BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 815|
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THIRD READING
Bill No: SB 815
Author: Hernandez (D) and De León (D)
Amended: 5/3/16
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE: 8-0, 4/27/16
AYES: Hernandez, Nguyen, Mitchell, Monning, Nielsen, Pan,
Roth, Wolk
NO VOTE RECORDED: Hall
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SUBJECT: Medi-Cal: demonstration project
SOURCE: Author
DIGEST: This bill enacts the statutory provisions of "Medi-Cal
2020," the state's recently approved five-year federal Section
1115 waiver, which runs through December 31, 2020. Implements
the Public Hospital Redesign and Incentive in Medi-Cal program,
the Global Payment Program for county designated public
hospitals, the Dental Transformation Initiative, the Whole
Person Care program and the access assessment required under the
Special Terms of Conditions of Medi-Cal 2020.
ANALYSIS: Existing law establishes a Medicaid Section 1115
demonstration project under the Medi-Cal program until October
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31, 2015, known as California's Bridge to Reform, to implement
specified objectives. Provides for payments under the state's
Bridge to Reform waiver to designated public hospitals (DPHs are
the University of California [UC] 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 now referred to as
District/Municipal Public Hospitals or DMPH) through October 1,
2015.
This bill:
1) Requires the Department of Health Care Services (DHCS) to
implement the Medi-Cal 2020 Demonstration Project, consistent
with federal law and the Special Terms and Conditions (STCs).
Requires the STCs to prevail in the event of a conflict
between this bill and the STCs.
2) Continues the current Medi-Cal fee-for-service (FFS) payment
methodologies for DPHs from the previous waiver, whereby DPHs
receive cost-based reimbursement with county certified public
expenditures used to draw down federal Medicaid matching
funds, and which require DPHs to receive supplemental
reimbursements for the costs incurred for physician and
non-physician services provided to Medi-Cal beneficiaries, to
the extent those services are not claimed as inpatient
hospital services by the hospital.
3) Requires DSH payments to be paid only to UC DPHs and DMPHs,
and requires private DSH hospitals to receive "DSH
replacement payments" funded by General Fund (GF) and federal
Medicaid funds (instead of federal DSH funds) in the same
manner as under the previous waiver, with the federal DSH
amounts going to UC DPHs capped by fiscal year. Requires
federal DSH payments and federal funds under an uncompensated
care pool (referred to as the Safety Net Care Pool under the
previous waiver) to be used for a new Global Payment Program
(GPP).
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4) Requires DHCS to implement the new GPP to supporting
participating health care systems that provide health care
for the uninsured. Requires, under GPP, GPP systems to
receive global payments based on the health care they provide
to the uninsured, in lieu of traditional DSH payments and
payments from an uncompensated care pool.
5) Requires DPH systems to receive GPP payments based on a
value-based point methodology that incorporates measures of
value for patients in conjunction with the recognition of
costs. Requires the points assigned to a particular service
or activity to be the same across all GPP systems.
6) Requires the nonfederal share of payment under GPP to be
funded by intergovernmental transfers (IGTs).
7) Requires DHCS to establish and operate the Public Hospital
Redesign and Incentives in Medi-Cal (PRIME) program, which is
intended to accelerate efforts by participating PRIME
entities to change care delivery to maximize health care
value and strengthen their ability to successfully perform
under risk-based alternative payment models. PRIME is the
successor to the Delivery System Reform Incentive Program
from the previous waiver.
8) Makes participating PRIME entities eligible to earn
incentive payments by undertaking projects set forth in the
STCs for which there are required metrics.
9) Designates DPHs and DMPHs as participating PRIME entities.
Subject to the STCs, authorizes up to $1.2 billion available
to DPHs and $200 million available to DMPHs. Requires the
nonfederal share of PRIME payments to consist of voluntary
IGTs.
10)Requires PRIME entities to submit a five-year PRIME project
plan containing the specific elements of the STCs. Requires
DHCS to review all five-year PRIME project plans and take
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action to approve or disapprove each plan.
11)Requires DHCS to establish and operate the Whole Person Care
(WPC) pilot program to allow for development of WPC pilots
focused on target populations of high-risk, high-utilizing
Medi-Cal beneficiaries in local geographic areas. Requires
WPC pilots to provide an option to a county, city and county,
a health or hospital authority or a consortium of any of
these entities to receive support to integrate care for
particularly vulnerable Medi-Cal beneficiaries who have been
identified as high users of multiple systems and who continue
to have or are at-risk of poor health outcomes.
12)Defines the WPC target population as the population or
populations identified by a WPC pilot through a collaborative
data approach across partnering entities that identifies
common Medi-Cal high-risk, high-utilizing beneficiaries who
frequently access urgent and emergency services, including
across multiple systems.
13)Requires WPC pilots to include specific strategies to
increase integration among local governmental agencies,
health plans, providers, and other entities that serve
high-risk, high-utilizing beneficiaries, increase
coordination and appropriate access to care, reduce
inappropriate inpatient and emergency room utilization,
improve data collection and sharing among local entities,
improve health outcomes for the WPC target population and
permits it to include other strategies to increase access to
housing and supportive services.
14)Requires the WPC lead entity to be responsible for operating
the WPC pilot, conducting ongoing monitoring of WPC
participating entities, arranging for the required reporting,
ensuring an appropriate financial structure is in place, and
identifying and securing a permissible source of the
nonfederal share for WPC pilot payments.
15)Permits the sharing of health information, records, and
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other data with and among WPC lead entities, and allows WPC
participating entities to share health information, records,
and other data with and among prospective WPC lead entities
and WPC participating entities in the process of identifying
a proposed target population and preparing an application for
a WPC pilot.
16)Requires that payments to the WPC pilot are intended to
support infrastructure to integrate services among local
entities that serve the WPC target population, to support the
availability of services not otherwise covered or directly
reimbursed by Medi-Cal to improve care for the WPC target
population, and to foster other strategies to improve
integration, reduce unnecessary utilization of health care
services, and improve health outcomes.
17)Requires the nonfederal share of any payments under the WPC
pilot program to consist of voluntary IGTs of funds.
18)Requires DHCS to implement the Dental Transformation
Initiative (DTI) in accordance with the STCs, with the goal
of improving the oral health care for Medi-Cal children 0 to
20, inclusive, years of age. Establishes as the purpose of
the DTI is to improve the oral health care for Medi-Cal
children with a particular focus on increasing the statewide
proportion of qualifying children enrolled in the Medi-Cal
Dental Program who receive a preventive dental service by 10
percentage points over a five-year period.
19)Requires the DTI to include the following four domains as
outlined in the STCs: a) increase preventive services
utilization for children; b) caries risk assessment and
disease management pilot; c) increase continuity of care;
and, d) local dental pilot projects.
20)Requires the DTI to be funded at a maximum of $148 million
annually, and for five years totaling a maximum of $740
million, except as provided in the STCs. Permits unspent
funds to be rolled over to subsequent years. Permits DHCS to
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earn additional demonstration authority, up to a maximum of
$10 million to be added to the DTI Pool for use in paying
incentives to qualifying providers under DTI by achieving
higher performance improvement, as indicated in the STCs.
21)Permits DHCS to enter into exclusive or nonexclusive
contracts or amend existing contracts on a bid or negotiated
basis. Exempts these contracts from specified provisions of
the Public Contract Code and Department of General Services
review.
22)Requires DHCS to seek any federal approval as necessary to
implement Medi-Cal 2020, this bill and any changes to the
STCs as deemed necessary. Implements this only to the extent
federal financial participation (FFP) is available and is not
otherwise jeopardized.
23)Permits the DHCS director to modify any process or
methodology in this bill to the extent necessary to comply
with federal law or the STCs, but only if the modification is
consistent with the goals of this bill.
24)Requires the DHCS director to develop a methodology by which
payments under Medi-Cal 2020 are reduced if the amount of FFP
is reduced due to the application of penalties in the STC,
the enforcement of the budget neutrality limit or other
similar occurrence.
25)Permits DHCS to claim FFP for expenditures associated with
designated state health programs (DSHP) identified in the
STCs.
26)Continues the continuously appropriated Demonstration DSH
Fund and Public Hospital Investment, Improvement and
Incentive Fund, and establishes two new continuously
appropriated funds.
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27)Requires DHCS to conduct or arrange to have conducted any
study, report, assessment, evaluation or other similar
demonstration project activity required under the STCs.
Requires DHCS to conduct or arrange to have conducted the
PRIME program evaluation, the DTI evaluation, the WPC pilot
program, and two evaluations of the GPP required by the STCs.
Comments
1)Author's statement. According to the author, this bill is
needed to provide the statutory framework for implementation
of "Medi-Cal 2020." While the STCs outline the programmatic
and financing elements of Medi-Cal 2020, state law changes are
required, particularly related to hospital financing. This
bill is needed to continue existing Medi-Cal FFS payments to
DPHs, to change how federal DSH funds are provided to DPHs
consistent with the STCs under the GPP, to continue DSH
payments to private and DMPHs, to implement the expanded
provisions of PRIME, to appropriate funds for the
waiver-related provisions, to enable data sharing as part of
WPC projects, and to codify the provisions of the STCs
establishing the DTI and the access assessments. In addition,
this bill grants flexibility to DHCS to implement Medi-Cal
2020 without using the regular contracting and regulatory
processes due to waiver timelines, and requires notification
to the Legislature regarding waiver-related activities.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, over the
course of the five-year waiver period, the state will be able to
access at least $6.2 billion in additional federal funding that
the state would not be eligible for without the waiver. The
state is eligible for the additional funding under the waiver
for two primary reasons. First, the state's continuing use of
Medi-Cal managed care reduces costs relative to the alternative
FFS system. The federal government will allow the state to use a
portion of those projected savings for waiver programs. Second,
the federal government will allow the state draw down federal
matching funds for certain "state only" health care programs
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that are not currently eligible for federal funding. The GF
savings from receiving those additional federal funds will be
redirected to a specific waiver program.
The following are the major elements of Medi-Cal 2020. Note that
the funding amounts are for the five-year waiver period, unless
otherwise noted.
PRIME - $3.7 billion (federal funds). The PRIME program
authorizes federal matching funds to make incentive payments
to DPHs and DMPHs in order to improve care delivery and
strengthen their ability to take on risk-based payments.
GPP- at least $236 million (federal funds). The GPP
restructures the distribution of federal funding for
uncompensated care. This includes DSH funding, to DPHs
(excluding UC hospitals) in order to incentivize improvements
in care delivery and provision of care in appropriate
settings. Medi-Cal 2020 maintains the DSH funding methodology
for other hospitals, with DSH funding for UC hospitals capped
by fiscal year. The $236 million in federal funding is only
for the first year of the waiver. Additional funding in
subsequent years will be determined based on future
uncompensated care. Also, the figures above do not include
existing DSH funding of about $5.9 billion in federal funds
over the waiver period.
DTI - $375 million (federal funds). The DTI permits incentive
payments to qualified dental providers to improve dental care
and utilization among children enrolled in Medi-Cal. The state
share of funding for this program is provided through the
redirection of existing GF support for specific state only
health care programs which will be eligible for federal
matching funds under the waiver.
DSHP - $375 million (federal funds). The waiver authorizes the
state to access federal matching funds for several existing
health care programs that are currently funded only with state
and local funds. By making these programs eligible for federal
matching funds, the waiver frees up state funding to support
the DTI and to draw down federal matching funds.
WPC - $1.5 billion (federal funds). This program allows
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participating lead entities (primarily counties) to claim
federal matching funds for efforts to coordinate health,
behavioral health, and social services for high-risk Medi-Cal
beneficiaries who are high utilizers of health care services.
Federal matching funds will be available for a variety of
social services and supports that are not eligible for federal
matching funds absent the waiver.
DHCS has requested additional administrative funding to oversee
Medi-Cal 2020 of $34 million over the five-year waiver period,
including $11 million in the Budget Year (GF and federal funds).
SUPPORT: (Verified5/27/16)
Antelope Valley Hospital
Association of California Healthcare Districts
Bear Valley Community Healthcare District
California Association of Public Hospitals
California Hospital Association
California Primary Care Association
California State Association of Counties
California State Council of the Service Employees International
Union
Coalinga Regional Medical Center
County Health Executives Association of California
County of San Bernardino
District Hospital Leadership Forum
El Camino Hospital
Health Access California
Kern Valley Healthcare District
Mammoth Hospital
Marin General Hospital
Mayers Memorial District Hospital
Northern Inyo Hospital
Oak Valley Hospital District
Palo Verde Hospital
Palomar Health
Pioneers Memorial Healthcare District
Plumas District Hospitals
Salinas Valley Memorial Healthcare System
San Bernardino Mountains Community Hospital District
San Gorgonio Memorial Hospital
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Santa Clara County Board of Supervisors
San Joaquin General Hospital
Seneca Healthcare District
Tahoe Forest Hospital District
Tri-City Medical Center
University of California
Urban Counties of California
Ventura County Board of Supervisors
Washington Hospital Healthcare System
Western Center on Law & Poverty
OPPOSITION: (Verified5/27/16)
None received
Prepared by:Scott Bain / HEALTH / (916) 651-4111
5/28/16 16:45:51
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