BILL ANALYSIS AB 366 Page 1 Date of Hearing: May 6, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair AB 366 (Ruskin) - As Amended: April 2, 2009 Policy Committee: Health Vote:17-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill requires the California Medical Assistance Commission (CMAC) to provide separate reimbursement for hospitals for the full cost of orthopedic implants for bone cancer patients. The separate reimbursement established by this bill will be distinct from the contracting process CMAC conducts on behalf of the California Department of Health Care Services (DHCS) for Medi-Cal hospital in-patient costs. FISCAL EFFECT 1)Increased annual costs of $1 million (50% GF) to $1.2 million (50% GF) to provide reimbursement above current CMAC contracted rates. Annually, 300 Californians are diagnosed with bone cancer each year. Only some of these individuals have Medi-Cal and only some of the Medi-Cal beneficiaries will be clinically eligible for a bone implant. Under current law hospitals with orthopedic bone specialty care must absorb per implant costs of $20,000 within CMAC inpatient rates or fail to recover these costs for Medi-Cal patients. 2)The term "full cost" in this bill is undefined. Pricing in health care is more variable than in many other sectors. The author may wish to define this term and tie it to a known benchmark. COMMENTS 1)Rationale . This bill is sponsored by City of Hope, one of 40 National Cancer Institute-designated Comprehensive Cancer Centers, located in Los Angeles. This bill increases reimbursement paid for bone implants by creating a separate AB 366 Page 2 rate, in addition to CMAC rates which average approximately $1,300 per day. This bill improves Medi-Cal beneficiary access to orthopedic services when bone implants are a component of a treatment plan. 2)Background . The CMAC negotiates contracts with hospitals on behalf of DHCS for inpatient services under the Medi-Cal program. The CMAC selectively contracts on a competitive basis with hospitals for inpatient services provided to beneficiaries in the fee-for-service Medi-Cal program via the Selective Provider Contracting Program (SPCP). CMAC contracts with about 200 general acute care hospitals. Under current law CMAC includes specialized pricing features in contracts for bone marrow searches, cord blood transplantation and factor drugs used to treat hemophilia. Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081