BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1542
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 1542 (Jones)
          As Amended August 27, 2010
          2/3 vote.  Urgency
           
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          |ASSEMBLY:  |72-0 |(May 14, 2009)  |SENATE: |28-9 |(August 31,    |
          |           |     |                |        |     |2010)          |
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           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  








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            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  








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          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  








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          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  








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          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   


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