BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1081
AUTHOR: Fuller
INTRODUCED: February 14, 2012
HEARING DATE: March 28, 2012
CONSULTANT: Bain
SUBJECT : Public health care: Medi-Cal: demonstration projects.
SUMMARY : Allows a nondesignated public hospital (NDPHs are
hospitals owned by a local health care district) to operate an
approved Low Income Health Program (LIHP) if it is located in a
county that does not have a county hospital and does not intend
to operate a LIHP.
Existing law:
1.Establishes the Medi-Cal program, which is administered by the
Department of Health Care Services (DHCS), under which
qualified low-income individuals receive health care services.
2.Requires DHCS, pursuant to federal approval of a demonstration
project, to authorize local LIHPs to provide health care
services to eligible low-income individuals under certain
circumstances. LIHPs are established at local option, and are
authorized to cover individuals up to 200 percent of the
federal poverty level (FPL) (200 percent of the FPL is at or
below $22,340 for an individual in 2012).
3.Defines the entities authorized to operate an approved LIHP as
follows: a county, a city and county, a consortium of
counties serving a region of more than one county, or a health
authority.
This bill: Expands the entities authorized to operate a LIHP by
allowing a NDPH to operate an approved LIHP if it is located in
a county that does not have a county hospital and does not
intend to operate a LIHP. This bill would take effect
immediately as an urgency statute.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
Continued---
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1.Author's statement. According to the author, SB 1081 is
needed to allow a public district hospital to become a LIHP
contractor in counties that are both without a county
hospital and are not interested in operating a LIHP.
Expanding coverage to more areas in California will ensure
that the stated goals of the Medicaid Coverage Expansion
(MCE) can be achieved throughout all of California without a
cost to the state General Fund while allowing additional
federal dollars to be generated for California.
2.Federal waiver and early implementation of federal MCE. In
2010, the Legislature passed and Governor Schwarzenegger
signed into law AB 342 (John A. P�rez), Chapter 723,
Statutes of 2010, and SB 208 (Steinberg), Chapter 714,
Statutes of 2010, a two-bill package to implement a new
federal demonstration project entitled California's "Bridge
to Reform." AB 342 authorized the LIHPs (originally called
Coverage Expansion and Enrollment Demonstration) that built
upon the Health Care Coverage Initiatives (HCCIs)
established under the 2005 demonstration project. Under the
2005 waiver, a total of $180 million in federal funds were
allotted annually to the county-based HCCIs in years three,
four, and five of the 2005 waiver (September 1, 2007 through
August 31, 2010) to provide coverage to medically-indigent
adults who are not eligible for other public programs.
AB 342 extended the 10 "legacy" HCCIs funded under the 2005
demonstration project, and authorized the expansion of the
HCCIs statewide using an early implementation option created
by the federal health care reform bill (the Patient
Protection and Affordable Care Act or ACA). The ACA requires
states, by January 1, 2014, to cover adults under age 65 and
with family incomes up to 138 percent of the FPL (at or
below $15,414 in 2012) in their Medicaid program. Under the
ACA, states have the option of drawing down federal funds
for early implementation of this provision.
3.Background on LIHPs. LIHPs are established at county
option, and services provided through LIHPs are not an
entitlement. Each LIHP can establish an upper income limit
for eligible individuals, and can limit enrollment, subject
to specified conditions, including state approval. The state
match used to draw down federal Medicaid funds for LIHPs
comes from the local funds. Existing law prohibits state
General Fund moneys from being used to fund LIHP services or
any related administrative costs incurred by counties.
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LIHPs are authorized to cover two populations:
� The MCE population, consisting of low-income
individuals 19 to 64 years of age, who are not pregnant,
with family incomes at or below 133 percent of the FPL
(at or below $14,856 for an individual in 2012), who are
not eligible for the Medi-Cal program or the Healthy
Families Program, have satisfactory immigration status,
and meet county of residence requirements.
� The HCCI population, consisting of low-income
individuals 19 to 64 years of age, who are not pregnant,
with family incomes above 133 percent through 200 percent
of the FPL (between $14,856 and $22,340 for an individual
in 2012), who are not eligible for the Medicare Program,
the Medi-Cal program, the Healthy Families Program, or
other third-party coverage, have satisfactory immigration
status, and meet county of residence requirements.
The MCE is not subject to a cap on federal funding, and
provides a broader range of medical assistance than the
HCCI, which is subject to a cap on federal funding. The
federal Special Terms and Conditions (STCs) governing the
demonstration project limit the operation of the LIHPs to
December 31, 2013. The STCs require California to prepare
and revise a transition plan for individuals enrolled in the
LIHPs, including details on how California plans to
coordinate the transition of these individuals to a coverage
option available under the ACA without interruption in
coverage to the maximum extent possible.
As of January 2012, LIHP enrollment was 321,825 individuals.
LIHPs in two counties (Placer and Monterey) are under review
with the federal government, and four counties (Merced, San
Joaquin, Sacramento, Yolo and the California Rural Indian
Health Board) are still submitting program deliverables, and
all these entities expect to be implemented by August 2012.
However, a few counties have decided not to establish a
LIHP. San Luis Obispo, Tulare and Santa Barbara counties
have put their LIHP implementation "on hold," and Fresno
county does not intend to implement a LIHP.
Three district hospitals in Tulare county have had
discussions with Tulare county staff regarding these
hospitals becoming the LIHP contractor, instead of the
county. Tulare county staff indicates issues of concern to
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the county regarding whether to implement a LIHP are the
fiscal position of the county and the potential impact of
additional state budget cuts on the county. Tulare county
staff further indicates they have had discussions with these
hospitals about becoming the LIHP contractor, and two areas
of concern to the county are its desire to be held
financially harmless if the hospitals administer the LIHP,
and its desire not to adversely affect providers in the
county's existing county indigent program. Tulare county
staff indicates it is asking its board of supervisors for
direction on April 17, 2012.
1.Support. This bill is sponsored by the District Hospital
Leadership Forum (DHLF), which represents California's health
care district-operated acute-care hospitals, to allow a public
district hospital to become a LIHP contractor in counties that
are both without a county hospital and are not interested in
becoming a LIHP contractor. DHLF states that while public
district hospitals can negotiate with a LIHP contractor to
participate in a LIHP provider network, they cannot become a
LIHP contractor under the implementing legislation. DHLF
states this restricts the flow of these federal dollars to
California and limits access to care for uninsured
Californians in counties that are without a county hospital
and that are not interested in becoming a LIHP contractor.
DHLF concludes that allowing district hospitals to act as a
LIHP contractor will result in expanded coverage to more areas
in California without a cost to the state General Fund.
Western Center on Law & Poverty (WCLP) writes in support of this
bill stating that enrolling beneficiaries in LIHPs ahead of
the implementation of the ACA will ease the burden of adding
them all at once in 2014. WCLP has one concern relating to the
role of county eligibility processing, as district hospitals
may not have had experience in determining eligibility or
providing outreach to potentially eligible beneficiaries. WCLP
indicates it hopes to see future references to how district
hospitals intend to work with county eligibility departments,
and how a LIHP administered by a district hospital transfers
people from LIHP to Medi-Cal in 2014.
2.Support if amended. Health Access California (HAC) writes
that it would support this bill if it were amended to clarify
how a county would work cooperatively with a district hospital
for LIHP implementation. In addition, HAC asks whether the
measure should be amended to narrow its application to Tulare
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county as the circumstances of each county are sufficiently
distinct that it is worth considering whether a broad change
of law is appropriate.
3.Implementation timing. LIHPs are in effect until December 31,
2013, when individuals enrolled in the LIHP become eligible
for Medi-Cal under the ACA. Practically, if this bill were to
be signed into law and state and federal approvals were
obtained by June 2012, this would leave only 18 months of
eligibility for LIHP-eligible individuals, and the NDPHs would
have to undertake significant efforts to implement the LIHP,
including establishing an eligibility and enrollment system,
establishing a provider network and claims payment system,
negotiating rates with providers, and meeting the federal
maintenance of effort requirement.
4.Recommended clarifying amendments. Staff recommends the
following amendments to this bill: (a) defining
"nondesignated public hospital" using the definition in
existing Medi-Cal law; (b) replacing the reference to "county
hospital" as used in this bill with "designated public
hospital," as defined in existing law; and (c) clarifying how
a county that does not intend to operate a LIHP makes this
decision known and during which time frame.
SUPPORT AND OPPOSITION :
Support: Alameda Hospital (co-sponsor)
Antelope Valley Hospital (co-sponsor)
Coalinga Regional Medical Center (co-sponsor)
District Hospital Leadership Forum (co-sponsor)
Hazel Hawkins Memorial Hospital (co-sponsor)
Hi-Desert Memorial Health Care District (co-sponsor)
Lompoc Valley Medical Center (co-sponsor)
Marin General Hospital (co-sponsor)
Palomar Health (co-sponsor)
Salinas Valley Memorial Healthcare System (co-sponsor)
San Benito Health Care District (co-sponsor)
San Bernardino Mountains Community Hospital District
(co-sponsor)
Association of California Healthcare Districts
Kaweah Delta Health Care District
Tri-City Medical Center
Western Center on Law & Poverty
Oppose: None received.
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