BILL ANALYSIS �
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THIRD READING
Bill No: AB 2577
Author: Cooley (D) and Pan (D)
Amended: 6/12/14 in Senate
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE : 8-0, 6/18/14
AYES: Hernandez, Morrell, Beall, DeSaulnier, Evans, Monning,
Nielsen, Wolk
NO VOTE RECORDED: De Le�n
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 77-0, 5/28/14 - See last page for vote
SUBJECT : Medi-Cal: ground emergency medical transportation
services:
supplemental reimbursement
SOURCE : California Fire Chiefs
California Metropolitan Fire Chiefs
California Professional Firefighters
DIGEST : This bill permits governmental entities to elect to
make intergovernmental transfers (IGTs) as the non-federal share
of Medi-Cal expenditures for ground emergency medical
transportation services, as long as the IGTs are in conformity
with federal law. Contains an urgency clause that will make
this bill effective upon enactment.
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ANALYSIS :
Existing law:
1. 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.
2. Makes participation in the program by a public ground
emergency medical transportation services provider voluntary.
Requires, if an applicable governmental entity elects to
seek supplemental reimbursement on behalf of a public ground
emergency medical transportation service provider, the
governmental entity to perform specified functions.
3. Requires the supplemental reimbursement paid to be calculated
and paid, as specified.
4. Requires the Department of Health Care Services (DHCS) to
obtain approval from the Center for Medicare and Medicaid
Services (CMS) for the certified public expenditures (CPE)
payment methodology to be utilized, and prohibits DHCS from
making any payment prior to obtaining that approval.
5. Requires the non-federal share of the supplemental
reimbursement submitted to CMS for purposes of claiming the
federal financial participation (FFP) to be paid only with
funds from the governmental entities that are certified to
the state.
6. Requires DHCS to promptly seek any necessary federal
approvals for the implementation of the CPEs. Permits DHCS
to limit the program to those costs that are allowable
expenditures under federal Medicaid law. Prohibits the
CPE-related provisions from being implemented if federal
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approval is not obtained. Requires DHCS to submit claims for
FFP for CPEs that are allowable expenditures under federal
law.
This bill:
1. Permits governmental entities to elect to include, in
collaboration with DHCS, and as the non-federal share of
expenditures for ground emergency medical transportation
services, voluntary IGTs, as long as the IGTs are in
conformity with federal law. Requires, if a governmental
entity elects to include IGTs as the non-federal share of
expenditures, the IGT funds to be submitted no later than
November 1, of each year.
2. Requires DHCS, if the state receives IGT funds, to certify
the IGT funds as the non-federal share of expenditures within
60 days of receiving the IGT funds. Requires DHCS to submit
to the State Controller claims for payment within 10 days of
receiving the FFP.
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 within 30 days of receiving the FFP.
4. Requires each Medi-Cal managed care plan, within 30 days of
receiving funds, distribute 100% of the funds received to the
eligible ground emergency medical transportation providers.
5. Defines "eligible providers" as ground emergency medical
transportation providers that provide services in Medi-Cal
fee-for-service or Medi-Cal managed care, for purposes of
CPEs and IGTs.
6. Contains an urgency clause that will make this bill effective
upon enactment.
Background
Federal Medicaid regulations and CPEs and IGTs as the
non-federal share . Federal Medicaid regulations permit both
state and local governments to participate in the financing of
the non-federal portion of medical assistance expenditures.
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CPEs are one of several mechanisms that a state may employ to
obtain FFP and to make supplemental payments to Medi-Cal
providers without cost to the General Fund (GF). Under AB 678
(Pan, Chapter 397, Statutes of 2011), state and local entities
have the option to claim FFP for the difference between the
Medi-Cal reimbursement rate and the actual cost of providing the
service. Under a CPE arrangement, 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 non-federal 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
Governor's 2014-15 Budget assumes annual supplemental
reimbursements of approximately $300 million as a result of AB
678.
Another source of funds for the state share is IGTs, which is
the source of funds authorized under this bill. IGTs are
transfers of public funds between governmental entities, such as
from a county to the state. One source of the funding used for
the transfer is local tax dollars. This bill also allows local
governmental entities the option of using IGTs as the state
share to draw down FFP in Medi-Cal. Both CPEs and IGTs allow
the state to reduce its GF spending, and allow local governments
to receive additional Medicaid funds using their own funds to
draw down federal funds.
Prior Legislation
AB 2173 (Beall, Chapter 547, Statutes of 2010) established a $4
penalty on every Vehicle Code violation. The resulting revenue
is matched by federal funds and used to make supplemental
payments for emergency air medical transportation services in
the Medi-Cal Program.
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. The proceeds from the
QAF would be required to be deposited into the Medi-Cal
Ambulance Transportation Services Providers Fund (Fund). Monies
in the Fund would be available only to enhance FFP for ambulance
transportation services under the Medi-Cal Program, or to
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provide additional reimbursement to, and to support quality
improvement efforts of, ambulance transportation services
providers, including increased reimbursement for and improvement
of the quality of the provision of ALS services, as defined. AB
511 was held on the Senate Appropriations suspense file;
subsequently referred to Senate Health and Senate Revenue and
Taxation Committees. At the request of the author, the bill was
not heard in a policy committee again.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time costs up to $1 million to get federal approvals and
set up the program requirements by the DHCS (reimbursements
and federal funds). Existing law requires participating
government entities to reimburse DHCS for any administrative
costs to administer the program.
Ongoing costs, potentially up to $500,000 per year, to
administer the program and facilitate payments to managed care
plans (which would then be paid to government entities)
(reimbursements and federal funds).
Potential increase in federal funding to government emergency
services providers in the tens of millions per year. Under
existing law, government entities can use a similar system to
receive additional federal funding based on their actual
expenditures to cover uncompensated costs for providing
emergency transportation services in fee-for-service Medi-Cal.
Under that program, annual revenues to government entities are
projected to be about $25 million per year. This bill allows
government entities to receive supplemental federal funding
for managed care beneficiaries. About 75% of Medi-Cal
beneficiaries are in managed care. While actual
reimbursements to government entities will depend on the
amount of intergovernmental transfers and the maximum
allowable payments for services, total additional
reimbursements under the bill could be several times the
reimbursements allowed for similar services provided in the
fee-for-service system.
SUPPORT : (Verified 8/15/14)
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California Fire Chiefs (co-source)
California Metropolitan Fire Chiefs (co-source)
California Professional Firefighters (co-source)
Association of California Healthcare Districts
Burbank Fire Department
California Metro Fire Chiefs
California Special Districts Association
California State Firefighters Association
City and County of San Francisco Mayor, Edwin Lee
Cosumnes Community Services District Fire Department
Culver City
Dinuba Fire Department
Gilroy Fire Department
Hayward Fire Department
Mill Valley Fire Department
Ontario Fire Department
Orange Fire Department
Rialto Fire Department
Sacramento Metropolitan Fire District
ARGUMENTS IN SUPPORT : This bill is jointly sponsored by the
California Fire Chiefs Association, the California Professional
Firefighters, and the California Metropolitan Fire Chiefs. The
sponsors state that, as Medi-Cal beneficiaries move from
fee-for-service to Medi-Cal managed care plans, much of the
anticipated additional reimbursement from the recently enacted
CPE program will disappear as CPEs cannot be used for obtaining
the supplemental reimbursement for the Medi-Cal managed care
population. The sponsors argue that this bill allows those
entities that provide ground emergency medical transportation to
Medi-Cal beneficiaries to capture additional reimbursements for
Medi-Cal managed care beneficiaries through the use of an IGT.
This allows public agency providers to seek partial
reimbursement for their share of unreimbursed Medi-Cal ground
transportation expenses via funding provided by the federal
government as existing Medi-Cal rates do not cover the operating
cost of a typical ambulance transport.
ASSEMBLY FLOOR : 77-0, 5/28/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Beth
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Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Donnelly, Frazier, Vacancy
JL:d 8/17/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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