BILL ANALYSIS �
AB 2577
Page 1
ASSEMBLY THIRD READING
AB 2577 (Cooley and Pan)
As Amended May 23, 2014
2/3 vote. Urgency
HEALTH 19-0 APPROPRIATIONS 16-0
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|Ayes:|Pan, Maienschein, |Ayes:|Gatto, Bigelow, |
| |Ammiano, Chau, Bonilla, | |Bocanegra, Bradford, Ian |
| |Bonta, Ch�vez, Chesbro, | |Calderon, Campos, Eggman, |
| |Gomez, Gonzalez, Roger | |Gomez, Holden, Jones, |
| |Hern�ndez, Lowenthal, | |Linder, Pan, Quirk, |
| |Waldron, Nazarian, | |Ridley-Thomas, Wagner, |
| |Nestande, Patterson, | |Weber |
| |Ridley-Thomas, Wagner, | | |
| |Wieckowski | | |
| | | | |
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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 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 30 days of receiving the FFP.
4)Directs managed care plans to distribute 100% of the funds
received as supplemental reimbursement within 30 days of
receiving the funds.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
AB 2577
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1)Likely minor one-time administrative costs to DHCS, and
ongoing costs not likely to exceed $1 million (local
reimbursements/federal funds), to expand the existing
reimbursement program to include IGTs through managed care
contracts. Existing law stipulates DHCS administrative costs
are reimbursed by the program, and prohibits General Fund
expenditures.
2)In addition to administrative costs noted above, timelines
required in this bill may lead to increased additional
administrative workload costs if DHCS, the State Controller,
and/or managed care plans have to develop new payment
processes.
3)Significant additional federal matching funds, likely in the
tens or hundreds of millions of dollars may be available if
this funding mechanism is approved, according to local
government providers of ground emergency medical
transportation.
COMMENTS : 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 health care
safety net. The Medi-Cal program falls short of meeting the
true cost of providing emergency ambulance service. The author
argues this bill will allow qualified ground emergency medical
transportation providers to draw down almost $350 million in
federal matching funds to help offset the gap between the
amounts paid through Medi-Cal and the true cost of providing
those services. According the California Ambulance Association,
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 federal Emergency Medical Treatment and Active
Labor Act prohibits the practice of patient dumping, treatment
denial, and patient discharge based on anticipated high
emergency treatment costs.
AB 2577
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The existing supplemental reimbursement for medical
transportation is accessed by using certified public
expenditures (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.
Another method to use other governmental funds for drawing down
FFP is the IGTs being authorized by this bill. 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.
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 fee-for-service 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.
There is no known opposition to this bill.
Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097
FN: 0003766