BILL ANALYSIS Ó
AB 2213
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2213 (Dahle) - As Amended March 18, 2016
-----------------------------------------------------------------
|Policy |Health |Vote:|19 - 0 |
|Committee: | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Department of Health Care Services (DHCS)
and Office of Statewide Health Planning and Development (OSHPD)
to jointly develop and implement a three-year demonstration
program, whereby the data collected by DHCS and OSHPD from the
audits of non-designated public hospitals (NDPHs) for the cost
reporting periods beginning on and after July 1, 2016, is
evaluated for reimbursement relevancy.
It also requires DHCS and OSHPD to prepare and submit a report
to the Legislature that evaluates the effectiveness of the
three-year demonstration program and makes recommendations
AB 2213
Page 2
regarding continuing and expanding the project to all hospitals.
FISCAL EFFECT:
1)Costs of $350,000 (GF/potentially federal) annually for DHCS
staff costs to manage the project for the three-year life of
the demonstration and minor costs to OSHPD for consultation
and collaboration (Health Data and Planning Fund).
2)Unknown, potentially significant additional costs for training
and costs, information technology contract costs, or related
contract activities.
3)This bill does not make implementation contingent on federal
approval, and it's unknown if the federal Center for Medicare
and Medicaid Services (CMS) would approve a demonstration
project for amending the federal cost report form. If DHCS
does not obtain federal approval for the demonstration
project, the cost of implementation would be 100% GF with no
federal match.
COMMENTS:
1)Purpose. According to the author, the Medi-Cal cost report is
no longer needed as a reimbursement tool. Minimizing
reporting burden and streamlining reporting to what is useful
and necessary would benefit hospitals and the state. This bill
is sponsored by the District Hospital Leadership Forum, who
states it would reduce the administrative costs and burdens
associated with the outdated cost report process.
2)Background. Hospital reimbursement in Medi-Cal is complex, and
AB 2213
Page 3
how hospitals are paid depends on the status of the hospital
as designated public hospital (DPH), non-designated public
hospital (NDPH or district hospitals), and or a private
hospital. NDPHs recently converted to a Medi-Cal inpatient
reimbursement methodology called Diagnosis-Related Group
(DRG). The methodology takes into account the patient's
diagnosis, age, procedures performed, and discharge status.
Hospitals indicate that since the inception of the new
methodology, the Medi-Cal cost report is no longer used as a
reimbursement tool. This bill allows hospitals to work with
DHCS, OSHPD, and other stakeholders to determine the
appropriate data needed.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081