BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 326 (Beall) - Courts:  penalties:  emergency services funding
          
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          |Version: February 23, 2015      |Policy Vote: HEALTH 8 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: April 20, 2015    |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.



          


          Bill  
          Summary:  SB 326 would eliminate the sunset on an existing  
          program that levies a $4 penalty assessment for Vehicle Code  
          violations and dedicates the resulting revenues to support  
          emergency air medical transportation services in the Medi-Cal  
          program.


          Fiscal  
          Impact:  
           Penalty revenues of $11 million to $13 million per year  
            (Emergency Medical Air Transportation Act Fund).

           Minor administrative costs to process payments (Emergency  
            Medical Air Transportation Act Fund).

           Reduced General Fund expenditures of $2 million to $3 million  







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            per year for Medi-Cal payments, by using penalty revenues to  
            offset General Fund expenditures for emergency air ambulance  
            services for Medi-Cal beneficiaries.

           Annual expenditures of $18 million to $22 million per year for  
            supplemental payments to private emergency air medical service  
            providers (Emergency Medical Air Transportation Act Fund and  
            federal funds).


          Background:  Under state and federal law, the Department of Health Care  
          Services operates the Medi-Cal program, which provides health  
          care coverage to low income individuals, families, and children.  
          The federal government provides matching funds that vary from 50  
          percent to 90 percent of expenditures depending on the category  
          of beneficiary.

          Under current practice, when private emergency air ambulance  
          services provide service to Medi-Cal beneficiaries, they are  
          paid through the Medi-Cal fee-for-service system (even if a  
          beneficiary is enrolled in a Medi-Cal managed care plan). The  
          operators of air ambulance services have maintained that the  
          rates paid by Medi-Cal are substantially below their operating  
          costs. Unlike many health care providers, air ambulance  
          providers do not have the option to decide whether or not to  
          accept Medi-Cal patients, given the nature of emergency response  
          situations. (Public agencies operate air ambulances as well.  
          However, because these public agencies generally do not use  
          civilian aircraft that meet federal rules for participation in  
          Medicaid, public agencies have been unable to bill Medi-Cal for  
          emergency air ambulance services provided to Medi-Cal  
          beneficiaries.)

          AB 2173 (Beall, Statutes of 2010) levied an additional $4  
          penalty assessment on Vehicle Code violations (except parking  
          tickets). Under that law, after accounting for administrative  
          costs, the state retains 20 percent of resulting revenues to  
          offset state General Fund expenditures for emergency air  
          ambulance services. The remaining revenues are matched with  
          federal matching funds and then provided to private emergency  
          air ambulance services as supplemental payments, to offset some  
          of the losses incurred in serving Medi-Cal patients. Current law  
          terminates collection of the additional penalty assessment on  
          January 1, 2016. As of June 30, 2017, any unspent funds would be  








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          reverted to the General Fund. Current law sunsets the entire  
          program on January 1, 2018.


          Proposed Law:  
            SB 326 would eliminate the sunset on an existing program that  
          levies a $4 penalty assessment for Vehicle Code violations and  
          dedicates the resulting revenues to support emergency air  
          medical transportation services in Medi-Cal.


          Staff  
          Comments:  The penalty assessment that would be extended in this  
          bill is only one of many assessments that have been added to  
          Motor Vehicle Code violations over time. In sum, these  
          assessments dramatically increase the cost of a violation. For  
          example, a moving violation penalty that has a base fine of $35  
          has a total fine, after accounting for all assessments, of $238.





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