BILL ANALYSIS Ó
AB 72
Page 1
Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
72 (Bonta) - As Introduced December 18, 2014
-----------------------------------------------------------------
|Policy |Health |Vote:|18 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: Yes State Mandated Local Program: NoReimbursable: No
This bill requires the Department of Health Care Services (DHCS)
to submit an application to the federal Centers for Medicare and
Medicaid Services (CMS) for a waiver to implement a specified
demonstration project related to the Medi-Cal program.
The bill is vague as to the requirements of the waiver, but
AB 72
Page 2
specifies the department shall implement the waiver or
demonstration project only upon submittal of an implementation
plan to the appropriate policy and fiscal committees of the
Legislature at least 60 days prior to any appropriation. It
also requires DHCS to consult with stakeholders.
FISCAL EFFECT:
This bill in its current form does not result in additional
state costs.
DHCS is currently incurring staff and in-kind costs for
development of a "Section 1115 Waiver," so called for the
section of federal law that provides CMS broad authority to
waive provisions of federal Medicaid law to seek improved
outcomes. Private foundations have committed about $650,000,
and about $250,000 in federal matching funds are likely
available for these purposes. Foundations are also funding
additional consulting work related to waiver development.
If the bill is amended to include specific waiver provisions,
such provisions are likely to have significant fiscal effects.
COMMENTS:
AB 72
Page 3
1)Purpose. According to the author, this bill is one of two
legislative vehicles to make statutory changes necessary to
implement a new Section 1115 Medicaid waiver, and contains
important Legislative notification and stakeholder
consultation requirements. The waiver renewal is critical to
the long-term fiscal sustainability of the Medi-Cal program
and to California's ability to continue to provide high
quality health care to Medi-Cal beneficiaries. Specific
strategies anticipated for inclusion are: a federal-state
shared savings initiative; housing and supportive services for
vulnerable populations; health plan and provider delivery
system transformation and alignment incentive programs,
including a new Delivery System Reform Incentive Payment
program (DSRIP) at designated public hospitals and
non-designated public hospitals; workforce development
strategies to expand provider access and capacity; and safety
net payment and delivery system transformation.
2)Background. Section 1115 of the Social Security Act gives the
federal Secretary of Health and Human Services authority to
waive certain federal rules in order to allow states to expand
eligibility, improve services, enhance delivery systems, and
receive federal reimbursement for activities that are normally
not eligible for reimbursement. Authority for the current
1115 waiver, titled "A Bridge to Reform," expires October 31,
2015. This waiver included a number of initiatives to prepare
the state for implementation of the federal Affordable Care
Act, including mandatory enrollment of additional Medi-Cal
populations into managed care, early expansion of Medi-Cal at
local option called the Low-Income Health Program (LIHP), a
DSRIP program that provided over $3 billion in federal
matching funds for quality improvement at public hospitals,
and federal matching funds for certain state health programs
that were otherwise ineligible for matching funds. The new
waiver, titled "Medi-Cal 2020" is currently under development.
After months of stakeholder input, DHCS submitted a concept
paper to CMS on March 27, 2015.
AB 72
Page 4
1)Related Legislation. SB 36 (Ed Hernandez) is nearly identical
to this bill. SB 36 is pending in the Senate Appropriations
Committee.
AB 1432 (Bonta), also being heard today in this committee, is
similar to this bill, but requires DHCS to submit a waiver
application specific to substance use and co-occurring
disorders.
2)Prior Legislation. Prior legislation has implemented
components of the 2010 Bridge to Reform Waiver, including the
following:
c) AB 342 (John A. Pérez), Chapter 723, Statutes of 2010
enacted the LIHP.
d) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
implemented provisions related to the DSRIP for public
hospital quality improvement, mandatory enrollment in
managed care, and authorized pilot projects to test new
approaches to the California Childrens' Services (CCS)
program.
e) AB 1066 (John A. Pérez), Chapter 86, Statutes of 2011,
enacts funding provisions for public hospitals.
AB 72
Page 5
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081