HOUSE BILL REPORT

ESB 5169

BYSenators Smith and Stratton; by request of Department of Social and Health Services

Providing for revenue collection by the department of social and health services.

House Committe on Human Services

Majority Report:  Do pass as amended.  (7)

      Signed by Representatives Sayan, Chair; Scott, Vice Chair; Moyer, Ranking Republican Member; Anderson, Brekke, Leonard and Winsley.

Minority Report:  Do not pass.  (3)

      Signed by Representatives Tate, Assistant Ranking Republican Member; Hargrove and Padden.

House Staff:John Welsh (786-7133)

AS PASSED HOUSE MARCH 1, 1990

BACKGROUND:

The Department of Social and Health Services provides medical assistance to persons who qualify as a result of injuries caused by the negligent or wrongful acts of others.  The department currently recovers its costs for medical care from these tortfeasors, but cannot recover its costs for residential care provided by a hospital for the mentally ill or a habilitative care center for the developmentally disabled.

There is no provision that requires the written consent of the department before a lien, filed by the department to secure its recovery rights, is discharged or compromised by any settlement between the recipient and the tortfeasor, or any judgment entered by the court.

There is no requirement that attorneys, representing recipients in legal actions against tortfeasors, notify the department at the time of commencing the action.

There are no provisions governing the payment of attorney fees or court costs by the department in revenue recovery actions.

For the purpose of establishing usual and customary charges for reimbursement purposes, the department can examine only the provider records of recipients receiving state medical assistance. The department has no authority to examine records of other patients.

Wrongful disclosure of patient records is punishable as a gross misdemeanor.

SUMMARY:

The Department of Social and Health Services is authorized to recover its costs of residential care provided by a hospital for the mentally ill or a habilitative care center for the developmentally disabled.  But there is no right of recovery from awards made in wrongful death actions where the survivors are dependent persons.

The written consent of the secretary is required before any settlement of a tort claim or judgment is entered that would compromise a lien filed by the department to secure its recovery rights.  The secretary has discretionary authority to compromise the lien.

Attorneys representing recipients are required to notify the department before commencing any legal action against a tortfeasor or negotiating a settlement, and must give the department at least 30 days notice before a judgment, award or settlement becomes final.

The department must bear its proportionate share of attorney fees and court costs in recovery actions between a recipient and tortfeasor, upon court approval or based on any written agreement between the parties.

The department's authority to audit provider medical records is expanded to include the examination of random representative patient records of accounts billed and received to determine the provider's actual, usual, customary or prevailing charges.  However, patient names, other than those of public assistance recipients, may not be made available to the department.  Any overpayments made by the department for provider services must be off-set against any underpayments.

The penalty for wrongful disclosure of patient records is increased from a gross misdemeanor to a class C felony.

Technical changes are made to statutory references.

Revenue:    $54,468.

Fiscal Note:      Available.

House Committee ‑ Testified For:    Dave Hogan, Department of Social and Health Services.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    State funds should be conserved as much as possible by imposing financial liability upon tortfeasors to enable the department to recover its costs for the medical services it renders to public assistance recipients for injuries caused by the negligence or wrongful acts of others.  The department should be able to recover its costs for care rendered in state mental hospitals and habilitation care centers, as well as have a say in any settlement of claims that affect its liens securing its recovery rights.  Access to patient financial records is necessary for establishing usual and customary providers' charges.  Requiring attorneys representing recipients to notify the department when commencing legal actions will alert the department to possibilities for recovering its costs on a systematic basis.

House Committee - Testimony Against:      None.