BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1445 (Chesbro) Hearing Date: 8/12/2010 Amended: 6/1/2009 Consultant: Katie Johnson Policy Vote: Health 10-0 _________________________________________________________________ ____ BILL SUMMARY: AB 1445 would permit federally qualified health centers and rural health centers to claim reimbursement for multiple visits for a single patient on the same day at the same location, as specified. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund DHCS implementation up to $200 up to $300 $1,000General/* and increased Medi-Cal Federal payments to FQHC/RHCs *50 percent General Funds, 50 percent federal funds _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. Federal law allows for the separate reimbursement of same-day medical and mental health visits. However, current state law permits only one visit per day to be reimbursed by Medi-Cal, except for a subsequent visit by a patient to a dental professional with rates determined prospectively. This bill would permit FQHC/RHCs to be reimbursed for medical and mental health visits as two separate visits and would require clinics that currently include the cost of encounters with more than one health professional that take place on the same day at a single location as constituting a single visit to apply to the department for an adjustment of their per-visit rate. This rate redetermination provision is meant to imply that the department would adjust the per-visit rate to make this bill cost neutral. There are 907 FQHC/RHCs in the state and they are reimbursed $160.60 per visit per day under the current reimbursement system. If half of the clinics were to have two additional Medi-Cal visits each month as a result of being able to serve the same person on the same day and bill separately for the two visits, annual costs would be $1.7 million in total funds, commencing January 1, 2012, and thereafter. Since Medi-Cal costs are typically shared 50 percent General Funds and 50 percent, costs would be $850,000 General Fund and $850,000 federal funds. If the redetermination provision were to result in a new per visit rate that would render these additional visits closer to or cost neutral, costs could be considerably less. DHCS would also be required to apply for federal approval and would need to amend its state plan in order to draw down federal funds to implement these provisions. DHCS could need up to .5 PY to achieve this in FY 2010-2011 at a cost of approximately $50,000 total funds. Additionally, DHCS could need up to 3 limited-term auditors at a Page 2 AB 1445 (Chesbro) cost of $300,000 in total funds for two years commencing in FY 2010-2011, in order to adjust FQHC/RHC rates as provided for in the bill depending on the number of clinics that apply for a rate redetermination. These departmental staffing costs would be shared 50 percent General Fund and 50 percent federal funds. Additionally, staff recommends that the implementation dates in the bill be pushed forward 1 year so they reflect this bill as it would take effect January 1, 2011, instead of assuming a January 1, 2010, effective date, as it currently does. In 2007, the Governor vetoed a similar bill, SB 260 (Steinberg), saying, "While I support improving access to health care services, including mental health services, I cannot support this bill as it would increase General Fund pressure at a time of continuing budget challenges. Mental health services are already included in the Medi-Cal rates for federally qualified health centers and rural health clinics. Allowing separate billing for mental health services would lead to increased costs that our state cannot afford."