BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 534
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|AUTHOR: |Pan |
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|VERSION: |April 6, 2015 |
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|HEARING DATE: |April 29, 2015 | | |
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|CONSULTANT: |Scott Bain |
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SUBJECT : Medi-Cal: ground emergency medical transportation
services: supplemental reimbursement
SUMMARY : Requires the Department of Health Care Services (DHCS) to
design and implement an intergovernmental transfer program for
public Medi-Cal managed care ground emergency medical transport
services in order to increase Medi-Cal capitation payments to
Medi-Cal managed care plans for the purpose of increasing
Medi-Cal reimbursement to public ground emergency medical
transport services providers. Permits DHCS to provide
supplemental Medicaid reimbursement for the cost of paramedic
services at a rate of payment equal to cost through the use of
certified public expenditures.
Existing law:
1.Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), which provides
health benefits to low-income who meet specified eligibility
criteria.
2.Establishes a schedule of benefits under the Medi-Cal program,
which includes emergency and nonemergency medical
transportation.
3.Allows ground emergency medical transportation services
providers owned by public entities (the state, a city, a
county, a city and county, a fire protection district, a
special district, a health care district or a federally
recognized Indian Tribe) that are enrolled in the Medi-Cal
program and that provide emergency medical transportation
services to Medi-Cal beneficiaries continuously through the
state fiscal year, to receive supplemental Medi-Cal
reimbursement, in addition to the rate of payment that the
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provider would otherwise receive for Medi-Cal ground emergency
medical transportation services.
4.Makes participation in the program by a public ground
emergency medical transportation services provider voluntary.
Requires, if an applicable governmental entity elects to seek
supplemental reimbursement on behalf of a public ground
emergency medical transportation service provider, the
governmental entity to do all of the following:
a. Certify, in conformity with the federal
regulatory requirements, that the claimed expenditures
for the ground emergency medical transportation
services (known as certified public expenditures or
CPEs) are eligible for federal financial participation
(FFP);
b. Provide evidence supporting the certification
as specified by DHCS, and submit data as specified by
DHCS to determine the appropriate amounts to claim as
expenditures qualifying for FFP; and,
c. Keep, maintain, and have readily retrievable,
any records specified by DHCS to fully disclose
reimbursement amounts to which the public emergency
medical transportation provider is entitled, and any
other records required by the federal Centers for
Medicare and Medicaid Services (CMS).
5.Establishes requirements for how the supplemental
reimbursement is calculated and paid.
6.Requires the non-federal share of the supplemental
reimbursement submitted to CMS for purposes of claiming FFP to
be paid only with funds from the governmental entities that
are certified to the state.
7.Requires DHCS, with specified exemptions, to assess a fee of
20 percent on each intergovernmental transfer (IGT) used in
Medi-Cal managed care setting to reimburse DHCS for the
administrative costs of operating the IGT program and for the
support of the Medi-Cal program.
This bill:
1.Permits DHCS, to the extent permitted under federal law and
regulations, to provide supplemental reimbursement for the
cost of paramedic services at a rate of payment equal to cost
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through the use of CPEs.
2.Requires DHCS to design and implement, in consultation with
eligible providers, an IGT program relating to Medi-Cal
managed care ground emergency medical transport services in
order to increase capitation payments for the purpose of
increasing Medi-Cal reimbursement to eligible providers.
3.Defines "eligible providers" as providers of ground emergency
medical transport services that:
a. Are owned or operated by the state, a city,
county, city and county, fire protection district,
special district, community services district, health
care district, or a federally recognized Indian tribe;
and,
b. Provide ground emergency medical transport
services to Medi-Cal managed care enrollees pursuant
to a contract or other arrangement with a Medi-Cal
managed care plan.
4.Requires DHCS to make increased capitation payments to
applicable Medi-Cal managed care plans for covered ground
emergency medical transportation services to the extent IGTs
are voluntarily made by, and accepted from, an eligible
provider, or a governmental entity affiliated with an eligible
provider.
5.Requires the increased capitation payments to be in amounts
actuarially equivalent to the supplemental fee-for-service
payments available for eligible providers under existing law,
to the extent permissible under federal law.
6.Requires all funds associated with IGTs made and accepted
under this bill to be used to fund additional payments to
eligible providers.
7.Requires Medi-Cal managed care plans to pay 100 percent of any
amount of increased capitation payments made under this bill
to eligible providers for providing and making available
ground emergency medical transportation services pursuant to a
contract or other arrangement with a Medi-Cal managed care
plan.
8.Requires the IGT program developed under this bill to be
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implemented on January 1, 2016, or a later date if otherwise
required pursuant to any necessary federal approvals obtained,
and only to the extent IGTs from the eligible provider, or the
governmental entity with which it is affiliated, are provided
for this purpose. Permits DHCS to implement the IGT and
increased capitation payments under this bill on a retroactive
basis as needed, to the extent federal approval is obtained.
9.Makes participation in the IGT under this bill voluntary on
the part of the transferring entities for purposes of all
applicable federal laws.
10.Requires the IGT provisions to be implemented without any
additional expenditure from the General Fund.
11.Requires each eligible provider, or the governmental entity
affiliated with an eligible provider, to agree to reimburse
DHCS for any costs associated with implementing this bill.
12.Prohibits IGTs made under this bill from being subject to the
20 percent administrative fee required to be assessed under
existing law.
13.Requires, as a condition of participation in the IGT program
under this bill, Medi-Cal managed care plans, eligible
providers, and governmental entities affiliated with eligible
providers to agree to comply with any requests for information
or similar data requirements imposed by DHCS for purposes of
obtaining supporting documentation necessary to claim federal
funds or to obtain federal approvals.
14.Implements the IGT program only if and to the extent federal
financial participation is available and is not otherwise
jeopardized, and any necessary federal approvals have been
obtained.
15.Grants the DHCS director the discretion to return or not
accept an IGT, and to adjust payments made under this bill as
necessary to comply with federal Medicaid requirements, to the
extent the DHCS director determines that the payments made
under the IGT program under this bill do not comply with
federal Medicaid requirements.
16.Permits, to the extent federal approval is obtained, the
increased capitation payments under this bill to commence for
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dates of service on or after January 1, 2016.
17.Permits the authority 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 under the Administrative
Procedure Act.
FISCAL
EFFECT : This bill has not been analyzed by a fiscal committee.
COMMENTS :
1.Author's statement. According to the author, much of
California's population receives emergency ambulance services
from local governments. Many Californians relay on the state
Medi-Cal program to provide for their medical care, of which
emergency ambulance service is a vital part of the health care
safety net. The Medi-Cal program, although an important part
of keeping California, healthy falls short of meeting the true
cost of providing that vital emergency ambulance service. The
average Medi-Cal reimbursement for emergency ambulance
transport across the state is approximately $120 while the
cost to provide those services can range from $498 - $1,200
depending on region. With the downturn in the economy, many of
California's public emergency ambulance providers have seen
significant and drastic financial cuts that have negatively
impacted their ability to provide both the fire protection and
emergency medical services their communities have relied and
become accustomed too. This bill will allow qualified public
ground emergency transportation providers to draw down federal
matching funds to help offset the gap between the amounts paid
through Medi-Cal and the true cost of providing those
services. This amount, estimated at nearly $350 million
dollars annually will flow back into local government public
safety and allow the continued provision of those services the
public enjoys. This bill will accomplish this at no cost to
the state General Fund.
2.Federal Medicaid regulations and CPEs and IGTs as the
non-federal share. Federal Medicaid regulations permit both
state and local governments to participate in the financing of
the non-federal portion of medical assistance expenditures.
CPEs are one of several mechanisms that a state may employ to
obtain FFP and to make supplemental payments to Medi-Cal
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providers without cost to the General Fund (GF). Under AB 678
(Pan), Chapter 397, Statutes of 2011, state and local entities
have the option to claim FFP for the difference between the
Medi-Cal reimbursement rate and the actual cost of providing
the service. Under a CPE arrangement, government providers
certify their Medicaid expenditures to the state, and the
state then obtains federal reimbursement on the basis of these
CPEs. Medicaid law allows states to finance the non-federal
share of payments with CPEs as long as the funds are derived
from state or local tax revenue and are certified by units of
local or state government as eligible for federal
reimbursement.
Federal approval of the ground emergency medical transportation
State Plan Amendment (SPA) was granted in September 2013 for
services provided to Medi-Cal beneficiaries on or after
January 30, 2010. The supplemental reimbursement authorized by
the SPA are for uncompensated care costs incurred by eligible
providers for providing ground emergency medical
transportation services to Medi-Cal beneficiaries for costs
that are in excess of the payment made to each provider for
services providing to Medi-Cal beneficiaries.
Another source of funds for the state share is IGTs, which is
the source of funds authorized under this bill. IGTs are
transfers of public funds between governmental entities, such
as from a county to the State. One source of the funding used
for the transfer is local tax dollars. This bill would also
allow local governmental entities the option of using IGTs as
the state share to draw down FFP in Medi-Cal. Both CPEs and
IGTs allow the state to reduce its GF spending, and allow
local governments to receive additional Medicaid funds using
their own funds to draw down federal funds.
3.Governmental Accounting Office (GAO) report on ambulance
rates. A 2007 GAO report on ambulance rates, entitled "Costs
and Expected Medicare Margins Vary Greatly," found that the
costs of ground ambulance transports were highly variable
across ambulance providers without shared costs, reflecting
differences in provider characteristics (an example of an
ambulance provider with shared costs would be an ambulance in
a fire department, where the cost of the ambulance is part of
the overall cost of the fire department). Costs per transport
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for ambulance providers without shared costs averaged $415,
but varied from $99 to $1,218 per transport. The GAO found
ambulance providers without shared costs had higher costs per
transport, but typically had fewer transports per year, a
greater percentage of transports in which more than a basic
medical intervention occurred, more transports in rural
counties with lower population density, lower productivity
(measured as number of transports furnished per staffed hour),
and a greater percentage of revenues from local tax support.
4.Prior legislation. AB 2577 (Cooley and Pan), of 2014, was
similar to this bill. AB 2577 was vetoed by the Governor. In
his veto message, the Governor stated that while he supported
funding mechanisms that would increase the availability of
federal funds, AB 2577 presented significant policy and
implementation challenges at a time when DHCS is working at
full capacity on several new and critical priorities
integrating the Affordable Care Act into the state's health
care system. The Governor's veto message directed DHCS to
continue conversations on this funding mechanism that reflects
a more realistic time frame and is more workable for DHCS.
SB 1374 (Hernandez), of 2014, would have required DHCS, by July
1, 2015, to adopt regulations establishing the Medi-Cal
reimbursement rate for ground ambulance services using one of
two specified methodologies. SB 1374 was held on the Senate
Appropriations suspense file.
AB 97 (Committee on Budget), Chapter 3, Statutes of 2011, the
health budget trailer bill, among other provisions, reduces
Medi-Cal payments to providers by 10 percent, including
medical transportation rates, for dates of service on and
after June 1, 2011, subject to federal approval, FFP, and the
reduction meeting federal Medicaid requirements. The 2014-2015
Governor's budget proposes to exempt certain classes of
providers and services from the retroactive recoupments,
including medical transportation, but these providers are
subject to the rate reduction.
SB 359 (Hernandez), of 2011, would have required DHCS, by July
1, 2012, to adopt regulations establishing the Medi-Cal
reimbursement rate for ground ambulance services using one of
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two specified methodologies. SB 359 was held on the Senate
Appropriations Committee suspense file.
AB 2173 (Beall), Chapter 547, Statutes of 2010, established a
$4 penalty on every vehicle code violation. The resulting
revenue is matched by federal funds and used to make
supplemental payments for emergency air medical transportation
services in the Medi-Cal Program.
AB 1932 (Hernandez), of 2010, in its final form, would have
authorized DHCS to utilize certain service levels for purposes
of determining billing codes for emergency and non-emergency
Basic Life Support (BLS) and Advanced Life Support (ALS)
transportation and specialty care transportation. If DHCS
used the service levels to determine billing codes, AB 1932
would have required DHCS to adopt the definitions and
Healthcare Common Procedure Coding System codes for those
service levels that have been established by CMS, and to
determine the above described billing codes in a
revenue-neutral manner. AB 1932 was held on the Senate
Appropriations suspense file.
AB 1174 (Hernandez), of 2009, would have required Medi-Cal to
cover emergency BLS and ALS services when a patient
reasonably believes that without immediate medical attention,
a serious health condition, as specified, could reasonably
result. In addition, AB 1174 would have increased and
established in statute maximum Medi-Cal reimbursement rates
for ambulance transportation services, and would have required
the rates be adjusted to reflect changes in the California
Consumer Price Index. AB 2257 (Hernandez), of 2008, was
similar to AB 1147, except that AB 2257 also would have also
increased Medi-Cal rates for air ambulance providers. AB 1174
and AB 2257 were both held on the Assembly Appropriations
suspense file.
AB 511 (De La Torre), of 2010, would have imposed, as a
condition of participation in the Medi-Cal Program, a quality
assurance fee (QAF) on certain ambulance transportation
services providers, to be administered by DHCS. The proceeds
from the QAF would be required to be deposited into the
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Medi-Cal Ambulance Transportation Services Providers Fund
(Fund). Moneys in the Fund would be available only to enhance
FFP for ambulance transportation services under the Medi-Cal
Program, or to provide additional reimbursement to, and to
support quality improvement efforts of, ambulance
transportation services providers, including increased
reimbursement for and improvement of the quality of the
provision of ALS services, as defined. AB 511 was held on the
Senate Appropriations suspense file; subsequently referred to
Senate Health and Senate Revenue and Taxation Committees. At
the request of the author, the bill was not heard in a policy
committee again.
5.Related legislation. SB 243 (Hernandez), and AB 366 (Bonta),
would increase Medi-Cal provider rates, including increase
Medi-Cal transportation provider rates to Medicare levels.
AB 1257 (Gray), requires DHCS to establish payment rates for
ground ambulance services based on changes in the Consumer
Price Index-Urban and the California weighted average
Geographic Practice Cost Index, and to designate the ambulance
cost study conducted by the federal Government Accountability
Office described above as the evidentiary base. AB 1257 is
scheduled for hearing in the Assembly Health Committee on
April 28, 2015.
6.Support. This bill is co-sponsored by the California Fire
Chiefs Association, the California Metro Fire Chiefs, and the
California Professional Firefighters which states that, as
Medi-Cal beneficiaries move from fee-for-service to Medi-Cal
managed care plans, much of the anticipated additional
reimbursement from the recently enacted CPE program will
disappear as CPEs cannot be used for obtaining the
supplemental reimbursement for the Medi-Cal managed care
population. The sponsors argue that this bill will allow those
entities that provide ground emergency medical transportation
to capture additional reimbursements for Medi-Cal managed care
beneficiaries through the use of an IGT. This will allow
public agency providers to seek partial reimbursement for
their share of unreimbursed Medi-Cal ground transportation
expenses via funding provided by the federal government as
existing Medi-Cal rates do not cover the operating cost of a
typical ambulance transport.
The California State Firefighters' Association (CSFA) writes in
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support that this bill will bring millions of dollars to
cash-strapped communities to provide emergency medical
transportation services.
7.Bill implementation date. This bill requires the IGT program
developed under this bill to be implemented on January 1,
2016, or a later date if otherwise required pursuant to any
necessary federal approvals obtained. The Governor's veto
message directed DHCS to continue conversations on this
funding mechanism that reflects a more realistic time frame
and is more workable for DHCS. The author may wish to consider
moving back the IGT program to a date later than January 1,
2016 as this bill does not take effect until that date and in
light of the Governor's veto message.
SUPPORT AND OPPOSITION :
Support: California Fire Chiefs Association (co-sponsor)
California Metro Fire Chiefs (co-sponsor)
California Professional Firefighters (co-sponsor)
Association of California Healthcare Districts
California State Firefighters' Association
Paramedics Plus
Oppose: None received
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