BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                SB 222
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        SENATE THIRD READING
        SB 222 (Alquist)
        As Introduced February 9, 2011
        Majority vote

         SENATE VOTE  :26-13  
         
         HEALTH              13-6        APPROPRIATIONS      12-5        
         
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        |Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield,     |
        |     |Bonilla, Eng, Gordon,     |     |Bradford, Charles         |
        |     |Hayashi,                  |     |Calderon, Campos, Davis,  |
        |     |Roger Hernández, Bonnie   |     |Gatto, Hall, Hill, Lara,  |
        |     |Lowenthal, Mitchell, Pan, |     |Mitchell, Solorio         |
        |     |V. Manuel Pérez, Williams |     |                          |
        |     |                          |     |                          |
        |-----+--------------------------+-----+--------------------------|
        |Nays:|Logue, Garrick, Mansoor,  |Nays:|Harkey, Donnelly,         |
        |     |Nestande, Silva, Smyth    |     |Nielsen, Norby, Wagner    |
        |     |                          |     |                          |
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         SUMMARY  :  Authorizes public Medi-Cal managed care (MCMC) plans and 
        the County Medical Care Services Program (CMSP) to form joint 
        ventures for the joint or coordinated offering of health plans to 
        individuals and groups.  Specifically,  this bill  :   

        1)Authorizes a health plan that is governed, owned or operated by a 
          county board of supervisors, a county special commission, a 
          county-organized health system (COHS) or a county health authority 
          (public MCMC plans) to form joint ventures for the joint or 
          coordinated offering of health plans to individuals and groups, 
          and that joint ventures consist of the following:

           a)   Contractual relationships entered into in order to pool risk 
             or share networks, or both; or,

           b)   Contractual relationships entered into in order to provide 
             for the joint offering or marketing of health plans to 
             individuals and groups.  

        2)Requires, in forming joint ventures, participating health plans to 
          seek to contract with designated public hospitals, county health 
          clinics, primary care clinics, and other traditional safety net 
          providers.








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        3)Authorizes the board of the CMSP to contract with a third-party 
          administrator to provide health coverage under the joint venture 
          if the CMSP governing board elects to participate in a joint 
          venture.  

        4)Provides, in existing law that establishes authority for CMSP,  
          the CMSP governing board the power to develop and participate in 
          joint ventures with public MCMC plans as described in 1) above and 
          requires the joint ventures to be funded separately from the CMSP 
          and not impair the financial stability of the CMSP Program.  

        5)Requires all joint ventures established pursuant to this section 
          to meet all the requirements of the Knox-Keene Health Care Service 
          Plan Act of 1975.
         
         FISCAL EFFECT  :  According to the Assembly Appropriations Committee:

        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 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, or applying 
          for licensure as a Knox-Keene plan, under current law.

         COMMENTS  :  The author states that public MCMC plans, such as the 
        Medi-Cal local initiatives and COHS plans, have proven that they can 
        deliver cost-effective care to Medi-Cal beneficiaries and children 
        enrolled in the Healthy Families Program.  Because of the 
        cost-effective provider networks these plans use, and their low 
        levels of overhead, the local health plans have the potential to be 
        a viable coverage alternative for the general commercial market, a 
        market they do not currently serve.  To do so, however, they need to 
        be able to integrate their operations and offer coverage on a 
        broader geographic basis.  This bill would remove barriers in 
        current law that limits their ability to do that.

        California currently utilizes three managed care delivery models to 
        provide health care to specified Medi-Cal beneficiaries in 27 
        counties, representing approximately half of the total Medi-Cal 
        enrollees statewide.  For the purposes of this bill public MCMC 








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        plans refer to the public or local initiative plans operated in COHS 
        and Two-Plan counties.

        1)COHS are managed care plans that are operated by a governing board 
          appointed by a county board of supervisors that contract to 
          provide services to approximately 860,000 Med-Cal beneficiaries in 
          11 designated counties.  Currently five COHS provide services to 
          Medi-Cal beneficiaries in nine California counties:  Monterey, 
          Napa, Orange, San Luis Obispo, San Mateo, Santa Barbara, Santa 
          Cruz, Solano, and Yolo.

        2)In 14 designated "Two-Plan" counties, services to approximately 
          2.8 million Medi-Cal beneficiaries are provided through contracts 
          with a commercial plan selected through competitive bidding and a 
          local initiative plan which provides services through networks 
          that include county hospitals, community clinics, and other safety 
          net providers.  Current local initiative plans are the Alameda 
          Alliance for Health, Contra Costa Health Plan, Health Plan of San 
          Joaquin, Inland Empire Health Plan, Kern Family Health Care, L.A. 
          Care Health Plan, San Francisco Health Plan, and Santa Clara 
          Family Health Plan.  

        3)In Geographic Managed Care counties, currently limited to 
          Sacramento and San Diego counties, services to approximately 
          460,000 Medi-Cal beneficiaries are provided by competing 
          commercial health plans.

        The CMSP provides medical care services in 34 smaller counties 
        including Imperial in the south, San Benito, Inyo, Mono, and several 
        other eastern counties and all counties except Yolo, north of the 
        Bay Area, Sacramento and Placer.  CMSP serves 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 with incomes above 200% of 
        the FPL may be eligible with a share of cost. 


         Analysis Prepared by  :    Teri Boughton / HEALTH / (916) 319-2097 
                                                                  FN: 0002223