BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2213


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          Date of Hearing:  May 4, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2213 (Dahle) - As Amended March 18, 2016


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          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


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          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


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            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