BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 72 (Bonta) - Medi-Cal: demonstration project
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: December 18, 2014 |Policy Vote: HEALTH 9 - 0 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: Yes |Mandate: No |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: August 17, 2015 |Consultant: Brendan McCarthy |
| | |
-----------------------------------------------------------------
This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: AB 72 would require the Department of Health Care
Services to submit an application to the federal government for
a Section 1115 waiver of federal law, to allow the state to make
changes to the operation of the Medi-Cal program for the period
of 2015 to 2020.
Fiscal
Impact: No new administrative costs to the Department of Health
Care Services are anticipated due to this bill. The Department
is currently in the process of developing a waiver application
and has been engaged in planning and stakeholder discussions
which will continue in 2015-16. Because the Department is
already undertaking these efforts this bill will not impose new
administrative duties on the Department.
Background: Under state and federal law, the Department of Health Care
Services operates the Medi-Cal program, which provides health
AB 72 (Bonta) Page 1 of
?
care coverage to low income individuals, families, and children.
The federal government provides matching funds that vary from 50
percent to 90 percent of expenditures depending on the category
of beneficiary.
Current federal law allows states to apply for "Section 1115
waivers" of requirements of the federal Social Security Act.
This process allows states, on a case by case basis, to make
changes to their Medicaid program with the approval of the
federal Centers for Medicare and Medicaid Services. In general,
for the federal government to approve a waiver, the state must
demonstrate that will assist in promoting the objectives of
Medicaid and that total federal costs will not exceed
fee-for-service equivalent costs to the federal government over
the period of the waiver, typically five years.
California's existing Section 1115 wavier, referred to as the
"Bridge to Reform Waiver" will expire in October 2015. The
existing wavier was designed to provide about $10 billion in
addition federal funding to the state to fund an early
implementation of the coverage expansion under the Affordable
Care Act and to invest in safety net health care programs. (The
additional federal funds were available due to cost savings
created through the use of Medi-Cal managed care to reduce per
beneficiary expenditures below what they would have been through
fee-for-service health care.)
The Department of Health Care Services has been engaged in the
process for developing a new Section 1115 waiver and has
submitted a preliminary proposal to the federal government.
Under that proposal, the state would be eligible for about $17
billion in additional federal funding to invest in innovative
programs, such as more comprehensive care for the uninsured
population, workforce development, and programs to transform
health care delivery systems.
Proposed Law:
AB 72 would require the Department of Health Care Services to
submit an application to the federal government for a Section
1115 waiver of federal law, to allow the state to make changes
to the operation of the Medi-Cal program for the period of 2015
to 2020.
The bill is an urgency measure.
AB 72 (Bonta) Page 2 of
?
Related
Legislation: SB 36 (Hernandez and de Leon) is almost identical
to this bill. That bill is pending in the Assembly
Appropriations Committee.
Staff
Comments: The intention in developing the new Section 1115
wavier is to allow the state to generate cost savings (chiefly
by using managed care to provide appropriate primary care and
preventative care to avoid costly hospitalizations) and to use a
portion of the projected cost savings to fund other state
programs, such as safety net programs for the uninsured
population. Based on preliminary analyses by the Department, the
state has indicated to the federal government that it will be
requesting about $17 billion in shared savings over the five
year waiver period from the federal government to support
additional waiver programs.
While this bill requires the Department to submit a waiver
application to the federal government, it does not specify the
programmatic requirements of such a waiver.
-- END --