BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1081
                                                                  Page  1

          SENATE THIRD READING
          SB 1081 (Fuller)
          As Amended August 20, 2012
          2/3 vote. Urgency

           SENATE VOTE  :37-0  
           
           HEALTH              19-0        APPROPRIATIONS      17-0        
           
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          |Ayes:|Monning, Logue, Ammiano,  |Ayes:|Fuentes, Harkey,          |
          |     |Atkins, Bonilla, Eng,     |     |Blumenfield, Bradford,    |
          |     |Garrick, Gordon, Hayashi, |     |Charles Calderon, Campos, |
          |     |Roger Hernández,          |     |Davis, Donnelly, Gatto,   |
          |     |Bonnie Lowenthal,         |     |Hall, Hill, Lara,         |
          |     |Mansoor, Mitchell,        |     |Mitchell, Nielsen, Norby, |
          |     |Nestande, Pan,            |     |Solorio, Wagner           |
          |     |V. Manuel Pérez, Silva,   |     |                          |
          |     |Smyth, Williams           |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Authorizes nondesignated public hospitals (NDPH), 
          which are hospitals owned by a local health care district, to 
          operate a Low Income Health Program (LIHP) in a county that does 
          not have a designated public hospital if the county has 
          previously filed an application to operate a LIHP but has 
          formally withdrawn the application.  Specifically,  this bill  : 

          1)Requires the NDPH to provide the application to the county at 
            the same time it is provided to the Department of Health Care 
            Services (DHCS).

          2)Requires DHCS to consider the application if the county does 
            not indicate within 30 days that it will proceed by rescinding 
            the withdrawal of the application.  

          3)Requires DHCS to seek any necessary federal approvals.

          4)States legislative intent that any NDPH that submits an 
            application initially establish a local stakeholder advisory 
            committee as specified.  

          5)Contains an urgency clause to ensure that the provisions of 
            this bill go into immediate effect upon enactment. 









                                                                  SB 1081
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           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee,

          1)Minor administrative costs to DHCS to seek federal approval 
            for this change and review applications from hospitals to 
            operate LIHPs.  These administrative costs are funded by 50% 
            federal funds, 50% local funds from participating entities.  
            Given the short time frame and unique circumstances, only one 
            county (Tulare County) is expected to apply pursuant to this 
            bill.   

          2)If an NDPH operated a LIHP pursuant to this bill, local funds 
            for health care services would also be matched by new federal 
            funds.  According to the District Hospital Leadership Forum, 
            the sponsor of this bill, this could result in an estimated 
            increase in federal funds in Tulare County of $2.7 million.   

           COMMENTS  :  According to the author, this bill is needed in order 
          to modify the special terms and conditions (STCs) of the 2010 
          Section 1115 Medi-Cal Demonstration/Pilot Project Waiver, 
          entitled "A Bridge to Reform" to allow a public district 
          hospital to become a Medicaid Coverage Expansion (MCE)-LIHP 
          contractor in counties that are both without a county hospital 
          or are not interested in becoming a LIHP contractor.  The author 
          argues that expanding coverage to more areas in California will 
          ensure that the stated goals of the MCE can be achieved 
          throughout all of California without a cost to the state General 
          Fund allowing for additional federal dollars to be received in 
          California.  Currently, while an NDPH can negotiate with a 
          MCE-LIHP contractor to participate in a LIHP network, they 
          cannot become an MCE-LIHP contractor.  The waiver STCs and 
          implementing legislation specifically limit the LIHP contractor 
          applicant to either be a county, city and county, health 
          authority or consortium of counties serving a region.  These 
          restrictions limit California's ability to take full advantage 
          of these uncapped federal dollars.  Public district hospitals 
          are the only public health care entities that cannot contract 
          directly, creating a barrier restricting the flow of these 
          federal dollars to California.  There are circumstances where an 
          NDPH would like to be a LIHP network provider, but the county 
          chooses not to participate in the program, thus prohibiting the 
          district's ability to participate without being the contractor.

          As of April 2012, LIHP enrollment was 384,000.  This includes 
          the enrollment in the 10 legacy Health Care Coverage Initiative 








                                                                  SB 1081
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          counties from the 2005 waiver.  Originally voluntary letters of 
          intent to participate had been received from all 58 counties, 
          the City of Pasadena, and 12 California Rural Indian Health 
          Board (CRIHB) programs in 11 counties.  Thirty-four of the 
          counties are participating through the County Medical Services 
          Program (CMSP) which provides medical and dental care to 
          indigent adults in 34 small and rural counties but is 
          administered through DHCS.  As of April 2012, in addition to the 
          CMSP counties and the 10 legacy counties, three additional 
          counties have implemented LIHPs.  Seven counties have 
          implementation dates between June 1, 2012, and August 1, 2012.  
          Two counties, Fresno and San Luis Obispo, have withdrawn their 
          applications.  Three applications are pending (Tulare, Santa 
          Barbara and CRIHB).  

          According to the sponsor, this bill is intended to apply to 
          Tulare County.  Tulare County has engaged a consulting firm to 
          determine whether a LIHP is viable for the county or not.  The 
          report has not yet been submitted to the county and the Board of 
          Supervisors has not yet noticed the item for the Board agenda.  
          If the Board decides not to move forward, the three NDPHs in the 
          county will submit an application.  This bill states legislative 
          intent that the hospital initially establish a local stakeholder 
          committee comprised of health plans, community health centers, 
          consumers and other interested stakeholders to provide input 
          regarding the development, implementation, and operation of the 
          LIHP.  This was added in response to concerns raised by the 
          community clinics and others that the hospital district may have 
          little or no prior experience providing primary care services to 
          the population that a LIHP would serve.  


           Analysis Prepared by  :    Marjorie Swartz / HEALTH / (916) 
          319-2097 


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