BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1374
AUTHOR: Hernandez
AMENDED: April 21, 2014
HEARING DATE: April 30, 2014
CONSULTANT: Bain
SUBJECT : Medi-Cal: ground ambulance rates.
SUMMARY : Requires the Department of Health Care Services, by
July 1, 2015, to adopt regulations establishing the Medi-Cal
reimbursement rate for ground ambulance services using one of
two specified methodologies.
Existing law:
1.Establishes the Medi-Cal program, administered by the
Department of Health Care Services
(DHCS), which provides health benefits to low-income
individuals who meet specified eligibility criteria.
2.Establishes a schedule of benefits under the Medi-Cal program,
which includes emergency and non-emergency medical
transportation.
3.Establishes, through regulation, maximum Medi-Cal
reimbursement rates for medical transportation services, and
prohibits bills from exceeding charges made to the general
public.
4.Reduces specified Medi-Cal provider rates (including for
ground ambulance services), effective June 1, 2011, by 10
percent for dates of services on and after June 1, 2011,
subject to federal approval, federal financial participation
(FFP), and the reduction meeting federal Medicaid
requirements. If the director of DHCS determines that the
payments do not comply with federal Medicaid requirements or
that FFP is not available with respect to any payment that is
reduced, the director retains the discretion to not implement
the particular payment reduction and to adjust the payment as
necessary to comply with federal Medicaid requirements. The 10
percent rate reduction replaced a one percent Medi-Cal
provider reduction previously in effect.
This bill:
Continued---
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1.Requires, no later than July 1, 2015, DHCS to adopt
regulations establishing the Medi-Cal reimbursement rate for
ground ambulance services, based upon existing statutes,
regulations, and case law.
2.Requires DHCS to use one of the following methodologies:
a. Establish payment rates through regulation by doing all
of the following:
i. Developing a rate study or establish a
cost-based evidentiary base that results in proposed
rates;
ii. Presenting the proposed rates at a public
hearing; and,
iii. Combining public input and the evidentiary
base for a final adopted regulation.
b. Establish payment rates for ground ambulance services at
an unspecified percentage of the current Medicare Ambulance
Fee Schedule, and designates the ambulance cost study
conducted by the federal Government Accountability Office
(GAO-07-383) as the evidentiary base.
3.Makes various legislative findings regarding state and federal
requirements for Medi-Cal ground ambulance rates, including
the requirements of the Medicaid State Plan; ground ambulance
rates for prisoners and worker's compensation, which are being
reimbursed at rates up to 120 percent of the Medicare
Ambulance Fee Schedule; and Medi-Cal payment rates which cover
one-quarter of the cost of service.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, the
ever-increasing costs for providing crucial emergency response
and ambulance transport cannot be satisfied by inadequate
Medi-Cal reimbursement rates. Unlike most other health care
providers, ambulance providers must accept Medi-Cal patients
when they respond to a 911 call. The author states that, while
the costs to provide essential ambulance services have
significantly increased during the past decade, including
escalating wages and benefits, increasing insurance fees,
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newly mandated equipment, including vehicles and supplies,
Medi-Cal reimbursement has not kept pace with these increased
costs and has in fact declined. The author cites a GAO
analysis of ambulance costs that found the average cost of
providing ambulance service on a per transport basis was $592,
as compared to the current Medi-Cal base reimbursement rate of
$115.27. With Medi-Cal beneficiaries comprising approximately
21 percent of all patient transports, the author states the
current Medi-Cal rate inequity jeopardizes all Californians'
access to private ambulance services as an essential component
of emergency medical care.
2.Medi-Cal rates for ambulance services. According to the
Medi-Cal policy manual, 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. To receive
reimbursement, a recipient must be eligible for Medi-Cal on
the date of service. Ambulance providers are instructed to
use the ambulance service Basic Life Support (BLS) base rate
when billing for responses to an emergency "911" call. In
addition to the base rate, Medi-Cal provides additional
funding 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.
According to DHCS, the Medi-Cal base rate for BLS ambulance
services for daytime calls was $71.59 in 1997, $105.82 in
1998, and $118.20 in 1999. The current rate is $115.27.
Non-emergency transportation for one patient was $61.71 in
1997, $95.95 in 1998, and $107.16 in 1999. The current rate is
$96.44. Mileage was $3.18 per mile in 1997, and was increased
to the $3.55 in 1999, and $3.55 is the current rate.
Pursuant to AB 97 (Committee on Budget), Chapter 3, Statutes of
2011, Medi-Cal provider rates were reduced by 10 percent for
dates of services on and after June 1, 2011, subject to
federal approval, and FFP. This rate reduction was blocked by
court action for many providers, but it took effect for
ambulance providers in September 2013. DHCS has announced
ambulance providers would not be subject to a retroactive
recoupment of their rates.
3.Federal law and Medicaid state plan requirements. Federal law
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allows a state to qualify for federal Medicaid matching funds
only if it designs its program within specific federal
requirements, including adherence to specific rules relating
to payment methodologies, payment amounts, and cost-sharing
for Medicaid beneficiaries. To qualify for federal Medicaid
matching funds, a state must obtain approval of its Medicaid
State Plan (State Plan) from the federal Department of Health
and Human Services, Centers for Medicare and Medicaid Services
(CMS). The State Plan is the contract between the federal
government and the state, which spells out the terms and
conditions under which the state will receive federal Medicaid
matching funds. California's State Plan contains the
methodology to be utilized by DHCS in establishing payment
rates, as follows:
a. The development of an evidentiary base or rate
study resulting in the determination of a proposed
rate;
b. To the extent required by state or federal law
or regulations, the presentation of the proposed rate
at a public hearing to gather public input to the rate
determination process.
c. The determination of a payment rate based on
an evidentiary base, including pertinent input from
the public; and,
d. The establishment of the payment rate through
the state's adoption of regulations specifying the
rate in the California Code of Regulations.
One of the two rate methodologies in this bill essentially
codifies the current State Plan provisions. Existing
California regulation requires DHCS to administer the Medi-Cal
program in accordance with the State Plan, applicable state
law (as specified in the Welfare and Institutions Code), and
Medi-Cal regulations.
1.GAO report on ambulance rates. The other proposed alternative
rate methodology in this bill requires DHCS to establish
payment rates for ground ambulance services at an unspecified
percentage of the current Medicare Ambulance Fee Schedule, and
it designates the GAO ambulance cost study as the evidentiary
base. The referenced 2007 GAO report on ambulance rates,
entitled "Costs and Expected Medicare Margins Vary Greatly,"
found that the costs of ground ambulance transports were
highly variable across ambulance providers without shared
costs, reflecting differences in provider characteristics (an
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example of an ambulance provider with shared costs would be an
ambulance in a fire department, where the cost of the
ambulance is part of the overall cost of the fire department).
Costs per transport for ambulance providers without shared
costs averaged $415, but varied from $99 to $1,218 per
transport. The GAO found ambulance providers without shared
costs had higher costs per transport typically had fewer
transports per year, a greater percentage of transports in
which more than a basic medical intervention occurred, more
transports in rural counties with lowest population density,
lower productivity (measured as number of transports furnished
per staffed hour), and a greater percentage of revenues from
local tax support.
2.Related legislation. AB 2577 (Cooley and Pan) would authorize
governmental entities to make intergovernmental transfers as
the non-federal share of expenditures for ground emergency
medical transportation services for purposes of drawing down
federal Medicaid matching funds. AB 2577 is currently pending
hearing in Assembly Health Committee.
3.Prior legislation. SB 359 (Hernandez), of 2011, was similar to
this bill in that it would have required DHCS, by July 1,
2012, to adopt regulations establishing the Medi-Cal
reimbursement rate for ground ambulance services using one of
two specified methodologies. SB 359 designated one of the two
methodologies as 120 percent of the Medicare ambulance fee
schedule. SB 359 was held on the Senate Appropriations
Committee suspense file and was gutted and amended and used
for another purpose.
AB 678 (Pan), Chapter 397, Statutes of 2011 established a
supplemental payment program for governmental entity providers
of Medi-Cal emergency medical transportation services, based
on certified public expenditures using state or local
governmental entities' funds as the required federal match.
AB 2173 (Beall), Chapter 547, Statutes of 2010, established a
$4 penalty on every vehicle code violation. The resulting
revenue would be matched by federal funds and used to make
supplemental payments for emergency air medical transportation
services in the Medi-Cal Program.
AB 1932 (Hernandez) of 2010, in its final form, would have
authorized DHCS to utilize certain service levels for purposes
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of determining billing codes for emergency and non-emergency
basic life and advanced life support transportation and
specialty care transportation. If DHCS used the service levels
to determine billing codes, AB 1932 would have required DHCS
to adopt the definitions and Healthcare Common Procedure
Coding System codes for those service levels that have been
established by CMS, and to determine the above described
billing codes in a revenue-neutral manner. AB 1932 was held on
the Senate Appropriations suspense file.
AB 1174 (Hernandez), of 2009 would have required Medi-Cal to
cover emergency basic life support and advanced life support
services when a patient reasonably believes that without
immediate medical attention, a serious health condition, as
specified, could reasonably result. In addition, AB 1174
would have 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 1174, 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.
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). Moneys in the Fund would be available only to enhance
FFP for ambulance transportation services under the Medi-Cal
Program, or to 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 advanced life support services, as defined. 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.
AB 1153 (Beall), of 2009 would have levied an additional
penalty of $3 upon every fine, penalty, or forfeiture imposed
and collected by the courts for all offenses involving a
vehicle violation, except certain parking offenses, in each
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county. The resulting revenue would be transferred to the
state and continuously appropriated to DHCS solely for the
purposes of augmenting Medi-Cal reimbursement paid to
emergency air medical transportation services providers. DHCS
would be required to use the moneys in the Emergency Air
Medical Transportation Act Fund and federal matching funds to
increase the Medi-Cal reimbursement or supplemental payments
for emergency air medical transportation services in an amount
not to exceed normal and customary charges charged by the
emergency air ambulance transportation services provider. AB
1153 was held on the Senate Appropriations suspense file.
4.Support. This bill is sponsored by the California Ambulance
Association (CAA), which writes this bill is a measure
intended to increase the inadequate Medi-Cal reimbursement
rate for ambulance providers in California. CAA states that
ambulance providers are an essential part of California's
health care safety-net. Unlike other health care providers,
ambulance providers cannot adjust their patient load to
account for lower reimbursement by Medi-Cal as ambulance
providers respond, treat and transport all emergency patients
without regard to a patient's ability to pay. CAA states that,
while the costs to provide essential ambulance services have
significantly increased during the past decade, Medi-Cal's
reimbursement for these services have not kept pace with
inflation, and were further reduced by 10 percent in September
2013. CAA states Medi-Cal pays on average just one-quarter of
the actual cost of providing 911 services in California, and
private ambulance providers are being squeezed by the growing
reluctance of insurance companies to continue paying inflated
rates for services provided to their enrollees due to Medi-Cal
underpayments.
5.Should Medi-Cal rates for ground ambulance services be
changed?
This bill addresses an important issue in that provider payment
rates in Medi-Cal are a key factor in beneficiaries' ability
to access program services and the ability of providers to
continue to provide services. In addition, Medi-Cal ambulance
providers, as part of the 911 emergency response system, are
unable to "opt out" of providing services to Medi-Cal
beneficiaries. Medi-Cal reimbursement rates for ambulances, as
well as for many other provider types, are significantly less
than Medicare rates, and rates were reduced by 10 percent
beginning September 2013.
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This bill requires DHCS to adopt regulations by July 1, 2015
establishing the Medi-Cal reimbursement rate for ground
ambulance services. The first methodology mirrors language in
the existing State Plan by requiring a rate study or by
establishing a cost-based evidentiary base that results in
proposed rates. In effect, this option would place in state
law this State Plan requirement for Medi-Cal ground ambulance
rates, and would likely result in DHCS increasing ground
ambulance Medi-Cal rates. The second option is the
establishment of payment rates at an unspecified percentage of
the current Medicare Ambulance Fee Schedule, designating the
GAO study as the evidentiary cost base. Depending upon the
percentage specified, the effect of this provision, if elected
by DHCS, would be a Medi-Cal rate increase.
SUPPORT AND OPPOSITION :
Support: California Ambulance Association (sponsor)
Oppose: None received
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