BILL ANALYSIS Ó AB 361 Page 1 ASSEMBLY THIRD READING AB 361 (Mitchell) As Amended April 4, 2013 Majority vote HEALTH 15-3 APPROPRIATIONS 12-1 ----------------------------------------------------------------- |Ayes:|Pan, Ammiano, Atkins, |Ayes:|Gatto, Bocanegra, | | |Bonilla, Bonta, Chesbro, | |Bradford, | | |Gomez, | |Ian Calderon, Campos, | | |Roger Hernández, Gordon, | |Eggman, Gomez, Hall, | | |Maienschein, Mitchell, | |Ammiano, Pan, Quirk, | | |Nazarian, Nestande, V. | |Weber | | |Manuel Pérez, Wieckowski | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Mansoor, Wagner, Wilk |Nays:|Donnelly | | | | | | ----------------------------------------------------------------- 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 and create a California Health Home Program (HHP). Specifically, this bill : 1)Defines the population of individuals eligible to receive health home services, the required services, and the criteria for health care providers and authorizes DHCS to design one or more SPAs to provide home health services to children and adults and, subject to enhanced federal matching funds, requires specific services including comprehensive and individualized care management, care coordination, transitional care, individual and family support, and referral to community and social services supports. 2)Requires DHCS to determine if a SPA that targets adults, as specified, is feasible; and if DHCS submits a SPA targeting any adults, requires a SPA targeting adults who meet specified criteria to also be submitted. 3)Defines targeted adults as adults who meet the following criteria: AB 361 Page 2 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. 4)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. Provides that the 10% state share shall not be provided from state sources and may be provided by funds from local governments, private foundations or other sources permitted by federal law. 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. 5)Requires DHCS to ensure that an evaluation is completed within two years after implementation. 6)Authorizes DHCS to conduct the activities necessary to design, submit, and implement the program to provide health home services to adults and children with chronic conditions pursuant to the federal Patient Protection and Affordable Care Act (ACA). 7)Requires health homes to meet federal criteria, to offer a whole person approach, including coordinating with other services that affect a person's health, and to offer services in a range of settings. Specifies the services that are to be provided under the program. AB 361 Page 3 8)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. 9)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. 10)Permits DHCS to enter into exclusive or nonexclusive contracts, as specified, or amend existing contracts; and, 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. 11)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. FISCAL EFFECT : According to the Assembly Appropriations Committee, tens of millions of dollars, for design, implementation, and evaluation, with 90% federal funds, 10% state matching rate. The state share is to come from non-state sources, except as specified based on DHCS projections of expenditures. COMMENTS : According to the author, this bill will 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 AB 361 Page 4 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. 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 AB 361 Page 5 services to frequent users integrate primary and behavioral health care, foster a "whole person" approach, and reduce health disparities. 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: 1) having at least two chronic conditions; 2) having one chronic condition and are at risk of having a second chronic condition; or, 3) having one serious and persistent mental health condition. The Federal guidance 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: comprehensive care management; care coordination and health promotion; comprehensive transitional care, including appropriate follow-up, from inpatient to other settings; patient and family support (including authorized representatives); referral to community and social support services, if relevant; and, use of health information technology to link services, as feasible and appropriate. 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. 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 AB 361 Page 6 vulnerable Californians, without any initial state investment. Supporters point out that this bill will give California the opportunity to draw down 90% FFP to target vulnerable and difficult to reach populations. The sponsors also state that foundation funding is available for the State's 10% share. Supporters also state 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 the supporters, 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. These supporters conclude 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. 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, California Right to Life Committee states that one of the legislative findings "to access better care and better health, while decreasing costs" could encourage the use of Physician's Orders for Life Sustaining Treatment for the very ill and homeless veterans, a document promoted by Compassion and Choice. Analysis Prepared by : Marjorie Swartz / HEALTH / (916) 319-2097 FN: 0000807