Amended in Assembly August 19, 2016

Amended in Assembly August 15, 2016

Amended in Assembly June 30, 2016

Amended in Senate May 31, 2016

Amended in Senate April 26, 2016

Amended in Senate April 5, 2016

Senate Bill No. 1300

Introduced by Senator Hernandez

February 19, 2016

An act to add Article 3.91 (commencing with Section 14129) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to Medi-Cal, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 1300, as amended, Hernandez. Medi-Cal: emergency medical transport providers: quality assurance fee.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law establishes a quality assurance fee program for skilled nursing and intermediate care facilities, as prescribed.

This bill, commencing July 1, 2017, and subject to federal approval, would impose a quality assurance fee for each transport provided by an emergency medical transport provider, as defined, subject to the quality assurance fee in accordance with a prescribed methodology. The bill would authorize the director to exempt categories of emergency medical transport providers from the quality assurance fee if necessary to obtain federal approval. The bill would require the Director of Health Care Services to deposit the collected quality assurance fee into the Medi-Cal Emergency Medical Transport Fund, which the bill would create in the State Treasury, to be continuously appropriated, thereby making an appropriation, to the department to be used exclusively in a specified order of priority to enhance federal financial participation for ambulance services under the Medi-Cal program, and to provide additional reimbursement to, and to support quality improvement efforts of, emergency medical transport providers, to pay for state administrative costs, and to provide funding for health care coverage for Californians. The bill, on or before November 15, 2016, would require each emergency medical transport provider to report to the department specified data, including data on gross receipts, as defined, from the provision of emergency medical transports, as specified, in a manner and form prescribed by the department and, commencing on January 1, 2017, and each fiscal quarter thereafter, would require each emergency medical transport provider to report this data to the department. The bill would authorize the department to establish an Internet Web site for the submission of these data reports. The bill would authorize the department to require a certification by each emergency medical transport provider, under penalty of perjury, of the truth of these data reports. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The bill would authorize the department, upon written notice to the emergency medical transport provider, to impose a $100 per day penalty against the provider for each day that the provider fails to make a report within 5 business days of the date upon which the data report was due.

The bill, commencing July 1, 2017, and subject to federal approval, would increase the Medi-Cal reimbursement to emergency medical transport providers for emergency medical transports, including both fee-for-service transports paid by the department and managed care transports paid by Medi-Cal managed care health plans, as specified.

The bill would authorize the department to adopt regulations as necessary to implement these provisions, as specified.

The bill would provide that the provisions of the bill shall cease to be implemented if any of certain conditions, including withdrawal of federal approval, are satisfied.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The Legislature recognizes the essential role that emergency
medical transport providers play in serving the state’s Medi-Cal
beneficiaries. To that end, it has been and remains the intent of the
Legislature to improve funding for emergency medical transport
providers and obtain all available federal funds to make
supplemental Medi-Cal payments to emergency medical transport
providers.

(b) It is the intent of the Legislature to impose a quality
assurance fee to be paid by emergency medical transport providers,
which will be used to increase federal financial participation in
order to increase Medi-Cal payments to emergency medical
transport providers.

(c) It is the intent of the Legislature to increase the Medi-Cal
emergency medical transport reimbursement in Medi-Cal
fee-for-service and Medi-Cal managed care by increasing the
fee-for-service payment schedule for emergency medical transports
to support quality improvement efforts by emergency medical
transport providers, including, but not limited to, the provision of
advanced life support services, as defined in Section 1797.52 of
the Health and Safety Code.

(d) It is the further intent of the Legislature that the increased
fee-for-service and Medi-Cal managed care payment schedule
amounts pursuant to this article shall not result in any expenditure
from the General Fund.

SEC. 2.  

Article 3.91 (commencing with Section 14129) is
added to Chapter 7 of Part 3 of Division 9 of the Welfare and
Institutions Code, to read:

 

Article 3.91.  Medi-Cal Emergency Medical Transportation
Reimbursement Act

 

14129.  

For purposes of this article, the following definitions
shall apply:

(a) “Annual quality assurance fee rate” means the quality
assurance fee assessed on each emergency medical transport
applicable to each state fiscal year.

(b) “Aggregate fee schedule increase amount” means the product
of the quotient described in paragraph (2) of subdivision (a) of
Section 14129.3 and the Medi-Cal emergency medical transports,
including both fee-for-service transports paid by the department
and managed care transports paid by Medi-Cal managed care health
plans, utilizing the billing codes for emergency medical transport
for the state fiscal year.

(c) “Available fee amount” shall be calculated as the sum of the
following:

(1) The amount deposited in the Medi-Cal Emergency
Transportation Fund established under Section 14129.2 during the
applicable state fiscal year, less the amounts described in
subparagraphs (A) and (B) of paragraph (2) of subdivision (f) of
Section 14129.2.

(2) Any federal financial participation obtained as a result of
the deposit of the amount described in paragraph (1) in the
Medi-Cal Emergency Transportation Fund for the applicable fiscal
year.

(d) “Department” means the State Department of Health Care
Services.

(e) “Director” means the Director of Health Care Services.

(f) “Effective state medical assistance percentage” means a ratio
of the aggregate expenditures from state-only sources for the
Medi-Cal program divided by the aggregate expenditures from
state and federal sources for the Medi-Cal program for a state fiscal
year.

(g) “Emergency medical transport” means the act of transporting
an individual from any point of origin to the nearest medical facility
capable of meeting the emergency medical needs of the patient by
an ambulance licensed, operated, and equipped in accordance with
applicable state or local statutes, ordinances, or regulations that
are billed with billing codes A0429 BLS Emergency, A0427 ALS
Emergency, and A0433 ALS2, and any equivalent, predecessor,
or successor billing codes as may be determined by the director.
“Emergency medical transports” shall not include transportation
of beneficiaries by passenger car, taxicabs, litter vans, wheelchair
vans, or other forms of public or private conveyances, nor shall it
include transportation by an air ambulance provider. An
“emergency medical transport” does not occur when, following
evaluation of a patient, a transport is not provided.

(h) “Gross receipts” means gross payments received as patient
care revenue for emergency medical transports, determined on a
cash basis of accounting. “Gross receipts” shall include all
payments received as patient care revenue for emergency medical
transports, including payments for billing codes A0429 BLS
Emergency, A0427 ALS Emergency, and A0433 ALS2, and any
equivalent, predecessor, or successor billing codes as may be
determined by the director, and any other ancillary billing codes
associated with emergency medical transport as may be determined
by the director. “Gross receipts” shall not include supplemental
amounts received pursuant to Section 14105.94.

(i) “Emergency medical transport provider” means any provider
of emergency medical transports.

(j) “Emergency medical transport provider subject to the fee”
means all emergency medical transport providers that bill and
receive patient care revenue from the provision of emergency
medical transports, except emergency medical transport providers
that are exempt pursuant to subdivision (c) of Section 14129.6.

(k) “Medi-Cal managed care health plan” means a “managed
health care plan” as that term is defined in subdivision (ab) of
Section 14169.51.

14129.1.  

(a) On or before November 15, 2016, each emergency
medical transport provider shall report to the department data on
the number of actual emergency medical transports by payor type,
including, without limitation, Medi-Cal fee-for-service emergency
medical transports and Medi-Cal managed care emergency medical
transports, and gross receipts from the provision of emergency
medical transports provided in each quarter from July 1, 2015, to
October 31, 2016, inclusive, in a manner and format prescribed
by the department.

(b) Commencing with the fiscal quarter beginning on January
1, 2017, and each fiscal quarter thereafter, on or before the 45th
day of the quarter, each emergency medical transport provider
shall report to the department data on the number of actual
emergency medical transports by payor type, including, without
limitation, Medi-Cal fee-for-service emergency medical transports
and Medi-Cal managed care emergency medical transports, and
gross receipts from the provision of emergency medical transports
provided in the quarter preceding the quarter in which the report
is due, in a manner and format prescribed by the department.

(c) The department may establish an Internet Web site for the
submission of reports required by this section.

(d) The department may require a certification by each
emergency medical transport under penalty of perjury of the truth
of the reports required under this section. Upon written notice to
an emergency medical transport provider, the department may
impose a penalty of one hundred dollars ($100) per day against an
emergency medical transport provider for every day that an
emergency medical transport provider fails to make a report
required by this section within five days of the date upon which
the report was due.

14129.2.  

(a) Commencing with the state fiscal quarter
beginning on July 1, 2017, and continuing each state fiscal quarter
thereafter, there shall be imposed a quality assurance fee for each
emergency medical transport provided by each emergency medical
transport provider subject to the fee in accordance with this section.

(b) (1) On or before June 15, 2017, and each June 15 thereafter,
the director shall calculate the annual quality assurance fee rate
applicable to the following state fiscal year based on the most
recently collected data collected from emergency medical transport
providers pursuant to Section 14129.1, and publish the annual
quality assurance fee rate on its Internet Web site. In no case shall
the fees calculated pursuant to this subdivision and collected
pursuant to this article exceed the amounts allowable under federal
law.

(A) For state fiscal year 2017-18, the annual quality assurance
fee rate shall be calculated by multiplying the projected total annual
gross receipts for all emergency medical transport providers subject
to the fee by 5.1 percent, which resulting product shall be divided
by the projected total annual emergency medical transports by all
emergency medical transport providers subject to the fee for the
state fiscal year.

(B) For state fiscal years 2018-19 and thereafter, the annual
quality assurance fee rate shall be calculated by a ratio, the
numerator of which shall be the sum of the product of the projected
aggregate fee schedule amount and the effective state medical
assistance percentage, and the amount described in subparagraph
(A) of paragraph (2) of subdivision (f), and the denominator of
which shall be 90 percent of the projected total annual emergency
medical transports by all emergency medical transport providers
subject to the fee for the state fiscal year.

(2) On or before June 15, 2017, and each June 15 thereafter, the
director shall publish the annual quality assurance fee rate on its
Internet Web site.

(3) In no case shall the fees calculated pursuant to this
subdivision and collected pursuant to this article exceed the
amounts allowable under federal law. If, on or before June 15 of
each year, the director makes a determination that the fees collected
pursuant to this subdivision exceed the amounts allowable under
federal law, the director may reduce the increased fee-for-service
payment schedule described in Section 14129.3 only to the extent
necessary to reduce the fees calculated pursuant to this subdivision
to comply with the amount allowable under federal law.

(4) If, during a state fiscal year, the actual or projected available
fee amount exceeds or is less than the actual or projected aggregate
fee schedule amount by more than 1 percent, the director shall
adjust the annual quality assurance fee rate so that the available
fee amount for the state fiscal year will approximately equal the
aggregate fee schedule amount for the state fiscal year. The
available fee amount for a state fiscal year will be considered to
equal the aggregate fee schedule amount for the state fiscal year
if the difference between the available fee amount for the state
fiscal year and the aggregate fee schedule amount for the state
fiscal year constitutes less than 1 percent of the aggregate fee
schedule amount for the state fiscal year.

(c) (1) Each emergency medical transport provider subject to
the fee shall remit to the department an amount equal to the annual
quality assurance fee rate for the 2017-18 state fiscal year
multiplied by the number of transports reported or that should have
been reported by the emergency medical transport provider
pursuant to subdivision (b) of Section 14129.1 in the quarter
commencing April 1, 2017, based on a schedule established by
the director. The schedule established by the director for the fee
payment described in this paragraph shall require remittance of
the fee payment according to the following guidelines:

(A) The director shall require an emergency medical transport
provider that rendered 35,000 or more Medi-Cal fee-for-service
emergency medical transports during the 2016 calendar year to
remit the fee payment described in this paragraph on or after June
20, 2017.

(B) The director shall require an emergency medical transport
provider that rendered fewer than 35,000 Medi-Cal fee-for-service
emergency medical transports during the 2016 calendar year to
remit 50 percent or less of the fee payment described in this
paragraph on or after July 1, 2017.

(C) The director shall require an emergency medical transport
provider that rendered fewer than 35,000 Medi-Cal fee-for-service
emergency medical transports during the 2016 calendar year to
remit any remaining fee payment amount described in this
paragraph on or after August 15, 2017.

(2) Commencing with the state fiscal quarter beginning on
October 1, 2017, and each state fiscal quarter thereafter, on or
before the first day of each state fiscal quarter, each emergency
medical transport provider subject to the fee shall remit to the
department an amount equal to the annual quality assurance fee
rate for the applicable state fiscal year multiplied by the number
of transports reported or that should have been reported by the
emergency medical transport provider pursuant to subdivision (b)
of Section 14129.1 in the immediately preceding quarter.

(d) (1) Interest shall be assessed on quality assurance fees not
paid on the date due at the greater of 10 percent per annum or the
rate at which the department assesses interest on Medi-Cal program
overpayments to hospitals that are not repaid when due. Interest
shall begin to accrue the day after the date the payment was due
and shall be deposited in the Medi-Cal Emergency Medical
Transport Fund established in subdivision (f).

(2) In the event that any fee payment is more than 60 days
overdue, the department may deduct the unpaid fee and interest
owed from any Medi-Cal reimbursement payments owed to the
provider until the full amount of the fee, interest, and any penalties
assessed under this article are recovered. Any deduction made
pursuant to this subdivision shall be made only after the department
gives the provider written notification. Any deduction made
pursuant to this subdivision may be deducted over a period of time
that takes into account the financial condition of the provider.

(3) In the event that any fee payment is more than 60 days
overdue, a penalty equal to the interest charge described in
paragraph (1) shall be assessed and due for each month for which
the payment is not received after 60 days.

(e) The department shall accept an emergency medical transport
provider’s payment even if the payment is submitted in a rate year
subsequent to the rate year in which the fee was assessed.

(f) (1) The director shall deposit the quality assurance fee
collected pursuant to this section in the Medi-Cal Emergency
Medical Transport Fund, which is hereby created in the State
Treasury and, notwithstanding Section 13440 of the Government
Code, is continuously appropriated without regard to fiscal years
to the department for the purposes specified in this article.
Notwithstanding Section 16305.7 of the Government Code, the
fund shall also include interest and dividends earned on moneys
in the fund.

(2) The moneys in the Medi-Cal Emergency Medical Transport
Fund, including any interest and dividends earned on money in
the fund, shall be available exclusively to enhance federal financial
participation for ambulance services under the Medi-Cal program
and to provide additional reimbursement to, and to support quality
improvement efforts of, emergency medical transport providers,
as well as to pay for the state’s administrative costs and to provide
funding for health care coverage for Californians, in the following
order of priority:

(A) To pay for the department’s staffing and administrative
costs directly attributable to implementing this article, not to exceed
the following amounts:

(i) For the 2016-17 fiscal year, one million three thousand
dollars ($1,003,000), exclusive of any federal matching funds.

(ii) For the 2017-18 fiscal year and each fiscal year thereafter,
three hundred seventy-four thousand dollars ($374,000), exclusive
of any federal matching funds.

(B) To pay for the health care coverage in each fiscal year in
the amount of 10 percent of the projected quality assurance fee
revenue for that fiscal year, as calculated by the department on or
before June 15 preceding that fiscal year, exclusive of any federal
matching funds.

(C) To make increased payments to emergency medical transport
providers pursuant to this article.

14129.3.  

(a) Effective July 1, 2017, the Medi-Cal
fee-for-service payment schedule governing reimbursement to
emergency medical transport providers for emergency medical
transports shall be increased. begin insert The increase to the fee-for-service
payment schedule under this section shall be calculated on or
before June 15, 2017, and shall remain the same for later fiscal
years. The increase to the fee-for-service payment schedule under
this section shall apply only to those billing codes identified in, or
any equivalent, predecessor, or successor billing codes as may be
determined by the director pursuant to, subdivision (g) of Section
14129. end insert The department shall calculate the projections required by
this subdivision based on the data submitted pursuant to Section
14129.1. The resulting fee-for-service payment schedule amounts
after the application of this section shall be equal to the sum of
both of the following:

(1) The Medi-Cal fee-for-service payment schedule amount for
the state fiscal year 2015-16.

(2) The quotient of the begin delete projected end delete available fee amount begin insert projected
by the department on or before June 15, 2017, end insert for the state fiscal
year 2017-18, divided by the total begin delete projected end delete Medi-Cal emergency
medical transports, including both fee-for-service transports paid
by the department and managed care transports paid by Medi-Cal
managed care health plans, utilizing these billing codes begin insert projected
by the department on or before June 15, 2017, end insert for the state fiscal
year 2017-18.

(b) Each Medi-Cal managed care health plan shall satisfy its
obligation under Section 438.114(c) of Title 42 of the Code of
Federal Regulations for emergency medical transports by providing
payment to emergency medical transport providers that is equal
to the amount of payment described in Section 1396u-2(b)(2)(D)
of Title 42 of the United States Code.

(c) The fee-for-service and Medi-Cal managed care payment
schedule increase established pursuant to this section shall be
funded solely from the following:

(1) The quality assurance fee set forth in Section 14129.2, along
with any interest or other investment income thereon.

(2) Federal reimbursement and any other related federal funds.

(d) The proceeds of the quality assurance fee set forth in Section
14129.2, the matching amount provided by the federal government,
and any interest earned on those proceeds shall be used to
supplement existing funding for emergency medical transports
provided by emergency transport providers and not supplant this
funding.

14129.4.  

If there is a delay in the implementation of this article
for any reason, including a delay in any required approval of the
quality assurance fee and reimbursement methodology specified
by the federal Centers for Medicare and Medicaid Services, all of
the following shall apply:

(a) An emergency transport provider subject to the fee may be
assessed the amount the provider would be required to pay to the
department if the fee-for-service payment schedule increases
described in Section 14129.3 were already approved, but shall not
be required to pay the fee until the fee-for-service payment
schedule increases described in Section 14129.3 are approved. The
director shall establish a schedule for payment of retroactive fees
pursuant to this subdivision in consultation with emergency medical
transport providers to minimize the disruption to the cashflow of
emergency medical transport providers.

(b) The department may retroactively increase and make
payment of supplemental rates to emergency medical transport
providers pursuant to Section 14129.3.

14129.5.  

(a) The director shall administer this article.

(b) The director may adopt regulations as are necessary to
implement this article. These regulations may be adopted as
emergency regulations in accordance with the rulemaking
provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code). For purposes of this article, the first
adoption of regulations shall be deemed an emergency and
necessary for the immediate preservation of the public peace, health
and safety, or general welfare. The regulations shall include, but
need not be limited to, any regulations necessary for any of the
following purposes:

(1) The administration of this article, including the proper
imposition of the quality assurance fee and process for its
collection, reporting, and refunds. The costs associated with the
administration of this article are not to exceed the amounts
reasonably necessary to administer this article.

(2) The development of any forms necessary to obtain required
information from providers subject to the quality assurance fee.

(3) The provision of details, definitions, formulas, and other
requirements.

(c) As an alternative to subdivision (b), and notwithstanding
the rulemaking provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code), the director may
implement this article, in whole or in part, by means of a provider
bulletin, or other similar instructions, without taking regulatory
action, provided that no such bulletin or other similar instructions
shall remain in effect after June 30, 2018. It is the intent of the
Legislature that the regulations adopted pursuant to subdivision
(b) be adopted on or before June 30, 2018.

(d) The director shall ensure that the quality assurance fee per
transport imposed pursuant to this article is collected.

14129.6.  

(a) The department shall request approval from the
federal Centers for Medicare and Medicaid Services for the use
of fees collected pursuant to this article for the purpose of receiving
federal matching funds.

(b) The director may alter the methodology specified in this
article to the extent necessary to meet the requirements of federal
law or regulations or to obtain federal approval. If the director,
after consulting with affected emergency medical transport
providers, determines that an alteration is needed, the director shall
execute a declaration stating that this determination has been made.
The director shall retain the declaration and provide a copy, within
five working days of the execution of the declaration, to the fiscal
and appropriate policy committees of the Legislature.

(c) The director may add categories of exempt emergency
medical transport providers or apply a nonuniform fee per transport
to emergency medical transport providers that are subject to the
fee in order to meet requirements of federal law or regulations.
The director may exempt categories of emergency medical
transport providers from the fee if necessary to obtain federal
approval.

14129.7.  

(a) This article shall be implemented only if, and as
long as, begin delete both end delete begin insert all end insert of the following conditions are met:

(1) The begin delete state receives federal approval of the quality assurance
fee from the end delete federal Centers for Medicare and Medicaid begin delete Services. end delete

begin insert Services does not determine that the quality assurance fee revenues
may not be used for the purposes set forth in this article. end insert

(2) The state receives federal approval for the increased
fee-for-service payment schedule increases described in subdivision
(a) of Section 14129.3.

begin insert

(3) The state continues its maintenance of effort for the level of
state funding of emergency medical transports reimbursement for
the 2017-18 rate year, and for every subsequent rate year, in an
amount not less than the amount that the state would have paid
for the same number of emergency medical transports under the
rate methodology that was in effect on July 31, 2016.

end insert

(b) This article shall cease to be implemented if one of the
following conditions is satisfied:

(1) The federal Centers for Medicare and Medicaid Services no
longer allows the use of the provider assessment provided in this
article.

(2) The Medi-Cal fee-for-service payment schedule increase
described in subdivision (a) of Section 14129.3 no longer remains
in effect.

(3) The quality assurance fee assessed and collected pursuant
to this article is no longer available for the purposes specified in
this article.

(4) A final judicial determination by the California Supreme
Court or any California Court of Appeal that the revenues collected
pursuant to this article that are deposited in the Medi-Cal
Emergency Medical Transport Fund are either of the following:

(A) “General Fund proceeds of taxes appropriated pursuant to
Article XIII B of the California Constitution,” as used in
subdivision (b) of Section 8 of Article XVI of the California
Constitution.

(B) “Allocated local proceeds of taxes,” as used in subdivision
(b) of Section 8 of Article XVI of the California Constitution.

begin insert

(5) The state does not continue its maintenance of effort for the
level of state funding of emergency medical transports
reimbursement for the 2017-18 rate year, or for any subsequent
rate year, in an amount not less than the amount that the state
would have paid for the same number of emergency medical
transports under the rate methodology in effect on July 31, 2016.

end insert

(c) If all of the conditions in subdivision (a) are met, this article
is implemented. If, subsequently, any one of the conditions in
subdivision (b) is met, this article shall become inoperative
notwithstanding that the condition or conditions subsequently may
be met.

(d) Notwithstanding subdivisions (a), (b), and (c), in the event
of a final judicial determination made by any state or federal court
that is not appealed, or by a court of appellate jurisdiction that is
not further appealed, in any action by any party, or a final
determination by the administrator of the federal Centers for
Medicare and Medicaid Services, that federal financial participation
is not available with respect to any payment made under the
methodology implemented pursuant to this article because the
methodology is invalid, unlawful, or contrary to any provision of
federal law or regulations or of state law, this article shall become
inoperative.

SEC. 3.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

SEC. 4.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to make the necessary changes to increase Medi-Cal
payments to emergency ambulance providers and to improve
access, at the earliest possible time, to allow this act to be operative
as soon as approval from the federal Centers for Medicare and
Medicaid Services is obtained by the State Department of Health
Care Services, it is necessary that this act take effect immediately.