BILL ANALYSIS Ó
SB 1004
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Date of Hearing: July 2, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1004 (Hernandez) - As Amended: May 5, 2014
Policy Committee: HealthVote:18-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires the Department of Health Care Services (DHCS)
to develop a pilot project to evaluate the medical necessity and
cost-effectiveness of offering an adult palliative care benefit
in the Medi-Cal program. It also requires the department to
submit any necessary federal waiver applications and requires
implementation only to the extent federal financial
participation is available.
FISCAL EFFECT
1)$500,000 to $1,000,000 (GF/federal) in staff costs to develop
a palliative care waiver program.
2)Uncertain costs of providing palliative care benefits in
Medi-Cal through the pilot (GF/federal). Palliative care
requires an infrastructure and intensive team-based management
of patients, which does have an up-front cost. Information
from providers of these benefits in a similar pediatric
program suggests reimbursement of about $1,000 per child, per
month. On the other hand, palliative care has also been shown
to significantly reduce costs for hospital inpatient services.
One study of the pediatric pilot mentioned above reported net
cost savings of $1,700 per child per month.
Medi-Cal coverage of palliative care benefits for pilot
enrollees does not appear likely to increase overall net
Medi-Cal benefits costs. But because palliative care benefits
are paid out up-front and the savings results from reduced
inpatient utilization, the actual cost impact to the state is
uncertain. It would depend on how the palliative care benefit
is structured, how the population is defined, how and when
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services are reimbursed, where savings are incurred and
whether, how, and when the state captures potential savings.
Given the nuances of Medi-Cal funding, particularly the
involvement of managed care plans and public hospitals in
paying for Medi-Cal services, it appears the pilot project
could be cost-neutral or cost-saving for the state, but it
would have to be carefully structured in order to ensure costs
and savings accrue to appropriate entities.
3)Costs of around $200,000 (GF/federal) to conduct an evaluation
of the pilot program.
COMMENTS
1)Purpose . According to the author, an abundance of recent
evidence suggests that an expansion of patient and family
centered palliative care has the potential to change health
outcomes for many Californians, while reducing costs
associated with inpatient care. Palliative care is designed
to better address patient preferences for patients facing
advanced illness. With palliative care, the author asserts,
patients can live longer with a higher quality of life and
fewer hospitalizations.
2)Background . Palliative care is specialized medical care for
people with serious illnesses. It is intended to provide
patients with relief from the symptoms, pain, and stress of a
serious illness. The goal is to improve quality of life for
both the patient and the family. Palliative care is provided
by a team of doctors, nurses, and other specialists who work
together with a patient's other doctors to provide an extra
layer of support. It is appropriate at any age and at any
stage in a serious illness and can be provided along with
curative treatment.
3)Pediatric Pilot . AB 1745 (Chan), Chapter 330, Statutes of 2006
established a pediatric palliative care pilot program for
children with a life-limiting or life-threatening medical
disorder. Benefits include in-home coordinated
family-centered care including pain and symptom management,
access to a 24/7 nurse line, family education, respite care,
expressive therapies and family counseling. Preliminary
findings show a one-third reduction in hospital days per
child, 11% reduction in average costs, and high satisfaction
ratings.
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4)State Health Care Innovation Plan . The California Health and
Human Services Agency has convened stakeholders to make
transformational improvements to the health care system
through the Innovation Plan, which feeds in to a federal grant
proposal. Assuming the state's application is approved, a
potential federal implementation grant of $60 million is
available.
The Innovation Plan defines palliative care as one of four
critical initiatives to improving health care in the state,
and calls for removal of barriers to provision of palliative
care. The plan estimates overall savings of providing
palliative care at $20-26 million total funds to Medi-Cal over
the first three years of offering such benefits.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081