BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      SB 36


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          SENATE THIRD READING


          SB  
          36 (Hernandez and De León)


          As Amended  September 4, 2015


          2/3 vote. Urgency


          SENATE VOTE:  Vote not relevant


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          |Committee       |Votes|Ayes                  |Noes               |
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          |                |     |                      |                   |
          |                |     |                      |                   |
          |----------------+-----+----------------------+-------------------|
          |Health          |     |                      |                   |
          |                |     |                      |                   |
          |(vote not       |     |                      |                   |
          |relevant)       |     |                      |                   |
          |                |     |                      |                   |
          |----------------+-----+----------------------+-------------------|
          |Appropriations  |     |                      |                   |
          |                |     |                      |                   |
          |(vote not       |     |                      |                   |
          |relevant)       |     |                      |                   |
          |                |     |                      |                   |
          |----------------+-----+----------------------+-------------------|
          |Health          |18-0 |Bonta, Maienschein,   |                   |
          |                |     |Bonilla, Burke,       |                   |
          |                |     |Chávez, Chiu, Gomez,  |                   |
          |                |     |Gonzalez, Lackey,     |                   |
          |                |     |Nazarian, Patterson,  |                   |








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          |                |     |Ridley-Thomas,        |                   |
          |                |     |Rodriguez, Santiago,  |                   |
          |                |     |Steinorth, Thurmond,  |                   |
          |                |     |Waldron, Wood         |                   |
          |                |     |                      |                   |
          |                |     |                      |                   |
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          SUMMARY:  Authorizes the Department of Health Care Services  
          (DHCS) to request one or more temporary waiver extensions to  
          continue the operation of, and the authorities provided under,  
          the current "California Bridge to Reform Demonstration," the  
          state's Section 1115 Medicaid waiver which is set to expire on  
          October 31, 2015.  Contains an urgency clause to ensure that the  
          provisions of this bill go into immediate effect upon enactment.  
           Specifically, this bill:  


          1)Requires DHCS to extend and apply the existing hospital  
            payment methodologies and allocations on a state fiscal year,  
            annual, partial year, or other basis, to the extent permitted  
            under any approved temporary waiver extension, an approved  
            subsequent waiver, or as otherwise permitted under federal  
            Medicaid law.


          2)Conditions the provisions of this bill on DHCS obtaining any  
            necessary federal approvals and continuing eligibility to  
            obtain federal matching funds.


          EXISTING LAW:  


       1)Establishes the Medi-Cal program to provide comprehensive health  
            benefits to low-income persons.
       2)Establishes a demonstration project under the Medi-Cal program  
            until October 31, 2015, to implement specified objectives,  








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            including better care coordination for Seniors and Persons  
            with Disabilities (SPDs) and increased opportunities to reduce  
            the number uninsured. 


          FISCAL EFFECT:  This bill, as amended, has not been analyzed by  
          a fiscal committee.


          





          COMMENTS:  


          1)Purpose.  According to the author, this bill bridges the gap  
            between the current Medicaid Section 1115 waiver which expires  
            October 31, 2015, and the new waiver by allowing DHCS to  
            request one or more temporary waiver extensions, and by  
            requiring DHCS to extend the current hospital payment  
            methodologies.  The author states a new waiver agreement has  
            not been reached between the state and federal government and  
            is unlikely to be reached before the Legislature adjourns on  
            September 11, 2015.  An extension of the current hospital  
            financing methodologies would continue to provide essential  
            funding for safety net hospitals in the event of a delay in  
            completion of the next waiver.


          2)Federal Section 1115 Waiver and Expenditure Authority.   
            Medicaid (Medi-Cal in California) is a joint federal-state  
            program to provide health coverage to low-income individuals.   
            Section 1115 of the federal Social Security Act gives the  
            Secretary of the Department of Health and Human Services (HHS)  
            authority to waive provisions of major health and welfare  
            programs.  This includes certain federal Medicaid requirements  








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            in any experimental pilot or demonstration project which, in  
            the judgment of the HHS Secretary, is likely to assist in  
            promoting the objectives of Medicaid.  In addition, Section  
            1115 also allows states to use federal Medicaid funds to  
            reimburse for costs in ways that are not otherwise allowed  
            under federal Medicaid law.  


          3)Bridge to Reform Waiver.  California's existing Section 1115  
            waiver, commonly called "the California Bridge to Reform  
            Demonstration," is a five-year demonstration of health care  
            reform initiatives that was projected to provide an additional  
            $10 billion in federal funds over the lifetime of the waiver.   
            The waiver prepared the state for successful implementation of  
            health care reform through an early expansion of Medicaid, and  
            tested innovations in health care support for safety net  
            providers. 


            California is currently in the fourth year of this waiver,  
            which began November 1, 2010.  Under the current waiver,  
            California is required to submit an extension request no later  
            than six months prior to the expiration date of the current  
            demonstration.  California also operates its Medi-Cal managed  
            care delivery system under this federal waiver.


          4)Support.  According to the California Association of Public  
            Hospitals (CAPH), in the event of a delay in negotiating a new  
            waiver, it is critical for the state to maintain existing  
            expenditure authority, in order to ensure that funds can  
            continue to flow to public safety net providers.  CAPH argues  
            this bill includes two important provisions to allow for  
            continuity during these negotiations.  The Association of  
            California Healthcare Districts argues in support because the  
            waiver extension will build on the priorities of the  
            association, which include access to care, workforce  
            development, expanding the use of telehealth and improving  
            mental health and substance use disorder treatment.








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          5)Opposition. There is no known opposition on file.




          Analysis Prepared by:                                             
                          Roger Dunstan / HEALTH / (916) 319-2097  FN:  
          0002342