BILL ANALYSIS �
SB 945
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Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 945 (Committee on Health) - As Amended: May 31, 2011
Policy Committee: HealthVote:18-0
Urgency: Yes State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes the Department of Health Care Services to
implement a largely federally funded program that provides
monetary incentives to eligible Medi-Cal providers who install
and use certified Electronic Health Records (EHRs).
Specifically, this bill:
1)Requires DHCS to establish and administer the Medi-Cal EHR
Program in accordance with the State Medicaid Health
Information Technology Plan.
2)Requires DHCS to accept applications from and make incentive
payments to eligible professionals and facilities, upon
federal approval.
3)Allows contracts entered into by DHCS to implement the program
to be exempt from established competitive bidding requirements
in state law.
4)Allows DHCS to implement the program through provider
bulletins or similar instruction without regulatory action.
5)Establishes reporting requirements to the appropriate fiscal
and policy committees of the Legislature and to the
Legislative Analyst's Office.
6)Specifies the program would only be implemented to the extent
that federal financial participation is available and that
General Fund moneys shall not be used.
7)Provides a program sunset date of June 30, 2021.
SB 945
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FISCAL EFFECT
This bill would provide statutory authority for the Medi-Cal EHR
Program that is currently ongoing, so it would likely not result
in new state costs beyond what is already approved through the
budget process. Current program funding is approximately $2.2
million annually (90% federal/10% private funding).
Administrative funding for the EHR incentive program is provided
through a 90% federal-10% state match, and the California Health
Care Foundation, an independent philanthropy, has agreed to
provide the 10% state match for the life of this program.
COMMENTS
1)Rationale . This bill would provide statutory authority for the
Medi-Cal EHR Program, a program that will provide incentive
payments to the state's Medi-Cal providers for implementing
EHRs. This bill is needed to authorize DHCS to administer
this ongoing program efficiently and in a manner that meets
aggressive federal implementation timelines. As noted in the
explanation of the bill's urgency clause, this bill is
necessary "in order to authorize the state to disburse
incentive payments to eligible professionals and hospitals,
issue provider bulletins or similar instructions without
regulatory action, and administer an appeals process at the
earliest possible time."
2)Background . Many health care providers are in the process of
transitioning from paper-based medical record systems to
electronic systems, but uptake among safety net providers has
been slow due to limited financial resources to invest in
technological upgrades. A program to award monetary
incentives to encourage Medicaid and Medicare providers to
install EHRs was enacted as part of the Health Information
Technology for Economic and Clinical Health (HITECH) Act, a
component of the 2009 federal American Recovery Reinvestment
Act (ARRA)(federal stimulus package). Specifically, the
HITECH Act included an option for states to administer
incentive programs to eligible hospitals and Medicaid
providers. Eligible providers can receive up to $63,750
over the six years that they choose to participate in the
program. The incentive payments to providers are 100%
federally funded, while the cost of administering the program
SB 945
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is 90% federally funded and 10% state funded.
3)Medi-Cal EHR Program . The Medi-Cal EHR program is intended to
incentivize Medi-Cal providers to adopt and use electronic
health records in a meaningful way and by doing so advance
patient safety and quality of care. This program is estimated
to provide incentive payments of approximately $1.4 billion to
435 hospitals and 10,000 Medi-Cal providers.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081