BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1817
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          Date of Hearing:   May 12, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 1817 (Arambula) - As Amended:  April 26, 2010 

          Policy Committee:                              HealthVote:18-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill requires the California Department of Corrections and  
          Rehabilitation (CDCR) to maintain a statewide utilization  
          management (UM) program, defined as a strategy to ensure health  
          care expenditures are restricted to those most needed and  
          appropriate by reviewing patient-inmate medical records through  
          defined criteria, expert opinion, or both. Specifically, this  
          bill requires CDCR to:

          1)Maintain a statewide UM program that includes:

             a)   objective, evidence-based medical necessity criteria and  
               guidelines;
             b)   review and approval of referrals to specialty medical  
               services;
             c)   management of community hospital bed use;
             d)   case management for high medical risk and cost patients;  

             e)   a preferred provider organization (PPO) and contract  
               initiatives to improve care. 

          2)Ensure all adult prisons employ the same UM program.

          3)Establish annual quantitative UM performance objectives.

          4)Provide reports to the Legislature regarding policies and  
            procedures, objectives and performance outcomes. 

           FISCAL EFFECT  

          No new net costs as this bill essentially codifies current  
          CDCR/federal medical receivership practice and planning. The  








                                                                  AB 1817
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          receivership estimates continued implementation of the UM  
          program will result in annual GF savings in the range of $100  
          million. UM is a significant component of the receiver's ongoing  
          prison health care "turn-around plan" as well as the governor's  
          proposal to reduce correctional health care spending by $800  
          million in 2010-11.   

           COMMENTS  

           1)Rationale  . According to the receivership, the sponsor of this  
            measure, while this bill is not necessary for implementation  
            of the ongoing UM program, it is important to "to ensure the  
            sustainability of a cost-effective prison health care system  
            once the Receivership has returned control of prison health  
            care back to some State entity. By codifying these nationally  
            recognized standards of effective medicine, the legislature  
            will establish some oversight of the State prison health care  
            system in order to ensure that it does not once again  
            backslide to an unconstitutional level in the future."

           2)The problem  as stated by the receivership in its October 2009  
            Utilization Management Project Charter, is a lack of a  
            standardized process of access to specialty care, which has  
            contributed to appointment backlogs, resulting in delayed  
            access to care. In addition, the lack of standardized  
            processes related to long-term bed needs, results in infirmary  
            beds used for non-intended purposes and longer stays.   

             According to the receivership in its April 2010 Cost  
            Containment Report, the current UM referral management and  
            institutional bed management processes are improving care and  
            reducing costs.

           3)Background - The California Prison Health Care Receivership  is  
            a non-profit organization created to house the activities of  
            the federal Receiver. The Receivership was established by U.S.  
            District Court Judge Thelton E. Henderson as the result of a  
            2001 class action law suit (Plata v. Schwarzenegger) over the  
            quality of medical care in the state's 33 prisons. The court  
            found that the care violated the Eighth Amendment of the U.S.  
            Constitution, which forbids cruel and unusual punishment of  
            the incarcerated.  

            In 2006, the court appointed the receiver to oversee the  
            delivery of inmate medical care within CDCR. According to the  








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            Department of Finance (DOF) in a 2010-11 budget change  
            proposal, since 2006 the receiver has significantly increased  
            the number of clinical staff, clinician pay, access to CDCR  
            clinicians, and referrals to specialists and contracted  
            providers, which has resulted in the cost of inmate medical  
            services increasing from $883 million in 2005-06 to $2 billion  
            in 2008-09 with a slight reduction in expenditures anticipated  
            for 2009-10 and 2010-11.  

           4)Related Legislation  .

             a)   AB 1785 (Galgiani), also before the committee today, and  
               also sponsored by the receiver, requires CDCR to maintain a  
               statewide telemedicine services program.  

             b)   AB 2747 (Lowenthal), also before the committee today,  
               and also sponsored by the receiver, requires CDCR to  
               maintain and operate a comprehensive pharmacy services  
               program.  

             c)   AB 2668 (Galgiani), on this committee's Suspense File,  
               requires CDCR to install telemedicine fixtures and  
               broadband infrastructure in the CDCR Medical Facility.  

             d)   AB 2222 (Galgiani), on this committee's Suspense File,  
               authorizes CDCR to install telemedicine fixtures and  
               broadband infrastructure in new or existing buildings  
               authorized pursuant to phase II of AB 900.    

             e)   AB 2233 (Nielsen), on this committee's Suspense File,   
               requires CDCR to create a new system of inmate health care  
               delivery and work with UC and the receiver to assess the  
               concept of turning inmate health care over to the UC  
               system.

           Analysis Prepared by  :    Geoff Long / APPR. / (916) 319-2081