BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1339 (Canella) - Medi-Cal: Drug Medi-Cal Program providers.
Amended: April 29, 2014 Policy Vote: Health 8-0
Urgency: No Mandate: No
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE. AS AMENDED.
Bill Summary: SB 1339 would require the Department of Health
Care Services or a county to obtain a criminal background check
for the owner and medical director of a Drug Medi-Cal provider
prior to entering into a contract.
Fiscal Impact (as approved on May 23, 2014):
One-time costs up to $140,000 for initial background checks
by the Department of Justice (private funds) and minor costs
ongoing. There are about 1,000 active Drug Medi-Cal
providers and the cost for a background check is $65. After
the initial round of background checks, ongoing costs to
perform background checks should be minor for new providers
or new medical directors.
Likely administrative costs up to $75,000 in the first year
to coordinate background checks with Drug Medi-Cal providers
and the Department of Justice by the Department of Health
Care Services (General Fund and federal funds).
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with low incomes, as well as blind, disabled, and
certain other populations. Generally, the federal government
provides a 50 percent federal match for state Medi-Cal
expenditures.
The federal Affordable Care Act allows states to expand Medicaid
(Medi-Cal in California) eligibility to individuals with income
up to 138 percent of the federal poverty level. California has
opted to expand eligibility for Medi-Cal up to 138 percent of
the federal poverty level. The Affordable Care Act provides a
significantly enhanced federal match for the expansion. Under
SB 1339 (Cannella)
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the law, the federal government will pay for 100 percent of the
cost of the expansion in 2013-14 declining to a 90 percent
federal match in the 2020 federal fiscal year and thereafter.
With the exception of certain populations (for example,
individuals eligible for limited scope Medi-Cal benefits or
individuals dually eligible for Medi-Cal and Medicare in most
counties), managed care is the primary system for providing
Medi-Cal benefits. The Department estimates that in 2014-15, 7.5
million Medi-Cal beneficiaries (73 percent of total enrollment)
will receive care through the managed care system.
Drug Medi-Cal, which is the package of benefits related to
substance use disorders, has been "carved out" of managed care.
Drug Medi-Cal is a benefit provided by the counties using
realignment funds. However, counties are only responsible for
the costs to provide the benefits that were authorized prior to
January 1, 2014.
Under current law, any provider to the fee-for-service Medi-Cal
program must enroll with the Department of Health Care Services,
whether the provider bills the state or a local government for
Medi-Cal services. The Department reviews the application for
enrollment, but only conducts criminal background checks on
providers deemed high risk (for example providers who have
previously been suspended from the program or who are in a
certain class of provider). In addition, a provider that wishes
to provide Drug Medi-Cal services in a county must contract with
either the county or the Department before providing services.
Proposed Law: SB 1339 would require the Department of Health
Care Services or a county to obtain a criminal background check
for the owner and medical director of a prospective Drug
Medi-Cal provider prior to entering into a contract.
The bill provides that a provider shall not be excluded from
participation in Medi-Cal solely based on the existence of a
criminal record by the owner or medical director.
Related Legislation:
AB 1664 (Medina) would require Drug Medi-Cal providers to
be designated as high risk. That bill is pending in the
Assembly Appropriations Committee.
AB 1967 (Pan) would require the Department to notify a
SB 1339 (Cannella)
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county that contracts with a Drug Medi-Cal provider if the
Department has commenced an investigation of the that
provider. That bill is pending in the Assembly
Appropriations Committee.
Committee amendments: require the subject of the background
check to pay for the background check.