BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: August 30, 2010 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: Yes
Bill No: AB 2780
Author: Solorio
Version: As amended August 19, 2010
SUBJECT
Workers' compensation: individually identifiable information
KEY ISSUE
Should the Legislature authorize the Department of Health Care
Services to review individually identifiable information
relating to a Medi-Cal claim in order to determine if this claim
was actually a result of an 'on-the job injury' that should have
been paid by a workers' compensation insurer rather than the
Medi-Cal program?
PURPOSE
To authorize the Department of Industrial Relations (DIR) to
share workers' compensation individually identifiable claims
data with the Department of Health Care Services (DHCS).
ANALYSIS
Existing law establishes the Medi-Cal program, administered by
the State Department of Health Care Services (DHCS), under which
basic health care services are provided to qualified low-income
persons. Existing law provides that when benefits are provided
or will be provided to a beneficiary under the Medi-Cal program
because of an injury for which another person or insurance
carrier is liable, the Director of DHCS may recover from that
person or carrier the reasonable value of benefits provided.
Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation (DWC), to compensate an employee for
injuries sustained in the course of his or her employment.
Existing law provides that a person or public or private entity
who is not a party to a claim for workers' compensation benefits
may not obtain individually identifiable information, as
defined, that is obtained or maintained by the Division of
Workers' Compensation of the Department of Industrial Relations
on that claim, except as specified.
Existing law expresses the intent of the Legislature to comply
with federal law requiring that when a beneficiary has other
available health coverage or insurance, the Medi-Cal Program
shall be the payer of last resort. (Section 14124.795 of the
Welfare and Institutions Code)
Existing law requires the DHCS to enter into contracts to
recover Medi-Cal costs that are payable as workers' compensation
claims, including matters on file with the Workers' Compensation
Appeals Board. (Section 14124.82 of the Welfare and
Institutions Code)
This Bill would authorize the state Department of Health Care
Services to obtain and use individually identifiable information
from the Department of Industrial Relations for the purpose of
seeking recovery of Medi-Cal costs incurred by the state for
treatment provided to injured workers that should have been
incurred by employers and insurance carriers pursuant to
existing law governing workers' compensation claims.
Specifically, this bill would:
Require the DIR to furnish individually identifiable
information to the DHCS and allows the DHCS to furnish the
information to its designated agent, provided that the
information is disclosed only for the purpose noted above.
Authorize the Administrative Director of the Division of
Workers' Compensation to adopt regulations solely for the
Hearing Date: August 30, 2010 AB 2780
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
purpose of governing access by the DHCS or its designated
agents to individually identifiable information.
Specify that this authorization shall remain in effect
only until January 1, 2017, and as of that date is
repealed, unless a later enacted statue deletes or extends
that date.
Declare that the provisions of this bill are to take
effect immediately as an urgency statute.
COMMENTS
1. Need for this bill?
Existing law requires workers' compensation insurance carriers
to provide claimant information to Medi-Cal to facilitate
state recovery of funds where appropriate. This information is
currently obtained from the insurance carrier using a
case-by-case process. Currently, if a Medi-Cal beneficiary
files a workers' compensation claim, Medi-Cal has already paid
for medical services for the accident. The only way for
Medi-Cal to recover funds that they should not have paid is by
accessing workers' compensation claims data to see if the
Medi-Cal patient was actually injured on the job.
The Department of Health Care Services (DHCS) has been able to
recover monies for the State of California via a program which
identifies, and undertakes to recover, the cost of Medi-Cal
claims that should have been paid by private insurers or other
government programs. Currently, DHCS contracts with a private
company, Health Management Systems (HMS), to assist in the
administration of this recovery program. Under existing law,
Medi-Cal has access to workers' compensation claims data when
it is made public either by being denied or if it is in the
process of being adjudicated.
The author states recoveries would be more efficient if the
DHCS could review workers' compensation claims directly for
the sole purpose of determining if Medi-Cal claims should have
been paid by a workers' compensation insurer. This bill would
Hearing Date: August 30, 2010 AB 2780
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
authorize DIR to share workers' compensation claims data with
the DHCS for this purpose.
2. Proponent Arguments :
According to the author, the DHCS has been able to recover
millions for the State of California by instituting a third
party liability program which recovers the cost of Medi-Cal
claims that should have been paid by private insurers or other
government programs. DHCS contracts with a private company,
Health Management Systems (HMS), to assist the department in
these recoveries. The author argues that, unfortunately, DHCS
currently does not have the ability to review workers'
compensation claims - unless they are being adjudicated - to
see if Medi-Cal claims should have been paid by a workers'
compensation insurer.
The author states that typically when a Medi-Cal beneficiary
files a workers' compensation claim, Medi-Cal has already paid
for medical services associated with the accident. The author
argues that the only way for Medi-Cal to recover funds that
they should not have paid is to access workers' compensation
claims data to see if the Medi-Cal patient was actually
injured on the job. In addition, proponents argue that
currently, because only denials are shared with third party
liability programs, only denied cases are worked. Proponents
argue that having access to the full DIR workers' compensation
file, including both accepted and denied claims, could save
millions.
According to the author, this bill would authorize the
Department of Industrial Relations to share workers'
compensation claims data with the Department of Health Care
Services and, thereby, enhance the ability of DHCS to recover
Medi-Cal costs that should have been paid by a workers'
compensation insurer.
3. Opponent Arguments :
None received to date.
4. Prior Legislation :
Hearing Date: August 30, 2010 AB 2780
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Senate Committee on Labor and Industrial Relations
AJR 42 (Solorio) of 2010: Chaptered
This resolution requests that the Congress and the President
of the United States enact the Medicare Secondary Payer
Enhancement Act of 2010 which is designed to protect the
Medicare Trust Fund and ensure that Medicare pays only for
medical expenses for which it is responsible.
SUPPORT
Health Management Systems (HMS)
OPPOSITION
None received
* * *
Hearing Date: August 30, 2010 AB 2780
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations