BILL ANALYSIS
AB 366
Page 1
ASSEMBLY THIRD READING
AB 366 (Ruskin)
As Amended June 2, 2009
Majority vote
HEALTH 17-0 APPROPRIATIONS 13-3
-----------------------------------------------------------------
|Ayes:|Jones, Fletcher, Adams, |Ayes:|De Leon, Ammiano, |
| |Ammiano, Block, Carter, | |Charles Calderon, Davis, |
| |Conway, De Leon, | |Fuentes, Hall, John A. |
| |Emmerson, Gaines, | |Perez, Price, Skinner, |
| |Hayashi, Hernandez, | |Solorio, Audra |
| |Bonnie Lowenthal, Nava, | |Strickland, Torlakson, |
| |V. Manuel Perez, Salas, | |Krekorian |
| | Audra | | |
| |Strickland | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Nielsen, Duvall, Harkey |
| | | | |
-----------------------------------------------------------------
SUMMARY : Requires the California Medical Assistance Commission
(CMAC), in negotiating Medi-Cal inpatient contracts with
hospitals under the selective provider contracting program, or
in drawing specifications for competitive bidding, to consider
as a factor specialization in orthopedic implantation related to
bone cancer.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, no direct fiscal impact to CMAC. Current law
authorizes the evaluation of more than a dozen factors for CMAC
to consider during contracting, including tertiary care and
specialty services.
COMMENTS : This bill is sponsored by the City of Hope to
require CMAC to address Medi-Cal reimbursement to hospitals for
the cost of orthopedic implants in patients with bone cancer.
City of Hope states that, for contracting hospitals, Medi-Cal
will reimburse facilities for certain specialized treatments and
procedures (bone marrow searches, bone marrow and cord blood
transplantation, and factor drugs) at a separate negotiated
price. The sponsor argues these services are negotiated
separately because of the high costs, because Medi-Cal patients
AB 366
Page 2
needing these procedures normally have no other treatment
options, and because not reimbursing these charges at higher
rates can prevent Medi-Cal from meeting federal requirements to
enlist enough providers so that services to Medi-Cal recipients
are available to the same extent as those available to the
general population. City of Hope states that under-payment, or
lack of payment, for procedures and treatments have resulted in
limited treatment options for Medi-Cal recipients, and cites
published medical journal literature on lack of timely access
for children with Medi-Cal needing orthopedic care. Bone cancer
patients are often given the option of amputation or orthopedic
implants as part of their treatment, and few patients ever
choose amputation (which Medi-Cal will reimburse).
City of Hope states existing state reimbursement policy fails to
reflect medical advances that have succeeded in allowing
patients with bone cancer to avoid amputation. The sponsor
argues decades ago, amputation was the only option and Medi-Cal
paid for prosthetic limbs which cost an average of $9,000 for
above-the-knee pieces and had to be replaced every year in
children until age 15, but surgeons are now able to spare the
limbs of approximately 90% of patients with malignant bone
tumors. The sponsor states these advances save the state money
in the long-run and improve the lives of Medi-Cal beneficiaries
afflicted with this devastating disease. According to City of
Hope, due to the small number of facilities in California that
treat bone cancer patients and the few orthopedic oncologists in
California, it is possible that finding a physician for Medi-Cal
recipients in need of treatment could be severely limited, and
providing adequate reimbursement helps ensure patients have
access to care. City of Hope argues this bill is necessary if
the state plans to enlist enough providers so that critical
services to Medi-Cal recipients are available to the same extent
as those available to the general population.
Since 1983, CMAC has been the state agency responsible for
negotiating contracts with hospitals on behalf of the state for
in-patient services under the fee-for-service Medi-Cal program
through what is known as the Selective Provider Contracting
Program. Through CMAC, the state selectively contracts on a
competitive basis with hospitals for fee-for-service inpatient
services provided to Medi-Cal beneficiaries. Existing law
requires CMAC, in negotiating contracts or in drawing
specifications for competitive bidding, to take into account an
AB 366
Page 3
enumerated list of factors, that include but are not limited to,
beneficiary access, utilization controls, the ability to render
quality services efficiently and economically, and the capacity
to provide a given tertiary service, such as specialized
children's services, on a regional basis. Additionally, CMAC is
required to give special consideration to the reimbursement
issues faced by hospitals caring for Medi-Cal beneficiaries who
are receiving treatment for AIDS. CMAC indicates it has the
statutory discretion and flexibility to address unique
circumstances at contracted hospitals, whether through rate
negotiations, supplemental funds or, in selected situations,
through contract terms that can, for example, "carve out"
certain high-cost inpatient items (such as implants, prostheses,
or blood factor) to be paid separately from the per diem rate.
Analysis Prepared by : Scott Bain / HEALTH / (916) 319-2097
FN: 0001370