BILL ANALYSIS �
AB 678
Page 1
Date of Hearing: April 5, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 678 (Pan) - As Amended: March 25, 2011
SUBJECT : Medi-Cal: supplemental provider reimbursement.
SUMMARY : Establishes a supplemental payment program for
governmental entity providers of Medi-Cal emergency medical
transportation services. Specifically, this bill :
1)Authorizes a provider of emergency medical transportation
services to Medi-Cal enrollees to be eligible for supplemental
payments if the provider is owned or operated by the state, a
city, county, or city and county, fire protection district or
other local governmental entity and is certified to provides
services in the Medi-Cal Program.
2)Specifies that the supplemental reimbursement is based on the
amount of federal financial participation (FFP) received for
eligible certified public expenditures (CPEs) and that total
reimbursement, including the supplemental payments may not
exceed actual costs.
3)Provides that distribution of the supplemental payments shall
be based on ground emergency medical transportation services
as determined by the Medi-Cal State Plan on a per-transport or
other federally permissible basis.
4)Requires the nonfederal share to be paid by local governmental
entities and prohibits General Fund expenditures.
5)Requires the provider to pay the administrative costs to the
Department of Health Care Services (DHCS).
6)Requires participating governmental entities to maintain
records, submit data, and provide certifications regarding
expenditures as required by the federal Centers for Medicare
and Medicaid Services (CMS).
7)Requires DHCS to seek federal approval and conditions
implementation on approval.
8)Provides the supplemental payment program shall be inoperative
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if there is a judicial or CMS determination that payments must
be made to any other providers.
EXISTING LAW :
1)Establishes, under federal law, the Medicaid Program (Medi-Cal
in California) administered by DHCS, which provides
comprehensive health benefits to low-income children, their
parents or caretaker relatives, pregnant women, elderly, blind
or disabled persons, nursing home residents, and refugees who
meet specified eligibility criteria.
2)Establishes a schedule of benefits under the Medi-Cal Program,
which includes emergency and medical transportation and
through regulation, maximum reimbursement rates for emergency
medical transportation services under Medi-Cal.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, local fire
departments, as a first responder, are transporting Medi-Cal
patients at an ever increasing rate as the health system
continues to deteriorate. The author states that Medi-Cal
reimbursement rates for ambulance services, as in many other
categories, have not kept pace with the cost of providing the
services. The author further points out fire departments are
an essential part of the health care safety net and are unique
because of the mandate to respond, treat and transport all
emergency patients without exception and without regard to a
patient's ability to pay. The purpose of this bill is to
enact a mechanism to provide supplemental payments for
unreimbursed expenses incurred by these local agencies without
cost to the General Fund.
2)CPE . CPEs are one of several mechanisms that a state may
employ to obtain FFP and make supplemental payments to
Medi-Cal providers without cost to the state General Fund.
Under a CPE arrangement, government providers certify their
Medicaid expenditures to the state, and the state then obtains
federal reimbursement on the basis of these CPEs. Medicaid
law allows states to finance the nonfederal share of payments
with CPEs as long as the funds are derived from state or local
tax revenue and certified by units of local or state
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government as eligible for federal reimbursement. States are
responsible for ensuring that expenditures are eligible for
federal reimbursement by reviewing standard cost reports filed
annually by each government provider. In no event may the
reimbursement rate exceed the equivalent Medicare rate.
According to a March 2007 U.S. Government Accountability
Office Report on Medicaid Financing, at least 10 out of 19
states that implemented new financing mechanisms as a result
of CMS restrictions on other mechanisms adopted this approach.
Under this bill, local entities would have the option to claim
FFP for the difference between the reimbursement rate under
the Medi-Cal Program and the actual cost of providing the
service. This is modeled after AB 915 (Frommer), Chapter 747,
Statutes of 2002 authorizing local public agencies and public
health facilities to use local funds to obtain FFP for
supplemental Medi-Cal reimbursements for hospital outpatient
services. AB 959 (Frommer), Chapter 162, Statutes of 2006
expanded this to state facilities (hospitals, veterans' homes,
and clinics) and to clinics owned or operated by the state,
cities, counties, and University of California (UC) and health
care districts.
In 2005, the State of California sought a five year federal
waiver as a Medicaid demonstration project under the authority
of Section 1115(a) of the Social Security Act. The nonfederal
share of Medi-Cal funds for 22 county and UC hospitals known
as Designated Public Hospitals (DPHs) was shifted from State
General Funds to CPEs. This allowed the state to reduce the
General Fund contribution and allowed DPH hospitals to be
reimbursed up 100% of the equivalent Medicare rates. This
financing mechanism was renewed in the 2010 successor
demonstration waiver.
Provider fees or taxes are another mechanism states have used
to generate state matching funds. In 1991, federal law was
enacted to limit the use of provider fees as it was viewed as
an overt recycling of money collected from providers to obtain
the match and paid back to the providers or retained by the
state. The law now limits the class of health care providers
and requires the fee to be assessed uniformly on all
non-public providers in the class (Medi-Cal and non Medi-Cal)
and prohibits states from guaranteeing that a portion will be
returned to the provider (referred to as "hold harmless").
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California has enacted provider fees on hospitals, nursing
homes, managed care organizations, and intermediate care
facilities for the developmentally disabled. Payment in those
programs may be based on the volume of Medi-Cal services or
patient quality measures.
3)MEDI-CAL EMERGENCY TRANSPORTATION SERVICES RATES . The current
Medi-Cal reimbursement rates are as follows:
-----------------------------------------------------------------
|Ambulance service, basic life support (BLS) base rate, |$118.20 |
|emergency transport, one way (includes allowance for | |
|emergency run) | |
|--------------------------------------------------------+--------|
|Response to call, 2 patients, each patient (does not | 37.02 |
|include an allowance for emergency run) | |
|--------------------------------------------------------+--------|
|Ambulance service, (BLS) per mile, transport one way | 3.55 |
|--------------------------------------------------------+--------|
|Night call - 7:00 p.m. to 7:00 a.m. | 9.78 |
|--------------------------------------------------------+--------|
|Emergency run | 9.88 |
|--------------------------------------------------------+--------|
|Ambulance service, oxygen, administration and supplies, | 9.88 |
|life sustaining situation | |
|--------------------------------------------------------+--------|
|Neonatal intensive care incubator | 51.49 |
|--------------------------------------------------------+--------|
|Waiting time over 15 min. -each 15 min | 9.88 |
|--------------------------------------------------------+--------|
|Compressed air for infant respirator | 10.23 |
-----------------------------------------------------------------
-----------------------------------------------------------------
|Extra attendant - registered nurse, emergency medical |
|technician, or equivalent; |
|(in addition to normal crew of two): |
-----------------------------------------------------------------
-----------------------------------------------------------------
| First hour | 16.44 |
-----------------------------------------------------------------
| Second and third hour, each hour | 11.51 |
-----------------------------------------------------------------
| Each additional hour | 5.25 |
-----------------------------------------------------------------
| Cost of IV fluids (invoice must be attached) | By |
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| | Report|
-----------------------------------------------------------------
| ECG in ambulance | 16.07 |
|--------------------------------------------------------+--------|
| Unlisted | By |
| |Report |
-----------------------------------------------------------------
According to the California Ambulance Association (CAA) the
following comparison of ambulance rates, is from an "Industry
Performance Survey" done by Hobbs & Ong on behalf of CAA. CAA
further estimates that the 2010 adjusted cost per transport is
$586.
Annual California Ambulance Services - By Source of Payment
(2005):
----------------------------------------------------------------
|Payment |% of |% of |Cost per |Average |
|Source |Transport |Revenue |Transport |Reimbursement per |
| | | | |Transport |
|-----------+-----------+----------+----------+------------------|
|Medicare | 34.9% | 34.9% | $562 | $ 520 |
|-----------+-----------+----------+----------+------------------|
|Medi-Cal | 21% | 10.7% | $562 | $ 250 |
|-----------+-----------+----------+----------+------------------|
|Facility | 8.2% | 8.9% | $562 | $ 723 |
|-----------+-----------+----------+----------+------------------|
|Private | 17.9% | 6.3% | $562 | $ 201 |
|pay | | | | |
|-----------+-----------+----------+----------+------------------|
|Other | 17.7% | 38.7% | $562 | $1,100 |
|insurers | | | | |
|-----------+-----------+----------+----------+------------------|
|Other | 0.3% | 0.2% | $562 | $ |
| | | | |342 |
| | | | | |
----------------------------------------------------------------
4)SUPPORT . The California Professional Firefighters (CPF),
sponsors of this bill, report that ambulance transports have
increased 13% from 1997 to 2006 and ambulance transports of
Medi-Cal beneficiaries have increase 19% from 2006 to 2009.
CPF also points out that Medicare rates were reduced 10% in
2010, representing a reduction of $35 million statewide and
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straining fire department budgets even more. According to
CPF, current Medi-Cal rates do not cover the operating cost of
a typical ambulance transport. These unreimbursed costs are
subsequently absorbed into a fire department's general fund
and paid for by the taxpayers. In support of this bill CPF
points out that DHCS has identified an existing federal
program that provides a 50% match on unreimbursed expenses.
According to the sponsor, the sooner this voluntary program is
up and running the sooner local fire departments can access
much needed fiscal relief.
5)RELATED LEGISLATION . AB 540 (Beall) of 2011 would allow
county or local public agencies to use CPEs to provide alcohol
and drug screening and brief intervention services for
Medi-Cal beneficiaries who are pregnant women or women of
childbearing age in the Medi-Cal Program
6)PRIOR LEGISLATION .
a) AB 2173 (Beall), Chapter 547, Statutes of 2010,
established a $4 penalty on every vehicle code violation to
be matched in the Medi-Cal Program to be used to make
supplemental payments for emergency air medical
transportation services in the Medi-Cal Program.
b) AB 511 (De La Torre) of 2010 would have imposed a 5.5%
quality assurance fee, as a condition of participation in
the Medi-Cal Program, on ambulance transportation services
providers with the purpose of drawing down matching FFP in
order to increase Medi-Cal reimbursement rates for these
providers through the end of fiscal year 2015-16. AB 511
died on the Senate Appropriations Committee Suspense File.
c) AB 1932 (Hernandez) of 2010 would have revised ambulance
transportation services categories for Medi-Cal
reimbursement rates to be consistent with Medicare
categories. AB 1932 died on the Senate Appropriations
Committee Suspense File.
d) AB 1174 ( Hernandez) of 2009 would have required
Medi-Cal to cover ambulance services when a patient
reasonably believes that without an ambulance a serious
health condition, as specified, might result, increased and
established in statute maximum Medi-Cal reimbursement rates
for ambulance transportation services, and would have
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required the rates be adjusted per changes in the
California Consumer Price Index. AB 1174 died on the
Assembly Appropriations Committee Suspense File.
e) AB 1153 (Beall) of 2009 would have established a $3
penalty on every vehicle code violation to be matched in
the Medi-Cal Program and used to make supplemental payments
for emergency air medical transportation services in the
Medi-Cal. AB 1153 died on the Assembly Appropriations
Committee Suspense File.
f) AB 2257 (Hernandez) of 2008 would have required Medi-Cal
to cover ambulance services when a patient reasonably
believes that without an ambulance a serious health
condition might result and established maximum Medi-Cal
reimbursement rates for ambulance transportation services.
AB 2257 died on the Assembly Appropriations Committee
Suspense File.
REGISTERED SUPPORT / OPPOSITION :
Support
California Professional Firefighters (sponsor)
California Fire Chiefs Association
Fire Districts Association of California
Opposition
None on file
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097