BILL ANALYSIS Ó
AB 361
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Date of Hearing: April 2, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 361 (Mitchell) - As Introduced: February 14, 2013
SUBJECT : Medi-Cal: Health Homes for Medi-Cal Enrollees and
Section 1115 Waiver Demonstration Populations with Chronic and
Complex Conditions.
SUMMARY : Authorizes the Department of Health Care Services
(DHCS) to submit State Plan Amendments (SPAs) to the federal
Centers for Medicare and Medicaid Services (CMS) for approval to
provide health home services to adults and children. Defines
the population of individuals eligible to receive health home
services, the required services, and the criteria for health
care providers. Requires DHCS to determine if a SPA that
targets adults, as specified, is feasible. Requires, if DHCS
submits a SPA targeting any adults, a SPA targeting adults who
meet specified criteria must also be submitted. Implements this
bill only if federal financial participation (FFP) is available
and imposes limitations on use of additional General Funds (GFs)
during the first eight quarters. Requires DHCS to ensure that
an evaluation is completed within two years after
implementation. Permits DHCS to revise or terminate the health
home program any time after the first eight quarters of
implementation if it finds that the program fails to result in
improved health outcomes or results in substantial GF expense
without commensurate decreases in Medi-Cal costs among program
participants. Specifically, this bill :
1)Permits DHCS to do all of the following in creating a
California Health Home Program (HHP):
a) Design and submit one or more SPA, in consultation with
stakeholders and with opportunity for public comment, to
provide health home services to adults and children with
chronic conditions pursuant to the federal Affordable Care
Act (ACA);
b) Submit applications to CMS and operate more than one
program for distinct populations, different providers, or
contractors, to the extent federal approval is obtained;
c) Include current Medi-Cal eligible children and adults,
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newly eligible enrollees upon expansion under the ACA, and
Low Income Health Program (LIHP) enrollees in counties
willing to match federal funds;
d) Develop payment methodologies, including Fee-for
service (FFS) and per member, per month methodologies that
are tied to the intensity of services; and,
e) Identify the health home services consistent with
federal guidance;
2)Requires health homes to meet federal criteria, offer a whole
person approach, including coordinating with other services
that affect a person's health and offer services in a range of
settings.
3)In designing and requesting any SPAs to implement the HHP,
requires DHCS to develop geographic criteria and enrollee and
provider eligibility criteria.
4)Requires, subject to federal approval for receipt of enhanced
federal matching funds, the services provided under the
program to include all of the following:
a) Comprehensive and individualized case management;
b) Care coordination and health promotion, including
connection to medical, mental health, and substance abuse
care;
c) Comprehensive transitional care from inpatient to other
settings, including appropriate follow-up;
d) Individual and family support, including authorized
representatives;
e) Referral, if relevant, to other community and social
services supports, including transportation to appointments
needed to manage health needs, connection to housing for
participants who are homeless or unstably housed, and peer
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and recovery support; and,
f) Health information technology to identify eligible
individuals and link services, if feasible and appropriate.
5)Requires, as part of the process of creating a health home
project, DHCS to determine whether a program that targets
adults is operationally viable. In making this determination,
requires DHCS to consider the following factors:
a) Whether a SPA could be designed in a manner that
minimizes the impact to the GF;
b) Whether DHCS has capacity to administer the program;
and,
c) Whether there is a sufficient provider network.
6)Requires DHCS, if a program to target adults is determined to
be operationally viable, to submit a SPA to target adult
enrollees that meet the following criteria:
a) Have current diagnoses of chronic, co-occurring physical
health, mental health, or substance use disorders prevalent
among frequent hospital users; and,
b) A severity level determined by DHCS, using one or more
of the following indicators:
i) Frequent inpatient hospital admissions, including
hospitalization for medical, psychiatric, or substance
use related conditions;
ii) Excessive use of crisis or emergency services; and,
iii) Chronic homelessness.
7)Requires DHCS, for purposes of providing health home services,
if a program to target adults is determined to be
operationally viable, to:
a) Select designated health home providers, managed care
organizations subcontracting with providers, or counties
acting as or subcontracting with providers operating as a
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health home team that have all of the following:
i) Demonstrated experience working with frequent
hospital users;
ii) Demonstrated experience working with people who are
chronically homeless;
iii) The capacity and administrative infrastructure to
participate in the program, including the ability to meet
requirements of federal guidelines;
iv) A viable plan, with roles identified among providers
of the health home, to do all of the following:
(1) Reach out to and engage frequent hospital
users and chronically homeless eligible individuals;
(2) Link eligible individuals who are homeless or
experiencing housing instability to permanent housing,
such as supportive housing; and,
(3) Ensure coordination and linkages to services
needed to access and maintain health stability,
including medical, mental health, substance use care,
and social services to address social determinants of
health.
b) Require a lead provider to be a community clinic, a
mental health plan, a community-based nonprofit
organization, a county health system, or a hospital;
c) Design strategies to outreach, engage with, and provide
health home services to targeted adults, based on
consultation with stakeholder groups who have expertise in
engaging with and providing services to this population;
and,
d) Design program elements, including provider rates,
specific to targeted adult populations, after consultation
with stakeholder groups with expertise in engaging and
serving the target populations.
8)Permits DHCS to design additional provider criteria to those
identified in 7) above after consultation with stakeholder
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groups who have expertise in engagement and services for
targeted beneficiaries described in this bill.
9)Permits health home providers eligible to serve targeted
adults through a FFS or managed care delivery system, and to
be county-operated or private providers.
10)Specifies that nothing in this bill is to be construed to
preclude local governments or foundations from contributing
the nonfederal share of costs for services provided under this
program, so long as those contributions are permitted under
federal law.
11)Permits DHCS or counties contracting with DHCS, to enter into
risk-sharing and social impact bond program agreements to fund
services under this article.
12)Requires DHCS to administer the program in a manner that
maximizes FFP and conditions implementation on the
availability of FFP and approval of the SPA.
13)Provides that this bill shall be implemented only if no
additional GFs are used to fund the administration and costs
of services, unless DHCS projects that it can be implemented
in a manner that does not result in a net increase prior to
and during the first eight quarters.
14)Permits DHCS to use new funding in the form of enhanced FFP
for health home services that are currently funded for any
additional costs for new health home services.
15)Requires DHCS to seek to fund the creation, implementation,
and administration of this bill with funding other than state
GFs.
16)Requires DHCS to ensure that an evaluation is completed
within two years after implementation.
17)Permits DHCS to revise or terminate the HHP any time after
the first eight quarters of implementation if it finds the
program fails to result in improved health outcomes or results
in substantial General Fund expense without commensurate
decreases in Medi-Cal costs among program participants.
18)Provides that in the event of a judicial challenge, these
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provisions shall not be construed to create an obligation on
the part of the state to fund any payment from state funds due
to the absence or shortfall of federal funding.
19)Permits DHCS to do the following in implementing the
provisions of this bill:
a) Enter into exclusive or nonexclusive contracts, as
specified, or amend existing contracts; and,
b) Implement by means of specified letters, bulletins, or
other instructions without taking regulatory action until
regulations are adopted and requires emergency regulations
within two years.
20)Requires if DHCS determines a HHP is not operationally
viable, report the basis for the determination and a plan to
address the needs of the chronically homeless and frequent
hospital users to the Legislature.
EXISTING LAW :
1)Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
services.
2)Authorizes under the ACA, states to offer health home
services, as defined, to eligible individuals with chronic
conditions who select a designated provider, a team of health
care professionals operating with such a provider, or a health
team as the individual's health home for purpose of providing
the individual with health home services.
3)Provides, under the ACA, 90% federal matching funds for the
first eight quarters the health home option is in effect.
Thereafter, the state's regular federal matching rate would be
in effect (typically 50% in California).
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill will
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allow the state to access federal funding for "Health Home
Services" for Medi-Cal beneficiaries, while ensuring the state
targets beneficiaries with chronic medical, mental health, or
substance abuse conditions who are chronically homeless or
frequent hospital users. This bill takes advantage of the
"Health Home" option offering states 90% federal money for two
years for services such as intensive case management and care
coordination and provides options for ongoing funding should
these health homes demonstrate decreased costs. The author
points out that the Health Home option is an ideal vehicle for
providing appropriate health-related services and social
service supports to overlapping populations of people who are
chronically homeless and to people who are frequent hospital
users. The author states that many among this group
experience a combination of chronic medical, mental health,
and substance abuse conditions, as well as social issues that
negatively impact their ability to access care. The sponsor,
Corporation for Supportive Housing (CSH), states that
California spends significant Medi-Cal resources on a small
group of beneficiaries. According to data CSH reviewed, about
1,000 Medi-Cal beneficiaries who frequently used hospitals for
reasons that could be avoided with better access to care
("frequent users") incurred over $100,000 in Medi-Cal costs in
2007 alone. CSH states that in administering the Frequent
Users of Health Services Initiative (Initiative), a
foundation-funded five-year program, supporting six projects
offering community-based multidisciplinary services to
frequent users, evidence showed medical home services alone
are ineffective in addressing the needs of this population.
CSH cites a Lewin Group evaluation of the Initiative showing
that frequent users experience psychosocial complexities, like
chronic disease, mental disability, substance addiction,
social isolation, and homelessness. According to the sponsor,
intensive face-to-face services that coordinate and help
frequent users manage their care not only improved health
outcomes among these individuals, but significantly decreased
hospital costs. Medi-Cal beneficiaries participating in the
Initiative programs experienced a 60% decrease in emergency
room visits and a 69% decrease in inpatient days. Data from
similar programs across the country, several using randomized,
control-group studies, show these services save between $7,500
and $29,000 per year, per beneficiary in Medicaid costs.
These evaluations and studies also demonstrated significantly
improved health outcomes, decreased nursing home stays, and
longer life spans among participants.
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The author further states that chronically homeless people and
frequent users who are homeless have such poor health outcomes
that they die, on average, 30 years younger than life
expectancy in this country. For these reasons, medical home
services alone cannot sufficiently address the myriad of
barriers these populations face in accessing appropriate care.
The author points out that with the addition of comprehensive
case management, hospital discharge planning, and connection
to social services, including housing, enhanced medical home
programs have proved to reduce high-cost care among the most
vulnerable Californians. Social services interventions, like
connecting participants to housing, are a critical step to
reducing the costs and improving the care of homeless frequent
users. According to the author, programs offering health home
services to frequent users integrate primary and behavioral
health care, and foster a "whole person" approach and reduce
health disparities.
2)BACKGROUND . The ACA allows states to elect the health home
option in their Medicaid program and receive a 90% federal
matching rate for two years for these services. Federal law
defines the individuals eligible for health home services as
individuals meeting one of the following: a) having at least
two chronic conditions; b) having one chronic condition and
are at risk of having a second chronic condition; or, c)
having one serious and persistent mental health condition.
Federal law defines "health home services" as services provided
by a designated provider, a team of health care professionals
operating with such a provider, or a health team that
provides:
a) Comprehensive care management;
b) Care coordination and health promotion;
c) Comprehensive transitional care, including appropriate
follow-up, from inpatient to other settings;
d) Patient and family support (including authorized
representatives);
e) Referral to community and social support services, if
relevant; and,
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f) Use of health information technology to link services,
as feasible and appropriate.
In preliminary guidance provided to State Medicaid Directors
in November 2010, CMS stated that this ACA provision provides
an opportunity for states to address and receive additional
federal support for the enhanced integration and coordination
of primary, acute, behavioral health (mental health and
substance use), and long-term services and supports for
persons across the lifespan with chronic illness. CMS stated
that the health home provision provides an opportunity to
build a person-centered system of care that achieves improved
outcomes for beneficiaries and better services and value for
Medicaid programs. CMS indicated it expects that use of the
health home service delivery model will result in lower rates
of emergency department use, reduction in hospital admissions
and re-admissions, reduction in health care costs, less
reliance on long-term care facilities, and improved experience
of care and quality of care outcomes for the individual.
The medical home concept first arose in the 1960s as a way of
improving care for children with special health care needs,
and policy interest developed outside of pediatrics over time.
According to the federal Agency for Healthcare Research and
Quality, the primary care medical home (PCMH) holds promise as
a way to improve health care by transforming how primary care
is organized and delivered. A review of the research on the
PCMH model by noted health services researcher, Dr. Barbara
Starfield, found "International and within-nation studies
indicate that a relationship with a medical home is associated
with better health, on both the individual and population
levels, with lower overall costs of care and with reductions
in disparities in health between socially disadvantaged
subpopulations and more socially advantaged populations." Her
research notes that these positive findings depend upon the
patient's identification with a particular primary care
physician.
The guidance points out that many state Medicaid programs have
already developed medical home models and implemented delivery
systems beyond traditional primary care case management
programs, many focusing on high-cost, high-user beneficiaries
(not limited to specific diagnoses) under existing Medicaid
authority for managed care or Section 1115 waivers. According
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to CMS, while many of these models are physician-based, there
is a growing movement toward interdisciplinary team-based
approaches. Services such as care coordination and follow-up,
linkages to social services, and medication compliance are
reimbursed through a "per member per month" structure. The
goal of this provision of the ACA is to expand the traditional
medical home model with a new statutory definition of the term
"health home" to build linkages to other community and social
supports, and to enhance coordination of medical and
behavioral health care, in keeping with the needs of persons
with multiple chronic illnesses. The CMS guidance clarifies
that although the "health home model of service delivery"
encompasses all the medical, behavioral health, and social
supports and services needed by a beneficiary with chronic
conditions, only the specific activities specified in the ACA
and referred to as health home services will qualify for the
90% FFP.
According to the CMS guidance, the whole-person philosophy is
fundamental to a health home model of service delivery. CMS
expects health homes to build on the expertise and experience
of medical home models and, when appropriate, to deliver
health home services. The State will be expected to develop a
health home model of service delivery that has designated
providers operating under a "whole-person" approach to care
within a culture of continuous quality improvement. According
to CMS, a whole-person approach to care looks at all the needs
of the person and does not compartmentalize aspects of the
person, his or her health, or his or her well-being. The
guidance states that CMS expects providers of health home
services to use a person-centered planning approach in
identifying needed services and supports and providing care
and linkages to care that address all of the clinical and
non-clinical needs of an individual. While physicians may
play the lead role in directing health home services for an
individual, the health home option also contemplates
approaches in which multi-disciplinary community health teams
may play this role, according to an Issue Paper prepared by
the Kaiser Commission on Medicaid and the Uninsured on
Medicaid Health Homes for Beneficiaries with Chronic
Conditions, August 2012.
The ACA identifies three different health home provider
arrangements:
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a) Designated provider - A physician, clinical practice or
clinical group practice, rural clinic, community health
center, community mental health center, home health agency,
or any other entity or provider (including pediatricians,
gynecologists, and obstetricians) that is determined
appropriate by the state, and that meets qualification
standards to be set by the federal Department of Health and
Human Services (HHS) Secretary.
b) Team of health care professionals operating with a
designated provider - The team may include physicians and
other professionals, such as a nurse care coordinator,
nutritionist, social worker, behavioral health
professional, or any professionals deemed appropriate by
the state. The team can be freestanding, virtual, or based
in any setting determined appropriate by the state and
approved by the HHS Secretary.
c) Health team - A community-based interdisciplinary,
inter-professional team of health care providers
established to support primary care practices, as outlined
in the ACA. The team may include medical specialists,
nurses, pharmacists, nutritionists, dieticians, social
workers, behavioral and mental health providers,
chiropractors, licensed complementary and alternative
medicine practitioners, and physicians' assistants.
According to a February 20, 2013 article in Politico, 10
states have health home initiatives approved by CMS. Of
these, six target those with serious and persistent mental
illnesses or substance abuse disorders. According to the
article, there have been challenges in getting the health
homes up and running. It requires knitting together a fabric
of local health care stakeholders, gaining their trust, and
pushing them to communicate and share health data. However,
the article points out that these patients need this kind of
integrated care because people with behavioral health
conditions frequently have other chronic, costly, but
preventable, or at least manageable, health problems.
3)SUPPORT . Supporters, representing providers, clinics,
affordable housing groups, and consumer advocates, state that
this bill will reduce Medi-Cal costs, decrease avoidable
emergency department visits and inpatient stays, and improve
health outcomes for extremely vulnerable Californians, without
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any initial state investment. The Western Center on Law and
Poverty (WCLP), a sponsor of this bill, states that the ACA's
health home option is a valuable opportunity for California to
address the needs of people who frequently use emergency
departments for reasons that could have been avoided with
earlier or primary care. The WCLP argues that this bill will
give California the opportunity to draw down 90% FFP to target
vulnerable and difficult-to reach populations. The sponsors
also point out that foundation funding is available for the
State's 10% share. WellSpace Health, a Federally Qualified
Health Center, writes in support that people who frequently
use hospital services for what seem like avoidable reasons
face numerous challenges accessing care. They are often
homeless, live in provider shortage areas, and almost all of
them have multiple chronic medical and co-morbid behavioral
health conditions. According to WellSpace, robust research
demonstrates programs providing outreach to these populations,
offering intensive case management, and connecting individuals
to appropriate care and social services-"health homes"- are
the only models proven to improve health outcomes, decrease
hospital and nursing home stays, and reduce emergency room
visits. WellSpace points out that this results not only in
cost savings, but also yields a cohort of better-informed
consumers who are increasingly focused on preventive rather
than reactive care.
4)SUPPORT IF AMENDED . The ALS Association Golden West Chapter
writes that it supports the desire to provide better services
to the chronically homeless population, but believes that this
is also a rare opportunity to access badly needed federal
funds to support care and treatment for people with chronic
conditions like ALS and is requesting the following amendment:
Add subsection 14127.3( c) (1)(A) to read:
"The chronic disorders eligible for health home
services may include, but are not limited to, mental
health conditions, substance use disorders, asthma,
diabetes, heart disease, obesity, Amyotrophic
lateral sclerosis, or HIV/AIDS."
The California Academy of Family Physicians (CAFP) has taken a
support if amended position, stating that it is in strong
support of this bill's intent and has been a longtime
supporter of the health home model, also known as the Patient
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Centered Medical Home. According to CAFP, this bill currently
lacks an essential element of the health home model: the
transformed delivery of primary care as a centerpiece of the
model. CAFP argues that a health home must be based on team
care and include a primary care physician as an integral part
of that team.
The California Medical Association (CMA) has taken a support
if amended position and states that Health Homes outlined in
this bill are distinct from medical homes in form and
function, but both involve medical providers, including
physicians. CMA is requesting that the role of physicians in
the health home models established by this bill be clarified.
5)OPPOSITION. The California Right to Life Committee writes in
opposition that its concerns relate to the requirement of
health related bills to implement the ACA and that while there
are issues that may not be directly in this bill language,
could be the resulting consequence of its passage.
Specifically, Right to Life states that one of the legislative
findings is "to access better care and better health, while
decreasing costs" and could encourage the use of Physician's
Orders for Life Sustain Treatment for the very ill and
homeless veterans, a document promoted by Compassion and
Choice.
6)RELATED LEGISLATION .
a) AB 676 (Fox) requires a health plan and insurer that
provides coverage for inpatient hospital care, the DHCS
with regard to Medi-Cal, and Medi-Cal managed care plans to
not cause an enrollee to remain in a general acute care
hospital or acute psychiatric hospital upon a determination
by the attending physician or the medical staff that the
enrollee no longer requires inpatient hospital care, or pay
a daily penalty amount equal to the applicable inpatient
rate, or pro rata calculated rate if case based, or the
diagnosis-related group rate. Requires DHCS or the
Medi-Cal managed care plan to assist hospitals in locating
and securing appropriate community setting and coordinate
post discharge care needs. AB 676 is pending in Assembly
Health Committee.
b) AB 1208 (Pan) establishes the Patient Centered Medical
Home (PCMH) Act of 2013 and would define a "medical home"
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and a "patient centered medical home" to refer to a health
care delivery model in which a patient establishes an
ongoing relationship with a licensed health care provider,
as specified. AB 1208 is pending in Assembly Health
Committee.
7)PREVIOUS RELATED LEGISLATION .
a) AB 2266 (Mitchell) would have required DHCS to establish
a program to provide health home services designed to
reduce a participating individual's avoidable use of
hospitals when more effective care can be provided in less
costly settings. Defined the population of individuals
eligible to receive health home services, the required
services, and the criteria for health care providers
selected through a request for proposal (RFP) process.
Required DHCS to prepare or contract for an evaluation of
the program, to complete the evaluation, and to submit a
report to the appropriate policy and fiscal committees of
the Legislature. Would have implemented the bill only if
FFP was available and CMS approved the SPA. AB 2266 died
on the Senate Floor.
b) SB 393 (Ed Hernandez) would have enacted the PCMH Act
of 2011 and established a definition for a medical home
based upon specified standards. SB 393 was vetoed by
Governor Brown who stated in his veto message that he
commends the author for trying to improve the delivery of
health care by encouraging the greater use of
"patient-centered medical homes." While this concept is
not new, it is still evolving. For this reason, he thought
more work was needed before we codify the definition
contained in this bill.
c) AB 1542 (Jones) of 2009 would have defined a PCMH to
mean, in part, a health care delivery model in which a
patient establishes an ongoing relationship with a
physician or other licensed health care provider, working
in a physician-directed practice team to provide
comprehensive, accessible, and continuous evidence-based
primary care and coordinate the patient's health care needs
across the health care system. AB 1542 died on the
Assembly Floor.
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d) SB 1738 (Steinberg) of 2008 would have required DHCS to
establish a three-year pilot program to provide intensive
multidisciplinary services to 2,500 Medi-Cal beneficiaries
identified as frequent users of health care. SB 1738 was
vetoed by Governor Schwarzenegger who stated in his veto
message that he could not support the bill because of the
state's ongoing fiscal challenges and asked the author and
stakeholders to work with his Administration to identify
strategies to ensure these beneficiaries receive the right
care, at the right time, in the right setting.
8)COMMENTS .
a) Definition of Lead Provider. The ACA and the CMS
guidance clearly contemplate that a broad range of provider
entities may serve as health home providers as long as they
meet the federal requirements. However, states that have
implemented it have limited the providers to ensure that
those selected meet the program requirements and the unique
needs of the population. According to the Kaiser
Commission August 2012 Issue Brief, in Rhode Island and
Missouri only the existing network of community mental
health organizations and specialty providers can be
designated. Other states have allowed primary care
providers, community health centers, and rural health
clinics. This bill requires a lead provider to be a
community clinic, a mental health plan, a community-based
nonprofit organization, a county health system, or a
hospital. This list does not include a physician. The
author has agreed to expand the definition to include a
physician.
b) Technical Amendments. The author has agreed to
technical amendments to clarify the following issues:
i) Depending on a determination of feasibility, this
bill will permit DHCS to submit multiple SPAs that target
adults, but at least one SPA must target adults who are
chronically ill and are frequent users of emergency
services, inpatient services or are homeless, as defined
in this bill;
ii) Clarify the definition of the targeted population
and how the level of severity of qualifying conditions is
to be determined: and,
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iii) Add physicians to the definition of lead provider.
REGISTERED SUPPORT / OPPOSITION :
Support
Corporation for Supportive Housing (cosponsor)
Western Center on Law and Poverty (cosponsor)
California Association of Addiction Recovery Resources
California Immigrant Policy Center
California State Association of Counties
Century Housing
Children Now
Children's Defense Fund California
EveryOne Home
First Place for Youth
Health Access California
Non-Profit Housing Association of Northern California
Senior Community Centers
United Ways of California
WellSpace Health
Opposition
California Right to Life Committee, Inc.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097