BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 1368
S
AUTHOR: Committee on Health
B
AMENDED: As Introduced
HEARING DATE: April 21, 2010
1
CONSULTANT:
3
Tadeo/cjt
6 8
SUBJECT
Health care
SUMMARY
Requires local emergency medical services agencies to send
Maddy Emergency Medical Services Fund reports to the
Emergency Medical Services Authority.
Expands the authority of the Office of Statewide Health
Planning and Development to insure financings that are for
the purpose of refinancing short-term loans that are
secured elsewhere to start a project.
Deletes obsolete references to nonprofit hospital services
plans in the Insurance Code.
CHANGES TO EXISTING LAW
Local Emergency Medical Services Agency reports
Existing law:
Establishes the Emergency Medical Services Authority (EMSA)
within the Health and Human Services Agency to provide
statewide coordination of local emergency medical services
agencies (LEMSAs).
Authorizes counties to develop an emergency medical
services program, and requires the designation of a LEMSA
Continued---
STAFF ANALYSIS OF SENATE BILL 1368 (Committee on Health)
Page 2
for the purposes of its administration.
Authorizes counties to establish a Maddy Emergency Medical
Services Fund (Maddy EMS Fund) and to deposit specified
penalties, forfeitures, and fines into the fund to
reimburse physicians and hospitals for losses from
providing uncompensated emergency care, and for other
emergency medical services purposes as determined by the
county.
Requires counties, as a condition of receiving Proposition
99 (Prop 99) tobacco tax funds, to establish an EMS fund
and to establish within that fund, a physician services
account to reimburse physicians for losses incurred for
uncompensated services provided to patients, limited to
emergency services, obstetric services, and pediatric
services.
Requires a county with a Maddy EMS Fund to report the
implementation and status of the fund to the Legislature on
an annual basis.
This bill:
Requires a county that has established a Maddy EMS Fund to
provide the annual Maddy EMS Fund report to EMSA instead of
the Legislature.
Requires EMSA to compile and forward a summary of each
county's report to the appropriate policy and fiscal
committees of the Legislature.
Cal-Mortgage Program
Existing law:
Establishes the Office of Statewide Health Planning and
Development (OSHPD) within the Health and Welfare Agency
and sets forth its duties, powers, responsibilities,
purposes, and jurisdictions which include, but are not
limited to, the administration of the California Health
Facility Construction Loan Insurance Law, known as the
Cal-Mortgage Program, for the purposes of insuring health
facility loans.
Establishes the Health Facility Construction Loan Insurance
Fund and continuously appropriates the fund for these
purposes. The Cal-Mortgage Program administers the fund.
STAFF ANALYSIS OF SENATE BILL 1368 (Committee on Health)
Page 3
OSHPD is authorized to charge a premium charge for the
insurance of these loans for deposit into the fund.
Establishes the conditions for loans to be eligible for
loan insurance including, but not limited to, the
requirement that the proceeds of the loan be guaranteed to
be used exclusively for the construction, improvement, or
expansion of the health facility, as approved by the
office.
Authorizes insurance of loans to refinance a prior loan if
the prior loan would have been eligible at the time it was
made.
This bill:
Authorizes OSHPD to annually charge a portion of the loan
insurance premium in advance, not to exceed $6 per year for
each $1,000 of principal of the proposed loan. Makes the
total dollar amount of the premium advanced nonrefundable
and would require that it be credited against the amount of
the premium charged or, if the commitment expires and the
loan is not insured, requires that the advance be retained
by the office to offset costs and expenses of the office,
as prescribed.
Allows OSHPD to insure a loan that is a refinancing of a
prior loan if the amount to be refinanced does not exceed
90 percent of the original total construction costs and the
loan is otherwise eligible for loan insurance.
Insurance Code clean-up
Existing law:
Creates the Access for Infants and Mothers (AIM) Program,
which is administered by the Managed Risk Medical Insurance
Board, to provide coverage for perinatal and infant care to
residents of this state meeting certain income and other
eligibility requirements and paying certain subscriber
contributions.
Creates the California Major Risk Medical Insurance Program
(MRMIP), which is also administered by the board, to
provide major risk health coverage to residents of this
state who are unable to secure adequate private health
coverage because of preexisting medical conditions and who
STAFF ANALYSIS OF SENATE BILL 1368 (Committee on Health)
Page 4
meet other eligibility requirements and pay certain
subscriber contributions.
This bill:
Deletes obsolete references within the AIM Program and
MRMIP provisions, to nonprofit hospital services plans, as
they no longer exist in state law.
FISCAL IMPACT
This bill has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
LEMSA Maddy EMS Fund reports
SB 1368 would make county reports, that are already
required, easily available to the public through EMSA.
Currently, these reports are submitted to the Senate and
Assembly Health Committees and the sole means of access to
them is in-person at the Capitol offices of these two
committees. Requiring EMSA to both collect the reports, and
post them online will afford the public better and quicker
access thereto.
The Maddy EMS Fund was created to provide reimbursement to
physicians and hospitals for treating uninsured patients
receiving emergency care in the emergency department.
In 1987, the Legislature concluded that emergency medical
service providers bore higher costs for their services than
did providers of other medical services, but often received
only partial or no payment from patients. To address this
problem, the state enacted a series of bills and revenue
sources to compensate physicians and medical facilities for
EMS provided to patients who do not have health insurance
and cannot pay for their medical care.
In 1988, the voters passed Proposition 99, which imposes
taxes on the distribution of cigarettes and other tobacco
products. The state deposits these taxes in the state
Cigarette and Tobacco Products Surtax Fund to fund a
variety of programs which fund counties for indigent care.
Counties have several sources of revenue for Maddy EMS
Funds: a portion of county penalty assessments on certain
STAFF ANALYSIS OF SENATE BILL 1368 (Committee on Health)
Page 5
criminal offenses and motor vehicle violations; traffic
violator school fees; revenues from taxes on tobacco
products deposited in the Proposition 99 tobacco tax fund;
and, redirected money from the Proposition 99 fund through
an annual EMS appropriation. Approximately 50 counties
have established Maddy EMS Funds to date.
Each county is required to establish a physician services
account within its Maddy Fund for revenues appropriated by
the Legislature from Proposition 99 tobacco tax revenues.
These funds can be used to reimburse physicians for
emergency, obstetric, and pediatric care.
Cal-Mortgage Program
The Cal-Mortgage Program, administered by OSHPD, was
created in 1969 to provide loan insurance for health
facility construction, improvement, and expansion without
cost to the state. The program objective is to stimulate
the flow of private capital into health facility
construction to improve access to health care for all
Californians. The principal method of financing these
loans is through tax exempt project revenue bonds issued by
state or local agencies.
According to OSHPD, the technical amendment proposed in SB
1368 will allow the Cal-Mortgage Program to provide loan
insurance to nonprofit or publicly owned health facilities
refinancing original construction loans, which would
otherwise qualify for Cal-Mortgage loan insurance, but for
the fact that their first construction loan exceeded 90
percent of the construction cost. The refinanced loan
would not be for more than 90 percent of the construction
cost. This technical change will allow Cal-Mortgage to
provide construction loan insurance to about two or three
nonprofit or publicly owned health facilities per year.
Financing for the construction of nonprofit and publicly
owned health care facilities is often difficult and
expensive to obtain even in normal times; in the current
market, it is almost impossible for the smaller nonprofit
borrower to obtain. Removing this minor technical barrier
in the law will assist some of these facilities in seeking
financing for construction projects, which may include
seismic compliance projects.
STAFF ANALYSIS OF SENATE BILL 1368 (Committee on Health)
Page 6
Arguments in support:
American College of Emergency Physicians State Chapter of
California (CAL/ACEP) states that, while the Maddy EMS
Funds only reimburse a small portion of the cost of care,
they are nevertheless a critical source of funding helping
to preserve the emergency care safety net. CAL/ACEP adds
that a time when cuts to coverage and services are
happening at both the state and local level while the
demand for emergency services is on the rise, it is
essential to ensure that every Maddy EMS dollar is spent to
preserve the emergency care safety net as it was intended
to do. CAL/ACEP contends that the administrative reports
completed by counties are the public's primary way to
ensure Maddy EMS Funds are being administered properly.
Related bills
AB 2456 (Torrico) requires EMSA to include model policies,
procedures, treatment protocols, and licensure and
certification requirements in guidelines for local EMS
systems and requires local emergency services authorities
to adhere to these guidelines. This bill is currently
located in Assembly Appropriations Committee.
AB 2248 (Hernandez) requires each county establishing a
Maddy EMS Fund to include in its annual report to the
Legislature a description of each disbursement for other
emergency medical services if funds were disbursed for this
purpose. This bill is currently in the Assembly
Appropriations Committee.
Prior legislation
SB 941 (Alquist), Chapter 671, Statutes of 2005,
establishes the Emergency Medical Services Funding Act,
which revises existing law governing administration of the
Maddy EMS Fund and the Proposition 99 Physician Services
Account California to make the statutes more consistent.
SB 476 (Florez), Chapter 707, Statutes of 2003, authorizes
each administering agency of an emergency medical services
fund to maintain a reserve in specified portions of its
Maddy Emergency Medical Services Fund. Changes the county
reporting requirements and the date at which these are due
annually to the Legislature.
SB 623 (Speier), Chapter 679, Statutes of 1999, requires,
STAFF ANALYSIS OF SENATE BILL 1368 (Committee on Health)
Page 7
in a county that has established an EMS Fund, an amount
equal to $2 for every $7 that would have been collected in
traffic penalty assessments to be deposited into the fund.
Requires counties with EMS Funds to add to an existing
report to the Legislature the total amount of traffic fines
and forfeitures collected, the total amount of penalty
assessments collected, and the total amount of penalty
assessments deposited into the EMS Fund. Requires each
county to make this report available to the public upon
request.
Prior Legislation:
AB 282 (Torlakson), Chapter 848, Statutes of 1999, modifies
eligibility for the Cal-Mortgage health facility loan
program and adjusts program fees based on risk.
AB 3050 (Assembly Health Committee), Chapter 351, Statutes
of 2002, makes various technical changes relating to OSHPD
and permits OSHPD to accelerate bond maturities when a
borrower under the Health Facility Construction Loan
Insurance Program defaults on an insured loan.
POSITIONS
Support: American College of Emergency Physicians State
Chapter of California
Oppose: None received
-- END -