BILL NUMBER: AB 542	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 23, 2010
	PASSED THE ASSEMBLY  AUGUST 25, 2010
	AMENDED IN SENATE  AUGUST 17, 2010
	AMENDED IN SENATE  AUGUST 2, 2010
	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN SENATE  JUNE 23, 2010
	AMENDED IN SENATE  JUNE 18, 2009
	AMENDED IN ASSEMBLY  MAY 5, 2009
	AMENDED IN ASSEMBLY  APRIL 22, 2009

INTRODUCED BY   Assembly Member Feuer

                        FEBRUARY 25, 2009

   An act to add Section 1279.4 to the Health and Safety Code, to add
Sections 12693.56, 12699.06, and 12713.5 to the Insurance Code, and
to add Article 5.5 (commencing with Section 14183) to Chapter 7 of
Part 3 of Division 9 of the Welfare and Institutions Code, relating
to public health.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 542, Feuer. Hospital acquired conditions.
   Existing law establishes various programs for the prevention of
disease and the promotion of health, including, but not limited to,
the licensing and regulation of health facilities to be administered
by the State Department of Public Health. Existing law requires
specified health facilities to report patient adverse events to the
department within 5 days. A violation of these provisions is a
misdemeanor.
   This bill would require the medical director and the director of
nursing of a hospital to annually report adverse events and hospital
acquired conditions to its governing board.
   By changing the definition of an existing crime, this bill would
impose a state-mandated local program.
   Existing law provides for the Medi-Cal program, administered by
the State Department of Health Care Services, under which health care
services are provided to qualified low-income persons.
   This bill would require the State Department of Health Care
Services to convene a technical working group to evaluate options for
implementing nonpayment policies and practices for hospital acquired
conditions for the Medi-Cal program, as specified. This bill would
require the technical working group to provide the best options to
the Director of Health Care Services, the Secretary of California
Health and Human Services, and the Legislature by February 1, 2011.
This bill would also require the department to implement nonpayment
policies and procedures for hospital acquired conditions for the
Medi-Cal program, as specified.
   Existing law imposes various functions and duties on the Managed
Risk Medical Insurance Board with respect to the regulation and
administration of various insurance programs, including the Healthy
Families Program.
   This bill would require certain managed care plans contracting
with the board to implement nonpayment policies and practices for
hospital acquired conditions that are consistent with those adopted
by the Medi-Cal program through their contracts with health care
facilities, as defined.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Patients seeking medical treatment have a right to quality
medical care delivered in a timely, safe, and appropriate manner.
   (b) Licensed health facilities are vital community resources that
perform life-saving procedures and ensure the health and welfare of
the general public.
   (c) Despite the best intentions of a health facility, when a
hospital acquired condition occurs, a patient can be harmed,
potentially leading to serious disability or even death.
   (d) Most hospital acquired conditions can be prevented through
ongoing health care provider education and established safety plans
and procedures. It is the policy of the State of California to
encourage constant monitoring and continuous improvement in health
care quality processes to ensure patient safety.
   (e) The recently enacted federal Patient Protection and Affordable
Care Act (Public Law 111-148) established as a national policy that
state Medicaid programs should no longer pay for hospital acquired
conditions.
   (f) It is the policy of the State of California that patients and
purchasers of health care services should not be expected to pay for
hospital acquired conditions that are reasonably preventable by the
adoption and implementation of evidence-based guidelines. It is also
the policy of the State of California that hospital acquired
conditions that are reasonably preventable by the adoption and
implementation of evidence-based guidelines should not be reimbursed
by patients or purchasers of health care services.
   (g) Patients who have been harmed by a hospital acquired condition
must receive the medically necessary followup care to correct or
treat the complications or consequences of the hospital acquired
condition, to the extent possible. Medically necessary followup care
and services should be reimbursed.
   (h) The development of policies and procedures for the nonpayment
of hospital acquired conditions is a complex process that requires
expertise from many sectors of the health care delivery system. While
these policies and procedures are being established, the State of
California encourages private sector solutions that bring improvement
in the delivery of health care services and a reduction in the
occurrence of hospital acquired conditions.
  SEC. 2.  Section 1279.4 is added to the Health and Safety Code, to
read:
   1279.4.  (a) The medical director and the director of nursing of
each health facility, as defined by subdivision (a), (b), or (f) of
Section 1250, shall report annually to the board of directors or
other similar governing body the following:
   (1) The number of adverse events and hospital acquired conditions
that occurred in the health facility in the most recent 12-month
period.
   (2) The outcomes for each patient involved, if known.
   (3) A comparison to comparable institutions of rates of adverse
events and hospital acquired conditions, if this data exists and is
publicly available.
   (b) No communication of data or information pursuant to this
section by an officer or employee of the corporation to the governing
body shall constitute a waiver of privileges preserved by Section
1156, 1156.1, or 1157 of the Evidence Code or Section 1370.
  SEC. 3.  Section 12693.56 is added to the Insurance Code, to read:
   12693.56.  (a) For purposes of this section, "health care facility"
means a health care entity that is subject to the federal
regulations promulgated pursuant to Section 2702 of Subtitle I of
Title II of the Patient Protection and Affordable Care Act (Public
Law 111-148).
   (b) The board shall implement nonpayment policies and practices
consistent with those adopted by the Medi-Cal program pursuant to
Article 5.5 (commencing with Section 14183) of Chapter 7 of Part 3 of
Division 9 of the Welfare and Institutions Code, for the program, by
requiring managed care plans contracting with the board to implement
nonpayment policies and practices through their contracts with
health care facilities. This subdivision shall be implemented only
if, and to the extent that, federal financial participation is
available and is not jeopardized.
   (c) A health care facility shall not accept and retain payment
from a patient for any applicable cost-sharing amounts for care and
services for which payment is denied by the program, including its
participating health, dental, and vision plans.
   (d) The implementation of guidelines or other standards pursuant
to this section shall not be construed as establishing or altering in
any way the standard of care or duty of care owed by a health care
provider to his or her patient in a medical malpractice action or
claim.
  SEC. 4.  Section 12699.06 is added to the Insurance Code, to read:
   12699.06.  (a) For purposes of this part, "health care facility"
means a health care entity that is subject to the federal regulations
promulgated pursuant to Section 2702 of Subtitle I of Title II of
the Patient Protection and Affordable Care Act (Public Law 111-148).
   (b) The board shall implement nonpayment policies and practices
consistent with those adopted by the Medi-Cal program pursuant to
Article 5.5 (commencing with Section 14183) of Chapter 7 of Part 3 of
Division 9 of the Welfare and Institutions Code, for the program, by
requiring managed care plans contracting with the board to implement
nonpayment policies and practices through their contracts with
health care facilities. This subdivision shall be implemented only
if, and to the extent that, federal financial participation is
available and is not jeopardized.
   (c) A health care facility shall not accept and retain payment
from a patient for any applicable cost-sharing amounts for care and
services for which payment is denied by the program, including its
participating health plans.
   (d) The implementation of guidelines or other standards pursuant
to this section shall not be construed as establishing or altering in
any way the standard of care or duty of care owed by a health care
provider to his or her patient in a medical malpractice action or
claim.
  SEC. 5.  Section 12713.5 is added to the Insurance Code, to read:
   12713.5.  (a) For purposes of this part, "health care facility"
means a health care entity that is subject to the federal regulations
promulgated pursuant to Section 2702 of Subtitle I of Title II of
the Patient Protection and Affordable Care Act (Public Law 111-148).
   (b) The board shall implement nonpayment policies and practices
consistent with those adopted by the Medi-Cal program pursuant to
Article 5.5 (commencing with Section 14183) of Chapter 7 of Part 3 of
Division 9 of the Welfare and Institutions Code, for the program, by
requiring managed care plans contracting with the board to implement
nonpayment policies and practices through their contracts with
health care facilities.
   (c) A health care facility shall not accept and retain payment
from a patient for any applicable cost-sharing amounts for care and
services for which payment is denied by the program, including its
participating health plans.
   (d) The implementation of guidelines or other standards pursuant
to this section shall not be construed as establishing or altering in
any way the standard of care or duty of care owed by a health care
provider to his or her patient in a medical malpractice action or
claim.
  SEC. 6.  Article 5.5 (commencing with Section 14183) is added to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:

      Article 5.5.  Hospital Acquired Conditions


   14183.  (a) (1) The department shall convene a technical working
group to evaluate options for implementing nonpayment policies and
procedures for hospital acquired conditions for the Medi-Cal program
consistent with federal laws and regulations, including, but not
limited to, Section 2702 of Subtitle I of Title II of the federal
Patient Protection and Affordable Care Act (Public Law 111-148). By
February 1, 2011, the technical working group shall provide
recommendations to the Director of Health Care Services, the
Secretary of California Health and Human Services, and the
Legislature on the best options for implementing nonpayment policies
and procedures for hospital acquired conditions for the Medi-Cal
program consistent with federal laws and regulations, including, but
not limited to, Section 2702 of Subtitle I of Title II of the federal
Patient Protection and Affordable Care Act (Public Law 111-148).
   (2) The hospital acquired conditions considered by the workgroup
shall include those referenced by Section 2702 of Subtitle I of Title
II of the federal Patient Protection and Affordable Care Act (Public
Law 111-148) and subdivision (c) of Section 5001 of the federal
Deficit Reduction Act of 2005 (42 U.S.C. Sec. 1395ww(d)(4)).
   (3) The technical working group convened pursuant to paragraph (1)
shall include, but not be limited to, all of the following:
   (A) Consumer advocates.
   (B) Experts the department deems necessary for the technical
working group to effectively carry out its functions.
   (C) Pediatricians or physicians in current practice in California
who have relevant experience in reducing the incidence of hospital
acquired conditions or adverse events.
   (D) Representatives of specialty hospitals and children's or other
hospitals that are exempt from the Medicare Inpatient Prospective
Payment System, as authorized pursuant to clause (v) of subparagraph
(B) of paragraph (1) of subdivision (d) of Section 1886 of the Social
Security Act (42 U.S.C. Sec. 1395ww).
   (E) Representatives of the department.
   (F) Representatives of the Department of Managed Health Care.
   (G) Representatives of health care service plans or health
insurers.
   (H) Representatives of large employers that purchase group health
care coverage for their employees and that are neither suppliers nor
brokers of health care coverage.
   (I) Representatives of nonnursing, nonphysician hospital support
staff.
   (J) Representatives of the Office of Statewide Health Planning and
Development.
   (K) Representatives of private hospitals.
   (L) Representatives of public hospitals.
   (M) Representatives of hospitals operated by the University of
California.
   (N) Representatives of the Managed Risk Medical Insurance Board.
   (4) Each member appointed to the technical working group pursuant
to paragraph (3) shall have expertise in hospital reimbursement.
   (5) The technical working group may consult with individuals
possessing relevant clinical or other health care expertise to assist
in the development of the recommendations provided pursuant to this
section.
   (6) The technical working group shall provide an opportunity for
members of the public to submit comments to the technical working
group.
   (7) (A) The requirement for submitting a report imposed under this
subdivision is inoperative on February 1, 2015, pursuant to Section
10231.5 of the Government Code.
   (B) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
   (b) The department shall implement nonpayment policies and
procedures for hospital acquired conditions for the Medi-Cal program
that are consistent with federal regulations promulgated pursuant to
Section 2702 of Subtitle I of Title II of the federal Patient
Protection and Affordable Care Act (Public Law 111-148). In
implementing the nonpayment policies and procedures, the department
shall strongly consider the recommendations submitted pursuant to
subdivision (a) by the technical working group.
   (c) Medi-Cal managed care plans contracting with the department
pursuant to Chapter 7 (commencing with Section 14000), Chapter 8
(commencing with Section 14200), or Chapter 8.75 (commencing with
Section 14590) of Part 3 of Division 9, shall be required to
implement similar nonpayment policies and practices through their
contracts with health care facilities.
   (d) A health care facility shall not accept and retain payment
from a patient for any applicable cost-sharing amounts for care and
services for which payment is denied by the Medi-Cal program or any
other program administered by the department pursuant to this
article.
   (e) This article shall be implemented only if, and to the extent
that, federal financial participation is available and is not
jeopardized for programs receiving federal funds.
   (f) This article shall not be interpreted or implemented in a way
that would limit patient access to needed health care services or
payment to a health care facility for medically necessary followup
care to correct or treat the complications or consequences of a
hospital acquired condition or for the care originally sought by the
patient.
   (g) Nothing in this article shall be construed to authorize the
disclosure of confidential information concerning contracted rates
between health care providers and payers or another date source.
   (h) (1) No person reporting data pursuant to this article shall be
liable for damages in an action based on the use or misuse of
patient-identifiable data by the department that has been properly
mailed or otherwise properly transmitted to the department pursuant
to the requirements of this article.
   (2) No communication of data or information to the department
pursuant to this article shall constitute a waiver of privileges
preserved pursuant to Sections 1156, 1156.1, and 1157 of the Evidence
Code, and Section 1370 of the Health and Safety Code.
   (3) Information, documents, and records from original sources
subject to discovery or introduction into evidence shall not be
immune from discovery or evidence because the information, document,
or record was also provided to the department pursuant to this
article.
   (i) For purposes of this article, "health care facility" means a
health care entity that is subject to the federal regulations
promulgated pursuant to Section 2702 of Subtitle I of Title II of the
Patient Protection and Affordable Care Act (Public Law 111-148).
   (j) The implementation of guidelines or other standards pursuant
to this section shall not be construed as establishing or altering in
any way the standard of care or duty of care owed by a health care
provider to his or her patient in a medical malpractice action or
claim.
  SEC. 7.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.