BILL ANALYSIS Ó
SB 222
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Date of Hearing: July 13, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 222 (Alquist) - As Introduced: February 9, 2011
Policy Committee: HealthVote:13-6
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes specified health plans to form joint
ventures to offer health coverage to individuals and groups.
Specifically, this bill:
1)Authorizes a health plan governed, owned, or operated by a
county board of supervisors, a county special commission, a
county-organized health system (COHS), a county health
authority, or a County Medical Services Program (CMSP) to form
joint ventures to offer health coverage to individuals and
groups.
2)Requires any joint ventures established pursuant to this bill
to be licensed under the Knox-Keene Act, which regulates
California managed care plans.
3)Authorizes joint ventures to consist of either:
a) Contractual relationships to pool risk and/or to share
provider networks, or,
b) Contractual relationships for the joint offering or
marketing of health coverage.
4)Requires joint ventures to pursue contracts with designated
public hospitals, county health clinics, community health
centers, and other traditional safety net providers.
FISCAL EFFECT
1)To the extent that this bill leads to the formation of new
joint ventures, potential one-time fee-supported licensure
costs to DMHC in the range of $100,000 per licensee (special
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fund). Since the number potential licensees is unlikely to
exceed five, the one-time costs would not exceed $500,000.
2)It is uncertain whether increased costs would occur as a
result of this bill, as the local entities specified in this
bill are not specifically prohibited from forming joint
ventures, nor applying for licensure as a Knox-Keene plan,
under current law.
COMMENTS
1)Rationale . This bill, supported by a variety of consumer and
labor groups, aims to increase health coverage options
statewide by increasing public alternatives to commercial
health coverage. This bill authorizes new alliances between
specified local health entities. This bill requires
newly-formed joint ventures to emphasize care provided by
safety net providers. According to the author, local managed
care entities have proven the ability to deliver
cost-effective health care. The author intends to provide more
alternatives to commercial coverage than are currently
available. This bill establishes clear authority for local
health plans to establish joint ventures without relying on
current law related to joint powers agreements, which is less
clear.
2)County Health Delivery Modes . This bill authorizes expansions
of health coverage through new arrangements between health
delivery entities at the local level. California utilizes
three managed care delivery models to provide health care to
Medi-Cal enrollees. These models are the County-Operated
Health System (COHS) model, the Two-Plan model and Geographic
Managed Care. The County Medical Services Program (CMSP) is a
county-administered coverage program to allow smaller counties
to provide health coverage to medically indigent adults.
Additional detail on these health delivery modes is provided
below:
a) COHS are managed care arrangements organized and
operated by a governing board appointed by a county board
of supervisors. There are currently five COHS providing
services to 800,000 Medi-Cal beneficiaries in 11 California
counties: Merced, Monterey, Napa, Orange, Santa Barbara,
Santa Cruz, San Luis Obispo, San Mateo, Solano, Sonoma, and
Yolo.
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b) Two-Plan model counties provide Medi-Cal managed care
services via contracts with a commercial plan selected
through competitive bidding and a local initiative. Local
initiatives provide services through networks comprised of
county health system providers, safety net providers, and
county hospitals. Currently, local initiatives serve 2.6
million Medi-Cal beneficiaries in 12 counties: Alameda,
Contra Costa, Fresno, Kern, Los Angeles, Riverside, San
Bernardino, San Francisco, San Joaquin, Santa Clara,
Stanislaus, and Tulare.
c) Geographic Managed Care (GMC), found only in Sacramento
and San Diego, allows Medi-Cal beneficiaries to choose
among competing commercial health plans. GMC is distinct
from the COHS model because of the availability of multiple
health plans and beneficiary choice of a health plan. There
are 400,000 Medi-Cal patients receiving care through GMC.
d) CMSP provides medical care services in smaller counties
to indigent adults 18-64 years of age with incomes at or
below 200% of the federal poverty level (FPL) who are not
eligible for Medi-Cal and who are U.S. citizens or legal
residents. Individuals above 200% FPL may be eligible with
a share of cost. County welfare departments determine
eligibility. Most individuals on CMSP are on the program
for only three to seven months and the average monthly
enrollment is 40,000.
3)Related Legislation .
a) SB 56 (Alquist) in 2010 was substantially similar to
this bill. SB 56 was vetoed, with a veto message citing
concerns about the necessity of the bill.
b) SB 973 (Simitian) in 2007 and SB 1622 (Simitian) in 2008
created the California Health Benefits Service Program
within DHCS to facilitate the creation of joint ventures
and to authorize local health plans to enter into joint
ventures in order to pool risk and share provider networks.
SB 973 was vetoed due to concerns about a piecemeal
approach to health reform. SB 1622 was held on Suspense in
Senate Appropriations.
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Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081