BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 494
                                                                  Page  1

          Date of Hearing:   August 30, 2013

                                  Mike Gatto, Chair

                   SB 494 (Monning) - As Amended:  August 19, 2013 

          Policy Committee:                             HealthVote:18-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No


          This bill modifies standards related to primary care providers  
          in managed care plans.  Specifically, this bill:

          1)Until January 1, 2019, for purposes of health plans, including  
            Medi-Cal managed care plans, permits assignment of an  
            additional 1,000 patients to a physician's panel for every  
            nurse practitioner (NP) or physician assistant (PA) supervised  
            by the physician.  

          2)Defines the term "nonphysician medical practitioner" in the  
            Welfare and Institutions Code, Insurance Code, and Health and  
            Safety Code.  

          3)Until January 1, 2019, for purposes of Medi-Cal managed care,  
            explicitly authorizes assignment of up to 2,000 beneficiaries  
            for each full-time equivalent primary care physician in  
            addition to the authorization in (1) above.

           FISCAL EFFECT  

          1)Potentially significant cost pressure to Medi-Cal managed care  
            (MCMC) rates (GF/federal funds) if plans are forced to change  
            or expand their networks to accommodate the new requirements  
            in (3) above. It is difficult to evaluate the cost  
            implications of compliance with this new standard, as neither  
            the plan nor the state regulates the number of members an  
            individual provider is willing to accept into a panel.  

          2)Unknown, likely minor, one-time administrative costs to the  
            Department of Health Care Services (DHCS) (GF/federal funds)  
            and likely some level of expenditure ongoing, to verify  


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            compliance with the new requirements in (3), above, related to  
            panel size of physicians who contract with MCMC plans.

          3)One-time costs of $600,000 to DMHC (Managed Care Fund) for  
            review of licensee's documents verifying compliance with these  

          4)Minor potential ongoing costs, in the tens of thousands of  
            dollars annually, to DMHC (Managed Care Fund), for enforcement  
            of new rules related to the size of physician panels.  

          5)It is unclear if this bill will trigger a review of network  
            adequacy requirements in regulation, given the new definitions  
            and authorizations. If it does, both the California Department  
            of Insurance and DMHC may incur associated special fund costs.  
             Costs would depend on the depth of review and revision of  


          1)Rationale  . The author believes this bill will encourage  
            greater use of NPs and PAs as primary care providers in the  
            managed care setting. Currently, managed care contracts in the  
            Medi-Cal program allow assignment of a caseload of up to 1,000  
            patients to nonphysician medical practitioners.  This bill  
            applies a similar logic to managed care plans broadly. 
             The sunset was added in Health committee in order to reexamine  
            the impact of this policy in several years.  The bill is  
            sponsored by California Association of Physician Groups (CAPG)  
            and the California Academy of Physician Assistants, and has no  
            registered opposition.

           2)Background  . In order to maintain a plan license, managed care  
            plans must meet, among other standards, network adequacy  
            requirements that establish minimum ratios of enrollees to  
            physicians.  Currently, DMHC regulations require a ratio of  
            one fulltime equivalent physician to every 2,000 enrollees in  
            a plan. This bill explicitly permits assignment of an  
            additional 1,000 patients to a physician's panel for every  
            nonphysician primary care provider in managed care plans.  If  
            additional patients can be served by NPs and PAs in a group  
            setting, it may trigger a reevaluation of what constitutes  
            adequate networks for purposes of primary care.  Additionally,  
            the hire of more nonphysician medical practitioners would  


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            better allow physician practices to expand capacity and meet  
            requirements on timely access to care under the Knox-Keene  
            3)Medi-Cal Managed Care (MCMC)  . Currently MCMC plans are  
            required to maintain a ratio of one primary care physician  
            (PCP) for every 2,000 members, but neither the plan nor the  
            state regulates the number of members an individual provider  
            is willing to accept into a panel.  The plan will, however,  
            have to meet standards related to timely access to care, which  
            limits the number of patients a physician or physician group  
            can manage for purposes of primary care.  This bill explicitly  
            authorizes assignment of "up to" 2,000 patients per physician,  
            but the number of patients per physician is not directly  
            capped or limited elsewhere in law or regulation.  Thus, the  
            implication of this change is not clear, as the number of  
            patients assigned to each physician is not currently centrally  
            4)Related Legislation  . SB 491 (Ed Hernandez) permits a NP to  
            practice independently after a period of physician supervision  
            if the NP has national certification and liability insurance,  
            and authorizes the NP to perform various other specified tasks  
            related to the practice of nursing without protocols.  

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081