BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 147 (Hernandez) - Federally qualified health centers
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|Version: April 21, 2015 |Policy Vote: HEALTH 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 4, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 147 would require the Department of Health Care
Services to authorize a three-year pilot project, under which
federally qualified health centers would receive capitated
monthly payments from Medi-Cal managed care plans in lieu of
wrap-around payments from Medi-Cal for individual visits.
Fiscal
Impact:
Likely costs of $450,000 per year for one to two years to
develop the pilot project and apply for federal approval of
the pilot project (General Fund and federal funds).
One-time costs of $150,000 to $300,000 to prepare an
evaluation of the pilot project (private funds).
SB 147 (Hernandez) Page 1 of
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Unknown potential additional tax revenues to the state
(General Fund). The state imposes a tax on Medi-Cal managed
care organizations. To the extent that payments for services
provided in federally qualified health centers shift from
direct payments from the Department of Health Care Services to
capitated payments made to managed care plans (who would then
provide capitated payments to centers), the bill will increase
managed care plan revenues and subsequent tax revenues. The
size of this impact will depend on the scale of the pilot
project.
Background: Under current law, the Medi-Cal program provides health care
coverage for certain low income and disabled individuals.
In the Medi-Cal fee-for-service system, federally qualified
health centers are paid a per-visit payment known as the
prospective payment system (PPS). The PPS rate is based on a
baseline rate that reflects a federally qualified health
center's costs to provide services in 1999-2000, adjusted for
inflation. When a Medi-Cal beneficiary in the managed care
system receives care from a federally qualified health center,
the managed care plan makes a per-visit payment to the center.
Because the rates paid by managed care plans are significantly
below the PPS rate, the state makes a supplemental "wrap-around"
payment to the federally qualified health center to bring the
total payment up to the PPS rate.
In the 2012-13 Governor's Budget Proposal, the administration
proposed a new method to make payments to federally qualified
health centers, based on a capitated payment structure. The
proposal would have also given greater flexibility to federally
qualified health centers to provide services in new ways. The
Legislature rejected that proposal.
Proposed Law:
SB 147 would require the Department of Health Care Services to
authorize a three-year pilot project, under which federally
qualified health centers would receive capitated monthly
payments from Medi-Cal managed care plans in lieu of wrap-around
payments from Medi-Cal for individual visits.
Specific provisions of the bill would:
SB 147 (Hernandez) Page 2 of
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Require the Department of Health Care Services to develop
an alternate payment methodology pilot project for federally
qualified health centers, beginning no sooner than July 1,
2016;
Require the pilot to be implemented in any county and any
federally qualified health center willing to participate;
Require any participating federally qualified health center
to receive capitated monthly payments from Medi-Cal managed
care plans for Medi-Cal enrollees whose care is covered by
the pilot program, in lieu of wrap-around payments from the
Department;
Require the pilot to include financial protections for both
the participating federally qualified health centers and
managed care plans;
Require an evaluation of the pilot, to be funded with
non-state funds;
Require the Department to seek all necessary federal
approvals.
Related
Legislation:
AB 690 (Wood) would add marriage and family therapists to
the list of providers for which FQHCs and RHCs can bill
Medi-Cal. That bill will be heard in the Assembly
Appropriations Committee.
AB 858 (Wood) would require Medi-Cal reimbursement to FQHCs
and RHCs for two visits taking place on the same day, under
certain circumstances. That bill will be heard in the
Assembly Appropriations Committee.
SB 1081 (Hernandez, 2014) was substantially similar to this
bill. That bill was held on this committee's Suspense File.
Staff
Comments: Under current law, the state imposes a 3.9% tax on
Medi-Cal managed care plans, which is used to draw down federal
funding and support the Medi-Cal program. Recent federal
guidance indicates that the state's existing tax on Medi-Cal
managed care plans is not allowed under federal rules, because
it does not apply to managed care plans in general. The Governor
has proposed to replace the existing tax with a tax on all
managed care plans. By spreading the tax burden across all
managed care plans, which the federal guidance would require to
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some degree, any revised managed care tax would likely generate
less tax revenue from Medi-Cal managed care plans than is
currently the case.
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