BILL ANALYSIS
AB 2233
Page 1
Date of Hearing: April 20, 2010
Counsel: Meghan Masera
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Tom Ammiano, Chair
AB 2233 (Nielsen) - As Amended: April 6, 2010
SUMMARY : Requires the California Department of Corrections and
Rehabilitation (CDCR) to create a new system of inmate health
care delivery and to work with the University of California and
the Federal Receiver to engage in a study to assess the concept
of turning the delivery of inmate health care over to the
University of California system. Specifically, this bill :
1)Creates the Academic Correctional Health Care Act that
requires the CDCR to create a preferred provider organization
or health management organization system of inmate health care
delivery that dramatically reduces costs to a level similar to
other large states, which is currently about one-half of
California's costs, while providing a constitutional level of
care to inmates. The implementation of this program shall
begin no later than one year after the effective date of this
bill, and the complete implementation of the program must
occur within four years of the effective date.
2)Requires the CDCR to give careful and expeditious
consideration to partnering with the University of California
in the delivery of inmate health care. The CDCR, in
cooperation with the University of California, Office of the
President, and in coordination with the Federal Receiver for
the California Prison Health Care Receivership Corporation,
shall engage in a study to assess and evaluate the concept of
and mutual interests in turning the delivery of inmate health
care over to the University of California system, with the
goals of significantly reducing costs while more efficiently
providing the constitutionally mandated level of care to
inmates.
3)Provides that the CDCR must include in its study a review of
similar reorganizations in Texas, New Jersey, and Georgia, as
well as the findings contained in the NuPhysicia study,
"Assessment and Evaluation: California's Opportunities for
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Improved Inmate Health Care Quality and Cost Controls" (March
17, 2010).
4)States that the study must consist of the following:
a) Streamlining the leadership structure within the
California correctional health care system;
b) A separation of duties where one entity assesses quality
and controls budgets, while a separate entity is
accountable for execution and delivery of care;
c) Evaluating the efficacy of the existing decentralization
of leadership of the current 33 independent entities, as
well as the divisions of medical, dental, and mental
health;
d) How to best leverage the existing academic health care
centers;
e) Implementation of true electronic medical records
instead of printing and scanning;
f) Expansion of telemedicine; and,
g) Centralization of pharmacy, supplies, and materials
management.
5)Requires that the study be completed and CDCR report the study
results to the Legislature by September 1, 2011. The
requirement for submitting a report imposed by this bill shall
become inoperative on September 1, 2015.
EXISTING LAW :
1)States that it is the intent of the Legislature that the CDCR
operate in the most cost-effective and efficient manner
possible when purchasing health care services for inmates. To
achieve this goal, it is desirable that CDCR have the benefit
and experience of the California Medical Assistance Commission
in planning and negotiating for the purchase of health care
services. The CDCR shall consult with the Commission to
assist the department in planning and negotiating contracts
for the purchase of health care services. The Commission
shall advise the CDCR, and may negotiate directly with
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providers on behalf of the CDCR, as mutually agreed upon by
both parties. (Penal Code Section 5023.)
2)Provides that the CDCR may contract with providers of health
care services and health care network providers, including,
but not limited to, health plans, preferred provider
organizations, and other health care network managers. CDCR
may only reimburse a non-contract provider of hospital or
physician services at a rate equal to or less than the amount
payable under the Medicare Fee Schedule, regardless of whether
the hospital is located within or outside of California.
Until regulations or emergency regulations are adopted, the
CDCR shall not reimburse a contract provider of hospital
services at a rate that exceeds 130% of the amount payable
under the Medicare Fee Schedule, a contract provider of
physician services at a rate that exceeds 110% of the amount
payable under the Medicare Fee Schedule, or a contract
provider of ambulance services at a rate that exceeds 120% of
the amount payable under the Medicare Fee Schedule. [Penal
Code Section 5023(a) to (c).]
3)Creates Phase I of the Public Safety and Offender
Rehabilitation Services Act of 2007 that allows the CDCR to
design, construct, or renovate housing units, support
buildings, and programming space in order to add up to 12,000
beds at facilities under its jurisdiction. CDCR shall
complete site assessments at facilities at which it intends to
construct or renovate additional housing units, support
buildings, and programming space. [Government Code Section
15819.40(a).]
4)Authorizes the CDCR to design, construct, and establish new
buildings at facilities under the jurisdiction of the
Department to provide medical, dental, and mental health
treatment or housing for up to 6,000 inmates. [Government
Code Section 15819.40(c).]
5)Creates Phase II of the Public Safety and Offender
Rehabilitation Services Act of 2007 that authorizes the CDCR
to complete site assessments at facilities where it intends to
construct or renovate additional housing units, support
buildings, and programming space in order to add up to 4,000
beds at facilities under its jurisdiction. After completing
these site assessments, CDCR shall define the scope and costs
of each project. Any new beds constructed shall be supported
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by rehabilitative programming for inmates, including, but not
limited to, education, vocational programs, substance abuse
treatment programs, employment programs, and prerelease
planning. The CDCR is authorized to design, construct, or
renovate housing units, support buildings, and programming
space in order to add up to 4,000 beds at facilities under its
jurisdiction. [Government Code Section 15819.40(a).]
6)Authorizes the CDCR to design and construct new, or renovate
existing, buildings at facilities under the jurisdiction of
the department to provide medical, dental, and mental health
treatment or housing for up to 2,000 inmates. [Government
Code Section 15819.40(c).]
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time cots in the range of $50,000 for the study.
COMMENTS :
1)Author's Statement : According to the author, "California's
prison health care costs are two to four times what other
large states pay. The entire health care management and
delivery systems need to be reconstituted based on best
practices and not a patchwork of court-compliance measures
that have created a large, inefficient and costly system.
"The current system is antiquated and has not drawn on success
stories from outside California. Fiscal management and
physical delivery of services are combined into a single
entity, where best practices suggest a separation of these
duties into two categories. CDCR operates 33 independent
entities with little-to-no coordination of services or
benefits from economies of scale. Medical, dental and mental
health divisions are currently 'siloed' which has lead to
redundant overhead expenses and impaired sharing of resources,
ideas and data.
"Part one of this bill directs CDCR to create a PPO or HMO-style
management system to reign in mushrooming costs of inmate
health care, while streamlining its delivery.
"Part two directs this creation process to include examining the
possibility of using the University of California (UC) system
as the delivery vehicle. This method is showing great promise
in three other states and should be examined in California.
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Using the UC is in no way mandated by this bill. In fact, all
qualified providers desiring to provide this care will bid on
the contract, just as in other state procurement efforts.
"With an inmate population of 168,000, California should be
enjoying the economic benefits of economies-of-scale, and
paying among the lowest per-inmate-cost, not the highest.
This bill is a step toward achieving that goal."
2)Prison Health Care Reform : Severe prison overcrowding and
inadequate inmate health care have prompted several lawsuits
and court-ordered reforms of the system. The most significant
of these has been Plata v. Schwarzenegger, (2005) U.S. Dist.
LEXIS 43796.
In Plata, the plaintiffs had filed a class action lawsuit in
2001 alleging that the health care provided to inmates in the
California correctional system did not meet minimum
constitutional requirements. In 2002, the State entered into
a consent decree, agreeing to employ a number of new medical
care policies and procedures to remedy the problem. By 2005,
California had still not improved its correctional health care
system enough to meet minimum constitutional standards. As a
result, in Plata, the judge placed California's correctional
health care system under the control of a federal receiver.
[Plata v. Schwarzenegger, (2005) U.S. Dist. LEXIS 43796.]
In an effort to reform the system and reduce prison
overcrowding, the Legislature passed AB 900 (Solorio), Chapter
7, Statutes of 2007. The two main goals of AB 900 were to
ease the state's massive prison overcrowding problem and to
overhaul inmate rehabilitation programs. AB 900 authorized a
total of $7.7 billion in lease revenue bonds to build 53,000
new prison, reentry and local jail beds. The money is to be
distributed in two phases. [Regents of the University of
California on behalf of Boalt Journal of Criminal Law, An
Update on the California Prison Crisis and Other Developments
in State Corrections Policy (2009) 14 Berkeley J. Crim. L.
143, 144.]
"Phase I provides $3.6 billion in bonds to create 12,000
so-called infill beds, which are beds on the grounds of
existing state prisons that will replace 'bad beds' - the
temporary housing in gymnasiums, dayrooms, classrooms and
hallways of the prison. This includes 6,000 new reentry beds
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for inmates who have less than a year of their sentence
remaining, and 6,000 new medical beds to improve prison health
care. (14 Berkeley J. Crim. L. 143, 144.)
"In Phase II, Assembly Bill 900 provides an additional $2.5
billion in lease revenue bonds for up to 16,000 new infill,
medical and reentry beds. However, this Phase II funding is
contingent on CDCR meeting certain rehabilitation and
construction goals during Phase I. There are thirteen
benchmarks that must be met in order to trigger Phase II
funding. Among the most significant are the requirements that
4,000 new beds be under construction, 2,000 of the original
reentry beds be under construction or have an identified site,
and that half of the substance abuse treatment beds be in
operation with continued treatment available upon release from
prison. During Phase I, the Department also must implement a
new inmate assessment tool at its reception centers and have
it operational for six months. There is no specific date by
which these benchmarks must be completed in order to activate
Phase II funding. (14 Berkeley J. Crim. L. 143, 144-45.)
"Another key component of Assembly Bill 900 is the $1.2 billion
allotted to create 13,000 new beds in the local county jails.
However, in order for counties to receive funding for new
jails in Phase I, they must agree to provide sites for reentry
facilities. These state-run 'mini-prisons,' which house up to
500 inmates each, would provide more intensive rehabilitation
programming for inmates who will soon be released on parole.
Aside from the major prison expansion plans, Assembly Bill 900
also authorizes CDCR to transfer inmates to out-of-state
facilities over the next four years." (14 Berkeley J. Crim.
L. 143, 145.)
Implementation of AB 900 has been significantly delayed.
However, according to the CDCR's Annual Report "Corrections:
Moving Forward" (2009), as of July 2009 CDCR had transferred
nearly 8,000 inmates out-of-state to ease overcrowding and
meet the goal established in AB 900. In addition, "CDCR
reduced the total number of non-traditional or 'bad beds' by
8,900 beds since reaching an all time high of 19,618 inmates
in these beds in August 2007. The August 2009 non-traditional
bed count was at 10,568, the lowest level since the 1990s."
[California Department of Corrections and Rehabilitation,
Corrections: Moving Forward (2009) p. IV.]
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CDCR also reports, "In February 2009, the California State
Legislature passed bills that provided necessary fixes to AB
900 in order to implement the reforms. As of July 2009, CDCR
has overcome multiple legal challenges to AB 900 and is able
to move forward with AB 900 implementation and pursuing the
sale of lease revenue bonds." [California Department of
Corrections and Rehabilitation, Corrections: Moving Forward
(2009) p. V.]
3)NuPhysicia's Assessment : In effort to work toward removing
itself from the control of federal receivership, the CDCR
requested that NuPhysicia complete an assessment of the
current inmate health care system and analyze whether an
integrated corrections health care system similar to those
employed in Georgia, New Jersey and Texas, is feasible in
California.
According to its Web site, "NuPhysicia evolved from the
telemedicine programs of The University of Texas Medical
Branch (UTMB) in Galveston, Texas. UTMB has been operating
successful telemedicine medical care since 1997. Through its
division of Correctional Managed Care, UTMB developed and
operates a large-scale program in prison health care that is
recognized as the nation's largest corrections telemedicine
system which provides specialty medicine, primary care
medicine, and behavioral health care." [NuPysicia, NuPhysicia
Origins (as of April 12, 2010).]
NuPhysicia released its assessment of the California
correctional health care system, "Assessment and Evaluation:
California's Opportunities for Improved Inmate Health Care
Quality and Cost Controls" (hereinafter NuPhysicia
Assessment), in March 2010. The assessment identified the
primary health care delivery challenges faced by the CDCR
[NuPhysicia, Assessment and Evaluation: California's
Opportunities for Improved Inmate Health Care Quality and Cost
Controls (March 2010) p. 5]:
a) The current health care system is based on court
mandates, not health care outcomes;
b) There is a lack of a single, statewide health care
delivery system in CDCR; and CDCR institutions operate as
33 independent entities with very limited coordination of
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care. Decentralization leads to process variances, cost
escalations, and inadequate data management.
c) Independent court cases are crippling efforts to manage
health care because medical, mental health, and dental
systems are all being operated independently.
The NuPhysicia Assessment stated, "Major changes in method of
the care delivery and administrative restructuring will be
necessary to provide progress toward the primary goals of
restoring a constitutional level of care, relieving the State
from court oversight, and providing improved cost management
for the CDCR health care program." NuPhysicia feels that
through implementation of a specific approach to improved
management, the State can achieve a constitutional level of
health care and dramatically reduce the cost of care by
implementing an academic correctional health care model.
[NuPhysicia, Assessment and Evaluation: California's
Opportunities for Improved Inmate Health Care Quality and Cost
Controls (March 2010) p. 6.]
The NuPhysicia Assessment recommends these improvements
through the following specific actions (Id. at p. 6):
a) Create a new administrative structure, the "Correctional
Health Care Authority", that will have the ability to
separate monitoring and budgetary functions from the
delivery of health care;
b) Integrate health care disciplines like medical, dental,
and mental health, into a single health care delivery
system;
c) Utilize the strength of the University of California
health centers by creating a model similar to other
successful, university based systems; and,
d) Make expedited operational changes in six specific
areas:
i) Utilize Electronic Medical Record Implementation
instead of document scanning;
ii) Accelerate the implementation and utilization of
telemedicine;
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iii) Centralize off-site care protocols and utilization
management;
iv) Centralize pharmacy services;
v) Centralize the supply logistics system; and,
vi) Centralize dialysis services.
4)University of California Participation : At the Governor's
request, officials from the University of California
cooperated with NuPhysicia during the assessment process.
However, there has been no agreement among parties to move
corrections health care under the umbrella of the University
of California's health care system.
In March 2010, the Chairman of the University of California's
Board of Regents said that it would form a special committee
to study whether to take over inmate health care for CDCR.
The committee will study issues including the cost, effect on
labor relations, and the university's liability in inmate
lawsuits. [Thompson, UC Regents to Study Prison Health Care
Takeover, Associated Press (March 25, 2010).]
5)Related Legislation :
a) AB 2222 (Galgiani) authorizes the CDCR to install
telemedicine fixtures and broadband infrastructure in new
or existing buildings. AB 2222 will be heard by this
Committee today.
b) AB 2668 (Galgiani) requires the CDCR Secretary to
install telemedicine fixtures and broadband infrastructure
in the CDCR Medical Facility. AB 2668 will be heard by
this Committee today.
6)Prior Legislation :
a) AB 900 (Solorio), Chapter 7, Statutes of 2007,
authorized the CDCR to design, construct, or renovate
prison housing units, prison support buildings, and
programming space in order to add new beds; to acquire
land, design, construct, and renovate reentry program
facilities; and to construct and establish new buildings at
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facilities under CDCR's jurisdiction to provide medical,
dental, and mental health treatment or housing for inmates.
b) SB 81 (Committee on Budget and Fiscal Review), Chapter
175, Statutes of 2007, specified additional items to be
included in the master plan relative to the construction
and renovation projects authorized by AB 900.
REGISTERED SUPPORT / OPPOSITION :
Support
None
Opposition
None
Analysis Prepared by : Meghan Masera / PUB. S. / (916)
319-3744