BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 36|
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UNFINISHED BUSINESS
Bill No: SB 36
Author: Hernandez (D) and De León (D), et al.
Amended: 9/4/15
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE: 9-0, 4/8/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 4/20/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE HEALTH COMMITTEE: 9-0, 9/11/15 (pursuant to Senate Rule
29.10)
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE FLOOR: 35-0, 4/27/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock,
Hernandez, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu,
McGuire, Mendoza, Mitchell, Monning, Morrell, Nguyen, Nielsen,
Pan, Roth, Runner, Stone, Wieckowski, Wolk
NO VOTE RECORDED: Hertzberg, Moorlach, Pavley, Vidak
ASSEMBLY FLOOR: Not available
SUBJECT: Medi-Cal: demonstration project
SOURCE: Author
DIGEST: 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
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provided under, the current "California Bridge to Reform
Demonstration," the state's Section 1115 Medicaid waiver. This
bill 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.
Assembly Amendments delete the Senate-approved dealing with a
new Section 1115 Medicaid waiver, with the exception of the
urgency clause, and instead insert the provisions described in
the summary above.
ANALYSIS:
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
University of California and county hospitals), and for
federal disproportionate share (DSH), payments to private
hospitals (referred to as "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
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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 (NDPHs 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.
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
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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)Takes effect immediately as an urgency statute.
Comments
1)Author's statement. According to the author, this bill is
needed because the current Section 1115 Medicaid waiver known
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as California Bridge to Reform 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 will 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 the Patient Protection
and Affordable Care Act through the Low Income Health
Program, which enrolled 650,000 individuals;
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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 DPH 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).
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
Unknown with latest amendments.
SUPPORT: (Verified9/8/15)
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
OPPOSITION: (Verified9/8/15)
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None received
ARGUMENTS IN 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 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.
Prepared by: Scott Bain / HEALTH /
9/11/15 19:32:06
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