BILL ANALYSIS �
SB 1528
Page 1
SENATE THIRD READING
SB 1528 (Steinberg)
As Amended August 29, 2012
Majority vote
SENATE VOTE :22-13
JUDICIARY JUDICIARY 6-3
(vote not relevant)
-----------------------------------------------------------------
| | |Ayes:|Wieckowski, Alejo, |
| | | |Dickinson, Feuer, |
| | | |Monning, Cedillo |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Wagner, Gorell, Huber |
| | | | |
-----------------------------------------------------------------
SUMMARY : Amends various compensation, lien and subrogation
rights. Specifically, this bill :
1)Provides that an injured person whose health care is provided
through a public or private capitated health care service
plan, if the health care provider is paid a set periodic
amount regardless of the number of, or nature of services
provided, and the health care provider does not present the
injured person with a bill for payment identifying the costs
of the particular services rendered, shall be entitled to
recover as damages the reasonable and necessary value of
medical services.
2)Extends a county's existing lien rights against any judgment
recovered by an injured tort victim, where the county has
furnished medical services to the tort victim, to any amount
that the tort victim recovered in a settlement, compromise,
arbitration award, mediation settlement, or other recovery for
past medical services. Specifies that consistent with the
common fund doctrine, the lien shall be subject to any liens
for attorney's fees and costs incurred by the injured person
or the person's representative, estate, or survivors.
3)Requires the following factors to be considered when a county
is requested to compromise or waive any claim based on medical
services to a person injured in tort:
SB 1528
Page 2
a) The total value of the damages suffered by the injured
persons in comparison to the amount actually recovered by
way of judgment, settlement, compromise, arbitration award,
or mediation settlement.
b) Other liens being asserted against the recovery that
would reduce the final recovery to the injured person,
whether or not other lienholders have agreed to compromise
or waive their liens.
c) Whether or not the claim would exceed 50% of the moneys
ultimately recovered by the person.
d) Any other factors that would be just, fair, and
equitable.
4)Provides that a person injured in tort who receives medical
services under a Medi-Cal plan shall be entitled to recover
from the person or party responsible the reasonable and
necessary value of medical services.
5)States the intent of this bill is limited to resolving an
issue not addressed in Howell v. Hamilton Meats (2011) 52
Cal.4th 541 or Hanif v. Housing Authority of Yolo County
(1988) 200 Cal.App.3d 635 concerning how to establish the
value of damages for medical services provided through a
capitated healthcare service plan and to maximize the recovery
of liens by the Department of Health Care Services and has no
other effect on the holding of those cases.
EXISTING LAW :
1)Provides that every person who suffers a loss or harm from the
unlawful act or omission of another may recover from the
person at fault monetary compensation, which is called
damages. Specifies that damages may be awarded, in a judicial
proceeding, for loss or harm resulting after the commencement
of the judicial proceeding, or certain to result in the
future.
2)Provides that, for the breach of an obligation not arising
from contract, the measure of damages, except where otherwise
expressly provided, is the amount which will compensate for
SB 1528
Page 3
all the detriment proximately caused thereby, whether it could
have been anticipated or not.
3)Pursuant to the collateral source rule, provides that evidence
of a plaintiff's collateral source of payment for medical
services, such as payment provided by an insurer, should not
be introduced to reduce the amount of compensatory damages to
be awarded to the plaintiff. (Helfend v. Southern Cal. Rapid
Transit Dist. (1970) 2 Cal.3d 1, 6.)
4)Permits a health insurer to assert a lien against an injured
person's recovery from a third party that is liable for the
injuries, but limits the proportion of the recovery that may
be subject to the lien.
5)Establishes a procedure for a hospital to place a lien upon
the damages recovered or to be recovered by an injured person
from a third party liable for the injury.
6)Provides that where a county is required by law to furnish
medical services to a person who is injured under
circumstances creating tort liability in a third person, the
county shall have a right to recover from the third person the
reasonable value of medical care furnished, or shall, as to
this right, be subrogated to any right or claim that the
injured person has against that third person to the extent of
the reasonable value of the medical care furnished. Specifies
the manner by which the county may enforce this right and
provides that, in the event that the injured party brings an
action against the liable third person, the county's right of
action shall abate during the pendency of that action and
continue as a first lien against any judgment recovered by the
injured person.
7)Provides, pursuant to the rights described above, that the
county may: 1) compromise, or settle and execute a release
of, any claim which the county has; 2) waive any such claim,
in whole or in part, for the convenience of the county, or if
the governing body of the county determines that collection
would result in undue hardship upon the injured person.
FISCAL EFFECT : None
COMMENTS : This bill seeks more narrowly to address certain
SB 1528
Page 4
ambiguities in existing law relating to: 1) the ability of an
injured tort plaintiff to prove and recover the cost of medical
expenses; and, 2) the ability of the counties and the state to
recover the cost of medical services that were expended on the
plaintiff's behalf from any amount that the plaintiff recovers
from the tortfeasor.
This bill is related to, but not inconsistent with, the
California Supreme Court's decision in Howell v. Hamilton Meats
(2011) 52 Cal 4th 541, which held that a plaintiff was only
entitled to recover the PPO- discounted charges that were
actually incurred as opposed to the higher listed rate that the
health care provider could have charged in the absence of the
discount. In short, the plaintiff may only recover a reasonable
amount actually incurred; the plaintiff is not entitled to a
market rate, even if reasonable, if the amount actually incurred
was less than that market rate.
While the so-called Howell rule directly addresses the damages
questions arising in fee-for-service health plans, it raises
questions about the proper level of damages where the plaintiff
received medical services through a capitated health plan, where
typically no bill is presented for specific services provided.
This bill provides that where a plaintiff received medical
services through capitated plan, such that neither the insurer
or the plaintiff has been presented with a bill for the specific
services provided, then the damages will be based on the
"reasonable and necessary value" of those services.
Second, on the matter of county liens for medical expenses
provided, this bill makes the following changes: 1) while
existing law permits a county to recover medical expenses
provided from a tort plaintiff's judgment, this bill would
extend that right to settlements as well; 2) the bill specifies
that the county's lien is subject to the common fund rule, and
thus subject to any liens for attorney's fees and costs; and, 3)
the bill sets forth "factors" that counties shall consider in
determining whether to waive a lien claim.
Finally, under existing law, where a tort plaintiff's medical
expenses are paid by Medi-Cal, the director of the Department of
Health Care Services has a lien against that portion of a
plaintiff's recovery that is based on medical expenses. This
bill provides that, in order to better secure the director's
SB 1528
Page 5
right and comply with case law that limits a state's recovery to
the portion of the award reflecting medical expenses, the
plaintiff-beneficiary shall be entitled to recover from the
tortfeasor the reasonable and necessary value of the medical
services.
Analysis Prepared by : Thomas Clark/ JUD. / (916) 319-2334
FN: 0005755