BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1300|
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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
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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
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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
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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
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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
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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
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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
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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)
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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
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