BILL ANALYSIS Ó SB 222 Page 1 SENATE THIRD READING SB 222 (Alquist) As Introduced February 9, 2011 Majority vote SENATE VOTE :26-13 HEALTH 13-6 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |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 | | | | | | ----------------------------------------------------------------- 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. SB 222 Page 2 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 SB 222 Page 3 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