BILL ANALYSIS Ó AB 344 Page 1 Date of Hearing: April 29, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 344 (Chávez) - As Introduced February 13, 2015 ----------------------------------------------------------------- |Policy |Health |Vote:|18 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill, as proposed to be amended, provides that if a payment is made to a non-designated public hospital (NDPH), as specified, the payment is not be subject to a peer group inpatient reimbursement limitation established by the Department AB 344 Page 2 of Health Care Services (DHCS), unless otherwise required under federal law. FISCAL EFFECT: Negligible state fiscal effect. COMMENTS: 1)Purpose. According to the sponsor, the District Hospital Leadership Forum, this bill addresses a technical issue related to the Peer Grouping Inpatient Reimbursement Limitation (PIRL) that non-contract district/municipal hospitals (otherwise known as NDPHs) were subject to prior to January 1, 2014. The PIRL is a reimbursement limitation that in certain circumstances could restrict Medi-Cal payment to hospitals. The sponsor states that this bill seeks to prevent application of an existing statutory or regulatory rate limitation on a NDPH with the conversion to a new Medi-Cal inpatient reimbursement methodology called Diagnosis-Related Group (DRG). 2)Necessity of this bill? As the reimbursement methodology for NDPHs has recently changed, this bill does not appear necessary. The PIRL applied to the prior reimbursement methodology. DHCS does not plan to apply this to the new methodology. The PIRL is defined in regulations, not in statute, so a statutory clarification does not appear necessary when this could be clarified in regulation. The transition to DRG payments occurred July 1, 2014 and the PIRL does not appear to be an issue. 3)Amendments are technical and correct a code reference. AB 344 Page 3 Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081