BILL NUMBER: AB 1985 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 21, 2010
INTRODUCED BY Assembly Member Galgiani
FEBRUARY 17, 2010
An act to add Section 5024.3 Sections
5023.6 and 5024.3 to the Penal Code, relating to the
Department of Corrections and Rehabilitation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1985, as amended, Galgiani. Corrections: medical equipment and
care.
(1) Existing law authorizes the Department of Corrections and
Rehabilitation to enter into contracts with providers of health care
services to provide health care services to inmates.
This bill would require the department, by January 1, 2011, to
adopt industry standard claim forms for use by contract health care
providers, to be able to accept electronic submissions of claims from
contract health care providers, to perform periodic audits of claims
paid to contract health care providers, and to provide remote
electronic access to claim status information to contract health care
providers. The bill would authorize the department to adopt policies
and procedures for enabling electronic health care claims management
and processing, and would exempt the adoption, amendment, and repeal
of policies and procedures for this limited purpose from the
rulemaking provisions of the Administrative Procedure Act.
Existing
(2) Existing law provides for the
Medi-Cal program, administered by the State Department of Health
Care Services, pursuant to which medical benefits are provided to
low-income persons. Existing law requires the department to establish
a list of covered services and maximum allowable reimbursement rates
for durable medical equipment, as defined. Existing law requires
that reimbursement for all durable medical equipment billed to the
Medi-Cal program be the lesser of certain amounts.
This bill would permit the Department of Corrections and
Rehabilitation, upon approval by the federal receiver, if necessary,
to establish a list of covered services and maximum allowable
reimbursement rates for durable medical equipment used for inmate
medical care. It would provide that reimbursement for these items of
durable medical equipment may be the lesser of specified amounts. The
bill would permit the department to establish capped rental
reimbursement for specific items of durable medical equipment. It
would require that items in this category be reimbursed on a monthly
rental basis, as prescribed.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares
all of the following:
(1) Contractors providing hospital care, specialty care, emergency
medical transportation, and other health care services form an
essential component of the continuum of care that the Department of
Corrections and Rehabilitation is required to deliver to its inmates.
(2) The department will process approximately 300,000 individual
claims from contract health care providers in the 2009-010 fiscal
year.
(3) The department has historically struggled to pay its contract
health care providers in a timely manner, causing additional costs to
the department and threatening the availability of competent,
cost-effective providers willing to serve the department.
(4) Manual claims processing by the department has resulted in
significant and costly errors. A department audit of claims paid
during the period of July 1, 2007, to June 30, 2009, inclusive,
identified millions of dollars in billing and payment errors, which
have resulted in more than fifteen million dollars ($15,000,000) in
contractor refunds to the state as of June 1, 2010.
(5) The department has made significant progress in reducing its
payment backlog and increasing billing accuracy by processing certain
health care claims electronically.
(b) It is the intent of the Legislature that the department
achieve even greater efficiency, accuracy, timeliness, and cost
savings in processing contract health care claims by adopting
industry standard electronic health care management and processing
practices and performing periodic audits of claims paid.
SEC. 2. Section 5023.6 is added to the
Penal Code , to read:
5023.6. (a) The Department of Corrections and Rehabilitation
shall, by January 1, 2011, do all of the following:
(1) Adopt industry standard claim forms for use by contract health
care service providers.
(2) Be able to accept secure electronic submission of claims from
contract health care service providers.
(3) Perform periodic audits of claims paid to contract health care
providers.
(4) Provide secure, remote electronic access to claim status
information to those contract health care service providers
submitting claims electronically in the manner required by the
department.
(b) The department may adopt policies and procedures for the
purpose of enabling electronic health care claims management and
processing. The adoption, amendment, or repeal of policies and
procedures for this limited purpose are exempt from the rulemaking
provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).
SECTION 1. SEC. 3. Section 5024.3 is
added to the Penal Code, to read:
5024.3. Upon approval of the federal receiver, or at such time as
the Department of Corrections and Rehabilitation is no longer under
the authority of the federal receiver, the Department of Corrections
and Rehabilitation may do all of the following:
(a) The department may establish a list of covered services and
maximum allowable reimbursement rates for durable medical equipment
as defined in Section 51160 of Title 22 of the California Code of
Regulations. The list may specify utilization controls to be applied
to each type of durable medical equipment.
(b) The department may set reimbursement for durable medical
equipment, except wheelchairs, wheelchair accessories, and
speech-generating devices and related accessories, at the lesser of
(1) the amount billed pursuant to Section 51008.1 of Title 22 of the
California Code of Regulations, (2) an amount that does not exceed 80
percent of the lowest maximum allowance for California established
by the federal Medicare Program for the same or similar item or
service, or (3) the guaranteed acquisition cost negotiated by means
of the contracting process provided for pursuant to Section 14105.3
of the Welfare and Institutions Code plus a percentage markup to be
established by the department.
(c) The department may set reimbursement for wheelchairs,
wheelchair accessories, and speech-generating devices and related
accessories at the lesser of (1) the amount billed pursuant to
Section 51008.1 of Title 22 of the California Code of Regulations,
(2) an amount that does not exceed 100 percent of the lowest maximum
allowance for California established by the federal Medicare Program
for the same or similar item or service, or (3) the guaranteed
acquisition cost negotiated by means of the contracting process
provided for pursuant to Section 14105.3 of the Welfare and
Institutions Code plus a percentage markup to be established by the
department.
(d) The department may set reimbursement for all durable medical
equipment billed to the department utilizing codes with no specified
maximum allowable rate at the lesser of (1) the amount billed
pursuant to Section 51008.1 of Title 22 of the California Code of
Regulations, (2) the guaranteed acquisition cost negotiated by means
of the contracting process provided for pursuant to Section 14105.3
of the Welfare and Institutions Code plus a percentage markup to be
established by the department, (3) the actual acquisition cost plus a
markup to be established by the department, (4) the manufacturer's
suggested retail purchase price on June 1, 2006, and documented by a
printed catalog or a hardcopy of an electronic catalog page showing
the price on that date, reduced by a percentage discount not to
exceed 20 percent, or not to exceed 15 percent for wheelchairs and
wheelchair accessories if the provider employs or contracts with a
qualified rehabilitation professional, as defined in paragraph (3) of
subdivision (c) of Section 14105.485 of the Welfare and Institutions
Code, or (5) a price established through targeted product-specific
cost containment provisions developed with providers.
(e) The department may set reimbursement for all durable medical
equipment supplies and accessories billed to the department at the
lesser of (1) the amount billed pursuant to Section 51008.1 of Title
22 of the California Code of Regulations, or (2) the acquisition cost
plus a 23-percent markup.
(f) The department may establish "capped rental" reimbursement for
specific items of durable medical equipment. Items in this category
may be reimbursed on a monthly rental basis not to exceed a period of
continuous use of 10 months. After 10 months of rent have been paid,
the provider shall continue to provide the item without charge,
except for maintenance and servicing fees, until the medical
necessity ends. If the department establishes "capped rental"
reimbursement pursuant to this subdivision, monthly reimbursement for
the rental of these specific items of durable medical equipment may
not exceed 80 percent of the lowest maximum allowance for California
established by the federal Medicare Program for the same or similar
item or service.
(g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of the Government Code, actions under
subdivisions (a) and (f) shall not be subject to the rulemaking
provisions of the Administrative Procedure Act or to the review and
approval of the Office of Administrative Law.