BILL ANALYSIS
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THIRD READING
Bill No: AB 1985
Author: Galgiani (D)
Amended: 7/15/10 in Senate
Vote: 21
SENATE PUBLIC SAFETY COMMITTEE : 5-0, 6/29/10
AYES: Leno, Cedillo, Huff, Steinberg, Wright
NO VOTE RECORDED: Cogdill, Hancock
SENATE APPROPRIATIONS COMMITTEE : 10-0, 8/2/10
AYES: Kehoe, Alquist, Ashburn, Corbett, Emmerson, Leno,
Price, Wolk, Wyland, Yee
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 52-22, 6/1/10 - See last page for vote
SUBJECT : Corrections: contract health care providers
SOURCE : California Prison Health Care Services (Federal
Receiver)
DIGEST : This bill requires the Department of Corrections
and Rehabilitation (CDCR), by January 1, 2011, to adopt
industry standard claim forms for use by contract health
care providers, to be able to accept electronic submissions
of claims from contract health care providers, to perform
periodic audits of claims paid to contract health care
providers, and to provide remote electronic access to claim
status information to contract health care providers. This
bill authorizes CDCR to adopt policies and procedures for
CONTINUED
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enabling electronic health care claims management and
processing, and would exempt the adoption, amendment, and
repeal of policies and procedures for this limited purpose
from the rulemaking provisions of the Administrative
Procedures Act.
ANALYSIS : Current law establishes the following durable
medical goods (DME) reimbursement rules for Medi-Cal:
1. Requires the Department of Health Care Services (DHCS)
to establish a list of covered services and maximum
allowable reimbursement rates for DME, as defined, and
requires the list to specify utilization controls to be
applied to each type of DME.
2. Requires reimbursement for DME, except wheelchairs and
speech-generating devices to be the lesser of:
A. The amount billed pursuant to DHCS regulations.
B. An amount that does not exceed 80 percent Medicare
allowance.
C. Or, the guaranteed negotiated acquisition cost by
means of exclusive or nonexclusive contracts on a bid
plus a specified percentage markup.
3. Requires reimbursement for wheelchairs and
speech-generating devices and their related accessories
to be the lesser of:
A. The amount billed pursuant to DHCS regulations.
B. An amount that does not exceed 100 percent of
Medicare allowance.
C. Or, the guaranteed negotiated acquisition cost by
means of exclusive or nonexclusive contracts on a bid
plus a specified percentage markup.
4. Requires reimbursement for all DME utilizing codes with
no specified maximum allowable rate to be the lesser of:
A. The amount billed pursuant to DHCS regulations.
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B. The guaranteed negotiated acquisition cost
negotiated by means of exclusive or nonexclusive
contracts on a bid plus a specified percentage
markup.
C. The actual acquisition cost plus a markup
established by DHCS.
D. A specified percentage of the manufacturer's
suggested retail purchase price on June 1, 2006, as
specified, not to exceed 15 percent for wheelchairs
and wheelchair accessories if the provider employs or
contracts with a qualified rehabilitation
professional.
E. Or, a price established through targeted
product-specific cost containment provisions
developed with providers.
5. Requires reimbursement for all DME supplies and
accessories billed to the Medi-Cal Program to be the
lesser of the amount billed pursuant to pursuant to DHCS
regulations or the acquisition cost plus a 23 percent
markup. (Section 14105.48 of the Welfare and
Institutions Code)
This bill requires CDCR, by January 1, 2011, to do the
following:
1. Adopt industry standard claims forms for use by contract
healthcare service providers.
2. Be able to accept secure electronic submission of claims
from contract healthcare service providers.
3. Perform periodic audits of claims paid to contract
healthcare providers.
4. Provide secure, remote electronic access to claim status
information to those contract healthcare service
providers submitting claims electronically in the manner
required by the department.
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This bill permits CDCR to adopt policies and procedures for
the purpose of enabling electronic healthcare claims
management and processing and would exempt the adoption,
amendment, or repeal of policies and procedures for this
limited purpose from the rulemaking provisions of the
Administrative Procedure Act, as specified.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Codifies existing practice No new state costs
resulting from this bill General
New state savings after receivership
ends General
Administrative Procedures Potentially significant
future state savings General
Act exemption
SUPPORT : (Verified 8/3/10)
California Prison Health Care Services (Federal Receiver)
(source)
ARGUMENTS IN SUPPORT : According to the author, "The
Department of Corrections and Rehabilitation's medical care
system is in a current state of crisis, as evidenced by the
fact it was placed in a federal receivership. Any way the
state of California can assist the Receiver in finding ways
to cut state costs in the prison medical care system is a
plus."
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Coto, Davis, De La
AB 1985
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5
Torre, De Leon, Eng, Evans, Feuer, Fong, Fuentes, Fuller,
Furutani, Galgiani, Gilmore, Hall, Hayashi, Hernandez,
Hill, Huffman, Jones, Lieu, Bonnie Lowenthal, Ma,
Mendoza, Monning, Nava, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Skinner, Solorio, Swanson,
Torlakson, Torres, Torrico, Yamada, John A. Perez
NOES: Adams, Anderson, Blakeslee, DeVore, Emmerson,
Gaines, Garrick, Hagman, Harkey, Huber, Jeffries, Knight,
Logue, Miller, Nestande, Niello, Nielsen, Norby, Silva,
Smyth, Tran, Villines
NO VOTE RECORDED: Bill Berryhill, Tom Berryhill, Cook,
Fletcher, Audra Strickland, Vacancy
RJG:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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