BILL ANALYSIS Ó
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 301
A
AUTHOR: Pan
B
AMENDED: As Introduced
HEARING DATE: June 8, 2011
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CONSULTANT:
0
Trueworthy
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SUBJECT
Medi-Cal: managed care
SUMMARY
Extends the sunset date from January 1, 2012 to January 1,
2018, on the prohibition of services covered by the
California Children's Services (CCS) program from being
incorporated into a Medi-Cal managed care (MCMC) contract
entered into after August 1, 1994.
CHANGES TO EXISTING LAW
Existing law:
Establishes the Medi-Cal Program, administered by the
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.
Establishes the CCS program to provide specified medical
care and therapy services to children with eligible
conditions.
Continued---
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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 in managed care plans.
Prohibits, until January 1, 2012, CCS covered services from
being incorporated into MCMC contracts, except for
contracts in the county organized health systems (COHS)
plans.
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 of the models.
This bill:
Prohibits, until January 1, 2018, CCS covered services from
being incorporated into MCMC contracts, except for
contracts in COHS plans.
FISCAL IMPACT
The Assembly Appropriations Committee analysis of AB 301
states that DHCS indicates there will be no state fiscal
effect, as the bill continues current practice. The
analysis indicates it is possible that by removing the
prohibition and authorizing CCS services to be integrated
into managed care contracts, or provided through alternate
systems of care, cost savings would be provided to the
state, as compared with current practice. However, at this
time there is no evidence as to the fiscal or programmatic
effects of removing the prohibition.
BACKGROUND AND DISCUSSION
According to the author, the current sunset for the CCS
carve-out is set to expire on January 1, 2012, and AB 301
will extend the sunset date until January 1, 2018. The CCS
program is currently developing pilot projects to test
different models of care and the program will be
permanently restructured based on the evaluations of these
pilots at the end of the Section 1115 Medi-Cal
Demonstration Project Waiver (Waiver) in the fall of 2015.
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The author argues it would be premature to end a carve-out
that has been in place for nearly 20 years until these
pilot projects are completed and evaluated.
CCS Program
Since 1927, the CCS program has been providing 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 cystic
fibrosis, hemophilia, cerebral palsy, heart disease,
cancer, and traumatic injuries. Since California began
enrolling low-income families into managed care, CCS
services have been carved-out of MCMC.
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 percent of
who were also eligible for Medi-Cal, in which Medi-Cal
reimburses the cost of their care. Of the remainder, 14
percent were also eligible for the Healthy Families
Program, and 10 percent were eligible for CCS only or had
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 residing within their county. This includes
determining all phases of program eligibility, evaluating
needs for specific services, determining the appropriate
provider(s), and authorizing medically necessary care. For
counties with populations under 200,000 (dependent
counties), the Children's Medical Services Branch (CMS) 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.
CCS Carve-out
SB 1371(Bergeson), Chapter 917, Statutes of 1994, provided
that CCS-covered services for CCS-eligible children would
not be incorporated into MCMC and would instead be provided
and paid for on a fee-for service basis through the CCS
program, for three years. The "carve-out" has been
extended since then, usually for three or four year period
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intervals. The first extension allowed the COHS in the
counties of San Mateo, Santa Barbara, Solano, and Napa to
include CCS services ("carve-in"). To date, the only
counties in which CCS services are included Medi-Cal
managed care contracts are these COHS counties.
Section 1115 Medi-Cal Demonstration Project Waiver and CCS
Pilots
In 2010, California received federal approval for a new
five-year Waiver. 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 for coverage expansions without complying
with all of the federal Medicaid rules if they can
demonstrate cost neutrality to the federal government.
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 manner that improves coordination and quality
of care, better integrates services, uses and supports
medical homes, and provides incentives for specialty and
non-specialty care.
In preparation for the redesign process, the California
Health Care Foundation (CHCF), engaged Health Management
Associates (HMA) 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 to 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 the CCS pilot projects emerged:
a) Existing Medi-Cal Managed Care Plan (MCO);
b) Specialty Health Care Plan (SHCP);
c) Enhanced Primary Care Case Management (EPCCM), and
d)Provider-based Accountable Care Organization (ACO).
SB 208 (Steinberg), Chapter 714, Statutes of 2010, the
legislation that implemented the 2010 waiver, requires DHCS
to seek proposals to test the identified models, either
statewide or on a more limited geographic basis, and
requires DHCS to conduct an evaluation to assess the
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effectiveness of the models. SB 208 further requires the
models be established by January 1, 2012. The request for
proposal issued by DHCS for the CCS pilots states that at
the end of the five-year demonstration period, or 2015,
decisions can be made on permanent restructuring of the CCS
program design and delivery systems. SB 208 also requires
the models to meet specified standards, including
establishing a network that includes CCS-approved providers
and maintains the current system of regionalized pediatric
specialty and subspecialty services. SB 208 requires DHCS
to assess the effectiveness of each model in improving the
delivery of health care services for these children and
specifies the measures for the evaluation.
Prior legislation
AB 2379 (Chan), Chapter 333, Statutes of 2006, extends the
sunset date from August 1, 2008, to January 1, 2012 on the
CCS carve-out.
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.
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.
AB 1107 (Cedillo), Chapter 146, Statutes of 1999, extended
the sunset on the carve-out until August 1, 2003.
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.
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.
SB 1371 (Bergeson), Chapter 917, Statutes of 1994, created
the carve-out provision that CCS-eligible services be
"carved-out" of any MCMC contract upon three years of the
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effective date of the contract.
Arguments in support
Supporters write that extending the carve-out until January
1, 2018, will allow vulnerable children with complex
medical conditions and their families to continue to get
the care and support they need. Supporters state that
children enrolled in CCS have serious medical conditions
that demand coordinated care, quality assurance, and case
management. AB 301 preserves a system of care that
protects 185,000 of California's children. Supporters
write that the CCS program is developing pilot projects to
test various models of care for children with serious and
chronic health conditions. Until these pilot projects are
completed and evaluated, to ensure the effective delivery
of medical care for these severely ill or disabled
children, it would be premature to the end the carve-out
for CCS services.
PRIOR ACTIONS
Assembly Health: 19- 0
Assembly Appropriations:15- 0
Assembly Floor: 75- 0
COMMENTS
1. Sunset date. AB 301 extends the CCS carve-out until
January 1, 2018; however, the CCS pilots are set to run
through the end of the Waiver, which is expected to be fall
2015. Committee staff recommend amending the sunset date
to July 1 2016, to better coincide with the end of the
pilot and the budget process to allow for funding for any
new model that may be developed from the pilot evaluations.
A July 1 2016 date also allows time for any needed
legislation as a result of the pilot evaluations.
POSITIONS
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Support: 100% Campaign
American Academy of Pediatrics, California
American Federation of State, County and
Municipal Employees
California Children's Health Initiative
California Children's Hospital Association
California Chiropractic Association
California Medical Association
California Primary Care Association
Children's Advocacy Institute
Children's Specialty Care Coalition
Hemophilia Council of California
Lucile Packard Children's Hospital
Occupational Therapy Association of California
PICO California
United Ways of California
Oppose: None on file.
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