SB 73 Senate Bill

BILL NUMBER: SB 73	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 25, 2011
	AMENDED IN ASSEMBLY  MARCH 14, 2011

INTRODUCED BY    Committee on Budget and Fiscal Review
  Senator   DeSaulnier 
    (   Principal   coauthors:  
Senators   Alquist,   Hernandez,   Leno,
  Liu,   and Steinberg   ) 

                        JANUARY 10, 2011

    An act to amend Section 76000.5 of the Government Code,
to amend Section 1797.98a of the Health and Safety Code, to amend
Sections 12693.43,12693.60, 12693.615, and 12693.65 of the Insurance
Code, to amend Sections 12009, 12201, 12204, 12207, 12242, 12251,
12253, 12254, 12257, 12258, 12260, 12301, 12302, 12303, 12304, 12305,
12307, 12412, 12413, 12421, 12422, 12423, 12427, 12428, 12429,
12431, 12433, 12434, 12491, 12493, 12494, 12601, 12602, 12631, 12632,
12636, 12636.5, 12679, 12681, 12801, 12951, 12977, 12983, 12984, and
13108 of the Revenue and Taxation Code, to amend Sections 42007,
42007.3, 42007.4, and 42008.7 of the Vehicle Code, and to amend
Sections 4474.5, 14007.9, 14091.3, 14105.31, 14105.33, 14105.332,
14105.34, 14126.033, 14132, 14154, and 14301.11 of, to amend and
repeal Sections 14105.191 and 14134.1 of, to amend, repeal, and add
Section 14134 of, to add Sections 14105.07, 14105.192, 14105.451,
14126.036, 14131.05, and 14131.07 to, and to add Article 6
(commencing with Section 14589) to Chapter 8.7 of Part 3 of Division
9 of, the Welfare   An act to add Chapter 8.65
(commencing with Section 14518) to Part 3 of Division 9 of the
Welfare  and Institutions Code, relating to  health care
services, making an appropriation therefor,   Medi-Cal,
 and declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 73, as amended,  Committee on Budget and Fiscal Review
  DeSaulnier .  Health care services.
  Adult day health care: community-based services. 

   Existing law establishes the Medi-Cal program, administered by the
State Department of Health Care Services, under which health care
services are provided to qualified, low-income persons. The Medi-Cal
program is, in part, governed and funded by federal Medicaid Program
provisions. Existing law, the Adult Day Health Medi-Cal Law,
establishes adult day health care services as a Medi-Cal benefit for
Medi-Cal beneficiaries who meet certain criteria.  
   This bill would require the department to submit an application,
as prescribed, to the federal Centers for Medicare and Medicaid
Services to implement the Keeping Adults Free from Institutions
(KAFI) program, which would provide a well-defined scope of services
for beneficiaries who meet a high medical acuity standard and are at
a significant risk of institutionalization in the absence of
community-based services. This bill would provide that it is the
intent of the Legislature that the KAFI program allow former
recipients of adult day health care services who meet certain high
acuity measures to be given immediate priority to transition to the
new program.  
   This bill would declare that it is to take effect immediately as
an urgency statute.  
   (1) Existing law authorizes each county to establish a Maddy
Emergency Medical Services (EMS) Fund for reimbursement of
EMS-related costs, as specified, and provides for the deposit into
the EMS Fund of an additional penalty that the county board of
supervisors is authorized to have levied in the amount of $2 for
every $10, or part of $10, upon fines, penalties, and forfeitures
collected for criminal offenses, as specified.  
   Existing law establishes a one-time amnesty program for fines and
bail meeting certain requirements between January 1, 2012, and June
30, 2012. Existing law includes the above-described additional
penalty within this amnesty program.  
   This bill would, until July 1, 2016, require the levy of the
additional $2 for every $10 of a penalty and require the deposit of
these moneys into the continuously-appropriated State Emergency
Services Fund, which would be established by the bill. This bill
would continuously appropriate, on an annual basis, 15% of the moneys
in the fund, not to exceed $9 million, to the Emergency Medical
Services Authority for allocation to local emergency medical services
agencies in counties that had elected, prior to the effective date
of this act, to levy the additional penalty for the purpose of
maintaining pediatric trauma and emergency services. The bill would
make the remainder available, upon appropriation, to the State
Department of Health Care Services for the nonfederal share of
Medi-Cal program expenditures related to emergency medical services.
This bill would also exempt this additional penalty from the one-time
amnesty program.  
   By increasing the duties of local officials, this bill would
impose a state-mandated local program.  
   (2) Existing law creates the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board, to arrange
for the provision of health, vision, and dental benefits to children
less than 19 years of age who meet certain criteria, including having
a limited household income. Existing law requires families with
children participating in the program to pay specified family
contribution amounts. Existing law continuously appropriates funds,
including family contributions, to the board from the Healthy
Families Fund for the program.  
   This bill would, commencing on a specified date, increase those
family contribution amounts, subject to federal authorization and any
lesser increase in family contribution as is authorized by the
federal Department of Health and Human Services. By increasing moneys
deposited into a continuously appropriated fund, the bill would make
an appropriation.  
   Existing law requires the board to establish the required
copayment levels for specific benefits and prohibits copayments from
exceeding the copayment level established for state employees under
the Public Employees' Retirement System (PERS) as of January 1, 1998,
and from exceeding $250 annually per family. Existing law also
requires covered health benefits provided under the program to be
equivalent to those provided to state employees under PERS as of
January 1, 1998.  
   This bill would require the board to set copayments for outpatient
emergency room and inpatient hospital services at specified amounts,
contingent upon federal approval and implementation of the same
copayments under Medi-Cal, as specified. The bill would also modify
the health benefit and copayment provisions to prohibit copayments
from exceeding those charged, and require covered health benefits to
be equivalent to those provided, to state employees under PERS in the
year prior to the program plan year, except as otherwise provided.
The bill would deem regulations of the board to implement these
provisions to be emergency regulations.  
   (3) Existing law provides, except as specified, that vision
benefits under the Healthy Families Program shall be equivalent to,
and subscriber copayment levels shall reflect, those provided to
state employees through the Department of Personnel Administration on
July 1, 1997.  
   This bill would delete the specified date of July 1, 1997, from
these provisions.  
   (4) Existing law establishes the Medi-Cal program, administered by
the State Department of Health Care Services, under which health
care services are provided to qualified, low-income persons. The
Medi-Cal program is, in part, governed and funded by federal Medicaid
Program provisions. Under existing law, one of the methods by which
Medi-Cal services are provided is pursuant to contracts with various
types of managed care plans. Existing law imposes various taxes,
including a tax at a specified rate on the gross premiums of an
insurer, as defined, and, until July 1, 2011, on the total operating
revenue, as specified, of a Medi-Cal managed care plan, as defined.
Existing law continuously appropriates the revenues derived from the
tax on Medi-Cal managed care plans for specified purposes. 

   This bill would extend the imposition of the tax on the total
operating revenue of Medi-Cal managed care plans until January 1,
2014, and make other conforming changes. By extending the imposition
of a tax whose revenues are continuously appropriated, this bill
would make an appropriation.  
   (5) Existing law requires the establishment of protocols to ensure
appropriate services are provided for persons transitioning as a
result of the planned closure of the Agnews Developmental Center and
the Lanterman Developmental Center. For persons transitioning under a
plan for the closure of these developmental centers who have service
needs for coordinated medical and specialty care identified in their
individual program plans that cannot be met using the traditional
Medi-Cal fee-for-service system, existing law establishes a structure
requiring provision of those services under Medi-Cal managed care
health plans that are currently operational in prescribed counties as
a county organized health system or a local initiative, if consumers
choose to enroll, and authorizes prescribed supplemental payments,
including payments for administrative services.  
   This bill would recast those provisions to require, for consumers
transitioning from the Lanterman Developmental Center, that the
Medi-Cal managed care health plan be any plan operating in the
various counties if the consumers choose to enroll, or as mandated by
prescribed statutory provisions; to delete consultation with the
Lanterman Developmental Center staff as an administrative service
eligible for supplemental reimbursement; and to require that plans be
paid a full-risk capitation payment.  
   (6) Existing law requires the collection of a fee from a person
who is ordered or permitted to attend a traffic violator school and
requires revenues derived from the fee to be collected and deposited
in the general fund of a county for distribution with $2 for every
$10 that would have been collected as an additional penalty deposited
in the EMS Fund.  
   This bill would require, on and after July 1, 2011, in every
county, $2 for every $10 that would have been collected as an
additional penalty to be deposited in the State Emergency Services
Fund.  
   By increasing the duties of local officials, this bill would
impose a state-mandated local program.  
   (7) Existing law, operative 30 days after the date that the
increase in the state's federal medical assistance percentage (FMAP)
pursuant to the federal American Recovery and Reinvestment Act of
2009 (ARRA) is no longer available, requires, no later than 90 days
after this operative date, each individual to pay a monthly premium
that is equal to 5% of his or her individual or spousal countable
income, as described, except that the premium cannot fall below or
exceed a specified minimum and maximum premium payment, as provided.
 
   This bill would, instead, make these provisions operative 30 days
after the execution of a declaration by the Director of Health Care
Services that states that implementation of these provisions will not
jeopardize the state's ability to receive certain federal funds, as
specified.  
   (8) Existing law, until January 1, 2012, requires the State
Department of Health Care Services, subject to any necessary federal
approval, to take all appropriate steps to amend the Medicaid state
plan, to implement a requirement that any hospital that does not have
in effect a contract with a Medi-Cal managed health care plan that
establishes payment amounts for services furnished to a beneficiary
enrolled in that plan shall accept, as payment in full, prescribed
payment amounts.  
   This bill would extend the duration of these provisions until
January 1, 2013.  
   (9) Existing law, until July 31, 2012, requires that money
appropriated for the purposes of the Medi-Cal Long-Term Care
Reimbursement Act shall be, in part, used for increasing rates,
except as otherwise provided, for freestanding nursing facilities, as
specified. Existing law requires that the maximum annual increase in
the weighted average Medi-Cal reimbursement rate for the purposes of
these provisions shall not exceed a specified amount plus the
projected cost of complying with new state and federal mandates.
Existing law requires the weighted average Medi-Cal reimbursement
rate increase for the 2010-11 and 2011-12 rate years to be adjusted
by the department for specified reasons.  
   This bill would require, except as provided, that for dates of
service on and after June 1, 2011, the payments resulting from the
application of these rate increases shall be reduced by 10% and would
authorize the Director of Health Care Services to adjust the
percentage reductions as specified. This bill would require, except
as provided, that payments to intermediate care facilities for the
developmentally disabled, as specified, for dates of service on and
after June 1, 2011, shall not exceed the reimbursement rates that
were applicable to those providers in the 2008-09 rate year, reduced
by 10%. This bill would also authorize the Director of Health Care
Services to adjust the percentage reductions as specified. 

   (10) Existing law requires, except as otherwise provided, Medi-Cal
provider payments to be reduced by 1% or 5%, as specified, for dates
of service on and after March 1, 2009. Existing law also requires
provider payments for specified non-Medi-Cal programs to be reduced
by 1% for dates of on and after March 1, 2009.  
   This bill would provide that these provisions shall become
inoperative for dates of service on and after June 1, 2011. This bill
would require, except as otherwise provided, that Medi-Cal and
specified non-Medi-Cal provider payments be reduced by 10%, as
prescribed, for dates of service on and after June 1, 2011. 

   (11) Existing law requires the reimbursement to Medi-Cal pharmacy
providers for legend and nonlegend drugs, as defined, to consist of
the estimated acquisition cost of the drug, as defined, plus a
professional fee for dispensing. Existing law authorizes the State
Department of Health Care Services to enter into contracts with
manufacturers of single-source and multiple-source drugs, on a bid or
nonbid basis, for drugs from each major therapeutic category.
Existing law requires, among other things, that contracts executed
pursuant to these provisions provide for an equalization payment
amount, as defined, to be remitted to the department by the
manufacturer on a quarterly basis.  
   This bill would, instead, provide that the contracts shall provide
for a state rebate, as defined, and would make conforming changes.
This bill would also provide that it is the intent of the Legislature
to enact legislation by August 1, 2011, that provides for the
development of a new reimbursement methodology for pharmacy
providers. This bill would, in relation to establishing the new
reimbursement methodology, authorize the State Department of Health
Care Services to require providers, manufacturers, and wholesalers to
submit any data the Director of Health Care Services determines is
necessary or useful in preparing for the transition from a
methodology based on average wholesale price to a methodology based
on actual acquisition price.  
   (12) Existing law requires Medi-Cal beneficiaries to make set
copayments for specified services. Copayments for services, under
existing law, do not reduce the reimbursement to the providers.
Existing law, with certain exceptions, prohibits a provider from
denying services to an individual solely because the person is unable
to pay the copayment.  
   This bill would, commencing as provided, revise the copayment
rates, expand the services for which copayments are due, and require
the department to reduce the amount of the payment to the provider by
the amount of the copayment. The bill would provide that, with
certain exceptions, a provider has no obligation to provide services
to a beneficiary who does not pay the copayment at the point of
service.  
   (13) Existing law, provides that outpatient services provided by a
physician are a covered benefit under the Medi-Cal program, subject
to utilization controls.  
   This bill would, to the extent permitted by federal law, limit
physician office and clinic visits that are a covered benefit under
the Medi-Cal program, with specified exceptions, to 7 visits per
beneficiary per fiscal year. This bill would require these provisions
to be implemented on the first day of the first calendar month
following 180 days after the effective date of the bill or on the
first day of the calendar month following 60 days after federal
approval, whichever is later.  
   (14) Existing law provides for a schedule of benefits under the
Medi-Cal program, which includes prescribed drugs subject to the
Medi-Cal List of Contract Drugs, enteral formulae subject to the
Medi-Cal list of enteral formulae, and hearing aids, all of which are
subject to utilization controls. Existing law provides that
nonlegend acetaminophen-containing products, with the exception of
children's Tylenol, selected by the department are not covered
benefits.  
   This bill would, in relation to these benefits, instead provide
that nonlegend acetaminophen-containing products, with the exception
of children's acetaminophen-containing products, and nonlegend cough
and cold products, selected by the department are not covered
benefits. This bill would, in relation to enteral formulae, instead
refer to the benefit as enteral nutrition products. This bill would,
except as specified, require that the purchase of enteral nutrition
products be limited to those products administered through a feeding
tube. This bill would also, with certain exceptions, establish an
annual per beneficiary benefit cap amount, as defined, for optional
hearing aid benefits.  
   (15) Existing law provides that it is the intent of the
Legislature to provide appropriate funding to the counties for the
effective administration of the Medi-Cal program, except for
specified fiscal years in regard to any cost-of-doing-business
adjustment.  
   This bill would additionally provide that it is the intent of the
Legislature to not appropriate funds for the cost-of-doing-business
adjustment for the 2011-12 fiscal year.  
   (16) Existing law, the Adult Day Health Medi-Cal Law, establishes
adult day health care services as a Medi-Cal benefit for Medi-Cal
beneficiaries who meet certain criteria.  
   This bill would provide, to the extent permitted by federal law,
that notwithstanding existing law, adult day health care be excluded
from coverage under the Medi-Cal program. This bill would provide
that this provision shall be implemented on the first day of the
first calendar month following 90 days after the effective date of
the bill or on the first day of the first calendar month after
federal approval, whichever is later.  
   (17) The California Constitution authorizes the Governor to
declare a fiscal emergency and to call the Legislature into special
session for that purpose. Governor Schwarzenegger issued a
proclamation declaring a fiscal emergency, and calling a special
session for this purpose, on December 6, 2010. Governor Brown issued
a proclamation on January 20, 2011, declaring and reaffirming that a
fiscal emergency exists and stating that his proclamation supersedes
the earlier proclamation for purposes of that constitutional
provision.  
   This bill would state that it addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation issued on
January 20, 2011, pursuant to the California Constitution. 

   (18) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.  
   (19) This bill would declare that it is to take effect immediately
as an urgency statute. 
   Vote: 2/3. Appropriation:  yes   no  .
Fiscal committee: yes. State-mandated local program:  yes
  no  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Chapter 8.65 (commencing with Se 
 ction 14518) is added to Part 3 of Division 9 of the  
Welfare and Institutions Code  , to read:  
      CHAPTER 8.65.  KEEPING ADULTS FREE FROM INSTITUTIONS


   14518.  (a) The department shall submit an application to the
federal Centers for Medicare and Medicaid Services (CMS) to implement
the Keeping Adults Free from Institutions (KAFI) program, which
shall provide a well-defined scope of services for beneficiaries who
meet a high medical acuity standard and are at a significant risk of
institutionalization in the absence of community-based services. The
KAFI program shall achieve all of the following:
   (1) Promote home- and community-based care.
   (2) Work in coordination with existing state programs to delay or
prevent inappropriate or personally undesirable institutionalization.

   (3) Emphasize partnership between the participant, the family, the
physician, and the community in working towards maintaining personal
independence.
   (b) The department may implement this chapter by means of a state
plan amendment or federal waiver, or a combination thereof, as
necessary to accomplish the intent of this chapter. The department
shall seek to maximize the availability of federal financial
participation for implementation of this chapter under the terms of
any existing waivers or state plan provisions, through amendment of
any existing waivers or state plan provisions, or by means of a new
waiver or state plan amendment, or any combination thereof.
   (c) In developing the application to CMS pursuant to this section,
the department shall consult with interested stakeholders and the
Legislature.
   (d) It is the intent of the Legislature that the KAFI program
allow former recipients of adult day health care services who meet
certain high acuity measures to be given immediate priority to
transition to the new program.
   (e) Notwithstanding the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department may implement the provisions of
this chapter through all-county letters or similar instructions,
without taking regulatory action. Prior to issuing any letter or
similar instruction authorized pursuant to this subdivision, the
department shall notify and consult with stakeholders, including
advocates, providers, and beneficiaries, in implementing,
interpreting, or making specific this chapter. 
   SEC. 2.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to ensure that health care for Californians is improved
at the earliest possible time, it is necessary for this act to take
effect immediately.  All matter omitted in this version of the
bill appears in the bill as amended in the Assembly, March 14, 2011.
(JR11)