BILL ANALYSIS
AB 342
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CONCURRENCE IN SENATE AMENDMENTS
AB 342 (John A. Perez)
As Amended October 6, 2010
2/3 vote. Urgency
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|ASSEMBLY: |78-0 |(May 28, 2009) |SENATE: |29-1 |(October 7, |
| | | | | |2010) |
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Original Committee Reference: HEALTH
SUMMARY : Enacts statutory changes necessary for the Department of
Health Care Services (DHCS) and counties to implement a new proposed
Comprehensive Demonstration Project Waiver (Section 1115 Waiver) in
the Medi-Cal Program.
The Senate amendments delete the Assembly approved version and
instead:
1)Authorize DHCS to implement the provisions, terms and conditions
of the proposed new federal Medicaid Demonstration Project waiver,
A Bridget To Reform, pursuant of Section 1115(a) of the Social
Security Act and to begin approving local Coverage Expansion and
Enrollment Demonstration (CEED) projects, proposed by local
eligible entities, as defined, subject to federal approval,
effective on or after November 1, 2010 and no later than March 1,
2011.
2)Require CEED projects to be designed and implemented with systems
and program elements necessary to facilitate the transition to
Medi-Cal coverage or alternative coverage through the California
Health Benefits Exchange, as appropriate by 2014.
3)Require DHCS to approve CEED projects proposed by eligible local
entities to provide scheduled health care benefits, consistent
with the terms and conditions of the demonstration project, to
uninsured adults, between the ages of 19 and 64, who are not
otherwise eligible for Medi-Cal or Medicare, with incomes up to
133% of the federal poverty level (FPL) and that meet specified
requirements, terms and conditions.
4)Authorize CEED projects to provide services to individuals with
income between 134% and 200% of FPL, to the extent federal funds
are available and establish a process for allocating federal
funding among CEEDs who have agreed to provide the nonfederal
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share to cover these individuals in the event there is a limit on
the federal funds available or there are requirements that are
different from those that apply to individuals with income under
133% and require, at a minimum, existing enrollees of the Health
Care Coverage Initiatives (HCCI) retain coverage.
5)Establish a process and time line for eligible entities to apply
to implement a CEED project that includes a required notification
to eligible entities, by the department by January 1, 2011 or 60
days after federal approval, of the requirements and the process
for submitting an application. Require the application to be
approved or denied within 60 days of receipt and require denials
to be in writing with reasons. Establish a process for
reconsideration.
6)Authorize approvals to be retroactive, allows for up to three
months retroactive benefits for individuals for services provided
in the CEED network and allows existing HCCIs to remain in effect
for up to 6 months.
7)Authorize eligible entities to perform outreach and enrollment
activities to target specific populations, including people who
are homeless, individuals who frequently use inpatient or hospital
emergency department services for avoidable reasons, or people
with mental health or substance abuse needs.
8)Require each CEED project to establish income eligibility
standards that are based on the FPL and is set between 0 and 133%
of FPL.
9)Authorize the CEED projects to limit enrollment, if authorized by
the Centers for Medicare and Medicare Services (CMS) in the terms
and conditions of the demonstration project and subject to
approval by DHCS, and the County Board of Supervisors.
10)Provide that CEED projects are not required to be a licensed
health care plan and that these projects are not intended to
create an entitlement.
11)Require DHCS to approve any CEED project that is proposed by an
entity that agrees to provide annually, the nonfederal share of
project expenditures and meets the following specified
requirements, subject to the terms and conditions of the new
demonstration project:
a) Development of a standardized eligibility and enrollment
procedure to interface with Medi-Cal, according to
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collaboratively established milestones;
b) Designation of a medical home to which eligible individuals
would be assigned, and defined as a single provider, facility,
or health care team that maintains the individual's medical
information and coordinates health care services for the
individual, and meets other specified elements;
c) Provide a scheduled package of services that limits the
services covered to those provided within an approved CEED
project provider network and delivery system;
d) Include a provider network that seeks to promote the
viability of the existing primary care safety net and meets the
standards established in the terms and conditions of the
demonstration project;
e) An outreach and enrollment plan that reaches potential
enrollees and begins to transition eligible individuals to
Medi-Cal coverage or enrollment in the Exchange in 2014;
f) A quality measurement and quality monitoring system,
including a data tracking system for use in evaluation and
performance measures;
g) Promotion of viability of existing safety net;
h) Consumer assistance including making material available that
provides information on the scope of covered services,
exceptions, and limitations, premiums, co-payments and
deductibles, participating providers, the medical home choices
available and the CEED project's telephone number for
additional information with applications, access, and
participation; and,
i) Ability to meet program requirements, standards, and
performance measurement as developed by DHCS in consultation
with participating counties.
12)Specify the minimum elements of a medical home including the
following elements which are to be considered in the contracting
process:
a) Acting as the primary health care contact and facilitating
access to preventive, primary, specialty, mental health or
chronic illness treatment;
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b) Conducting intake assessments;
c) Providing referrals to community resources or other
professionals and agencies;
d) Care coordination, as specified;
e) Care management, case management, and transition among
levels of care;
f) Use of clinical guidelines and other evidence-based medicine
when applicable;
g) A focus on continuous improvement in quality of care;
h) Providing timely access to interpretation services; and,
i) Providing health information, education, and support in a
culturally competent manner.
13) Authorize DHCS to make additional modifications of the
elements of a medical home, if necessary to secure federal funding
that is available under the Patient Protection and Affordable Care
Act (Public Law 111-148) (PPACA).
14) Require DHCS, in consultation with the participating entities,
to develop an actuarially sound per enrollee capitation rate for
the CEED projects that is adequate and sufficient to ensure access
and is based on utilization and cost data specific to the project
or county. Require each CEED to submit proposed methodologies and
rates, as specified, as part of the rate development. Require the
rate to be determined annually and allows for adjustments.
15) Specify the costs that shall be considered in the rate
development, including the cost of services, administrative costs,
graduate medical education costs, and case management services,
and prohibit any limit on payments to CEED projects that is based
on the reimbursement that would be available under a Medi-Cal
Program.
16) Authorize DHCS to establish a risk corridor for the purposes
of rate adjustments if necessary and to develop a mechanism to
provide incentive payments based on performance criteria.
17) Authorize DHCS to use a cost-based reimbursement methodology
as an alternative to a capitation rate and as a default if no
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agreement on a rate is reached between the CEED project and DHCS
and allow federal matching funds for specified administrative
expenses.
18) Provide the allocation of funds for each CEED project is to be
based on, the amount that the participating entities voluntarily
provides as the nonfederal share, any limitations imposed by the
CMS terms and conditions, whether funds are allocated for
individuals with incomes between 134% and 200% of FPL, and whether
funding would result in reductions of other payments under the
waiver.
19) Establish mechanisms to pay the costs of the CEED projects
through intergovernmental transfers of funds and federal funds to
the CEED Project Fund and authorizes payment if a CEED project is
operated through a contract and based on certified public
expenditures.
20) Specify time lines for payment to CEED projects, judicial
remedies to enforce the payment obligation and other provisions to
provide payment for costs to the CEED projects including
administrative costs, subject to terms and conditions of the
demonstration project.
21) Create the CEED Project Fund and provides that it is
continuously appropriated.
22) Require, on or after January 1, 2014, implementation of
comprehensive health care reform for the CEED population in
compliance with the federal PPACA.
23) Require DHCS to ensure that the CEED projects are evaluated as
specified and authorize use of private funds as specified.
24) Provide that participation in the CEED projects is voluntary,
including under the federal PPACA and that as part of the
voluntary agreement to participate, counties agree to reimburse
the state for the nonfederal share of administrative costs.
25) Authorize DHCS to implement by means of specified letters or
other notices in lieu of regulatory action and require
consultation with stakeholders and notice to the Legislature.
26) Provide that in the event of a conflict between these
provisions and the terms and conditions of the demonstration
project, the terms and conditions apply.
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27) Make enactment conditioned on the enactment of SB 208
(Steinberg).
28) Provide that this is an urgency measure and will become
effective immediately upon enactment.
AS PASSED BY THE ASSEMBLY , this bill required DHCS to submit a
waiver application to the federal government for a demonstration
project that, among other provisions, maximizes opportunities to
expand coverage to eligible but uninsured populations.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS: This bill and SB 208 (Steinberg) are part of a two bill
package to implement a new proposed Medi-Cal demonstration project
under the authority of Section 1115(a) of the Social Security Act.
This bill contains all the provisions that relate to the CEED
projects and SB 208 contains provisions that relate to hospital
financing, mandatory enrollment of Seniors and Person with
Disability into Medi-Cal managed care plans, and pilot projects to
provide organized systems of care to California Children's Services
and Medi-Cal eligible children and to Medicare and Medi-Cal dual
eligible persons.
In 2005, the State of California sought a five year federal waiver
as a Medicaid demonstration project under the authority of Section
1115(a) of the Social Security Act. Under this waiver, hospital
financing was fundamentally restructured. The non-federal share of
Medi-Cal funds for 22 county and University of California hospitals
known as Designated Public Hospitals was shifted from State General
Funds to Certified Public Expenditures (CPEs).
The waiver also created the Safety Net Care Pool to pay for services
to the uninsured and for unreimbursed Medi-Cal expenditures
delivered through public hospitals, other governmental entities and
state-funded programs. A portion of these funds were contingent on
implementation of an HCCI pilot program. In October 2007 CMS
approved the state's proposal for the HCCI. Under the current
waiver, $180 million in federal funds were allotted to the
county-based HCCIs to provide coverage to more than 130,000
medically-indigent adults who are not eligible for other public
programs. Using a competitive process, California selected 10
counties in waiver years three, four, and five (September 1,
2007-August 31, 2010) to provide coverage to this population through
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an organized system of care. The participating counties-Alameda,
Contra Costa, Kern, Los Angeles, Orange, San Diego, San Francisco,
San Mateo, Santa Clara, and Ventura-use CPEs to draw down the
available federal funds.
PPACA requires states, by January 1, 2014 to cover all childless
adults under age 65 and with family incomes up to 133% FPL in their
Medicaid program and to offer subsidized coverage through a
statewide insurance exchange. States have the option of early
implementation as long as the plan doesn't provide coverage to
people at higher incomes than those who are not covered.
California's proposal is to allow an incremental approach by
expanding on the existing HCCIs and allowing all counties to
participate. The individual county expansions will be dependent on
the availability of county funding. Specifically, the state is
proposing to use the Section 1115 (a) waiver process to treat
coverage for the newly eligible (up to 133% of FPL) as a new
optional eligibility group within an option to cover individuals
with income between 133-200% of FPL if additional federal funds are
approved, as a "Bridge to Reform" under PPACA. The state is
requesting blanket waivers from such requirements as state wideness,
comparability, and freedom of choice in order to implement this
approach. However, the state acknowledges that statewide uniformity
will be required by 2014.
Under the new waiver, the state is proposing to work with the
counties to create more standardized eligibility and enrollment,
benefits, provider networks, use of medical homes, and data
collection. Under PPACA, The Secretary of the Department of Health
and Human Services will be establishing definitions for a
"benchmark" or "bench mark equivalent" plan. The state is proposing
to establish a minimum benefits package that would be a transition
to these requirements.
The current waiver was due to expire on September 1, 2010. DHCS is
in the process of negotiating a new waiver, but the specific terms
and conditions have not yet been finalized. On August 19, 2010,
DHCS requested a 60 day extension. On August 27, 2010 CMS granted
the request. Given that the current hospital financing waiver is
expiring, a new waiver must be negotiated and established by
November 1, 2010. This bill and the companion bill, SB 208, are the
product of negotiations, stakeholder forums and other input,
including language submitted by the Governor at the May revision,
informal feedback from preliminary discussions with CMS, and
legislative revisions.
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Analysis Prepared by : Marjorie Swartz / HEALTH / (916) 319-2097
FN: 0007210