BILL ANALYSIS �
AB 2577
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Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 2577 (Cooley and Pan) - As Amended: April 7, 2014
SUBJECT : Medi-Cal: ground emergency medical transportation
services: supplemental reimbursement.
SUMMARY : Authorizes Department of Health Care Services (DHCS)
and local governments to use intergovernmental transfers (IGTs)
to claim federal Medicaid funds as reimbursement for ground
emergency medical transportation services. Specifically, this
bill :
1)Authorizes local governments to provide IGTs as the nonfederal
share of expenditures to use for matching money for federal
funds, known as federal financial participation (FFP).
2)Requires DHCS to accept IGT funds and use them as the nonfederal
share of expenditures within 60 days of receiving the funds.
3)Requires the Controller to transfer the federal funds within 10
days of receiving the FFP.
4)Requires DHCS to distribute supplemental reimbursement for
eligible ground emergency medical transportation providers for
services provided to Medi-Cal managed care beneficiaries to
managed care plans with 15 days of receiving the FFP.
5)Directs managed care plans to distribute 100% of the funds
received as supplemental reimbursement within 30 days of
receiving the funds.
6)Clarifies it applies to all Medi-Cal beneficiaries in both
fee-for-service (FFS) and managed care.
EXISTING LAW :
1)Establishes in federal law the federal Medicaid program to
provide comprehensive health benefits to low income persons.
2)Establishes the Medi-Cal program as California's Medicaid
program.
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3)Establishes a schedule of benefits provided in the Medi-Cal
program, which includes emergency and nonemergency medical
transportation.
4)Establishes, through regulation, maximum Medi-Cal reimbursement
rates for medical transportation services, and prohibits
providers from billing Medi-Cal at rates that exceed charges
made to the general public.
5)Reduces specified Medi-Cal provider rates (including for ground
ambulance services), effective June 1, 2011, by 10% for dates
of services on and after June 1, 2011, provided the reduction
meets federal Medicaid requirements, receives federal
approval, and allows the state to receive FFP.
6)Allows ground emergency medical transportation services providers
owned by public entities (the state, a city, a county, a city
and county, a fire protection district, a special district, a
health care district or a federally recognized Indian Tribe)
that are enrolled in the Medi-Cal program and that provide
emergency medical transportation services to Medi-Cal
beneficiaries continuously through the state fiscal year, to
receive supplemental Medi-Cal reimbursement, in addition to
the rate of payment that the provider would otherwise receive
for Medi-Cal ground emergency medical transportation services.
7)Makes participation in the Medi-Cal program by public ground
emergency medical transportation services providers voluntary.
Requires an applicable governmental entity to certify the
claimed expenditures were made and elects to seek supplemental
reimbursement on behalf of a public ground emergency medical
transportation service provider in conformity with the federal
regulatory requirements, that the claimed expenditures for the
ground emergency medical transportation services (known as
certified public expenditures or CPEs) are eligible for FFP
and meet other specified requirements.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . The author notes many Californians rely
on the Medi-Cal program to provide for their medical care of
which emergency ambulance service is a vital part of the
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health care safety net. The Medi-Cal program although an
important part of keeping California healthy falls short of
meeting the true cost of providing that vital emergency
ambulance service. According to the author, the average
Medi-Cal reimbursement for emergency ambulance transport
across the state is approximately $150 while the cost to
provide those services can range from $500-$1200 depending on
the region. The author adds with the downturn in the economy,
many of California's public emergency ambulance providers have
seen significant cuts in their budgets that have adversely
affected their ability to provide the fire protection and
emergency medical services their communities expect. The
author argues this bill will allow qualified ground emergency
medical transportation providers to draw down federal matching
funds to help offset the gap between the amounts paid through
Medi-Cal and the true cost of providing those services. The
amount of new federal funding, according to the author, is
estimated at nearly $350 million annually and will flow back
into local government public safety and allow the continued
provision of those services at no cost to the General Fund.
2)BACKGROUND . According to estimates by the California
Ambulance Association (CAA), there are approximately 715
ambulance providers in California, of which 75% are public
agencies, principally fire departments. Conversely, of the
licensed ambulances, about 75% are private. In many areas,
fire service personnel provide initial response to 911 calls
in fire trucks and they are joined by privately operated
ambulances which provide additional treatment and transport to
a hospital. According to CAA, the average cost of an
ambulance transport in California is about $600, while
Medi-Cal reimburses an average of $150, resulting in $165
million in uncompensated care to Medi-Cal beneficiaries.
Ambulance providers, unlike many other Medi-Cal providers, are
mandated to care for those who require services. Providers
such as non-emergency physicians, dentists, and surgeons may
simply choose not to treat Medi-Cal patients, ambulance
providers cannot. The Emergency Medical Treatment and Active
Labor Act (EMTALA), enacted in 1986, prohibits the practice of
patient dumping, treatment denial, and patient discharge based
on anticipated high emergency treatment costs.
3)MEDICAID MATCH REQUIREMENTS . Federal law allows states to
cover services in their Medicaid program that have
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traditionally been state or local responsibilities and to
receive federal matching funds for the cost of furnishing
these services to Medicaid beneficiaries. Federal law does
allow states to use other sources of funds to provide the
match to draw down FFP without cost to the state. The
existing supplemental reimbursement for medical transportation
is accessed by using CPEs. To use CPEs, other 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 are certified
by units of local or state government as eligible for federal
reimbursement. The reimbursement rate cannot exceed the
equivalent Medicare rate.
Another method to use other governmental funds for drawing
down FFP is the IGTs being authorized by this bill. The use
of IGTs is more problematic from the federal perspective but
IGTs are still widely used in Medicaid programs. The chief
problem occurred when states authorized the use of IGTs by
local governments and then required local governments to
transfer funds back to the state, which some states then used
for non-Medicaid purposes, diverting the funds used for the
federal match. There are extensive federal requirements
regarding IGTs, including that the source of funds must be
public funds and cannot be a provider donation. The source of
the IGTs contemplated in this bill are from local governments,
hence they are legitimate public funds. CPEs cannot be used
when beneficiaries are enrolled in and receive their benefits
through a managed care plan, but in this case an IGT can be
used as a match for the FFP which then is paid as a
supplemental reimbursement to providers.
4)MEDI-CAL RATES . Medi-Cal covers ambulance and other medical
transportation only when ordinary public or private conveyance
is medically contra-indicated and transportation is required
to obtain needed medical care. Ambulance providers are
instructed by DHCS to use the ambulance service Basic Life
Support base rate when billing for responses to an emergency
call. In addition to the base rate, Medi-Cal provides
additional reimbursement for mileage, night calls, extra
attendants, waiting times, certain supplies and services, and
a separate reimbursement rate for non-emergency transportation
for a single patient.
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AB 97 (Committee on Budget) Chapter 3, Statutes of 2011,
authorizes DHCS to reduce Medi-Cal FFS payments to providers
for certain services by up to 10%, and to reduce capitation
payments to Medi-Cal managed care plans by a similar amount.
The Legislature adopted AB 97 as part of a package of
expenditure cuts to address the state's 2011-12 budget
deficit. After a lengthy delay in gaining federal approval
and resolving litigation, the state was free to reduce the
rates but a retroactive reduction was needed to meet the
deficit targets. The 2014-2015 Governor's budget proposes to
exempt certain classes of providers and services from the
retroactive recoupments, including medical transportation, but
they would still be subject to the rate reduction.
5)SUPPORT . The bill's sponsors, the California Fire Chiefs
Association, the California Professional Firefighters, and the
California Metropolitan Fire Chiefs, state as Medi-Cal
providers migrate from FFS arrangements to managed care much
of the anticipated reimbursements from the existing program
will disappear as CPEs cannot be used for obtaining the
supplemental reimbursement for the managed care population.
They argue that this bill would allow those entities that
provide ground emergency medical transportation to Medi-Cal to
capture those lost reimbursements from managed care
beneficiaries through the use of an IGT. According to the
sponsors, this bill will allow the state to draw down federal
funds for beneficiaries in managed care plans at no cost to
the taxpayer.
6)PREVIOUS LEGISLATION .
1) AB 678 (Pan), Chapter 397, Statutes of 2011, establishes
a supplemental reimbursement program for ground ambulance
services using certified public expenditures.
2) AB 97, the health budget trailer bill, among other
provisions, reduces Medi-Cal payments to providers by 10%,
including medical transportation rates, for dates of
service on and after June 1, 2011, subject to federal
approval, FFP, and the reduction meeting federal Medicaid
requirements.
3) SB 359 (Ed Hernandez) of 2011, would have required DHCS,
by July 1, 2012, to adopt regulations establishing the
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Medi-Cal reimbursement rate for ground ambulance services
using one of two specified methodologies. SB 359 was held
on the Senate Appropriations Committee suspense file.
4) AB 2173 (Beall), Chapter 547, Statutes of 2010,
establishes a $4 penalty on every vehicle code violation
with the resulting revenue matched by federal funds and
used to make supplemental payments for emergency air
medical transportation services in the Medi-Cal Program.
5) AB 1174 (Hernandez) of 2009 would have, among its other
provisions, increased and established in statute maximum
Medi-Cal reimbursement rates for ambulance transportation
services and would have required the rates be adjusted to
reflect changes in the California Consumer Price Index. AB
2257 (Hernandez) of 2008 was similar to AB 1147, except
that AB 2257 also would have also increased Medi-Cal rates
for air ambulance providers. AB 1174 and AB 2257 were both
held on the Assembly Appropriations suspense file.
6) AB 511 (De La Torre) of 2010 would have imposed, as a
condition of participation in the Medi-Cal program, a
quality assurance fee (QAF) on certain ambulance
transportation services providers, to be administered by
DHCS with the proceeds from the QAF to be used for
additional reimbursement to ambulance providers. AB 511
held on the Senate Appropriations suspense file;
subsequently referred to Senate Health and Senate Revenue
and Taxation Committees. At the request of the author, was
not heard in a policy committee again.
7) AB 1153 (Beall) of 2009 would have established a $4
penalty on every vehicle code violation with the resulting
revenue matched by federal funds and used to make
supplemental payments for emergency air medical
transportation services in the Medi-Cal Program. AB 1153
was held on the Senate Appropriations suspense file.
REGISTERED SUPPORT / OPPOSITION :
Support
California Fire Chiefs Association (cosponsor)
California Metropolitan Fire Chiefs (cosponsor)
California Professional Firefighters (cosponsor)
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Opposition
None on file.
Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097