BILL ANALYSIS Ó SB 1300 Page 1 SENATE THIRD READING SB 1300 (Hernandez) As Amended August 19, 2016 2/3 vote. Urgency SENATE VOTE: 36-1 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Health |16-0 |Wood, Maienschein, | | | | |Bonilla, Burke, | | | | |Campos, Chiu, Gomez, | | | | |Roger Hernández, | | | | |Lackey, Olsen, | | | | |Patterson, | | | | | | | | | | | | | | |Ridley-Thomas, | | | | |Rodriguez, Santiago, | | | | |McCarty, Waldron | | | | | | | |----------------+-----+-----------------------+---------------------| |Appropriations |19-0 |Gonzalez, Bigelow, | | | | |Bloom, Bonilla, Bonta, | | | | |Calderon, Daly, | | | | |Eggman, Gallagher, | | SB 1300 Page 2 | | | | | | | | | | | | |Eduardo Garcia, | | | | |Holden, Jones, | | | | |Obernolte, Quirk, | | | | |Santiago, Wagner, | | | | |Weber, Wood, McCarty | | | | | | | | | | | | -------------------------------------------------------------------- SUMMARY: Establishes the Medi-Cal Emergency Medical Transportation Reimbursement Act which assesses an annual quality assurance fee (QAF) on providers of emergency medical transportation (EMT) in accordance with a prescribed methodology beginning on July 1, 2017, and continuing each state fiscal quarter. Applies the QAF to three EMT billing codes. Specifically, this bill: 1)Excludes from the definition of EMTs air ambulance providers, or transportation provided by taxicabs, litter vans, wheelchair vans, or other forms of public or private conveyances, as specified. 2)Requires each EMT provider, on or before November 15, 2016, to report to the Department of Health Care Services (DHCS) data on the number of actual EMTs by payor type, including, without limitation, Medi-Cal fee-for-service (FFS) EMTs and Medi-Cal managed care (MCMC) EMTs, and gross receipts from the provision of EMTs provided each quarter from July 1, 2015, to October 31, 2016, in a manner prescribed by DHCS. 3)Requires each EMT provider, commencing with the fiscal quarter beginning on January 1, 2017, and each fiscal quarter thereafter, on or before the 45th day of the quarter, to SB 1300 Page 3 report to DHCS data on the number of actual EMTs by payor type, as specified, and gross receipts from the provision of EMTs provided in the quarter preceding the quarter in which the report is due, in an manner and format prescribed by DHCS. 4)Authorizes DHCS to establish an Internet Web site for the submission of the required reports specified in 2) and 3) above. 5)Permits DHCS to require certification by each EMT under penalty of perjury of the truth of the reports required in 2) and 3) above. Authorizes DHCS, upon written notice to an EMT provider, to impose a penalty of $100 per day that an EMT provider fails to make a report, as specified. Provides that failure to make the report within 90 days of the date upon which the report was due is considered a licensure violation, as specified. 6)Requires, on or before June 15, 2017, and each June 15 thereafter, the DHCS Director to calculate the annual QAF rate applicable to the following state fiscal year based on the most recently collected data collected from EMT providers (See 2) and 3) above), and publish the annual QAF rate on its Internet Web site. 7)Prohibits the fees calculated and collected from exceeding the amounts allowed under federal law, and authorizes the Director of DHCS to reduce the fees as necessary to comply with the amounts allowable under federal law, as specified. Specifies calculations of the QAF rate as follows: a) Calculate the QAF rate for state fiscal year (FY) 2017-18 by multiplying the projected total annual gross receipts for all EMT providers subject to the fee by 5.1%, SB 1300 Page 4 the resulting product to be divided by the projected total annual EMTs by all EMT providers subject to the fee for the state FY; and, b) For state FY 2018-19 and thereafter, the QAF 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 of DHCS staffing and administrative costs, as specified, and the denominator of which shall be 90% of the projected total annual EMTs by all EMT providers subject to the fee for the state FY. 8)Establishes a staggered schedule for payment of the fee relative to the number of Medi-Cal FFS EMT that is rendered, as specified. 9)Requires each EMT provider subject to the fee to remit to DHCS an amount equal to the annual QAF rate on specified timeframes. Authorizes DHCS to assess interest not paid on the due dates 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. 10)Authorizes DHCS, if any fee is more than 60 days overdue to deduct any 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 are recovered. Requires DHCS to give the provider written notification of the deduction which could be deducted over a period of time taking into account the financial condition of the provider. Assesses an additional penalty if a payment is not received after 60 days. SB 1300 Page 5 11)Establishes the Medi-Cal Emergency Transport Fund for purposes of the QAF raised in this bill and provides funding for health care coverage, in the following order of priority: a) To pay for the DHCS's staffing and administrative costs for implementation of this bill, not to exceed the following: i) $1,0003,000 in 2016-17; and, ii) $374,000 in 2017-18 and annually thereafter; b) To pay for the health care coverage in each FY in the amount of 10% of the projected quality assurance fee revenue for that FY, as calculated by DHCS on or before June 15 preceding that FY, exclusive of any federal matching funds; and, c) To make increased payments to EMT providers. 12)Increases, effective July 1, 2017, the Medi-Cal FFS payment schedule governing reimbursement to EMT providers for EMTs. Requires the increase to the FFS payment schedule to: a) be calculated on or before June 15, 2017, and to remain the same for later fiscal years; and, b) apply only to those billing codes identified in, or any equivalent, predecessor, or successor billing codes as may be determined by the Director. 13)Requires DHCS to calculate the projections based on data submitted pursuant to 2) and 3) above. Specifies the payment schedule amounts. 14)Requires the FFS and MCMC payment schedule increase to be funded solely from the QAF, and federal reimbursement and any other related federal funds. SB 1300 Page 6 15)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. Includes in these provisions retroactive fees and the authority for DHCS to make retroactive payment of supplemental rates. 16)Authorizes the DHCS Director to adopt regulations as are necessary to implement this bill. Authorizes adoption of regulations as emergency regulations, as specified. 17)Requires DHCS to request approval from the federal Centers for Medicare and Medicaid Services (CMS) for the use of fees collected for the purpose of receiving federal matching funds. 18)Authorizes the DHCS Director to alter the methodology to the extent necessary to meet the requirements of federal law or to obtain federal approval. Requires the DHCS Director to execute a declaration if an alteration is necessary. 19)Authorizes the DHCS Director to add categories of exempt EMT providers or apply a nonuniform fee per transport to EMT providers that are subject to the fee in order to meet requirements of federal law or regulations. 20)Implements this bill only if all of the following conditions are met: a) The CMS does not determine that the QAF may not be used for the purposes set forth in this bill; SB 1300 Page 7 b) The state receives federal approval for the increased FFS payment schedule increases; and, c) The state continues its maintenance of effort for the level of state funding of EMT reimbursement for the 2017-18 rate year, and for every subsequent rate year, in an amount no 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. 21)Ceases implementation of this bill if one of the following conditions is satisfied: a) CMS no longer allows the use of the provider assessment; b) The Medi-Cal FFS payment schedule increase no longer remains in effect; c) The QAF assessed and collected is no longer available; 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, or, e) The state does not continue its maintenance of effort for the level of state funding of EMT reimbursement for the 2017-18 rate year, and for every subsequent rate year, as specified. SB 1300 Page 8 22)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 financial participation (FFP) 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. FISCAL EFFECT: According to the Assembly Appropriations Committee: 1)One-time costs of $1.2 million and ongoing administrative costs of $750,000 annually (Medi-Cal Emergency Medical Transport Fund/General Fund (GF)/federal) for DHCS to develop regulations, gain federal approval, make any necessary system changes, oversee collection of the quality assurance fee, and make increased payments. 2)DHCS states it has been unable to independently verify data provided by EMT providers. However, based on such data, staff assumes costs associated with fee collection and payment as follows: a) Ongoing GF benefit of about $3 million per year through reduced health care spending. This bill provides that 10% of revenue collected (after setting aside administrative funding) is available to the state for health care coverage. Thus, this bill reduces the need for GF support of the Medi-Cal program by an equal amount. b) Additional payments of about $73 million per year for SB 1300 Page 9 Medi-Cal EMT services (Medi-Cal Emergency Medical Transport Fund/ federal). 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, about $73 million per year would be paid in increased reimbursements to providers. 1)Unknown GF cost pressure to maintain higher ambulance transport rates if QAF revenues are eliminated or changed. COMMENTS: According to the author, this bill increases Medi-Cal EMT rates by levying a QAF on three EMT 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 GF. In addition, 10% of revenue raised by the QAF would go to the state GF. 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 system. This bill assesses a QAF on revenue EMT providers receive from three EMT reimbursement codes (A0429 Basic Life Support Emergency, A0427 Advanced Life Support (ALS1) Emergency, and A0433 ALS 2). A QAF rate of 5.1% is assessed for 2017-18 against the gross revenue of all EMT providers from the three reimbursement codes. After 2017-18, estimates of the QAF rate provided by the 911 Ambulance Provider's Medi-Cal Alliance, the sponsor of this bill, are as follows: for 2018-19 the QAF would be at 5.7%; for 2019-20 it would be 5.8%; and for 2020-21 and beyond, the rate would be at 5.9%. The increase in the QAF rate is needed to account for the reduction in the federal match (known as the Federal Medical Assistance Percentages or FMAP) for certain populations including adults who became eligible for Medi-Cal under the optional expansion enacted under the federal Affordable Care Act. SB 1300 Page 10 Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097 FN: 0004567