BILL ANALYSIS Ó
AB 1568
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CONCURRENCE IN SENATE AMENDMENTS
AB
1568 (Bonta and Atkins)
As Amended June 2, 2016
2/3 vote. Urgency
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|ASSEMBLY: | 80-0 | May 31, 2016 |SENATE: | 36-0 | June 23, 2016 |
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Original Committee Reference: HEALTH
SUMMARY: Enacts the Medi-Cal 2020 Demonstration Project Act
(Medi-Cal 2020 / Demonstration Project), administered by the
Department of Health Care Services (DHCS) which implements the
Special Terms and Conditions (STCs) approved by the federal
Centers for Medicare and Medicaid Services, including the Dental
Transformation Initiative (DTI), the Whole Person Care (WPC)
program and the evaluations required under the STCs. Requires
the DHCS to conduct or arrange to have conducted studies,
reports and assessments required under the STCs. Makes the
operation of this bill contingent upon the enactment of SB 815
(Hernandez and De León) of the current legislative session.
The Senate amendments require DHCS to implement the WPC and DTI
provisions of Medi-Cal 2020, and conduct the studies, reports,
and assessments required by the STCs.
FISCAL EFFECT: According to the Senate Appropriations
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Committee, the following information represents the fiscal
impact of the entire Section 1115 waiver. Although this bill
contains only a portion of the implementing language for the new
waiver, this bill is contingent on SB 815 and the federal
government has approved Medi-Cal 2020 as a single waiver.
Therefore, the fiscal information below reflects the complete
fiscal impact of the waiver.
Over the course of the five-year waiver period, the state will
be able to access at least $6.2 billion in additional federal
funding that the state would not be eligible for without the
waiver. The state is eligible for the additional funding under
the waiver for two primary reasons. First, the state's
continuing use of Medi-Cal managed care reduces costs relative
to the alternative fee-for-service system. The federal
government will allow the state to use a portion of those
projected savings for waiver programs. Second, the federal
government will allow the state draw down federal matching funds
for certain "state only" health care programs that are not
currently eligible for federal funding. The General Fund
savings from receiving those additional federal funds will be
redirected to a specific waiver program.
The following are the major elements of Medi-Cal 2020. Note
that the funding amounts are for the five-year waiver period,
unless otherwise noted.
1)PRIME - $3.7 billion (federal funds). The Public Hospital
Redesign and Incentives in Medi-Cal (PRIME) program authorizes
federal matching funds to make incentive payments to
Designated Public Hospitals and District/Municipal Public
Hospitals in order to improve care delivery and strengthen
their ability to take on risk-based payments.
2)Global Payment Program - at least $236 million (federal
funds). The Global Payment Program restructures the
distribution of federal funding for uncompensated care. This
includes disproportionate share hospital (DSH) funding to
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designated public hospitals (excluding University of
California (UC) hospitals) in order to incentivize
improvements in care delivery and provision of care in
appropriate settings. Medi-Cal 2020 maintains the DSH funding
methodology for other hospitals, with DSH funding for UC
hospitals capped by fiscal year. The $236 million in federal
funding is only for the first year of the waiver. Additional
funding in subsequent years will be determined based on future
uncompensated care. Also, the figures above do not include
existing DSH funding of about $5.9 billion in federal funds
over the waiver period.
3)Dental Transformation Initiative - $375 million (federal
funds). The DTI permits incentive payments to qualified
dental providers to improve dental care and utilization among
children enrolled in Medi-Cal. The state share of funding for
this program is provided through the redirection of existing
General Fund support for specific state only health care
programs which will be eligible for federal matching funds
under the waiver.
4)Designated State Health Programs - $375 million (federal
funds). The waiver authorizes the state to access federal
matching funds for several existing health care programs that
are currently funded only with state and local funds. By
making these programs eligible for federal matching funds, the
waiver frees up state funding to support the DTI and to draw
down federal matching funds.
5)WPC - $1.5 billion (federal funds). This program allows
participating lead entities (primarily counties) to claim
federal matching funds for efforts to coordinate health,
behavioral health, and social services for high-risk Medi-Cal
beneficiaries who are high-utilizers of health care services.
Federal matching funds will be available for a variety of
social services and supports that are not eligible for federal
matching funds absent the waiver.
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DHCS has requested additional administrative funding to oversee
Medi-Cal 2020 of $34 million over the five-year waiver period,
including $11 million in the Budget Year (General Fund and
federal funds).
COMMENTS: According to the author, this bill is needed to
provide the statutory framework for implementation of "Medi-Cal
2020." While the STCs outline the programmatic and financing
elements of Medi-Cal 2020, state law changes are required, to
appropriate funds for the waiver-related WPC provisions, to
enable data sharing as part of WPC projects, and to codify the
provisions of the STCs establishing the DTI and the WPC. In
addition, this bill would require DHCS to conduct or contract
for the waiver-required evaluations. This bill is a companion
measure to SB 815.
Analysis Prepared by:
Rosielyn Pulmano / HEALTH / (916) 319-2097 FN:
0003524