BILL ANALYSIS Ó AB 301 Page 1 Date of Hearing: April 13, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 301 (Pan) - As Introduced: February 9, 2011 Policy Committee: HealthVote:19-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill would extend, from January 1, 2012 to January 1, 2018, the sunset date for the prohibition on California Children's Services (CCS) program from being incorporated into a Medi-Cal managed care contract. The prohibition exempts contracts entered into for county organized health systems or a regional health authority in San Mateo, Santa Barbara, Solano, Yolo, Marin, and Napa counties. FISCAL EFFECT 1)DHCS indicates no state fiscal effect, as this continues current practice. 2)It is possible that removing the prohibition and authorizing CCS services to be integrated into managed care contracts or provided through alternate systems of care would provide cost savings to the state as compared with current practice. However, at this time there is no evidence as to the fiscal nor programmatic effects of removing the prohibition. COMMENTS 1)Rationale . This bill is jointly sponsored by the Children's Specialty Care Coalition, the California Children's Hospital Association, and the American Academy of Pediatrics, who argue that since 1994, there has been a bipartisan effort to protect children with catastrophic and chronic health conditions in California. The sponsors state that the carve-out maintains CCS as a separate organized system that meets the needs of infants, children, and teens with catastrophic and chronic AB 301 Page 2 medical conditions. 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. 3)CCS Carve-out . Existing law prohibits CCS-covered services from being incorporated into a Medi-Cal managed care contract entered into after August 1, 1994, until January 1, 2012, except with respect to contracts entered into with county organized health systems in San Mateo, Santa Barbara, Solano, Yolo, Marin, and Napa counties. During the 1990s, as California began enrolling increasing numbers of Medi-Cal beneficiaries (including children) into managed care plans, providers and children's advocates became concerned that CCS-eligible children would fail to receive the same quality of care as they did through CCS. As a result, in 1994, a "carve-out" for CCS-eligible children, who are enrolled in Medi-Cal managed care, became law, requiring these children to continue receiving highly specialized care for their CCS-eligible condition through CCS, while receiving preventive and general care through a managed care plan. The law contained a sunset that has since been extended several times. 4)CCS Redesign . While the CCS-carve out has been effective in providing access to high-quality pediatric specialty care for eligible children, according to DHCS the carve-out has been identified by an array of stakeholders as a barrier to effective care coordination. Furthermore, a recent independent review identified a broad array of other program challenges, including significant program variation across counties, a complex and burdensome financial structure, provider access problems, and an inefficient authorization process for services. DHCS states that the recent development of a new Section 1115 Medi-Cal Demonstration Project Waiver offered an opportunity AB 301 Page 3 to redesign the CCS program and improve care for children with special health care needs. As part of the waiver development, a technical work group appointed by DHCS identified four potential models for pilot projects to test alternate systems of care for the CCS program: (a) existing Medi-Cal managed care plans, (b) a specialty health care plan, (c) Enhanced Primary Care Case Management, and (d) a Provider-based Accountable Care Organization. SB 208 (Steinberg), Chapter 714, Statutes of 2010, required DHCS to seek proposals to test and evaluate these models. DHCS is currently seeking comments on a draft RFP for pilot projects, with the intent to begin implementation of the projects in 2012. The bill's sponsors, as well as DHCS, indicate that passage of this legislation would allow the CCS pilot demonstration projects to constructively inform the redesign of the CCS Program and provide a sound evidence base for instituting changes to the CCS Program. 5)Related Legislation . 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. Several other bills prior to AB 2379 have also extended the sunset. Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081