BILL ANALYSIS
AB 1142
Page 1
ASSEMBLY THIRD READING
AB 1142 (Price)
As Amended April 28, 2009
Majority vote
HEALTH 13-4 APPROPRIATIONS 11-5
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|Ayes:|Jones, Ammiano, Block, |Ayes:|De Leon, Ammiano, Charles |
| |Carter, | |Calderon, Davis, Krekorian, |
| |De La Torre, De Leon, | |Hall, John A. Perez, Price, |
| |Hall, Hayashi, Hernandez, | |Skinner, Solorio, Torlakson |
| |Bonnie Lowenthal, Nava, | | |
| |V. Manuel Perez, Salas | | |
| | | | |
|-----+--------------------------+-----+----------------------------|
|Nays:|Adams, Conway, Emmerson, |Nays:|Nielsen, Duvall, Harkey, |
| |Audra Strickland | |Miller, |
| | | |Audra Strickland |
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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; allows the Department of Health Care Services
(DHCS) to subject providers 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
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for all services associated with person's treatment in the
hospital rendered during the 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; and,
b) "Professional services" to include, but not be limited
to, diagnostic, laboratory, therapeutic, and radiologic
services.
3)Requires, if a Medi-Cal provider receives proof of a patient's
Medi-Cal eligibility and that provider has referred an unpaid
bill for services rendered to the patient to a third-party
collection agency, the Medi-Cal provider to promptly recall
the matter from the third-party collection agency, to
otherwise ensure collection efforts by the third-party
collection agency are halted, and to notify the patient
accordingly.
4)Requires, beginning July 1, 2010, all contracts between a
third-party collection agency and a Medi-Cal provider or
billing service that works on behalf of a Medi-Cal provider to
include a provision allowing the Medi-Cal provider to
immediately recall a debt from collection pursuant to 3)
above.
5)Prohibits, if a patient provides proof of Medi-Cal eligibility
to a third-party collection agency and the third-party
collection agency fails to notify the provider of this proof,
the provider from being responsible for recalling the debt
until either the patient or the third-party collection agency
provides the provider with proof of the patient's Medi-Cal
eligibility.
6)Permits 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
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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.
7)Requires, if a Medi-Cal provider or third-party collection
agency receives proof of Medi-Cal coverage for services
rendered, the provider or third-party collection agency to be
deemed to be in violation of a provision of the Consumer
Credit Reporting Agencies Act if they do either of the
following:
a) Report the rendering of the Medi-Cal-covered services to
a consumer credit reporting agency; or,
b) Fail 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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)No direct fiscal impact to DHCS to continue oversight of
Medi-Cal billing and the requirements and prohibitions
established by this bill. Current law and regulations
prohibit providers with proof of Medi-Cal eligibility from
seeking reimbursement from a patient or sending patient
billing issues to a third-party collections agency. In
addition, current regulations provide DHCS with broad
authority to impose administrative sanctions, provider
reprimands, or placement of a provider on probationary status.
The requirements and prohibitions on providers and DHCS are
generally current law and practice.
2)Unknown, likely absorbable workload to the California
Department of Consumer Affairs to continue oversight of
California's third-party collection agency business practices.
COMMENTS : This bill is sponsored by Western Center Law on &
Poverty (WCLP) and supported by consumer and legal services
groups to address the longstanding problem of Medi-Cal
beneficiaries who are wrongly billed for services covered by
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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 an unpaid bill if they find out that the
patient had Medi-Cal, and 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 allow 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
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have their credit ruined. WCLP argues this measure will help
protect Medi-Cal beneficiaries from being wrongly billed.
Under existing law, the Consumer Credit Reporting Agencies Act
prohibits 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. Existing Medi-Cal 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 Medi-Cal 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.
The California Medical Association (CMA) indicates it is opposed
to this bill unless it is amended. CMA is opposed to the
provision of this bill allowing DHCS to fine physicians who bill
Medi-Cal beneficiaries, stating existing regulations already
include appropriate remedies for punishing providers who
knowingly bill Medi-Cal beneficiaries. The California
Children's Hospital Association writes it is opposed to 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.
Analysis Prepared by : Scott Bain / HEALTH / (916) 319-2097
FN: 0000726