BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 6XXXX
Author: Ducheny (D)
Amended: 7/23/09
Vote: 27 - Urgency
SENATE FLOOR : Not relevant
ASSEMBLY FLOOR : Not available
SUBJECT : Budget Act of 2009: health care and health
care financing
SOURCE : Author
DIGEST : Assembly Amendments delete the prior version of
the bill expressing the intent of the Legislature to enact
statutory changes relating to the 2009 Budget Act.
This bill now directs the Department of Health Care
Services (DHCS) to submit an application to the federal
Centers for Medicare and Medicaid Services (CMS) for a
waiver or demonstration project as specified, and further
directs the DHCS to maximize the receipt of federal funds
as specified.
ANALYSIS : This bill provides for two changes regarding
the Medi-Cal Program. Each change is discussed below.
1.Maximizing Receipt of Federal Funds under Medi-Cal
Program for the Waiver/Demonstration Project.
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Existing law provides for California's Hospital Financing
Waiver and Demonstration Project that enables the Medi-Cal
Program to obtain federal funding for the Medi-Cal
population, as well as certain uncompensated care
expenditures.
California has not been able to claim a component of this
Waiver/Demonstration Project due to conditions contained in
the Waiver. Further, this Waiver/Demonstration Project has
not fully accounted for additional savings which have been
generated within the Medi-Cal Program through additional
cost containment efforts.
The Budget Conference Committee discussed areas within the
Medi-Cal Program for which California should be able to
claim additional federal funds. A total of $1 billion
(federal funds) was identified for which the state is
presently in discussions with the federal CMS regarding,
including claiming more federal funds through this
Waiver/Demonstration Project. This bill will enable the
state to claim a considerable portion of these federal
funds. There is no General Fund affect.
This bill expresses the intent of the Legislature for the
department to maximize the receipt of federal funds under
Medi-Cal, including this Demonstration Project, by
identifying state resources which will enable the state to
obtain additional federal reimbursement during this
unprecedented fiscal crisis.
This bill provides the DHCS with broad discretion to claim
federal reimbursement, where applicable, for the following
expenditures:
A. Expenditures in programs funded by realignment
funds.
B. Expenditures in programs funded by the Mental
Health Services Act.
C. Other public expenditures, to the extent the
DHCS determines the expenditures to be appropriate
for claiming under the Demonstration Project.
The DHCS shall have discretion to claim additional
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Demonstration Project funding made available pursuant to
any amendments to this project made on or after October
2008 (date the federal American Recovery & Reinvestment Act
was effective for Federal Matching Assistance Percentage
increases).
This bill provides for the Department of Finance to
authorize expenditure of these federal funds as specified,
upon notification to the Joint Legislative Budget
Committee, in a manner consistent with federal law and that
offsets General Fund expenditures otherwise authorized in
the Budget Act of 2009 for the Medi-Cal Program.
This bill also provides the DHCS with authority to
discontinue use of expenditures from these stated programs
for claiming federal funds, as noted, in the event any
federal or state court issues a ruling precluding such
usage.
In addition, it provides for the DHCS to implement
provisions of the Waiver or Demonstration Project through
provider bulletin, or similar instruction. The DHCS shall
provide notification to the Joint Legislative Budget
Committee within five working days if that action is taken
in order to inform the Legislature that action is being
taken.
2.Provides for a Waiver or Demonstration Project for
Medi-Cal Managed Care, or Other Models, to Expand
Enrollment into Organized Systems of Care Across All
Medi-Cal Populations.
Existing law provides for the Medi-Cal Program, which is
administered by the Department of Health Care Services
(DHCS) and under which qualified low-income persons receive
health care services.
Existing law allows the DHCS to contract with one or more
prepaid health plans in order to provide Medi-Cal benefits.
Specifically, the director of the DHCS can contract with
any qualified individual, organization, or entity,
including counties, to provide services to, or arrange for,
or case manage the care of, Medi-Cal enrollees.
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This bill would require the DHCS to submit an application
to the federal Centers for Medicare and Medicaid (federal
CMS) for a Waiver or Demonstration Project to, among other
things, restructure the organization and delivery of
services to be more responsive to the health care needs of
Medi-Cal enrollees and to continue the support of the
safety net care system.
The restructuring proposals may include, but are not
limited to, the following:
A. Better care coordination for seniors and
persons with disabilities, dual eligibles, children
with special health care needs, and persons with
behavioral health conditions, which include the
establishment of organized delivery systems that
incorporate a medical home system and care and
disease management.
B. Improved coordination between Medicare and
Medi-Cal coverage.
C. Improved coordination of care for children with
significant medical needs through improved
integration of delivery systems and use of medical
homes.
D. Improved integration of physical and behavioral
health care.
The DHCS is to consult on a regular basis with interested
stakeholders and the Legislature in the development of the
Waiver or Demonstration Project.
The DHCS must submit the application to the federal CMS by
a date that provides for federal CMS approval by no later
than September 1, 2010, or the conclusion of the Medi-Cal
Hospital Finance/Uninsured Care Waiver, whichever happens
last.
The DHCS shall only implement the Waiver or Demonstration
Project upon submittal of an implementation plan to the
appropriate policy and fiscal committees of the Legislature
at least 60 days prior to any appropriation.
The bill requires the California Health and Human Services
Agency, or designated department, to submit a comprehensive
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implementation plan to the appropriate policy and fiscal
committees of the Legislature for implementation of the
Waiver or Demonstration Project. This plan is to be
developed in consultation with a stakeholder advisory
committee and is to include, among other things, the
following elements:
A. Plan readiness
B. Availability and accessibility of services,
including physical access and communication access
C. Benefit management and scope of services
D. Care coordination and case management
E. Cultural and linguistic appropriateness
F. Financial management
G. Measurement and improvement of health outcomes
H. Network capacity
I. Performance Measurement and Improvement
J. Strategies to be used to monitor performance of
all contractors and to ensure compliance with all
components of the Waiver or Demonstration Project
AA. Timeline of key milestones for implementation
BB. Provision of a framework for evaluation of the
Waiver or Demonstration Project
The bill provides the DHCS with discretion to utilize State
Plan Amendments to the Medi-Cal Program to accomplish
implementation of the approved Waiver or Demonstration
Project. In addition, it provides for the DHCS to
implement provisions of the Waiver or Demonstration Project
through all county letters or similar instruction after
consultation with stakeholders as specified.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
DLW:nl 7/23/09 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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