BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1817|
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THIRD READING
Bill No: AB 1817
Author: Arambula (I)
Amended: 4/26/10 in Assembly
Vote: 21
SENATE PUBLIC SAFETY COMMITTEE : 7-0, 6/22/10
AYES: Leno, Cogdill, Cedillo, Hancock, Huff, Steinberg,
Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 70-0, 5/20/10 - See last page for vote
SUBJECT : Corrections: inmate health care: utilization
management
program
SOURCE : California Prison Healthcare Services (federal
Prison
HealthCare Receiver)
DIGEST : This bill (1) makes specified findings and
declarations; (2) requires the Department of Corrections
and Rehabilitation (CDCR) to maintain a statewide
utilization management program with respect to inmate
health care, as specified; (3) requires CDCR to develop and
implement policies and procedures to ensure that all
prisons employ that program and require that a copy of
these policies and procedures be provided to specified
legislative committees by July 1, 2011; (4) requires CDCR
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to establish annual quantitative utilization management
performance objectives, as specified, and, on July 1, 2011,
report the objectives it intends to accomplish in each
adult prison during the next 12 months to specified
legislative committees; and (5) requires CDCR to report on
March 1, 2012, and each March 1 thereafter, to specified
legislative committees, specified performance objectives
achieved or not achieved and reasons for each, as well as
costs for inmate health care for the previous fiscal year
both statewide and in each prison and a comparison of costs
from the year prior to that.
ANALYSIS : Existing law requires the CDCR to consult with
the California Medical Assistance Commission to assist the
department in planning and negotiating contracts for the
purchase of health care services. The commission shall
advise the department, and may negotiate directly with
providers on behalf of the department, as mutually agreed
upon by the commission and the department. (Penal Code
Section 5023.)
Existing law provides:
1. CDCR may contract with providers of health care services
and health care network providers, including, but not
limited to, health plans, preferred provider
organizations, and other health care network managers.
Hospitals that do not contract with the department for
emergency health care services shall provide these
services to the department, as specified. The
department may only reimburse a noncontract provider of
hospital or physician services at a rate equal to or
less than the amount payable under the Medicare Fee
Schedule, regardless of whether the hospital is located
within or outside of California.
2. An entity that provides ambulance or any other emergency
or nonemergency response service to the department, and
that does not contract with the department for that
service, shall be reimbursed for the service at the rate
payable under the Medicare Fee Schedule, regardless of
whether the provider is located within or outside of
California.
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3. The maximum rates set forth in this section shall not
apply to contracts entered into through the department's
designated health care network provider, if any. The
rates for those contracts shall be negotiated at the
lowest rate possible under the circumstances.
4. The department and its designated health care network
provider may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis for hospital,
physician, and ambulance services contracts.
5. During the existence of the receivership established in
United States District Court for the Northern District
of California, Case No. C01-1351 TEH, Plata v.
Schwarzenegger , references in this section to the
"secretary" shall mean the receiver appointed in that
action. (Penal Code Section 5023.5.)
This bill requires that, in order to promote the best
possible patient outcomes, eliminate unnecessary medical
and pharmacy costs, and ensure consistency in the delivery
of health care services, the department shall maintain a
statewide utilization management program that shall
include, but not be limited to, all of the following:
1. Objective, evidence-based medical necessity criteria and
utilization guidelines.
2. The review, approval, and oversight of referrals to
specialty medical services.
3. The management and oversight of community hospital bed
usage and supervision of health care bed availability.
4. Case management processes for high medical risk and high
medical cost patients.
5. A preferred provider organization (PPO) and related
contract initiatives that improve the coverage, resource
allocation, and quality of contract medical providers
and facilities.
This bill requires CDCR to develop and implement policies
and procedures to ensure that all adult prisons employ the
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same statewide utilization management program described
above that supports the department's goals for
cost-effective auditable patient outcomes, access to care,
an effective and accessible specialty network, and prompt
access to hospital and infirmary resources. The CDCR shall
provide a copy of these policies and procedures, by July 1,
2011, to the Joint Legislative Budget Committee, the Senate
Committee on Appropriations, the Senate Committee on Budget
and Fiscal Review , the Senate Committee on Health, the
Senate Committee on Public Safety, the Assembly Committee
on Appropriations, the Assembly Committee on Budget, the
Assembly Committee on Health, and the Assembly Committee on
Public Safety.
This bill requires CDCR to establish annual quantitative
utilization management performance objectives to promote
greater consistency in the delivery of contract health care
services, enhance health care quality outcomes, and reduce
unnecessary referrals to contract medical services. On
July 1, 2011, the CDCR shall report the specific
quantitative utilization management performance objectives
it intends to accomplish statewide in each adult prison
during the next 12 months to the Joint Legislative Budget
Committee, the Senate Committee on Appropriations, the
Senate Committee on Budget and Fiscal Review, the Senate
Committee on Health, the Senate Committee on Public Safety,
the Assembly Committee on Appropriations, the Assembly
Committee on Budget, the Assembly Committee on Health, and
the Assembly Committee on Public Safety. The requirement
for submitting a report imposed under this subdivision is
inoperative on January 1, 2015, pursuant to Section 10231.5
of the Government Code.
This bill requires that on March 1, 2012, and each March 1
thereafter, the department shall report all of the
following to the Joint Legislative Budget Committee, the
Senate Committee on Appropriations, the Senate Committee on
Budget and Fiscal Review, the Senate Committee on Health,
the Senate Committee on Public Safety, the Assembly
Committee on Appropriations, the Assembly Committee on
Budget, the Assembly Committee on Health, and the Assembly
Committee on Public Safety:
1. The extent to which the department achieved the
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statewide quantitative utilization management
performance objectives set forth in the report issued
the previous March as well as the most significant
reasons for achieving or not achieving those performance
objectives.
2. A list of adult prisons that achieved and a list of
adult prisons that did not achieve its quantitative
utilization management performance objectives and the
significant reasons for the success or failure in
achieving those performance objectives at each adult
state prison.
3. The specific quantitative utilization management
performance objectives the department and each adult
state prison intends to accomplish in the next 12
months.
4. A description of planned and implemented initiatives
necessary to accomplish the next 12 months' quantitative
utilization management performance objectives statewide
and for each adult state prison. The department shall
describe initiatives that were considered and rejected
and the reasons for their rejection.
5. The costs for inmate health care for the previous fiscal
year, both statewide and at each adult state prison, and
a comparison of costs from the fiscal year prior to the
fiscal year being reported both statewide and at each
adult state prison.
This bill states that it is the intent of the Legislature
that any activities the department undertakes to implement
the provisions of this section shall result in no year over
year net increase in state costs.
This bill provides that the following definitions shall
apply to this section:
1. "Contract medical costs" mean costs associated with an
approved contractual agreement for the purposes of
providing direct and indirect specialty medical care
services.
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2. "Specialty care" means medical services not delivered by
primary care providers.
3. "Utilization management program" means a strategy
designed to ensure that health care expenditures are
restricted to those that are needed and appropriate by
reviewing patient-inmate medical records through the
application of defined criteria or expert opinion, or
both. Utilization management assesses the efficiency of
the health care process and the appropriateness of
decision making in relation to the site of care, its
frequency, and its duration through prospective,
concurrent, and retrospective utilization reviews.
4. "Community hospital" means an institution located within
a city, county, or city and county which is licensed
under all applicable state and local laws and
regulations to provide diagnostic and therapeutic
services for the medical diagnosis, treatment, and care
of injured, disabled, or sick persons in need of acute
inpatient medical, psychiatric, or psychological care.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee anaylsis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Codifies existing
Potentially substantial future cost General
Plans/practice avoidance
SUPPORT : (Verified 8/3/10)
California Prison Healthcare Services (federal Prison
HealthCare Receiver)
(source)
OPPOSITION : (Verified 8/3/10)
Taxpayers for Improving Public Safety
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ARGUMENTS IN SUPPORT : According to the author's office
state, this bill codifies the healthcare utilization
management program currently being used by the Prison
Receivership. This healthcare delivery process uses
standardized, nationally tested, and updated criteria to
control when inmates are referred to expensive outside
specialists, as well as control the utilization of
expensive community hospital beds.
This bill is a key measure to move the state prison system
out of federal court receivership. By codifying this
decision-making process, the Department of Corrections and
Rehabilitation will use a system that meets the court's
standards when control of the state's prisons is returned
to CDCR. The bill is part of the budget plan to reduce
prison costs by $800 million, including ongoing annual
savings of approximately $100 million.
ASSEMBLY FLOOR:
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Davis, De Leon,
DeVore, Emmerson, Eng, Feuer, Fong, Fuentes, Fuller,
Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman,
Hall, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,
Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma,
Mendoza, Miller, Monning, Nestande, Niello, Nielsen, V.
Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Yamada
NO VOTE RECORDED: Coto, De La Torre, Evans, Fletcher,
Harkey, Nava, Norby, Villines, John A. Perez, Vacancy
RJG:do 8/3/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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