BILL ANALYSIS Ó
SB 484
Page 1
Date of Hearing: June 28, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 484 (Rubio) - As Amended: June 8, 2011
SENATE VOTE : 34-4
SUBJECT : Public Records: prison Health Care Services Contracts
KEY ISSUES :
1)Should the Legislative Analyst's office have IMMEDIATE access
to health care services contracts entered into by the
California department of Corrections and rehabilitation?
2)Should the Department of Corrections be required to limit per
prisoner health care costs to what the state pays per patient
for Medi-Cal Services?
FISCAL EFFECT : As currently in print this bill is keyed
fiscal.
SYNOPSIS
Although the Public Records Act (PRA) generally requires that
all public records should be open for public inspection, it
permits a number of exceptions. Under existing law, the PRA
limits access to the records of the California Department of
Corrections and Rehabilitation (CDCR) relating to health care
services contracts. Specifically, information that reveals the
process of negotiations may not be disclosed until one year
after the contract is fully executed, and information on payment
rates may not be disclosed until three years after the contract
is fully executed. The purpose of this restriction, according
to legislative intent, is to protect the competitive nature of
the bidding process. Notwithstanding these restrictions,
contracts are immediately open to inspection by the Joint
Legislative Audit Committee and the Bureau of State Audits, so
long as confidentiality is maintained until the contracts are
available to the public. This bill will give the Legislative
Analyst's Office the same access to contracts that these other
agencies have, subject to the same confidentiality requirement.
It was largely due to this issue that the bill was referred to
this Committee. The bill was amended in the Assembly to add
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another provision that requires CDCR to develop targets for
reducing health care costs, and specifies that those targets
should ensure that CDCR contracts spend no more per inmate on
health care than the state pays per patient for Medi-Cal
services by 2015. According to prior analyses the bill is
supported by AFSCME and Taxpayers for Improving Public Safety.
The bill, without the provision requiring CDCR to reach Medi-Cal
targets, passed out of the Senate on a 34-4 vote. It will be
referred to the Government Organization Committee if it passes
out of this Committee.
SUMMARY : Authorizes the Legislative Analyst's Office to have
the same access to CDCR health services contracts that the Joint
Legislature Audit Committee and the Bureau of State Audits have
under existing law, and requires CDCR to establish health care
cost reductions, as specified. Specifically, this bill :
1)Provides that, notwithstanding any restrictions imposed by
law, CDCR records relating to health care services contracts,
or any amendments thereto, shall be open to inspection to the
Legislative Analyst's Office (LAO), and that the LAO shall
maintain the confidentiality of any contract and amendment
until the contract or amendment is fully open to inspection by
the public.
2)Requires CDCR to develop targets and to implement a plan based
on those targets to achieve a reduction in prison health care
spending while maintaining an adequate level of care.
Specifies that when setting these targets, CDCR shall seek
ways of achieving a goal of spending no more per inmate on
health care than the state pays per patient for Medi-Cal
Services by 2015. Specifies that progress toward meeting that
goal shall be reviewed as part of the annual budget process
for determining CDCR's budget.
3)Requires CDCR to report to the Legislature by January 1, 2013,
and annually by January 1 thereafter, to provide updates on
how it is meeting the above goals.
EXISTING LAW :
1)Requires, under the California Public Records Act, that all
public agency documents be disclosed to the public, unless a
specific statutory exemption applies. (Government Code
Section 6250 et seq.)
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2)Provides that, notwithstanding any restrictions imposed by
law, that CDCR records relating to health care services
contracts, or any amendments, shall be open to inspection to
the Joint Legislative Audit Committee (JLAC) and the Bureau of
State Audits (BSA), and that JLAC and BSA shall maintain the
confidentiality of any contract and amendment until the
contract or amendment is fully open to inspection by the
public. (Government Code Section 6254.14.)
3)Requires CDCR to consult with the California Medical
Assistance Commission (CMAC) to assist the department in
planning and negotiating contracts for the purpose of health
care services and negotiating with providers. (Penal Code
Section 5023.)
4)Provides that CDCR shall not reimburse hospital services at a
rate that exceeds 130 percent of the amount payable under the
Medicare Fee Schedule; shall not reimburse physician services
at a rate that exceeds 110 percent of the Medicare Fee
Schedule; and shall not reimburse ambulance services at a rate
that exceeds 120 percent of the Medicare Fee Schedule. (Penal
Code Section 2023.5.)
COMMENTS : Although the Public Records Act (PRA) generally
requires that all public records should be open for public
inspection, it permits a number of exceptions. Under existing
law, the PRA limits access to the records of CDCR that relate to
its health care services contracts. Information that reveals
the process of negotiations are not subject to disclosure for
one year after execution of the contract, and information that
relates to payment rates are not subject to disclosure for three
years after execution. The purpose of this restriction is to
protect the competitive nature of the bidding process.
Notwithstanding these restrictions, contracts are immediately
open to inspection by the Joint Legislative Audit Committee and
the Bureau of State Audits, so long as confidentiality is
maintained until the contracts would generally be available to
the public. This bill gives the Legislative Analyst's Office
the same access to contracts, subject to the same
confidentiality requirement. According to the author, the LAO
will use this information for purposes of analyzing CDCR's
budget needs.
After leaving the Senate, this bill was amended to add another
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provision that requires CDCR to develop targets for reducing
health care costs, and specifies that those targets should
ensure that CDCR contracts spend no more per inmate on health
care than the state pays per patient for Medi-Cal services by
2015.
Health Care Cost Reduction Targets : Under the recent amendments
to the bill, CDCR is required to develop cost-cutting targets
and implement a plan based on those targets. Specifically, the
bill requires CDCR to set targets and implement a plan for
reducing health care costs so that per inmate health care costs
do not exceed the amount that the state pays per patient for
Medi-Cal services by 2015. CDCR would be required to file
annual reports, beginning January 1, 2013, on its progress.
The Committee may wish to discuss with the author his
perspectives about the benefits of linking per inmate medical
costs to per patient costs under Medi-Cal . It is certainly
laudable that the author wants to make CDCR accountable for
health care costs and encourage cost reductions. Because the
prison population represents a very unique demographic with
health problems peculiar to a prison population, the Committee
may wish to explore whether it may at least sometime be the case
that the kinds of treatment prisoners might need, as a group,
would be the same that Medi-Cal recipients need as a group. For
example, according to the California Hospital Association (CHA),
prisoners tend to have higher incidences of HIV, as well as
higher rates drug-, alcohol-, and smoking-related illnesses. It
is also the case that the proposed limitation would be occurring
at a time when CDCR's Prison Health Care Services are under a
federal receivership and under court order to bring the quality
of its health care services up to constitutional standards.
Thus the Committee may wish to explore with the author whether
there may be unintended challenges that might occur when linking
per prisoner health care costs to per patient Medi-Cal costs.
Existing law provides that CDCR reimbursements shall not exceed
anywhere from 110 percent to 130 percent of the Medicare Fee
Schedule, depending on the type of services. These figures
apparently presume that prison health care costs could exceed
the Medicare Fee Schedule. Moreover, as CHA has informed the
Committee, the Medicare Fee Schedule, because it covers an
elderly population with more serious health complications,
typically exceeds the rates paid by Medi-Cal. This does not
appear to suggest that per inmate health costs are greater than
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per patient Medi-Cal payments, the same, or less than those
payments. The author may wish to consider requiring some
development of helpful data pertaining to the health needs of
the prison population as compared to the health needs of the
Medi-Cal population.
ARGUMENTS IN SUPPORT : According to the author, "Prison health
care costs are currently skyrocketing. The non-partisan LAO
found 'dramatic increase in spending on adult prison health
care: from $1.2 billion in 2005-2006 to $2.5 billion in
2008-2009.' Last year, California spent an average of $16,000
per inmate (170,000 total) on health care services. The LAO
directly attributes the growing health care costs to greater
usage of contract medical services. Despite the growing costs
in prison health care, the LAO and the Legislature are kept in
the dark about exactly how much is being spent on health
contracts because all health care contracts and records under
the Department of Corrections and Rehabilitation are exempt from
the Public Records Act."
ARGUMENTS IN OPPOSITION : The California Hospital Association
(CHA) "is opposed to the requirement in the bill that ÝCDCR] pay
providers Medi-Cal rates for health care services." The CHA
writes that the "prison population is notably different than the
Medi-Cal population; thus, capping hospital reimbursement for
inmate care based on the Medi-Cal payment system is
inappropriate. Prisoners often have past medical history and
secondary health conditions (such as HIV, and smoking and
alcohol related illnesses) that contribute to their medical
cases being comparably more complex and expensive."
In addition to the direct costs of providing patient care, CHA
argues that there are other costs that need to be taken into
account. For example, CHA observes, "if a prisoner is in a
hospital room with two patient beds, the second patient bed must
remain empty for security reasons. Emergency rooms in
particular are often at full capacity, and this security
requirement prevents the hospital from using the vacant bed to
treat patients." CHA contends rather than the bill's current
approach it be preferable for the author to foster
"collaboration between hospitals and CDCR, and reasonable
payment rates so hospitals can continue to fulfill their mission
and service to their community." They apparently have offered
proposed amendments to the author in this regard.
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Relating Pending Legislation : AB 2233 (Nielsen) requires CDCR
to create a preferred provider organization (PPO) or health
maintenance organization (HMO) for health care delivery in an
effort to reduce costs while at the same time providing a
constitutional level of care. AB 2233, therefore, seeks to
reduce costs not by linking it to Medi-Cal rates, but by
employing a system of managed care that is more cost-effective
than fee-for-service systems.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
California Hospital Association
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334