BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1004 (Hernandez) - Health facilities: hospice care.
Amended: May 5, 2014 Policy Vote: Health 9-0
Urgency: No Mandate: No
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: SB 1004 would require the Department of Health
Care Services to develop a pilot project to provide a palliative
care benefit to adult Medi-Cal beneficiaries.
Fiscal Impact:
Likely costs of about $900,000 over two years to design the
pilot project and negotiate a waiver with the federal
government (General Fund and federal funds). Based on the
workload to engage with stakeholders, design the pilot
project, and negotiate an agreement with the federal
government, staff estimates that he Department would need
about three additional staff positions for one to two years.
One-time costs, likely in the range of $150,000 to $300,000
to conduct an evaluation of the pilot project once enough
data has been collected (General Fund and federal funds).
Unknown potential for cost savings from the pilot project
(General Fund and federal funds). The state created a pilot
project for pediatric palliative care in the Medi-Cal
program from 2009 to 2012. According to a preliminary
analysis of the pilot project, total spending for
participants was about $1,700 per month less than it would
have been under standard Medi-Cal pediatric benefits.
Similarly, an analysis of a pilot project to provide adult
palliative care benefits in New York State indicated that
hospitalization costs were substantially reduced for program
participants.
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with low incomes, as well as blind, disabled, and
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certain other populations. Generally, the federal government
provides a 50 percent federal match for state expenditures.
Pursuant to the federal Affordable Care Act, California has
opted to expand eligibility for Medi-Cal up to 138 percent of
the federal poverty level and to include childless adults. The
Affordable Care Act provides a significantly enhanced federal
match for the Medi-Cal expansion. Under the law, the federal
government will pay for 100 percent of the cost of the Medi-Cal
expansion in 2013-14, declining to a 90 percent federal match in
the 2020 federal fiscal year and thereafter.
With the exception of certain populations (for example,
individuals eligible for limited scope Medi-Cal benefits or
individuals dually eligible for Medi-Cal and Medicare in most
counties), managed care is the primary system for providing
Medi-Cal benefits. The Department estimates that in 2014-15, 7.5
million Medi-Cal beneficiaries (73 percent of total enrollment)
will receive care through the managed care system.
Palliative care provides relief from pain and the stress of
serious illness. Palliative care is typically provided by an
interdisciplinary team and can be provided alongside treatment
intended to cure the underlying condition.
Proposed Law: SB 1004 would require the Department of Health
Care Services to develop a pilot project to provide a palliative
care benefit to adult Medi-Cal beneficiaries.
Specific provisions of the bill would:
Require the Department of Health Care Services to develop a
pilot project to evaluate whether to offer a palliative care
benefit in the Medi-Cal program;
Limit participation to adult Medi-Cal beneficiaries,
subject to further limitation by the Department;
Specify that the services to be available in the pilot
include Medi-Cal hospice benefits and other services and can
be offered at the same time as curative treatments;
Require the Department to submit a waiver application to
the federal government within twelve months of the bill's
enactment;
Authorize the Department to implement the bill without
adopting regulations.
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Staff Comments: Current federal law allows states to apply for
"waivers" of requirements of the federal Social Security Act.
This process allows states, on a case by case basis, to make
changes to their Medicaid program with the approval of the
federal Centers for Medicare and Medicaid Services. In general,
for the federal government to approve a waiver, the state must
demonstrate that total federal costs will not exceed
fee-for-service equivalent costs to the federal government over
the period of the waiver.
As was noted above, preliminary information indicates that
palliative care benefits in Medi-Cal and New York's Medicaid
program have the potential to reduce costs. Based on this
information, it is likely that the federal government would
authorize a pilot project authorized under this bill.