BILL ANALYSIS
SB 208
Page 1
SENATE THIRD READING
SB 208 (Steinberg and Alquist)
As Amended October 7, 2010
2/3 vote. Urgency
SENATE VOTE :38-0
HEALTH 13-0 APPROPRIATIONS 12-0
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Bradford, |
| |De La Torre, De Leon, | |Huffman, Coto, Davis, De |
| |Eng, Hayashi, Hernandez, | |Leon, Gatto, Hall, |
| |Jones, Bonnie Lowenthal, | |Skinner, Solorio, |
| |Nava, V. Manuel Perez, | |Torlakson, Torrico |
| |Salas | | |
| | | | |
| | | | |
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SUMMARY : Enacts statutory changes necessary for the Department
of Health Care Services (DHCS) and counties to implement a new
proposed Comprehensive Demonstration Project Waiver (Section
1115 Waiver) in the Medi-Cal Program. Specifically, this bill :
1)Requires existing statutory provisions, enacted by SB 1100
(Perata), Chapter 560, Statutes of 2005, implementing the
hospital financing provisions of the 2005 Medi-Cal
Hospital/Uninsured Care Waiver remain in effect to the extent
there is no conflict with this bill or the terms and
conditions of the new Medi-Cal Section 1115 demonstration
project.
2)Requires, in the event of a conflict between this bill and the
special terms and conditions required by the federal Centers
for Medicare and Medicaid Services (CMS) for approval of the
new demonstration project, the terms and conditions to
control.
3)Requires the state have priority to claim the first $500
million in federal funds obtained under the new demonstration
project as a match for expenditures incurred under state-only
programs.
4)Authorizes funds from the first $500 million be re-allocated,
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if necessary as determined by the director of DHCS to ensure
that at least the $681.64 million of "base funding", as
defined, from the original waiver is available to the
designated public hospitals.
5)Grants the director authority to maximize available federal
funds including the use of intergovernmental transfer funding
for district hospitals that do not have a contract through the
Selective Provider Contracting Program.
6)Establishes the Public Hospital Investment, Improvement and
Incentive Fund consisting of intergovernmental transfers from
counties or other specified governmental entities, to be
matched with federal funds if approved by CMS and authorized
by the waiver, and to be used for investment, improvement and
incentive payments for designated public hospitals and the
affiliated governmental entities (Counties and UC).
7)Provides that participation in intergovernmental funding is
voluntary and that the transferring entity is responsible for
the administrative and staff costs to the DHCS.
8)Requires DHCS to seek federal approval for a Medicare,
Medicaid, or combination, demonstration project or waiver for
persons who are Medi-Cal and Medicare eligible (dual eligible)
in up to four counties. Authorizes DHCS to require dual
eligibles to be assigned as mandatory enrollees as part of the
pilot project. And to identify the models for the pilot
project by March 1, 2011.
9)Provides that mandatory enrollment in the dual eligible pilot
project applies only to an enrollees Medi-Cal benefits and
that enrollment in the Medicare Advantage Special Needs Plan
will continue to be optional.
10)Requires any pilot project to utilize existing mechanisms,
including contract, direct hire, public authority or nonprofit
consortium, when providing In-Home Support Services (IHSS).
11)Authorizes DHCS to require the mandatory enrollment of
seniors and people with disabilities (SPDs) in a Medi-Cal
managed care plan commencing the later of June 1, 2011, or
obtaining federal approval and allows a phase-in over a 12
month period.
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12)Establishes a methodology for the assignment of SPDs who do
not choose a plan that is based on utilizations history, plan
quality and the inclusion of safety net providers; establishes
a stakeholder workgroup to advise on the development of
quality data submission standards and establishes penalties
for plan noncompliance.
13)Establishes contract, performance, quality and network
adequacy measures and standards that must be met in order to
implement mandatory enrollment.
14)Provides that the terms and conditions of the CMS approved
demonstration project shall control in the event of a conflict
and in such event requires DHCS to identify the specific
provision and provide notice to the Legislature.
15)Requires the health plans to develop a mechanism to identify
higher risk enrollees with complex health needs, in
consultation with individual plan member consumers and
stakeholders, and requires DHCS to review and approve the
mechanism.
16)Requires the plans to use a facility site review tool to
assess the physical accessibility of providers and requires it
to be publicly available.
17)Specifies that the elements of a medical home include
providing referrals and assuring timely preventive, acute and
chronic illness treatment in the appropriate setting.
18)Authorizes DHCS to make additional modifications to the
elements of a medical home, if necessary to secure federal
funding that is available under the Patient Protection and
Affordable Care Act (Public Law 111-148).
19)Authorizes, except in a county with a County Organized Health
System, DHCS to contract with additional plans to provide
services to SPDs in any county with less than two existing
Medi-Cal managed health care plans.
20)Authorizes DHCS, for a three-year period, to include a risk
sharing mechanism in the contract with the Medi-Cal Managed
Care Local Initiative demonstrating the highest potential cost
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risk in a conversion from fee for service to capitation in a
specified rate study.
21)Provides, at the director's discretion, authority to allow
mandatory enrollment of SPDs in Los Angeles to be phased in
over a 12-month period using geography as a factor.
22)Requires IHSS services provided to enrollees of Medi-Cal
managed health care plans to be provided by means of existing
mechanisms (contract, direct hire, public authority or
nonprofit consortium).
23)Establishes a mechanism, conditioned on federal approval, for
the voluntary transfer of public funds by designated public
hospitals, the University of California, counties and other
entities, to be used as the nonfederal share of payments to
Medi-Cal managed care plans for services provided to Medi-Cal
enrollees. Require payments made by Medi-Cal managed care
plans, for services provided by these transferring entities,
to be no less than the entity would have received on a fee for
service basis.
24)Requires DHCS to establish, by January 1, 2012, organized
health care delivery models for children eligible for CCS and
Medi-Cal. Any model selected must be one of the following:
a) An enhanced primary care case management;
b) A provider-based accountable care organization;
c) A specialty health care plan; or,
d) A Medi-Cal managed care plan that includes payment and
coverage for CCS-eligible conditions.
25)Authorizes DHCS to require mandatory enrollment of CCS
eligible children in a pilot project.
26)Adds legislative findings related to the essential role of
safety net hospitals in serving the uninsured and Medi-Cal
enrollees and the effect that recent health care reform will
have in moving payment for health care services to risk-based
models and states that it is the intent of the Legislature
that funding provided to designated public hospital, private
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disproportionate share hospitals and district hospitals
through a future hospital quality assurance fee and under a
new waiver is implemented with the goal of providing balance
and fiscal equity, as specified, predictable and stable
funding and to ensure that hospitals have sufficient resources
to move towards efficient care and achieving health reform
goals and states that the development of specific mechanisms
to achieve these goals requires future legislation.
27)Makes technical and clarifying changes to the hospital
provider fee enacted by AB 1383 (Jones) Chapter 627, Statutes
of 2009 and as amended by AB 1653, Chapter 218, Statutes of
2010, to conform to the Medi-Cal State Plan Amendment and
modifications requested by CMS.
28)Clarifies the obligation of a hospital to pay the provider
fee.
29)Authorizes the director to waive interest and penalties if a
hospital agrees to make up past due payments as specified.
30)Authorizes Sacramento County to establish a stakeholder
advisory committee, as specified, to provide input on the
delivery of health care services to Medi-Cal enrollees by the
county safety net providers and authorize the committee to
submit input to the department on specified subjects related
to health care providers and the county's health care delivery
system.
31)Requires DHCS to consult with stakeholders and provide notice
to the Legislature prior to issuing specified implementing
notices in lieu of regulatory action.
32)Makes other technical, conforming and clarifying changes.
33)Provides that enactment is contingent upon enactment of AB
342 ( John A. Perez and Monning).
34)Includes an urgency clause allowing this bill to take effect
immediately upon enactment.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
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COMMENTS : In 2005, California sought a five year federal waiver
as a Medicaid demonstration project under the authority of
Section 1115(a) of the Social Security Act. Under this waiver,
hospital financing was fundamentally restructured. The
non-federal share of Medi-Cal funds for 22 county and University
of California hospitals known as Designated Public Hospitals was
shifted from State General Funds to certified public
expenditures (CPEs).
Federal authority to continue this financing structure expires
September 1, 2010. DHCS is in the process of negotiating a new
waiver, but the specific terms and conditions have not yet been
finalized. On August 19, 2010, DHCS requested a 60 day
extension. On August 27, 2010 CMS granted the request. Given
that the current hospital financing waiver is expiring, a new
waiver must be negotiated and established by November 1, 2010.
This bill and the companion bill, AB 342, synthesize proposed
language submitted by the Governor at the May revision, informal
feedback from preliminary discussions with CMS, legislative
revisions, and input from stakeholders.
This bill authorizes DHCS to continue to negotiate with CMS in
order to finalize the details of a new waiver that will result
in savings of up to $500 million per year by obtaining federal
funds to offset General Fund expenditures. In addition, DHCS is
estimating up to $250 million annually in savings in the
Medi-Cal program. This bill is also necessary to begin
implementation of mandatory enrollment of SPDs into Medi-Cal
managed care plans and development of pilot projects for CCS
children and dual eligbles.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097 FN: 0007205