BILL ANALYSIS
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Mark Leno, Chair A
2009-2010 Regular Session B
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AB 2173 (Beall) 3
As Amended May 28, 2010
Hearing date: June 29, 2010
Government Code
MK:mc
EMERGENCY AIR MEDICAL TRANPORTATION PROVIDERS:
PENALTY LEVY: REIMBURSEMENT AUGMENTATION
HISTORY
Source: California Association of Air Medical Services
Prior Legislation: AB 1153 (Beall) - held in Assembly
Appropriations, 2009
Support: CDF Firefighters Local 2881; Mercy Air; Westport Fire
Protection District; Childrens Hospital Los Angeles;
California Shock Trauma Air Rescue (CALSTAR); Westside
Community Healthcare District; Patterson District
Ambulance; Diamond Springs Fire District; John C.
Fremont Healthcare District; Board for Critical Care
Transport Paramedic Certification; Mercy Medical Center
Mt. Shasta; Barton Health; The Oregon State Ambulance
Association; Trinity County Life Support; Mercy
Flights, Inc.; Hall Critical Care Transport; Placer
Hills Fire Protection District; California Children's
Hospital Association; Cal-Ore Life Flight; Reach Air
Medical Services; Sheriff, Trinity County; PHI Air
Medical; California Hospital Association; Regional
Council of Rural Counties; Congressman Dennis Cardoza
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Opposition:California Teamsters Public Affairs Council;
Automobile Club of Southern California; AAA of Northern
California
Assembly Floor Vote: Ayes 65 - Noes 8
KEY ISSUE
SHOULD $3 BE ADDED TO EVERY VEHICLE CODE FINE TO BE USED TO
SUPPLEMENT MEDI-CAL PAYMENTS TO AIR AMBULANCES?
PURPOSE
The purpose of this bill is to add $3 to every Vehicle Code
violation fine which will go into a newly created fund to
supplement Medi-Cal payments to air ambulances.
Existing law provides for an additional "state penalty" of $10
for every $10 or fraction thereof, upon every fine, penalty or
forfeiture imposed and collected by the courts for criminal
offenses including all offenses, except parking offenses,
involving the Vehicle Code. Of the money collected, 70 percent
is transmitted to the state and 30 percent remains with the
county. The state portion of the money collected from the
penalty is distributed in specified percentages among the
following: Fish and Game Preservation Fund (0.33 percent);
Restitution Fund (32.02 percent); Peace Officers Training Fund
(23.99 percent); Driver Training Penalty Assessment Fund (25.70
percent); Corrections Training Fund (7.88 percent); Local Public
Prosecutors and Public Defenders Fund (0.78 percent, not to
exceed $850,000 per year); Victim-Witness Assistance Fund (8.64
percent); Traumatic Brain Injury Fund (0.66 percent). (Penal
Code 1464.)
Existing law provides for an additional county penalty
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assessment of $7 for every $10 or fraction thereof, upon every
fine, penalty, or forfeiture imposed and collected by the courts
for criminal offenses, including all offenses involving a
violation of the Vehicle Code or any local ordinance adopted
pursuant to the Vehicle Code, except parking offenses. The
money collected shall be placed in any of the following funds,
if established by a County Board of Supervisors: Courthouse
Construction Fund; Criminal Justice Facilities Construction
Fund; Automated Fingerprint Identification Fund; Emergency
Medical Services Fund; DNA Identification Fund. (Government
Code 76000 et seq.)
Existing law , as a part of the 2002-03 Budget Act, the
Legislature imposed what was to be a temporary state surcharge
of 20 percent on every base fine collected by the court. All
money collected shall be deposited in the General Fund. This
section was made permanent in the 2007 Budget. (Penal Code
1465.7.)
Existing law established the "State Court Facilities
Construction Fund" and added a state court construction penalty
assessment in an amount up to $5 for every $10 or fraction
thereof, upon every fine, penalty, or forfeiture imposed and
collected by the courts for criminal offenses. The variation in
the amount is dependant on the amount collected by the county
for deposit into the local Courthouse Construction Fund
established pursuant to Government Code Section 76100.
As a result, the penalty assessment ranges from $0.00 for every
$10 in two counties to the full $5 for every $10 in nine
counties. This provision took effect on January 1, 2003.
(Government Code 70372.)
Existing law provides for a flat fee of $30 on every conviction
for a criminal offense to ensure adequate funding for court
security. (Penal Code 1465.8.)
Existing law , established by Proposition 69, November 2004,
levies a $1 penalty assessment on every $10 in fines and
forfeitures resulting from criminal and traffic offenses and
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dedicates these revenues to state and local governments for DNA
databank implementation purposes - the state will receive 70
percent of these funds in the first two years, 50 percent in the
third year and 25 percent annually thereafter. The remainder
will go to local governments. (Government Code 76104.6.)
Existing law creates an additional penalty assessment of $2 on
every $10 to support emergency medical services. (Government
Code 76000.5.)
This bill provides that a penalty of $3 shall be imposed on
every conviction for a violation of the Vehicle Code or a local
ordinance adopted pursuant to the Vehicle Code, except parking
offenses.
This bill provides that the penalty should be in addition to the
other penalty assessments, but should not be used to calculate
the base fine.
This bill provides that the county board of supervisors shall
establish in a county treasury an emergency air medical
transportation act fund into which the moneys should be
deposited.
This bill provides that on the last day of each calendar quarter
of the year, the county treasurer shall transfer moneys in the
county's emergency air medical transportation fund to the
Controller for deposit to the Emergency Air Medical
Transportation Act Fund which this bill establishes.
This bill provides that the Emergency Air Medical Transportation
Act Fund shall be administered by the State Department of Health
Care Services.
This bill provides that moneys in the Emergency Air Medical
Transportation Act Fund shall be made available upon
appropriation by the Legislature to augment emergency air
medical transportation reimbursement payments made through the
Medi-Cal program and to reimburse the Department of Health Care
Services, the courts, and each county for its expenses of
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administering this section.
This bill provides that the Department of Health Care Services
shall seek to obtain federal matching funds by using the moneys
in the Emergency Air Medical Transportation Act Fund for the
purpose of augmenting Medi-Cal reimbursement paid to emergency
air medical transportation services providers.
This bill provides that the Department of Health Care Services
shall use the moneys in the Emergency Air Medical Transportation
Act Fund and federal matching funds to increase the Medi-Cal
reimbursement or supplemental payments for emergency air medical
transportation services in an amount not to exceed normal and
customary charges charged by the emergency air ambulance
transportation service provider.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION IMPLICATIONS
The severe prison overcrowding problem California has
experienced for the last several years has not been solved. In
December of 2006 plaintiffs in two federal lawsuits against the
Department of Corrections and Rehabilitation sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
federal three-judge panel issued an order requiring the state to
reduce its inmate population to 137.5 percent of design capacity
-- a reduction of roughly 40,000 inmates -- within two years.
In a prior, related 184-page Opinion and Order dated August 4,
2009, that court stated in part:
"California's correctional system is in a tailspin,"
the state's independent oversight agency has reported.
. . . (Jan. 2007 Little Hoover Commission Report,
"Solving California's Corrections Crisis: Time Is
Running Out"). Tough-on-crime politics have increased
the population of California's prisons dramatically
while making necessary reforms impossible. . . . As a
result, the state's prisons have become places "of
extreme peril to the safety of persons" they house, .
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. . (Governor Schwarzenegger's Oct. 4, 2006 Prison
Overcrowding State of Emergency Declaration), while
contributing little to the safety of California's
residents, . . . . California "spends more on
corrections than most countries in the world," but the
state "reaps fewer public safety benefits." . . . .
Although California's existing prison system serves
neither the public nor the inmates well, the state has
for years been unable or unwilling to implement the
reforms necessary to reverse its continuing
deterioration. (Some citations omitted.)
. . .
The massive 750% increase in the California prison
population since the mid-1970s is the result of
political decisions made over three decades, including
the shift to inflexible determinate sentencing and the
passage of harsh mandatory minimum and three-strikes
laws, as well as the state's counterproductive parole
system. Unfortunately, as California's prison
population has grown, California's political
decision-makers have failed to provide the resources
and facilities required to meet the additional need
for space and for other necessities of prison
existence. Likewise, although state-appointed experts
have repeatedly provided numerous methods by which the
state could safely reduce its prison population, their
recommendations have been ignored, underfunded, or
postponed indefinitely. The convergence of
tough-on-crime policies and an unwillingness to expend
the necessary funds to support the population growth
has brought California's prisons to the breaking
point. The state of emergency declared by Governor
Schwarzenegger almost three years ago continues to
this day, California's prisons remain severely
overcrowded, and inmates in the California prison
system continue to languish without constitutionally
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adequate medical and mental health care.<1>
The court stayed implementation of its January 12, 2010, ruling
pending the state's appeal of the decision to the U.S. Supreme
Court. On Monday, June 14, 2010, the U.S. Supreme Court agreed
to hear the state's appeal in this case.
This bill does not appear to aggravate the prison overcrowding
crisis described above.
COMMENTS
1. Need for This Bill
According to the author:
Air ambulance services provide life-saving emergency
transportation from accident scenes directly to trauma
centers for the most critical patients. Emergency
helicopter air ambulance providers maintain a critical
link between rural areas and urban tertiary care
hospitals (i.e. trauma centers, heart/stroke centers,
and burn units). They are an essential part of the
statewide EMS system and play a key role in disaster
response and homeland security.
Emergency air ambulance services provide coverage to
multiple counties within a 100-mile radius of their
bases. As a result, transports often originate in a
county other than where they are based, which makes it
virtually impossible for them to be funded by local tax
support except in the geographically largest of
-----------------------
<1> Three Judge Court Opinion and Order, Coleman v.
Schwarzenegger, Plata v. Schwarzenegger, in the United States
District Courts for the Eastern District of California and the
Northern District of California United States District Court
composed of three judges pursuant to Section 2284, Title 28
United States Code (August 4, 2009).
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counties.
These critical service providers transport all emergency
patients without knowing if the patient has any form of
medical insurance or ability to pay for the service. A
significant number of emergency patients transported by
air ambulances have no insurance, are not eligible for
Medi-Cal, and have no ability to pay for the service,
yet these patients are rightfully given the same high
level of care as those with medical insurance.
For hospitals where patients are delivered, air
ambulance services providers are not eligible to apply
for additional federal funding for providing services to
high numbers of indigent patients pursuant to
California's disproportionate share hospital (DSH)
program under the Medi-Cal program.
The Medi-Cal program pays air ambulance services far
below the cost of providing emergency air
transportation, and pays nothing if the patient is
indigent and not eligible for Medi-Cal. Medi-Cal rates
for air ambulance services have not increased since
1993. Current Medi-Cal base rates for helicopter
services are only 40% of the average Medicare rates in
California, which are similarly inadequate to cover
costs. In rural areas, this can fall below 35% of the
cost of the transport service.
AB 2173 will provide for increased Medi-Cal funding of
emergency air ambulance transportation by imposing a
flat $3 fee on each motor vehicle violation in
California, with the exception of parking tickets.
Revenue generated by the additional penalty will be
augmented with federal matching funds by the State
Department of Health Care Services, who will then use
the funds to increase Medi-Cal payment rates and/or
provide supplemental payments to air ambulance
providers. This bill would provide critical funding to
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this essential life saving service.
2. Additional $3 on Every Vehicle Code Violation
This bill creates an additional $3 penalty on every Vehicle Code
or local ordinance fine to be deposited in a fund created by
this bill called the Emergency Air Medical Transportation Act.
The money is to be used to supplement the Medi-Cal payments to
air medical transportation providers.
3. Diminishing Returns
Until the budget year 2002-2003, there was 170 percent in
penalty assessments applied to every fine, the current penalty
assessments are 270 percent of the base fine. Thus, a $100 fine
is approximately $370; a $500 fine approximately $1,850; a $800
fine approximately $2,960, et cetera. Judges have the
discretion to reduce the base fine, which then reduces revenue
to state and local governments, as well as to assessments. With
the current penalty assessments already so high, increasing
fines and assessments may have the unintended consequence of
reduced fine collections. Indigent defendants facing
ever-increasing fees may simply choose to spend time in jail in
lieu of paying the fine, causing taxpayers to pay the jail costs
while state and local government receive fewer penalty funds.
Moreover, county jail population caps may provide additional
incentives to opt for jail time over fines, as the time served
for nonviolent offenders may be minimal.
As noted by the California Research Bureau (CRB) in its 2006
review of penalty assessments, "High penalty assessments may
result in higher rates of default by the guilty parties. Some
offenders may spend time in jail, or plea for community service,
rather than pay the fine and penalty assessment. The end result
may be that a substantial amount of fines, fees, and revenue is
not collected."
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4. Payments to Air Medical Transportation
According to CALSTAR, one of the supporters of this bill, while
the current raw cost of their air ambulance service the amount
they are paid for such service is as follows:
Average Private Insurance Payment--$20,795
Average Medicare Payment---$5,400
Average Medi-cal Payment---$2,838
Some percentage of their transports are also of indigent people
who do not have any type of insurance. According to the
sponsor, the Medi-Cal rates have not increased in 15 years.
This bill is intended to raise money to supplement the Medi-Cal
payments. They state that the funds raised by this assessment
will draw matching funds from the federal government.
The supporters argue that air ambulance patients are often
victims of vehicle accidents. If that is the case, it would be
interesting to know how much of the costs of the service are
eventually reimbursed by a car insurance settlement.
5. Assessments as a Revenue Source
As noted above, increased penalty assessments may result in less
fines actually being collected. Thus, assessments are not a
reliable funding source. With changes to the health care system
and other proposals to increase the Medi-Cal payments for air
ambulance drivers, would it be appropriate to place a sunset in
this bill to see if a more reliable funding for the payment of
the air ambulance services is found?
SHOULD A SUNSET BE PUT IN THIS BILL?
6. Opposition
The Automobile Club of Southern California and the AAA of
Northern California state that 70 percent to 80 percent of
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penalty assessment revenue is generated from Vehicle Code moving
violations. The AAA contends that while air medical
transportation is a laudable program, increasing program funding
via Vehicle Code assessments places a disproportionate burden
upon the motoring public.
The California Teamsters Public Affairs Council notes the cost
of citations has increased dramatically in recent years as an
alternative means of funding services. As a result, citations
are now unaffordable for many Californians and often fall on
commercial drivers.
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