BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1081| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1081 Author: Fuller (R) Amended: 5/7/12 Vote: 27 - Urgency SENATE HEALTH COMMITTEE : 8-0, 3/28/12 AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee, De León, Rubio, Wolk NO VOTE RECORDED: DeSaulnier SENATE APPROPRIATIONS COMMITTEE : 7-0, 4/30/12 AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price, Steinberg SUBJECT : Public health care: Medi-Cal: demonstration projects SOURCE : District Hospital Leadership Forum DIGEST : This bill allows a non-designated public hospital (hospitals owned by a local health care district) to operate an approved Low Income Health Program (LIHP) if it is located in a county that does not have a designated public hospital and does not intend to operate an LIHP. Senate Floor Amendments of 5/7/12 clarify that it is the intent of the Legislature that if a nondesignated public hospital (NDHP) submits an application pursuant to this bill, that the hospital is required to establish a local stakeholder advisory committee, as specified, to provide CONTINUED SB 1081 Page 2 input regarding the development, implementation, and operation of the local LIHP. ANALYSIS : Existing law: 1. Establishes the Medi-Cal program, which is administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. 2. Requires DHCS, pursuant to federal approval of a demonstration project, to authorize local LIHPs to provide health care services to eligible low-income individuals under certain circumstances. LIHPs are established at local option, and are authorized to cover individuals up to 200 percent of the federal poverty level (FPL) (200 percent of the FPL is at or below $22,340 for an individual in 2012). 3. Defines the entities authorized to operate an approved LIHP as follows: a county, a city and county, a consortium of counties serving a region of more than one county, or a health authority. This bill: 1. Expands the entities authorized to operate an LIHP by allowing a non-designated public hospital to operate an approved LIHP if it is located in a county that does not have a designated public hospital and does not intend to operate an LIHP. 2. Defines "non-designated public hospital" using the definition in existing Medic-Cal law. 3. Clarifies how a county that does not intend to operate an LIHP makes specified decision and under what time frame. 4. Clarifies that it is the intent of the Legislature that if a NDHP submits an application pursuant to this bill, that the hospital is required to establish a local CONTINUED SB 1081 Page 3 stakeholder advisory committee, as specified, to provide input regarding the development, implementation, and operation of the local LIHP. Background In 2010, the Legislature passed and Governor Schwarzenegger signed into law AB 342 (John A. Pérez), Chapter 723, Statutes of 2010, and SB 208 (Steinberg), Chapter 714, Statutes of 2010, a two-bill package to implement a new federal demonstration project entitled California's "Bridge to Reform." AB 342 authorized the LIHPs (originally called Coverage Expansion and Enrollment Demonstration) that built upon the Health Care Coverage Initiatives (HCCIs) established under the 2005 demonstration project. Under the 2005 waiver, a total of $180 million in federal funds were allotted annually to the county-based HCCIs in years three, four, and five of the 2005 waiver (September 1, 2007 through August 31, 2010) to provide coverage to medically-indigent adults who are not eligible for other public programs. AB 342 extended the 10 "legacy" HCCIs funded under the 2005 demonstration project, and authorized the expansion of the HCCIs statewide using an early implementation option created by the federal health care reform bill (the Patient Protection and Affordable Care Act or ACA). The ACA requires states, by January 1, 2014, to cover adults under age 65 and with family incomes up to 138 percent of the FPL (at or below $15,414 in 2012) in their Medicaid program. Under the ACA, states have the option of drawing down federal funds for early implementation of this provision. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Unknown, but likely minor, state costs. All state costs to be fully reimbursed by participating non-designated public hospitals. Additional local government reimbursements up to $2.7 million (federal funds). CONTINUED SB 1081 Page 4 SUPPORT : (Verified 5/7/12) District Hospital Leadership Forum (source) Alameda Hospital Antelope Valley Hospital Coalinga Regional Medical Center Hazel Hawkins Memorial Hospital Hi-Desert Memorial Health Care District Lompoc Valley Medical Center Marin General Hospital Palomar Health Salinas Valley Memorial Healthcare System San Benito Health Care District San Bernardino Mountains Community Hospital District Association of California Healthcare Districts Kaweah Delta Health Care District Tri-City Medical Center Western Center on Law & Poverty ARGUMENTS IN SUPPORT : This bill is sponsored by the District Hospital Leadership Forum (DHLF), which represents California's health care district-operated acute-care hospitals, to allow a public district hospital to become an LIHP contractor in counties that are both without a county hospital and are not interested in becoming an LIHP contractor. DHLF states that while public district hospitals can negotiate with an LIHP contractor to participate in an LIHP provider network, they cannot become an LIHP contractor under the implementing legislation. DHLF states this restricts the flow of these federal dollars to California and limits access to care for uninsured Californians in counties that are without a county hospital and that are not interested in becoming an LIHP contractor. DHLF concludes that allowing district hospitals to act as an LIHP contractor will result in expanded coverage to more areas in California without a cost to the state General Fund CTW:do 5/8/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE CONTINUED SB 1081 Page 5 **** END **** CONTINUED