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HomeMy WebLinkAboutMINUTES - 06222004 - C.34-C.35 AGENDA DATE : 06/22/04 ITEM NO. C.34 DELETED s TO: BOARD OF SUPERVISORS , CONTRA COSTA FROM: John Sweeten,County Administrator ,COUNTY DATE: June 22,2004 '` •- SUBJECT: Support SII 494 (Escutia)Health Care Cost Reimbursement SPECIFIC REQUEST(S)OR RECOMMENDATIONS)c& BACKGROUND AND JUSTIFICATION RECQMMENDATION 1. SUPPORT SB 494 (Escutia) which would authorize counties and other health care providers to secure reimbursement for medical services Brom responsible third parties through liens on settlements and compromises,as recommended by the Health Services Director. 2. SUPPORT the County of San Bernardino's recommended friendly amendment to SB 494 which would extend the lien rights to include not only judgments, settlements and compromises, but also arbitration awards,mediation settlements and other recoveries. BACKGROUND/REASON(S)FOR RECOMMENDATION(S): Contra Costa County's 2004 Legislative Platform includes the following policy position: SUPPORT efforts to increase revenues and to contain mandated costs in the County's hospital and clinics system. B 494 (Escutia) is supportive of this policy, since it would expand the authority of the County to receive reimbursement for medical services rendered to Medi-Cal beneficiaries. Currently, if the County provides medical services to a Medi-Cal beneficiary who is injured by a third party, the County is only authorized to place a lien for expenses against the beneficiary's recovery from the responsible third parry if there is a court judgment. The County has no lien rights if the matter is resolved through settlement, compromise or however else. SB 494 would extend the County's current lien rights to include settlements and compromises. Since settlements and compromises are more common than judgments, this will increase the County's ability to be reimbursed for its expenses. CONTINUED ON ATTACHMENT: t"""YES SIGNATURE- C _RECOMMENDATION_RECOMMENDATIONt OF COUNTY ADMINISTRATOR_„_RECOMME ATION O B COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON JUMa APPROVED AS RECOMMENDED,_,_OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS(ABSENT I, � ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ABSENT: ABSTAIN- ON MINUTES OF TILE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact.Sara Hoffman,335-1090 ATTESTED ime 22, 2004 cc: CAO JOHN SWEETEN,CLERK OF Health Services Dept. THE BOARD OF SUPERVISORS ORC AND COUNTY ADMINISTRATOR State Lobbyist(via CAO) z D"ty BACK+GROUNDf EASON(S)FOR RECOMMENDATION (cont'd): SB 494 responds to the California Supreme Court decision in Olszewski v. Scripps Health(June 2003)30 Cal.46' '798. Ms. Olszewski was critically injured by a drunk driver and subsequently treated by Scripps Health. The cost of medical care was over$250,000,yet Scripps was reimbursed only$3000 by Medi-Cal. The Supreme Court ruled that federal law precluded Scripps from asserting any claim to Ms. Olszewski's tort recovery against the drunk driver,because,as written, California's Hospital Lien Statute violated federal Medicare laws. SB 494 addresses the Supreme Court's concerns by limiting a provider's recovery to the injured person's past medical expenses, permitting the injured person to seek full medical damages against the person who caused the injury; and creating a fairness hearing within which to resolve disputes over the amount a provider should be reimbursed on a lien. It also requires the provider to reimburse the Department of Health Services 100%of the Medi-Cal monies paid to the provider. In their letter of support for SB 494,the County of San Bernardino suggested fwrther amendment of the language in Section 23004.1(b)of the Government Code as follows: ". . . and continue as a first lien against any judgment, settlement,compromise, arbitration award, mediation settlement or any other recovery obtained by the injured or diseased person. . ."{ SB 494, page 3,lines 9.11) This friendly amendment would ensure that awarded money, regardless of how it is characterized, is subject to the lien. SB 494 (Escu#iay as amended May 28, 2004 SB 494 answers the call of the California Supreme Court in 01s,zewski v. Scripps Health (June, 2003) 30 Cal.4t' 798, to hold tortfeasors responsible for the full amount of medical expenses he or she causes; get money back into the healthcare system, and assure that claimants are fairly compensated by fixing California's Hospital Lien Statute to mare it constitutional. Cimmaron Olszewski was critically injured by a drunk driver. Scripps Health treated Ms. Olszewski's serious injuries and incurred more than $250,000 in medical charges. Of those charges, Scripps was reimbursed only $3000 by Medi-Cal. The California Supreme Court ruled that federal law precluded Scripps from asserting any claim to Ms. Olszewski's tort recovery against the drunk driver because, as written, California's Hospital Lien Statute violated federal Medi-Care laws. SB 494 addresses the Supreme Court's concerns by limiting a provider's recovery to the injured person's past medical expenses, permitting the injured parson to seek full medical damages from the person who caused the injury, and creating a fairness hearing within which to resolve disputes over the amount a provider should be reimbursed on a lien. It also requires the provider to reimburse the Department of Health Services 100% of the Medi-Cal monies paid to the provider. Additionally, SB 494 is absolutely critical to providing access to healthcare for the poor. It is already difficult for Medi-Cal recipients to find doctors who can afford to treat them. The decision in Olszewski amplifies the problem because when a person is injured, the provider can no longer look to a recovery against the wrongdoer to pay the medical costs. Thus, poor people who are injured in accidents are hurt twice: first by the wrongdoer and then by the health care system. SB 494 will right that wrong by helping providers get reimbursement which in turn allows them to treat Medi-Cal patients. SB 494 was amended on May 28 to make the following changes: • Requires providers to reimburse the Department of Health Services for any amounts paid under Medi-Cal within 35 days of the time a final determination is made as to the provider's reimbursement. This provision assures that DHS receives prompt reimbursement. • Removes the presumption that a provider's medical charges constitute the reasonable value of the services. This provision was removed to address the committee's concern that inflated charges would be presumed to be reasonable. • removes the provision that the lien may only be satisfied out of 50% of any recovery. This provision was amended to address CMA concerns about the amount available for reimbursement. The amendment also makes clear that liens may only be asserted against past medical expenses, which is necessary to avoid federal preemption. • Clarifies that the due process hearing is a special proceeding. This amendment addresses the concerns raised by the Judicial Council about the characterization of the hearing. • Clarifies that the Government Cade section 985 provisions governing collateral source payments in actions against public entitles are not affected by these provisions. • Specifically includes counties in its provisions so that any county provider lien is included in the bill's provisions. • Grants the counties lien rights against settlements and compromises, which are currently prohibited by the decision in Mares v. Baughman (2001) 92 Cal.AppAth 872. These amendments address concerns raised by Counties that are currently precluded from asserting liens against settlements. SB 494 is supported by Consumer Attorneys of California, the California Medical Association, and the County of San Diego. For questions, please call Consumer Attorneys of California at 442-6902. AMENDED IN ASSEMBLY MAY 28,2004 AMENDED IN ASSEMBLY SEPTEMBER.8, 2003 SENATE BILL No. 494 Introduced by Senator Escutia February 20, 2003 An act to amend Section 230114.1 of the Government Code, and to amend Section 14124.791 of the Welfare and Institutions Code,relating to Medi Health services. LEG'SL.ATIVE COUNSEUS DIGEST SB 494, as amended,Escutia. Medi-Go!health services. Emi9ting (1) Existing law prescribes procedures under which a provider, beneficiary, or the Director of Health Services may bring an action or claim against a 3rd party who is liable for services rendered to a beneficiary under the Medi-Cal program. Existing law—speei s provide=s that, subject to a prior right of recovery of the director, a provider who has Tenndered services to a beneficiary because of an injury for which a 3rd party is liable and who has received payment under the Medi-Cal program shall be entitled: to file a lien for the services provided thereto against any judgment, award, or settlement obtained by the beneficiary or the director against that 3rd party of the provider has made a fall reimbursement of any fees paid to the departmentfor those services. This bill would—erem—speetfied revise these 3rd party claim procedures . The bill would revise the provider lien procedures to instead authorize the lien for the reasonable and necessary charges f'or services provided to the 91 SB 494 .� . beneficiary against the portion of any judgment, award, or settlement relating to past medical expenses in the action or claim- brought against a 3rd party;-*9-speeified. (2) Existing lax}provides procedures under which, in any case in which a 3rd person is liable to pay for health services provided by a county to an injured or diseased person, the county may recover from that 3rd person or be subrogated to any right or claire that the injured or diseased person, including 7der-4fied parties in interest, have against that 3rd persona. under these procedures the county s right of action abates during the pendency of`an action broughtfor damages against the 3rdpersona by the injured or diseased person and continues as a,first herr against any judgment recovered by the injured or diseased person. This bill would provide that the county right of action would continue under this provision as a first lien, in addition, against any settlementor compromise recovered by the inured or diseased person. The bill would also provide that a county enforcing a lien under these provisions is a provider for purposes q f paragraph (1), Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program:no. The people of the Mate of California do enact asfollows: I SECTION 1. Section 230043 of the Government Code is 2 amended to read: 3 23004.1. (a) Subject to the Section 23004.3, in 4 any case in which the county is authorized or required by lav to 5 furnish hospital,medical, surgical, or dental care and treatment, 6 including prostheses and medical appliances, to a parson who is 7 injured or suffers a disease, under circumstances creating a tart 8 liability upon some third person to pay damages therefor, the 9 county shall have a right to recover from-said that third persona the 10 reasonable value of the care and treatment so furnished or to be I I furnished, or shah,as to this right, be subrogated to any right or 12 claim that the injured or diseased person, his or her guardian, 13 personal representative,estate,or survivors has against-ffaelt that 14 third person to the extent of the reasonable value of the care and 15 treatment so furnished or to be fumished. 16 (b) The county may, to enfcsrce-sit rights established under 17 subdivision (ra), institute and prosecute legal proceedings against 18 the third person who is liable for the injury or disease in the 9? -3— SB 494 1 appropriate cert, either in its awn name or in the name of the 2 injured person,his or her guardian,personal representative,estate, 3 or survivors. Sueb 1his action shall be commenced within the 4 period prescribed in Section 340 of the Code of Civil Procedure. 5 In the event that the injured person,his or her guardian,personal 6 representative,estate,survivors,or either of there brings an action 7 for damages against the third person who is liable for the injury or 8 disease, the county's right of action shall abate during the 9 pendency of- eh that action, and continue as a fust lien against 10 any judgment,settlement or compromise recovered by the injured 11 or diseased person,his or her guardian, personal representative, 12 estate, or survivors, against the third person who is liable for the 13 injury or disease,to the extent of the reasonable value of the care 14 and treatment so furnished or to be furnished. When the third 15 person who is liable is insured, the county shall notify the third 16 person's insurer,when known to the county,in writing of the lien 17 within 30 clays following the filing of the action by the injured or 18 diseased person., his or her ,guardian, personal representative, 19 estate,or survivors, against the third person:who is liable for the 20 injury or disease, However, 21 failure to so notify the insurer shall not prejudice the claire or cause 22 of action of the injured or diseased person, his or her guardian, 23 personal representative,estate,or survivors, or the county. 24 SEC. 2. Section 14124.791 of the Welfare and Institutions 25 Code is amended to rte; 26 14124.791. (a) The Legislature finds and declares that t 27 28 29 andeteempermeted for the eare Otey provide. The Imegiglowe 30providers of emergency medical 31 care furnish a vital public service of great benefit to all 32 Californians by furnishing emergency medical service, to all 33 without regard to the ability to pay,as required by existing law.The 34 35 36 panies to beer the bor4m 101 37 Legislature further finds and de laces 38 that ensnaring that Medi-Cal providers obtain reasonable 39 compensation helps alleviate the severe access problems already 40 experienced by Medi-Cal beneficiaries. It is the intent of the 97 SB 494 —4- 1 4-1 Legislature to respond to the invitation of the California Supreme 2 Court in Olszewski v. Scripps Health (2003) 30 CalAth 798, to 3 permit providers to recover their reasonable and necessary charges 4 while protecting Medi-Cal beneficiaries' rights to recover full 5 damages from responsible third-party tortfeasors,and to preclude 6 tortfeasors from receiving the benefit of the Medi-Gal program at 7 the expense of providers, beneficiaries, and taxpayers. The 8 Legislature further nds and declares that granting providers lien 9 recovery rights increases a prnvider s incentive to notify the State 10 Department of Health Services of the existence of thirdparty 11 liability. .This in turn increases the number of cases in which the 12 department is reimbursed by providers who,can collect far services 13 rendered foam responsible Hoard parties and will result in savings 14 to the state. 15 (b) Subject to the director's prior right of recovery,a provider 16 who has rendered services to a beneficiary because of an injury for 17 which a third party is or may be liable and who has received 18 payment under the Medi-Cal program shall be entitled to a lien for 19 the reasonable and necessary charges for services provided to the 20 beneficiary against the portion of any judgment, award, or 21 settlement relating to past medical expenses obtained by the 22 beneficiary or the director against that third party.A provider may 23 recover upon the lien only if the provider has made a full 24 reintbtir"merA of wiy fees paid by the depaltme"t fer those 25 serrees. reimbursement to the director of any payment,for those 26 services within 35 days ofthe,inal determination to.f`the amount the 27 provider will be reimbursed on the lien. 28 (c) If either the beneficiary or the director brings an action or 29 claim against the third party, the party bringing the action shall, 30 within 30 days of bringing the action, give written notice to any 31 provider who is emidedto eligible to ftle a lien under subdivision 32 {b}of,to the extent known,the name and address of each third 33 party and the name and address of each insurance carrier that has 34 insured the third party against the liability and, to the extent 35 applicable,the name of the action and court or state or local agency 36 in which the action or claim is brought, Notice shall be given by 37 personal service or registered mail, and proof of service shall be 38 filed in the action or claim.. 39 (d) (1) The lien shall become effective when the provider 40 sends a written notice containing the name and address of the 47 5-- SB 494 1 injured person, the name and location of the provider, and the 2 amount claimed as reasonable and necessary charges, to the 3 beneficiary=aft4 the bevwfieiary's 4 S J and, if known 8 at the time the notice is given, the beneficiary's attorney? 9 (2) If notice is givers to the beneficiary and the provider 10 subsequently has notice that the beneficiary has legal 11 representation, the provider shall give written notice to the 12 benefzciaiys attorney. The failure to give notice to the 13 benefzciatvs attorney pursuant to this paragraph shall not 14 invalidate the lien. 15 (3) The written notice required by this subdivision shall be sent 16 by registered mail with proof of service. 17 (4) The amount claimed in the notice, or so mach of that 18 amount as can be satisftedfivm any jlnal judgment,compromise, 19 or settlement agreement after paying any prior ether liens,shalt be 20 deemed to be included within:any judgment,award,or settlement 21 unless the judgment, award, or settlement expressly allocates a 22 lesser amount.. Any recovery on tom- any provider lien snail be 23 limited to that portion of the judgment, award, or settlement 24 constituting compensation for past medical expenses. 25 26 (e) The amount paid under the Medi-Cal program shall be 27 inadmissible in any action or claim against the third party and the 28 third party may not use the amount paid by Medi-Cat to reduce the 29 amount of its liability. This provision overturns Hanif v. Housing 30 Authority of'holo County (1988), 200 Cal.App.3d 635, to the 31 extent it is inconsistent herewith.This provision is consistent with 32 the law as stated in Helfend v. Southern California Rapid Transit 33 District(1970), 2 Cal.3d 1. 34 (f) If the beneficiary has filed a third-party claim, the court 35 where the action was filed shall have jurisdiction over a dispute 36 between the provider and the beneficiary regarding the amount of 37 a lien asserted pursuant to this section that is based. upon an 38 allocation of damages contained in a -' emetit judgment, 39 settlement, or compromise of the third-party claim. If no 40 third-party claim or action has been filen, any superior court in 97 i SB 494 —6- 1 6-1 California where venue would have been proper had a claim or 2 action been filed shall have jurisdiction quer the motion. The 3 motion may be filed as a special motion and treated as an ordinary 4 law and motion proceeding and subject to regular motion fees. The 5 reimbursement determination motion shall he treated as a special 6 proceeding of a civil nature pursuant to Part 3(commencing with 7 Section 1463)of"the Code of'Civil Procedure. When no action is 8 pending,the person malting the motion shall be required to pay a 9 first appearance fee. When an action is pending,the person making 10 the motion shall pay a regular law and motion fee. I 1 (g) In any motion filed pursuant to subdivision(f), all of the 12 following shall apply: 13 (1) The provider asserting a lien pursuant to this section and the 14 beneficiary shall be made a party to the motion and either the 15 beneficiary or the provider may file the motion.In cases where the 16 third-party claim was tried to a verdict or judgment, the motion 17 shall be hearts by the trial judge, if available. In cases where aii 18 action has been filed and settled or otherwise. resolved prior to 19 verdict or judgment, the motion shall be heard by the judge to 20 whom the matter was assigned,or,if no judge was assigned or the 21 assigned judge is unavailable, in the regular law and motion 22 department or by a judge assignee-#: to hear the matter. When no 23 action has previously been filed,the inotion shall be assigned and 24 heard pursuant to the regular law and motion procedures in the 25 court where the motion is filed. 2,6 (2) The beneficiary shall produce to the provider a true and 27 correct copy of those portions of the settlement document upon. 28 which the asserted allocation is based that are relevant to the 29 determination motion, prior to the filing of the motion. 30 (3) If the beneficiary is the moving party,notice of the motion. 31 shall be addressed to the provider at the provider's address as 32 shown on the notice of lien and to any counsel representing the 33 provider on the lien,ifknowm If the provider is the moving;party, 34 notice of the motion shall be addressed to the beneficiary at the 35 beneficiary's last known address and to the beneficiary's counsel, 36 if known. If the beneficiary is not represented by counsel, the 37 notice of motion shall be Mailed to the beneficiary by registered 38 mail. Proof of service in compliance with this subdivision shall be 39 filed with the court. 97 -7— SB 494 1 (4) If the beneficiary=is represented by counsel,the beneficiary 2 shall bear the burden of proof as to the fairness of the allocation 3 and the burden of producing evidence, by declaration or other 4 written farm,as to the manner in which the allocation was made 5 and the evidentiary basis for the allocation.If the beneficiary is not 6 represented by counsel,the party malting the motion shall bear the 7 burden of proof as to the fairness of the allocation and the burden 8 of producing evidence,by declaration or other written form,as to 9 the manner in which the allocation was made and the evidentiary 10 basis for the allocation.. 11 (5) In determining the fairness of the allocation, the court gall 12 consider the relationship of damages,for past medical expenses to 13 the total damages claimed and the total amount of the settlement. 14 (6) If a settlement has been reached contingentt upon the 15 amount of a lien asserted pursuant to this section,the settlement 16 remains contingent unless the beneficiary accepts the allocation 17 made by the court in its decision on the motion, within 30 days o,f` 18 the notice of entry of the court's findings, decision, or curler. 19 (6 -- 20 (7) The court shall issue its:findings,decision,and order,which 21 shall be considered the final determination, , 22 of the parties'rights and obligations with respect to the provider's 23 lien, 24 . lien, subject to 25 reconsideration as authorized in paragraph (8). 26 (8) f the beneficiary does not accept the settlement, any party 27 may subsequently seek reconsideration©f the court's findings upon 28 application to modr_"fi,the prior fir:dings, decision, or order, based 29 on new or difterentfacts or circumstances. The application shall 30 include an affidavit showing what application was arcade before, 31 when, and to whatJudge, what order or decision was made, and 32 what nein or different facts or circumstances are claimed to exist. 33 Upon reconsideration, the court may madam the allocation in the 34 interest of fairness and for good cause. 35 (h) No claim authorized by this section shall be permitted':to the 36 extent that the claim would reduce the director's right to recover 37 pursuant to Section 14124.78. However, the provider's 38 reimbursementt to the department pursuant to subdivision(b)shall 39 extinguish the director's claire for the same services. SB 494 —8-- I (i) Any person,frrtn,or corporation,including,but not limited 2 to, an insurance carrier, who receives notice of a lien asserted 3 pursuant to this section and who makes any payment to the injured 4 person,or to his or her attorney,heirs,or legal representative, for 5 the injuries the beneficiary sustained, after receipt of this notice, 6 without paying to the provider the amount the provider is entitled 7 to receive as payment on its lien,shall be liable to the provider for 8 that amount. 9 0) For purposes of this section, `Treasonable and. necessary 10 charges"means the usual,customary,and reasonable charges for I I medical services in the geographic region where the services were 12 provided, when these services were medically necessary to treat 13 the injuries allegedly caused by a third-party tortfeasor. The 14 amount paid to the provider by Medi-Cal shall not be considered 15 in the determination of the amount of a provider's lien or in the 16 determination of the amount ofthe tom--party tortfeasor's liability 1.7 to the beneficiary. 18 (k) When a final judgment in the third-party claim includes a 19 special finding by a judge,jury, or arbitrator that the beneficiary 20 was partially at fault,the provider's lien shall be reduced by the 21 same comparative fault percentage by which the beneficiary's 22 recovery for past medical expenses was reduced.. 23 (l) At the request of the beneficiary,the court or arbitrator in the 24 third:-party claim shall provide for special findings with respect to 25 compensation allocated to past medical expenses. 26 (m) The provider's lion shall be reduced by the pro rata amount 27 commensurate with the beneficiary's reasonable attorney's fees 28 and costs in accordance with the common fond doctrine. The 29 amount o,f`the reduction in the provider' lien pursuant to this 30 subdivision shall accrue solety to the benefit of the beneficiary and 31 shall not increase attorneys ,fees and costs payable to the 32 beneficiarysattorney. 33 (n) The amount claimed by the beneficiary,or his or her heirs 34 or personal representative in case of his or her death, as the 35 provider's reasonable and necessary charges in securing a 36 judgment, settlement, award, or compromise in the third-party 37 claim.,shall preclude the beneficiary,or his or her heirs or personal 38 representative in case of his or her death, from challenging the 39 reasonableness and necessity of those charges in any dispute 4£1 between the provider and the beneficiary regarding the lien,unless 97 __. ... . —9— SB 494 1 a lesser amount has been specifically allocated in a judgment, 2 settlement, award,or compromise. 3 (o) If any provision of this section, or the application of any 4 protusion of this section to any person, firm,corporation,or other 5 entity or to any circumstance or situation,shall be held invalid,the 6 remaining provisions of this section shall not be affected thereby, 7 and shall be given effect. 8 (p) Subdivision (e)shall have no effect on the rights of parties 9 or public agencies under Section -985 of the Government Cade. 10 (qAs used in this section `provider"shall include, but is not 11 limited to, a county enforcing a lien pursuant to Section 23004.1 12 of the Government Code, 0 47 F