BILL ANALYSIS AB 1985 Page 1 ASSEMBLY THIRD READING AB 1985 (Galgiani) As Introduced February 17, 2010 Majority vote HEALTH 15-2 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Ammiano, | | |Conway, Brownley, De | |Bradford, | | |Leon, Adams, Eng, | |Charles Calderon, Coto, | | |Hayashi, Hernandez, | |Davis, Monning, Ruskin, | | |Jones, Bonnie Lowenthal, | |Skinner, Solorio, | | |Nava, | |Torlakson, Torrico | | |V. Manuel Perez, Salas | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Gaines, Audra Strickland |Nays:|Conway, Harkey, Miller, | | | | |Nielsen, Norby | | | | | | ----------------------------------------------------------------- SUMMARY : Permits the California Department of Corrections and Rehabilitation (CDCR) to use Medi-Cal's methodology for determining maximum allowable reimbursement rates for durable medical equipment (DME), if approved by the federal receiver or when CDCR is no longer under the authority of the federal receiver. Exempts the provisions of this bill from the Administrative Procedures Act. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)This bill is permissive. If CDCR chose to implement the DME approach proposed in this bill, the fiscal impact is a one-time General Fund (GF) cost of $250,000 to CDCR to research and establish a list of DME and associated fee schedules for 33 correctional facilities with distinct procurement and expenditure policies. 2)Annual GF costs of $1.5 million to $2 million to CDCR to provide staff to oversee the implementation and procurement of DME pursuant to the provisions of this bill. 3)Unknown GF savings may accrue to the extent a centralized AB 1985 Page 2 procurement and reimbursement system brings down CDCR costs for DME. COMMENTS : According to the author, CDCR's medical care system is currently in a state of crisis because of decades of neglect, underinvestment, and increasing over-crowding. This bill attempts to streamline the costs of CDCR's medical care system by providing the same DME cost savings in prison healthcare as was achieved for the Medi-Cal program by mirroring the language that was introduced in AB 747 (Matthews) of 2003 and later adopted in AB 1762 (Committee on Budget), Chapter 230, Statutes of 2003. According to CDCR, prisons purchase DME in the same manner as other non-medical equipment. For purchase contracts of less than $100,000, individual CDCR facilities must obtain at least two or three bids and choose the lowest qualified bidder (with certain exceptions designed to favor purchases from small businesses and disabled veterans business enterprises). Purchases of $100,000 or more are processed through DGS to determine if DGS has a contract in place to purchase the specific item or items. DGS secures contracts by using the competitive invitation for bid process. This process includes advertising DGS' requirements through the state contracts register, receiving bids from at least three vendors, and accepting the lowest competitive bid that meets DGS' requirements. The Receiver may, but is not required to, follow existing state law in the acquisition of DME. Analysis Prepared by : Martin Radosevich / HEALTH / (916) 319-2097 FN: 0004703