Bill Text: CA AB1894 | 2021-2022 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Integrated cannabis vaporizer: packaging, labeling, advertisement, and marketing.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Passed) 2022-09-18 - Chaptered by Secretary of State - Chapter 390, Statutes of 2022. [AB1894 Detail]

Download: California-2021-AB1894-Introduced.html

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CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 1894

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Introduced by Assembly Member Luz Rivas
(Coauthors: Assembly Members Bennett and Carrillo)

February 09, 2022

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An act to add Article 5.55 (commencing with Section 14184.900) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to hospitals.

LEGISLATIVE COUNSEL'S DIGEST

AB 1894, as introduced, Luz Rivas. Designated public hospital financing advisory group.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services, either through a fee-for-service or managed care delivery system. Existing law establishes the Medi-Cal Hospital/Uninsured Care Demonstration Project Act, which revises hospital reimbursement methodologies in order to maximize the use of federal funds consistent with federal Medicaid law and stabilize the distribution of funding for hospitals that provide care to Medi-Cal beneficiaries and uninsured patients, including designated public hospital systems, as defined. Under the Medi-Cal 2020 demonstration project, existing law establishes prescribed payment methodologies and requirements relating to the Medi-Cal Hospital/Uninsured Care Demonstration Project Act.

This bill would require the department to create an advisory group to evaluate the increasing financial challenges faced by designated public hospital systems and would require the department to work with designated public hospitals on potential financing strategies to stabilize their financing. The bill would require the advisory board to be made up of various representatives, including representatives from the California Hospital Association, the California State Association of Counties, and the California Association of Public Hospitals and Health Systems. The bill would require the department to submit a report to the Legislature, no later than July 1, 2023, outlining the financial challenges of designated public hospitals and provide policy recommendations to address mounting financial losses and financial instability. The bill would also make findings and declarations in support of these provisions.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 The Legislature finds and declares all of the following:

(a) The 21 Designated Public Hospital Systems (DPHs) in California play an outsized and essential role in the state’s health care delivery system. Though just 6 percent of all hospitals across the state, they provide care for nearly 40 percent of the state’s uninsured and 35 percent of Medi-Cal patients in their communities.

(b) DPHs collectively serve more than 3.7 million patients annually, regardless of ability to pay or insurance status. These systems include both county-operated or -affiliated facilities and the five University of California medical centers and are located in communities where more than 85 percent of the state’s population resides, including:

(1) The County of Alameda.

(2) The County of Contra Costa.

(3) The County of Kern.

(4) The County of Los Angeles.

(5) The County of Monterey.

(6) The County of Orange (UC Irvine Health).

(7) The County of Riverside.

(8) The County of Sacramento (UC Davis Health).

(9) The County of San Bernardino.

(10) The County of San Diego (UC San Diego Health).

(11) The County of San Francisco.

(12) The County of San Joaquin.

(13) The County of San Mateo.

(14) The County of Santa Clara.

(15) The County of Ventura.

(c) In addition to providing essential inpatient, emergency, specialty and primary care services to their communities, DPHs provide highly specialized and lifesaving services that are accessed by patients across the state. Together DPHs operate over one-half of the state’s top-level trauma and burn centers, and train one-half of all physicians in California.

(d) DPHs serve an increasingly diverse patient population and offer extensive translation services to ensure all patients can access the care they need. Nearly 60 percent of patients served at DPHs identify as persons of color, and many DPHs offer translation services in 98 languages.

(e) DPHs have been integral to the state’s COVID-19 response through efforts to increase surge capacity, rapidly expand and deploy testing, assist in the development and distribution of vaccines, and continue to serve vulnerable populations and communities of color. The role DPHs have played in their communities has never been more important.

(f) Historically, Medi-Cal payments have been insufficient to cover the cost of services provided to Medi-Cal beneficiaries. DPHs have had to rely on a patchwork of Medi-Cal supplemental payments to try to cover the cost of care.

(g) DPHs also play a significant role supporting the financing of the state’s Medi-Cal program. Specifically, these systems, rather than the state, provide billions of dollars for the nonfederal share of Medi-Cal expenditures annually, including disproportionate share hospital payments, which enable the corresponding federal funding to support care to Medi-Cal and uninsured patients. In 2021, DPHs provided the nonfederal share for 68 percent of their supplemental and base payments for Medi-Cal and uninsured care to draw down federal matching funds.

(h) Such self-financing structures result in the DPH and its affiliated county bearing the added costs of supporting the Medi-Cal program, putting them at a substantial financial disadvantage. If the state provided the nonfederal share, DPHs would receive the full benefit of the Medi-Cal payments.

(i) For more than a decade, DPHs have been leading efforts to evolve many of their Medi-Cal supplemental payments from volume to quality and value, transforming their delivery systems in the process. Each year, billions of dollars in supplemental payments are at risk for DPHs, contingent on meeting ambitious improvement targets in quality, care coordination, and outcomes. These efforts align closely with state and Medi-Cal managed care plan priorities, and support the state’s equity roadmap, with specific efforts to reduce health care disparities.

(j) Since 2005, DPHs have relied on supplemental payments through California’s Section 1115 Medi-Cal demonstration waivers to help narrow the gap between payments and the costs of providing care to a large Medi-Cal and uninsured population. It is anticipated that the CalAIM Section 1115 demonstration waiver will result in materially less funding for DPHs than prior waivers.

(k) Reduced waiver funding and the added cost of self-financing the nonfederal share of their payments has created a significant and growing deficit for DPHs that is becoming increasingly unsustainable. Despite recent state investments in Medi-Cal, DPHs are facing a financial crisis. Without additional funding, and a reduction in the burden of providing the nonfederal share, DPHs could be forced to significantly reduce services.

(l) A reduction of DPH services would disproportionately impact low-income communities of color, hindering statewide efforts to achieve equity and to promote access to high-quality, culturally competent care for patients.

(m) The strength and financial stability of DPHs is of critical importance to the health and welfare of the people of California. Given the severity of the fiscal concerns for all designated public hospital systems and the important role these systems play in the safety net, the state must play a role in assisting these systems with long-term policy and financial solutions to ensure their long-term viability and maintain critical access to care for millions of California residents.

SEC. 2.

 Article 5.55 (commencing with Section 14184.900) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read:

Article  5.55. Designated Public Hospital Financing Advisory Group

14184.900.

 (a) In recognition of the profound impact that designated public hospitals play in California and the increasing financial challenges these systems are facing, the State Department of Health Care Services shall work with designated public hospitals on potential financing strategies to stabilize their financing and enable them to focus on their special and important roles in the delivery system.

(b) The State Department of Health Care Services shall convene an advisory group consisting of subject matter experts and other affected stakeholders to provide recommendations to inform the department in developing long-term financing strategies to support designated public hospitals and the patients they serve. The advisory group shall analyze the current and future financial challenges of designated public hospitals and assess potential opportunities to help stabilize designated public hospital financing and support care for Medi-Cal and uninsured populations.

(c) The advisory group shall consist of the following individuals:

(1) Representatives from the Legislature.

(2) Representatives from the California Association of Public Hospitals and Health Systems.

(3) Representatives from individual designated public hospitals from counties and the University of California.

(4) Representatives from the California Hospital Association.

(5) Representatives from the California State Association of Counties.

(6) Representatives from the Service Employees International Union.

(7) Consumer advocates.

(8) Other subject matter experts or other affected stakeholders as identified by the department.

(d) Based on the findings of the advisory group, the department shall submit a report to the Legislature, no later than July 1, 2023, outlining the financial challenges of designated public hospitals and provide policy recommendations to address mounting financial losses and financial instability. The report shall consider all of the following:

(1) The current state and federal statutory and regulatory environment for designated public hospitals.

(2) The increasing uncompensated costs of providing services to Medicaid beneficiaries and the uninsured, including any expenses related to provision of the nonfederal share by the designated public hospitals or their affiliated counties.

(3) The capacity and access needs for designated public hospitals in serving Medi-Cal and uninsured patients over the next decade.

(4) Infrastructure and workforce needs for designated public hospitals over the next decade, which shall include recommendations on infrastructure and strategies to address barriers to hiring, training, and retraining and building the designated public hospital workforce of the future.

(e) The report required under subdivision (d) shall be in compliance with Section 9795 of the Government Code.

(f) For purposes of this section, “designated public hospital” has the meaning given in subdivision (f) of Section 14184.10.