Bill Text: CA SB243 | 2015-2016 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Medi-Cal: reimbursement: provider rates.
Spectrum: Moderate Partisan Bill (Democrat 45-5)
Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB243 Detail]
Download: California-2015-SB243-Amended.html
Bill Title: Medi-Cal: reimbursement: provider rates.
Spectrum: Moderate Partisan Bill (Democrat 45-5)
Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB243 Detail]
Download: California-2015-SB243-Amended.html
BILL NUMBER: SB 243 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2015
INTRODUCED BY Senator Hernandez
(Principal coauthor: Assembly Member Bonta)
( Coauthors: Senators
Galgiani, Hertzberg, Pan, Pavley,
Roth, Stone, Wieckowski,
and Wolk )
( Coauthors: Assembly Members
Achadjian, Campos, Cooper,
Dababneh, Levine, Lopez, Low,
Maienschein, Nazarian, Rendon,
Santiago, Steinorth, Thurmond, Ting,
and Waldron )
FEBRUARY 17, 2015
An act to amend Section 14105.28 of, and to add Sections
14105.194, 14105.196, and 14301.6 14105.194 and
14105.196 to, the Welfare and Institutions Code, relating to
Medi-Cal and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 243, as amended, Hernandez. Medi-Cal: reimbursement: provider
rates.
(1) Existing law establishes the Medi-Cal program, administered by
the State Department of Health Care Services, under which health
care services are provided to qualified, low-income persons. The
Medi-Cal program is, in part, governed and funded by federal Medicaid
provisions. Existing law requires the department to develop and
implement a Medi-Cal inpatient hospital reimbursement payment
methodology based on diagnosis-related groups, subject to federal
approval, that reflects the costs and staffing levels associated with
quality of care for patients in all general acute care hospitals, as
specified. Existing law generally requires the diagnosis-related
group-based payments to apply to all claims.
This bill would require claims for payments pursuant to the
inpatient hospital reimbursement methodology described above to be
increased by ___ 16 percent for the
2015-16 fiscal year, and would require, commencing July 1, 2016, and
annually thereafter, the department to increase each
diagnosis-related group payment claim amount based , at a
minimum, on increases in the medical component of the
California Consumer Price Index. Commencing with the 2015-16
fiscal year, and annually thereafter, the bill would require managed
care rates for Medi-Cal managed care health plans to be increased by
a proportionately equal amount for increased payments for hospital
services.
(2) Existing law requires, except as otherwise provided, Medi-Cal
provider payments to be reduced by 1% or 5%, and provider payments
for specified non-Medi-Cal programs to be reduced by 1%, for dates of
service on and after March 1, 2009, and until June 1, 2011. Existing
law requires, except as otherwise provided, Medi-Cal provider
payments and payments for specified non-Medi-Cal programs to be
reduced by 10% for dates of service on and after June 1, 2011.
This bill would, instead, prohibit the application of those
reductions for payments to providers for dates of service on or after
June 1, 2011. The bill would also require payments for managed care
health plans for dates of service following the effective date of the
bill to be determined without application of some of those
reductions. The bill would require the Director of Health Care
Services to implement this provision to the maximum extent permitted
by federal law and for the maximum time period for which the director
obtains federal approval for federal financial participation for
those payments.
(3) Prior law required, beginning January 1, 2013, through and
including December 31, 2014, that payments for primary care services
provided by specified physicians be no less than 100% of the payment
rate that applies to those services and physicians as established by
the Medicare Program, program, for both
fee-for-service and managed care plans.
This bill, commencing January 1, 2016, would require, only to the
extent permitted by federal law and that federal financial
participation is available, payments for specified medical care
services to not be less than 100% of the payment rate that applies to
those services as established by the Medicare Program, for
both fee-for-service and managed care plans. program
for services rendered by fee-for-service providers, and would require
rates paid to Medi-Cal managed care plans to be actuarially
equivalent to payment rates established by the Medicare program.
The bill would authorize the department to implement those
provisions through provider bulletins without taking regulatory
action until regulations are adopted, and would require the
department to adopt those regulations by July 1, 2018. The bill would
require, commencing July 1, 2016, the department to provide a status
report to the Legislature on a semiannual basis until regulations
have been adopted.
(4) Under existing law, one of the methods by which Medi-Cal
services are provided is pursuant to contracts with various types of
managed care plans.
This bill would require, to the extent federal financial
participation is not jeopardized, the department to pay Medi-Cal
managed care plans rate range increases at a minimum level of 100% of
the rate range available with respect to all enrollees who are not
subject to the rate range payment requirements that are applicable to
all enrollees who are newly eligible beneficiaries assigned to
county public hospital health systems.
(5)
(4) This bill would declare that it is to take effect
immediately as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14105.28 of the Welfare and Institutions Code
is amended to read:
14105.28. (a) It is the intent of the Legislature to design a new
Medi-Cal inpatient hospital reimbursement methodology based on
diagnosis-related groups that more effectively ensures all of the
following:
(1) Encouragement of access by setting higher payments for
patients with more serious conditions.
(2) Rewards for efficiency by allowing hospitals to retain savings
from decreased length of stays and decreased costs per day.
(3) Improvement of transparency and understanding by defining the
"product" of a hospital in a way that is understandable to both
clinical and financial managers.
(4) Improvement of fairness so that different hospitals receive
similar payment for similar care and payments to hospitals are
adjusted for significant cost factors that are outside the hospital's
control.
(5) Encouragement of administrative efficiency and minimizing
administrative burdens on hospitals and the Medi-Cal program.
(6) That payments depend on data that has high consistency and
credibility.
(7) Simplification of the process for determining and making
payments to the hospitals.
(8) Facilitation of improvement of quality and outcomes.
(9) Facilitation of implementation of state and federal provisions
related to hospital acquired conditions.
(10) Support of provider compliance with all applicable state and
federal requirements.
(b) (1) (A) (i) The department shall develop and implement a
payment methodology based on diagnosis-related groups, subject to
federal approval, that reflects the costs and staffing levels
associated with quality of care for patients in all general acute
care hospitals in state and out of state, including Medicare critical
access hospitals, but excluding public hospitals, psychiatric
hospitals, and rehabilitation hospitals, which include alcohol and
drug rehabilitation hospitals.
(ii) The payment methodology developed pursuant to this section
shall be implemented on July 1, 2012, or on the date upon which the
director executes a declaration certifying that all necessary federal
approvals have been obtained and the methodology is sufficient for
formal implementation, whichever is later.
(iii) Claims for payments pursuant to the payment methodology
based on diagnosis-related groups established under this section
shall be increased by ___ 16 percent
for the 2015-16 fiscal year. Managed care rates to Medi-Cal
managed care health plans shall be increased by a
proportionately equal amount for increased payments for hospital
services for the 2015-16 fiscal year.
(iv) Commencing July 1, 2016, and annually thereafter, the
department shall increase each diagnosis-related group payment claim
amount based , at a minimum, on increases in the medical
component of the California Consumer Price Index. Commencing
July 1, 2016, and annually thereafter, managed care rates to Medi-Cal
managed care health plans shall be increased by a proportionately
equal amount for increased payments for hospital services.
(B) The diagnosis-related group-based payments shall apply to all
claims, except claims for psychiatric inpatient days, rehabilitation
inpatient days, managed care inpatient days, and swing bed stays for
long-term care services, provided, however, that psychiatric and
rehabilitation inpatient days shall be excluded regardless of whether
the stay was in a distinct-part unit. The department may exclude or
include other claims and services as may be determined during the
development of the payment methodology.
(C) Implementation of the new payment methodology shall be
coordinated with the development and implementation of the
replacement Medicaid Management Information System pursuant to the
contract entered into pursuant to Section 14104.3, effective on May
3, 2010.
(2) The department shall evaluate alternative diagnosis-related
group algorithms for the new Medi-Cal reimbursement system for the
hospitals to which paragraph (1) applies. The evaluation shall
include, but not be limited to, consideration of all of the following
factors:
(A) The basis for determining diagnosis-related group base price,
and whether different base prices should be used taking into account
factors such as geographic location, hospital size, teaching status,
the local hospital wage area index, and any other variables that may
be relevant.
(B) Classification of patients based on appropriate acuity
classification systems.
(C) Hospital case mix factors.
(D) Geographic or regional differences in the cost of operating
facilities and providing care.
(E) Payment models based on diagnosis-related groups used in other
states.
(F) Frequency of grouper updates for the diagnosis-related groups.
(G) The extent to which the particular grouping algorithm for the
diagnosis-related groups accommodates ICD-10 diagnosis and procedure
codes, and applicable requirements of the federal Health Insurance
Portability and Accountability Act of 1996.
(H) The basis for calculating relative weights for the various
diagnosis-related groups.
(I) Whether policy adjusters should be used, for which care
categories they should be used, and the frequency of updates to the
policy adjusters.
(J) The extent to which the payment system is budget neutral and
can be expected to result in state budget savings in future years.
(K) Other factors that may be relevant to determining payments,
including, but not limited to, add-on payments, outlier payments,
capital payments, payments for medical education, payments in the
case of early transfers of patients, and payments based on
performance and quality of care.
(c) The department shall submit to the Legislature a status report
on the implementation of this section on April 1, 2011, April 1,
2012, April 1, 2013, and April 1, 2014.
(d) The alternatives for a new system described in paragraph (2)
of subdivision (b) shall be developed in consultation with recognized
experts with experience in hospital reimbursement, economists, the
federal Centers for Medicare and Medicaid Services, and other
interested parties.
(e) In implementing this section, the department may contract, as
necessary, on a bid or nonbid basis, for professional consulting
services from nationally recognized higher education and research
institutions, or other qualified individuals and entities not
associated with a particular hospital or hospital group, with
demonstrated expertise in hospital reimbursement systems. The rate
setting system described in subdivision (b) shall be developed with
all possible expediency. This subdivision establishes an accelerated
process for issuing contracts pursuant to this section and contracts
entered into pursuant to this subdivision shall be exempt from the
requirements of Chapter 1 (commencing with Section 10100) and Chapter
2 (commencing with Section 10290) of Part 2 of Division 2 of the
Public Contract Code.
(f) (1) The department may adopt emergency regulations to
implement the provisions of this section in accordance with
rulemaking provisions of the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code). The initial adoption of emergency
regulations and one readoption of the initial regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare. Initial emergency regulations and the one readoption of
those regulations shall be exempt from review by the Office of
Administrative Law. The initial emergency regulations and the one
readoption of those regulations authorized by this section shall be
submitted to the Office of Administrative Law for filing with the
Secretary of State and publication in the California Code of
Regulations.
(2) As an alternative to paragraph (1), and notwithstanding the
rulemaking provisions of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code, or any
other law, the department may implement and administer this section
by means of provider bulletins, all-county letters, manuals, or other
similar instructions, without taking regulatory action. The
department shall notify the fiscal and appropriate policy committees
of the Legislature of its intent to issue a provider bulletin,
all-county letter, manual, or other similar instruction, at least
five days prior to issuance. In addition, the department shall
provide a copy of any provider bulletin, all-county letter, manual,
or other similar instruction issued under this paragraph to the
fiscal and appropriate policy committees of the Legislature.
SEC. 2. Section 14105.194 is added to the Welfare and Institutions
Code, to read:
14105.194. (a) Notwithstanding Sections 14105.07, 14105.191,
14105.192, and 14105.193, payments to providers for dates of service
on or after June 1, 2011, shall be determined without application of
the reductions in Sections 14105.07, 14105.191, 14105.192, and
14105.193, except as otherwise provided in this section.
(b) Notwithstanding Sections 14105.07 and 14105.192, and except as
otherwise provided in this section, for managed care health plans
that contract with the department pursuant to this chapter or Chapter
8 (commencing with Section 14200), payments for dates of service
following the effective date of the act adding this section shall be
determined without application of the reductions, limitations, and
adjustments in Sections 14105.07 and 14105.192.
(c) The director shall implement this section to the maximum
extent permitted by federal law and for the maximum time period for
which the director obtains federal approval for federal financial
participation for the payments provided for in this section.
(d) The director shall promptly seek all necessary federal
approvals to implement this section.
SEC. 3. Section 14105.196 is added to the Welfare and Institutions
Code, to read:
14105.196. (a) It is the intent of the Legislature to:
(1) Maintain the increased reimbursement rates for primary care
providers in the Medi-Cal program upon expiration of the temporary
increase provided for under Chapter 23 of the Statutes of 2012, as
amended by Chapter 438 of the Statutes of 2012, in order to ensure
adequate access to these providers.
(2) To increase Increase
reimbursement rates for other Medi-Cal providers to the amounts
reimbursed by the federal Medicare program in order to ensure access
to medically necessary health care services, and to comply with
federal Medicaid requirements that care and services are available to
Medi-Cal enrollees at least to the extent that care and services are
available to the general population in the geographic area.
(3) Increase reimbursement rates for Denti-Cal providers to the
equivalent rate of the percentage increase for other Medi-Cal
providers to the amounts reimbursed by the federal Medicare program
in order to ensure access to medically necessary dental services, and
to comply with federal Medicaid requirements that care and services
are available to Medi-Cal enrollees at least to the extent that care
and services are available to the general population in the
geographic area.
(b) Beginning January 1, 2016, to the extent permitted by federal
law and regulations, payments
(b) (1) (A)
Commencing January 1, 2016, payments for
medical care services rendered by fee-for-service Medi-Cal
providers, including dental providers, shall not be less than
100 percent of the payment rate that applies to those services as
established by the Medicare program, for both
fee-for-service and managed care plans. program for
services rendered by fee-for-service providers.
(B) Commencing January 1, 2016, rates paid to Medi-Cal managed
care plans shall be actuarially equivalent to the payment rates
established under the Medicare program.
(2) This subdivision shall be implemented only to the extent
permitted by federal law and regulations.
(c) Notwithstanding any other law, to the extent permitted by
federal law and regulations, the payments for medical care services
made pursuant to this section shall be exempt from the payment
reductions under Sections 14105.191 and 14105.192.
(d) Payment increases made pursuant to this section shall not
apply to provider rates of payment described in Section 14105.18 for
services provided to individuals not eligible for Medi-Cal or the
Family Planning, Access, Care and Treatment (Family PACT) Program.
(e) For purposes of this section, "medical care services" means
the services identified in subdivisions (a), (h), (i), (j),
(n), and (q) , and (w) of Section
14132. 14132, and adult dental benefits
provided pursuant to Section 14131.10.
(f) Notwithstanding any other law, the department shall
implement the payment increase implemented
pursuant to required by this section
shall apply to managed care health plans that contract
with the department pursuant to Chapter 8.75
(commencing with Section 14591) and to contracts with the Senior Care
Action Network and the AIDS Healthcare Foundation, and
Foundation in the following manner, to the
extent that the services are provided through any of these contracts,
payments by the department to managed care health plans
shall be increased by the actuarial
actuarially equivalent amount of the payment increases pursuant
to contract amendments or change orders effective on or after
January 1, 2016.
(g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement, clarify, make specific, and define the
provisions of this section by means of provider bulletins or similar
instructions, without taking regulatory action until the time
regulations are adopted. The department shall adopt regulations by
July 1, 2018, in accordance with the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. Beginning July 1, 2016, and notwithstanding
Section 10231.5 of the Government Code, the department shall provide
a status report to the Legislature on a semiannual basis, in
compliance with Section 9795 of the Government Code, until
regulations have been adopted.
(h) This section shall be implemented only if and to the extent
that federal financial participation is available and any necessary
federal approvals have been obtained.
SEC. 4. Section 14301.6 is added to the Welfare
and Institutions Code, to read:
14301.6. To the extent federal financial participation is not
jeopardized and consistent with federal law, the department shall pay
Medi-Cal managed care plans rate range increases, as defined by
paragraph (4) of subdivision (b) of Section 14301.4, at a minimum
level of 100 percent of the rate range available with respect to all
enrollees who are not subject to the rate range payment requirements
described in Section 14301.5.
SEC. 5. SEC. 4. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to ensure, at the earliest possible time, access to
medically necessary care for Medi-Cal beneficiaries, it is necessary
that this act take effect immediately.
