BILL ANALYSIS
AB 1542
Page 1
Date of Hearing: May 12, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 1542 (Committee on Health) - As Amended: May 6, 2009
SUBJECT : Medical homes.
SUMMARY : Defines a patient-centered medical home (PCMH) as an
approach to providing health care that originates in a primary
care setting and fosters partnerships among the patient and
health professionals to promote coordinated care, ensure quality
and access to care, and to improve health. Specifically, this
bill :
1)States the intent of the Legislature to encourage health care
providers and patients to partner in a PCMH that promotes
access to high quality, comprehensive care and to ensure that
all Californians have a medical home which adheres to
specified nationally recognized quality standards.
2)Defines a medical home as a team approach to providing health
care that fosters a partnership among the patient, the
personal provider, other health care professionals, and the
patient's family where appropriate; utilizes the partnership
to access all needed health-related services to achieve
maximum health potential; maintains a comprehensive record of
health-related services; and, has all the characteristics that
qualify it as a medical home.
3)Defines the following terms:
a) National Committee for Quality Assurance (NCQA);
b) Personal provider as the patient's first point of
contact in the health care system with a primary care
provider, as specified;
c) Primary care as health care that emphasizes providing
for a patient's general health needs and utilizes
collaboration with other health care professionals and
consultation and referral as appropriate.
4)Specifies that a medical home, for the purposes of this bill,
meets the standards established by NCQA, and includes all of
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the following characteristics:
a) An ongoing personal provider for each patient trained to
provide first contact, continuous, and comprehensive care;
b) The personal provider leads a team at the practice level
which collectively takes responsibility for the ongoing
care of patients;
c) The personal provider is responsible for providing for
all of a patient's health care needs or taking
responsibility for appropriately arranging health care by
other qualified health care professionals, for all stages
of life;
d) Care is coordinated and integrated across all elements
of the health care system and the patient's community, and
is facilitated by registries, information technology,
health information exchange, and other means to ensure the
patient receives needed care in a culturally and
linguistically appropriate manner;
e) Provider-directed medical practices advocate for their
patients to support optimal, patient-centered outcomes
defined by a care planning process which is driven by a
compassionate, robust partnership between providers, the
patient, and the patient's family;
f) Evidence-based medicine and clinical decision support
tools guide decisionmaking;
g) Providers in the medical practice accept accountability
for continuous quality improvement through voluntary
engagement in performance measurement and improvement;
h) Patients participate in decision making and feedback is
sought to ensure that patients' expectations are being met;
i) Appropriate use of information technology to support
optimal patient care, performance measurement, patient
education, and communication;
j) Participation in a voluntary recognition process
conducted by an appropriate nongovernmental entity to
demonstrate that the practice has capabilities to provide
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patient-centered services consistent with the medical home
model;
aa) Patients and families participate in quality improvement
activities at the practice level;
bb) Enhanced access to health care through systems such as
open scheduling, expanded hours, and new options for
communication between the patient, personal provider, and
practice staff; and,
cc) The payment system appropriately recognizes the added
value of the PCMH by doing the following:
i) Reflecting the value of provider and other staff
and patient-centered management work that is in
addition to the face-to-face visit;
ii) Paying for services associated with coordination
of health care;
iii) Supports adoption and use of health information
technology for quality improvement;
iv) Supports enhanced communication access such as
secure electronic mail and telephone consultation;
v) Recognizes the value of remote monitoring of
clinical data;
vi) Allows for separate fee-for-service payments for
face-to-face visits and payments for health care
management services do not result in a reduction in
payment for face-to-face visits;
vii) Recognizes case-mix differences in the patient
population being treated;
viii) Allows providers to share in savings from reduced
hospitalizations associated with provider-guided
management in the office setting;
ix) Allows for additional payments for achieving
measurable and continuous quality improvements.
EXISTING LAW defines a medical home as a "single provider or
facility that maintains all of an individual's medical
information" for the purposes of the Health Care Coverage
Initiative, a demonstration project which uses federal funds
from the Safety Net Care Pool to fund programs to expand health
care coverage to low income, uninsured residents of ten selected
counties for fiscal year (FY) 2007-08 through FY 2009-10.
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FISCAL EFFECT : None
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, more than
three-quarters of national health spending goes to treating
chronic diseases. The author states that 95% of Medicare
costs are spent on patients with two or more chronic
illnesses, and 78% of national health care expenditures, or
nearly $1.8 trillion, can be attributed to chronic illness.
The author argues that with the number of Americans with a
chronic disease projected to increase from 125 million in 2000
to 157 million in 2020, we can expect improved care management
to have a real effect on health spending. The author contends
that high-cost, low quality compartmentalized care, combined
with a growing shortage and maldistribution of physicians and
a shrinking primary care infrastructure, highlight the need to
implement PCMHs in California.
According to the author, a medical practice that operates as a
PCMH consists of a primary care physician and a team of health
care professionals who collectively take responsibility for
the ongoing care of the patient, including acute care, chronic
care, preventive services, and end-of-life care. In the PCMH
model, the patient actively participates in decision-making
and care is coordinated across the patient's community,
including hospitals, home health agencies, nursing homes,
consultants, and other components of the health care system,
to assure that patients get the indicated care when and where
they need it. Evidence-based medicine and information
technology, including clinical decision-support tools, guide
decision making to improve quality and safety and support
optimal patient care, performance measurement, patient
education, and communication. The author states that
developing a standard, uniform definition of the PCMH could
pave the way to reducing health disparities, reining in costs,
and improving quality and outcomes in health care.
2)PRIMARY CARE . The PCMH is a model for primary care. In a
1996 report, the Institute of Medicine (IOM) defines primary
care as the provision of integrated, accessible health care
services by primary care clinicians who are accountable for
addressing a majority of a person's health care needs,
developing a sustained partnership with patients, and
practicing in the context of family and community. The IOM
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states primary care clinicians are generally considered to be
physicians, nurse practitioners (NPs), and physician
assistants (PAs), and acknowledges that a broader array of
individuals participate in a primary care team. According to
the IOM definition, critical elements of primary care also
include accountability of clinicians and systems for quality
of care, patient satisfaction, efficient use of resources, and
ethical behavior; care for the majority of personal health
care needs, which include physical, mental, emotional, and
social concerns; a sustained partnership between patients and
clinicians; and, primary care in the context of family and
community.
Research has shown that primary care makes significant
contributions to health. Primary care reduces deaths from
heart and lung disease, leads to longer lives, reduces
hospital and emergency room use, and reduces health
disparities. Researchers have linked the United States' low
scores on primary care to higher costs and poorer health
outcomes relative to other developed nations. In addition,
according to the Department of Health Care Services (DHCS),
states find that a reliable medical home can magnify the
effect of disease management programs.
3)PCMH . The PCMH, according to the Joint Principles developed
by the American Academy of Family Physicians, American Academy
of Pediatrics, the American College of Physicians, and the
American Osteopathic Association, is a health care setting
that facilitates partnership between the patient, physician,
and when appropriate, the patient's family. Other principles
form the basis of the NCQA definition of a PCMH, as outlined
by this bill.
4)HEALTH DISPARITIES . According to a 2007 Commonwealth Fund
report, "Closing the Divide: How Medical Homes Promote Equity
in Health Care," when adults have health insurance coverage
and a medical home, racial and ethnic disparities in access
and quality tend to disappear. The analysis, based on a
Commonwealth Fund survey of more than 2,830 adults nationwide,
reveals that linking minority patients to a medical home can
help them better manage chronic conditions and obtain critical
preventive care.
5)MEDICAL HOME PROGRAMS . Many states have adopted medical home
legislation and programs, mostly for Medicaid and State
Children's Health Insurance Program (SCHIP) enrollees. Some
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states, such as Iowa, Oregon, Pennsylvania, and Vermont, also
allow or encourage private sector participation. Community
Care of North Carolina (CCNC), the state's Medicaid program,
is a working example of a PCMH. The goals of CCNC are to
improve the care of the Medicaid population, control costs,
develop community-based networks to manage care of populations
in partnership with the state, and fully develop the medical
home model. In 2009, CCNC includes 15 networks with more than
3,500 primary care physicians (1,200 medical homes) and one
million Medicaid and SCHIP enrollees. CCNC has demonstrated
excellent quality and cost outcomes through disease
management, evidence-based clinical practice, and an emphasis
on a physician-led team approach. Two evaluations of this
program indicate it saved the state $195 to $215 million in
2003 and between $230 and $260 million in 2004 when compared
to historical fee-for-service.
IBM also implemented a "patient-centric medical home" which was
similar to the PCMH defined in this bill. As a result, IBM
states injury and illness rates are lower than the rest of the
industry. IBM employees also had nine to 25% fewer emergency
room visits and a 16% reduction in medical and pharmaceutical
costs. These savings also led to lower premiums and $100
million dollar savings annually. Moreover, IBM states
productivity is also higher.
6)FEDERAL INTEREST IN MEDICAL HOMES . In a 2008 report to the
United States (U.S.) Congress, the federal Medicare Payment
Advisory Commission (MedPAC) recommended that Congress
establish a budget-neutral payment increase for primary care
services furnished by primary-care-focused practitioners
(defined as those whose specialty designation is defined as
primary care or whose pattern of claims meets a minimum
threshold of furnishing primary care services). MedPAC also
recommended that Congress initiate a Medicare medical home
pilot project, with stringent specified criteria and a
physician pay-for-performance program. The Obama
Administration has expressed support for medical home
demonstration projects in Medicare. The MedPAC report cites
U.S. Government Accountability Office data showing that 83,000
NPs and 23,000 PAs are in primary care practice, and their
numbers have grown faster than those of primary care
physicians. In an October 2008 letter to the Secretary of the
U.S. Department of Health and Human Services (DHHS), 13
members of Congress cited the MedPAC report and encouraged
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DHHS to include medical home demonstrations that allow NPs to
participate fully in the medical home model.
7)RELATED LEGISLATION .
a) AB 1076 (Jones), pending in the Assembly, requires DHCS
to expand the Medical Case Management program to include
Medi-Cal beneficiaries who have two or more chronic
conditions and have used a hospital emergency department
four or more times in the previous year, and specifies the
type of services which must be included in case management
services. AB 1076 also requires the Medi-Cal disease
management benefit to include the designation of a primary
care provider as a patient's medical home. AB 1076 will be
heard in Assembly Health Committee on May 12, 2009.
b) SB 771 (Alquist), pending in the Senate, would require a
health care service plan or a health insurer, or a medical
group that contracts with a plan, that uses a
pay-for-performance system for the payment of providers to
provide a differential payment to providers who provide
patients with a patient-centered medical home. SB 771 has
not been scheduled for a hearing.
8)SUPPORT . The California Academy of Family Physicians (CAFP),
sponsor of this bill, writes that with the growing popularity
of the concept of the medical home among consumers and
providers, this bill will ensure uniform standards of quality
and access. CAFP argues that with almost $1.8 trillion spent
annually in the U.S. on chronic disease care, improved
management can have a dramatic effect on our health spending
and the need for the PCMH has never been more profound. The
American College of Obstetricians and Gynecologists (ACOG)
District IX (California) writes in support that as many women
use their obstetrician/gynecologist as their primary or only
physician, ACOG has taken a keen interest in developing a
women's medical home initiative. ACOG further writes it is
championing the concept of a woman's medical home at the
national level and recommending pilot projects to show the
effectiveness in both patient outcomes and cost savings. ACOG
states adding language to California law sets the stage for
demonstration projects in California. The California
Chiropractic Association writes in support it is essential to
create PCMHs to comprehensively serve a patient's health care
needs with the highest standards and that PCMHs will encourage
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wellness and preventative care. The Osteopathic Physicians
and Surgeons of California writes that health care costs are
spiraling, emergency rooms are overcrowded, and that higher
quality and lower cost can be achieved through coordinated
care that the PCMH model offers.
REGISTERED SUPPORT / OPPOSITION :
Support
California Academy of Family Physicians (sponsor)
American College of Obstetricians and Gynecologists, District IX
(California)
California Academy of Physician Assistants
California Chiropractic Association
Osteopathic Physicians and Surgeons of California
Opposition
None on file.
Analysis Prepared by : Allegra Kim / HEALTH / (916) 319-2097