California hospitals will face tougher penalties for patient-privacy breaches and serious medical errors, under legislation signed by Gov. Arnold Schwarzenegger. But the Republican governor vetoed a slew of other bills that would have cracked down on healthcare policy rescissions and required insurers to cover medical devices, among others.
California will create an Office of Health Information Integrity to assess penalties against individuals who violate patient privacy with fines up to $250,000. Another new law sets fines up to $250,000 for hospitals that fail to protect patients information. The law also raises fines for serious medical errors in hospitals from $25,000 to up to $125,000 per violation. The California Hospital Association supported both bills, which were crafted in response to a rash of cases at Ronald Reagan UCLA Medical Center where personnel peeked at celebrities medical records, including those of the governors wife, Maria Shriver.
The governor vetoed a bill that would have required health insurers to prove that members intentionally misled them on their applications for individual policies before revoking coverage. The individual insurance market is fragile, Schwarzenegger wrote in his veto message. And we must balance the need for strong consumer protections with the recognition that unintended consequences can tighten this market even more. He signed another bill prohibiting health plans from revoking family coverage based on misinformation from a single family member. -- by Rebecca Vesely