BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 815|
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UNFINISHED BUSINESS
Bill No: SB 815
Author: Hernandez (D) and De León (D)
Amended: 6/9/16
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
SENATE FLOOR: 39-0, 5/31/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,
Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR: 79-0, 6/23/16 (Consent) - See last page for
vote
SUBJECT: Medi-Cal: demonstration project
SOURCE: Author
DIGEST: This bill enacts the statutory provisions of Medi-Cal
2020, the states 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,
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the Global Payment Program for county designated public
hospitals, and the access assessment required under the Special
Terms of Conditions of Medi-Cal 2020.
Assembly Amendments delete provisions establishing the Whole
Person Care (WPC) and Dental Transformation Initiative (DTI),
which are contained in AB 1568 (Bonta and Atkins), which is a
companion bill to this measure, and make the measures contingent
upon each other. In addition, the Assembly amendments add a
requirement that designated public hospital systems (DPHs are
University of California and county hospitals) report a summary
of the contracting arrangement the DPHs has with Medi-Cal
managed care plans and the scope of services covered under the
contract, and add legislative intent language to encourage
contracting between the two parties.
ANALYSIS Existing law 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. Provides for payments under the state's
Bridge to Reform waiver to DPHs, 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.
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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).
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.
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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
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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
action to approve or disapprove each plan.
11)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.
12)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.
13)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.
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14)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.
15)Permits DHCS to claim FFP for expenditures associated with
designated state health programs (DSHP) identified in the
STCs.
16)Continues the continuously appropriated Demonstration DSH
Fund and Public Hospital Investment, Improvement and
Incentive Fund, and establishes two new continuously
appropriated funds.
17)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
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
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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, and to
codify the provisions of the STCs establishing the Medi-Cal
managed care access assessment. 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
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee:
1)DHCS has requested administrative resources through an April
2016 Spring Finance Letter totaling $33.6 million for waiver
implementation over its five-year lifetime, $14 million of the
total is for contract costs, and $10.8 million of which is
requested for 2016-17. Funding will pay for implementation,
monitoring, oversight, evaluation and assessment, technical
assistance, program development, and related activities
(GF/federal).
The funding request is the cost to implement the entire
waiver, but only certain elements of the waiver are included
in this bill. Other provisions are implemented in AB 1568
(Bonta), a companion bill.
2)Federal matching funds available by waiver program component
are as follows:
PRIME $3.73 billion
GPP $236 million*
DTI $375 million**
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DSHPs $375 million
WPC $1.5 billion**
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Total $6.2 billion
*The $236 million for GPP only represents additional waiver
funding; it does not include the existing federal DSH component
of GPP funding. Federal DSH funding over the five-year life of
the waiver is projected to be about $5.8 billion. In addition,
only the first year of federal funding for GPP is shown here.
Funding in subsequent years is based on a study of uncompensated
care.
**DTI and WPC are implemented in AB 1568 (Bonta).
SUPPORT: (Verified6/23/16)
Antelope Valley Hospital
Association of California Healthcare Districts
Bear Valley Community Healthcare District
California Association of Public Hospitals and Health Systems
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
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Pioneers Memorial Healthcare District
Plumas District Hospitals
Salinas Valley Memorial Healthcare System
San Bernardino Mountains Community Hospital District
San Gorgonio Memorial Hospital
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: (Verified6/23/16)
None received
ARGUMENTS IN SUPPORT: This bill is supported by hospitals and
consumer and labor groups, which write in support of the $6.2
billion in federal funds and the new waiver funding components,
including PRIME and GPP. Public and district hospitals write in
support of PRIME, arguing the incentive funding provided by
PRIME will provide opportunity for public hospitals to put into
place needed programs to allow California to continue its drive
toward quality, improved outcomes and accountability in safety
net systems. The California Association of Public Hospitals and
Health Systems (CAPH) writes in support that this bill will
leverage California's coverage expansion with significant
payment reforms and delivery system improvements for public
health care systems.
ASSEMBLY FLOOR: 79-0, 6/23/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
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Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: O'Donnell
Prepared by:Scott Bain / HEALTH / (916) 651-4111
6/24/16 14:33:56
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