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, through managed care or fee-for-service delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law covers emergency or nonemergency medical transportation, and nonmedical transportation, under the Medi-Cal program, as specified.

This bill would require the department to require Medi-Cal managed care plans that are contracted to provide nonemergency medical transportation or nonmedical transportation to contract with public paratransit service operators who are enrolled Medi-Cal providers, for the purpose of establishing reimbursement rates for those transportation trips provided by a public paratransit service operator. The bill would require that the rates be based on the departments fee-for-service rates for the transportation service, as specified. ensure that the fiscal burden of nonemergency medical transportation or nonmedical transportation is not unfairly placed on public paratransit service operators and would authorize the department to direct Medi-Cal managed care plans to reimburse public paratransit service operators who are enrolled as Medi-Cal providers at the fee-for-service rates for conducting that transportation, as described. The bill would require the department to engage with public paratransit service operators to understand the challenges as public operators of nonemergency medical transportation or nonmedical transportation services and would require the department to issue new guidance to ensure the fiscal burden is not unfairly placed on public operators on or before June 1, 2026.

The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.

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, through managed care or fee-for-service delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law covers emergency or nonemergency medical transportation, and nonmedical transportation, under the Medi-Cal program, as specified.

This bill would require the department to require Medi-Cal managed care plans that are contracted to provide nonemergency medical transportation or nonmedical transportation to contract with public paratransit service operators who are enrolled Medi-Cal providers, for the purpose of establishing reimbursement rates for those transportation trips provided by a public paratransit service operator. The bill would require that the rates be based on the departments fee-for-service rates for the transportation service, as specified.

The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2043 (Boerner) - Medi-Cal: nonmedical and nonemergency medical transportation

Bill Summary:

AB 2043 would require the Department of Health Care Services (DHCS) to ensure that the fiscal burden of nonemergency medical transportation (NEMT) or nonmedical transportation (NMT) is not unfairly placed on public paratransit operators.

Fiscal Impact:

Unknown ongoing cost pressures in the Medi-Cal program, likely millions, to the extent the bill would result in higher reimbursement expenditures related to NEMT and NMT services (General Fund and federal funds).

Background:

The Medi-Cal program provides health coverage for eligible low-income individuals. Current law requires the Medi-Cal program to provide NEMT and NMT services for a recipient to obtain covered Medi-Cal services, subject to utilization controls.

NEMT is transportation by ambulance, litter van, wheelchair van, or air to get to and from covered Medi-Cal services. NEMT is provided only in situations when the enrollee cannot utilize ordinary means of public or private transportation (such as bus, passenger car, or taxicab) due to their medical, mental health, or physical condition. NEMT services are subject to prior written authorization by a licensed practitioner. The provider must submit a treatment authorization request. Once requests are approved, Medi-Cal plans are required to authorize the lowest cost type of NEMT that is adequate for the member’s medical or mental health needs.

NMT is round trip transportation for recipients to access covered Medi-Cal services by private car, cab, bus, taxi, train, or other forms of public or private transportation. NMT is available to travel to appointments or visits for medically necessary covered services; picking up drug prescriptions that cannot be mailed directly to the enrollee; picking up medical supplies like prosthetics, orthotics, and other equipment; or, for visiting a sick child in the hospital. Enrollees using NMT can use a wheelchair but must be able to walk or otherwise get themselves from place to place without assistance from the driver. Enrollees using NMT services must attest, typically over the phone, that other available transportation resources have been reasonably exhausted. Unlike for NEMT, a provider’s authorization is not required for NMT authorization. The NMT requested must be the least costly method of transportation that meets the enrollee’s needs.

On September 28, 2023, the federal Centers for Medicare & Medicaid Services (CMS) issued guidance regarding Medicaid transportation services. With regards to public transit agencies, the guide stated that public transit agencies are often utilized in state Medicaid transportation programs and recognized as one of the least costly options. The guide directed state departments of transportation and Medicaid agencies to explore partnerships to better serve the Medicaid population. With regards to paratransit agencies, the guide states that states should ensure that the fiscal burden of transporting Medicaid recipients is not unfairly placed on paratransit services. Recognizing the higher costs of operating a paratransit system, a state’s Medicaid program may pay more than the rate charged to individuals with disabilities for a paratransit ride. The rate paid for paratransit trips must represent a reasonable amount and be no more than the rate paid for similar paratransit trips paid by other state human services agencies.

Proposed Law:

Specific provisions of the bill would:

• Require DHCS to ensure that the fiscal burden of transporting Medi-Cal recipients via NEMT or NMT is not unfairly placed on public paratransit service operators.
• Allow DHCS to ensure compliance by directing Medi-Cal plans to reimburse public paratransit operators, who are enrolled as Medi-Cal providers, at DHCS’s fee-for-service rates for NEMT or NMT for trips that do not include fixed-route transportation service; and specify that this bill does not address reimbursement for fixed-route transportation service.
• Require DHCS to engage with public paratransit service operators to understand the unique challenges as public operators of NEMT or NMT services; and require DHCS to provide updated guidance that ensures the fiscal burden of transporting Medi-Cal recipients is not unfairly placed on public paratransit service operators.

Related Legislation: AB 719 (Boerner, 2023) would have required Medi-Cal plans to contract with public paratransit services for the purpose of establishing reimbursement rates for NEMT and NMT trips provided by a public paratransit service operator. AB 719 was vetoed by the Governor.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Richard Roth, Chair

BILL NO: AB 2043

SUBJECT: Medi-Cal: nonmedical and nonemergency medical transportation.

SUMMARY:

Requires the Department of Health Care Services (DHCS) to ensure that the fiscal burden of nonemergency medical transportation (NEMT) or nonmedical transportation (NMT) is not unfairly placed on public paratransit operators. Authorizes DHCS to direct Medi-Cal managed care plans to reimburse public paratransit service operators who are enrolled as Medi-Cal providers at the fee-for-service rates. Requires DHCS to engage with public paratransit service operators to understand the challenges these operators face in providing NEMT and NMT services and to issue updated guidance to ensure these operators are not unfairly shouldering the fiscal burden of providing these services by June 1, 2026.

Existing law:

1. Establishes the Medi-Cal program, administered by DHCS, under which low-income individuals are eligible for medical coverage. [WIC §14000, et seq.]
2. Establishes a schedule of benefits under the Medi-Cal program, which includes benefits required under federal law and benefits provided at state option but for which federal financial participation through Medicaid is available. The schedule of benefits includes NEMT and NMT for a recipient to obtain covered Medi-Cal services, subject to utilization controls. [WIC §14132]
3. Requires the coverage of NMT when a recipient attests that other currently available resources have been reasonably exhausted, and includes, at a minimum, round trip transportation by passenger car, taxicab, or any other form of public or private conveyance, and mileage reimbursement when conveyance is in a private vehicle arranged by the recipient and not through a transportation broker, bus passes, taxi vouchers, or train tickets. Requires NMT to be covered by a recipient’s Medi-Cal managed care plan (Medi-Cal plan) when the recipient is enrolled in a Medi-Cal plan. [WIC §14132]

This bill:

1. Requires DHCS to ensure that the fiscal burden of transporting Medi-Cal recipients via NEMT or NMT is not unfairly placed on public paratransit service operators. Allows DHCS to ensure compliance by directing Medi-Cal plans to reimburse public paratransit operators, who are enrolled as Medi-Cal providers, at DHCS’s fee-for-service rates for NEMT or NMT for trips that do not include fixed-route transportation service. Specifies that this bill does not address reimbursement for fixed-route transportation service.
2. Requires DHCS to engage with public paratransit service operators to understand the unique challenges as public operators of NEMT or NMT services. Requires DHCS to provide updated guidance that ensures the fiscal burden of transporting Medi-Cal recipients is not unfairly placed on public paratransit service operators by June 1, 2026.
3. Conditions implementation of this bill only to the extent that any necessary federal approvals are obtained and federal financial participation is available and not jeopardized.
4. Makes legislative findings that public transportation is an essential service particularly for the elderly, the disabled, and citizens of limited means; public transit agencies providing fixed route services are required under federal law to provide complementary paratransit services to people with disabilities who cannot use the fixed route bus or rail service because of their disability; public transit agencies are often utilized for Medi-Cal transportation services as one of the least costly options; prior to the requirement that Medi-Cal plans cover transportation services, public transit agencies were able to seek partial reimbursement for Medi-Cal covered transportation trips; the continuance of public transportation systems is a matter of state concern; the federal Medicaid agency issued guidance encouraging state departments of transportation and Medicaid agencies to explore better partnerships and allowing Medicaid to pay more than the rate charged to individuals with disabilities for the paratransit ride; and, that the rate charged to individuals with disabilities for paratransit rides does not cover the cost of these services in order to make the service accessible.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, this bill would have one-time costs of an unknown amount, possibly exceeding $150,000, for DHCS to engage with transit operators, update guidance, and obtain federal approvals if necessary (General Fund, federal).

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, public transit operators provide NMT mandated by federal law for medically necessary Medi-Cal covered services, for which the transit operators are supposed to be reimbursed. AB 2394 (Garcia, Chapter 615, Statutes of 2016) had the unintended consequence of these transportation costs being sent directly to the Medi-Cal plan as part of the customer’s overall capitated health care coverage. With no requirement or incentive to reimburse public transit operators, they are often left with little recourse to recoup the costs for their services. This bill seeks to correct that by requiring DHCS to ensure that the fiscal burden of NEMT or NMT is not unfairly placed on public paratransit service operators.
2. Medi-Cal transportation services. Medi-Cal provides coverage for three different types of transportation. The first two, emergency medical transportation and NEMT, have long been recognized as Medi-Cal benefits. Prior to 2017, DHCS only provided guidance to cover NMT for children under age 21 through the federally-mandated Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit, and for dually eligible recipients enrolled in the CalMediConnect demonstration project, which combined Medicare and Medi-Cal benefits in one health plan and operated in seven counties. CalMediConnect recipients received up to 30 one-way trips per year with no co-payment. Because federal regulation had long required coverage of NMT, in 2016, AB 2394 added NMT to the Medi-Cal schedule of benefits with language stating that it should not be interpreted as adding a new benefit to the Medi-Cal program. It also specified that for Medi-Cal recipients enrolled in a Medi-Cal plan, the plan would be responsible for providing the transportation services.
3. NEMT. NEMT is transportation by ambulance, litter van, wheelchair van, or air to get to and from covered Medi-Cal services. NEMT is provided only in situations when the enrollee cannot utilize ordinary means of public or private transportation (such as bus, passenger car, or taxicab) due to their medical, mental health, or physical condition. NEMT services are subject to prior written authorization by a licensed practitioner. The provider must submit a treatment authorization request that includes: (1) the purpose of the transportation; (2) the frequency of medical visits/trips or the inclusive dates of the requested transportation; and, (3) the medical, mental health, or physical condition that makes normal public or private transportation inadvisable. Once requests are approved, Medi-Cal plans are required to authorize the lowest cost type of NEMT that is adequate for the member’s medical or mental health needs.
4. NMT. NMT is round trip transportation for recipients to access covered Medi-Cal services by private car, cab, bus, taxi, train, or other forms of public or private transportation. NMT is available to travel to appointments or visits for medically necessary covered services; picking up drug prescriptions that cannot be mailed directly to the enrollee; picking up medical supplies like prosthetics, orthotics, and other equipment; or, for visiting a sick child in the hospital. Enrollees using NMT can use a wheelchair but must be able to walk or otherwise get themselves from place to place without assistance from the driver. Enrollees using NMT services must attest, typically over the phone, that other available transportation resources have been reasonably exhausted. Unlike for NEMT, a provider’s authorization and signature is not required for NMT authorization. The NMT requested must be the least costly method of transportation that meets the enrollee’s needs.
5. Changes to NEMT and NMT services since AB 2394. After the passage of AB 2394, DHCS began requiring Medi-Cal plans to provide all NEMT and NMT services. According to a May 2022 guidance published by DHCS, this includes transportation to services that the plan does not cover, such as transportation needed for carved out mental health services provided by a county mental health plan or to pick up prescriptions (outpatient prescriptions are provided through DHCS’s Medi-Cal Rx, not the Medi-Cal plan). According to the California Transit Association, a supporter of this bill, before the enactment of AB 2394, Medi-Cal directly reimbursed transit agencies for covered transportation services. However, since the responsibility was transferred to Medi-Cal plans, and plans do not appear required to reimburse transit providers, plans are placed under little to no pressure at all to partner with transportation providers. The California Transit Association states that for some agencies, this transportation reimbursement is a sizable revenue source, providing hundreds of thousands to several millions of dollars that enable them to continue offering NMT and NEMT services, as well as maintain the other transportation services they provide.

According to an October 2020 California Health Care Foundation report on Medi-Cal’s transportation benefit, for NMT in particular, most Medi-Cal plans delegate the benefit to transportation brokers, which is similar to how the benefit is handled in other states. Additionally, the vast majority of NMT trips are provided by rideshare drivers such as Lyft and Uber. Data from three of the plans had rideshare trips accounting for 89% of the NMT trips, though that can vary by plan and over time. NEMT companies, by contrast, are required to be enrolled as Medi-Cal providers and the drivers must be credentialed which includes background checks, first aid/CPR certification, passenger assistance training, HIPAA compliance attestation, and among other required verifications. The report did find that Medi-Cal enrollees are still facing challenges in accessing the benefit, particularly in rural areas, or for riders with limited mobility who were given transportation in rideshare vehicles.

1. Decline in transit ridership since COVID-19. Lack of payment from Medi-Cal plans is not the only financial strain on the state’s public transit agencies. According to an April 5, 2023 article in CalMatters, statewide, monthly ridership dropped from 100 million in February 2019 to about 20 million in June 2020. As of June 2022, the numbers rebounded to about 60 million, but varied by region and transportation mode. Transit agencies across California are grappling with a “fiscal cliff” — a decline in revenue and the end of federal funding that has been a lifeline for the last three years. Without the state stepping in, they say they may have to cut service or increase fares. A June 21, 2023 article in the New York Times found that transit agencies serving lower-income passengers had rebounded better than those primarily serving commuters, though ridership was still down across all providers discussed.
2. Recent Centers for Medicare & Medicaid Services (CMS) transportation guidance. On September 28, 2023, CMS issued State Medicaid Director letter #23-006 with an accompanying Medicaid transportation guide. With regards to public transit agencies, the guide stated that public transit agencies are often utilized in state Medicaid transportation programs and recognized as one of the least costly options. The guide directed state departments of transportation and Medicaid agencies to explore partnerships to better serve the Medicaid population. With regards to paratransit agencies, the guide states that states should ensure that the fiscal burden of transporting Medicaid recipients is not unfairly placed on paratransit services. Recognizing the higher costs of operating a paratransit system, a state’s Medicaid program may pay more than the rate charged to individuals with disabilities for a paratransit ride. The rate paid for paratransit trips must represent a reasonable amount and be no more than the rate paid for similar paratransit trips paid by other state human services agencies. This bill reflects much of the language of the guidance both in the findings and in the direction to DHCS to ensure that the burden of transporting Medi-Cal recipients is not unfairly placed on paratransit operators.
3. Prior legislation. AB 719 (Boerner of 2023) would have required Medi-Cal plans to contract with public paratransit services for the purpose of establishing reimbursement rates for NEMT and NMT trips provided by a public paratransit service operator based on DHCS’s fee-for-service rate for these services. AB 719 was vetoed by Governor Newsom who stated: “I support efforts to encourage more public paratransit service operators to enroll as NMT providers in Medi-Cal, which is permitted under existing law. It would be beneficial to have more options for NMT in the Medi-Cal system. This bill takes a different approach, however, requiring the DHCS to pursue a series of federal approvals that are not currently allowable under federal guidance.” 

AB 2394 (Eduardo Garcia, Chapter 615, Statutes of 2016) added NMT services to the Medi-Cal schedule of benefits while specifying that such services are not a new benefit.

AB 1231 (Wood of 2015), was substantially similar to AB 2394. Along with five other Medi-Cal focused bills, AB 1231 was vetoed by Governor Brown, who stated: these bills unnecessarily codify certain existing health care benefits or require the expansion or development of new benefits and procedures in the Medi-Cal program. Taken together, these bills would require new spending at a time when there is considerable uncertainty in the funding of this program.

1. Support. This bill is sponsored by the San Diego Metropolitan Transit System and supported by several transit systems and associations, several of whom share their experience in providing transit services to Medi-Cal recipients. For example, Gold Coast Transit District writes that in 2023, Gold Coast Transit District provided 84,895 trips for its passengers to various locations, including 39,187 trips to dialysis, physical therapy, adult day healthcare services, and medical – of which, they believe 60% were potentially Medi-Cal eligible trips, which cost approximately $1,031,715 to provide. This bill would require engagement with public transit providers to understand the challenges of providing services and develop guidance to ensure the cost burdens do not affect our ability to maintain quality services for the passengers.

SUPPORT AND OPPOSITION:

Support: San Diego Metropolitan Transit System (sponsor)

AARP

Access Services

California Academy of Family Physicians

California Special Districts Association

California Transit Association

Eastern Sierra Transit Authority

Gold Coast Transit District

Orange County Transportation Authority

Stanislaus Regional Transit Authority

Oppose: None received.

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ASSEMBLY THIRD READING

ATR Bill Id:AB 2043

Author:(Boerner)

As Amended Ver:April 1, 2024

Majority vote

SUMMARY

Requires the Department of Health Care Services (DHCS) to ensure the fiscal burden of transporting Medi-Cal beneficiaries is not unfairly placed on public paratransit service operators (public transit operators or transit agencies) by requiring DHCS to engage with public transit operators and provide updated guidance to Medi-Cal managed care plans on this issue. Allows DHCS to implement this requirement by ensuring a minimum fee schedule for transit operators.

Major Provisions

COMMENTS

1. Medi-Cal Transportation Coverage. Medi-Cal is California's safety net health care program, covering about one-third of the state's population. Medi-Cal covers a comprehensive set of health benefits. Pursuant to federal regulation, Medi-Cal also covers both medical and nonmedical transportation that is needed in order to access other covered benefits; for instance, Medi-Cal will cover a beneficiary's ride to a doctor's office. Medical transportation includes emergency transportation through ambulances and non-emergency medical transportation through ambulance, litter van, and wheelchair van services for individuals with special transportation needs. Nonmedical transportation can be by passenger car, taxicabs, or other forms of public or private transport. Most Medi-Cal enrollees receive care, including access to the transportation benefit, through Medi-Cal managed care plans.
2. Experience of California Public Transit Operators. According to the sponsor of this bill, San Diego Metropolitan Transit System (SDMTS), public transit operators provide both medical and nonmedical transportation to Medi-Cal managed care plan enrollees to access medically necessary Medi-Cal covered services. However, SDMTS asserts that since the responsibility was transferred from the fee-for-service Medi-Cal system to managed care plans, and plans are not required to reimburse transit providers, plans are placed under little to no pressure at all to partner with transit operators. For some operators, Medi-Cal transportation reimbursement has been a sizable revenue source, providing hundreds of thousands to several millions of dollars. Without this revenue, operators absorb the costs, which may impact other services. According to recent reporting, public transit ridership in California has fully not recovered since plummeting during the pandemic. Public transit operators have been experiencing a drop in ridership and revenue.

Transit operators also have independent mandates to ensure the availability of nondiscriminatory transportation to individuals with disabilities under the federal Americans with Disabilities Act (ADA). This distinguishes transit operators from private providers such as taxis or Uber. This bill's sponsors suggest the mandate under ADA undermines the ability of transit operators to negotiate and reach contractual agreements with plans because, under ADA, these operators must provide requested services such as paratransit, regardless of another payer's responsibility to cover the service.

1. Federal Guidance. On September 28, 2023, the Centers for Medicare and Medicaid Services (CMS) issued State Medicaid Director letter # 23-006: "Assurance of Transportation: A Medicaid Transportation Coverage Guide" to serve as a compilation of current and new Medicaid transportation policy. As it relates to the issues raised by this bill, the CMS letter provides that states should ensure that the fiscal burden of transporting Medicaid beneficiaries is not unfairly placed on paratransit services, states that Medicaid agencies should explore partnerships with Departments of Transportation, and clarifies Medicaid may pay more than the rate charged to individuals with disabilities for a paratransit ride.
2. Implementation of this Bill. This bill requires DHCS to ensure, per federal guidance, that the fiscal burden of transporting Medicaid beneficiaries is not unfairly placed on public paratransit service operators. It authorizes, but does not require, DHCS to do so by directing Medi-Cal managed care plans to reimburse public paratransit service operators who are enrolled as Medi-Cal providers at the Medi-Cal FFS rates for the trip.

According to the Author

Public transit operators provide transportation for medically necessary Medi-Cal covered services, for which the transit operators are supposed to be reimbursed. The author asserts that pursuant to AB 2394 (Garcia), Chapter 615, Statutes of 2016, transportation costs were built into Medi-Cal managed care plan rates, but the bill had an unintended consequence because it did not include a corresponding requirement to reimburse public transit operators. With no requirement or incentive to reimburse public transit operators for Medi-Cal transportation services that the plan is responsible to pay for, the author states operators are often left with little recourse to recoup the costs for their services. This bill seeks to correct this imbalance by requiring DHCS to take specific steps to ensure the fiscal burden of transporting Medi-Cal beneficiaries is not unfairly placed on public paratransit service operators, pursuant to recent federal Medicaid guidance.

Arguments in Support

Transit operators and advocates support this bill to ensure public transit operators can be reimbursed for providing covered services that Medi-Cal managed care plans are financially responsible to provide. Eastern Sierra Transit Authority (ESTA) writes that in Bishop, California, the public transit system carries hundreds of Medi-Cal passengers every year. Under current law, ESTA writes, managed care plans are placed under little to no pressure at all to partner with public paratransit service operators, who are not legally allowed to turn away customers, because there is no requirement to reimburse these operators.

Arguments in Opposition

There is no known opposition.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, one-time costs of an unknown amount, possibly exceeding $150,000, to DHCS to engage with transit operators, update guidance, and obtain federal approvals if necessary (General Fund, federal).

VOTES

ASM HEALTH: 16-0-0

YES: Bonta, Waldron, Aguiar-Curry, Arambula, Wendy Carrillo, Flora, Haney, Jones-Sawyer, Maienschein, McCarty, Joe Patterson, Rodriguez, Sanchez, Santiago, Schiavo, Weber

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: April 1, 2024

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0003108

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2043

Author:(Boerner) – As Amended Ver:April 1, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Department of Health Care Services (DHCS) to ensure that the cost of nonemergency medical transportation or nonmedical transportation is not placed on public paratransit service operators.

Specifically, this bill:

1. Authorizes DHCS to direct Medi-Cal managed care plans to reimburse public paratransit service operators who are enrolled Medi-Cal providers at the fee-for-service rates for nonemergency medical transportation or nonmedical transportation that do not include fixed-route service.
2. Requires DHCS to engage with public paratransit service operators to understand their challenges and issue updated guidance to ensure the cost of transporting beneficiaries is not unfairly placed on public paratransit operators.
3. Conditions implementation on receipt of necessary federal approvals and the availability of federal financial participation.

FISCAL EFFECT:

One-time costs of an unknown amount, possibly exceeding $150,000, to DHCS to engage with transit operators, update guidance, and obtain federal approvals if necessary (General Fund, federal).

COMMENTS:

1. Purpose. This bill is sponsored by the San Diego Metropolitan Transit System (MTS). According to the author:

Public transit operators provide non-medical paratransit transportation mandated by federal law for medically necessary Medi-Cal covered services, for which the transit operators are supposed to be reimbursed. AB 2394 (Garcia) [Chapter 615, Statutes of 2016] had the unintended consequence of these transportation costs being sent directly to the managed care plan (MCP) as part of the customer’s overall capitated health care coverage. With no requirement or incentive to reimburse public transit operators, they are often left with little recourse to recoup the costs for their services. This bill seeks to correct that by requiring MCPs, under the direction of Department of Health Care Services, to contract with public transit operators for the purpose of establishing reimbursement rates for [nonmedical transportation (NMT)] and [non-emergency medical transportation (NEMT)] trips provided by a public transit operator.

1. Medi-Cal Transportation Coverage. Medi-Cal covers both medical transportation and NMT beneficiaries need to access other covered benefits. Medical transportation can be either emergency medical transportation, or NEMT:
   1. Emergency medical transportation is a typical “ambulance ride” and may involve the emergency medical system. Per Medi-Cal guidance, it is provided when necessary to obtain program-covered benefits when the beneficiary’s condition is acute and severe, requiring immediate medical diagnosis and treatment to prevent death or disability; it does not require prior authorization (PA).
   2. NEMT is provided when necessary to obtain program-covered medical services and when the beneficiary’s medical and physical condition is such that transport by ordinary means of private or public conveyance is medically contraindicated. This type of medical transportation is subject to PA. Each PA request for such transportation must be accompanied by either a prescription or order signed by a physician, dentist, or podiatrist, which describes the medical reasons necessitating the use of NEMT.

NMT is the transportation of members to access covered services by passenger car, taxicabs, or other forms of public or private transport. NMT is covered when it is used to transport people to a medical service, such as an office visit or an outpatient surgery. However, NMT is distinct from emergency medical transportation and NEMT, in that the transportation itself is does not require specialized vehicles, equipment, or personnel.

1. AB 2394. AB 2394 (Garcia), Chapter 615, Statutes of 2016, specified NMT was a Medi-Cal benefit, making managed care plans responsible for providing NMT to their beneficiaries. MTS, the sponsor of this bill, contends that before the enactment of AB 2394, public transit operators billed Medi-Cal FFS directly for covered transportation services, and since the responsibility was transferred to managed care plans, plans have little to no pressure to partner with transportation providers. For some transit operators, Medi-Cal reimbursement was a sizable revenue source, providing hundreds of thousands to millions of dollars that enabled them to continue offering NMT and NEMT services. Without the reimbursement, transit operators must absorb the costs of these services, which may impact other services.
   
2. Related Legislation. AB 719 (Boerner) attempts to address the same issue as this bill by requiring Medi-Cal managed care plans that are contracted to provide NEMT or NMT to contract with public paratransit service operators who are enrolled Medi-Cal providers, for the purpose of establishing reimbursement rates. AB 719 was vetoed by Governor Newsom, who stated it required DHCS to pursue a series of federal approvals that are not currently allowable under federal guidance, and was therefore not a prudent use of state resources.
   
3. Prior Legislation.
   
   1. AB 2394 (Garcia), Chapter 615, Statutes of 2016, added to the schedule of Medi-Cal benefits NMT, subject to utilization controls and permissible time and distance standards, for a beneficiary to obtain covered Medi-Cal services.
      
   2. AB 1231 (Wood), of the 2015-16 Legislative Session, was substantially similar to AB 2394 and would have added NMT as a Medi-Cal benefit. Governor Brown vetoed AB 1231, along with five other bills, stating:
      

These bills unnecessarily codify certain existing health care benefits or require the expansion or development of new benefits and procedures in the Medi-Cal program.

Taken together, these bills would require new spending at a time when there is considerable uncertainty in the funding of this program. Until the fiscal outlook for Medi-Cal is stabilized, I cannot support these measures.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 9, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2043

Author:((Boerner) – As Amended Ver:April 1, 2024

SUBJECT: Medi-Cal: nonmedical and nonemergency medical transportation.

SUMMARY: Requires the Department of Health Care Services (DHCS) to ensure the fiscal burden of transporting Medi-Cal beneficiaries is not unfairly placed on public paratransit service operators (public transit operators or transit agencies). Specifically, this bill:

1. Requires DHCS to ensure that the fiscal burden of transporting beneficiaries via nonemergency medical transportation or nonmedical transportation is not unfairly placed on public transit operators.
2. Allows DHCS to ensure compliance with 1), above, by directing Medi-Cal managed care plans to reimburse public paratransit service operators who are enrolled as Medi-Cal providers at DHCS’s fee-for-service (FFS) rates for the trip.
   
3. Requires DHCS to engage with transit agencies and issue guidance related to the requirement in 1), above.
4. Makes various findings and declarations that clarify this bill’s purpose, including:
   1. Support of public transportation as a state concern;
   2. Transit agencies’ responsibility under the federal Americans with Disabilities Act of 1990 to provide complementary paratransit services to people with disabilities;
   3. The status of complementary paratransit services as highly subsidized by public transit operators for the public benefit of eligible riders;
   4. The ability of transit agencies to seek reimbursement for Medi-Cal transportation before and after the inclusion of the transportation benefit in Medi-Cal managed care; and,
   5. A 2023 Centers for Medicare and Medicaid Services (CMS) guidance that advises state Medicaid agencies to explore partnerships with transit agencies and should ensure that the fiscal burden of transporting Medicaid beneficiaries is not unfairly placed on paratransit services.

EXISTING LAW:

1. Requires, under federal regulations issued by CMS, states to ensure necessary transportation for beneficiaries to and from providers. [Title 42, Code of Federal Regulations (CFR) §431.53]
   
2. Establishes the Medi-Cal Program, administered by DHCS, to provide comprehensive health benefits to low-income individuals who meet specified eligibility criteria. [Welfare and Institutions Code (WIC) § 14000 et seq.]
3. Establishes a schedule of benefits under the Medi-Cal program, which includes federally required and optional Medicaid benefits. [WIC §14132]
4. Defines, under state regulations, a nonemergency medical transportation (NEMT) as ambulance, litter van, and wheelchair van services, which are to be provided when the beneficiary’s medical and physical condition is such that transport by ordinary means of public or private conveyance is medically contraindicated, and transportation is required for the purpose of obtaining needed medical care. [Title 22, California Code of Regulations §51151.7]
   
5. Requires Medi-Cal to cover nonmedical transportation (NMT), subject to utilization controls and permissible time and distance standards, for a beneficiary to obtain covered Medi-Cal services. [Ibid]
   
6. States that NMT includes, at a minimum, round trip transportation for a beneficiary to obtain covered Medi-Cal services by passenger car, taxicab, or any other form of public or private conveyance, and mileage reimbursement when conveyance is in a private vehicle arranged by the beneficiary and not through a transportation broker, bus passes, taxi vouchers, or train tickets. [Ibid]
   
7. Excludes from NMT the transportation of the sick, injured, invalid, convalescent, infirm, or otherwise incapacitated beneficiaries by ambulance, litter van, or wheelchair van licensed, operated, and equipped in accordance with state and local statutes, ordinances, or regulations. [Ibid]
   
8. Requires NMT to be provided for a beneficiary who can attest that other currently available resources have been reasonably exhausted. Provides that for beneficiaries enrolled in a managed care plan, NMT must be provided by the plan. Requires, for Medi-Cal FFS beneficiaries, DHCS to provide NMT when those services are not available to the beneficiary. [Ibid]
   
9. Requires NMT to be provided in a form and manner that is accessible in terms of physical and geographic accessibility, for the beneficiary and consistent with applicable state and federal disability rights laws. [Ibid]
   
10. States it is the intent of the Legislature to affirm federal requirements, in which DHCS is required to provide necessary transportation, including NMT, for recipients to and from covered services, and that the addition of statutory requirements are not to be interpreted to add a new benefit to the Medi-Cal program. [Ibid]
11. States, prior to the effective date of any necessary federal approvals, NMT was not a Medi-Cal managed care benefit with the exception of when provided as an Early and Periodic Screening, Diagnostic, and Treatment service. [Ibid]
    

FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. This bill is sponsored by the San Diego Metropolitan Transit System (MTS) to ensure Medi-Cal reimbursement for public transit operators despite enrollment of individuals into Medi-Cal managed care plans. According to the author, public transit operators provide NMT and NEMT for medically necessary Medi-Cal covered services, for which the transit operators are supposed to be reimbursed. The author asserts that pursuant to AB 2394 (Garcia), Chapter 615, Statutes of 2016, transportation costs were being built into Medi-Cal managed care plan rates, but the bill has an unintended consequence because it did not include a corresponding requirement to reimburse public transit operators. With no requirement or incentive to reimburse public transit operators for Medi-Cal transportation services the plan is responsible to pay for, the author states operators are often left with little recourse to recoup the costs for their services. This bill seeks to correct this imbalance by requiring DHCS to take specific steps to ensure the fiscal burden of transporting Medi-Cal beneficiaries is not unfairly placed on public paratransit service operators, pursuant to recent federal Medicaid guidance.
2. BACKGROUND.
   1. Medi-Cal Transportation Coverage. Medi-Cal is California’s safety net health care program, covering about one-third of the state’s population. Medi-Cal covers a comprehensive set of health benefits. Pursuant to federal regulation, Medi-Cal also covers both medical and nonmedical transportation that is needed in order to access other covered benefits.
      1. Medical transportation. Medical transportation can be either emergency medical transportation or NEMT, as described below:
         1. Emergency medical transportation is a typical “ambulance ride” and may involve the emergency medical system. Per Medi-Cal guidance, it is provided when necessary to obtain program covered benefits when the beneficiary’s condition is acute and severe, necessitating immediate medical diagnosis and treatment in order to prevent death or disability. It does not require prior authorization and is always by ambulance.
         2. NEMT is provided when necessary to obtain program covered medical services and when the beneficiary’s medical and physical condition is such that transport by ordinary means of private or public conveyance is medically contraindicated. This type of medical transportation is subject to prior authorization. Each authorization request for such transportation must be accompanied by either a prescription or order signed by a physician, dentist, or podiatrist, which describes the medical reasons necessitating the use of NEMT. Authorization is granted only for the lowest cost type of medical transport that is adequate for the patient’s medical needs and is available to transport the patient at the time transportation is required. NEMT is specialized transportation by ambulance, litter van, and wheelchair van services.
      2. NMT. NMT is the transportation of members to access covered services by passenger car, taxicabs, or other forms of public or private transport. The term “NMT” can be confusing, as NMT is covered when it is used to transport people to a medical service, such as an office visit or an outpatient surgery. However, unlike emergency and nonemergency medical transportation, the transportation itself is “nonmedical” in that is does not require specialized vehicles, equipment, or personnel.
   2. Other State Medicaid Programs. According to a Kaiser Family Foundation issue brief, “Medicaid Non-Emergency Medical Transportation: Overview and Key Issues in Medicaid Expansion Waivers,” state Medicaid agencies have considerable latitude in how they administer NEMT/NMT benefits. Most states use third-party brokerage firms to coordinate transportation for beneficiaries in return for a capitated payment, while some states deliver services directly via FFS reimbursements, and still others rely on a mix of capitated brokerage, direct delivery, and public transit voucher programs as appropriate based on geographic and beneficiary needs. States may also contract with managed care plans to provide transportation for their enrollees.

Pursuant to recent federal guidance discussed further below, the Centers for Medicare and Medicaid Services (CMS), which oversees state Medicaid programs, notes that while states can engage vendors and managed care plans, and can delegate the many aspects of the operation of transportation programs to other entities, the single state Medicaid agency ultimately is responsible for ensuring transportation that meets all statutory and regulatory requirements, regardless of whether the beneficiary receives necessary transportation through a Medicaid FFS or managed care delivery system.

According to the Medicaid and Children's Health Insurance Program Payment and Access Commission (MacPAC), a federal entity that tracks and advises on Medicaid policy, use of public transportation for NEMT/NMT purposes varies considerably across states and even within states as public transportation is not available in all areas. MacPAC indicates although the scope of the benefit varies by state, NEMT/NMT generally covers a broad range of transportation services including trips in taxis, buses, vans, and personal vehicles belonging to beneficiaries and their family or friends.

• 1. Federal Americans with Disabilities Act (ADA) requirements. Independent of Medi-Cal, the federal ADA obligates public transit operators to ensure that their policies and practices do not discriminate against individuals with disabilities. This includes offering so-called demand-responsive services such as dial-a-ride and paratransit services that are comparable to the level of service provided to individuals without disabilities who use the fixed route system.
  2. Experience of California Public Transit Operators. According to the sponsor of this bill, public transit operators provide both NMT and NEMT to Medi-Cal managed care plan enrollees to access medically necessary Medi-Cal covered services, such as travel to appointments for medically necessary covered services; picking up drug prescriptions that cannot be mailed directly to the enrollee; or, picking up medical supplies such as prosthetics, orthotics, and other equipment.
     
     According to MTS, the sponsor of this bill, before the enactment of AB 2394, which specified managed care plans were responsible for providing NMT to their beneficiaries, public transit operators billed Medi-Cal FFS directly for covered transportation services. However, MTS asserts that since the responsibility was transferred to managed care plans, and plans do not appear required to reimburse transit providers, plans are placed under little to no pressure at all to partner with transportation providers. For some operators, transportation reimbursement has been a sizable revenue source, providing hundreds of thousands to several millions of dollars that enable them to continue offering NMT and NEMT services. Without it, operators absorb the costs of these services, which may impact other services.
     
     According to recent reporting, public transit ridership in California has fully not recovered since plummeting during the pandemic. Public transit operators have been experiencing a drop in ridership and revenue. Combined with the end of federal aid, many operators expect without additional public subsidies, they need to impose higher fares and/or service cuts. Transit operators more reliant on revenue collected from passenger fares to fund operations are at higher financial risk. Significantly increasing public transit trips is also key to reducing vehicle-miles traveled and meeting the state’s climate goals.

The role of public transit operators is unique. From a fiscal perspective, there are significant public subsidies inherent in the public transit system. For instance, this bill’s sponsor indicates a transit agency may charge a rider $5 for a paratransit ride that costs the agency $60 to provide. The balance of the cost to the transit agency is generally covered by local, state, and federal revenue. This dynamic creates some level of murkiness about whether appropriate reimbursement from a plan is what the transit agency charges a consumer, which is heavily subsidized, or something closer to the actual cost of providing the service. Recent federal guidance addressed this question, as discussed further below.

Transit operators also have independent mandates to ensure the availability of nondiscriminatory transportation to individuals with disabilities under ADA. This distinguishes these operators from private providers such as taxis or Uber, and may, as this bill’s sponsors suggest, undermine the ability of these operators to negotiate and reach contractual agreements with plans because, by definition, these operators must provide requested services pursuant to federal requirements, regardless of another payer’s responsibility to cover the service.

• 1. DHCS Guidance. On May 18, 2022, DHCS issued All Plan Letter (APL) 22-008 to provide Medi-Cal managed care health plans with guidance regarding NEMT and NMT services. The APL:
     1. Details coverage requirements for NMT and NEMT, generally restating statutory and regulatory requirements for transportation coverage, and clarifying processes and plan responsibility for monitoring and oversight;
     2. Requires plans to provide transportation to Medi-Cal covered services, whether the covered service is covered by the plan or by a different delivery system, like a county;
     3. Specifies plans may subcontract with transportation brokers for the provision of the NEMT or NMT services;
     4. States NEMT services are subject to prior authorization, with some exceptions, and allows plans to require prior authorization for NMT; and,
     5. Requires plans to authorize, at a minimum, the lowest cost type of NEMT service, and requires the NMT service requested to be the least costly method of transportation that meets the member’s needs.

Although it seems reasonable to infer the least costly method would at times be the public transit agency, the APL does not specifically address availability of public transit for Medi-Cal beneficiaries or specify whether the plan has a responsibility to contract with or reimburse public transit operators.

• 1. Federal Guidance. On September 28, 2023, CMS issued State Medicaid Director letter # 23-006: “Assurance of Transportation: A Medicaid Transportation Coverage Guide” to serve as a consolidated and comprehensive compilation of both current and new Medicaid transportation policy, providing a one-stop source of guidance on federal requirements and state flexibilities. As it relates to the issues raised by this bill, the CMS letter offers the following guidance to states:
     
     1. States should ensure that the fiscal burden of transporting Medicaid beneficiaries is not unfairly placed on paratransit services.
     2. State departments of transportation and Medicaid agencies should explore partnerships to better serve the Medicaid population, including considering how public providers and Medicaid agencies can work together to understand transit and Medicaid policies and definitions.
     3. Recognizing the higher costs of operating a paratransit system, Medicaid may pay more than the rate charged to individuals with disabilities for a paratransit ride.

With respect to iii) above, the bill’s sponsor reiterates the rate charged to individuals with disabilities for a paratransit ride is a subsidized rate designed to make the ride accessible to a public rider paying directly for the service, and is not equal to and does not cover the cost of providing the paratransit services. CMS appears to acknowledge this point, in explicitly authorizing Medicaid to reimburse paratransit operators more than the rate charged to individuals with disabilities.

• 1. Implementation of this Bill. This bill requires DHCS to ensure, per federal guidance, that the fiscal burden of transporting Medicaid beneficiaries is not unfairly placed on paratransit services. It authorizes, but does not require, DHCS to do so by directing Medi-Cal managed care plans to reimburse public paratransit service operators who are enrolled as Medi-Cal providers at the DHCS’s FFS rates for the trip. Although the state generally does not mandate payment levels and arrangements between Medi-Cal managed care plans and their contracted providers, federal regulations allow states to establish minimum fee schedules for providers in managed care (42 CFR §438.6). DHCS is also authorized to implement the bill without setting a minimum fee schedule requiring plans to pay paratransit operators at the FFS Medi-Cal rate, as long as DHCS ensures by some means that the fiscal burden of transporting Medicaid beneficiaries is not unfairly placed on paratransit services. However, requiring reimbursement at the FFS level for Medi-Cal enrolled paratransit providers seems a reasonable approach that would ensure a consistent level of reimbursement and address the unique needs of transit agencies, including addressing the imbalance in negotiating power between managed care plans and public transit operators based on the latter’s obligations under ADA.

1. SUPPORT. Transit operators and advocates support this bill to ensure public transit operators can be reimbursed for providing covered services that Medi-Cal managed care plans are financially responsible to provide. Eastern Sierra Transit Authority (ESTA) writes that in Bishop, California, the public transit system carries hundreds of Medi-Cal passengers every year. Under current law, ESTA writes, managed care plans are placed under little to no pressure at all to partner with public paratransit service operators, who are not legally allowed to turn away customers, because there is no requirement to reimburse these operators and plans can retain the funds instead of reimbursing operators.
2. PREVIOUS LEGISLATION.
   1. AB 719 (Boerner) of 2023 attempted to address the same issue as this bill. AB 719 would have required Medi-Cal managed care plans that are contracted to provide nonemergency medical transportation or nonmedical transportation to contract with public paratransit service operators who are enrolled Medi-Cal providers, for the purpose of establishing reimbursement rates for nonemergency medical transportation and nonmedical transportation trips provided by a public paratransit service operator. AB 719 was vetoed by Governor Newsom, who expressed support for more public paratransit service operators enrolling as nonmedical transportation providers in Medi-Cal, but contended that the bill required DHCS to pursue a series of federal approvals that are not currently allowable under federal guidance and was thereby not a prudent use of state resources.
   2. AB 2394 added to the schedule of benefits nonmedical transportation, as defined, effective July 1, 2017, subject to utilization controls and permissible time and distance standards, for a beneficiary to obtain covered Medi-Cal services.
      
   3. AB 1231 (Wood) of 2015 was substantially similar to AB 2394 and would have added NMT as a Medi-Cal benefit. Along with five other bills, AB 1231 was vetoed by the Governor, who stated that, “These bills unnecessarily codify certain existing health care benefits or require the expansion or development of new benefits and procedures in the Medi-Cal program. Taken together, these bills would require new spending at a time when there is considerable uncertainty in the funding of this program. Until the fiscal outlook for Medi-Cal is stabilized, I cannot support these measures.”
      

REGISTERED SUPPORT / OPPOSITION:

Support

AARP

Access Services

California Special Districts Association

Eastern Sierra Transit Authority

Orange County Transportation Authority

Stanislaus Regional Transit Authority

Opposition

None on file.

Analysis Prepared by: Lisa Murawski / HEALTH / (916) 319-2097