BILL ANALYSIS
AB 1142
Page 1
REPLACE 09/10/09-PER COMMITTEE CONSULTANT
CONCURRENCE IN SENATE AMENDMENTS
AB 1142 (Price)
As Amended September 3, 2009
Majority vote
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|ASSEMBLY: |47-29|(May 26, 2009) |SENATE: |26-13|(September 8, |
| | | | | |2009) |
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Original Committee Reference: HEALTH
SUMMARY : Requires a hospital that obtains proof of a patient's
Medi-Cal eligibility subsequent to the date of service, to
provide all information regarding that person's Medi-Cal
eligibility to all hospital-based providers, ambulance service
providers, and other hospital-based providers that bill
separately for their professional services. Permits the
Department of Health Care Services (DHCS) to assess a penalty,
up to three times the amount payable by Medi-Cal, against a
provider who, despite having proof of Medi-Cal eligibility,
seeks payment from or fails to cease collection efforts against
the beneficiary.
The Senate amendments :
1)Permit a hospital to satisfy its notification requirement to
hospital-based providers by informing a provider that a
person's Medi-Cal eligibility is pending, before a final
determination is made on the patient's Medi-Cal application.
2)Require DHCS, when assessing the penalty, to consider
mitigating circumstances, such as clerical error and good
faith mistakes, and gives providers subject to penalties the
right to appeal the assessed penalty, consistent with DHCS
procedures.
3)Delete a requirement that contracts between a Medi-Cal
provider and a third-party collection agency contain a
provision allowing the provider to recall a debt from
collection.
4)Modify provisions that a Medi-Cal provider or debt collector
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be deemed to be in violation of existing law regarding
knowingly furnishing incomplete or inaccurate information to a
consumer credit reporting agency, by specifying that these
provisions apply if the prohibited actions occur more than 30
days after receiving proof of Medi-Cal coverage.
5)Specify the provisions do not apply to the Medi-Cal share of
cost owed by a Medi-Cal beneficiary, unless the obligation has
been met for the month in which services were rendered.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Potential costs to an estimated 190 non-contract hospitals of
$190,000 - $285,000 in fiscal year 2009-10 (half year) and
$380,000 - $570,000 annually thereafter. These costs would be
split between the federal and state governments at a rate of
62% federal/38% state General Fund through December 31, 2010,
and 50%/50% thereafter.
2)Minor, absorbable costs to DHCS to assess and collect
penalties.
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
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. A provider may 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 his or her beneficiary
identification card (BIC), or a patient taken to the emergency
room provides his or her BIC to the hospital, but not directly
to the emergency room doctor or laboratory. This bill would
require hospitals, upon obtaining proof of Medi-Cal eligibility,
to forward that information to all hospital-based providers of
professional services.
Additionally, this bill would address the problem of a Medi-Cal
beneficiary having his or her account sent to collections. WCLP
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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 have
referred an unpaid bill to a debt collector but subsequently
receive proof of Medi-Cal eligibility, to instruct the collector
to cease collection efforts. Providers and collection agencies
that have received proof of a person's Medi-Cal coverage would
be prohibited from furnishing, or failing to correct, any
incomplete or inaccurate reports to credit reporting agencies.
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 assess a penalty, up to the three times the
amount payable by Medi-Cal, against a provider who wrongfully
seeks reimbursement for services or fails to cease collection
efforts. 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.
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
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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 Hospital Association (CHA) is opposed to this
bill unless amended. CHA opposes the burden placed on hospitals
by this bill and states that hospitals routinely provide
Medi-Cal information to providers on a voluntary basis.
Analysis Prepared by : Joyce Iseri/ HEALTH / (916) 319-2097
FN: 0003050