BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1300| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1300 Author: Hernandez (D) Amended: 5/31/16 Vote: 27 - Urgency SENATE HEALTH COMMITTEE: 5-0, 4/20/16 AYES: Hernandez, Hall, Mitchell, Monning, Pan NO VOTE RECORDED: Nguyen, Nielsen, Roth, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen SUBJECT: Medi-Cal: emergency medical transport providers: quality assurance fee SOURCE: 911 Ambulance Provider's Medi-Cal Alliance DIGEST: This bill 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. ANALYSIS: Existing law: 1) Establishes the Medi-Cal program, administered by the SB 1300 Page 2 Department of Health Care Services (DHCS), which provides health benefits to low-income individuals who meet specified eligibility criteria. Establishes a schedule of benefits under the Medi-Cal program, which includes emergency and non-emergency medical transportation. 2) 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. 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 15th 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 SB 1300 Page 3 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. 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 10% 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; and, c) To make increased payments to emergency medical transport providers pursuant to this bill. 1) Requires the Medi-Cal FFS and Medi-Cal managed care payment schedule increase established under this bill to be funded SB 1300 Page 4 solely the QAF, along with any interest or other investment income and federal reimbursement and any other related federal funds. 2) Requires the proceeds of the QAF, the matching amount 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. 3) 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. 4) 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. 5) 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. 6) 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. 7) Requires emergency medical transport providers to remit to DHCS annual QAF amounts, as specified. Requires interest to SB 1300 Page 5 be assessed on QAF not paid on the date due at the greater of 10% per annum or the rate at which 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. 8) 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. 9) 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. 10) 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. 11) 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. 12) Requires DHCS to request approval from the federal Centers for Medicare and Medicaid Services (CMS) for the use of fees collected under this bill for the purpose of receiving federal matching funds. 13) 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 SB 1300 Page 6 federal approval. Requires, if the DHCS director, after consulting with affected emergency medical transport providers, determines that an alteration is needed, the 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. 14) 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. 15) 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 CMS; and, b) The state receives federal approval for the increased Medi-Cal FFS payment schedule increases in this bill. 1) Ceases implementation of this bill if any of the following conditions are met: a) The federal CMS no longer allows the use of the QAF in this bill; b) The Medi-Cal FFS payment schedule increase described in this bill no longer remains in effect; c) The QAF assessed and collected under this bill no longer remains available for the purposes specified in this bill; and, d) 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 Fund are considered subject to be proceeds of taxes within the meaning of Proposition 98. 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 CMS, that federal SB 1300 Page 7 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. Comments 1) Author's statement. According to the author, this bill increases 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, 10% 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. 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. Medi-Cal FFS emergency base ambulance rates were increased in SB 1300 Page 8 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%). The current Medi-Cal base rate is $106.38, a rate that is $11.82 lower than the rate in 1999. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee: 1)Ongoing administrative costs, likely in the hundreds of thousands to low millions per year for DHCS 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 [GF], and federal funds). This bill provides that $350,000 per year shall be available to DHCS for administrative costs (the state would be able to draw down additional federal funding to help cover the administrative costs). To the extent that actual administrative costs are higher, those costs would be paid from the GF and federal funds. 2)Ongoing GF benefit of about $3 million per year. This bill provides that 10% of revenue collected (after setting aside administrative funding) shall be available to the state for support of the Medi-Cal program. In doing so, this bill reduces the need for GF support of the Medi-Cal program by an equal amount. 3)Additional payments of about $77 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). With federal matching funds, there would be about $77 million per year for increased reimbursements to providers. SUPPORT: (Verified5/31/16) SB 1300 Page 9 911 Ambulance Provider's Medi-Cal Alliance (source) American Ambulance American Medical Response California Ambulance Association California Fire Chiefs Association California Professional Firefighters Fire District Association of California Paramedics Plus Gold Coast Ambulance McCormick Ambulance Service Mercy Medical Transportation Inc OPPOSITION: (Verified5/31/16) None received ARGUMENTS IN 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 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, the cost to deliver emergency ambulance service to all Californians, and this bill addresses 17 years of a growing difference between the cost to provide emergency ambulance service and Medi-Cal ambulance reimbursement. Prepared by:Scott Bain / HEALTH / (916) 651-4111 5/31/16 22:24:20 **** END **** SB 1300 Page 10