BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1236|
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THIRD READING
Bill No: SB 1236
Author: Alquist (D), et al
Amended: 5/20/10
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 4/14/10
AYES: Alquist, Strickland, Aanestad, Cedillo, Cox, Leno,
Negrete McLeod, Pavley, Romero
SENATE APPROPRIATIONS COMMITTEE : 10-0, 5/27/10
AYES: Kehoe, Alquist, Corbett, Denham, Leno, Price,
Walters, Wolk, Wyland, Yee
NO VOTE RECORDED: Cox
SUBJECT : Medi-Cal: utilization controls
SOURCE : County of Santa Clara
DIGEST : This bill creates a program where treatment
authorization requests shall not be required for inpatient
hospitalization of Medi-Cal beneficiaries at designated
public hospitals.
ANALYSIS : Existing federal law establishes the Medicaid
program to provide comprehensive health benefits to
low-income persons.
Existing state law establishes the Medi-Cal program as
California's Medicaid program, administered by the
Department of Health Care Services (DHCS), which provides
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comprehensive health care coverage for certain low-income
individuals and their families; pregnant women; elderly,
blind, or disabled persons; nursing home residents; and
refugees who meet specified eligibility criteria. Existing
law establishes a schedule of benefits under the Medi-Cal
Program, which includes inpatient hospital services,
subject to utilization controls.
Existing law also requires health care providers to file
Treatment Authorization Requests (TARs) with DHCS to obtain
authorization for various inpatient and outpatient services
to Medi-Cal beneficiaries. It also authorizes, in Alameda
County, that a county-hospital based utilization review
committee, rather than DHCS staff, to authorize
reimbursement for Medi-Cal services.
This bill establishes a program where state utilization
controls shall not be required for inpatient
hospitalization at designated public hospitals, with
participation being optional for each hospital. This bill
requires DHCS to consult with designated public hospitals
in the development of the program. This bill limits the
program only to those instances where the non-federal share
of expenditures for Medi-Cal shall be funds that are paid
and certified by designated public hospitals and are
certified as public expenditures. This bill, to the extent
the program increases the net costs to the state, requires
the participating designated public hospitals to agree to
pay the state's additional administrative costs through an
intergovernmental transfer of funds. This bill provides
that it shall become inoperative on the date the Director
of Health Care Services executes a declaration specifying
that the nonfederal share of expenditures for inpatient
hospitalization designated public hospitals are not
comprised of funds that are paid and certified by
designated public hospitals in accordance with applicable
state and federal requirements.
This bill requires DHCS to seek any necessary federal
approvals, including waivers and state plan amendments, for
implementing the above-described program, as specified.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Potential increased federal
potentially in the hundreds of thousands Federal
fund expenditure to low millions annually per hospital
SS Waiver update low hundreds of
thousands General/
of dollars one-time FY 2010-11Federal
Funding shared approximaley 50 percent General Fund, 50
percent Federal Funds. General Fund portion would be fully
offset by public hospital funds.
SUPPORT : (Verified 5/27/10)
County of Santa Clara (source)
California Children's Hospital Association
California Medical Association
California State Association of Counties
County of San Bernardino
ARGUMENTS IN SUPPORT : According to Santa Clara County,
the delay in TAR review and subsequent authorization
creates a significant billing back-log. They note that due
to the State's budget situation, and compounded by staff
furloughs, the number of days that state Review Nurses are
on site at SCVMC has dropped dramatically, from more than
ten days per month to four days per month, aggravating the
delay. They report that the delay in TAR-approval causes a
significant cash flow problem noting, that over the past
four months there have been anywhere from 279 to 426
admissions pending review, creating a delay in payment to
the county of $4 to $7 million. The county argues that
they would approve TARs through a hospital-based
utilization review committee and that process would be
subject to a retrospective audit conducted by the state to
ensure the appropriateness of all claims.
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The California Children's Hospital Association supports the
bill because they see it freeing up state resources that
could be used at other hospitals, including children's
hospitals. They argue that this move could result in
improved access to care for Medi-Cal beneficiaries. By
redirecting the state resources, other hospitals could gain
TAR approval and submit claims in a more timely manner,
reducing waiting time for Medi-Cal beneficiaries.
CTW:nl 5/28/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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