BILL ANALYSIS Ó
AB 97
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 97 (Budget Committee)
As Amended March 16, 2011
2/3 vote. Urgency
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|ASSEMBLY: | |(February 22, |SENATE: |36-2 |(March 16, |
| | |2011) | | |2011) |
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(vote not relevant)
SUMMARY : Contains necessary statutory changes to amend
appropriations contained in the 2011 Budget Act for the
Department of Developmental Services (DDS), Department of Health
Care Services (DHCS), and the Managed Risk Medical Insurance
Board (MRMIB).
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Make various changes concerning the DHCS. These proposals are
as follows:
a) Temporarily rescind a monthly premium increase in the
250% Working Disabled Program as it would violate the
existing maintenance of effort requirement under the
federal American Recovery and Reinvestment Act (ARRA),
thereby subjecting the state to substantial penalties;
b) Extend the sunset for one year on the state statute that
implements the federal "Roger's Amendment." Enacted as
part of the Deficit Reduction Act of 2005, the Roger's
Amendment sets a limit on the amount that a Medicaid
(Medi-Cal) managed care plan can reimburse a non-contracted
hospital that provides emergency services to one of the
plan's members. It requires hospitals to accept, as
payment in full, no more than the amounts that it could
collect under the fee-for-service Medicaid program. In
2008, California enacted Welfare & Institutions Code
Section 14091.3, which sets the rate methodology for
non-contracted emergency inpatient services and
non-contracted post-stabilization services, thereby
implementing the federal Roger's Amendment. Current
statute requires the DHCS to report to the Legislature on
the implementation of these rates by August 1, 2010 and the
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statute sunsets on January 1, 2012;
c) Implement a 10% rate reduction to Medi-Cal providers.
These reductions vary by provider type, due to the varying
statuses of prior provider payment reductions, some of
which have been enjoined by various Court actions and some
partially restored. As such, the Budget enacts an
additional percentage reduction that varies depending on
this history, but when combined results in a 10% reduction.
These reductions affect most Medi-Cal providers,
including, but not limited to: physicians, optometrists,
hearing aid dispensers, emergency and nonemergency medical
transportation providers, home health providers, and
pharmacies.
The state is undergoing a rate study to determine the
impact that this and the following two rate reductions
would have on network adequacy. This bill gives the DHCS
the authority to implement a rate reduction of less than
10% should the rate study results not support a full 10%
reduction;
d) Consistent with the provider rate reductions, this bill
implements a 10% rate reduction for 17 non-contract
hospitals for which the prior rate reduction was enjoined
by a court ruling. Once implemented, these 17 hospitals
will experience a rate reduction equal to that already in
place for other hospitals;
e) Consistent with the rate reductions for providers and
hospitals, long-term care facilities would receive rate
reductions of up to 10%. Long-term care facilities that
would experience rate reductions as a result of the Budget
Act include, but are not limited to: stand-alone skilled
nursing facilities ("1629 facilities"), nursing facilities
level A, Distinct Part Nursing Facilities level B, Distinct
Part Pediatric Subacute, and Intermediate Care
Facilities-Developmentally Disabled (ICF-DD). 1629
facilities will receive an approximately 2.4% increase in
2011-12 prior to the 10% reduction, thereby resulting in a
net reduction of 7.6%;
f) Require the state to collect rebates from pharmaceutical
companies for drugs dispensed through Medi-Cal Managed Care
Plans, as recently permitted under federal health care
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reform;
g) Place a maximum annual dollar cap of $1,510 on hearing
aids for adult Medi-Cal beneficiaries;
h) Institute a "soft cap" on the number of physician office
and clinic visits for physician services provided by a
physician, or under the direction of a physician, to seven
visits per year. This cap does not apply to: pregnancy
care, mental health care, children, and long-term care in a
skilled nursing facility or ICF-DD. Physician and clinic
visits exceeding seven per year must be certified by the
physician attesting that the care met at least one of the
following:
i) Will prevent the need for emergency department care;
ii) Will prevent the need for
inpatient hospital care;
iii) Will avoid disruption to ongoing
medical therapy; or,
iv) Constitutes a diagnostic work-up
in progress that would prevent the need for hospital
care. This bill requires physicians to maintain such
certifications in the physician's office or clinic,
subject to audit and inspections by the DHCS. This soft
cap applies to both managed care and fee-for-service
Medi-Cal.
i) Eliminate Medi-Cal coverage of over-the-counter cough
and cold products for adults;
j) Eliminate Medi-Cal coverage of over-the-counter enteral
nutrition products that are consumed orally, for adults.
Medi-Cal would still cover these products for adults who
must be tube-fed. This bill authorizes the DHCS to provide
exemptions for patients for whom these products prevent
serious disability or death;
aa) Dependent on approval of a federal waiver, institute
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mandatory co-payments for all Medi-Cal enrollees, including
children, people in long-term care facilities, and pregnant
women, as follows:
i) Physician & Clinic Visits:$5
ii) Pharmacy: $5 (brand-name), $3 (generic)
iii) Hospital Emergency Rooms: $50
(emergencies and non-emergencies)
iv) Hospital Inpatient Care:$100 per
day ($200 maximum per admission)
v) Dental Care: $5
bb) Suspend the cost-of-living adjustment (COLA) for the
2011-12 budget year for counties for their administration
of eligibility functions for the Medi-Cal Program;
cc) Eliminate Adult Day Health Care (ADHC) as a Medi-Cal
optional benefit. This bill also establishes guidelines
for the DHCS to make funds included in the Budget Act
available to assist with transitioning ADHC beneficiaries
to other services and for more narrowly-defined services to
be provided under a new program, Keeping Adults Free from
Institutions (KAFI); and,
dd) Establish legislative intent to enact legislation by
August 1, 2011 that provides for the development of a new
reimbursement methodology using a pricing benchmark that
reflects actual acquisition costs.
2)Make the necessary changes within the DDS to allow for
consumers transitioning from the Lanterman Developmental
Center, to receive Medi-Cal managed care health plan services
from any plan operating in the various counties, if the
consumer chooses to enroll, and requires that plans be paid by
a full-risk capitation payment.
3)Make various changes concerning MRMIB. These proposals are as
follows:
a) Increase family monthly premiums in the Healthy Families
Program. These increases will be implemented only upon
receipt of federal approval and the bill authorizes the
MRMIB Board to issue emergency regulations to implement
these changes. The new premiums are as follows:
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i) 150-200% federal poverty level (FPL):
(1) $30 per child, $90 family maximum; or
(2) $27 per child, $81 family maximum (Family
Value Pack).
ii) 200-250% FPL:
(1) $42 per child, $126 family maximum; or
(2) $39 per child, $117 family maximum (Family Value
Pack).
a) Increase mandatory co-payments on hospital services.
The co-payments will increase from $15 to $50 for emergency
room visits (and waived if the beneficiary is
hospitalized), and from $0 to $100 per day (with a maximum
of $200) for hospital inpatient services. These increases
do not change the existing maximum annual co-payment of
$250 per family. These co-payment increases are dependent
on:
i) being consistent with co-payments implemented in the
Medi-Cal program for children; and,
ii) the state receiving federal approval for these changes
to both programs. The bill authorizes the MRMIB Board to
issue emergency regulations to implement these changes.
b) Authorize the MRMIB Board to issue emergency
regulations, between March 1, 2011 and June 30, 2012, to
modify vision benefits, including, but not limited to,
restrictions on providers, benefits, or products and
materials, in order to achieve savings adopted in the 2011
Budget Act.
4)Add an urgency clause allowing this bill to take effect
immediately upon enactment.
AS PASSED BY THE ASSEMBLY , this bill expressed the intent of the
Legislature to enact statutory changes relating to the 2011
Budget Act.
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FISCAL EFFECT : This bill implements policy changes to achieve
approximately $1.5 billion in General Fund savings, as contained
in the 2011-12 Budget package.
Analysis Prepared by : Andrea Margolis / BUDGET / (916)
319-2099
FN: 0000084