BILL ANALYSIS                                                                                                                                                                                                    






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                        Senator Elaine K. Alquist, Chair


          BILL NO:       AB 2352                                      
          A
          AUTHOR:        John A. Perez                                
          B
          AMENDED:       As Introduced                               
          HEARING DATE:  June 23, 2010                                
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          CONSULTANT:                                                 
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          Dunstan/jl                                                   
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                                     SUBJECT
                                         
            Medi-Cal:  organ transplants:  antirejection medication


                                     SUMMARY  

          Requires Medi-Cal beneficiaries to remain eligible to  
          receive Medi-Cal coverage for anti-rejection medication for  
          up to two years following an organ transplant, unless  
          during that time the beneficiary becomes eligible for  
          Medicare or private health insurance that would cover the  
          medication.


                             CHANGES TO EXISTING LAW  

          Existing federal law:
          Establishes the Medicaid program to provide comprehensive  
          health benefits to low-income persons.  Mandates states  
          that elect to provide Medicaid benefits to cover certain  
          eligibility groups, such as low-income children, those  
          receiving supplemental security income (SSI) and others.   
          Allows states the option of providing Medicaid benefits to  
          other groups, including disabled persons who are not  
          eligible for SSI or children in families with incomes above  
          the mandatory coverage level.
          
                                                         Continued---



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          Existing state law: 
          Establishes the Medi-Cal program as California's Medicaid  
          program, administered by the Department of Health Care  
          Services (DHCS), which provides comprehensive health care  
          coverage for low-income individuals and their families;  
          pregnant women; elderly, blind, or disabled persons;  
          nursing home residents; and refugees who meet specified  
          eligibility criteria.  Establishes that the Medi-Cal  
          program comprises a uniform schedule of health care  
          benefits, including transplants for eligible beneficiaries,  
          subject to utilization controls.  Provides limited Medi-Cal  
          benefits for specified life-sustaining treatments,  
          including dialysis.  Establishes eligibility criteria for  
          dialysis-only benefits related to diagnosis, net worth and  
          absence of other coverage.  Provides that eligible  
          beneficiaries for dialysis benefits shall pay a share of  
          cost based on their net worth.
































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          This bill:
          Requires Medi-Cal beneficiaries to remain eligible to  
          receive Medi-Cal coverage for anti-rejection medication for  
          up to two years following an organ transplant unless during  
          that time the beneficiary becomes eligible for Medicare or  
          private health insurance that would cover the medication.


                                  FISCAL IMPACT  

          According to the Assembly Appropriations Committee  
          analysis, this bill would result in annual costs of  
          $500,000 (100 percent General Fund) to provide  
          post-transplant anti-rejection medication to Medi-Cal  
          beneficiaries who had formerly been on dialysis-only  
          Medi-Cal and who would either return to that program or  
          require a new kidney transplant.  In addition, this bill  
          would result in reduced Medi-Cal costs to the extent this  
          bill reduces the need for a return to Medi-Cal for the  
          purposes of receiving dialysis or a new transplant.  An  
          additional transplant or continuation of dialysis-only  
          treatment costs between $50,000 and $100,000 per year. 


                            BACKGROUND AND DISCUSSION  

          According to the author, there are currently some patients  
          that qualify for Medi-Cal under a federal rule allowing  
          coverage for patients with end-stage renal disease (on  
          dialysis).  The author notes that those patients, if they  
          are able to receive a kidney and have an organ transplant,  
          will only receive coverage for their immunosuppressive  
          medication for one year post-transplant, as the person's  
          Medi-Cal eligibility ends when he or she no longer meets  
          the eligibility requirement of end-stage renal disease.   
          The author states that patients in this particular group  
          may not be eligible for Medi-Cal under any other  
          eligibility criteria, and they may also be ineligible for  
          Medicare, either because they have not paid into Social  
          Security for a sufficient time or because of their  
          immigration status.  The author states that if these  
          patients were dual-eligible for Medicare and Medi-Cal,  
          Medicare would pay for immunosuppressive coverage for an  
          additional two years, so the patient would have  
          immunosuppressive drugs for a total of three years  




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          post-transplant.  The author says that because patients who  
          have had a kidney transplant must have immunosuppressive  
          drugs or their body will naturally reject the organ, they  
          have a medical need for the antirejection medication to  
          prevent kidney failure, being placed back on dialysis or,  
          in a worst-case scenario, death.  The author argues the  
          state has already paid for the organ transplant surgery  
          (the cost of transplant surgery is $50,000 to $100,000  
          according to the author) and it makes no sense to drop  
          Medi-Cal coverage for these patients after only a year when  
          many organ transplant patients are not yet stable or ready  
          to enter the workforce.

          Background
          This bill would address the situation of a Medi-Cal  
          beneficiary who has received an organ transplant.  The  
          beneficiary may have gained Medi-Cal eligibility through  
          the special treatment eligibility option for persons with  
          end stage renal disease, or by meeting other Medi-Cal  
          eligibility criteria.  The renal disease eligibility is not  
          full scope and covers only dialysis and related services.    
          As the renal disease advances, the beneficiary is likely to  
          become disabled and then become eligible for full scope  
          Medi-Cal.  Medi-Cal covers the cost of the major organ  
          transplant procedure and the anti-rejection medication.   
          However, as the beneficiary improves, they may lose their  
          Medi-Cal eligibility if they no longer meet the criteria  
          for disability, as determined by a review team.  If the  
          beneficiary no longer is considered disabled, they will  
          lose their Medi-Cal eligibility, unless they retain  
          eligibility by meeting other criteria.  Once they have lost  
          their eligibility, they will not have their antirejection  
          medicines covered by Medi-Cal.

          While the beneficiary is enrolled in Medi-Cal, the federal  
          government is paying its share, generally 50 percent, of  
          the medical costs.  This bill's eligibility expansion is  
          not a mandatory or optional coverage under federal law.   
          Because there is no federal match, the bill creates a  
          program for which the state pays the entire costs, also  
          known as a "state only" program.  Federal matching funds  
          would only be available if the state were to pursue what is  
          known as a waiver.  Under federal law, certain federal  
          requirements can be waived and federal matching funds  
          obtained.  The state already has a number of waivers in its  




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          Medi-Cal program, but these do not include the population  
          addressed by this bill.

          Transplants under the Medi-Cal program. 
          DHCS indicates fee-for-service Medi-Cal provided coverage  
          for 2,447 major organ transplants in 2008.  Medi-Cal  
          managed care provides coverage for additional procedures.   
          Major organ transplants are heart, heart and lung, lung,  
          kidney and liver, of which kidney is the most common  
          transplanted organ.

          Because of the high cost and the complex nature of the  
          procedures, the state has taken important steps to ensure  
          that Medi-Cal patients are protected and the state's funds  
          are well spent.  DHCS convenes panels of medical and  
          surgical experts that provide written standards for  
          Medi-Cal coverage and develop criteria for facility and  
          patient selection.  These standards and criteria are  
          continually revised and updated for use by the program.   
          According to DHCS, some third-party health-care payers use  
          Medi-Cal's organ transplant criteria for their own coverage  
          decisions.
          
          Through the use of the developed standards, DHCS identifies  
          "centers of excellence" where DHCS will permit and  
          reimburse for transplants performed under the Medi-Cal  
          program.  To be a center, facilities must demonstrate that  
          they have the professional staff and hospital  
          infrastructure to ensure the greatest success for organ  
          transplants.  In addition, a transplant center must  
          demonstrate performance of a specific number of transplants  
          annually with the requisite survival rate, along with other  
          detailed criteria.  DHCS regularly updates adopted criteria  
          and reviews the operations of the centers, in conjunction  
          with panels of medical and surgical experts.

          To receive continuing approval as a Medi-Cal center of  
          excellence, facilities must provide DHCS with annual  
          performance and survival data as well as information  
          regarding major staff changes in their transplant programs.  
           According to DHCS, they routinely access and review this  
          information in order to ensure compliance.

          Medical professionals define end stage renal disease (ESRD)  
          as that stage of kidney impairment which is irreversible,  




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          cannot be controlled by conservative management alone, and  
          requires dialysis or kidney transplantation to maintain  
          life.  Dialysis is a substitute for the normal functioning  
          of the kidneys.  It filters waste products from the blood.   
          Following a kidney transplant, these patients no longer  
          require dialysis and are no longer deemed disabled for the  
          purposes of their very narrow Medi-Cal coverage.  If a  
          patient has no Medi-Cal, private insurance, or Medicare  
          coverage, they are at risk for organ failure, a return to  
          dialysis, death, or a new transplant.  The author indicates  
          a significant investment has already been made via the  
          transplant and patients should be afforded continuity of  
          care at a much lower costs than alternatives.

          Prior legislation
          AB 998 (John A. Perez) of 2009, was substantially similar  
          to AB 2352, but would have provided that Medi-Cal  
          beneficiaries remain eligible to receive Medi-Cal coverage  
          for antirejection medication for up to a period of three  
          years, instead of two years.  AB 998 died on the Assembly  
          Appropriations Committee suspense file.

          Arguments in support
          Supporters argue that that access to antirejection drugs is  
          necessary and must be a priority in the health care  
          delivery system for transplant patients because they help  
          to suppress the immune system rejection of the new organ.  
          They also note that advances in antirejection medications  
          have decreased the incidence of adverse reactions to a  
          donated organ significantly, but it still remains one of  
          the gravest dangers facing transplant recipients.  They  
          argue that extending the Medi-Cal coverage period gives  
          transplant recipients another year of guaranteed access to  
          these products, and they can continue to recover and grow  
          stronger.  


                                     COMMENTS
           
          The Department of Health Care Services is not granted  
          customary statutory authority to implement this bill.  This  
          bill is not self implementing.  For example, the coverage  
          added by this bill would end when the beneficiary becomes  
          eligible for private health insurance that would cover the  
          medication.  The term "cover" is not defined, so it is left  




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          to the judgment of DHCS to determine the appropriate  
          standard.  Would the appropriate standard be insurance that  
          would pay for 50 percent of the drug cost or would a larger  
          share be required to meet the statute?  Absent the grant of  
          authority, DHCS would have to develop regulations which  
          would require at least several years.  

          Proposed amendment
          Page 2, line 3
          (b) Notwithstanding Chapter 3.5 (commencing with Section  
          11340) of Part 1 of Division 3 of Title 2 of the Government  
          Code, the department may implement, interpret, or make  
          specific this section by means of all-county letters,  
          provider bulletins, or other instructions, without taking  
          any further regulatory action. 
          
                                         

                                 PRIOR ACTIONS

           Assembly Health:                   17- 0
          Assembly Appropriations:      12- 0
          Assembly Floor:               62-12
                                         
                                   POSITIONS  

          Support:  American Federation of State, County and  
          Municipal Employees, AFL-CIO
                 Astellas Pharma, U.S., Inc.
                 California Healthcare Institute 
                 California Medical Association
                 California Transplant Donor Network
                 Donate Life California
                 National Kidney Foundation
                 Western Center on Law & Poverty
                 An individual


          Oppose:  None received





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