BILL ANALYSIS
SB 1368
Page 1
Date of Hearing: June 29, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 1368 (Committee on Health) - As Introduced: February 19,
2010
SENATE VOTE : 33-0
SUBJECT : Health care.
SUMMARY : Requires local emergency medical services agencies to
send Maddy Emergency Medical Services Fund (Maddy Fund) reports
to the Emergency Medical Services Authority (EMSA). Expands the
authority of the Office of Statewide Health Planning and
Development (OSHPD) 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.
Specifically, this bill :
1)Requires a county that has established a Maddy Fund to provide
the annual Maddy Fund report to EMSA instead of the
Legislature.
2)Requires EMSA to compile and forward a summary of each
county's report to the appropriate policy and fiscal
committees of the Legislature.
3)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 OSHPD to
offset costs and expenses of the office, as prescribed.
4)Allows OSHPD to insure a loan that is a refinancing of a prior
loan if the amount to be refinanced does not exceed 90% of the
original total construction costs and the loan is otherwise
eligible for loan insurance.
5)Deletes obsolete references within the Access for Infants and
Mothers (AIM) Program and California Major Risk Medical
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Insurance Program (MRMIP) provisions, to nonprofit hospital
services plans, as they no longer exist in state law.
EXISTING LAW :
1)Establishes EMSA within the Health and Human Services Agency
to provide statewide coordination of local emergency medical
services agencies (LEMSAs).
2)Authorizes counties to develop an emergency medical services
program, and requires the designation of a LEMSA for the
purposes of its administration.
3)Authorizes counties to establish a Maddy Fund, 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.
4)Requires counties, as a condition of receiving Proposition 99
(Prop 99) tobacco tax funds, to establish an emergency medical
services (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.
5)Requires a county with a Maddy Fund to report the
implementation and status of the fund to the Legislature on an
annual basis.
6)Establishes 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.
7)Establishes the Health Facility Construction Loan Insurance
Fund (Insurance Fund) and continuously appropriates the fund
for these purposes. The Cal-Mortgage Program administers the
Insurance Fund. OSHPD is authorized to charge a premium
charge for the insurance of these loans for deposit into the
Insurance Fund.
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8)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.
9)Authorizes insurance of loans to refinance a prior loan if the
prior loan would have been eligible at the time it was made.
10)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.
11)Creates the California Major Risk Medical Insurance Program,
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 meet other eligibility requirements
and pay certain subscriber contributions.
FISCAL EFFECT : According to the Senate Appropriations
Committee, Pursuant to Senate Rules 28.8, negligible state
costs.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill
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.
2)BACKGROUND . 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, the state enacted a series of bills and revenue sources
to compensate physicians and medical facilities for emergency
services provided to patients who do not have health insurance
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and cannot pay for their medical care. SB 12 (Maddy), Chapter
1240, Statutes of 1987, allows counties to establish Maddy
Funds. Approximately 50 counties have established Maddy
Funds. Counties have several sources of revenue for Maddy
Funds: a portion of county penalty assessments on certain
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 emergency medical services appropriation.
3)PROPOSITION 99 FUNDS . 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.
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.
4)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 this
bill 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, except that their
first construction loan exceeded 90% of the construction cost.
The refinanced loan would not be for more than 90% 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
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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.
5)SUPPORT . The American College of Emergency Physicians, State
Chapter of California (CAL/ACEP) states that, while the Maddy
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 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 Funds are being administered
properly.
6)RELATED LEGISLATION . AB 2456 (Torrico) addresses oversight of
emergency medical professionals under the jurisdiction of
EMSA. AB 2456 is set for hearing in the Senate Health
Committee on June 30, 2010.
AB 2248 (Hernandez) requires each county establishing a Maddy
Fund to include in its annual report to the Legislature
additional information regarding the moneys collected and
disbursed, including a description of each disbursement for
other emergency medical services if funds were disbursed for
this purpose. AB 2248 is set for hearing in the Senate Health
Committee on June 30, 2010.
7)PREVIOUS LEGISLATION . AB 1475 (Solorio), Chapter 537,
Statutes of 2009, limits the administrative costs for money
deposited into county Maddy Funds to actual administrative
costs, or 10% of the money collected, whichever amount is
lower. Limits administrative costs of money deposited into
the Maddy Fund from an additional penalty assessment
authorized until January 2014 to the actual administrative
costs, or 10% of the money collected, whichever amount is
lower.
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SB 1236 (Padilla), Chapter 60, Statutes of 2008, extends the
sunset date from January 1, 2009 to January 1, 2014, county
boards of supervisors to levy additional penalties on criminal
offenses for EMS.
AB 2702 (Nunez), Chapter 288, Statutes of 2008, allows
physicians providing services in a standby emergency
department that was in existence January 1, 2007 in a hospital
in Los Angeles County to receive reimbursement from
Proposition 99) and Maddy Funds if the emergency department
treats at least 18,000 patients per year and meets general,
staffing, and equipment requirements of a basic emergency
department.
SB 1773 (Alarcon), Chapter 841, Statutes of 2006, authorizes,
until January 1, 2009, county boards of supervisors to levy
additional penalties on criminal offenses for EMS.
SB 941 (Alquist), Chapter 671, Statutes of 2005, establishes the
Emergency Medical Services Funding Act, which revises existing
law governing administration of the Maddy Fund and Proposition
99 Physician Services Account to make the statutes more
consistent.
SB 476 (Florez), Chapter 707, Statutes of 2003, authorizes each
administering agency of a Maddy fund to maintain a reserve in
specified portions of its Maddy Fund. Changes the county
reporting requirements and the date at which these are due
annually to the Legislature.
AB 3050 (Committee on Health), 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.
SB 623 (Speier), Chapter 679, Statutes of 1999, requires, in a
county that has established an Maddy 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 Maddy 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
Maddy Fund. Requires each county to make this report
available to the public upon request.
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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.
SB 12 (Maddy) creates the Maddy Fund to provide supplemental
financing for local emergency services.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Patty Rodgers / HEALTH / (916) 319-2097