BILL ANALYSIS
SB 208
Page 1
Date of Hearing: June 29, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 208 (Steinberg and Alquist) - As Amended: June 22, 2010
SENATE VOTE : Not relevant
SUBJECT : Medi-Cal: demonstration project waivers.
SUMMARY : Enacts the statutory changes proposed by the
Department of Health Care (DHCS) to implement the proposed
Section 1115 Comprehensive Demonstration Project Waiver (Section
1115 Waiver) in the Medi-Cal Program. Specifically, this bill :
Coverage Expansion and Enrollment Demonstration Projects
1)Establishes local Coverage Expansion and Enrollment
Demonstration (CEED) projects to provide health care benefits
for uninsured adults age 19 to 24 with income up to 200% of
the federal poverty level (FPL) and who are not otherwise
eligible for Medi-cal or Medicare as a transition to full
implementation of the Patient Protection and Affordable Care
Act (PPACA) and does the following:
a) Authorizes DHCS to continue projects that were
established as Health Care Coverage Initiatives) (HCCIs)
under the prior Section 1115 Waiver to the extent they are
authorized and consistent with the terms of the successor
Section 1115 waiver;
b) Requires DHCS to develop local CEED projects, the later
of January 1, 2011 or 180 days after federal approval, for
the purpose of providing scheduled health care benefits to
uninsured adults 19 to 64 with income up to 200% FPL and
not otherwise eligible for Medi-Cal or Medicare;
c) Requires the CEED projects to include the following
elements, subject to the terms and conditions of the
Section 1115 Waiver:
i) Migration to a standardized eligibility and
enrollment procedure to interface with Medi-Cal,
according to collaboratively established milestones;
ii) Designation of a medical home and assignment to a
SB 208
Page 2
primary care provider;
iii) Development of an enhanced medical home, that may
include case management services, to target enrollees
who are frequent users of inpatient services, have
chronic medical conditions or mental health conditions;
iv) Benefit package as specified and a provider
network and service delivery system that includes
public and private providers to ensure that there is
capacity to transition to coverage through Medi-Cal or
the state health insurance exchange in 2014;
v) Outreach and enrollment plan that reaches
potential enrollees and includes the public and private
providers;
vi) Quality measurement and quality monitoring system,
including a data tracking system for use in evaluation
and performance measures;
vii) Promotion of viability of existing safety net;
viii) Consumer assistance with applications, access, and
participation; and,
ix) Ability to meet program requirements, standards,
and performance measurement as developed by DHCS in
consultation with participating counties.
d) Authorizes CEED projects to include primary care clinics
in the network.
e) Authorizes counties to conduct outreach and enrollment
activities to target populations such as the homeless,
individuals who frequently use hospital inpatient services,
individuals who use emergency departments for avoidable
reasons, or people with mental health treatment needs.
f) Requires DHCS to ensure that the CEED projects are
evaluated to determine if they have met the requirements of
the successor Section 1115 Waiver, authorizes DHCS to apply
for federal or private funds, enter into partnerships with
an independent, nonprofit group or a foundation, academic
institution, or apply for grants from a governmental entity
for this purpose.
g) Authorizes counties, a city and county, a consortium of
counties serving more than one county, or a health
authority to apply.
h) Requires the local entity that chooses to administer a
SB 208
Page 3
CEED to provide local funds as the nonfederal share of the
Certified Public Expenditures (CPE) or Intergovernmental
Transfer as allowed under the successor Section 1115
Waiver, consistent with the terms and conditions, but
specifies that nothing in these provisions shall be
construed to require local entities to participate and that
local funds expended shall be considered voluntary
contributions.
i) Requires DHCS to develop a methodology for distributing
the federal funds, to seek to balance the allocations
throughout the state and reallocate if necessary.
j) Specifies services provided pursuant to these provisions
are available to eligible uninsured persons, CEED projects
shall only be established to the extent there is federal
financial participation, shall not be construed to create
an entitlement, and no state General Funds shall be used
except as otherwise provided in the annual Budget Act.
Mandatory Enrollment of Seniors and People with Disabilities in
Managed Care
2)Authorizes DHCS to phase in mandatory enrollment seniors and
people with disabilities (SPDs) into a Medi-Cal managed care
plan or county alternative organized system of care,
commencing the later of February 1, 2011 or obtaining federal
approval.
County Alternative Organized System of Care
a) Authorizes any county that is not operating a County
Organized Health System (COHS) to develop a county
alternative model of care as an alternative choice to the
Local Initiative (LI) or Commercial Plan (CP).
b) Authorizes the county alternative model to be exempt
from the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene) unless it is a capitated model that assumes
full risk and specifies that it may include various models.
c) Requires counties to decide to develop the county
alternative option by January 1, 2012.
Pre-Enrollment
SB 208
Page 4
d) Requires DHCS, prior to implementing mandatory
enrollment, to ensure that each managed care plan or county
alternative is able to do the following;
i) Comply with the readiness evaluation criteria;
ii) Ensure and monitor the adequacy of the network in
each service area. DHCS is to collaborate with the
Department of Managed Health Care (DMHC) in assessing
the adequacy;
iii) Maintain an updated listing of providers accepting
new patients;
iv) Assess the health care needs of the SPDs who will
be enrolling across all settings including out of
network;
v) Ensure that provider network and informational
materials meet linguistic and other special needs of
SPDs such as toll-free lines and ombudsperson services;
vi) Provide a process for complaints, grievances, and
disenrollments as specified;
vii) Solicit stakeholder participation in advisory
groups;
viii) Contract with safety net and traditional
providers;
ix) Inform enrollees of procedure for obtaining
transportation;
x) Monitor the quality and appropriateness of
California Children's Services (CCS) eligible children;
xi) Maintain a dedicated liaison to coordinate with
regional centers;
xii) Stratify incoming enrollees applying a risk
stratification system based on fee-for-service (FFS)
claims data;
xiii) Administer a DHCS approved risk assessment survey
tool and a telephonic assessment of newly enrolled SPDs
within 45 days of enrollment for those identified as
high risk and within 105 days for those identified as
lower risk;
xiv) Based on the health assessment, develop individual
care plans for higher risk beneficiaries that includes
specified components;
xv) Assign enrollees to medical homes that meet
specified minimum criteria; and,
xvi) Perform care management and care coordination
functions and activities including facilitation of
SB 208
Page 5
access to health care services, equipment and
medications, referral to community resources and
agencies, communication with mental health and
substance abuse providers, and health education.
Outreach, Education and Enrollment
e) Requires DHCS to develop and implement an outreach and
education program to inform SPDs of their enrollment
rights.
f) Authorizes contracts or other arrangements with private
non-profit consumer assistance organizations.
g) Requires notice to beneficiaries with specified
information at least three months prior to mandatory
enrollment.
h) Requires DHCS to implement an awareness and sensitivity
training program.
Requirements on DHCS .
i) Requires DHCS to do the following:
i) Assess and ensure managed care plan and county
alternative readiness;
ii) Ensure compliance with applicable federal and
state laws such as physical accessibility and
availability of information in alternative formats;
iii) Develop a methodology, in consultation and
coordination with stakeholders and plans and county
alternatives, to identify persons with the highest risk
and most complex health care needs;
iv) Provide historical utilization data upon
enrollment;
v) Develop and provide to the managed care plans
and county alternatives, an enhanced facility site
review tool;
vi) Ensure that managed care plans and county
alternatives are able to provide alternative forms of
communication access as specified;
vii) Monitor utilization and caseload of the In-Home
Supportive Services (IHSS) Program, in collaboration
with the Department of Social Services; and,
SB 208
Page 6
viii) Work with counties to develop a method to use to
determine the appropriate contribution to cover the
nonfederal share of inpatient hospital expenses for
SPDs.
Access and Continuity
j) Requires DHCS to do the following:
i) Ensure that enrollees are able to request a
specialist or clinic as a primary care provider;
ii) Ensure that managed care plan and county
alternative allow a new enrollee to continue to have
access to a provider with whom they have an ongoing
relationships if the provider agrees to accept the
higher of the Medi-Cal FFS rate or the rate offered;
and,
iii) In cooperation with DMHC, monitor at least
quarterly the adequacy of the provider networks.
aa) Requires managed care plans and county alternatives to
comply with Knox-Keene continuity of care requirements.
bb) Allows specified beneficiaries to be exempt from
mandatory enrollment under existing regulatory provisions.
cc) Allows an enrollee to have the choice to continue to
have a patient-provider relationship with a treating
provider if the provider agrees and is a primary care
provider or clinic contracting with the managed care plan
and county alternative.
dd) Allows eligible persons to select a Program for
All-Inclusive Care for the Elderly (PACE) plan, if
available.
Sanctions and Enforcement
ee) Requires DHCS to do the following:
i) Develop a process to enforce legal sanctions as
specified against managed care plans and county
alternatives that consistently or repeatedly fail to meet
performance standards; and,
SB 208
Page 7
ii) Suspend new enrollment in any managed care plan and
county alternative if it determines that there are not
sufficient primary care or specialty providers.
Rates
ff) Requires DHCS to establish an actuarially sound rate,
adequate to ensure access and that is budget neutral.
gg) Requires the process of developing and negotiating
capitated rates to include analysis of data specific to the
SPD population and authorizes DHCS to require plans to
submit specified data.
Data and Reporting
hh) Requires all managed care plans, county alternative or
other managed care arrangement to submit specified
encounter and financial data for services provided to all
members to DHCS.
ii) Provides that failure to comply with the data
requirements established by DHCS shall result in penalty of
2% of the monthly capitation or arrangement until
compliance and provides that responsibility is not relieved
by failure of a provider or subcontractor.
jj) Requires DHCS to provide to the fiscal and policy
committees of the Legislature, semiannual updates on
specified activities such as milestones and program changes
which may include updates on outcomes and other measures of
success.
General Provisions
aaa) Authorizes DHCS or the California Medical Assistance
Commission to contract with managed care plans or other
entities as specified, authorizes expedited contracting,
exemptions from competitive bid requirements and other
Public Contract Code requirements.
bbb) Provides that the terms and conditions of certain
waivers or state plan amendment shall control in the event
of conflicts.
SB 208
Page 8
ccc) Authorizes DHCS to implement these provisions by means
of all-county letter, plan letters or plan or provider
bulletins in lieu of regulations and provides that any
regulations shall be deemed emergency.
Persons with Dual Medi-Cal and Medicare Eligibility Pilot
Project
3)Requires DHCS to seek approval federal approval for a
Medicare, Medicaid, or combination demonstration project or
waiver, for persons who are Medi-Cal and Medicare eligible
(dual eligible), authorizes the operation of the Medicare
component as a delegated Medicare benefit administrator and
the sharing in any Medicare program savings as follows:
a) Authorizes, after obtaining federal approval, the
establishment of pilot projects in up to four counties with
the purpose of developing effective health care models that
integrate Medi-Cal and Medicare services. Authorizes
inclusion of additional services as approved.
b) Requires the pilot projects to include at least one
two-plan Medi-Cal managed care county and one Medi-Cal COHS
plan county. Requires DHCS, in determining the counties,
to consider:
i) Local support for integrating medical care,
long-term care, and home-and-community based services;
and,
ii) Local stakeholder process that includes all
interested stakeholders.
c) Authorizes DHCS to require dual eligibles to be assigned
as mandatory enrollees in managed care plans, provides for
continuity of care with existing providers, as specified,
and allows enrollees to opt out with regard to Medicare
benefits.
d) Requires DHCS to identify the models by January 1, 2012
and develop a timeline and process for selection,
monitoring and evaluating.
e) Establishes goals as follows:
i) Coordinating Medi-Cal and Medicare benefits
SB 208
Page 9
across health care settings and improving continuity of
acute care, long-term care, and home and
community-based services;
ii) Coordinating access to acute and long-term care
services;
iii) Maximizing the ability of dual eligbles to remain
in their homes and communities with appropriate
services in lieu of institutional care; and,
iv) Increasing availability of and access to home and
community-based alternative.
f) Allows eligible persons to select a PACE plan if
available.
CALIFORNIA CHILDREN'S SERVICES PILOT PROJECT
4)Requires DHCS to establish, by January 1, 2012 organized
health care delivery models for children eligible for CCS as
follows:
a) Requires DHCS to seek proposals to establish and test
models of organized health care delivery systems by means
of contracts on a bid or negotiated basis, amending
existing managed care contracts, and requires capitated or
risk-based contracts to be actuarially sound and to take
care-coordination activities into account. Contracts may
be statewide.
b) Requires the models to include at least one of the
following:
i) Enhanced primary care case management;
ii) Provider-based accountable care organization;
iii) Specialty health care plan; or,
iv) Medi-Cal managed care plan that includes payment
and coverage for CCS-eligible conditions.
c) Provides that the models shall not be limited to
services related to the CCS-eligible condition.
d) Authorizes mandatory enrollment.
e) Establishes requirements for each model that include:
i) Care coordination linking CSHCN with services
and resources in a coordinated manner;
SB 208
Page 10
ii) Networks that include CCS-approved providers and
the current system of regionalized pediatric specialty
and sub-specialty providers;
iii) Coordination of out-of-network access if
appropriate;
iv) Ensuring that care for CCS-eligible conditions
continues to be received from CCS-approved providers
using CCS standards;
v) Participation in a quality improvement
collaborative and providing data for monitoring and
improvement measures as developed by DHCS; and,
vi) Establish and support medical homes as specified.
f) Requires DHCS to conduct an evaluation to assess the
effectiveness of each model in improving the delivery of
health care services for children eligible for CCS. DHCS
is required to consult with stakeholders in developing the
evaluation, to begin the process simultaneously with the
implementation of the model delivery systems, and to
compare the outcomes to children not enrolled in the
models.
g) Authorizes children enrolled in the Healthy Families
Program to enroll in the models, upon approval of DHCS.
EXISTING LAW :
1)Establishes the Medi-Cal Program, administered by DHCS, to
provide comprehensive health care services and long-term care
to pregnant women, children, and people who are aged, blind,
and disabled. Services are reimbursed through FFS, capitated
payments to managed care plans, COHS or other contractual
arrangements.
2)Authorizes DHCS to contract, on a bid or nonbid basis, with
any qualified individual, organization, or entity to provide
services to, arrange for, or case manage, the care of Medi-Cal
beneficiaries. Defines a Medi-Cal managed care plan as any
entity that enters into one of several types of contracts with
DHCS including COHS, geographic managed care (GMC) plans and
LIs. .
3)Requires DHCS to evaluate and determine the readiness of
managed care plans prior to geographic expansion of Medi-Cal
managed care. Existing law requires enrollment of SPDs into
SB 208
Page 11
Medi-Cal managed care plans to be voluntary, except in COHS
counties where the enrollment of SPDs is mandatory. Provides
that services provided by CCS are not incorporated into
Medi-Cal managed care contracts (carved-out).
4)Requires counties to provide medical services for the
medically indigent.
5)Authorizes, under federal law, the waiving of specified
Medicaid (Medi-Cal in California) requirements for
demonstration or pilot projects.
6)Until September 1, 2010, creates a hospital demonstration
project to implement a five-year federal Medicaid waiver for
support of public hospitals that serve uninsured patients and
patients whose health care services are covered by Medi-Cal.
7)Creates the Safety Net Care Pool (SNCP) as the federal funds
available under the demonstration project matched with "CPEs"
for health care services provided in public hospitals and
county clinics.
8)Under federal law, establishes the Medicare Program, which
provides health care benefits, to persons 65 years of age and
older and to the disabled. Provides that the Medicare Program
can grant waivers of federal law for demonstration projects.
9)Establishes the CCS Program as a state program for children up
to 21 years of age with certain diseases or health problems.
FISCAL EFFECT : This bill, as amended, has not been analyzed by
a fiscal committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
one of two companion bills (AB 342 (John A. Perez and Monning)
is the other) that will ultimately include the statutory
provisions necessary to implement a new federal waiver.
California currently has several waivers, including the
Medi-Cal Hospital/Uninsured Care waiver (hospital financing
waiver) which will expire in August 2010. The hospital
financing waiver and implementing legislation for that waiver
(SB 1100 (Perata), Chapter 560, Statutes of 2005) instituted a
number of changes to how the state reimburses hospitals.
SB 208
Page 12
Given that the current hospital financing waiver is expiring,
a new waiver must be negotiated and established by September
1, 2010 and will require implementing legislation.
The author indicates a waiver renewal is an opportunity to ask
the federal government to provide the state flexibility and to
seek federal funding for demonstration projects that achieve
federal budget neutrality. The author continues, the state
will embark upon a fairly comprehensive waiver proposal that
seeks to accomplish the following goals: a) strengthen
California's frayed and overburdened safety net that provides
most of the services to the uninsured and low-income; b)
maximize FFP and federal resources for uncompensated care; c)
promote stability and more efficiency in state and local
health care funding; and, d) promote quality and
value in health care services and outcomes.
2)BACKGROUND . In 2005, the State of California sought a five
year federal waiver as a Medicaid demonstration project under
the authority of Section 1115(a) of the Social Security Act.
Under this waiver, hospital financing was fundamentally
restructured. The non-federal share of Medi-Cal funds for 22
county and University of California (UC) hospitals known as
Designated Public Hospitals (DPHs) was shifted from State
General Funds to CPEs.
The waiver also created the SNCP to pay for services to the
uninsured and for unreimbursed Medi-Cal expenditures delivered
through public hospitals, other governmental entities and
state-funded programs. A portion of these funds were
contingent on implementation of an HCCI pilot program. In
October 2007 Centers for Medicare and Medicaid Services (CMS)
approved the state's proposal for the HCCI.
In addition, CMS set aside a portion of the SNCP funding
contingent on a Medi-Cal expansion of mandatory enrollment in
managed care to SPDs. Except for COHS, this provision of the
waiver was never enacted.
Enacted as part of the 2009-10 budget, AB 6 X4 (Evans),
Chapter 6, Statutes of 2009 Fourth Extraordinary Session,
requires the state to apply for a Health Care Coordination,
Improvement, and Long-Term Care Cost Containment Waiver or
Demonstration Project Waiver to be approved no later than the
conclusion of the current Section 1115 Waiver. As specified
SB 208
Page 13
in AB 6 X4, the State of California submitted a Section 1115
Comprehensive Demonstration Project Waiver Proposal on June
2010. On May 7, 2010 DHCS submitted the Implementation Plan
to the Legislature in compliance with AB 6 X4. As part of the
May Revision of the Governor's Proposed Budget for fiscal year
2010-11, DHCS submitted proposed trailer bill language with
the statutory changes necessary to implement the waiver plan.
The Budget Conference Committee referred consideration of this
legislation to the Senate and Assembly policy and fiscal
committees.
3)STAKEHOLDER PROCESS . As required by AB 6 X4, DHCS has
convened a Stakeholder Advisory Committee to advise on
preparation of the implementation plan. The Stakeholder
Advisory Committee will also advise on the implementation of
the waiver until its expiration. As specified, the
Stakeholder Advisory Committee includes persons with
disabilities, seniors, representatives of legal services
agencies that serve clients in the affected populations,
health plans, specialty care providers, physicians, hospitals,
county government, labor, and others as appropriate. A
Stakeholder Advisory Committee was appointed in December 31,
2009 and met on January 7, March 10, May 13 and June 10, 2010.
The Stakeholder Advisory Committee has been sub-divided into
five Technical Workgroups to provide technical support to DHCS
on the following aspects:
a) Implementation plan for mandatory enrollment of SPDs or
an alternative system where managed care is not
appropriate;
b) Implementation plan with respect to children with
special health care needs (CSHCN) in CCS;
c) Implementation plan to pilot and test different
strategies to integrate primary care and behavioral health
services, including substance abuse, in Medi-Cal;
d) Development of the Section 1115 Comprehensive
Waiver/Demonstration Project implementation plan for HCCI
to cover the uninsured; and,
e) Implementation plan for enrollment of Dual Eligible
individuals (those eligible for both Medicare and Medi-Cal)
in an organized system of care that more fully integrates
Medicare and Medi-Cal to provide more effective delivery of
Home and Community Based Services.
Each workgroup has also held multiple meetings. All meetings
are open to the public. DHCS has also established a Waiver
SB 208
Page 14
Renewal Resource Webpage to provide resources to those who
are interested in the waiver renewal process and would like
to contribute to the effort. It contains the agendas,
timelines, and other materials from the Stakeholder
Advisory Committee and workgroup meetings.
4)SECTION 1115 WAIVERS . Section 1115(a) of the Social Security
Act authorizes the federal Secretary of the federal Department
of Health and Human Services (DHHS) to allow states to receive
federal Medicaid matching funds without complying with all of
the federal Medicaid rules. Traditionally designed as
research and demonstration programs to test innovative program
improvements and to facilitate coverage expansions to
populations not otherwise eligible, they are also used to
modify benefits structures and financing mechanisms. CMS
generally requires "budget neutrality" so that the federal
spending would be no more than it would have been in the
absence of the waiver. This requirement is particularly
onerous for California due to the frugality of the Medi-Cal
Program. For instance, California spent $4,528 per
beneficiary in 2006. This is 25% less than the national
average and ranks least among the 10 largest states. Much of
the savings is a result of the Selective Provider Contracting
Program contracting program which has saved billions in
federal funds. In addition, until 2009, California
traditionally ranked among states with the least generous
federal sharing ratio. For all these reasons, California has
already cost the federal government less per beneficiary than
most states but has not yet been able to capitalize on this in
the budget neutrality discussions.
5)WAIVER SUBMISSION. On June 4, 2010 DHCS submitted a formal
Section 1115 Comprehensive Demonstration Project Waiver
Proposal: "A Bridge to Reform" to CMS. The waiver application
identified the following six goals:
a) Begin immediate phasing in of coverage for "newly
eligible" adults aged 19-64 with incomes up to 133% FPL by
building on current county-based coverage initiative;
b) Begin immediately phasing in coverage for adults with
incomes between 133% and 200% FPL using county coverage
initiatives as a transition to the health insurance
exchange in 2014;
c) Create more accountable, coordinated systems of care
with a focus initially on SPDs and Dual Eligibles. In year
two and three to propose further amendments to include
SB 208
Page 15
People with Mental Health and/or Substance Abuse challenges
and CSHCN as well as to advance a project for Dual
Eligibles under PPACA;
d) Continue and expand the SNCP;
e) Implement improvements to existing service delivery
system to strengthen infrastructure and prepare for full
implementation of PPACA; and,
f) Pilot reforms within the public hospital system to align
payment and care delivery incentives.
6)HCCI . Under the current waiver, $180 million in federal funds
were allotted to the county-based HCCIs to provide coverage to
more than 130,000 medically-indigent adults who are not
eligible for other public programs. Using a competitive
process, California selected 10 counties in waiver years
three, four, and five (September 1, 2007-August 31, 2010) to
provide coverage to this vulnerable population through an
organized system of care. The participating counties-Alameda,
Contra Costa, Kern, Los Angeles, Orange, San Diego, San
Francisco, San Mateo, Santa Clara, and Ventura-use CPEs to
draw down the available federal funds. The counties were
provided with significant flexibility to design their HCCI
programs to reflect local needs and existing delivery systems.
The State defined a standard set of eligibility criteria:
In addition, counties also were allowed to define additional
eligibility criteria based on their program design (e.g., to
target HCCI eligibles with specific chronic medical
conditions). While the eligibility criteria are fairly
similar across the participating counties and all counties
have developed a centralized eligibility system for their HCCI
programs, the eligibility determination process varies in
terms of how applications are processed and who determines
eligibility.
Participating counties are required to assign enrollees to a
medical home, either a public hospital system provider, a
community clinic, or private provider, defined as "a single
provider or facility that maintains all of an eligible
person's medical information and that is a licensed provider
of health care services, and that provides primary medical
care and prevention services."
SB 1448 requires the state to evaluate and assess the impact of
the HCCI programs. The state contracted with UC, Los Angeles
SB 208
Page 16
Center for Health Policy Research. An Interim Evaluation
Report, June 1, 2010 was submitted to CMS with the waiver
proposal submission. The June evaluation presents interim
findings on the seven criteria required by CMS and the state:
a) expansion in health care coverage; b) expenditures; c)
expansions to Safety Net Infrastructure; d) access and Quality
of Care; e) efficiencies; f) sustainability; and,
g) implementation.
7)BRIDGE TO REFORM : PPACA requires states, by January 1, 2014
to cover all childless adults under age 65 and with family
incomes up to 133% FPL in their Medicaid program and to offer
subsidized coverage through a statewide insurance exchange.
States have the option of early implementation as long as the
plan doesn't provide coverage to people at higher incomes than
those who are not covered. California's proposal is to allow
an incremental approach by expanding on the existing HCCIs and
allowing all counties to participate. The individual county
expansions will be dependent on the availability of county
funding. Specifically, the state is proposing to treat
coverage for the newly eligible (up to 133% of FPL) as a new
optional eligibility group under PPACA and the 133-200% of FPL
would be funded out of the SNCP. The state is requesting
blanket waivers from such requirements as state wideness,
comparability, and freedom of choice in order to implement
this approach. However, the state acknowledges that statewide
uniformity will be required by 2014.
Under the new waiver, the state is proposing to work with the
counties to create more standardized eligibility and
enrollment, benefits, provider networks, use of medical homes,
and data collection. Under PPACA, The Secretary of DHHS will
be establishing definitions for a "benchmark" or "bench mark
equivalent" plan. The state is proposing to establish a
minimum benefits package that would be a transition to these
requirements.
8)COVERAGE ENROLLMENT . According to DHCS, more than 130,000
persons are currently enrolled in the HCCIs and it estimates
that 56 out of 58 counties will participate in the next
expansion with a total estimated enrollment of 512,000. A
significant advantage of the state's purported approach is
that it avoids the complexity of attempting to cover and
enroll what is estimated to be close to two million uninsured
people on January 1, 2014. However, this approach will only
SB 208
Page 17
be successful if in fact there is in place a system to
transition the population without interruption. It is clear
from the current proposal that additional refinement of this
aspect will be necessary with input from representatives of
the counties and other stakeholders.
9)MEDICAL HOME . A significant focus of the presentations and
discussions at the Stakeholder Advisory Committee and
Technical Workgroup meetings was the concept of "medical
home." First used by the American Academy of Pediatrics (AAP)
in 1967 to describe pediatric practices that provide primary
care and coordinate all care for CSHCN, it has evolved to the
concept of a patient centered medical home 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: a) personal
physician; b) physician directed medical practice; c) whole
person orientation; d) coordinated and/or integrated care;
e) quality and safety; f) 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. Studies have shown
savings from reduction in emergency room visits and hospital
admissions.
A number of experts, however, made the case that additional
elements are needed for the care of patients with complex
health care needs and high cost. This was particularly the
case for the low-income Medi-Cal population many of whom also
have serious mental health problems. Some of the additional
elements in an "Enhanced Medical Home" include nurse care
management, in-clinic, home and phone contacts, same day or
next day access, smaller caseloads, patient education of
self-management skills, and after- hours access. Many of the
presenters also recommended risk stratification of patients
according to need.
The current HCCI counties were required to assign all enrollees
to a medical home. According to the Interim Evaluation of the
HCCI, the definition is did not include all the concepts of
the ideal medical home model in the literature. The
evaluation adds that the counties elected to implement
multiple aspects of the ideal medical home concept, taking
SB 208
Page 18
different approaches to this innovative strategy to provide
primary and preventive care in the safety net.
According to the Interim Evaluation, all of the counties have
gone beyond the statutory requirement and provide aspects of a
patient-centered medical home. For example, all of the
counties are using a physician-directed team-based approach
for care delivery. The counties also include case managers or
health educators to assist with chronic care management and
care coordination. While all of the counties assign HCCI
enrollees to a medical home, only three counties monitor
patient utilization of their assigned medical home. In the
other seven counties, adherence is encouraged but not
required. The HCCI authorizing statute required that
participating counties provide care management to program
enrollees, and the HCCI counties have introduced or expanded
disease management services for program enrollees. Nine of
the counties identify higher-risk enrollees with more severe
chronic conditions and target them for disease and care
management.
10)CURRENT SPD ENROLLMENT . The Legislature declined to adopt
the Governor's proposal for mandatory enrollment of the SPD
population in the 2005 waiver. DHCS has however, been
conducting outreach and awareness activities to encourage the
voluntary enrollment. As part of that effort, DHCS and the UC
Berkeley, School of Public Health, Health Research for Action
(HRA) are jointly working on SPD outreach activities. HRA
developed a comprehensive guide, "What Are My Medi-Cal
Choices?" which was tested in a phone survey and pilot study
in Alameda, Riverside, and Sacramento Counties in 2008 HRA
analyzed enrollment data for the six months following the
dissemination of the pilot SPD guide and found that
beneficiaries in pilot counties were more likely to change to
managed care and less likely to change back to FFS. The
analysis showed a significant difference between the
comparison and pilot counties. The SPD guide is currently
available online in English, Spanish, and Chinese and will be
translated into additional languages. DHCS is exploring
funding options for on-going printing and dissemination of the
SPD guide, including designing and mailing a flyer to SPDs in
FFS encouraging them to call and request a guide for more
information about managed care. According to data supplied by
DHCS, as of March 2010, over 148,000 SPDs have voluntarily
enrolled in a managed care plan.
SB 208
Page 19
11)CURRENT MEDI-CAL MANAGED CARE MODELS.
a) Two-Plan Counties . The two-plan model covers about 2.7
million of the state's 7.6 million Medi-Cal recipients in
12 counties. DHCS contracts with two plans (one designated
the LI and one the CP) and the beneficiary has a choice.
Both plans are required to be Knox-Keene licensed through
the DMHC. The 12 counties are Alameda, Contra Costa,
Fresno, Kern, Los Angeles, Riverside, San Bernardino, San
Francisco, San Joaquin, Santa Clara, Stanislaus, and
Tulare.
Mandatory enrollment of families and children into a Medi-Cal
managed care full risk plan was authorized as part of the
budget of 1992. DHCS released a strategic plan in 1993 and
in 1995, 12 counties were designated as two-plan counties.
The counties were given the option of developing an LI. In
nine of the 12 counties, the local government, community
groups, and health care providers worked together to
establish a community based LI. The design of the LI, a
public entity, was intended to shift this population into
managed care while preserving the role of the traditional
safety net, including disproportionate share hospitals,
county facilities and community clinics. In Fresno,
Stanislaus, and Tulare counties one of the CPs is
designated as the LI. (Fresno is in the process of
transitioning to a locally-developed LI that will operate
in Fresno, Kings, and Madera Counties, through an
administrative services organization contract with Health
Net). In Los Angeles, the LI is L.A. Care but L. A. Care
enrollees can choose among L. A. Care, Anthem Blue Cross,
Care 1st Health Plan, Community Health Plan, or Kaiser
Permanente. In all counties, the second CP is selected by
DHCS through a competitive request for proposal process.
In most cases, families and children must enroll in one of
the two plans. DHCS has established an enrollment process,
Health Care Options (HCO) through a statewide contractor.
A beneficiary in this mandatory category is mailed a packet
of information about the two plans and participating
providers. If no plan is selected after 30 days, the
family and children are default enrolled using an
algorithm. The original algorithm was weighted in favor of
the plan that relied most on the safety net providers,
SB 208
Page 20
(generally the LI) and was assigned a higher percentage of
default enrollees. In 2005, the algorithm was revised to
include a quality component using nationally recognized
measures. It is calculated using a combination of superior
scores and year over year improvement
b) GMC . GMC covers about 400, 000 of the state's 7.6
million Medi-Cal recipients in Sacramento and San Diego.
The GMC model allows many plans to operate in a designated
area. In Sacramento, DHCS contracts with four commercial
plans, Anthem Blue Cross, Health Net, Kaiser Foundation,
and Molina Healthcare. In San Diego there are five plans;
Care 1st Health Plan, Community Health Group, Health Net,
Kaiser Foundation, and Molina Healthcare.
The strategic plan developed by DHCS in 1993 for
implementation of mandatory enrollment designated
Sacramento as a GMC county allowing multiple plans to be
competitively bid and selected. At one time there were six
plans, currently there are four. San Diego proposed the
GMC model as an alternative to the two-plan model in 1993
during the development of the proposed mandatory enrollment
expansion. San Diego began operating as Healthy San Diego
in 1998 and has had seven plans, now five.
In most cases families and children must enroll in a managed
care plan. In Sacramento, enrollment is through the
statewide HCO that is used for the two-plan counties. San
Diego County developed its own enrollment program, Healthy
San Diego. When voluntary enrollment packets were mailed
to SPDs in the two-plan counties, Sacramento was included.
It now has the highest rate of voluntary enrollment of any
of the voluntary counties.
c) COHS . The six COHS plans are collectively known as the
California Association of Health Insuring Organizations,
which was formed in 1994. Together the six member plans
(defined in federal law as "Health Insuring Organizations,"
and in California state law as "COHS") serve as the primary
health delivery system for approximately 830,000 of the
State's 7.6 million Medi-Cal recipients. The six existing
plus one in formation, COHS plans administer the program
for 12 counties: CalOptima - Orange County; CenCal
(formerly Santa Barbara Health Initiative) - Santa Barbara
and San Luis Obispo Counties; Central California Alliance
SB 208
Page 21
for Health (Formerly Central Coast Alliance for Health) -
Santa Cruz, Monterey, and Merced Counties; Health Plan of
San Mateo - San Mateo County; Partnership HealthPlan -
Solano, Napa, Sonoma, and Yolo Counties; Ventura (in
formation-estimated implementation between Oct 2010 and Jan
2011) - Ventura County.
All SPDs, low-income mothers and children, and pregnant women
who are eligible for Medi-Cal are automatically enrolled in
the COHS. Many of the plans have obtained Knox-Keene
licenses to enroll children in the Healthy Families and
Healthy Kids Programs. Some of the COHS also provide
health coverage to IHSS workers and have established
Medicare Advantage Plans that cover dual eligible persons.
12)COUNTY ALTERNATIVE OPTION . This bill and the state
implementation plan envision a county developed alternative as
an additional choice in the two-plan and the GMC counties.
According to the CMS waiver submission, under this model the
county may contract with the State to develop and administer a
unique model of organized care and would be subject to
essential standards and performance measures and may be
required to obtain Knox-Keene licensure depending on the
structure. DHCS is anticipating that counties will propose
organizational structures that reflect and meet unique local
needs and circumstances.
13)PLAN OVERSIGHT AND REGULATION .
a) Knox-Keene . Knox-Keene is the regulatory framework that
most managed care plans operate under in California. It is
a comprehensive set of rules that includes mandatory basic
services, financial stability, availability and
accessibility of providers, review of provider contracts,
administrative organization, and consumer disclosure and
grievance requirements regulated by DMHC. Among the
factors that led to its passage, including the selection at
the time of the Department of Corporations as the
regulatory entity, were a number of scandals associated
with Medi-Cal prepaid health plans (PHP) and lax oversight
by the Department of Health Services (now DHCS) in the
early 70's when Governor Reagan expanded use of PHPs in the
Medi-Cal program as a means of reducing costs. In 1999,
comprehensive health plan reform legislation, led to the
SB 208
Page 22
creation of DMHC. Responsibility for Knox-Keene regulation
was transferred to the new department in July 2000.
However, it continues to be under the Business and
Transportation and Housing Agency, rather than the Health
and Human Services Agency.
DMHC conducts a licensing audit of each plan every three
years. The audit is not specific to Medi-Cal. DMHC
operates an "HMO Help Center" with a toll free hotline that
is answered 24 hours a day. Through coordination among
help center, licensing, and enforcement staff, additional
audits, investigations, or enforcement activities are
initiated if DMHC identifies a pattern of problems through
consumer or provider complaints.
b) Medi-Cal Managed Care . When expanded use of PHPs was
again proposed as a means of reducing costs in Medi-Cal in
1993, a basic tenet was that the plans in the two-plan and
GMC counties would be required to obtain Knox-Keene
licensure. COHS continued to be exempted from this
requirement. However many of the COHS obtained a
Knox-Keene license in order to participate in the Healthy
Families Program. In the most recent contracts, DHCS
required each COHS to meet Knox-Keene requirements.
Currently DHCS audits the plans regularly for contract
compliance and audits the Knox-Keene plans jointly with
DMHC. The general practice of DHCS is to require the plan
to submit a corrective action plan if there are
deficiencies. Financial and fraud investigation reviews
are performed by the Controller's office. DHCS is also in
the process of entering into an inter-agency agreement to
train the Controller's staff to be able to perform medical
audits.
14)DUAL ELIGIBLES. In California, 1.1 million seniors and
permanently disabled persons who qualify for Medicare also
qualify for Medi-Cal due to low-income. According to the DHCS
waiver proposal, dual eligible beneficiaries are the most
chronically ill patients within both Medicare and Medicaid,
requiring a complex array of services from multiple providers.
According to the Center for HealthCare Strategies, Inc
(CHCS), " Options for Integrating Care for Dual Eligibles,"
March 2010, many federal and state officials as well as those
in the stakeholder community have become engaged in a lively
SB 208
Page 23
and creative discussion of options for integrating care for
the eight to nine million duals, whose care is now costing
$250 billion annually-approaching half of all Medicaid
expenditures and a quarter of Medicare outlays.
According to DHCS, Medi-Cal spending on the 1.1 million dual
eligibles in California was $7.6 billion in fiscal year
2007-08, representing 23% of total Medi-Cal expenditures. In
2007, Medi-Cal spending on Long Term Care (LTC) for duals was
$3.2 billion, representing 75% of total Medi-Cal LTC
expenditures. It is estimated that in 2007, total
expenditures for dual eligible beneficiaries in California,
for both Medicare and Medi-Cal spending, was $20.9 billion.
Under the current system Medicare is administered and funded by
the federal government and generally covers primary and acute
care and pharmacy. Medi-Cal is the secondary payer for
low-income beneficiaries and covers primary and acute care,
medical equipment, and long-term care. Medi-Cal also pays for
home and community-based services (HCBS) but these may be
administered separately such as IHSS.
15)DUAL ELIGIBLE PILOT PROJECT WAIVER PROPOSAL . The Section
1115 Waiver proposal and this bill seek to implement pilot
projects in up to four counties to test dual integration in
COHS and other managed care plans that operate both Medi-Cal
managed care and Medicare Special Needs Plans (SNPs). The
Section 1115 Waiver proposal also states that in addition to
the pilot projects, the state will continue development of an
expanded strategy that provides full integration of funding
and benefits. According to Section 1115 Waiver proposal, this
will be added as an amendment at a later date. Consultation
with stakeholders and CMS regarding how to develop an
integrated funding approach will continue. Section 1115
Waiver proposal states that California is seeking inclusion of
this integrated approach in its Section 1115 Waiver
application to ensure the necessary Medicaid authority and
would like to discuss with CMS the necessary Medicare
authority.
The Section 1115 Waiver proposal states that Medi-Cal would
integrate dual eligible beneficiaries into the organized
systems of care that will be developed first for the
Medi-Cal-only SPD population. Medi-Cal will ensure that the
systems of care align for both populations and include
SB 208
Page 24
mandatory medical homes, care management, better connection to
specialty providers, incentives that reward providers and
beneficiaries for achieving the desired clinical, utilization,
and cost-specific outcomes. The systems of care will use
existing HCBS programs, such as IHSS, to shift care from the
institution to the community by leveraging existing HCBS
infrastructure and providers where possible. After
Medi-Cal-only SPD systems of care are developed, dual eligible
beneficiaries will be integrated in phases, according to
organizational readiness in various regions. According to the
Section 1115 Waiver proposal, Medi-Cal would act as the
administrator of the integrated program and assume the risk
for managing the Medicare benefit, subject to discussions
between California and CMS. Medi-Cal would be responsible for
coordinating payment, coverage, and benefits for all Medicare
and Medicaid acute, behavioral, pharmacy, and long-term
supports and services, including institutional care and HCBS.
CMS and Medi-Cal would negotiate an appropriate, risk-adjusted
global amount or per member per month amount of Medicare
funding for participating dually eligible beneficiaries that
would be provided by CMS to Medi-Cal to administer the
Medicare benefit. The specific elements of risk sharing would
be subject to discussion.
According to the Section 1115 Waiver proposal the objectives are
an integrated care model option for duals that:
a) Creates one point of accountability for the delivery,
coordination, and management of health care and long-term
supports and services;
b) Promotes and measures improvements in health outcomes;
c) Maintains appropriate consumer involvement and
safeguards;
Uses performance incentives to encourage providers to improve
coordination of care;
d) Blends and aligns Medicare and Medicaid services and
financing to streamline care, and through shared savings
approaches, eliminates cost shifting; and,
e) Slows the rate of cost growth in both Medicare and
Medicaid.
16)MEDICARE ADVANTAGE SPECIAL NEEDS PLANS . The Medicare
Modernization Act of 2003 gave CMS the authority to designate
certain Medicare Advantage plans as SNPs. Medicare SNPs are
designed for certain populations. For example, an SNP may
SB 208
Page 25
limit its enrollment only to people in certain long-term care
facilities (like a nursing home), people that are dual
eligibles, or people with certain chronic or disabling
conditions. The goal of SNPs is to provide health care and
services to those who can benefit the most from the special
expertise of the plans' providers and focused care management.
The Medicare Improvements for Patients and Providers Act of
2008 facilitated greater SNP integration by requiring new
plans or those expanding into new service areas to contract
with state Medicaid agencies and established new standards
relating to the provision of care. PPACA extended SNP
authority through December 31, 2013, created a new payment
adjustment for fully-integrated dual eligible SNPs and
requires all dual-eligible SNPs, to have a contract with state
Medicaid programs by January 1, 2013.
According to the CHCS, March 2010 Report, enrollment in an SNP
does not automatically translate into integrated care; the
value is in the potential relationships between these health
plans and state Medicaid agencies. SNPs are available in some
areas of California, but not all. Three of the five COHs
operate SNPs-CalOptima (OneCare), Health Plan of San Mateo and
Partnership Health Plan of California. Enrollment is
voluntary. According to CalOpitma, of the 64,000 dual
eligible members, 10,400 or about 17% have enrolled. Another
11% are enrolled in other SNPs and Medicare Advantage Plans.
As of May 2010, CalOptima reports that OneCare is the 3rd
largest dual eligible SNP in California, after Kaiser-Southern
California (57,395) and Health Net (13,437). The Health Plan
of San Mateo reports 7,900 SNP members and the Partnership
Health Plan 4,600.
17)PACE . PACE programs are a comprehensive community-based care
model for frail, chronically ill older adults whose
significant functional and cognitive impairments make them
nursing home eligible. The first PACE program, On-Lok,
started in the Chinatown section of San Francisco in 1971.
Begun as an alternative to nursing home care in the Chinese
community, where institutionalization was a culturally
unacceptable option, it was eventually granted Medicaid and
Medicare waivers to test a new financing system. In 1997,
PACE became a permanent provider type under both Medicare and
Medicaid. As of 2008, there were 61 PACE programs in 30
states.
SB 208
Page 26
18)CCS . Originally established in 1927, CCS manages the care of
CSHCN such as leukemia and other cancers, cleft palate,
congenital heart disease, HIV, spina bifida, diabetes,
cerebral palsy, sickle cell anemia, muscular dystrophy,
premature birth, and other serious life-threatening
conditions.
CCS provides medical care and medical therapy for children with
certain physical limitations and chronic health conditions or
diseases. Eligibility is limited to children under 21 years
of age who must have one or more of the specified medical
conditions and be in a family that meets one of three family
income eligibility criteria. The eligibility criteria are:
the families have an adjusted gross income of $40,000 or less;
the children have Healthy Families coverage; or the family has
medical care costs in excess of 20%of the family's adjusted
gross income. Eligibility under this last criterion is at the
discretion of the director of DHCS. Healthy Families covers
children in families up to 250% FPL. The CCS Program also
provides medical therapy treatment for children whose
disability would impede educational or physical development, a
program element that is unaffected by the income ceiling.
The CCS Program is not a comprehensive health insurance program,
but provides medical care, medical therapy and case management
services related to a child's specific qualifying condition.
CCS provides these children with a state-certified pediatric
specialist provider network, highly specialized treatment
plans and multi-disciplinary pediatric case management teams.
The CCS Program will only pay for medical services provided by
a CCS-approved provider. Less than 2% of California's
children have special health care needs that fall within the
jurisdiction of CCS. DHCS administers the CCS Program.
Larger counties operate their own CCS programs, while smaller
counties share the operation of their program with state CCS
regional offices in Sacramento, San Francisco, and Los
Angeles.
Not all CCS-eligible children are eligible for Medi-Cal. In the
two-plan and GMC counties, CCS children who are eligible for
Medi-Cal, but are not disabled, receive their Medi-Cal
services from a managed care plan and are mandated to enroll.
Services for CCS-eligible conditions remain the responsibility
of the CCS program or are "carved out."
SB 208
Page 27
19)SUPPORT IN CONCEPT . The California Association of Public
Hospitals and Health Systems (CAPH) writes, in support in
concept, that approval of the next waiver is critical to
California's public hospitals and encompasses their core
funding for essential outpatient and inpatient services
provided to Medi-Cal beneficiaries and the uninsured. CAPH
also writes in support of the inclusion of a county
alternative option in an organized system of care for SPDs but
states that key issues remain to be fully worked out such as
the definition of medical home and ensuring adequate rates.
CAPH further states that the sections relating to CEED should
be considered placeholder language and that further changes
will be needed particularly with regard to network structure,
scope of benefits, and definition of medical home.
Aging Services of California writes in support in concept but
expresses concerns that the timeframe for the implementation
process for SPDs into a managed care model is very aggressive
and details about integrating medical care, long-term care and
home and community-based services is unclear. Aging Services
of California also states that it is troubled by the lack of
mention of Adult Day Health Care.
20)SUPPORT IF AMENDED . The Children's Specialty Care Coalition
writes that although a number of their suggested amendments
were incorporated, the foremost concern is about children in
the SPD population and the recently stated intent to mandate
enrollment of disabled children into managed care. They
request that children be in the last phase of the enrollment
so that additional work can be done to develop contract and
reporting requirements. With regard to CCS pilots, they
request additional amendments including a process for opting
out of mandatory enrollment, approval from the Legislature
prior to any expansion, that the definition of medical home
meet the nationally accepted criteria set by the AAP and
additional specifications for the evaluation.
The AIDS Healthcare Foundation (AHF) supports the direction of
the proposed Section 1115 Waiver, however states that the
current version does not acknowledge or accommodate AHF's
unique position, potentially forcing AHF out of the HMO
market. AHF is request amendments to authorize Medi-Cal
beneficiaries with HIV/AIDS to choose a plan like AHF's and
ensure that a plan like AHFs can operate in a two-plan managed
SB 208
Page 28
care county and that the definition include a person with a
confirmed HIV positive test.
21)OPPOSE UNLESS AMENDED . Western Center on Law and Poverty
(WCLP) writes in opposition that the renewal of California's
1115 Medicaid waiver offers hope of investment in and
improvement of our Medi-Cal Program as well as an opportunity
to take early steps toward the promise of federal health
reform. WCLP states that despite these opportunities, this
bill does not go far enough to protect our most vulnerable
Californians during the transition. WCLP states longstanding
opposition to mandatory enrollment of SPDs into managed care
and further argues that although many of the suggested
consumer protections have been included additional protections
are needed. These include more specific requirements for
primary and specialty care providers as part of network
adequacy, providing SPD beneficiaries 90 days to make a
choice, a requirement of an in person assessment of new SPDs
within 30 days, the inclusion of a specific standard of care
for higher risk individuals, and a requirement to arrange
transportation. WCLP, with regard to mandatory enrollment of
dual eligibles argues that requiring dual eligibles to
mandatorily enroll in a managed care plan is a serious policy
decision with potential disastrous effects for dual eligibles
and allowing an opt-out on the Medicare side will not
necessarily address the coordination problems. WCLP further
states that DHCS should not be granted broad mandatory
enrollment authority and that DHCS should be required to
return for more specific enrollment authority once more
details about the pilots have been developed. With regard to
the coverage expansion, WCLP requests amendments to the
enrollment and renewal language requiring development of a
simple, working enrollment process and a screen for other
health coverage programs, more specific definitions and
standards for "health care homes," "enhanced health care
homes" and "care coordination" and at least minimal standards
both on network adequacy and timely access to care.
National Senior Citizens Law Center (NSCLC) writes in opposition
that there are inadequate requirements for stakeholder
involvement at the state level in the development of the dual
eligible pilot projects. NSCLC proposes amendments to ensure
that pilot enrollees do not lose access to any service or
appeal right those dual eligibles not in the pilot have access
to under Medi-Cal or Medicare and that a commitment to
SB 208
Page 29
reinvesting savings in the delivery system is explicit.
The Corporation for Supportive Housing (CSH) writes that data
from DHCS indicates that over 28,000 Medi-Cal beneficiaries
with disabilities were frequent users in 2007, with costs to
Medi-Cal of almost $40 million. According to CSH the Frequent
User Initiative that they housed oversaw funding for six
projects. By receiving "health care home" services, the
Frequent User Initiative participants who were Medi-Cal
beneficiaries experienced a 60% decrease in emergency room
visits and a 69% decrease in inpatient days, translating into
hospital costs avoided of $3,841 per beneficiary after one
year and $7,519 per beneficiary per year after two years. CSH
argues that California's 1115 waiver is the best vehicle to
support the interventions frequent user programs provide, but
that this bill fails to include provisions that would improve
health outcomes. CSH argues that based on evaluations of this
initiative, very intensive face-to-face care coordination was
a cornerstone of success in improving health outcomes and
decreasing costs among this population. CSH requests
amendments to require health plans to deliver higher levels of
services to individuals considered "high risk," in person
assessments, requirements to link high risk beneficiaries with
community resources, and a definition of medical home using
nationally recognized standards. CSH further requests
amendments to promote medical homes in counties without
managed care plans.
The Alzheimer's Association writes that while some of their
recommendations are reflected in this bill, they request
additional amendments. With regard to mandatory enrollment of
SPDs, they request an amendment requiring supplemental
criteria to the plan readiness that is specific to this
population, expedited transmission of historical utilization
data and in-person comprehensive assessment. They also
request mandatory reporting to the Legislature on outcomes.
The California Primary Care Association CPCA) requests that the
pending legislation make clear that it is the State's
intention for the customary Medicaid requirements, such as the
prospective payment system or PPS reimbursement to be in
effect come 2014, when coverage for the population under 133%
of poverty becomes mandatory (and the federal government
begins to pay 100% of the coverage). CPCA request similar
protections should be included for the subsidized populations
SB 208
Page 30
that will be transitioned to the new insurance exchange. CPCA
is also seeking contracting protections for the SPDs who will
be transitioning into Medi-Cal managed care.
The Congress of California Seniors adds, with regard to
mandatory enrollment of SPDs, that additional specificity is
needed with regard to coordinating services with HCBS and
objects to exceptions to the normal regulatory and contracting
processes.
22)CONCERNS. The Local Health Plans of California (LHPC) have
stated that while they have long supported the inclusion of
SPD in Medi-Cal managed care, they have concerns with this
bill. Specifically, LHPC states that the current language
would impose requirements for accessibility surveys and
standards for Medi-Cal providers that are unworkable and will
ultimately force much needed specialists providers away form
Medi-cal managed care. LHPC also expresses concerns with the
language that would impose across the board 2% reductions in
health plan rates for the entire health plan based upon
non-compliance with reporting data of a single provider.
The California Association of Health Plans (CAHP) also writes to
express concerns. Specifically, CAHP is concerned with the
provision that allows beneficiaries to request a specialist as
their primary care provider stating that some specialist that
are in high demand will be unable to provide the breadth of
services without depriving other patients of needed diagnosis
and treatment. CAHP also requests that the county alternative
be requires to meet he same Knox-Keene licensure standards.
Molina Healthcare also writes to express concerns. In
particular Molina states that effective plan performance
standards are already in place and that the enhanced standards
are not needed as the existing infrastructure is sufficient.
Molina also request the auto-assignment of SPD beneficiaries
who do not choose a plan should be based on quality and use of
safety net providers.
The California Hospital Association (CHA) writes with concerns
that transitioning dual eligibles to managed care plans will
require beneficiaries to change providers and may interfere
with timely access to care. CHA also adds that access to
transitional and rehabilitative care is more available for
patients covered by Medicare than Medi-Cal. CHA request that
SB 208
Page 31
the pilots be limited to two COHS and two other Medi-Cal
managed care program, excluding Los Angles County
23)RELATED LEGISLATION .
AB 342 (John A. Perez and Monning) is identical to SB 208. AB
342 is in the Senate Health Committee and is set for hearing
June 30th.
AB 2025 (De La Torre) requires DHCS to submit to CMS any
proposed amendments to the state plan that are necessary to
continue the hospital waiver. AB 2025 is on the Assembly
Appropriations Committee Suspense File.
24)PRIOR LEGISLATION .
AB 6 X4 requires the state to apply for a Health Care
Coordination, Improvement, and Long-Term Care Cost Containment
Waiver or Demonstration Project to be approved no later than
the conclusion of the current 1115 Medi-Cal Hospital/Uninsured
Care waiver, including enrolling beneficiaries in mandatory
managed care.
SB 1332 (Negrete McLeod) of 2008, would have established a
mandatory enrollment Medi-Cal managed care pilot program, and
would have authorized DHCS to require that in the San
Bernardino and Riverside counties, SPDs be assigned as
mandatory enrollees to new or existing managed care plans, as
specified. SB 1332 was held on the Senate Appropriations
Committee Suspense File.
AB 1 X1 (Nunez) of 2008, among its many provisions, would have
expanded eligibility for the Medi-Cal and Healthy Families
Programs, and expressed intent that a portion of the financing
for the bill's provisions would have come from a variety of
sources, including revenues from counties. AB 1 X1 failed
passage by the Senate Health Committee.
AB 752 (Dymally), Chapter 544 Statutes of 2007, allows DHCS to
continue distributing stabilization funding to designated
public hospitals for the three remaining project years of the
Medi-Cal Hospital/Uninsured Hospital Care Demonstration
Project Act and sets forth a distribution methodology for
stabilization funding that may be available in 2007-08 and
subsequent project years for public hospital.
SB 208
Page 32
AB 1920 (Chan), Chapter 270, Statutes of 2006, extends for a
second year, the methodology for distributing stabilization
funding to DPHs and makes other clarifying changes with
respect to payments for DPHs.
SB 1448 (Kuehl), Chapter 76, Statutes of 2006, established the
Health Care Coverage Act, which establishes a health care
coverage initiative as required in the waiver Special Terms
and Conditions.
AB 2607 (De La Torre) of 2006, was substantially similar to SB
1332. AB 2607 was held on the Senate Appropriations Committee
Suspense File.
SB 1100 (Perata and Ducheny), Chapter 560, Statutes of 2005,
provides the framework for implementing the new federal
hospital finance waiver, including establishing a new
mechanism for funding of safety-net hospitals.
AB 2979 (Richman) of 2006, was an administration sponsored bill
that would have authorized DHCS to implement two Medi-Cal
managed care pilot projects that would require mandatory
enrollment for SPDs. AB 2979 was held on the Senate
Appropriations Committee Suspense File.
AB 131 (Committee on Budget), Chapter 80, Statutes of 2005,
requires DHCS to evaluate the readiness of a Medi-Cal managed
care plan to commence operations to expand the geographic
areas they cover, and also requires DHCS to provide to the
fiscal and policy committees of the Legislature quarterly
updates, regarding activities to improve the Medi-Cal managed
care program and to expand to new counties, as directed by the
Budget Act of 2005.
25)POLICY QUESTIONS . This bill and AB 342 (John A. Perez and
Monning) are identical and incorporate the authors' revisions
to the trailer bill language proposed by DHCS, based on
written submissions and ongoing meetings with DHCS and various
stakeholders. As this process proceeds additional amendments
are expected. In addition, there are a number of issues that
have not yet been addressed that are part of the waiver
submission and may also require implementing legislation. The
Schwarzenegger Administration has begun the process of
obtaining CMS approval and CMS may also communicate
SB 208
Page 33
requirements either as Special Terms and Conditions or other
verbal or oral communications.
There are a number of outstanding issues, controversies and
areas needing further clarification. These include:
a) A definition or set of criteria for a "Medical Home" in
the CEED proposal.
b) The proposal to pilot organized systems of care for dual
eligibles has not been the subject of stakeholder or public
input to the degree that other proposals have as the work
group was convened on a later time line. There are also
minimal details in the proposal, particularly with regard
to the interaction with other long-term care and home and
community based care services. The authority provided to
DHCS is very broad and does not require termination if
there are negative outcomes.
c) The CCS pilot projects language does not clearly specify
the number of pilots that are authorized.
d) There is disagreement among stakeholders regarding the
initial assessment of an SPD who is enrolled into a plan
including who is responsible, when it is to be done and
whether it must be in-person.
e) There are no details regarding the financing mechanisms.
f) There are no provisions relating to the behavioral and
mental health needs of enrollees
REGISTERED SUPPORT / OPPOSITION :
Support in concept
Aging services of California
California Association of Public Hospitals and Health Systems
Support if amended
AIDS Healthcare Foundation
Children's Specialty Care Coalition
Amendments requested
California Children's Hospital Association
SB 208
Page 34
Oppose unless amended
AARP
Alzheimer's Association
California Association of Public Authorities
California Primary Care Association
Congress of California Seniors
Corporation for Supportive Housing
Disability Rights California
National Senior Citizens Law Center
Western Center on Law and Poverty
Concerns
California Association of Health Plans
Local Health Plans of California
Molina Healthcare
Private Essential Access Community Hospitals
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097