BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 728| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 728 Author: Negrete McLeod (D) Amended: 6/25/12 Vote: 21 PRIOR VOTES NOT RELEVANT ASSEMBLY FLOOR : 79-0, 8/16/12 (Consent) - See last page for vote SUBJECT : Medi-Cal: durable medical equipment reimbursement SOURCE : California Association of Medical Products Suppliers DIGEST : This bill revises a provision related to determining the maximum allowable reimbursement rate for durable medical equipment (DME) in the Medi-Cal program to use the manufacturer's suggested retail price (MSRP) as documented by a catalogue showing the price on or prior to the date of service (further reduced by a specified percentage) instead of the current requirement that it be determined by using a catalogue showing the price on June 1, 2006 as the base. Assembly Amendments delete the Senate version of the bill, relating to health care coverage, and add the current language dealing with Medi-Cal and medical equipment reimbursement. CONTINUED SB 728 Page 2 ANALYSIS : Existing law: 1.Establishes the Medi-Cal program administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. 2.Establishes a schedule of benefits and services in the Medi-Cal program, including DME. 3.Prohibits through Medi-Cal regulation: A. A provider from charging for any service or any article more than would have been charged for the same service or article to other purchasers of comparable services or articles under comparable circumstances (this regulation is referred to as the Medi-Cal "Best Price" regulation); and, B. A provider from billing or submitting a claim for reimbursement for rendering health care services to a Medi-Cal beneficiary in any amount greater or higher than the usual fee charged by the provider to the general public for the same service. 1.Requires DHCS to establish maximum allowable rates for DME and provides that if there is no specified rate that it be the lesser of: A. Usual charges made to the general public or the net purchase price plus a mark-up, as specified by regulation; B. A negotiated contract price based on the guaranteed acquisition cost; C. Actual acquisition cost plus a markup; D. The manufacturer's suggested retail purchase price on June 1, 2006, and documented by a printed catalogue or a hard copy of an electronic catalogue page showing the price on that date, reduced by a percentage discount as specified; or, CONTINUED SB 728 Page 3 E. A price established through targeted product-specific cost containment provisions developed with providers. This bill revises a provision related to determining the maximum allowable reimbursement rate for DME in the Medi-Cal program to use the MSRP as documented by a catalogue showing the price on or prior to the date of service (further reduced by a specified percentage) instead of the current requirement that it be determined by using a catalogue showing the price on June 1, 2006 as the base. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Assembly Appropriations Committee: Likely minor increased Medi-Cal costs for the small number of fee-for-service claims reimbursed with the methodology changed by this bill. Potential increased costs related to usage of updated catalogues are unknown, but are likely to be under $150,000 annually (50% GF, 50% federal funds), given the small number of reimbursement claims to which this bill applies and the shrinking proportion of Medi-Cal enrollees in the fee-for-service delivery system. Potential minor administrative cost savings to DHCS related to the use of updated catalogues. SUPPORT : (Verified 7/3/12) (per Assembly Health Committee analysis - unable to reverify at time of writing) California Association of Medical Products Suppliers (source) ATB Rehab ARGUMENTS IN SUPPORT : According to the California Association of Medical Products Suppliers (CAMPS), at the time this option was added, DHCS was concerned that it might provide an opportunity for an unscrupulous manufacturer to utilize a sham catalogue to inflate their MSRP. DHCS and CAMPS agreed that insertion of a catalogue CONTINUED SB 728 Page 4 date, i.e. one that already occurred, would prohibit creation of any new catalogue to artificially inflate the MSRP and avoid the effect of the discount. However according the CAMPS, they stated at the time that this fixed date would need to be updated to avoid being stuck in a time warp where MSRP changes would not be recognized. ASSEMBLY FLOOR : 79-0, 8/16/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Lara CTW:nd 8/17/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED