BILL ANALYSIS Ó
SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Mark Leno, Chair
Bill No: AB 1468
Author: Committee on Budget
As Amended: June 25, 2012
Consultant: Michelle Baass
Fiscal: Yes
Hearing Date: June 26, 2012
Subject: Budget Act of 2012 - Duals Demonstration Project
Summary: This bill implements the Duals Demonstration
Pilot Projects. These demonstration projects will achieve
$611.5 million GF savings in 2012-13.
Dual Demonstration Projects:
Expands, from four to eight, the number of counties
in which dual demonstration sites may be established.
Current law authorizes the Department of Health Care
Services to establish dual demonstration projects in
up to four counties to enable dual beneficiaries, who
are eligible for both Medicare and Medicaid services,
to receive a continuum of services that maximizes
coordination of benefits between Medicare and Medicaid
programs.
Provides that implementation of the demonstration
project in up to eight counties may not begin sooner
than March 1, 2013. Requires that the department
director consult with the Legislature, federal
government, and stakeholders when determining the
implementation date.
States legislative intent for the demonstration
project to expand statewide within three years of the
start of the demonstration project. Requires that
expansion beyond the initial eight counties is
contingent upon statutory authorization and a
subsequent budget appropriation.
Includes additional goals for the demonstration
project:
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o Coordinate access to necessary and
appropriate behavioral health services, including
mental health and substance use disorders
services.
o Improve the quality of care for dual
eligible beneficiaries.
o Promote a system that is both sustainable
and person- and family-centered by providing dual
eligible beneficiaries with timely access to
appropriate, coordinated health care services and
community resources that enable them to attain or
maintain personal health goals.
Requires the department to enter into a memorandum
of understanding with the federal government in
developing the process for selecting, financing,
monitoring, and evaluating the models for the
demonstration project. Requires the completed
memorandum of understanding to be provided to the
Legislature and posted on the department's Internet
Web site.
Requires dual beneficiaries to be enrolled into a
demonstration site unless the beneficiary makes an
affirmative choice to opt out of enrollment or is
enrolled in the Program of All-Inclusive Care for the
Elderly (PACE) or an AIDS Healthcare Foundation (AHF)
plan, as specified.
Allows beneficiaries who meet the requirements for
PACE or AHF to select either of these managed care
health plans for their Medicare and Medi-Cal benefits
if one is available in that county. Requires that in
areas where a PACE plan is available, the PACE plan
shall be presented as an enrollment option, included
in all enrollment materials, enrollment assistance
programs, and outreach programs related to the
demonstration project, and made available to
beneficiaries whenever enrollment choices and options
are presented.
Requires that dual beneficiaries who opt out of
enrollment into a demonstration site may choose to
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remain enrolled in fee-for-service Medicare or a
Medicare Advantage plan for their Medicare benefits,
but shall be mandatorily enrolled into a Medi-Cal
managed care health plan, with exceptions.
Allows, to the extent federal approval is obtained,
the department to require that any beneficiary, upon
enrollment in a demonstration site, to remain enrolled
in the Medicare portion of the demonstration project
on a mandatory basis for six months from the date of
initial enrollment. Includes criteria for which a
beneficiary may continue receiving services from an
out-of-network Medicare provider for primary and
specialty care services. Requires the department to
develop a process to inform providers and
beneficiaries of the availability of continuity of
services from an existing provider and ensure that the
beneficiary continues to receive services without
interruption.
Provides the following exemptions from enrollment
in the dual demonstration project:
o The beneficiary has a prior diagnosis of
end-stage renal disease. The exemption does not
apply to beneficiaries diagnosed with end-stage
renal disease subsequent to enrollment in the
demonstration project.
o The beneficiary has other health
coverage, as specified.
o The beneficiary is enrolled in a home-
and community-based waiver, as specified, except
for persons enrolled in Community-Based Adult
Services or Multipurpose Senior Services Program
services.
o The beneficiary is receiving services
through a regional center or state developmental
center.
o The beneficiary resides in a geographic
area or Zip Code not included in managed care.
o The beneficiary resides in one of the
Veterans' Homes of California.
Allows beneficiaries who have been diagnosed with
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HIV/AIDS to opt out of the demonstration project at
the beginning of any month.
Requires that for the 2013 calendar year, the
department shall offer federal "Medicare Improvements
for Patient and Providers Act of 2008" compliant
contracts to existing Medicare Advantage Special Needs
Plans (D-SNP plans) to continue to provide Medicare
benefits to their enrollees in their service areas as
approved on January 1, 2012. Requires that in the
2013 calendar year, beneficiaries in Medicare
Advantage and D-SNP plans shall be exempt from
mandatory enrollment in the demonstration project, but
may voluntarily choose to enroll in the demonstration
project.
Requires that for the 2013 calendar year,
demonstration sites shall not offer to enroll dual
beneficiaries eligible for the demonstration project
into the demonstration site's D-SNP.
Requires that the department shall not terminate
contracts in a demonstration site with AHF or PACE,
except as provided in the contract or pursuant to
state or federal law.
Requires that to the extent permitted under the
demonstration, demonstration sites shall pay
noncontracted hospitals prevailing Medicare
fee-for-service rates for traditionally Medicare
covered benefits and prevailing Medi-Cal
fee-for-service rates for traditionally Medi-Cal
covered benefits.
Requires the department, in consultation with the
hospital industry, to seek federal approval to ensure
that Medicare supplemental payments for direct
graduate medical education and Medicare add-on
payments, including indirect medical education and
disproportionate share hospital adjustments continue
to be made available to hospitals for services
provided under the demonstration. Requires the
department to seek federal approval to continue these
payments either outside the capitation rates or, if
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contained within the capitation rates, and to the
extent permitted under the demonstration requiring
demonstration sites to provide this reimbursement to
hospitals.
Requires that to the extent allowed under the
demonstration, the default rate for non-contracting
providers of physician services shall be the
prevailing Medicare fee schedule for services covered
by the Medicare program and the prevailing Medi-Cal
fee schedule for services covered by the Medi-Cal
program.
Includes requirements for payments to nursing
facility services.
Requires the department to enter into an
interagency agreement with the Department of Managed
Health Care to perform some or all of the department's
oversight and readiness review activities, including
providing consumer assistance to beneficiaries and
conducting financial audits, medical surveys, and a
review of the adequacy of provider networks of the
managed care plans participating in the demonstration.
Requires the department to report to the
Legislature on the enrollment status, quality
measures, and state costs related to the
demonstration.
Requires the department to develop, in consultation
with the federal government and stakeholders, quality
and fiscal measures for health plans. Requires the
department to require health plans to submit Medicare
and Medi-Cal data to determine the results of these
measures. Requires the department to publish the
results of these measures, including via posting on
the department's Internet Web site, on a quarterly
basis.
Enrollment of Dual Beneficiaries into Medi-Cal Managed
Care:
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Requires that Medi-Cal beneficiaries who have dual
eligibility in Medi-Cal and the Medicare Program be
assigned as mandatory enrollees into new or existing
Medi-Cal managed care health plans for their Medi-Cal
benefits in counties participating in the dual
demonstration projects only.
Exempts dual beneficiaries from mandatory
enrollment in a managed care if the dual beneficiary:
o Has other health coverage, except in
counties with county organized health systems.
o Receives services through a foster care
program.
o Is under 21 years of age.
o Is enrolled in a home- and
community-based waiver, as specified, except for
persons enrolled in Community-Based Adult
Services, Multipurpose Senior Services Program
services, or a Section 1915(c) waiver for persons
with developmental disabilities.
o Is not eligible for enrollment in managed
care plans for medically necessary reasons
determined by the department.
o Resides in one of the Veterans Homes of
California.
o Is enrolled in PACE or AHF.
Allows a beneficiary who has been diagnosed with
HIV/AIDS from opting out of managed care enrollment at
the beginning of any month.
Requires that to the extent that mandatory
enrollment is required by the department, an
enrollee's access to fee-for-service Medi-Cal shall
not be terminated until the enrollee has selected or
been assigned to a managed care health plan.
Requires the department to suspend new enrollment
of dual beneficiaries into a managed care plan if it
determines that the managed care plan does not have
sufficient primary or specialty care providers and
long-term service and supports to meet the needs of
its enrollees.
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Allows the department to implement an
intergovernmental transfer arrangement with a public
entity that elects to transfer public funds to the
state to be used solely as the nonfederal share of
Medi-Cal payments to managed care plans for the
provision of services to dual beneficiaries.
Requires that a managed care plan that contracts
with the department for the provision of services
shall ensure that beneficiaries have access to the
same categories of licensed providers that are
available under Medicare fee for service. Provides
that nothing shall prevent a managed care plan from
contracting with selected providers within a category
of licensure.
Long-Term Services and Supports (LTSS) Integration:
Requires that, no sooner than March 1, 2013, all
Medi-Cal LTSS services, as defined, shall be services
that are covered under managed care plan contracts and
shall be available only through managed care plans to
beneficiaries residing in counties participating in
the dual demonstration counties only.
Defines LTSS services to include In-Home Supportive
Services (IHSS), Community-Based Adult Services
(CBAS), Multipurpose Senior Services Program (MSSP),
and skilled nursing facility services.
Defines "home- and community-based services (HCBS)
benefits" that may be covered services that are
provided under managed care plan contracts for
beneficiaries residing in counties participating in
the dual demonstration counties.
Requires that beneficiaries who are not mandatorily
enrolled in managed care pursuant to current law
exemptions or specified new exemptions are not
required to receive LTSS, other than CBAS, through a
managed care plan.
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Exempts beneficiaries from receiving LTSS services
through managed care plans who meet the following:
o Has other health coverage, except in
counties with county organized health systems.
o Receives services through a foster care
program.
o Is under 21 years of age.
o Is enrolled in a home- and
community-based waiver, as specified, except for
persons enrolled in Community-Based Adult
Services, Multipurpose Senior Services Program
services, or a Section 1915(c) waiver for persons
with developmental disabilities.
o Is not eligible for enrollment in managed
care plans for medically necessary reasons
determined by the department.
o Resides in one of the Veterans Homes of
California.
o Is enrolled in PACE or AHF.
Allows the department to exempt other categories of
beneficiaries based on extraordinary medical needs of
specific patient groups or to meet federal
requirements, in consultation with stakeholders.
Allows beneficiaries who have been diagnosed with
HIV/AIDS to opt out of managed care enrollment at the
beginning of any month.
Requires that no sooner than July 1, 2012, CBAS
shall be a Medi-Cal benefit covered under every
managed care plan contract and available only through
managed care plans. This provision applies to all
counties, except in counties where Medi-Cal benefits
are not covered through managed care plans.
Requires that effective January 1, 2015, or 19
months after the commencement of beneficiary
enrollment in the dual demonstration project, or on
the date that any necessary federal approvals or
waivers are obtained, whichever is later, MSSP
services in counties where the dual demonstration
project is implemented shall transition from a federal
waiver to a benefit administered by managed care
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plans. Includes various program requirements regarding
the transition.
Requires that no sooner than March 1, 2013, or on
the date that any necessary federal approvals or
waivers are obtained, whichever is later, nursing
facility services and subacute facility services shall
be Medi-Cal benefits available only through managed
care plans in counties participating in the dual
demonstration project.
Allows the department director, after consulting
with the Director of Finance, stakeholders, and the
Legislature, to retain discretion to forgo provisions
of LTSS services integration into managed care if and
to the extent the director determines that the quality
of care for managed care beneficiaries, efficiency, or
cost-effectiveness of the program would be
jeopardized.
Requires the department to enter into an
interagency agreement with the Department of Managed
Health Care to perform some or all of the department's
oversight and readiness review activities, including
providing consumer assistance to beneficiaries and
conducting financial audits, medical surveys, and a
review of the adequacy of provider networks of the
managed care plans.
Requires the department to report to the
Legislature on enrollment status, quality measures,
and state costs.
Requires the department to develop, in consultation
with the federal government and stakeholders, quality
and fiscal measures for health plans. Requires the
department to require health plans to submit Medicare
and Medi-Cal data to determine the results of these
measures. Requires the department to publish the
results of these measures, including via posting on
the department's Internet Web site, on a quarterly
basis.
Readiness Requirements:
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Requires that before the department contracts with
managed care plans or Medi-Cal providers to furnish
Medi-Cal benefits and services under the dual
demonstration project, mandatory enrollment of dual
beneficiaries into Medi-Cal managed care, and LTSS
integration, the department shall do all of the
following:
o Ensure timely and appropriate
communications with beneficiaries
o Require that managed care plans perform
an assessment process
o Ensure that managed care plans arrange
for primary care
o Ensure that managed care plans perform
care coordination and care management activities
o Ensure that managed care plans comply
with network adequacy requirements
o Ensure that managed care plans address
medical and social needs
o Ensure that managed care plans provide a
grievance and appeal process
o Monitor managed care plans' performance
and accountability for provision of services
o Develop requirements for managed care
plans to solicit stakeholder and member
participation in advisory groups for the planning
and development activities relating to the
provision of services for dual beneficiaries
Requires the department to submit, to the
Legislature within specified timelines, the following:
o Copy of any report submitted to the
federal government, as specified.
o A transition plan developed together with
the Department of Social Services, Department of
Aging, Department of Managed Health Care, in
consultation with stakeholders.
o Report on the readiness of managed care
plans based on specified readiness evaluation
criteria.
Medical Exemption Review:
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Requires the department to provide notice to the
requesting provider and any person in the Medi-Cal
program who is a senior or a person with a disability
when a request for a medical exemption from mandatory
enrollment into a Medi-Cal managed care plan is denied
and requires plans to maintain a dedicated liaison to
coordinate continuity of care.
Other Provisions:
Revises the rate methodology for AHF plans.
Authorizes the department director to defer
payments to Medi-Cal managed care plans contracting
with the department, as specified, which are payable
to the plans during the final month of the 2012-13
state fiscal year.
Requires that in the event the department has not
received, by February 1, 2013, federal approval, or
notification indicating pending approval, of a mutual
ratesetting process, shared federal savings as
defined, and a six-month enrollment period in the dual
demonstration project, then effective March 1, 2013
the provisions of the dual demonstration project,
enrollment of dual beneficiaries into Medi-Cal managed
care, and LTSS integration become inoperative.
Requires that the bill become operative only if AB
1496 or SB 1036 of the 2011-12 Regular Session of the
Legislature is enacted and takes effect.
Fiscal Effect:
Duals Demonstration Projects/Coordinated Care Savings
(dollars in millions)
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| | |
| | General Fund|
| | |
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|--------------------------------------+---------------|
| | |
|Medicare Shared Savings | -$12.3|
| | |
|--------------------------------------+---------------|
| | |
|Long-Term Supports and Services | 111.6|
|Integration | |
| | |
|--------------------------------------+---------------|
| | |
|Defer Managed Care Payment | -635.5|
| | |
|--------------------------------------+---------------|
| | |
|Delay Check-write | -75.2|
| | |
|--------------------------------------+---------------|
| | |
|Total |-$611.5 |
| | |
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