This week, the Legislature approved a restructured Managed Care Organization (MCO) tax package, which was subsequently signed by Governor Brown. The MCO tax reform package will allow California to continue to draw down federal funds for Medi-Cal and avoid a potential $1.1 billion deficit in the State Budget.
The MCO tax package includes: Assembly Bill x2 1 (Bonta), Senate Bill x2 2 (Hernández), and Assembly Bill 133 (Committee on Budget). AB x2 1 is of specific importance to RCRC Member counties because it prohibits the Department of Health Care Services from retroactively recouping provider rate reductions for Distinct Part/Skilled Nursing Facilities (DP/SNFs), as required by Assembly Bill 97, for dates of service between June 1, 2011 and September 30, 2013. AB 97 was enacted by the Legislature as part of the 2011 State Budget Package and cut rates to a variety of Medi-Cal providers, including DP/SNFs, pharmacies, and other fee-for-service Medi-Cal activities by 10 percent from the 2008 reimbursement level.
RCRC staff has long-advocated that DP/SNFs are appropriately reimbursed for serving the Medi-Cal population, especially those in rural and underserved areas. The MCO Tax package addresses this long-time issue and prevents the State from collecting retroactive rate cuts from more than 50 facilities state wide, many of which are located in RCRC member counties.