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
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             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