BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 366|
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THIRD READING
Bill No: AB 366
Author: Ruskin (D), et al
Amended: 6/30/09 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 10-0, 7/15/09
AYES: Alquist, Strickland, Aanestad, Cedillo, Cox,
DeSaulnier, Leno, Negrete McLeod, Pavley, Wolk
NO VOTE RECORDED: Maldonado
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 77-0, 6/2/09 - See last page for vote
SUBJECT : Medi-Cal: inpatient hospital services:
contracts
SOURCE : City of Hope
DIGEST : This bill requires the California Medical
Assistance Commission to consider, when negotiating
contracts for inpatient care or developing specifications
for competitive bidding, specialization in orthopedic
implantation relating to cancers of the bone, in addition
to the factors already required.
ANALYSIS :
Existing law:
CONTINUED
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1. Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), which
provides comprehensive health care coverage for
low-income individuals and their families; pregnant
women; elderly, blind, or disabled persons; nursing home
residents; and refugees who meet specified eligibility
criteria.
2. Requires the Governor to designate a person in his/her
office to act as a special negotiator to negotiate
rates, terms, and conditions for contracts with
hospitals for inpatient services to be rendered to
Medi-Cal program beneficiaries.
3. Permits the special negotiator to call for bids, in lieu
of negotiations, and requires the special negotiator to
consider, when contracting, the total funds appropriated
for inpatient hospital services.
4. Requires the negotiator to take into account specified
factors in negotiating contracts or in drawing
specifications for competitive bidding.
5. Requires the California Medical Assistance Commission
(CMAC) to assume the duties and powers of the special
negotiator.
This bill requires CMAC to consider, when negotiating
contracts for inpatient care or developing specifications
for competitive bidding, specialization in orthopedic
implantation relating to cancers of the bone, in addition
to the factors already required.
Background
According to the author's office, this bill was prompted by
refusals by CMAC to negotiate higher rates or carve-outs
for these implants, which can cost up to $30,000. The
author's office argues that the cost of these implants,
even when replacements are considered, are largely
equivalent to the costs of external prostheses (which must
be replaced much more often) over time.
The bill's sponsor, the City of Hope, states that, for
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contracting hospitals, Medi-Cal will reimburse facilities
for certain specialized treatments and procedures at a
separate negotiated price. The sponsor argues these
services are negotiated separately because of their high
costs. Orthopedic implants, however, are not reimbursed
separately, nor are the costs of these expensive implants
being considered in the development of rates. City of Hope
states that under-payment, or lack of payment, for
procedures and treatments have resulted in limited
treatment options for Medi-Cal recipients, and cites
published medical journal literature on lack of timely
access for children with Medi-Cal needing orthopedic care.
City of Hope argues that existing state reimbursement
policy fails to reflect medical advances that have
succeeded in allowing patients with bone cancer to avoid
amputation. The sponsor argues, decades ago amputation was
the only option and Medi-Cal paid for prosthetic limbs
which cost an average of $9,000 for above-the-knee pieces
and had to be replaced every year in children up to age 15,
but surgeons are now able to spare the limbs of
approximately 90 percent of patients with malignant bone
tumors. The sponsor states these advances save the state
money in the long-run and improve the lives of Medi-Cal
beneficiaries afflicted with this devastating disease.
City of Hope also argues that, because Medi-Cal patients
needing these procedures normally have no other treatment
options, and because not reimbursing these charges at
higher rates can prevent Medi-Cal from meeting federal
requirements to enlist enough providers so that services to
Medi-Cal recipients to the same extent as those services
are available to the general population. City of Hope
argues this bill is necessary if the state plans to enlist
enough providers to meet that federal standard so that
critical services to Medi-Cal recipients are available to
the same extent as those available to the general
population.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/15/09) (per Senate Health Committee
analysis)
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City of Hope (source)
American Cancer Society
California Children's Hospital Association
California Hospital Association
Disability Rights California
ARGUMENTS IN SUPPORT : The California Children's Hospital
Associations (CCHA) argues that Medi-Cal and the California
Children's Services programs reimburse facilities for only
certain specialized treatments and procedures at a separate
negotiated price. Orthopedic implants are not reimbursed
separately or at the full cost. CCHA argues, as a result,
children's hospitals absorb most of the cost associated
with the implant, which on average cost $25,000 per
implant. CCHA states its hospitals currently provides an
orthopedic implant when medically necessary and/or if it is
in the best interest of the child, regardless of
reimbursement, and its member hospitals want to continue to
do so, but it is important that the state's reimbursement
system recognize and reward providers that do what is best
for the patient.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Tom
Berryhill, Blakeslee, Blumenfield, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Conway,
Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,
Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore,
Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,
Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava,
Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Bill Berryhill, Block, Duvall
DLW:mw 8/19/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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