BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 1142
A
AUTHOR: Price
B
AMENDED: April 28, 2009
HEARING DATE: June 25, 2009
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CONSULTANT:
1
Dunstan/
4
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SUBJECT
Medi-Cal: proof of eligibility
SUMMARY
Requires hospitals to provide proof of a person's Medi-Cal
eligibility to hospital-based providers, ambulance service
providers 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.
CHANGES TO EXISTING LAW
Existing law:
Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), which provides
comprehensive health care coverage for low-income
individuals and their families; pregnant women; elderly,
blind, or disabled persons; nursing home residents; and,
refugees who meet specified eligibility criteria.
Prohibits any provider of health care services under
Medi-Cal from seeking reimbursement or attempting to obtain
payment for the cost of those covered health care services
from the eligible applicant or recipient. Federal
Continued---
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regulations have a similar requirement.
Prohibits, under the Civil Code, a person from furnishing
information to any consumer credit reporting agency if the
person knows, or should know, the information is incomplete
or inaccurate.
This bill:
Provides that it is the responsibility of a hospital, as
soon as proof of Medi-Cal eligibility is obtained, 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.
Requires that when a Medi-Cal provider obtains proof of a
patient's Medi-Cal eligibililty to recall patient debts
that are sold or assigned to a third-party collection
agency, ensure that collection efforts by the third-party
agency are halted and notify the patient.
Requires DHCS to impose a fine on a health care provider
who obtains 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. Limits the fine
to three times the amount the provider could have obtained
from billing the Medi-Cal Program for the services
provided.
Requires that the Medi-Cal provider or third-party
collection agency will be deemed to have violated the Civil
Code prohibition against false reporting of credit
information if they report to a credit agency about
Medi-Cal covered services or fail to correct a negative
credit report regarding the Medi-Cal covered services, if
the Medi-Cal provider or third-party collection agency
receives proof of Medi-Cal coverage for the services
rendered.
FISCAL IMPACT
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According to the Assembly Appropriations Committee
analysis, there is 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 collection
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.
The analysis also concludes that there will be unknown,
likely absorbable, workload to the California Department of
Consumer Affairs to continue oversight of California's
third-party collection agency business practices.
BACKGROUND AND DISCUSSION
The author states this bill is necessary because most
Medi-Cal beneficiaries do not realize that they do not have
an obligation to pay bills providers send to them, and even
those that know are fearful that providers will not treat
them if they do not pay. The author notes that
inappropriate billing of Medi-Cal beneficiaries sometimes
occurs when a person goes in for emergency services, and
has to go to another department for additional tests.
Although hospitals may be aware of a Medi-Cal beneficiary's
status, hospital-based providers may not, according to the
author. As a result, the Medi-Cal beneficiary is billed
directly or the provider sells the account to a collection
agency. The author argues that collection agencies pursue
collecting the debt and may report negatively to credit
bureaus, damaging the credit of a beneficiary. The author
states that AB 1142 will protect low-income beneficiaries
by requiring hospitals, as soon as proof of Medi-Cal
eligibility is known, to provide all information regarding
that person's Medi-Cal eligibility to all other
hospital-based providers, ambulances, first responders and
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. The
author notes that this bill will also require Medi-Cal
providers that sell or reassign accounts to collection
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agencies to recall those accounts and require collection
agencies to retract any negative report to the credit
bureaus when they are given proof of the patient's Medi-Cal
eligibility. This requirement is necessary according to
the author who points to the case of a constituent where
the collection agency argued that the ban against billing
Medi-Cal patients did not apply to them because they are
not providers.
Prior legislation
AB 2285 (Chu) of 2004 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 Governor
Schwarzenegger.
Arguments in support
This bill is sponsored by Western Center on Law & 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. Additionally, WCLP argues that
this bill would address the problem of a Medi-Cal
beneficiary having his or her account sent to collections.
WCLP indicates that providers sometimes refuse to pull debt
back from collection, even when they are shown proof of
Medi-Cal eligibility. WCLP also 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.
The Health Rights Hotline writes in support that it has had
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many clients over the years that experience the problem of
being billed for Medi-Cal covered services. 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. They also state 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.
Arguments in opposition
The California Hospital Association (CHA) opposes the bill,
unless amended, because of the burden the bill would place
on hospitals. CHA states that hospitals routinely provide
Medi-Cal information to providers, but on a voluntary
basis. They also argue that Medi-Cal provides a variety of
electronic methods that allow providers to establish and
verify recipient eligibility, including an interactive
voice response system, the Medi-Cal website and a
point-of-service device offered by the Medi-Cal program.
Opponents are also concerned by the triple damages that
providers could be subject to if they knowingly billed a
patient for services covered by Medi-Cal.
PRIOR ACTIONS
Assembly Appropriations: 11-5
Assembly Health: 13-4
Assembly Floor: 47-29
COMMENTS
1. Author's amendments proposed for committee.
Attached is a mock up of amendments that the author
proposed to offer in committee. These amendments address
concerns that have been raised and remove some of the
opposition from the bill. These amendments clarify that
the portions of the bill that requires hospitals to
notify other providers applies to providers of
hospital-based professional services. These amendments
also eliminates the use of the phrases "recall of debt"
and "third party collection agency" and replaces it with
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,and exempts from the provisions of the bill, the share
of cost that certain Medi-Cal recipients are responsible
for paying. These amendments also require DHCS to use
their current process for levying penalties, which
includes specific due process requirements, including an
appeals process.
With these amendments, the opposition of the California
Medical Association will be withdrawn.
2. DHCS has existing procedures for taking enforcement
actions against providers.
The proposed amendments require DHCS to follow the rules
and procedures for collecting civil money penalties as
written in Title 22, California Code of Regulations,
subsections 51485.1(f) - (l). These regulations provide
that a civil penalty shall be no more than three times
the amount claimed by the provider for each item or
service and the director has the discretion to assess a
lower penalty. In setting the amount of the penalty, the
director may consider evidence of mitigating
circumstances submitted by the provider, including if
there was a clerical error, a good faith mistake, a
reliance on official publications and the providers
record of properly submitting claims. The regulations
also grant the provider the right to appeal the
determination by filing a request for hearing. The
regulations provide that civil money penalty appeal
hearings shall be conducted using procedures established
by DHCS regulation.
POSITIONS
Support: Western Center on Law & Poverty (sponsor)
100% Campaign, a collaboration of Children's Defense
Fund California,
California NOW, the Children's Partnership, and
PICO California
American Federation of State, County and Municipal
Employees
California Chapter of the American College of
Emergency Physicians
California Society for Clinical Social Work
County Welfare Directors Association of California
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Health Access California
Health Rights Hotline
Legal Aid Society of San Mateo County
Neighborhood Legal Services of Los Angeles County
Oppose: California Hospital Association (unless amended)
California Medical Association (unless amended)
-- END --
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AB 1142 (Price) - Proposed Amendments - June 16, 2009
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14018.2 of the Welfare and
Institutions Code is amended to read:
14018.2. (a) Reimbursement shall not be denied to any
qualified health care provider for care rendered to an
eligible Medi-Cal beneficiary for the sole reason that a
proof of eligibility label does not accompany the bill.
Proof of eligibility labels may, however, continue to be
used as such and shall be made available to an eligible
Medi-Cal beneficiary through the local office which has
determined the person's eligibility or through the
department. The provider may submit machine-reproduced
copies of the beneficiary Medi-Cal card for billing
purposes as long as the copy is made from the original
unaltered Medi-Cal card under circumstances controlled by
the provider, for example, on the premises of the provider
with copying equipment controlled by the provider.
(b) It shall remain the responsibility of a Medi-Cal
beneficiary to provide information and evidence of Medi-Cal
eligibility, restrictions on the eligibility, and
non-Medi-Cal health coverage, to that person's health care
providers, if this information is requested by those
providers prior to rendering services to that beneficiary.
(c) It shall be the responsibility of the provider prior
to rendering Medi-Cal reimbursable services to persons
presenting themselves as Medi-Cal beneficiaries to make a
good faith effort to verify the person's identity, if the
person is not known to the provider, by matching the name
and signature on his or her Medi-Cal card against the
signature on a valid California driver's license, or
California identification card issued by the Department of
Motor Vehicles, or another type of picture identification
card or other credible document of identification. When the
provider verifies the beneficiary's identity with a signed
Medi-Cal card and one of the documents described above, the
state will deem this to be a good faith effort. If the
provider does not make a good faith effort of
reasonable identification prior to rendering Medi-Cal
reimbursable services and renders services to a presenting
person who is ineligible for those Medi-Cal services,
payment for those services may later be disallowed.
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This provision shall not apply to:
(1) Persons 17 years of age and under.
(2) Persons in long-term care.
(3) Persons receiving emergency services.
(d) Notwithstanding subdivision (b) of this section,
county welfare departments may provide Medi-Cal eligibility
information to other governmental agencies and their
designated agents as necessary for proper administration of
the Medi-Cal program.
(e) It shall be 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 that provide ambulance transportation services
through the "911" emergency response system, and other
hospital-based providers of professional services that bill
separately all services associated with the person's
treatment in the hospital rendered during the same time
period for which the hospital is submitting a claim.
(f) For purposes of this section, the following
definitions apply:
(1) "Hospital-based provider" means an anesthesiologist,
radiologist, pathologist, emergency room physician, or
other physician or a group of physicians providing medical
services at the hospital.
(2) " Hospital-based professional services" are services
performed for a patient while at a hospital, related to the
patient's hospital stay, and known to the hospital,
includes including , but is not limited to, diagnostic,
laboratory, therapeutic, and radiologic services.
SEC. 2. Section 14019.4 of the Welfare and Institutions
Code is amended to read:
14019.4. (a) Any provider of health care services who
obtains a label or copy from the Medi-Cal card or other
proof of eligibility pursuant to this chapter shall not
seek reimbursement nor attempt to obtain payment for the
cost of those covered health care services from the
eligible applicant or recipient, or any person other than
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the department or a third-party payor who provides a
contractual or legal entitlement to health care services.
(b) Whenever a service or set of services rendered to a
Medi-Cal beneficiary results in the submission of a claim
in excess of five hundred dollars ($500), and the
beneficiary has given the provider proof of eligibility to
receive the service or services, the provider shall issue
the beneficiary a receipt to document that appropriate
proof of eligibility has been provided. The form and
content of those receipts shall be determined by the
provider but shall be sufficient to comply with the intent
of this subdivision. Nursing facilities and all categories
of intermediate care facilities for the developmentally
disabled are exempt from the requirements of this
subdivision.
(c) In addition to being subject to any applicable
penalties set forth in law or regulation, a provider of
health care services who obtains a label or copy from the
Medi-Cal card or other proof of eligibility pursuant to
this chapter, and who subsequently attempts to seek
reimbursement or to obtain payment for the cost of covered
services from the eligible applicant or recipient or fails
to recall a debt cease collection efforts against a patient
for covered services as required by subdivision (d),may be
punished with subject to a fine not to exceed three times
the amount the provider could otherwise have obtained had
the provider billed the
Medi-Cal program. In implementing this subsection, the
Department shall follow the rules and procedures for
collecting civil money penalties as written in Title 22,
California Code of Regulations, subsections 51485.1(f) -
(l).
(d) If a Medi-Cal provider receives proof of a patient's
Medi-Cal eligibility pursuant to this chapter and that
provider has referred an unpaid bill for services rendered
to the patient to a third-party collection agency debt
collector , the Medi-Cal provider shall promptly recall the
matter from the third-party collection agency and otherwise
ensure that collection efforts against the patient by the
third-party collection agency debt collector are halted and
notify the patient accordingly.
(e) Commencing 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
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shall include a provision allowing the Medi-Cal provider to
immediately recall a debt from collection pursuant to
subdivision (d).
(f) ( e) If a patient provides proof of Medi-Cal
eligibility to a third-party collection agency debt
collector and the third-party collection agency debt
collector fails to notify the provider of this proof, the
provider shall not be responsible for ensuring that
collections efforts against the patient cease recalling the
debt pursuant to subdivision (d) until either the patient
or the third-party collection agency debt collector
provides the provider with proof of the patient's Medi-Cal
eligibility.
(g) (f) If a A Medi-Cal provider or third-party
collection agency debt collector shall be deemed to be in
violation of subdivision (a) of Section 1785.25 of the
Civil Code if more than 30 days after receiving receives
proof of Medi-Cal coverage for services rendered , the
provider or third-party collection agency debt collector
shall be deemed to be in violation of subdivision (a) of
Section 1785.25 of the Civil Code if they do either of the
following :
(1) Furnishes information regarding Report the rendering
of the Medi-Cal-covered services to a consumer credit
reporting agency . , or
(2) Fail s to notify the consumer reporting agency of
corrections to information previously furnished correct a
negative credit report regarding the Medi-Cal-covered
services by that the Medi-Cal provider or third-party
collection agency debt collector. reported to a consumer
credit reporting agency.
(g) The provisions of this section shall not apply to the
Medi-Cal share of cost owed by a Medi-Cal beneficiary,
unless the beneficiary's share of cost has been met for the
month in which services were rendered.
(h) For purposes of this section "debt collector"
includes any person who regularly engages in debt
collection as defined by Civil Code 1788.2, except for
the original Medi-Cal provider.
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