BILL ANALYSIS AB 1542 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1542 (Jones) As Amended August 27, 2010 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: |72-0 |(May 14, 2009) |SENATE: |28-9 |(August 31, | | | | | | |2010) | ----------------------------------------------------------------- Original Committee Reference: HEALTH SUMMARY : Enacts the Patient-Centered Medical Home Act of 2010. Defines "medical home" to mean, in part, a health care delivery model in which a patient establishes an ongoing relationship with a physician or other licensed health care provider acting within his or her scope of practice, working in a physician-directed practice team to provide comprehensive, accessible and continuous evidence-based primary and preventative care and to coordinate the patient health care needs across the health care system.. The Senate amendments revise the Assembly approved version as follows: 1)State that nothing in the bill shall be construed to: a) Permit a medical home to engage in the unlicensed practice of medicine; b) Change the scope of practice of any health care provider; c) Affect the ability of a nurse to operate under standard procedures as allowed by law; d) Apply to activities of local Coverage Expansion and Enrollment Demonstration (CEED) projects, managed care plans or county alternative plans that are participating in the Medicaid Section 1115 Demonstration Waiver; and, e) Prevent participation in the Patient Protection and Affordable Care Act of 2010 (PPACA). 2)Clarify that the definition of a medical home includes the AB 1542 Page 2 term: "patient-centered medical home;" "advanced practice primary care;" "health home;" "person-centered health home;" and, "primary care home." 3)Revise the characteristics of a medical home by making the medical team the entity responsible for the providing and arranging all of the patient's health care needs instead of a personal provider. 4)Clarify that care coordination includes mental health and substance use disorder care. 5)Delete the requirements applicable to a payment structure framework. 6)Delete the requirement that a medical home meet the National Committee for Quality Assurance (NCQA) standards. 7)Make other technical and clarifying amendments. AS PASSED BY THE ASSEMBLY , this bill defined a "medical home" as a team approach to providing health care that fosters partnerships among the patient, other health professionals, and the patient's family, where appropriate, to promote coordinated care, ensure quality and access to care, and to improve health; required a medical home to have specified characteristics and meet specified standards, including those established by the NCQA; and, required payment systems to recognize the added value by allowing for payments as specified. FISCAL EFFECT : According to the Senate Appropriations Committee: 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 COMMENTS : The author contends that high-cost, low-quality AB 1542 Page 3 compartmentalized care, combined with a growing shortage of physicians and a shrinking primary care infrastructure, highlight the need to implement medical homes in California. According to the author, this bill defines what is known as a patient centered medical homes (PCMHs), which is a medical practice that consists of a physician-directed team of health care professionals who collectively take responsibility for the ongoing care of the patient. The author notes, that 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. The PCMH uses evidence-based medicine and information technology, including clinical decision-support tools, guided 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 a PCMH could pave the way to reducing health disparities, reining in costs, and improving quality and outcomes The concept of "medical home." was first used by the American Academy of Pediatrics (AAP) in 1967 to describe pediatric practices that provide primary care and coordinate all care for children with special health care needs. It has evolved to the concept of a PCMH with a whole person orientation. In 2007, the AAP, American Academy of Family Physicians, the American College of Physicians and the American Osteopathic Association released the "Joint Principles of the Patient-Centered Medical Home." The principles of this model include: 1) personal physician; 2) physician directed medical practice; 3) whole person orientation; 4) coordinated and/or integrated care; 5) quality and safety; 6) enhanced access; and, g) adequate payment. The model has been further adapted to include elements of chronic care management for treating individuals with chronic illnesses such as disease management and quality improvement. Studies of PCMH projects have shown savings from reduction in emergency room visits and hospital admissions. For instance, the Geisinger Health System in Pennsylvania reported a 20% reduction in hospital admissions and a 7% reduction in cost at the end of the first year of a pilot project. The Group Health Cooperative of Puget Sound reported a 29% reduction in emergency room visits, improvements in diabetes and heart disease care and AB 1542 Page 4 was cost neutral after one year. The PCMH model that is the basis of these projects includes payment reform such as a monthly care coordination payment, risk adjusted payments and bonus payments based on quality goals, cost and utilization reductions. According to a 2007 Commonwealth Fund report, when adults have health insurance coverage and a medical home, racial and ethnic disparities in access and quality tend to disappear. The report reveals that linking minority patients to a medical home helps them manage chronic conditions and obtain preventive care. In 2005, California obtained a five-year Section 1115 Medicaid waiver entitled the Medi-Cal Hospital/Uninsured Care Demonstration Project, or the hospital waiver that included, among other things, a Health Care Coverage Initiative (HCCI) demonstration project to provide health care coverage to low-income, uninsured residents of 10 selected counties for federal fiscal years 2007-08 through 2009-10. A fundamental feature of the HCCI program was the assignment of individuals to a medical home. The hospital waiver was due to expire on September 1, 2010. (A request for a 60 day extension was submitted on August 19, 2010). On June 4, 2010 the state submitted a Section 1115 Comprehensive Demonstration Project Waiver Proposal, "A Bridge to Reform" requesting a new five-year waiver. The new waiver request expands on the HCCIs and creates CEED projects to provide health care benefits to uninsured adults 19 to 64 with incomes up to 200 percent of the federal poverty level and who are not eligible for Medicare or Medi-Cal. Designation of a medical home is retained as a key element. In addition, the new waiver proposes to require the mandatory enrollment of Seniors and People with Disabilities (SPD) in a Medi-Cal managed care plan or a county alternative organized system of care. SB 208 (Steinberg) and AB 342 (John A. Perez), contain the legislative authority to implement the new waiver proposal. SB 208 and AB 342 require, prior to exercising its authority to enroll SPDs, the Department of Health Care Services to ensure that all managed care health plans or county alternative models of care are able to establish medical homes that meet specified criteria. However, this bill expressly exempts these waiver entities. PPACA, the federal health care reform bill, also recognizes the AB 1542 Page 5 concept of medical homes. Effective January 2011, states may implement a Medicaid Health Home State Option for enrollees with two or more chronic conditions, one conditions and the risk of developing another, or at least one serious and persistent mental health condition. Health home related services, such as comprehensive care management, care coordination, health promotion and use of health information technology to link services will be matched with federal funs at 90%. The new law will also create the following patient-centered medical home demonstration projects designed to create and reinforce a strong primary care foundation for the health care delivery system: 1)Grants for medication management services provided by pharmacists to treat patients with multiple chronic diseases and those who take several, or high-risk, prescribed medications. 2)Grants to states to establish community health teams working in collaboration with providers in the community to support primary care physicians, with capitated payments to qualified primary care providers. 3)A Medicare demonstration program to test a model of care that uses physician and nurse practitioner directed home-based primary care teams. Provides an incentive payment to qualified groups of providers who come in under target spending levels. A new CMS Innovation Center to test innovative payment and service delivery models, reduce health care hosts and enhance quality. Analysis Prepared by : Marjorie Swartz / HEALTH / (916) 319-2097 FN: 0006822