BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1300|
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VETO
Bill No: SB 1300
Author: Hernandez (D)
Amended: 8/19/16
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
SENATE FLOOR: 36-1, 6/1/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Morrell, Nielsen, Pan, Pavley, Stone, Vidak, Wieckowski, Wolk
NOES: Nguyen
NO VOTE RECORDED: Moorlach, Roth, Runner
SENATE FLOOR: 37-1, 8/25/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Morrell, Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski,
Wolk
NOES: Nguyen
NO VOTE RECORDED: Moorlach
ASSEMBLY FLOOR: 76-1, 8/23/16 - See last page for vote
SUBJECT: Medi-Cal: emergency medical transport providers:
quality assurance fee
SB 1300
Page 2
SOURCE: 911 Ambulance Providers 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
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
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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) 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.
3) 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. Permits the director of DHCS to reduce the increased
fee-for-service (FFS) payment schedule if the director makes
a determination that the fees collected exceeds the amounts
allowable under federal law, only to the extent necessary to
reduce the fees to comply with the amount allowable under
federal law.
4) Requires, effective July 1, 2017, the Medi-Cal 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. Requires the increase to the FFS
payment schedule under this bill to be calculated on or
before June 15, 2017, and to remain the same for later fiscal
years. Requires the increase to the FFS payment schedule
under this bill to apply only to those billing codes
identified in, or any equivalent, predecessor, or successor
billing codes as may be determined by the director under this
bill.
5) 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
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would have received under FFS Medi-Cal, by referencing
existing federal law and regulation.
6) 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.
7) 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
$1 million for 2016-17 and $374,00 for the 2017-18 and
each fiscal year thereafter, 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
solely the QAF, along with any interest or other investment
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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.
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6) Requires emergency medical transport providers to remit to
DHCS annual QAF amounts, as specified. 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 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.
7) 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.
8) 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.
9) 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 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.
10) 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.
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11) Implements this bill, and continues implementation of this
bill, only if certain conditions are met, including federal
approval and the state maintaining its existing level of
state funding for emergency medical transports in an amount
not 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.
12) 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 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
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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
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 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/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. This bill provides that $350,000 per year
must 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
GF/federal.
SB 1300
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2)DHCS states it has been unable to independently verify data
provided by emergency medical transportation (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
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.
3)Unknown GF cost pressure, potentially in the millions
annually, to maintain higher ambulance transport rates if QAF
revenues are eliminated or changed.
SUPPORT: (Verified8/22/16)
911 Ambulance Provider's Medi-Cal Alliance (source)
American Ambulance
American Medical Response
California Ambulance Association
California Fire Chiefs Association
California Professional Firefighters
Emergency Medical Services Administrators Association of
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California
Fire Districts Association of California
Fresno County Board of Supervisors
Paramedics Plus
Gold Coast Ambulance
McCormick Ambulance Service
Mercy Medical Transportation Inc.
Napa County Board of Supervisors
OPPOSITION: (Verified8/22/16)
Department of Finance
Department of Health Care Services
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.
ARGUMENTS IN OPPOSITION: DHCS writes in opposition that
using QAF revenue to increase the Medi-Cal fee schedule for
ambulance services, rather than having QAF revenue fund
supplemental payments places the General Fund at greater risk of
having to maintain the augmented rates if there are any changed
circumstance affecting the amount of QAF DHCS can collect. In
addition, DHCS states that using projected amounts in
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calculating the QAF may pose a challenge to obtaining federal
approval because it would make the calculation of the fee
uncertain, and DHCS is concerned that General Fund may be
required if QAF revenue falls short, Medi-Cal ambulance
utilization increases, or federal law requires a reduction in
QAF fees.
GOVERNOR'S VETO MESSAGE:
I am returning Senate Bill 1300 without my signature.
This bill creates a new ambulance quality assurance fee to
be collected by the Department of Health Care Services.
This fee would be used to claim additional federal funding
necessary to increase Medi-Cal reimbursements for ambulance
services.
I support establishing a quality assurance fee to bring in
additional federal funding to support emergency
transportation services. However, the structure of the rate
increase in this bill is unlike any other fee structure
supported by health care related quality assurance fees. I
am concerned this structure puts the state general fund at
risk for paying the increased rate if the revenue falls
short or if the fee is reduced or removed in the future.
I urge the Legislature and ambulance providers to work with
the Departments of Health Care Services and Finance to
restructure this fee in a way that protects the general
fund and allows for an increase in reimbursement for
emergency transportation services.
ASSEMBLY FLOOR: 76-1, 8/23/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
SB 1300
Page 12
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper,
Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Grove, Hadley, Roger Hernández,
Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine,
Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,
Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,
Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas,
Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NOES: Harper
NO VOTE RECORDED: Chang, Gray, Steinorth
Prepared by: Scott Bain / HEALTH / (916) 651-4111
10/24/16 11:39:11
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