BILL ANALYSIS �
AB 2577
Page 1
GOVERNOR'S VETO
AB 2577 (Cooley and Pan)
As Amended August 22, 2014
2/3 vote
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|ASSEMBLY: |77-0 |(May 28, 2014) |SENATE: |35-0 |(August 27, |
| | | | | |2014) |
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|ASSEMBLY: |79-0 |(August 28, | | | |
| | |2014) | | | |
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SUMMARY : Requires the Department of Health Care Services (DHCS)
to design and implement a program to allow government entities
to use intergovernmental transfers (IGTs) to claim federal
Medicaid funds in order to increase reimbursement for ground
emergency medical transportation (GEMT) services provided to
Medi-Cal managed care enrollees.
The Senate amendments :
1)Require DHCS to design and implement the IGT program distinct
from the existing section of law that governs fee-for-service
(FFS) supplemental GEMT reimbursement, and set forth various
provisions for the IGT program.
2)Delete the urgency clause and make the IGT program effective
January 1, 2015, with provisions to authorize DHCS to
implement the program retroactively as needed.
3)Authorize DHCS, if permitted by federal law, to provide
supplemental reimbursement, under the existing FFS
supplemental GEMT reimbursement program, for the cost of
paramedic services.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
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1)One-time costs up to $1 million to get federal approvals and
set up the program requirements by DHCS (reimbursements and
federal funds). Current law requires participating government
entities to reimburse DHCS for any administrative costs to
administer the program.
2)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).
3)Potential increase in federal funding to government emergency
services providers in the tens of millions 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 this bill could be several times the
reimbursements allowed for similar services provided in the
fee-for-service system.
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
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as non-emergency physicians, dentists, and surgeons may simply
choose not to treat Medi-Cal patients, ambulance providers
cannot due to the federal Emergency Medical Treatment and Active
Labor Act which prohibits the practice of patient dumping,
treatment denial, and patient discharge based on anticipated
high emergency treatment costs.
Federal law allows states to use other sources of funding as the
state's match for federal Medicaid funds, and to use those
sources of funding to draw down federal financial participation
(FFP) without any cost to the state. Under current state law,
supplemental reimbursement for GEMT is obtained through the use
of certified public expenditures (CPEs). Under a CPE
arrangement, government providers certify their Medi-Cal
expenditures to the state, and the state obtains federal
reimbursement on the basis of the CPEs. Another method of using
governmental funds to draw down FFP is the use of IGTs, which
are transfers of public funds between governmental entities,
such as from a county to the state. CPEs cannot be used when
beneficiaries are enrolled in and receive their benefits through
a managed care plan. As such, this bill allows governmental
entities the option of using IGTs in order to draw down FFP to
fund increased reimbursement to eligible GEMT providers serving
Medi-Cal managed care beneficiaries.
This bill's sponsors, the California Fire Chiefs Association,
the California Professional Firefighters, and the California
Metropolitan Fire Chiefs, state that, 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 GEMT 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.
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GOVERNOR'S VETO MESSAGE :
"While I support funding mechanisms that would increase the
availability of federal funds, this bill presents significant
policy and implementation challenges at a time when the
Department of Health Care Services is working at full capacity
on several new and critical priorities integrating the
Affordable Care Act into our health care system.
"I will direct the department to continue conversations on this
funding mechanism that reflects a more realistic time frame and
is more workable for the department."
Analysis Prepared by : Kelly Green / HEALTH / (916) 319-2097
FN: 0005652