BILL ANALYSIS Ó SB 36 Page 1 SENATE THIRD READING SB 36 (Hernandez and De León) As Amended September 4, 2015 2/3 vote. Urgency SENATE VOTE: Vote not relevant ----------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+-------------------| |Health | | | | | | | | | |(vote not | | | | |relevant) | | | | | | | | | |----------------+-----+----------------------+-------------------| |Appropriations | | | | | | | | | |(vote not | | | | |relevant) | | | | | | | | | |----------------+-----+----------------------+-------------------| |Health |18-0 |Bonta, Maienschein, | | | | |Bonilla, Burke, | | | | |Chávez, Chiu, Gomez, | | | | |Gonzalez, Lackey, | | | | |Nazarian, Patterson, | | SB 36 Page 2 | | |Ridley-Thomas, | | | | |Rodriguez, Santiago, | | | | |Steinorth, Thurmond, | | | | |Waldron, Wood | | | | | | | | | | | | ----------------------------------------------------------------- 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, SB 36 Page 3 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 SB 36 Page 4 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. SB 36 Page 5 5)Opposition. There is no known opposition on file. Analysis Prepared by: Roger Dunstan / HEALTH / (916) 319-2097 FN: 0002342