood Legal Services of Los Angeles County
PICO California
Oppose unless amended
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California Children's Hospital Association
California Medical Association
Opposition
None on file.
Analysis Prepared by : Scott Bain / HEALTH / (916) 319-2097