BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        SB 870|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                 UNFINISHED BUSINESS


          Bill No:  SB 870
          Author:   Senate Budget and Fiscal Review Committee
          Amended:  6/13/14
          Vote:     21

           
          PRIOR VOTES NOT RELEVANT

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Budget Act of 2014:  Health

           SOURCE  :     Author


           DIGEST  :    This is the Omnibus Health Trailer Bill for the  
          2014-15 Budget Act.  It contains necessary changes related to  
          the Budget Act of 2014-15.

           Assembly Amendments  delete the Senate version of the bill, which  
          expressed legislative intent to enact statutory changes relating  
          to the Budget Act, and instead add the current language. 

           ANALYSIS  :    This bill makes the following statutory changes to  
          implement the 2014-15 Budget:
          
            1. Medi-Cal:  Applied Behavioral Analysis (ABA).   This bill  
             requires ABA, or behavioral health treatment, to be a covered  
             Medi-Cal service for individuals under age 21 to the extent  
             required by the federal government.  This bill requires the  
             Department of Health Care Services (DHCS) to implement this  
             new benefit only after consultation with stakeholders.
                                                                CONTINUED





                                                                     SB 870
                                                                     Page  
          2


            2. Medi-Cal:  Supplemental Managed Care Organization (MCO) Drug  
             Rebates for Specialty Drugs.   This bill allows for MCO  
             supplemental rebates for specialty drugs, such as Hepatitis C  
             drugs like Sovaldi.  This rebate collection occurs when (1)  
             DHCS reimburses health plans through a separate capitated  
             payment or other supplemental payment ("kick-payment") for  
             the specialty drug and (2) health plans follow the clinical  
             guidelines (coverage policies) for this drug.  It is  
             estimated that this change would result in $6 million General  
             Fund savings in 2014-15, $20 million General Fund savings in  
             2015-16, and $31 million General Fund savings annually  
             thereafter.

            3. Medi-Cal:  Pediatric Vision Projects.   This bill implements  
             a pilot program in Los Angeles County no sooner than January  
             1, 2015, and concluding December 31, 2017, to expand  
             pediatric vision examinations and services through the use of  
             mobile vision providers.

            4. Medi-Cal:  Program of All-Inclusive Care for Elderly (PACE)  .  
             This bill requires that PACE capitation rates be no less than  
             95% of the fee-for-service equivalent cost (current law is  
             90%).  It is estimated that this change would result in $1.8  
             million General Fund costs in 2014-15, and $7.3 million  
             General Fund costs annually, thereafter.

            5. Medi-Cal: Rates and Access.   This bill expresses the  
             Legislature's intent that DHCS continue to monitor access to  
             and utilization of Medi-Cal services and to use this  
             information to evaluate the current reimbursement levels and  
             make targeted changes to those reimbursement levels as it  
             finds appropriate.

            6. Robert F. Kennedy Health Plan.   This bill provides $3.2  
             million in one-time funds from the Major Risk Medical  
             Insurance to DHCS to be allocated to the Robert F. Kennedy  
             Health Plan for purposes of purchasing stop loss insurance.

            7. Electronic Health Records - State Match.   This bill provides  
             $3.75 million in one-time funds from the Major Risk Medical  
             Insurance to DHCS to be used as the state match to draw down  
             $37.5 million in federal funds to support the meaningful use  
             of electronic health records in the state.

                                                                CONTINUED





                                                                     SB 870
                                                                     Page  
          3


            8. HIV Demonstration Projects.   This bill establishes public  
             health demonstration projects for innovative, evidence-based  
             approaches to provide outreach, HIV and Hepatitis C  
             screenings, and linkages to, and retention in, quality health  
             care for underserved individuals with high-risk for HIV  
             infection.

            9. Song-Brown Program - New Residency Slots.   This bill  
             specifies criteria for funds appropriated in the budget act  
             for Song-Brown grants to primary care residency training  
             programs. This bill specifies that priority shall be given to  
             support new primary care physician slots and shall be given  
             to physicians who have graduated from a California-based  
             medical school.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Budget Committee, the funding related to  
          the changes in this bill is contained in the 2014-15 Budget.   
          This bill reappropriates Department of Developmental Services'  
          funds.


          JL:nl  6/15/14   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

                                   ****  END  ****















                                                                CONTINUED