BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 728
Author: Negrete McLeod (D)
Amended: 6/25/12
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : 79-0, 8/16/12 (Consent) - See last page
for vote
SUBJECT : Medi-Cal: durable medical equipment
reimbursement
SOURCE : California Association of Medical Products
Suppliers
DIGEST : This bill revises a provision related to
determining the maximum allowable reimbursement rate for
durable medical equipment (DME) in the Medi-Cal program to
use the manufacturer's suggested retail price (MSRP) as
documented by a catalogue showing the price on or prior to
the date of service (further reduced by a specified
percentage) instead of the current requirement that it be
determined by using a catalogue showing the price on June
1, 2006 as the base.
Assembly Amendments delete the Senate version of the bill,
relating to health care coverage, and add the current
language dealing with Medi-Cal and medical equipment
reimbursement.
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ANALYSIS : Existing law:
1.Establishes the Medi-Cal program administered by the
Department of Health Care Services (DHCS), under which
qualified low-income individuals receive health care
services.
2.Establishes a schedule of benefits and services in the
Medi-Cal program, including DME.
3.Prohibits through Medi-Cal regulation:
A. A provider from charging for any service or any
article more than would have been charged for the same
service or article to other purchasers of comparable
services or articles under comparable circumstances
(this regulation is referred to as the Medi-Cal "Best
Price" regulation); and,
B. A provider from billing or submitting a claim for
reimbursement for rendering health care services to a
Medi-Cal beneficiary in any amount greater or higher
than the usual fee charged by the provider to the
general public for the same service.
1.Requires DHCS to establish maximum allowable rates for
DME and provides that if there is no specified rate that
it be the lesser of:
A. Usual charges made to the general public or the net
purchase price plus a mark-up, as specified by
regulation;
B. A negotiated contract price based on the guaranteed
acquisition cost;
C. Actual acquisition cost plus a markup;
D. The manufacturer's suggested retail purchase price
on June 1, 2006, and documented by a printed catalogue
or a hard copy of an electronic catalogue page showing
the price on that date, reduced by a percentage
discount as specified; or,
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E. A price established through targeted
product-specific cost containment provisions developed
with providers.
This bill revises a provision related to determining the
maximum allowable reimbursement rate for DME in the
Medi-Cal program to use the MSRP as documented by a
catalogue showing the price on or prior to the date of
service (further reduced by a specified percentage) instead
of the current requirement that it be determined by using a
catalogue showing the price on June 1, 2006 as the base.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee:
Likely minor increased Medi-Cal costs for the small
number of fee-for-service claims reimbursed with the
methodology changed by this bill.
Potential increased costs related to usage of updated
catalogues are unknown, but are likely to be under
$150,000 annually (50% GF, 50% federal funds), given the
small number of reimbursement claims to which this bill
applies and the shrinking proportion of Medi-Cal
enrollees in the fee-for-service delivery system.
Potential minor administrative cost savings to DHCS
related to the use of updated catalogues.
SUPPORT : (Verified 7/3/12) (per Assembly Health Committee
analysis - unable to reverify at time of writing)
California Association of Medical Products Suppliers
(source)
ATB Rehab
ARGUMENTS IN SUPPORT : According to the California
Association of Medical Products Suppliers (CAMPS), at the
time this option was added, DHCS was concerned that it
might provide an opportunity for an unscrupulous
manufacturer to utilize a sham catalogue to inflate their
MSRP. DHCS and CAMPS agreed that insertion of a catalogue
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date, i.e. one that already occurred, would prohibit
creation of any new catalogue to artificially inflate the
MSRP and avoid the effect of the discount. However
according the CAMPS, they stated at the time that this
fixed date would need to be updated to avoid being stuck in
a time warp where MSRP changes would not be recognized.
ASSEMBLY FLOOR : 79-0, 8/16/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza,
Miller, Mitchell, Monning, Morrell, Nestande, Nielsen,
Norby, Olsen, Pan, Perea, V. Manuel P�rez, Portantino,
Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Lara
CTW:nd 8/17/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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