BILL ANALYSIS
AB 1985
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Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1985 (Galgiani) - As Introduced: February 17, 2010
Policy Committee: Health Vote:15-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes the California Department of Corrections
and Rehabilitation (CDCR), subject to approval by the federal
receiver of medical care, to establish a list of durable medical
equipment (DME) and to determine the maximum allowable
reimbursement rates for each item, per methodologies used in the
Medi-Cal program. Exempts the provisions of the bill from the
Administrative Procedures Act.
FISCAL EFFECT
1)This bill is permissive. If CDCR chose to implement the DME
approach proposed in this bill, the fiscal impact is a
one-time GF cost of $250,000 to CDCR to research and establish
a list of DME and associated fee schedules for 33 correctional
facilities with distinct procurement and expenditure policies.
2)Annual GF costs of $1.5 million to $2 million to CDCR to
provide staff to oversee the implementation and procurement of
DME pursuant to the provisions of this bill.
3)Unknown GF savings may accrue to the extent a centralized
procurement and reimbursement system brings down CDCR costs
for DME.
COMMENTS
1)Rationale . This bill is author sponsored and proposes to
conform the reimbursement of durable medical equipment in
California prisons to current law under the Medi-Cal program.
DME includes items such as wheelchairs, hospital beds, oxygen,
AB 1985
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and related respiratory equipment.
This bill proposes DME language enacted by AB 1762 (Committee on
Budget), Chapter 230, Statutes of 2003 for the Medi-Cal
program to be applied to DME procured by CDCR. The author
indicates this approach will increase efficiencies and
generate savings.
2)Plata Receivership Eclipses DME Requirements in Legislation .
In February 2006, the federal District Court for Northern
California appointed a receiver to control the delivery of
medical services for California prisoners. Given that CDCR
medical care is now under federal receivership, it may be
appropriate to allow the receiver to evaluate whether CDCR is
following the dictates of current court orders and best
medical practices before requiring additional practices that
may overlap or conflict with the direction of the
receivership.
3)Medi-Cal Audit of DME . Following a Bureau of State Audits
report in 2002 about prohibitive DME cost escalation in
Medi-Cal, AB 1762 was enacted to require Medi-Cal to establish
price caps and fee schedules. Following enactment of those
provisions, Medi-Cal DME costs were reduced substantially.
While the enactment of AB 1762 may have generated cost savings
and alleviated escalating expenditures under Medi-Cal, the
funding and circumstances of health care provided in
California prisons are fundamentally different. The approach
that was effective for Medi-Cal may not be plausible in the
corrections environment. The CDCR approach to DME is generally
decentralized and is focused around competitive bidding for
costs of less than $100,000 and for costs in excess of
$100,000 the Department of General Services handles
procurement. It is unclear how easily CDCR could adapt to the
approach contained in this bill.
4)Related Legislation . AB 2119 (Galgiani) in 2008 was similar to
this bill, but required action by CDCR, while AB 1985 is
permissive. AB 2119 was held on the Suspense File of this
Committee.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081