AB 186

Bill Subjects

Abstract

(1) Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law, the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, an initiative measure approved as Proposition 56 at the November 8, 2016, statewide general election, increases taxes imposed on distributors of cigarettes and tobacco products and requires all revenues to be deposited into the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund, a continuously appropriated fund. Proposition 56 requires the Controller to transfer 82% of those revenues to the Healthcare Treatment Fund, to be used by the department to increase funding for the Medi-Cal program and other specified health care programs and services in a way that, among other things, ensures timely access, limits geographic shortages of services, and ensures quality care. The act authorizes the Legislature to amend the provision relating to the allocation of revenues in the Healthcare Treatment Fund to further the purposes of the act with a 23 vote of the membership of each house of the Legislature. Existing law, until January 1, 2026, establishes the Proposition 56 Medi-Cal Physicians and Dentists Loan Repayment Act Program, which requires the department to develop and administer the program to provide loan assistance payments to qualifying, recent graduate physicians and dentists who serve beneficiaries of the Medi-Cal program and other specified health care programs. Existing law requires this program to be funded using moneys appropriated to the department for this purpose in the Budget Act of 2018 from the Healthcare Treatment Fund, and requires the department to administer 2 separate payment pools for participating physicians and dentists, respectively, consistent with the allocations provided for in the Budget Act of 2018. This bill would rename the program the Medi-Cal Physicians and Dentists Loan Repayment Program and would make conforming changes. The bill would instead make the administratively created Loan Repayment Program Account, within the Healthcare Treatment Fund, continuously appropriated to implement the Medi-Cal Physicians and Dentists Loan Repayment Act Program. The bill would require that the account contain funds appropriated by the Legislature from the Healthcare Treatment Fund. The bill would also establish the Medi-Cal Loan Repayment Program Special Fund in the State Treasury and require the fund to contain funds transferred from the California Electronic Cigarette Excise Tax Fund, as specified, funds collected from remittances by Medi-Cal managed care plans as described below, and any other moneys appropriated to the program. The bill would make the Medi-Cal Loan Repayment Program Special Fund continuously appropriated to implement the Medi-Cal Physicians and Dentists Loan Repayment Program. The bill would require, for the Medi-Cal Loan Repayment Program Special Fund, the department and the State Controller's office to maintain separate subaccounts for funds appropriated or transferred from each funding source. The bill would require the department to expend all funds appropriated from the Loan Repayment Program Account of the Healthcare Treatment Fund before expending any funds from the Medi-Cal Loan Repayment Program Special Fund. The bill would make other changes to the allocations associated with the 2 separate payment pools. The bill would delete the provision making this program inoperative on January 1, 2026, thereby extending it indefinitely. By extending the operation of this program and the expenditure of certain allocated revenues for this program, the bill would amend Proposition 56. (2) Existing law requires a Medi-Cal managed care plan to comply with a minimum 85% medical loss ratio (MLR) consistent with specified federal regulations. Effective for contract rating periods commencing on or after July 1, 2023, existing law requires a Medi-Cal managed care plan to provide a remittance for noncompliance with the minimum MLR standard. After the department returns the requisite federal share amounts to the federal Centers for Medicare and Medicaid Services, existing law requires the transfer of the remaining remitted amounts to the Medically Underserved Account for Physicians within the Health Professions Education Fund for use, upon appropriation, for the Steven M. Thompson Physician Corps Loan Repayment Program, as specified. This bill would instead require that the remaining remitted amounts be transferred to the Medi-Cal Loan Repayment Program Special Fund for purposes of the above-described Medi-Cal Physicians and Dentists Loan Repayment Program. (3) Existing law, the Medi-Cal Long-Term Care Reimbursement Act, requires the department to implement a facility-specific reimbursement ratesetting system for certain skilled nursing facilities. Reimbursement rates for freestanding skilled nursing facilities are funded by a combination of federal funds and moneys collected pursuant to the skilled nursing uniform quality assurance fee. Existing law prohibits the fee from being assessed after December 31, 2022, and repeals these provisions on January 1, 2024. Existing law also establishes the Skilled Nursing Facility Quality and Accountability Special Fund in the State Treasury, which is a continuously appropriated fund that contains moneys from the assessment of specified administrative penalties and set asides of General Fund moneys, for the purposes of making quality and accountability payments, including supplemental payments. Under the act, the department is required to develop the Skilled Nursing Facility Quality and Accountability Supplemental Payment System (system) , which is utilized to provide supplemental payments to skilled nursing facilities that improve the quality and accountability of care rendered to residents in skilled nursing facilities, and to penalize those facilities that do not meet measurable standards. Existing law extends the department's use of the Skilled Nursing Facility Quality and Accountability Special Fund to December 31, 2022, and ceases the availability of those payments on January 1, 2023. Under existing law, the rate methodology becomes inoperative after December 31, 2022, and these provisions will be repealed on January 1, 2024. This bill would revise and recast these provisions. The bill would allow the system to lapse and would require the department, subject to an appropriation by the Legislature, to implement the Workforce and Quality Incentive Program, which would render a network provider furnishing skilled nursing services to a Medi-Cal managed care enrollee eligible to earn performance-based directed payments for the managed care plan with which they contract. The bill would require the department, in consultation with certain stakeholders, to establish a methodology, parameters, and eligibility criteria for the directed payments. The bill would implement these provisions only to the extent that any necessary federal approvals are obtained and federal financial participation is available. The bill would authorize the Department of Finance to administratively abolish the Skilled Nursing Facility Quality and Accountability Special Fund. The bill would continue the Skilled Nursing Facility Minimum Staffing Penalty Account. By extending the period of time during which transfers are made to the Skilled Nursing Facility Minimum Staffing Penalty Account, the bill would make an appropriation. This bill would establish the maximum annual aggregate rate increases for the 2023 to 2026, inclusive, calendar years, as prescribed, and set forth the annual rate methodologies. The bill would authorize the department to modify any methodology or other provision regarding the reimbursement methodology, to the extent it deems necessary to meet the requirements of federal law or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or is not otherwise jeopardized. The bill would extend the operative date of the Medi-Cal Long-Term Care Reimbursement Act to December 31, 2026, and would authorize the department to conduct necessary closeout activities after that date. The bill would repeal these provisions on January 1, 2028. This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.