Measures to Restore Medi-Cal Provider Rate Cuts Converge, Move Through Legislature

A broad coalition of hospitals, doctors, and health advocates is supporting two measures moving through the Assembly and Senate to restore cuts to the rate that the state pays to Medi-Cal providers in the 2011-12 state budget. 

The cuts, contained in AB 97 (Chapter 3, Statutes of 2011), were passed at the height of the Great Recession and during a time when California’s legislators were grappling with a $25 billion budget deficit. Compounding the devastating effects of the cuts is the fact that they are retroactive, meaning providers and facilities that received the regular rate while the courts decided the legality of the cuts must pay the state back. 
Two main measures, AB 900 by Assembly Member Luis Alejo and SB 640 by Senator Ricardo Lara, either restored all or some of the rate cuts. AB 900, which is supported by CSAC, originally sought to reinstate rate cuts and dismiss retroactivity for the reimbursement rate for Medi-Cal services provided by distinct part skilled nursing facilities (DP/SNFs). Many small urban and rural hospitals with skilled nursing facilities cannot pay the large retroactive amounts due for the rate cuts, which run into the hundreds of thousands of dollars. Further, many individual facilities cannot absorb the rate cut for this fiscal year, as health care costs have continued to rise. These small facilities are struggling financially, and their ability to continue to provide medically necessary services in communities throughout the state hangs in the balance. 

SB 640 seeks to restore all the rate cuts to Medi-Cal providers, and AB 900 was amended on April 19 to include a restoration for all AB 97 rate cuts as well. AB 900 was passed as amended by the Assembly Health Committee on May 1, and SB 640 was passed by the Senate Health Committee on April 30. Both measures will go to their respective Appropriations Committees, and estimates of cost range between $300 and $600 million. It is possible that the restoration of the rate cuts will be included in some fashion in the upcoming May Revision Budget, and CSAC will continue to monitor the progress of efforts to restore the cuts to DP/SNFs.
Public Health

AB 506 (Mitchell) – Support
As Amended on May 1, 2013

AB 506, by Assembly Member Holly Mitchell, would authorize social workers to consent to an HIV test for a child under the age of 12 months who is in temporary custody or is a dependent child of the court and where certain conditions related to their potential risk of HIV infection are met or where a physician determines that testing is necessary to render treatment to the child. The Assembly Judiciary Committee unanimously passed AB 506 on April 30 and it is now on the Assembly Floor. 

AB 720 (Skinner) – Support
As Amended on April 11, 2013

AB 720, by Assembly Member Nancy Skinner, would help reduce recidivism and assist counties in our responsibility for post release community supervision of individuals in county jails by enrolling them in the federally funded Medi-Cal program before their release.

Assembly Bill will give counties an important tool to reduce repeat crime and recidivism by allowing newly released inmates to access critical health care and substance use disorder services through Medi-Cal, or, if they qualify, through a qualified health plan in the state’s health benefits exchange. By pre-enrolling incarcerated individuals, counties can get a jump on providing wrap-around services to the most high-risk inmates to ensure adequate supervision and successful and sustainable reentry in our communities. Amendments will clarify that the county may designate which agency and staff is assigned to the jail to make eligibility determinations. 

CSAC supports efforts to increase local flexibility and innovation in serving the AB 109 and county jail population because the benefits of successful reintegration of incarcerated individuals accrue to a variety of stakeholders, including counties, the state, our local communities and families. It is for these reasons that CSAC supports AB 720. The Assembly Public Safety Committee passed AB 720 on April 16, but the Assembly Appropriations Committee placed it on their Suspense File on May 1.
Mental Health

SB 664 (Yee) – Oppose 
As Amended on April 11, 2013

SB 664, by Senator Leland Yee, would remove the authority of county Boards of Supervisors to determine whether the implementation of Assisted Outpatient Treatment (AOT) services, commonly known as Laura’s Law, is appropriate in their communities. The measure had also sought to clarify that Mental Health Services Act funds may be used for AOT services in those counties that have authorized implementation. However, this provision, which CSAC supported, was amended out of the measure on April 11. 

As amended, the measure removes the authority of county Boards of Supervisors to choose to implement Laura’s Law. However, the Laura’s Law demonstration project was specifically constructed to allow county Boards of Supervisors to consider the needs and priorities of their local communities, as well as the fiscal ramifications, of implementing AOT services. It is critical that county Boards of Supervisors retain the authority and flexibility to determine whether implementing Laura’s Law AOT services in their communities is appropriate. 

It is for these reasons that CSAC had taken an Oppose position on SB 664. This does not mean that CSAC opposes the implementation of Laura’s Law or the provision to cap participants in the program. Again, we oppose the removal of authority from the Board of Supervisors in each county to determine whether Laura’s Law is appropriate for their communities. The Senate Health Committee passed SB 664 on April 24, and the measure has been re-referred back to the Senate Rules Committee due to the possible local fiscal ramifications as amended. 

AB 1054 (Chesbro) – Support
As Amended on April 11, 2013

AB 1054, by Assembly Member Wesley Chesbro, would reduce the annual rate increase that counties pay to Institutions for Mental Disease (IMD) for inpatient psychiatric treatment from 4.7 percent to 3.5 percent starting July 1, 2014. 

The measure, sponsored by CSAC affiliate California Mental Health Directors Association (CMHDA), originally removed the automatic rate increase altogether and would have allowed counties to negotiate rates with IMDs within their borders. For counties, the 4.7 percent annual increase was a significant fiscal concern, as county mental health departments are responsible for the full cost of IMD rates. 

AB 1054 was amended in April to instead reduce the automatic rate increase down to 3.5 percent annually, which is consistent with a reasonable cost of living adjustment. The measure was passed by the Assembly Appropriations Committee on May 1 and recommended for the Assembly’s Consent Calendar. 

Emergency Medical Services

SB 191 (Padilla) – Support
As Introduced on February 7, 2013

SB 191, by Senator Alex Padilla, would emove the sunset date for local Maddy Emergency Medical Services Funds (Maddy Funds) to allow counties to continue to assist hospitals and emergency physicians with the costs of treating uninsured patients, local emergency services, and pediatric trauma care. 

Senate Bill 191 simply removes the January 1, 2014 sunset date for local Maddy Funds. Counties supported measures creating and sustaining Maddy Funds, and nearly all counties currently operate a Maddy Fund by collecting an additional $2 for every $10 penalty for all criminal offenses and moving violations. This funding is allocated to hospitals and emergency physicians to reimburse them for care given to uninsured patients and allows counties to supplement local emergency services. Fifteen percent of the funds collected are also directed to pediatric trauma care (Richie’s Fund), representing the only statewide funding source for these critical services for kids. 

California’s counties continue to grapple with a reduction of resources for the health care safety net. These changes are also felt by hospitals and emergency physicians, as well as by Californians who need emergency medical services. In rural areas, access to emergency department services is increasingly difficult, and urban areas are experiencing the same problem as fewer hospitals are able to finance emergency departments. Maddy funding statewide is small – about $50 million in non-state General Funds – but it is an important element in the local emergency services safety net and availability of pediatric trauma care.
For these reasons, CSAC supports SB 191. The Senate Health Committee passed the measure on April 10 and it is now on the Senate Floor.