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 








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            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 








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            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