BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 36
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|AUTHOR: |Hernandez |
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|VERSION: |September 4, 2015 |
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|HEARING DATE: |September 11, | | |
| |2015 | | |
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|CONSULTANT: |Scott Bain |
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PURSUANT TO SENATE RULE 29.10
SUBJECT : Medi-Cal: demonstration project.
SUMMARY : This bill 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. 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.
Existing law:
1)Establishes the Medi-Cal program, which is administered by
DHCS and under which qualified low-income persons receive
health care benefits.
2)Establishes a Medicaid Section 1115 demonstration project
under the Medi-Cal program until October 31, 2015 known as
California's Bridge to Reform, to implement specified
objectives, including better care coordination for Seniors and
Persons with Disabilities (SPDs) and maximization of
opportunities to reduce the number of uninsured individuals.
3)Provides for payments under the Bridge to Reform under the
"Medi-Cal Hospital/Uninsured Care Demonstration Project Act"
to designated public hospitals (DPHs are the approximately 20
UC and county hospitals), and for federal disproportionate
share (DSH), payments to private hospitals (referred to as
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"DSH replacement payments") and non-designated public
hospitals (NDPHs are district hospitals) through October 1,
2015. These provisions:
a) Make DPHs eligible for cost-based
fee-for-service Medicaid funding using certified
public expenditures (CPEs) as the federal match,
instead of state General Fund. DPHs put up the
nonfederal share of Medi-Cal fee-for-service payments
used to draw down federal Medicaid matching funds, and
receive cost-based reimbursement, using CPEs to draw
down federal Medicaid matching funds;
b) Provide DSH payments to DPHs, using CPEs and
intergovernmental transfers (IGTs) to draw down
federal DHS funds;
c) Provide DSH payments to eligible
non-designated public hospitals (NDPH are primarily
district hospitals) meeting DSH eligibility criteria,
using state General Fund to draw down federal DSH
funds;
d) Provide for "DSH replacement payments" to
private hospitals meeting DSH eligibility criteria,
using non-DSH Medicaid funds and state General Fund as
the fund source;
e) Make DPHs eligible for payments from the
federally funded Safety Net Care Pool (SNCP) for
uncompensated care; and,
f) Make DPHs eligible for payments from the
federally funded delivery system reform incentive pool
(DSRIP), based on the DPH's progress toward and
achievement of milestones and metrics established in
its DSRIP proposal, funded by federal funds and IGTs.
This bill:
1)Permits the director of DHCS to request one or more temporary
waiver extensions, as necessary to continue the operation of,
and the authorities provided under, the current "California
Bridge to Reform Demonstration" waiver until the approved
effective date of the next waiver, if DHCS has not received
adequate assurances from the federal Centers for Medicare and
Medicaid Services (CMS) before November 1, 2015, that DHCS's
application for a subsequent waiver is likely to be approved
with an effective date of November 1, 2015.
SB 36 (Hernandez) Page 3 of ?
2)Requires DHCS, after consulting with the affected DPHs, to
extend and apply the payment methodologies and allocations in
the existing "Medi-Cal Hospital/Uninsured Care Demonstration
Project Act" that are in effect under the current waiver, on a
state fiscal year, annual, partial year, or other basis.
3)Requires the extension and application of the current payment
methodologies and allocations to be consistent with any
applicable implementing provisions of the Medi-Cal state plan
and requirements imposed by CMS.
4)Implements the provisions in 2) and 3) above to the extent
permitted under the terms of any approved temporary waiver
extension obtained by DHCS, an approved subsequent waiver, or
as otherwise permitted under federal Medicaid law.
5)Permits DHCS to make payments on an interim basis, subject to
reconciliation to amounts payable under the payment and
allocation methodologies in any approved temporary extension
obtained by DHCS under this bill, or under an approved
subsequent waiver.
6)Implements this bill only to the extent that any necessary
federal approvals are obtained and federal financial
participation is available and is not jeopardized.
7)Requires, until July 1, 2016, in the event of a conflict
between the terms of any federally approved waiver extension
obtained by DHCS and the provisions of the "Medi-Cal
Hospital/Uninsured Care Demonstration Project Act," the terms
of the federally approved temporary extension to control.
Requires DHCS to provide notice of the conflict to the
appropriate policy and fiscal committees of the Legislature.
8)Permits DHCS to implement, interpret, or make specific this
bill by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions without taking
regulatory action until July 1, 2016.
9)Would take effect immediately as an urgency statute.
FISCAL
EFFECT : This current version of the bill has not been analyzed
by a fiscal committee.
SB 36 (Hernandez) Page 4 of ?
COMMENTS :
1)Author's statement. According to the author, According to the
author, this bill is needed because the current Section 1115
Medicaid waiver known as California Bridge to Reform Waiver
(Waiver) expires on October 31, 2015, but an agreement on a
subsequent waiver have not been agreed to by the state and the
federal government, and an agreement appears unlikely to be
reached before the Legislature adjourns on September 11, 2015
so that state law could be amended to incorporate the new
waiver-related funding provisions. This two-part bill would
bridge the gap between the current waiver and the new waiver
by allowing DHCS to request one or more temporary waiver
extensions, and by requiring DHCS to extend and apply the
current hospital payment methodologies and allocations in
effect under the current waiver on a state fiscal year,
annual, partial year, or other basis, to the extent allowed by
the federal government. The extension of the current hospital
financing methodologies would continue to provide essential
funding for safety net providers in the event of a delay in
completion of the next waiver and until state hospital
financing law is amended to determine the new DSH and
waiver-related funding provisions for private hospitals, NDPHs
and DPHs resulting from the next federal Section 1115 Medicaid
waiver.
2)Bridge to Reform Waiver. California's existing Section 1115
"California Bridge to Reform Demonstration" Waiver 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 and expires October 31, 2015. 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. The Bridge to Reform Waiver enabled California to:
a) Implement an early expansion of Medicaid to
low-income adults without minor children under ACA
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through the Low Income Health Program, which enrolled
650,000 individuals;
b) Require the mandatory enrollment of SPDs into
Medi-Cal managed care plans in specified counties;
c) Provide federal funding for delivery system reform
and uncompensated care in designated public hospital
systems (21 county and University of California
hospitals) through the DSRIP and SNCP;
d) Provided federal funding for designated state health
care programs and workforce development programs related
to medically disadvantaged service areas;
e) Operate its Medi-Cal managed care program,
Community-Based Adult Services program, and seven county
Coordinated Care Initiative (under the Initiative,
individuals dually eligible for Medicare and Medi-Cal
receive their Medi-Cal and Medicare benefits through one
health plan)..
3)Support. The California Association of Public Hospitals and
Health Systems (CAPH) writes in support that there is a chance
wavier negotiations could extend beyond October 31, 2015 when
the "Bridge to Reform" waiver expires. CAPH argues, in the
event of a delay, 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
states this bill includes two important provisions to allow
for continuity during these negotiations. These provisions
grant DHCS the authority to extend the existing waiver and
make waiver expenditures in the case of a delay, as many other
states have experienced delays in renewing their waivers due
to the time it can take the federal government to complete a
Section 1115 waiver negotiation. In addition, this bill
requires the continuation of existing hospital funding
distribution methodologies in the event of a delay. While
waivers make certain payment streams available, state law
specifies how those funds must be distributed amongst
providers. As such, if there are any delays in renewing the
waiver, there would be no new guidance for how to distribute
DSH and SNCP payments to public and private hospitals, and
SNCP payments to public hospitals. This bill requires the
continued distribution of DSH and SNCP payments according to
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current methodologies in the event of a delay, which is
important to hospitals as the total federal funding for these
programs in the current waiver year is $1.2 billion in federal
DSH funds and $236 million in federal SNCP funds.
SUPPORT AND OPPOSITION :
Support: Association of California Health Care Districts
California Association of Public Hospitals and Health
Systems
California Hospital Association
California State Association of Counties
District Hospital Leadership Forum
Oppose: None received.
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