BILL ANALYSIS �
AB 676
Page 1
Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 676 (Fox) - As Amended: April 10, 2013
SUBJECT : Health care coverage: postdischarge care needs.
SUMMARY : Establishes time frames and requirements for a health
plan, insurer, and the Department of Health Care Services (DHCS)
with regard to Medi-Cal, including Medi-Cal managed care (MCMC)
plans (MCPs), to facilitate the discharge of a patient who no
longer requires inpatient hospital care. Establishes a
financial penalty on these payers for failure to comply with the
requirements of this bill. Specifically, this bill :
1)Requires a health plan and insurer that provides coverage for
inpatient hospital care, the DHCS with regard to Medi-Cal, and
MCPs to not cause an enrollee to remain in a general acute
care hospital or acute psychiatric hospital if the attending
physician or the medical staff has determined that the
enrollee no longer requires inpatient hospital care.
2)Requires within 24 hours of receipt of notice of discharge,
the health plan, insurer, DHCS or the MCP to be in direct
communication with hospital staff to provide information,
support, and assistance to facilitate the ability of hospital
personnel to do all of the following:
a) Locate and secure an appropriate community setting for
the patient that is consistent with postdischarge care
needs;
b) Ensure there is an appropriate arrangement to transfer
the patient to the community setting; and,
c) Follow up with the patient or his or her designee to
coordinate postdischarge care needs.
3)Requires failure of the health plan, insurer, DHCS, or MCP to
satisfy 1) and 2) above within 72 hours of receipt of the
notice of discharge to result in a daily penalty amount equal
to 75% of the applicable inpatient rate, or pro rata
calculated rate if case based, or the diagnosis-related group
rate. Requires the penalty to be paid by the health plan,
insurer, DHCS, or MCP to the health facility under the
standard billing cycle, and final payment of the penalty to be
paid within 10 days of the discharge of the patient.
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EXISTING LAW :
1)Regulates health plans, including most MCPs, under the
Knox-Keene Health Care Service Plan Act of 1975 through the
Department of Managed Health Care, health insurers under the
California Department of Insurance, and acute care hospitals
and acute psychiatric hospitals under the Department of Public
Health. Establishes DHCS to administer the Medi-Cal program.
2)Requires a health plan that is contacted by a hospital, as
specified, within 30 minutes of the time the hospital makes
the initial telephone call requesting information, to either
authorize post stabilization care or inform the hospital that
it will arrange for the prompt transfer of the enrollee to
another hospital. Requires a health plan that is contacted by
a hospital to reimburse the hospital for poststabilization
care rendered to the enrollee if any of the following occurs:
a) The health plan authorizes the hospital to provide
poststabilization care;
b) The health plan does not respond to the hospital's
initial contact or does not make a decision regarding
whether to authorize poststabilization care or to promptly
transfer the enrollee within the specified timeframe; or,
c) There is an unreasonable delay in the transfer of the
enrollee, and the noncontracting physician and surgeon
determines that the enrollee requires poststabilization
care.
3)Requires, pursuant to regulations associated with the claims
settlement process, for contracted providers without a written
contract and non-contracted providers, except as specified:
the payment of the reasonable and customary value for the
health care services rendered based upon statistically
credible information that is updated at least annually and
takes into consideration:
a) The provider's training, qualifications, and length of
time in practice;
b) The nature of the services provided;
c) The fees usually charged by the provider;
d) Prevailing provider rates charged in the general
geographic area in which the services were rendered;
e) Other aspects of the economics of the medical provider's
practice that are relevant; and,
f) Any unusual circumstances in the case.
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4)Prohibits in state law, health facilities from transferring or
discharging patients for purposes of affecting a transfer from
one hospital to another unless arrangements between facilities
have been made in advance, and the person legally responsible
for the patient has been notified or attempts over a 24-hour
period have been made and a responsible person cannot be
reached. Prohibits the transfer or discharge of patients in
the case that the patient's physician deems that the transfer
or discharge would create a medical hazard for the patient.
5)Establishes the Medicaid Program (Medi-Cal in California) as a
joint federal-state program to provide health care services to
low-income families with children, seniors, and persons with
disabilities (SPDs).
6)Establishes the Coordinated Care Initiative (CCI) that
requires DHCS to seek federal approval to establish
demonstration sites in up to eight counties to provide
coordinated Medi-Cal and Medicare benefits to dual eligibles
and authorizes DHCS to require SPDs who are eligible for
Medi-Cal only (not Medicare) to mandatorily enroll in MCPs.
Requires consultation with stakeholders in implementing these
provisions.
7)Establishes Medicare as a federal health insurance program to
provide coverage to eligible individuals who are disabled or
over age 65.
8)Establishes, in the federal Affordable Care Act (ACA), in the
federal Centers on Medicare and Medicaid Services (CMS), the
Federal Coordinated Health Care Office (Medicare-Medicaid
Coordination Office) and the Center for Medicare and Medicaid
Innovation to test innovative payment and delivery models to
lower costs and improve quality for enrollees who are dually
eligible for Medi-Cal and Medicare (dual eligibles).
9)Establishes as California's Essential Health Benefits (EHBs)
the Kaiser Small Group Health Maintenance Organization (HMO)
plan along with the following 10 ACA mandated benefits:
a) Ambulatory patient services;
b) Emergency services;
c) Hospitalization;
d) Maternity and newborn care;
e) Mental health and substance use disorder services,
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including behavioral health treatment;
f) Prescription drugs;
g) Rehabilitative and habilitative services and devices;
h) Laboratory services;
i) Preventive and wellness services and chronic disease
management; and,
j) Pediatric services, including oral and vision care.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . The California Hospital Association
(CHA) is sponsoring this bill to facilitate timely discharge
of hospital patients to a more appropriate level of care, by
promoting communication and collaboration between third-party
payers, patients and hospital personnel. According to CHA, if
enacted, third-party payers would be required to communicate
with hospital personnel within specified time frames and to
actively participate in care coordination efforts with the
goal of successful transition of patients to an appropriate
post-hospital, non-acute care setting.
As an example of the problem CHA is trying to resolve with
this legislation, CHA submitted to the Assembly Health
Committee a spread sheet titled "Data for Post Acute Care,
January 1 - December 31, 2011," which indicates for six out of
seven hospitals in San Francisco the three largest avoidable
delays in discharge for post acute care were: a) long-term
custodial placement (8,751 days); b) skilled intravenous (IV)
therapy placement (703 days); and, c) locked board and care
(520 days). In other words, according to this survey over
9000 days of care associated with these three issues were
provided in an inpatient setting that could have been provided
elsewhere. Other reasons patients were not discharged include
patient refusal of treatment, no money for home attendant (not
enough In-Home Supportive Services (IHSS)), secured dementia,
traumatic brain injury patient, or outlier patient. The
survey results also include for six of the seven hospitals the
following:
-------------------------------------------------------------
|Awaiting Laguna Honda Hospital and Rehabilitation | 4190 days|
|Center | |
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|--------------------------------------------------+----------|
|Acute days denied by Medi-Cal | 437 days|
|--------------------------------------------------+----------|
|Acute days downgraded to administrative days by | 12,974 |
|Medi-Cal | days|
|--------------------------------------------------+----------|
|Total fixed cost of downgrade to administrative | $14.9 |
|days by Medi-Cal | million|
|--------------------------------------------------+----------|
|Total ancillary costs of downgrade to | $26.8 |
|administrative days from Medi-Cal | million|
|--------------------------------------------------+----------|
|Acute days denied by Medi-Cal |437 |
| |days |
-------------------------------------------------------------
Another survey provided by CHA with up to 37 respondents on
behalf of individual hospitals and hospital systems that are
members of CHA, indicates for difficult-to-discharge patients
by payer source Medi-Cal (91.9%) and unfunded/self-pay (89.2%)
were the highest categories, followed by MCMC, including
mental health (67.6%). In this survey, 50% of respondents
indicate a one to three day delay in discharge and 31% of
respondents indicate seven to 30 day delay in discharge.
Respondents indicate the factors which most frequently impact
ability to discharge are: presence of behavioral health
(91.9%); need for long-term custodial placement (81.1%);
family issues (64.9%); multiple needs (59.5%); need for
dialysis (51.4%); ventilator dependent (37.8%); and, need
skilled IV therapy (35.1%). In response to a question about
barriers to discharge, the top issues are: discharge to
non-skilled nursing facility (SNF) settings; respondents
indicate lack of reimbursement for alternative settings
(97.3%); lack of caregiver (89.2%); and, no resources for home
attendant (89.2%). Approximately 34% of respondents indicate
that 25-49% of their difficult-to-discharge patients are
subsequently re-admitted to a hospital.
2)HOSPITAL DISCHARGE AND READMISSION . Much attention has been
placed on hospital quality of care including financial
penalties for unplanned readmissions. Tracking the number of
patients who experience unplanned readmissions to hospitals
after previous hospital stays is one category of data used to
judge the quality of hospital care. One example of an
unplanned readmission would be someone who is readmitted to
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the hospital for a surgical wound infection that occurred
after his or her initial hospital stay. In 2009, 16% of
Medicare inpatients treated for medical conditions were
readmitted within 30 days of discharge in California, a
similar percentage as the nation. California hospitals
performed slightly better than the US average for Medicare
surgical readmissions. The focus of this bill is not hospital
readmissions. High rates of readmissions may indicate poor
discharge planning and insufficient coordination of
post-discharge care. This bill's focus is on the problem
created when patients no longer needing inpatient care cannot
easily be discharged for a variety of reasons including
insufficient coordination of post-discharge care.
3)BACKGROUND . In November of 2010, California obtained federal
approval for a Section 1115(b) Medicaid Demonstration Waiver
from CMS entitled "A Bridge to Reform Waiver." Among other
provisions, this waiver authorized mandatory enrollment into
MCPs of over 600,000 low-income SPDs who are eligible for
Medi-Cal only (not Medicare) in 16 counties. Enrollment was
phased in over a one-year period in the affected counties;
beginning on June 1, 2011. Services covered were preventative
and acute medical services including out-patient, primary
care, specialty care, care coordination, in-patient services,
durable medical equipment, drugs, and medical transportation.
Long-Term Services and Supports (LTSS) were carved out of
managed care and are largely provided through fee-for-service
(FFS). In the proposed 2012-13 Budget, the Brown
Administration requested authority from the Legislature to
allow a statewide CCI and proposed to include LTSS for dual
eligibles and SPDs into a coordinated delivery system that
would be delivered using managed care models. The LTSSs
proposed to be integrated included IHSS, Community-Based Adult
Services (CBAS), Multipurpose Senior Services (MSSP), and
skilled-nursing facility (SNF) services. The Legislature
enacted a modified version of the Governor's proposal in SB
1008 (Committee on Budget and Fiscal Review), Chapter 33,
Statutes of 2012, and SB 1036 (Committee on Budget and Fiscal
Review), Chapter 45, Statutes of 2012.
The two major parts of the CCI are the "Duals Demonstration" and
"Managed Medi-Cal LTSS." The Duals Demonstration is a
voluntary three-year demonstration for dual eligible
beneficiaries to receive coordinated medical, behavioral
health, long-term institutional, and home and community-based
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services through a single organized delivery system. The
demonstration is limited to eight counties, beginning no
sooner than March 2103. The eight counties selected are
Alameda, Los Angeles, Orange, Riverside, San Bernardino, San
Diego, San Mateo, and Santa Clara. The CCI will use a
capitated payment model to provide Medicare and Medi-Cal
benefits through existing MCPs. The Managed Medi-Cal LTSS
requires Medi-Cal-only SPDs (who are currently mandated to
enroll in a MCP for health care services) and dual eligibles
to receive their Medi-Cal LTSS and behavioral and health care
services through the same plans.
4)Cal MediConnect . Federal approval for the dual eligible
portion of the CCI was received on March 27, 2013 in the form
of a Memorandum of Understanding (MOU), referred to as the Cal
MediConnect program. This component is the framework for the
demonstration allowing the combination of all Medicare and
Medi-Cal benefits into one plan. The MOU contains several
changes from the state's original proposal. Enrollment will
begin no earlier than October 2013. Beneficiaries would begin
receiving notices about their choices and upcoming changes no
earlier than July 2013. Beneficiaries who enroll in a Cal
MediConnect health plan can opt out at any time. California
originally proposed an initial six-month period, during which
eligible beneficiaries would have been required to remain in
the same health plan. The MOU allows for 456,000 total
beneficiaries to be eligible for enrollment into the Cal
MediConnect program. This is almost half the size called for
in the Governor's 2012-13 Budget Proposal of January 2012.
The number of enrollees in Los Angeles County will be capped
at 200,000 and enrollment will occur over a 15 month period.
There are also specified exempt populations, such as persons
with developmental disabilities receiving services through a
regional center, persons enrolled in specified waiver
programs, and except in San Mateo and Orange counties, persons
with end stage renal disease. In San Mateo enrollment will be
completed by January 1, 2014 and in the other six counties,
enrollment will be over a 12 month period.
5)POPULATION CHARACTERISTICS . About 1.9 million SPDs are
enrolled in Medi-Cal. The majority of SPDs are also eligible
for Medicare, the federal program that provides medical
services to qualifying persons over age 65 and certain persons
with disabilities. The SPDs who are eligible for both
Medi-Cal and Medicare are known as dual eligibles and receive
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services paid by both programs. Most of the 1.2 million dual
eligibles in California currently receive both their medical
and LTSS benefits under FFS. Although more than half of the
700,000 Medi-Cal-only SPDs have been mandatorily enrolled in
MCMC for their medical benefits, they also continue to receive
most LTSS benefits under FFS. Generally, SPDs are more
expensive to serve than other Medi-Cal beneficiaries because
of the higher prevalence of complex medical conditions and
greater functional needs within this population. According to
the Legislative Analyst's Office (LAO), CCI Update, February
2013, in 2011-12, SPDs represented 25% of enrollment but 60%
of General Fund expenditures in the Medi-Cal program. The LAO
stated that the high cost of SPDs may be exacerbated by the
fragmentation of care under the current framework, in which
Medi-Cal FFS, MCMC, and Medicare function in silos. Over 35%
are receiving LTSS and 5% are residents of a LTC facility.
Forty-four percent have three of more chronic conditions. The
top three are diabetes (41.6%), arthritis (31.8%), and heart
disease (29.1%).
6)INTERDISCIPLINARY CARE TEAM (ICT) As part of the CCI plans
will comply with the with following requirements regarding
ICTs:
a) Plans will have the ability to facilitate and support an
ICT to coordinate the delivery of services and benefits as
needed for each member. Plans will make the initial
determination of which members need an ICT, although every
member will have access to an ICT if requested.
b) The role of the ICT is care management, including
assessment, care planning, and authorization of services,
transitional care issues and working closely with IHSS,
CBAS, MSSP, and SNF providers to stabilize medical
conditions, increase compliance with care plans, maintain
functional status, and meet individual members' care plan
goals.
c) The ICT will be led by professionally knowledgeable and
credentialed personnel such as physicians, nurses, social
workers, restorative therapists, pharmacists, and
psychologists.
d) The membership of the ICT will include the member and/or
authorized representative if willing or able to
participate, primary care provider, plan care coordinator,
and may include the following persons, as needed, and if
available:
i) Hospital discharge planner.
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ii) Nursing facility representative.
iii) Pharmacist, physical therapist, other
specialized provider.
iv) IHSS social worker, if receiving IHSS.
v) IHSS provider if approved by Member.
vi) MSSP care manager, if enrolled in MSSP.
vii) CBAS provider, if enrolled in CBAS.
viii) Behavioral Health specialist.
ix) Other professionals as appropriate.
e) Plans will support multiple levels of interdisciplinary
communication and coordination, such as individual
consultations among providers, county agencies, and
members.
f) Plans will have procedures for notifying the ICT of
hospital admission (psychiatric or acute), and coordinating
a discharge plan, if applicable.
g) Plans will not require a member to participate in an ICT
if that member objects.
h) Plans will adhere to a member's determination about the
appropriate involvement of his or her medical providers and
caregivers, according to the Health Insurance Portability
and Accountability Act of 1996 and for patients in
substance use disorder treatment.
7)SUPPORT . CHA states that many hospitals face significant
difficulty securing appropriate post-hospital care for
patients who no longer require a hospital level of care and
may have specialized needs. As a result, these individuals
may remain in hospital beds beyond the time required to treat
their medical condition, often for extended periods. CHA
states that hospital personnel may be unable to locate a
facility that has the capability and capacity to accept a
patient who requires continued specialized care. In other
cases, individuals may be able to go home or to a community
setting with support, but the necessary reimbursement or
ongoing care coordination may not be available. CHA states
that CCI, which integrates LTSS into managed care and
transitions the dually eligible into managed care, provides a
unique opportunity to develop new models of care. This bill
aligns financial incentives to allow-third party payers and
providers to work together to support effective transitions of
care. The California Chapter of the American College of
Emergency Physicians (Cal ACEP) believes this is an important
measure which would reduce emergency department crowding by
ensuring that patients are not held in the hospital beyond
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when it is medically necessary.
8)OPPOSITION . The California Association of Health Plans (CAHP)
opposes this bill because CAHP believes it unfairly penalizes
health plans when patients are not discharged out of an
inpatient hospital setting into lower levels of care. CAHP
indicates that finding the correct care setting is a shared
responsibility between plans, providers, and hospitals. CAHP
indicates that health plans do not cause patients to stay in
the hospital when inpatient care is not needed. The
Association of California Life and Health Insurance Companies
(ACLHIC) finds language in this bill offensive and asserts
there is no supporting evidence that health insurers are
deliberately causing delays with respect to discharging
patients. According to CAHP, in many cases the medical
management team of the health plan will use registered nurses
to work with hospital staff to identify a patient needing a
different level of care. They also participate and assist in
discharge planning. In most cases where an in-network
facility is not available, health plans routinely initiate
letters of agreement or MOUs with an out-of-network facility
until the appropriate location is identified. CAHP indicates,
contrary to this bill, that health plans report they often
find it difficult to deal with the hospital when plan medical
staff believes an enrollee is ready for a lower level care.
ACLHIC believes this bill creates a harsh and arbitrary
penalty structure which exposes an insurer to a daily penalty
if an insured is not transferred to an alternative community
setting within 72 hours, regardless of reason. This places an
unreasonable burden on insurers as they have very little
control over when and if a patient is discharged.
The Local Health Plans of California (LHPC), representing 14
local plans serving over 3 million people on Medi-Cal,
believes this bill puts arbitrary time frames on the process
for communication between the hospital and the health insurer
or plan, and on the transfer of the patient. What makes these
time frames arbitrary, are the penalties for the failure of
the transfer to be made. According to LHPC, this bill doubles
the rate for the inpatient day, and does so in the form of a
penalty. Doing so without regard to the myriad circumstances
that may arise in considering how to address the patient's
needs only serves to create tension and difficulties between
those providing care and those responsible for arranging for
care.
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9)RELATED LEGISLATION .
a) AB 974 (Hall) establishes a requirement for hospitals
seeking to transfer a person from one facility to another
for nonmedical reasons to first ask for a contact person
who should be notified and informed about any proposed
transfer. AB 974 passed the Assembly Health Committee and
is currently in the Assembly Appropriations Committee.
b) AB 1382 (Committee on Health) makes technical changes to
terms used in the reporting of health data information by
specified health facilities to the Office of Statewide
Health Planning and Development (OSHPD). AB 1382 passed
the Assembly and is currently in Senate Rules pending
referral.
c) SB 508 (Ed Hernandez) requires OSHPD to develop a health
disparity report based upon the inpatient hospital
discharge data set, requires the report to focus on
specified areas of concern, such as cardiovascular disease,
and breast cancer, and OSHPD to report their findings to
the Legislature by January 1, 2016. SB 508 is pending the
Senate Health Committee.
d) SB 701 (Emmerson) requires the Medical Board of
California to adopt standards for accreditation of entities
known as hospital-affiliated outpatient settings, as
defined, and would align the accreditation and reporting
processes with those of the general acute care hospital
with which the hospital-affiliated outpatient settings is
affiliated. SB 701 is currently set for hearing on the Sen
Business, Professions and Economic Development Committee.
10)PREVIOUS LEGISLATION .
a) AB 1453 (Monning), Chapter 854, Statutes of 2012 and SB
951 (Hernandez), Chapter 866, Statutes of 2012, establish
California's EHBs.
b) SB 1008 and SB 1036 authorize the CCI as an eight-county
pilot project to: i) integrate Medi-Cal and Medicare
benefits under managed care for dual eligibles; and, ii)
integrate LTSS under managed care for dual eligibles and
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Medi-Cal-only SPDs.
c) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
contained the provisions implementing Section 1115(b)
Medicaid Demonstration Waiver from CMS entitled "A Bridge
to Reform Waiver." Among the provisions, this waiver
authorized mandatory enrollment into MCPs of over 600,000
low-income SPDs who are eligible for Medi-Cal only (not
Medicare) in 16 counties
11)POLICY COMMENT . There are some populations for whom
discharge from a hospital setting presents many challenges.
For example, some individuals need a type or level of care
they do not have the resources or coverage to secure. Others
may live alone, are homeless, or have families who want
arrangements made for discharge to a facility closer to family
members. Individuals on Medi-Cal, especially seniors and
persons with disabilities, tend to have complex health
conditions and low-income which can translate to these
hospital discharge issues applying at disproportionately
higher rates. Fee-for-service Medi-Cal pays hospitals an
administrative rate for this purpose. Additionally, with CCI,
the state is placing an emphasis on more coordinated managed
and integrated care, including LTSS. It appears the
objectives of this bill are aimed at the Medi-Cal program,
including MCPs. Proponents seem to feel that the current
administrative rate is not sufficient and that the financial
incentives in the initiatives underway to coordinate care will
not do enough to encourage MCPs to assist hospitals with these
discharge challenges.
REGISTERED SUPPORT / OPPOSITION :
Support
California Hospital Association (sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
Association of California Healthcare Districts
California Chapter of the American College of Emergency
Physicians
Congress of California Seniors
Doctors Medical Center of Modesto
Hospital Corporation of America
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Opposition
Association of California Life and Health Insurance Companies
California Association of Health Plans
Local Health Plans of California
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097