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 ----------------------------------------------------------------- |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have a designated public hospital if the county has previously filed an application to operate a LIHP but has formally withdrawn the application.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 Page 2 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 Page 3 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 FN: 0004916