BILL ANALYSIS
AB 2315
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Date of Hearing: March 23, 2010
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 2315 (Conway) - As Introduced: February 19, 2010
SUBJECT : INJURED PERSONS: PERSONAL IDENTIFYING INFORMATION
KEY ISSUES :
1)SHOULD INJURED PERSONS BE REQUIRED TO PROVIDE SOCIAL SECURITY
NUMBERS AND OTHER PERSONAL IDENTIFYING INFORMATION WHEN
NOTIFYING PUBLIC AGENCIES OF POTENTIAL CLAIMS?
2)HAS THE NEED FOR THIS BILL BEEN DEMONSTRATED IN LIGHT OF
FEDERAL RULES THAT APPEAR TO INDICATE THAT IT IS UNNECESSARY
AND OVERBROAD, COULD UNFAIRLY PRECLUDE INJURED PERSONS FROM
SEEKING A REMEDY FOR THEIR INJURIES, AND POTENTIALLY INCREASES
PRIVACY RISKS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill would amend the process by which injured persons seek
a remedy for claims against the government. Existing law
requires that these claims be presented to the responsible
public agency prior to any legal action, and prescribes the
timing and content of that notice. This bill would add to that
notice the requirement that the injured person supply their
social security number and other personal identifying
information upon request, ostensibly to allow the public agency
to determine whether the claimant has received Medicare benefits
for their injury for the purpose of coordinating insurance and
Medicare payments. Although the sponsor, representing joint
powers authorities, believes that the bill is necessary in order
to allow public entities to timely and accurately comply with
federal law, the available information does not appear to
corroborate that concern. Moreover, the bill appears to be
significantly broader in scope than any federal requirement.
The bill may also inadvertently create potential obstacles to
recovery for injured persons, as well as the risk of privacy
intrusions and identity theft.
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SUMMARY : Requires sensitive personal information to be provided
to the government by crime victims, businesses, and others who
have claims for injury against state and local government
agencies. Specifically, this bill amends the pre-suit
government claims presentment rule to mandate that:
1)Upon request of the public entity or its representative, a
claimant whose claim includes past or future medical treatment
shall provide his or her social security number, Medicare
health insurance claim number (HICN), any alternate name, date
of birth, and gender within 30 days of the request.
2)Additionally, upon request of the public entity or its
representative, the claimant shall complete the Medicare
Beneficiary Inquiry Form.
EXISTING LAW :
1)Requires certain claims for money or damages by crime victims,
persons injured by governmental negligence and those alleging
breach of an express contract against the state, local
government entities, and entities of the judicial branch to be
presented to the governmental entity prior to suit, setting
forth the claimant's name, address, and the circumstances
giving rise to the claim. (Government Code sections 905,
905.2, 905.7, 910.) Further statutory references are to this
code unless otherwise noted.)
2)Bars any claimant from filing suit if the required government
presentment is not made or is incomplete or inaccurate.
(Sections 910.6, 910.8, 911, 945.4.)
3)Restricts the unnecessary collection and misuse of Social
Security numbers in order to protect individuals' right to
privacy and to minimize the opportunities for identity theft.
(E.g., Civil Code section 1798.85; Government Code sections
27300 and 27301.)
4)Restricts the collection of sensitive identifying information
in medical records. (E.g., Civil Code sections 56 et seq.,
1798.91.)
COMMENTS : The author maintains that the bill is needed for the
following reasons:
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A new federal law became effective January 1, 2009
establishing Section 111 of the Medicare, Medicaid and
SCHIP Extension Act of 2007 (MMSEA). This law now requires
expanded reporting by liability insurers (including
self-insurers), no-fault insurers, and workers'
compensation plans about Medicare beneficiaries seeking
past or future medical treatment who have other insurance
coverage. The additional items of information are the
claimant's Medicare health insurance claim number (HICN) or
social security number [SSN], any alternate name used by
the claimant, the claimant's date of birth and the gender
of the claimant.
The expanded claimant information assists the Centers for
Medicare & Medicaid Service (CMS) and other insurance plans
to coordinate payment of benefits among insurance plans so
that claims are paid promptly and correctly. Failure to
report, or to correctly report, claimant information to CMS
exposes public entities to fines of $1,000 per day per
claim.
Today, California law (Government Code 910) requires
claimants to supply their name, address, date of claim, the
circumstances of the claim, and estimated amount of claim.
However, Government Code 910 does not require the claimant
to include the expanded list of information needed by
public entities to correctly comply with the federal
changes.
The sponsor, the California Association of Joint Powers
Authorities (CAJPA), argues that it is necessary to amend
Government Code section 910 to authorize public entities to
collect the additional information from claimants who seek past
or future medical treatment as part of their claim against a
public entity in order to correctly comply with Section 111 of
the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA).
CAJPA states that this change in statute will permit public
entities to correctly comply with federal reporting requirements
in a timely fashion, and will reduce public entity exposure to
large fines and penalties for failing to correctly report
claimant information.
Background on Federal Medicare Reporting Law . Federal law has
long required coordination of Medicare benefits among the
federal government and any insurance payments, and has required
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that covered insurers report to the Medicare program when they
make payments to persons who received Medicare benefits so that
the federal government can seek reimbursement, if possible.
According to federal court documents provided by the sponsors:
All Medicare payments [to beneficiaries] are conditioned on
reimbursement if it is demonstrated that a primary plan had
responsibility to pay for those medical expenses. 42
U.S.C. 1395y(b)(2)(B); 42 C.F.R. 411.24. Although that
obligation has existed since 1980, Congress clarified its
intent of shifting the burden to private parties with its
amendments to the [Medicare Secondary Payer] Statute in
2003, which define "primary plan" to include a plan of
self-insurance, specifying that "[a]n entity that is
engaged in a business, trade, or profession shall be deemed
to have a self-insured plan if it carries its own risk
(whether by a failure to obtain insurance, or otherwise),
in whole or in part." 42 U.S.C. 1395y(b)(2)(A)(ii); see
also 42 C.F.R. 411.50(b). The primary plan's
responsibility to make primary payment may be demonstrated
by "a payment conditioned on the recipient's . . . release
(whether or not there is a determination or admission of
liability) of payment." 42 U.S.C. 1395y(b)(2)(A)(ii).
(Memorandum In Support Of The United States' Motion For Partial
Summary Judgment On Liability, U.S. v. Stricker, No.
CV-09-KOB-2423-E (N.D. Ala., filed Jan, 28, 2010).
A 2007 law, effective last year - Section 111 of the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (P.L.110-173)
- added new mandatory reporting requirements for certain
insurance plans, including certain self-insurers. (See
http://www.cms.hhs.gov/mandatoryinsrep.)
Under this law, covered self insurers may be required to report
additional information regarding payments made to Medicare
beneficiaries after verdicts and settlements of legal claims.
Although the sponsor appears to believe that this bill is
necessary in order to allow public entities to timely and
accurately comply with federal law, the available information
does not appear to validate that concern.
At Most, Federal Law Appears To Require Only That Certain
Information Be Requested - Not Required. Section 111 appears to
request reporting of SSN and other information indicated by the
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sponsor. However, contrary to the sponsors' understanding,
section 111 does not require that this information be reported.
Rather, the law provides a "safe harbor" by which covered
entities may simply ask claimants to complete an inquiry form,
which the claimant is authorized to decline. Guidance provided
by the Centers for Medicare & Medicaid Service (CMS) states:
If an individual refuses to furnish either a HICN or SSN,
and the ? reporting entity chooses to use the attached
model language, CMS will consider the reporting entity
compliant? even if the individual is later discovered to be
a Medicare beneficiary.
http://www.cms.hhs.gov/MandatoryInsRep/Downloads/ALERTComplianceH
ICNSSNsNGHP082409.pdf
This model language form expressly allows the claimant to refuse
to fill it out. (See
http://www.gpatpa.com/PDF/CMS_ALERT_and_Model_form_for_collecting
_SSN.pdf.)
The law firm of Wiley Rein LLP firm has published an article on
its web site noting:
It appears certain that many claimants will simply ignore
or refuse to sign or return the form. Claimants have
little or no incentive to provide the requested information
to liability insurers or self-insured entities, and in some
circumstances they arguably have an incentive not to make
the disclosure. Indeed, CMS implicitly acknowledges that
Medicare law imposes no legal obligation on claimants to
provide the requested personal information, and without
apparent irony has provided a space on the form for the
claimant to explain the "Reason(s) for Refusal to Provide
Requested Information." Many observers believe that large
numbers of claimants, however, will provide no such
explanation and instead will simply ignore the request --
leaving the requesting entity with no signed copy of the
form.
In a town-hall teleconference on September 30, 2009, CMS
representatives appeared to depart from the written
guidance contained in the CMS Alert, and implied that the
safe harbor might extend more broadly if the insurer could
prove that it has a "process" in place to obtain
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information from claimants and could prove delivery of the
request form to a specific claimant by certified mail or
otherwise.
(See
http://www.wileyrein.com/publications.cfm?sp=articles&id=5716.)
If Federal Law Does Require Reporting Of The Information
Mandated By This Bill, The Information Is Not Required To Be
Reported Until After A Self-Insured Entity Has Paid The Claimant
- Not At The Point When The Claim Is Simply Being Considered .
To the extent that federal law does require reporting of the
specified information under this bill, the reporting obligation
applies only after a claim has been paid - not at the initial
presentment stage when a claim is simply being evaluated and
considered by the covered entity. This point is made explicit
in the statute, which states: "Information shall be submitted
under subparagraph (A)(ii) within a time specified by the
Secretary after the claim is resolved through a settlement,
judgment, award, or other payment (regardless of whether or not
there is a determination or admission of liability). (42 U.S.C.
section 1395y(b)(8)(C).)" Of course, many claims against the
government are never paid, and relatively few are voluntarily
paid at the presentment stage. Thus there may be no need for
the information in many cases.
Despite the clear instruction of the statute, the sponsor has
suggested that covered entities must obtain the required
information prior to settlement in order to determine whether
the claimant received Medicare benefits. They contend this is
necessary because they must demonstrate to the federal
government that they gave "adequate consideration" to Medicare's
interest in reaching a settlement or potentially be responsible
for the entire amount if Medicare officials deem the settlement
"unreasonable." The sponsor cites oral statements by unnamed
CMS staff for this contention, but no written source, and
Committee staff have not been able to confirm that the sponsor's
understanding is accurate. Indeed, it appears to be
contradicted by the statute and accompanying guidance materials.
However, if in fact the amount of Medicare payments were needed
to demonstrate that a settlement payment was reasonable, nothing
in current law would appear to prohibit a public entity from
conditioning its payment on the receipt of information about the
claimant's Medicare benefits - or at least requesting the
safe-harbor form described above.
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It Is Not Clear That Federal Reporting Obligations Apply To
Self-Insured Public Entities. The ostensible need for this bill
is predicated on the sponsor's belief that self-insured public
entities are among the entities covered by the reporting
obligation. However, there is some question on this issue
because guidance published by CMS appears to suggest that only
self-insurers "engaged in a business, trade or profession" are
covered.
Pursuant to 42 C.F.R. Part 411.50: "Liability insurance
means insurance (including a self-insured plan) that
provides payment based on legal liability for injury or
illness or damage to property. It includes ? liability
insurance payment[s] ? by any individual or other entity
that carries liability insurance or is covered by a
self-insured plan." See Appendix G for the CMS definition
of "self-insurance." Essentially, individuals/entities
engaged in a business, trade, or profession are
self-insured to the extent they have not purchased
liability insurance coverage.
(Centers for Medicare & Medicaid Services, Liability Insurance
User Guide, p. 14-15 (available at
http://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPUserGuideV30
22210.pdf).)
If all self-insured public agencies are covered, it is somewhat
surprising that no other governmental entity or association has
joined the sponsor in support of the bill, despite the sponsor's
observation that most local public entities in California are
self-insured.
If Self-Insured Governmental Entities Are Required To Report
Information To Medicare, This Bill Nevertheless Appears To Be
Overbroad By Covering Many Governmental Entities, Many Types Of
Individual Claimants, And Many Types Of Claims That Are Not
Covered By Federal Reporting Requirements . This bill would
amend the government claims presentment statute that applies to
all public entities, including the state and the judicial
branch, not only those that may be self-insured. The statute
also covers all claimants, not simply those who have received
payments from Medicare (i.e., enrolled persons over 65 years of
age and certain persons with disabilities). And the statute
covers all types of claims, including crime victim compensation
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and claims for breach of contract. Consequently, the bill
appears to sweep much more broadly than any Medicare reporting
requirement.
If A Crime Victim Or Other Injured Person Failed To Comply With
This Bill The Apparent Penalty Would Be The Total Loss Of Any
Right To Seek Redress. The failure to comply with the mandate
of this bill would preclude the injured person from any recovery
for their injury because existing law bars any claimant from
filing suit if the required government presentment is not made
or is incomplete or inaccurate. (See Sections 910.6, 910.8,
911, 945.4.)
The Personal Identifying Information Required To Be Provided By
This Bill Is Sensitive And Creates Significant Risks To Privacy
Rights. As this Committee has often heard in recent years,
social security numbers are one of the most sensitive personal
identifiers because they are one of the three pieces of
information most often sought by identity thieves. The
collection of social security numbers has inevitably lead to
frequent inadvertent disclosures, putting the subjects at risk
of identity theft and invasion of privacy. As a result,
California has taken the lead in legislation to protect against
the unnecessary use and storage of this information by both
businesses and governmental agencies. By adding a new
requirement to provide social security numbers, this bill
appears to go in the opposite direction.
ARGUMENTS IN OPPOSITION: The ACLU writes in opposition to the
bill, stating:
California has taken the lead in protecting against the
unnecessary collection and misuse of Social Security
numbers in the interest of protecting individuals' right to
privacy and to minimize the opportunities for identity
theft. (See, for example, Civil Code section 1798.85, and
Government Code sections 27300 and 27301.)
In spite of the clear policy against unnecessary collection
and use of Social Security Numbers, AB 2315 would impose a
requirement to authorize public entities to gather SSNs as
part of an individual's claim under the tort claims act - a
publicly available record. This requirement appears to be
both unnecessary and risks exposing people's sensitive SSNs
to the public. While AB 2315 asserts that the Social
Security will assist with a federal reporting requirement,
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it is not required by the statute (See, 42 U.S.C. Sec.
1395y(b)(8).)
In addition, the Consumer Attorneys of California states:
This bill unnecessarily requires injured consumers to
prematurely disclose personal information, including their
Social Security number, and date of birth to a defendant
public entity at the presentment stage of a claim. Current
law, Gov. Code Sec. 910, requires claimants to submit only
their name, address, the circumstance of their injury, and
an estimated amount for the government tort claim. While
it is true that federal law requires additional information
to be collected from a claimant, the law requires this
information only in cases where claims have been resolved.
42 U.S.C. Sec. 1395y(b)(8)(C). It can take years to
resolve a claim, it is unnecessary for a plaintiff to have
to provide this information to the defendant within 30 days
of presenting a claim. In most cases, once the case
proceeds through the adjudicative process, good cause for
discovery will exist and the defendant will be able to
request the information at this point.
AB 2315 is also overinclusive. There is no reason why
claimants who are not on and will not forseeably be on
Medicare should have to comply with these invasive
requirements. AB 2315 would potentially allow the
government to request this information from any and all
claimants, regardless of whether they are in fact, on
Medicare and subject to the CMA reporting requirements.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Joint Powers Authorities
Opposition
ACLU
Consumer Attorneys of California
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334