BILL ANALYSIS �
AB 301
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Date of Hearing: March 29, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 301 (Pan) - As Introduced: February 9, 2011
SUBJECT : Medi-Cal: managed care.
SUMMARY : Extends the sunset date, from January 1, 2012 to
January 1, 2018, on the prohibition on incorporating California
Children's Services (CCS) covered services in a Medi-Cal managed
care (MCMC) contract.
EXISTING LAW :
1)Establishes the Medi-Cal Program, administered by Department
of Health Care Services (DHCS), which provides comprehensive
health benefits to low-income children, their parents or
caretaker relatives, pregnant women, elderly, blind or
disabled persons, nursing home residents, and refugees who
meet specified eligibility criteria.
2)Establishes the CCS Program to provide specified medical care
and therapy services to children with eligible conditions.
3)Authorizes the state to contract for comprehensive managed
health care services for Medi-Cal beneficiaries and requires
mandatory enrollment of beneficiaries in specified eligibility
categories.
4)Prohibits, until January 1, 2012, CCS covered services from
being incorporated into MCMC contracts, except in county
organized health systems (COHS) plans in the counties of San
Mateo, Santa Barbara, Solano, Yolo, Marin, and Napa.
5)Requires DHCS to seek proposals to establish models of
organized health care delivery for Medi-Cal eligible children
with CCS-eligible conditions and conduct an evaluation.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the CCS
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Program has an important partnership with managed care plans
that protects children with certain complex and catastrophic
health conditions. Children with serious and chronic health
conditions such as congenital heart disease, cancer, cleft
palate, premature birth, and other life-threatening conditions
depend on the CCS Program for high quality care. The author
argues that this bill is necessary because CCS is an organized
delivery system with quality standards for providers that
ensure critically sick children are referred to the
appropriate pediatric trained provider and require physicians,
hospitals, and other providers meet strict quality and volume
standards in order to participate in the program.
According to the author, the 2018 extension date proposed by
this bill was chosen because DHCS will begin four CCS pilot
projects in 2012 that are expected to last for five years.
The pilots are estimated to end in 2017, and the state would
need at least one more year to look at the results of the
evaluation of the pilots and determine the next phase for the
CCS delivery system. This is important because four different
models will be piloted and careful decisions need to be made
about the future of CCS based on the results of the pilots.
2)BACKGROUND . Originally established in 1927, the CCS Program
provides diagnostic and treatment services, medical case
management, and physical and occupational therapy services to
children under age 21 with CCS-eligible medical conditions.
Examples of CCS-eligible conditions include, but are not
limited to, chronic medical conditions such as cystic
fibrosis, hemophilia, cerebral palsy, heart disease, cancer,
traumatic injuries, and certain infectious diseases. CCS also
provides medical therapy services that are delivered at public
schools.
The CCS Program is administered as a partnership between
county health departments and DHCS. As of January, 2010,
there were 178,530 children enrolled in CCS; 76% of which were
also eligible for Medi-Cal. The Medi-Cal Program reimburses
for their care. Of the remainder, 14% were also eligible for
the Healthy Families Program and 10% were CCS-only or other
insurance.
CCS is a statewide program. In counties with populations
greater than 200,000 (independent counties), county staff
perform all case management activities for eligible children
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residing within their county. This includes determining all
phases of program eligibility, evaluating needs for specific
services, determining the appropriate provider(s), and
authorizing for medically necessary care. For counties with
populations under 200,000 (dependent counties), the Children's
Medical Services Branch of DHCS provides medical case
management and eligibility and benefits determination through
its regional offices located in Sacramento, San Francisco, and
Los Angeles. CCS authorizes and pays for specific medical
services and equipment provided by CCS-approved specialists.
3)MEDI-CAL MANAGED CARE . Mandatory enrollment of families and
children into a Medi-Cal managed care full risk plan was
authorized as part of the state budget of 1992. In
implementing this mandatory enrollment, the former Department
of Health Services (now DHCS) released a strategic plan in
1993. With regard to CCS, the Strategic Plan stated that the
department desired Medi-Cal children participating in managed
care to continue to have direct access to the level of highly
specialized services provided under the CCS Program. In order
to assure that CCS-eligible children received the benefit of
fully-coordinated care, it would be the responsibility of the
managed care plan to identify children with CCS-eligible
conditions, arrange for referral to the local CCS office and
coordinate the provision of care. CCS services would continue
to be provided through the CCS program while children would be
mandatorily enrolled in a health plan in the counties covered
by the managed care expansion for purposes of receiving
primary care and other services unrelated to the conditions
being treated by the CCS Program.
As of October 2010, managed care covered about 4.1 million
Medi-Cal enrollees in 25 counties with three different models.
The two-plan model covers about 2.7 million of the state's
7.6 million Medi-Cal recipients in 12 counties. Geographic
Managed Care (GMC) serves about 420,000 in two counties, San
Diego and Sacramento. COHS plans serve about 900,000
beneficiaries through five health plans in 11 counties.
Beginning June 1, 2011, DHCS will be implementing mandatory
enrollment of seniors and persons with disabilities in the 12
two-pan and two GMC counties. This includes additional
CCS-eligible children who are in the disabled category.
4)CCS "CARVE-OUT ." Consistent with the Strategic Plan, SB
1371(Bergeson), Chapter 917, Statutes of 1994 was enacted to
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provide that CCS-covered services, for CCS-eligible children
would not be incorporated into managed care and would be
provided and paid for on a Fee-for Service basis through the
CCS Program for three years. Also in line with the Strategic
Plan Strategic Plan, SB 1371 authorized pilot projects to test
alternative managed care models tailored to the special health
care needs of CCS Program, including using different payment
and incentive models. No pilot projects were ever approved.
The "carve-out" has been extended repeatedly since then, usually
for three or four year periods. The first extension allowed
the COHS in the counties of San Mateo, Santa Barbara, Solano,
and Napa to include CCS services ("carve-in").
5)SECTION 1115 MEDI-CAL DEMONSTRATION/PILOT PROJECT WAIVER .
California recently received federal approval for a new five
year Section 1115 Medi-Cal Demonstration Project Waiver,
entitled "A Bridge to Reform." Section 1115 of the Social
Security Act authorizes the federal Secretary of Health and
Human Services 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. This waiver is a
successor to the Hospital Financing /Uninsured Waiver that was
approved in 2005 and includes a continuation of the hospital
financing provisions from the 2005 waiver. Consistent with
the mandate of AB 6 X4 (Evans), Chapter 6, Statutes of 2009
Fourth Extraordinary Session, a primary focus of the successor
demonstration project is the coordination and integration of
services. As required by AB 6 X4, and in preparation of the
waiver request, DHCS established a stakeholder process. The
40-plus member stakeholder advisory committee (SAC) has been
holding public meetings since December 2009. DHCS also
appointed five technical workgroups, to advise and assist,
including a Children with Special Health Care Needs Technical
Workgroup.
6)CCS PILOTS . According to DHCS, the need to submit a new
waiver application presented an opportunity to transform the
delivery of health care to children with significant health
care needs enrolled in the CCS Program and to provide services
in a more efficient manner that improves coordination and
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quality of care through integration of delivery systems, uses
and supports medical homes, and provides incentives for
specialty and non-specialty care. In preparation for the
redesign process, the California HealthCare Foundation (CHCF),
in the fall of 2009, engaged Health Management Associates to
provide technical assistance and explore, in discussion with a
large group of stakeholders, the issues that must be addressed
in the process. The discussion was focused on exploring
potential options to redesign the CCS Program and see if a new
service delivery model would improve the CCS Program and meet
both stakeholder and the state's needs.
Four potential models for CCS pilot projects emerged from the
CCS Technical Working Group and the SAC:
a) Existing Medi-Cal Managed Care Plans (MCO);
b) Specialty Health Care Plan (SHCP);
c) Enhanced Primary Care Case Management (EPCCM), and
d)Provider-based Accountable Care Organization (ACO).
DHCS has released two draft Request for Proposals (RFPs), one in
July 2010 and one in January 2011. Fourteen Letters of Intent
were received in response to the July RFP. DHCS plans to
release a final RFP in March 2011 with responses due in May.
Decisions would be announced in July 2011 and operations
planned to begin in January 2012.
SB 208 (Steinberg), Chapter 714, Statutes of 2010, the
legislation that implemented the 2010 renewal waiver required
DHCS to seek proposals to test these models either statewide
or on a more limited geographic basis and not limited to the
provision of CCS services. DHCS is authorized to require
enrollment. Payment may be on a capitated or risk-based
methodology. DHCS is required to conduct an evaluation to
assess the effectiveness of the models. SB 208 requires the
models to be established by January 1, 2012 and requires they
be selected from among the models developed by the Children
with Special Health Care Needs Technical Workgroup. There is
no specified number of pilots and no ending date. The models
must meet specified standards including establishing a network
that includes CCS-approved providers and maintain the current
system of regionalized pediatric specialty and subspecialty
services. SB 208 also requires DHCS to conduct a simultaneous
evaluation, to assess the effectiveness of each model in
improving the delivery of health care services for these
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children and specifies the measures for the evaluation.
According to DHCS, CHCF and the Lucile Packard Foundation for
Children's Health are assisting with evaluation efforts. The
evaluation will provide information about whether various
models help children or not, but instead of a classic
case-control study will be providing an evaluation in
real-time. CCS clients who are also identified as Medi-Cal
Seniors and Persons with Disabilities beneficiaries will not
be mandatorily enrolled in MCMC at least until the
geographical locations for the CCS pilots have been
identified.
7)PREVIOUS LEGISLATION .
a) AB 2379 (Chan), Chapter 333, Statutes of 2007, extended
the sunset date from August 1, 2008, to January 1, 2012 on
the CCS carve-out.
b) SB 1103 (Committee on Budget and Fiscal Review),
Chapter 228, Statutes of 2004, extended the sunset on the
carve-out from August 1, 2005 to September 1, 2008.
c) AB 3049 (Committee on Health), Chapter 536, Statutes of
2002, extended the sunset on the carve-out from August 1,
2003 to August 1, 2005 and added COHS in Yolo and Marin
counties to the list of exceptions to the carve-out.
d) AB 1107 (Cedillo), Chapter 146, Statutes of 1999,
extended the sunset on the carve-out until August 1, 2003.
e) AB 469 (Papan) of 1999 would have allowed Medi-Cal
beneficiaries in the CCS Program to disenroll from
mandatory managed care if certain conditions are met. AB
469 was vetoed by then Governor Davis.
f) SB 391 (Solis), Chapter 294, Statutes of 1997, extended
the CCS carve-out until August 1, 2000, except for
contracts entered into for COHS in the counties of San
Mateo, Santa Barbara, Solano, and Napa.
g) SB 1371 required that CCS-eligible services be
"carved-out" of any Medi-Cal managed care contract until
three years after the effective date of the contract.
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8)SUPPPORT . The sponsors of this bill, the Children's Specialty
Care Coalition, point out that the CCS Program is currently
developing pilot projects to test different models of care for
children with serious and chronic health conditions.
According to the sponsors, there are four models under
consideration: MCO, SHCP, EPCCM, and ACO. The sponsors argue
that it would be premature to end a carve-out that has been in
place for nearly twenty years until the pilot projects are
completed, evaluated and sound decisions can be made about the
best way to deliver medical care for children with serious,
life, threatening and chronic conditions. In further support,
the sponsors point out that during the 1990's, as California
began enrolling low-income families into managed care,
policymakers became concerned that children in CCS would fail
to receive the same quality of care as they did through CCS.
As a result the CCS carve-out became law in 1994.
The California Children's Hospital Association writes in support
that this carve-out has enabled CCS to maintain an integrated,
statewide system of specialized health services for children
with serious and catastrophic health conditions. This
important carve-out has been extended four times by the
Legislature. The supporters write that the State is currently
developing pilot projects to test different systems of care
for CCS children and the children's hospitals have been in
discussion with the State about the possibility of
participation in the pilots. The supporters argue the RFP for
the demonstrations, which the State has said will start
January 1, 2012, has not been released and as the
demonstrations are said to run up to five years, ending the
carve-out before 2018 would be premature.
REGISTERED SUPPORT / OPPOSITION :
Support
Children's Specialty Care Coalition (sponsor)
American Federation of State, County and Municipal Employees
(AFSCME)
California Children's Health Initiative
California Children's Hospital Association
California Medical Association
California Primary Care Association
Children's Hospital & Research Center Oakland
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Children's Hospital Central California
Children's Hospital Los Angeles
CHOC Children's Hospital Orange County
Hemophilia Council of California
Lucile Packard Children's Hospital
PICO California
The 100% Campaign (The Children's Partnership, Children NOW,
Children's Defense Fund-California
United Ways of California
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097