BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1300 (Hernandez) - Medi-Cal: emergency medical transport
providers: quality assurance fee
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|Version: April 26, 2016 |Policy Vote: HEALTH 5 - 0 |
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|Urgency: Yes |Mandate: Yes |
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|Hearing Date: May 16, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1300 would impose a quality assurance fee on
emergency medical transportation. The bill would use the
resulting revenue and federal matching funds to increase
reimbursement rates paid in the Medi-Cal program for emergency
medical transportation.
Fiscal
Impact:
Ongoing administrative costs, likely in the hundreds of
thousands to low millions per year for the Department of
Health Care Services to develop regulations, gain federal
approval, make any necessary system changes, oversee
collection of the quality assurance fee, and make supplemental
payments (special fund, General Fund, and federal funds). The
bill provides that $350,000 per year shall be available to the
Department for administrative costs. To the extent that actual
administrative costs are higher, those costs would be paid
from the General Fund and federal funds.
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Ongoing General Fund benefit of about $1.5 million per year.
The bill provides that 5% of revenue collected (after setting
aside administrative funding) shall be available to the state
for support of the Medi-Cal program. In doing so, the bill
would reduce the need for General Fund support of the Medi-Cal
program by an equal amount.
Additional payments of about $78 million per year for
emergency medical transportation in the Medi-Cal program
(special fund and federal funds). The quality assurance fee is
projected to generate about $30 million per year in revenues
(after accounting for administration and state benefits).
Coupled with federal matching funds, there would be about $78
million per year for increased reimbursements to providers.
Potential increased Proposition 98 funding obligation. The
bill may result in additional state funding obligations for
education (General Fund). The state constitution generally
requires the state to make payments for K-14 education equal
to about 50% of annual General Fund revenues. (The actual
funding formulas for Proposition 98 are complex and vary from
year to year based on economic conditions and state
budgeting.) Historically, the state has not counted revenues
from quality assurance fees towards the Proposition 98 funding
requirement. However, because this measure imposes a new tax,
the resulting revenues may be subject to the requirements of
Proposition 98. The state could therefore be obligated to
increase payments for education on average by about 50% of the
resulting revenues - in this case about $15 million per year.
Background: The Medi-Cal program is a health care program for low-income
individuals and families who meet defined eligibility
requirements. Medi-Cal coordinates and directs the delivery of
health care services to approximately 12 million qualified
individuals, including low-income families, seniors and persons
with disabilities, children in families with low-incomes or in
foster care, pregnant women, low-income people with specific
diseases, and, as of January 1, 2014, due to the Affordable Care
Act, childless adults up to 138 percent of the federal poverty
level.
The reimbursement rates that the Medi-Cal program pays ambulance
providers (both private companies and public agencies) have not
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kept up with increasing costs over the years. In addition,
Medi-Cal providers, including ground ambulance providers, are
subject to a 10 percent rate reduction pursuant to AB 97
(Committee on Budget, Statutes of 2011). This rate reduction
went into effect in September 2013. However, unlike some
providers, ground ambulance providers will not be subject to
retroactive cuts to recoup the savings that the state did not
achieve while AB 97 was under court injunction from 2011 to
September 2013.
Federal law allows states to impose quality assurance fees on
providers in state Medicaid programs. States are allowed to
impose such fees or taxes on providers, use the resulting
revenues to draw down additional federal Medicaid funding, and
use the combined revenues to pay increased reimbursement rates
to providers. The state currently imposes quality assurance fees
on hospitals, managed care plans, skilled nursing facilities,
and intermediate care facilities for the developmentally
disabled.
Proposed Law:
SB 1300 would impose a quality assurance fee on emergency
medical transportation. The bill would use the resulting revenue
and federal matching funds to increase reimbursement rates paid
in the Medi-Cal program for emergency medical transportation.
Specific provisions of the bill would:
Impose a quality assurance fee for each emergency
medical transport, beginning on July 1, 2017 (the quality
assurance fee would not apply to all emergency medical
transportation, not just those provided to Medi-Cal
beneficiaries);
Require the Department of Health Care Services to
calculate the quality assurance fee rate each year;
Establish the methods for calculating the quality
assurance fee (which differ in the first year from
subsequent years);
Require the Medi-Cal fee-for-service reimbursement rate
to be increased using the revenue generated and require
Medi-Cal managed care plans to pay emergency medical
transportation providers based on the increased
fee-for-service reimbursement rate;
Require the quality assurance fee revenues to be
deposited in a new special fund and continuously
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appropriate the moneys in that fund for the purposes of the
bill;
Allocate the revenues generated under the bill: first to
pay for administrative costs up to $350,000 per year,
second to allocate 5% of revenues to pay for the state
costs of operating the Medi-Cal program, third to make
increased provider payments, and fourth to provide
additional support for health care in the state;
Require revenue generated from the quality assurance fee
and federal matching funds to be used to supplement
existing funding;
Provide for the Department to adjust the fee rate;
Require emergency medical transport providers to report
specified data to the Department;
Require emergency medical transport providers to remit
the quality assurance fee to the Department;
Require the Department to seek federal approval and to
modify the methodology in the bill if necessary to meet
federal requirements;
Make implementation of the bill contingent on federal
approval.
This bill is an urgency measure.
Related
Legislation: There have been several bills in recent years that
have attempted to raise reimbursement rates for Medi-Cal
emergency medical transport providers, by a variety of means.
None of those bills have been enacted.
Staff
Comments: Currently, the state pays on average $150 for ground
emergency medical transports in the fee-for-service system.
(This average includes the base rate of $106 and a variety
additional charges for the specific services provided by
ambulance providers.) According to the California Ambulance
Association, the average cost to provide these services is close
to $600. While the rates paid to providers is not publicly
available, providers indicate that payments from managed care
plans are also significantly below their costs. According to
calculations performed by the sponsors of the bill, the quality
assurance fee is projected to be about $28 per emergency medical
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transport (this cost would be assessed on all emergency medical
transports, not just those provided under the Medi-Cal program).
The quality assurance fee is projected to result in the base
emergency medical transport reimbursement rate increasing to
about $340.
The only costs that may be incurred by a local agency relate to
crimes and infractions. Under the California Constitution, such
costs are not reimbursable by the state.
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