BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1966
                                                                  Page  1

          Date of Hearing:   April 28, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 1966 (Fletcher) - As Amended:  April 5, 2010 

          Policy Committee:                              Health Vote:19-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes Federally Qualified Health Centers (FQHC)  
          and Rural Health Clinics (RHC) to be reimbursed for Medi-Cal  
          inpatient obstetrical and gynecological (ob/gyn) services at a  
          fee-for-service (FFS) rate.  This bill requires the Department  
          of Health Care Services (DHCS) to establish a separate FFS  
          billing number and to apply for federal approval by March 1,  
          2011. 

           FISCAL EFFECT  

          1)A one-time cost of $300,000 (25% GF) to $500,000 (25% GF) to  
            the Department of Health Care Services (DHCS) to make Medicaid  
            Management Information System (MMIS) changes including billing  
            definitions, computer coding, testing, and implementation.  
            Actual costs may be less to the extent the programming  
            workload is less complex than determined at the outset or to  
            the extent this change dovetails with other MMIS changes  
            pending. 

          2)An unknown reduction in administrative costs to move from the  
            current system of approving a clinic-based provider and  
            replacing such approval with a fee-for-service billing code. 

           COMMENTS  

           1)Rationale  . This bill is sponsored by the California Primary  
            Care Association (CPCA) to reduce administrative barriers that  
            certain clinics and providers face in treating pregnant women.  
            This bill replaces multi-step administrative processes  
            established by DHCS in 2005 and creates a mechanism by which  
            clinics may ensure that their low-income patients have access  
            to medically necessary specialty care services via a single  
            billing code. 






                                                                  AB 1966
                                                                  Page  2

           2)Background  . FQHC and RHC are a type of provider defined by  
            federal Medicaid and Medicare law. These designations enable  
            qualified providers in medically underserved areas to receive  
            enhanced reimbursement and allows for the direct reimbursement  
            of nurse practitioners, physician assistants, and certified  
            nurse midwives. These clinics provide comprehensive primary  
            health, oral, and mental health services to beneficiaries of  
            all ages throughout urban and rural communities statewide. 

          Under current law, in order for a clinic-based physician to  
            provide inpatient hospital services, the provider must  
            complete numerous forms and the clinic must make several  
            billing adjustments related to a clinic's prospective payment  
            system (PPS). PPS is a bundled rate paid to a clinic for a  
            patient visit and does not account for in-patient hospital  
            costs such as delivery of a baby. This bill replaces these  
            processes with a single billing code. 

           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081