BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1300
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|AUTHOR: |Hernandez |
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|VERSION: |April 5, 2016 |
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|HEARING DATE: |April 20, 2016 | | |
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|CONSULTANT: |Scott Bain |
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SUBJECT : Medi-Cal: emergency medical transport providers:
quality assurance fee
SUMMARY : Imposes a quality assurance fee on each transport provided by
an emergency medical transport provider in accordance with a
prescribed methodology. Requires the resulting revenue to be
placed in a continuously appropriated fund to be used to provide
additional Medi-Cal reimbursement to emergency medical transport
providers, to pay for state administrative costs, and to provide
funding for health care coverage for Californians. Would take
effect immediately as an urgency bill.
Existing law:
1)Establishes the Medi-Cal program, administered by the
Department of Health Care Services
(DHCS), which provides health benefits to low-income
individuals who meet specified eligibility criteria.
2)Establishes a schedule of benefits under the Medi-Cal program,
which includes emergency and non-emergency medical
transportation. Establishes, through regulation, maximum
Medi-Cal reimbursement rates for medical transportation
services, and prohibits the amount billed from exceeding
charges made to the general public.
3)Reduces specified Medi-Cal provider rates (including ground
ambulance services), effective June 1, 2011, by 10% for dates
of services on and after June 1, 2011, subject to federal
approval, federal financial participation (FFP), and the
reduction meeting federal Medicaid requirements. If the
director of DHCS determines that the payments do not comply
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with federal Medicaid requirements or that FFP is not
available with respect to any payment that is reduced, the
director retains the discretion to not implement the
particular payment reduction and to adjust the payment as
necessary to comply with federal Medicaid requirements. The
10% reduction took effect for ambulance providers for dates of
service on or after September 5, 2013 but was not applied
retroactively back to June 2011.
This bill:
1)Imposes, commencing with the state fiscal quarter beginning on
July 1, 2017, and continuing each fiscal quarter thereafter, a
quality assurance fee (QAF) for each emergency medical
transport provided by each emergency medical transport
provider.
2)Defines an "emergency medical transport" as 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 one of three billing codes: A0429 Basic Life Support
Emergency, A0427 Advanced Life Support Emergency, and A0433
Advanced Life Support 2.
3)Requires the DHCS director, on or before June 15, 2017, and
each June 15 thereafter, to calculate the annual QAF rate
applicable to the following state fiscal year based on the
most recently collected data collected from emergency medical
transport providers. Requires DHCS to publish the annual QAF
rate on its Internet Web site.
4)Establishes, for the 2017-18 fiscal year and the 2019-19
fiscal year and thereafter, different methods for calculating
the annual QAF rate. Prohibits the fees calculated and
collected from exceeding the amounts allowable under federal
law.
5)Requires, effective July 1, 2017, the Medi-Cal fee-for-service
(FFS) payment schedule governing reimbursement to emergency
medical transport providers for emergency medical transports
to be increased pursuant to a methodology established by this
bill, using revenue from the QAF.
SB 1300 (Hernandez) Page 3 of ?
6)Requires each Medi-Cal managed care health plan to provide
payment to emergency medical transport providers under this
bill that is equal to the amount of payment the provider would
have received under FFS Medi-Cal, by referencing existing
federal law and regulation.
7)Requires the DHCS director to deposit the QAF in the Medi-Cal
Emergency Medical Transport Fund (Fund) created by this bill.
Continuously appropriates the moneys in the Fund, and any
federal matching funds to DHCS.
8)Requires moneys in the Fund, including any interest and
dividends earned on money in the fund, to 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 DHCS staffing and administrative costs
directly attributable to implementing this bill, capped
at $350,000 for each fiscal year, exclusive of any
federal matching funds;
b) To pay for the health care coverage in each fiscal
year in the amount of 5% of the projected QAF revenue for
that fiscal year, as calculated by the DHCS 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 bill; and,
d) To provide additional support for health care
coverage of Californians.
9)Requires the Medi-Cal FFS payment schedule increase
established under this bill to be funded solely from the
following:
a) The QAF, along with any interest or other
investment income; and,
b) Federal reimbursement and any other related
federal funds.
10) Requires the proceeds of the QAF, the matching amount
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provided by the federal government, and any interest earned on
those proceeds to be used to supplement existing funding for
emergency medical transports provided by emergency transport
providers and not to supplant this funding.
11) Requires the DHCS director to adjust the annual QAF fee
rate so that the available fee amount for the state fiscal
year will approximately equal the aggregate Medi-Cal fee
schedule amount for the state fiscal year if, during a state
fiscal year, the actual or projected available QAF amount
exceeds or is less than the actual or projected aggregate fee
schedule amount by more than 1%. Requires the available fee
amount for a state fiscal year to 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% of the aggregate
fee schedule amount for the state fiscal year.
12) Requires each emergency medical transport provider to
report to DHCS data on the number of actual emergency medical
transports by payor type, and gross receipts from the
provision of emergency medical transports in a manner and
format prescribed by DHCS.
13) Permits DHCS to establish an Internet Web site for the
submission of reports required by this bill.
14) Permits DHCS to require a certification by each emergency
medical transport under penalty of perjury of the truth of the
required reports. Permits DHCS to impose a penalty of $100 per
day against an emergency medical transport provider for every
day that an emergency medical transport provider fails to make
a required report within five days of the date upon which the
report was due.
15) Requires the DHCS director, on or before June 15, 2017, and
each June 15 thereafter, to publish the annual QAF rate on its
Internet Web site.
16) Requires emergency medical transport providers to remit to
DHCS annual QAF amounts, as specified.
17) Requires interest to be assessed on QAF not paid on the
date due at the greater of 10% per annum or the rate at which
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DHCS assesses interest on Medi-Cal program overpayments to
hospitals that are not repaid when due. Requires interest to
begin to accrue the day after the date the payment was due,
and to be deposited in the Medi-Cal Emergency Medical
Transport Fund established by this bill.
18) Permits DHCS to deduct unpaid QAF amounts and interest owed
from Medi-Cal reimbursements payments owed to a provider until
the full amount of the fee and interest is owed in the event
that any fee payment is more than 60 days overdue. Requires
any deduction to be made only after DHCS gives the provider
written notification, and requires any deduction to be
deducted over a period of time that takes into account the
financial condition of the provider.
19) Requires DHCS to 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.
20) Establishes provisions for delayed payment of the QAF if
there is a delay in the implementation of this bill for any
reason, including a delay in any required approval of the QAF
and the reimbursement methodology. These include retroactive
fees and the authority for DHCS to make retroactive payment of
supplemental rates.
21) Permits DHCS to adopt regulations (including one-time
emergency regulations) as are necessary to implement this
bill, and permits the use of provider bulletin, or other
similar instructions, without taking regulatory action,
provided that no such bulletin or other similar instructions
remains in effect after June 30, 2018.
22) Requires DHCS to request approval from the federal Centers
for Medicare and Medicaid Services for the use of fees
collected under this bill for the purpose of receiving federal
matching funds.
23) Permits the DHCS director to alter the methodology
specified in this bill to the extent necessary to meet the
requirements of federal law or regulations or to obtain
federal approval. Requires, if the DHCS director, after
consulting with affected emergency medical transport
providers, determines that an alteration is needed, the
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director to execute a declaration stating that this
determination has been made, and to provide a copy to the
fiscal and appropriate policy committees of the Legislature.
24) Permits the DHCS director to add categories of exempt
emergency medical transport providers or apply a non-uniform
fee per transport to emergency medical transport providers
that are subject to the fee in order to meet requirements of
federal law or regulations. Permits the DHCS director to
exempt categories of emergency medical transport providers
from the fee if necessary to obtain federal approval.
25) Implements this bill only if, and as long as, both of the
following conditions are met:
a) The state receives federal approval of the QAF from the
federal Centers for Medicare and Medicaid Services (CMS);
and,
b) The state receives federal approval for the increased
Medi-Cal FFS payment schedule increases in this bill.
1) Continues to implement this bill if all of the following
conditions are met:
a) The federal CMS continues to allow the use of the QAF in
this bill;
b) The Medi-Cal FFS payment schedule increase described in
this bill remains in effect; and,
c) The QAF assessed and collected under this bill remains
available for the purposes specified in this bill.
1)Makes this bill inoperative 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 under this bill because
the methodology is invalid, unlawful, or contrary to any
provision of federal law or regulations or of state law.
2)Takes effect immediately as an urgency bill.
FISCAL
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EFFECT : This bill has not been analyzed by a fiscal committee.
COMMENTS :
1)Author's statement. According to the author, this bill would
increase Medi-Cal emergency medical transportation rates by
levying a QAF on three emergency medical transportation
reimbursement codes. The resulting revenue would then be used
to draw down additional federal Medicaid funds to increase
Medi-Cal emergency transportation rates, without imposing a
cost to the state General Fund. In addition, 5% of revenue
raised by the QAF would go to the state General Fund. The
author argues inadequate Medi-Cal reimbursement for ambulance
transport is a long-standing issue and places a strain on the
state's emergency medical services (EMS) system. Unlike other
Medi-Cal providers, ambulance providers cannot "opt out" or
otherwise limit their participation in the Medi-Cal program
the way other non-emergency health care providers can to
obtain a more favorable payor mix.
While the costs to provide essential ambulance services has
significantly increased during the past decade, including
escalating wages and benefits, and increasing insurance
premiums, Medi-Cal reimbursement has not kept pace with these
increased costs and has in fact declined to less than the
amounts paid in 1999. The QAF proposed by this bill would
increase Medi-Cal emergency medical transportation rates by
drawing down federal Medicaid dollars, which will flow back to
the state to be used by ambulance providers to maintain the
high level of care that is expected of the state's EMS and 911
programs.
2)Medi-Cal rates for ambulance services. Medi-Cal covers
emergency medical transportation when necessary to obtain
Medi-Cal covered benefits when a beneficiary's medical or
physical condition is acute and severe, necessitating
immediate diagnosis and treatment so as to prevent death or
disability. When billing Medi-Cal for a "911 call," ambulance
providers bill a Basic Life Support (BLS) base rate of
$106.38. In addition to the base rate, Medi-Cal provides
additional funding for additional costs and services, such as
mileage, night calls, extra attendants, waiting times, and
certain supplies and services.
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Medi-Cal FFS emergency base ambulance rates were increased in
1997 and 1998 and were last increased in 1999 by 11.7%, to
$118.20. Medi-Cal base ambulance rates were reduced in 2008
and again in 2013 (by 10%) pursuant to AB 97 (Committee on
Budget, Chapter 3, Statutes of 2011). The ambulance rate
reduction was not imposed retroactively but did apply
prospectively, beginning on September 5, 2013. The current
Medi-Cal base rate is $106.38, a rate that is $11.82 lower
than the rate in 1999.
3)Provider fees. Federal Medicaid law authorizes states to levy
fees on health care providers if the fees meet federal
requirements. Provider taxes must be broad-based and uniformly
imposed (unless waived), and not violate a "hold harmless"
prohibition that offsets the tax. Federal regulations allow 19
different classes of health care services on which a provider
tax may be imposed, one of which is "emergency ambulance
services." Nearly all states (including California) fund a
portion of their share of Medicaid program costs through a fee
on health care providers. Under these funding methods, states
collect funds (through fees, taxes, or other means) from
providers, which are then matched with federal Medicaid funds
to provide increased Medicaid (Medi-Cal in California)
reimbursement to health care providers. California currently
has Medicaid provider fees on managed care plans, hospitals,
skilled nursing facilities and intermediate care facilities
for the developmentally disabled.
4)Calculation of QAF amount owed and Medi-Cal rate increase
amounts. This bill levies a per emergency medical transport
QAF. This bill establishes how the QAF will be collected in
the initial year (2017-18) and then on an on-going basis
(2019-19 and thereafter) and how the resulting revenue will be
used to fund state administrative costs, 5% for the GF and
rate increases for three reimbursement codes for emergency
medical transportation providers .
For 2017-18, this bill would asses a QAF at a rate of 5.5%
against the gross revenue of all emergency medical transport
providers from three reimbursement codes. From this amount,
the state cost of administering the bill ($350,000) and the 5%
that goes to the GF would be subtracted. The remaining amount
would then be matched by federal Medicaid funds to determine
the total funds available for the rate increase. This amount
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would then be divided by the number of emergency medical
transports to determine the per transport increase for the
three reimbursement codes, and this amount would be added to
the existing 2015-16 base rates. The dollar amount of the
increase would be the same for each of the three codes, and
the increased rate would be fixed for the duration of the bill
to address DHCS' concern that rates could increase at a rate
higher than revenue from the QAF, which would result in either
a rate reduction or GF cost to maintain the increased rate.
For the 2017-18 fiscal year and thereafter, the QAF amount
owed would be calculated differently than the initial 2016-17
fiscal year. The state would determine the total funds amount
needed to fund the increased rate for the three billing codes
and multiply that by the state share of Medi-Cal costs
(referred to as the State Medicaid Assistance Percentage or
SMAP). The cost of the state administration ($350,000) would
be added to this amount. The resulting amount would be divided
by 95% (to account for the 5% that would go to the GF), and
then divided by the total transports for the three billing
codes to establish the per transport fee.
5)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 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 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 lowest population density,
lower productivity (measured as number of transports furnished
per staffed hour), and a greater percentage of revenues from
local tax support.
6)Related legislation. AB 1257 (Gray) would have required 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,
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and would designate the ambulance cost study conducted by the
federal GAO as the evidentiary base. AB 1257 was held on the
Assembly Appropriations Committee suspense file.
7)Prior legislation.
a) SB 1374 (Hernandez of 2013) 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.
b) AB 2577 (Cooley and Pan) would have authorized
governmental entities to make intergovernmental transfers
as the non-federal share of expenditures for ground
emergency medical transportation services for purposes of
drawing down federal Medicaid matching funds. AB 2577 was
vetoed by the Governor.
c) SB 359 (Hernandez of 2011), was similar to SB 1374 in
that it would have required DHCS, by July 1, 2012, to adopt
regulations establishing the Medi-Cal reimbursement rate
for ground ambulance services using one of two specified
methodologies. SB 359 designated one of the two
methodologies as 120% of the Medicare ambulance fee
schedule. SB 359 was held on the Senate Appropriations
Committee suspense file and was gutted and amended and used
for another purpose.
d) AB 678 (Pan, Chapter 397, Statutes of 2011) established
a supplemental payment program for governmental entity
providers of Medi-Cal emergency medical transportation
services, based on certified public expenditures using
state or local governmental entities' funds as the required
federal match.
e) AB 2173 (Beall, Chapter 547, Statutes of 2010)
established a $4 penalty on every vehicle code violation.
The resulting revenue would be matched by federal funds and
used to make supplemental payments for emergency air
medical transportation services in the Medi-Cal Program.
f) 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 and advanced life support
transportation and specialty care transportation. If DHCS
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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.
g) AB 1174 (Hernandez of 2009), would have required
Medi-Cal to cover emergency basic life support and advanced
life support 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
1174, 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.
h) 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 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 advanced
life support services, as defined. 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.
i) AB 1153 (Beall of 2009) would have levied an additional
penalty of $3 upon every fine, penalty, or forfeiture
imposed and collected by the courts for all offenses
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involving a vehicle violation, except certain parking
offenses, in each county. The resulting revenue would be
transferred to the state and continuously appropriated to
DHCS solely for the purposes of augmenting Medi-Cal
reimbursement paid to emergency air medical transportation
services providers. DHCS would be required to use the
moneys in the Emergency Air Medical Transportation Act Fund
and federal matching funds to increase the Medi-Cal
reimbursement or supplemental payments for emergency air
medical transportation services in an amount not to exceed
normal and customary charges charged by the emergency air
ambulance transportation services provider. AB 1153 was
held on the Senate Appropriations suspense file.
1)Support. This bill is sponsored by the 911 Provider's Medi-Cal
Alliance (911 Alliance), which writes that in 2015, the
leadership of six of California's largest private ambulance
companies (American Ambulance, American Medical Response, Care
Ambulance, Hall Ambulance, Paramedics Plus and Rural Metro
Ambulance) came together to discuss Medi-Cal reimbursement
rates for emergency ambulance transports and formed the 911
Ambulance Provider's Medi-Cal Alliance with a mission to work
together to help resolve the ongoing issue of low Medi-Cal
reimbursement rates. The 911 Alliance writes that emergency
ambulance providers have not seen an increase in base rates
for emergency transports since 1999, and in those 17 years
since the last increase, they have twice seen their Medi-Cal
rates decreased. In those 17 years, employee wages continue to
grow, fuel prices have skyrocketed, healthcare costs for
employees have grown exponentially, the cost of new technology
seems to know no ceiling, and worker's compensation rates have
climbed steadily. All this has increased the cost to deliver
emergency ambulance service to all Californians. This bill
would address 17 years of a growing difference between the
cost to provide emergency ambulance service and the
reimbursement for caring for Medi-Cal patients needing
emergency medical transportation.
2)Author's amendments. The author intends to amend this bill to:
(a) clarify that the QAF revenue would fund the Medi-Cal
managed care rate increase paid to ambulance providers as the
bill currently on refers to the QAF funding the FFS increase;
(b) to eliminate duplicate language regarding the Fund; (c) to
reword for clarity the "poison pill" language that halts the
QAF from operating if CMS approval is withdrawn or if the
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Medi-Cal rate increase no longer applies; (d) to clarify that
the state cost for administering the provisions of this bill
and the 5% of fee revenue that goes to the GF is taken into
account in determining the QAF rate; (e) to clarify that
"transport" means "emergency medical transport" and to correct
a cross reference; and (f) to make a correction of the dates
at the end of the second-to-last sentence in Section
14129.4(a) (from 2016-17 to 2017-18).
SUPPORT AND OPPOSITION :
Support: 911 Ambulance Provider's Medi-Cal Alliance (sponsor)
American Medical Response
Oppose: None received
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