BILL ANALYSIS
AB 511
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REPLACE - 6/1/09 APPROPRIATIONS VOTE CHANGE
ASSEMBLY THIRD READING
AB 511 (De La Torre)
As Amended May 4, 2009
Majority vote
HEALTH 19-0 APPROPRIATIONS 14-3
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|Ayes:|Jones, Fletcher, Adams, |Ayes:|De Leon, Ammiano, Charles |
| |Ammiano, Block, Carter, | |Calderon, Davis, Fuentes, |
| |Conway, De La Torre, De | |Hall, Miller, |
| |Leon, Emmerson, Gaines, | |John A. Perez, Price, |
| |Hall, Hayashi, Hernandez, | |Skinner, Solorio, Audra |
| | | |Strickland, Torlakson, |
| |Bonnie Lowenthal, Nava, | |Krekorian |
| |V. Manuel Perez, Salas, | | |
| |Audra Strickland | | |
| | | | |
|-----+--------------------------+-----+----------------------------|
| | |Nays:|Nielsen, Duvall, Harkey |
| | | | |
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SUMMARY : Imposes as a condition of participation in the Medi-Cal
Program a 5.5% quality assurance fee (QAF) on ambulance
transportation services providers until the 2015-16 fiscal year
(FY), and requires revenue from the QAF to be used exclusively to
enhance federal financial participation (FFP) under Medi-Cal or to
support quality improvement efforts. Implements this bill only if
the state receives federal approval and legislation is enacted
during the 2009-10 legislative session that makes an appropriation
to fund a Medi-Cal rate increase for ambulance transportation
services providers. Specifically, this bill :
1)Imposes, as a condition of participation in the Medi-Cal Program,
for each ambulance transportation services provider that derives
revenue from the provision of ambulance transportation services, a
QAF each state fiscal year based on the provision of ambulance
transportation services.
2)Requires the QAF to be assessed on all Medi-Cal ambulance
transportation services providers, except for a Medi-Cal ambulance
transportation services provider that is exempt pursuant to 19)
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below because the Department of Health Care Services (DHCS) had to
alter the provider fee methodology to obtain federal approval.
3)Requires the amount of the QAF assessed on each Medi-Cal ambulance
transportation services provider to be based on the revenue
received by the provider from the provision of ambulance
transportation services and to be calculated in accordance with
the methodology outlined in 4) directly below.
4)Requires, for the 2009-10 through 2015-16 FYs, the QAF for each
ambulance transportation services provider to be calculated by
multiplying by 5.5% the revenue that the ambulance transportation
services provider derived from providing ambulance transportation
services, as determined under the approved methodology. For the
2010-11 to 2015-16 FYs, prohibits the QAF calculated pursuant to
this provision and collected under this bill, taken together with
applicable licensing fees, from exceeding the amounts allowable
under federal law.
5)Requires DHCS to deposit the QAF collected pursuant to this bill
in the Medi-Cal Ambulance Transportation Services Providers Fund
(Fund), which is created in the State Treasury, and requires the
Fund to also include interest and dividends earned on moneys in
the Fund.
6)Requires moneys in the Fund, upon appropriation by the
Legislature, to be available to exclusively enhance FFP for
ambulance transportation services under the Medi-Cal program or to
provide additional reimbursement to, and to support quality
improvement efforts of, ambulance transportation services
providers, including increased reimbursement for and improvement
of the quality of the provision of advanced life support services.
7)Requires this bill to be implemented only if both of the following
conditions are met:
a) The state receives federal approval of the QAF from the
Centers for Medicare and Medicaid Services (CMS); and,
b) Legislation is enacted during the 2009-10 session that makes
an appropriation from the Fund and from the Federal Trust Fund
to fund a Medi-Cal rate increase for ambulance transportation
services providers.
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8)Requires this bill to remain operative only as long as all of the
following conditions are met:
a) CMS continues to allow the use of the QAF provided in this
bill;
b) The Medi-Cal rate increase for ambulance transportation
providers remains in effect; and,
c) The full amount of the QAF assessed and collected pursuant
to this bill remains available exclusively to enhance FFP for
ambulance transportation service providers in Medi-Cal.
9)Permits DHCS to retroactively increase and make payments of rates
to Medi-Cal ambulance transportation services providers.
10) Requires providers that have been assessed a fee by DHCS to
pay the fee assessed within 60 days of the date rates are
increased in accordance with this bill and paid to those
providers.
11) Requires DHCS to accept a provider's payment of the fee even
if the payment is submitted in a subsequent rate year than the
rate year in which the fee was assessed.
12) Requires the QAF to be paid by providers to DHCS on a
quarterly basis on or before the last fiscal day of the fiscal
quarter following the fiscal quarter for which the QAF was
imposed.
13) Requires each provider paying a QAF to submit with the fee
paid, in a form prescribed by DHCS, data on the gross receipts
from the provision of ambulance transportation services provided
during the fiscal quarter for which the fee is being paid in order
for DHCS to verify the accuracy of the QAF paid.
14) Permits DHCS, when a provider fails to pay all or part of the
QAF within 60 days of the date that payment is due, to deduct the
unpaid fee and interest owed from any Medi-Cal reimbursement
payments owed to the provider until the full amount of the fee and
interest are recovered.
15) Requires any deduction made pursuant to 14) above to be made
only after the DHCS gives the provider written notification, and
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permits any deduction made to be deducted over a period of time
that takes into account the financial condition of the provider.
16) Permits DHCS, if all or any part of the QAF remains unpaid, to
assess a penalty on the provider equal to 50% of the unpaid fee
amount.
17) Requires the director of DHCS, or his or her designee, to
administer this bill, permits the director to adopt regulations as
are necessary to implement this bill, including emergency
regulations, through the rulemaking provisions of the
Administrative Procedure Act. States legislative intent that the
regulations adopted pursuant to this bill be adopted on or before
July 31, 2012.
18) Permits the director of DHCS, as an alternative to adopting
regulations to implement this bill, in whole or in part, by means
of a provider bulletin, or other similar instructions, without
taking regulatory action, provided that no bulletin or other
similar instructions remain in effect after July 31, 2012.
19) Requires DHCS to request approval from the CMS for the
implementation of this bill, and permits the director of DHCS to
alter the methodology specified in this bill, to the extent
necessary to meet the requirements of federal law or regulations
or to obtain federal approval. Permits the director to also add
categories of exempt ambulance transportation services providers
or apply a non-uniform fee to ambulance transportation services
providers that are subject to the fee in order to meet the
requirements of federal law or regulations. Permits the director
to exempt categories of ambulance transportation services
providers from the fee, if necessary to obtain federal approval.
20) Requires DHCS to make retrospective adjustments, as necessary,
to the amounts calculated pursuant to this bill in order to ensure
that the QAF for any provider in a particular state fiscal year
does not exceed 5.5% of the revenue derived by a provider subject
to the fee from the provision of ambulance transportation
services.
21) Requires this bill to become inoperative in the event of a
final judicial determination made by any state or federal court
that is not appealed, or by a court of appellate jurisdiction that
is not further appealed, in any action by any party, or a final
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determination by CMS that FFP is not available with respect to any
payment made under the methodology implemented pursuant to this
bill because the methodology is invalid, unlawful, or contrary to
any provision of federal law or regulations, or of state law.
22) Requires this bill to be repealed on the date that it becomes
inoperative.
FISCAL EFFECT : According to the Assembly Appropriations Committee:
1)No General Fund (GF) will be used to support annual increased
Medi-Cal payments to ambulance providers of $100 million (50%
provider QAF/50% federal) to $110 million (50% provider QAF/50%
federal). These figures are based on preliminary estimates of
5.5% of statewide aggregate ambulance revenues and are supported
by research in this area regarding average reimbursement by payer
type, distribution of patient transport by payer type and
frequency, and related current law reimbursements.
2)The creation of a new funding mechanism to draw down millions in
federal financial participation creates GF pressure when the QAF
sunsets in 2016. GF pressure is created to continue Medi-Cal
increases paid to ambulance providers.
3)Staffing costs to DHCS of $200,000 (50% GF) to implement the
requirements of this bill including attaining federal approval
and establishing claims.
COMMENTS : This bill is sponsored by American Medical Response
(AMR), which states this bill is the legislative vehicle for
statutory changes needed to craft an ambulance QAF. AMR argues this
bill represents a unique opportunity to expand health care access
and raise the level of health care outcomes by providing a pathway
in state law to draw down additional federal Medicaid funding for
ambulance transport services. AMR argues inadequate Medi-Cal
reimbursement for ambulance transport has put an enormous strain on
the state's health care structure and in particular, the state's
emergency medical services (EMS) system. Unlike other Medi-Cal
providers, ambulance providers cannot limit their Medi-Cal patients
in order to find a survivable payor mix. AMR states ambulance
providers have been recently saddled with debilitating Medi-Cal cuts
including last year's 10% Medi-Cal provider rate reduction, while
having to endure additional increases in vehicle license fees and
fuel costs which are significant for large emergency vehicles. AMR
states that ambulance transport has the worst cost-of-service to
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reimbursement ratio of all health care providers in the Medi-Cal
system.
AMR states there are federal dollars that can be drawn back down to
the state through a QAF that will permit ambulance providers to
establish a means to increase patient outcomes and reverse, or at
least slow, the rate of degradation of reimbursement rates to
ambulance transport. The QAF in this bill would be assessed on
ambulance providers who chose to participate in the Medi-Cal Program
and the resulting revenue would be matched by federal funds and then
returned to ambulance providers in the form of an increase in the
Medi-Cal rate. No additional funding through the state's GF is
required to affect this program and the federal dollars which will
flow back to the state will be used by ambulance providers to
maintain the high level of care that is expected of the state's EMS
and 9-1-1 programs. AMR states it is committed to working
diligently with this partnership between the state and federal
authorities in crafting this important program to ensure the state
has a safety-net EMS system its residents can rely upon.
Federal law authorizes states to levy fees on health care providers
if the fees meet federal requirements. Many states (including
California) fund a portion of their share of Medicaid Program costs
through a fee on health care providers. Under these funding
methods, states collect funds (through fees, taxes, or other means)
from providers, which can then be matched with federal funds to
increase Medicaid reimbursement to providers. To prevent states
from only levying an assessment on certain providers, federal law
requires provider fees to be "broad based" and uniformly imposed
throughout a jurisdiction, and states are prohibited from having a
provision that would ensure providers are "held harmless" from the
impact of the fee. Forty-five states have Medicaid provider fees.
The health reform proposal from last session by Governor
Schwarzenegger and then-Assembly Speaker Fabian Nunez would have
levied a provider fee on hospitals through a separate ballot
initiative to be submitted to the voters. That proposal would have
increased Medi-Cal reimbursements to hospitals as a way of reducing
the "hidden tax" where below-market Medi-Cal reimbursement rates
shift costs onto insured individuals, families, and employers.
California currently has provider fees on intermediate care
facilities for the developmentally disabled, Medi-Cal managed care
plans, and skilled nursing facilities.
Analysis Prepared by : Scott Bain / HEALTH / (916) 319-2097FN:
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