BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1142 (Price)
Hearing Date: 8/27/2009 Amended: 8/17/2009
Consultant: Katie Johnson Policy Vote: Health 8-3
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BILL SUMMARY: AB 1142 would place responsibility of providing
all information regarding a patient's Medi-Cal eligibility to
all hospital-based providers on the hospital treating the
patient. The bill would impose a fine not to exceed three times
the amount a provider could otherwise have obtained had he or
she billed the Medi-Cal program on a provider who attempts to
seek payment from or fails to cease collection efforts against a
patient the provider knows to be a Medi-Cal beneficiary. The
bill would also require a provider or a collection agency to
cease collection efforts against a patient if he or she provides
proof of Medi-Cal eligibility.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Potential costs to $190 - $285
$380 - $570 $380 - $570 General/*
non-contract hospitals Federal
*October 1, 2008 - December 31, 2010 FMAP = 38%GF / 62%FF
January 1, 2011 - ongoing FMAP = 50%GF / 50%FF
FMAP = Federal Medical Assistance Percentage-the percent of
total costs paid by the federal government.
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Existing law establishes the Medi-Cal program, California's
version of the federal Medicaid program, which provides health
care services to eligible low-income Californians, including the
aged, blind, disabled, children, and pregnant women. The
Department of Health Care Services (DHCS) administers Medi-Cal.
Existing law makes it the responsibility of a Medi-Cal
beneficiary to provide evidence of Medi-Cal eligibility to his
or her health care provider if that information is requested.
Existing law also states that it is the responsibility of a
provider to make a good faith effort to verify a person
presenting a Medi-Cal card's identity.
This bill would require a hospital to assume the responsibility
of providing a Medi-Cal beneficiary's information to all
hospital-based providers, including anesthesiologists,
radiologists, pathologists, and emergency room physicians,
ambulance transportation services providers, and providers that
provide ambulance transportation services through the "911"
system, among others, once the hospital receives proof of a
person's Medi-Cal eligibility. In current practice, hospitals
provide this information upon the request of any hospital-based
provider. Additionally, hospital-based providers have access to
patient Medi-Cal information through the Medi-Cal Eligibility
Data System (MEDS).
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AB 1142 (Price)
This bill would provide that a provider of health care services
who obtains proof of an individual's Medi-Cal eligibility and
who subsequently attempts to seek payment for the cost of
covered services from or fails to cease collection efforts
against the individual may be subject to a fine not to exceed
three times the amount the provider could otherwise have
obtained had the provider billed Medi-Cal.
This bill would provide that if a Medi-Cal provider receives
proof of a patient's Medi-Cal eligibility and that provider has
referred an unpaid bill to a debt collector, the provider must
cease collection efforts against the patient by a debt collector
and notify the patient.
This bill would provide that if a patient provides proof of
Medi-Cal eligibility to a collection agency or debt collector,
and the debt collector fails to notify the provider of this
proof, the provider would not be responsible for ensuring the
cessation of collection efforts until the provider is provided
with proof of a patient's Medi-Cal eligibility.
Existing law prohibits a person from furnishing information on a
specific transaction to any consumer credit reporting agency if
the person knows that the information is incomplete or
inaccurate.
This bill would deem a provider or debt collector in violation
of existing law if, after more than 30 days of receiving proof
of a person's Medi-Cal coverage, he or she 1) furnishes
information regarding the rendering of the Medi-Cal covered
services to a consumer credit reporting agency, and 2) fails to
notify a consumer credit reporting agency of corrections to
information previously furnished by that provider or debt
collector.
Any administrative impact on DHCS to assess and collect fines
would be minor and absorbable.
180 - 200 of California's hospitals are not contracted with the
California Medical Assistance Commission (CMAC) and are paid a
cost-based rate for treating Medi-Cal patients. For a given
fiscal year, each hospital is paid an interim rate based on the
previous year's rate. At the end of the year, each hospital must
submit a detailed cost-report to DHCS. The department, in turn,
audits the cost reports and determines whether a hospital is
owed payments or whether it owes the state. In FY 2008 - 2009,
DHCS paid non-contract hospitals $6.1 million and it is
projected to owe hospitals $11.1 million in FY 2009-2010. These
costs are shared equally between the state General Fund and
federal funds. If this bill were to cost 190 non-contract
hospitals approximately $10,000 annually for .20 of a staff
person to accommodate extra workload, the cost to Medi-Cal would
be approximately $950,000 in FY 2009-2010 and $1,900,000
ongoing.
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AB 1142 (Price)
The author's proposed amendments would:
1) delete the requirement in the current version of this
bill that would require hospitals to inform providers of
all Medi-Cal beneficiaries' Medi-Cal eligibility.
2) narrow the bill to require hospitals to inform providers
that an individual is a Medi-Cal beneficiary or that an
individual's Medi-Cal application is pending if the
individual presents such evidence after the date of the
episode of care.
3) provide that a provider who fails to cease collection
efforts against a Medi-Cal beneficiary when presented of
proof of eligibility, the provider may be subject to a fine
payable to DHCS of not more than three times the amount
payable by Medi-Cal.
4) Require that mitigating circumstances, such as
consideration that a clerical error or a good faith mistake
may have occurred, be taken into account when imposing the
fine.
Assuming that non-contract hospitals would need to contact the
providers of approximately 20 - 30 percent of its Medi-Cal users
annually, the costs associated with this bill's implementation
would be $190,000 - $285,000 in FY 2009-2010 and $380,000 -
$570,000 ongoing. This assumes an estimate of 190 non-contract
hospitals.
Medi-Cal costs are generally shared equally between the federal
government (FF) and state General Fund (GF). However, as a
result of the passage of the American Reinvestment and Recovery
Act (ARRA) in February of 2009, the Federal Medical Assistance
Percentage (FMAP) increased from 50 percent to 61.59 percent.
Thus, retroactively from October 1, 2008, through December 31,
2010, the federal government would pay for approximately 62
percent and the state General Fund would pay for 38 percent of
benefit-related Medi-Cal expenditures. After December 31, 2010,
the FMAP reduces to 50 percent FF, 50 percent GF.