BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 361
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          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:








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             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.









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          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  








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          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  








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          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  








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          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 


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