BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                  SB 945
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          SB 945 (Health Committee)
          As Amended May 31, 2011
          2/3 vote. Urgency

           SENATE VOTE  :39-0  
           HEALTH              18-0        APPROPRIATIONS      17-0        
          |Ayes:|Monning, Logue, Atkins,   |Ayes:|Fuentes, Harkey,          |
          |     |Bonilla, Eng, Garrick,    |     |Blumenfield, Bradford,    |
          |     |Gordon, Hayashi, Roger    |     |Charles Calderon, Campos, |
          |     |Hernández, Bonnie         |     |Davis, Donnelly, Gatto,   |
          |     |Lowenthal, Mansoor,       |     |Hall, Hill, Lara,         |
          |     |Mitchell, Nestande, Pan,  |     |Mitchell, Nielsen, Norby, |
          |     |V. Manuel Pérez, Silva,   |     |Solorio, Wagner           |
          |     |Smyth, Williams           |     |                          |
          |     |                          |     |                          |
           SUMMARY  :  Requires the Department of Health Care Services (DHCS) 
          to establish and administer the Medi-Cal Electronic Health 
          Records Incentive Program (Program) to provide federally funded 
          incentive payments to Medi-Cal providers to implement and use 
          electronic health records (EHR) systems.  Contains an urgency 
          clause to ensure that the provisions of this bill go into 
          immediately effect upon enactment.  Specifically,  this bill  :  

          1)Requires DHCS to establish and administer the Program in 
            accordance with the State Medicaid Health Information 
            Technology (HIT) Plan as developed by DHCS and approved by the 
            federal Centers for Medicare and Medicaid Services.

          2)Requires the HIT Plan to include:

             a)   The identification and establishment of planning 
               processes, policies, and procedures necessary for the 
               Program to become operational;

             b)   The criteria for enrollment, eligibility, and data 

             c)   Timeframes for professional and facility technology 


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             d)   The process for provider outreach and DHCS coordination 
               with established regional extension centers;

             e)   The audit and appeals process; and,

             f)   Participation in the National Level Registry.

          3)Requires DHCS to accept applications from and make incentive 
            payments to eligible professionals and facilities, upon 
            receipt of all necessary federal approvals and in accordance 
            with the HIT plan.

          4)Requires the professional and facility applicants to meet the 
            standards for the federal EHR Technology Program, including 
            requirements for the meaningful use of EHR.

          5)Authorizes DHCS to contract with public or private entities 
            and to utilize existing health care service provider 
            enrollment and payment mechanisms in implementing the Program.

          6)Allows contracts entered into by DHCS to implement the Program 
            to be exempt from established competitive bidding requirements 
            in state law and, instead, provides for an alternative 
            competitive bidding process, as specified.

          7)Allows DHCS to implement the Program through provider 
            bulletins or similar instruction without regulatory action.

          8)Establishes reporting requirements to the appropriate fiscal 
            and policy committees of the Legislature and to the 
            Legislative Analyst's Office, as specified.

          9)Specifies that the Program be implemented only to the extent 
            federal financial participation is available.  Further 
            specifies legislative intent that the Program be funded solely 
            through federal funds and private contributions identified by 
            DHCS and that General Fund moneys shall not be used.  

          10)Sunsets the Program on June 30, 2021.

          11)Makes various legislative findings and declarations.

           FISCAL EFFECT  :  According to the Assembly Appropriations 


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          Committee, this bill would provide statutory authority for the 
          Medi-Cal EHR Program that is currently ongoing, so it would 
          likely not result in new state costs beyond what is already 
          approved through the budget process.  Current Program funding is 
          approximately $2.2 million annually (90% federal/10% private 

          Administrative funding for the EHR incentive program is provided 
          through a 90% federal-10% state match, and the California Health 
          Care Foundation, an independent philanthropy, has agreed to 
          provide the 10% state match.  

           COMMENTS  .  This bill is needed to ensure DHCS may distribute 
          federal incentive payments to Medi-Cal providers in an expedited 
          manner and help many California health care providers change 
          their practices and utilize electronic tools.  According to 
          DHCS, sponsor of this bill, the largest single obstacle to 
          adoption of EHRs by providers is the high upfront and ongoing 
          costs.  DHCS states that the incentive payments made available 
          by this bill offer an unparalleled opportunity to build the HIT 
          infrastructure of both outpatient providers as well as 
          acute-care inpatient hospitals.  According to the sponsor, this 
          bill is urgently needed in order to meet federal deadlines.  In 
          addition, the sponsor points out that the inability to secure 
          contractors in a timely fashion has led to missed opportunities, 
          such as participation in a collaborative outreach effort that 
          would have leveraged resources and funding from other 
          participating entities. 

           Analysis Prepared by  :    Marjorie Swartz / HEALTH / (916) 

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