BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1489|
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THIRD READING
Bill No: AB 1489
Author: Assembly Budget Committee
Amended: 8/31/12 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SUBJECT : Budget Trailer Bill: Medi-Cal
SOURCE : Author
DIGEST : This bill contains necessary statutory changes
to implement the Budget Act of 2012 for the Department of
Health Care Services (DHCS) and the Healthy Families
Program. This bill reauthorizes (1) the gross premiums tax
on Health Plans participating in the Medi-Cal Managed Care
Program and (2) the nursing home quality assurance fee;
implement nursing home rate adjustments; increases
oversight of referrals to community-based services by
nursing facilities; and creates a performance-based
incentive program for children-only Medi-Cal cases.
ANALYSIS : This bill:
1. Reauthorizes Nursing Home Quality Assurance Fee .
Reauthorizes the quality assurance fee (QAF) on skilled
nursing facilities (SNFs) (known as the "AB 1629 QAF").
This bill extends the sunset date by two years to July
31, 2015 for the AB 1629 QAF and the rate-setting
methodology. If this fee were to sunset, it places over
CONTINUED
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$500 million General Fund support at risk, as use of the
QAF has enabled California to provide reimbursement
increases to certain nursing homes with no added General
Fund support.
2. Implements Nursing Home Rate Adjustments
A. Repeals a two percent rate increase for 2012-13,
for $33 million General Fund savings.
B. Defers payment of the Quality and Accountability
Supplemental Payment System (QASP) for one year and
transfers the one percent of the AB 1629 facilities
reimbursement set-aside for QASP to the General
Fund. For General Savings of $37.4 million.
C. Keeps the savings from capping the professional
liability insurance (PLI) at the 75th percentile in
the General Fund instead of transferring it to the
Skilled Nursing Quality and Accountability Special
Fund. For General Fund savings of $4.25 million
General Fund.
D. Provides for a 3 percent increase in the
weighted average Medi-Cal reimbursement rate for
SNFs in 2013-14 and 2014-15.
E. Authorizes DHCS to identify alternative payment
methodologies for the QASP, such as including the
supplemental payment in the rate. Such alternative
payment methodologies may not be implemented
without subsequent statutory changes.
3. Increases Oversight of Referral to Community-Based
Services by Nursing Home Staff (Section Q of MDS) . This
bill requires the DHCS and the Department of Public
Health (DPH) to provide the Legislature with an analysis
of nursing facility referrals of residents to local
agencies for community-based services. Under Section Q
of MDS 3.0, nursing facilities must ask residents if
they are "interested in learning about the possibility
of returning to the community." If a resident indicates
"yes," a facility is required to make the appropriate
referrals to state designated local contact agency.
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4. Requires Stakeholder Participation in Development of
Nursing Facility Quality Improvement Program . This bill
requires DPH and the DHCS to regularly (and at least
quarterly) meet with stakeholders to plan for and
implement the skilled nursing facility quality
improvement program.
5. Reauthorizes the Gross Premiums Tax on Managed Care
Plans . Extends the sunset on the gross premiums tax on
managed care plans, from
July 1, 2012, to July 1, 2014, for the purpose of raising
additional revenue for children's health insurance.
This managed care organization tax, created through AB
1422 (Bass, Statutes of 2009), is projected to produce
$183 million in revenue in 2012-13. These revenues will
be matched with federal funds and used to:
A. Provide a reimbursement rate increase to
Medi-Cal Managed Care Plans.
B. Fund children's health care coverage through the
Healthy Families Program in 2012-13 and the Healthy
Families Program and Medi-Cal in 2013-14.
6. Creates Performance-Based Incentive Payment Program For
Medi-Cal Managed Care Plans . Specifies that, beginning
January 1, 2013,
$15 million from the gross premiums tax on managed care
plans (which can be used to draw down an additional $15
million in federal funds) shall be used to create a
performance-based incentive payment program by the DHCS.
Payments under this program shall be determined based
on Medi-Cal managed care plans performance on child-only
Health Care Effectiveness Data and Information Set
measures for all children enrolled in the plan under
Medi-Cal. Of the $15 million from the gross premium tax
revenue, $11 million shall be allocated to two-plan
model counties, $3 million shall be allocated to county
organized health system counties, and $1 million shall
be allocated to geographic managed care.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
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DLW:k 8/31/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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