BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1542 (Jones)
Hearing Date: 8/12/2010 Amended: 8/3/2010
Consultant: Katie Johnson Policy Vote: BP&ED 5-1
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BILL SUMMARY: AB 1542, an urgency measure, would enact the
Patient-Centered Medical Home Act of 2010 and would establish a
definition for a medical home based upon specified standards.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Potential increased costs cost pressure likely in the
millions General/
to Medi-Cal, Healthy of dollars commencing upon thisFederal/
Families, CalPERS, bill's enactment Special
and other publicly-funded
health care coverage
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
In enacting the Patient-Centered Medical Home Act of 2010 (Act),
this bill would state legislative intent to encourage licensed
health care providers and patients to partner in a
patient-centered medical home that promotes access to
high-quality, comprehensive care and ultimately to ensure that
all Californians have a medical home, as specified. It would
state further intent that payors take into account the increased
services and overhead associated with this type of practice and
the potential savings from better managing chronic diseases and
conditions.
This bill would define a medical home to mean a health care
delivery model in which a patient establishes an ongoing
relationship with a physician or other provider who would work
in a physician-directed team to provide comprehensive,
accessible, and continuous, evidence-based primary and
preventative care, and to coordinate the patient's health care
needs across the health care system in order to improve quality
and health outcomes in a cost-effective manner. This bill would
also require a medical home to include specified team-based,
culturally and linguistically appropriate care coordination,
quality, and safety characteristics, unless otherwise provided
by statute. This bill would specifically state that nothing in
these provisions should be construed to 1) apply to managed care
plan activities or those of their contracted providers when
those activities are part of a Medi-Cal Section 1115 Waiver, as
specified, and 2) prevent participation in the Patient
Protection and Affordable Care Act, as amended by the federal
Health Care and Education Reconciliation Act of 2010 (ACA).
In order to encourage physicians and other licensed health care
professionals, and consumers, their families, and their
representatives to engage and to recognize their participation
in a comprehensive patient-centered medical home model, as well
as to
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AB 1542 (Jones)
achieve increased quality and cost efficiency, as described by
these provisions, public and private payors alike, including
Medi-Cal, the Healthy Families Program, and the California
Public Employees Retirement System (CalPERS), would likely need
to provide financial incentives to their contracted plans and
providers since these provisions would represent an augmentation
of the level of services beyond what is currently provided to
most consumers.
Collectively, the cost pressure to provide these incentives
could reach into the millions to tens of millions of dollars
annually. For example, if Healthy Families were to pay an
incentive payment of $1 per subscriber per month for its 800,000
- 900,000 subscribers, costs would be $9.6 million - $10.8
million annually. If federal financial participation were
available, costs could be shared 35 percent General Fund and 65
percent federal funds. Medi-Cal costs would be shared
approximately 50 percent General Fund and 50 percent federal
funds. CalPERS costs are generally shared 55 percent General
Fund and 45 percent special funds.