BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1457| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 1457 Author: Evans (D) Amended: 6/30/14 Vote: 21 SENATE HEALTH COMMITTEE : 7-0, 3/26/14 AYES: Hernandez, Anderson, Beall, DeSaulnier, Evans, Monning, Wolk NO VOTE RECORDED: De León, Nielsen SENATE APPROPRIATIONS COMMITTEE : 5-0, 4/28/14 AYES: De León, Gaines, Hill, Lara, Steinberg NO VOTE RECORDED: Walters, Padilla SENATE FLOOR : 35-0, 5/1/14 AYES: Anderson, Berryhill, Block, Cannella, Corbett, Correa, De León, DeSaulnier, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Knight, Lara, Leno, Lieu, Liu, Mitchell, Monning, Morrell, Nielsen, Padilla, Pavley, Roth, Steinberg, Torres, Vidak, Walters, Wolk, Wyland NO VOTE RECORDED: Beall, Calderon, Jackson, Wright, Yee ASSEMBLY FLOOR : 78-0, 8/14/14 (Consent) - See last page for vote SUBJECT : Medical care: electronic treatment authorization requests SOURCE : Department of Health Care Services CONTINUED SB 1457 Page 2 DIGEST : This bill requires requests for authorization for treatment or services in the Medi-Cal program, California Children's Services (CCS) Program, and the Genetically Handicapped Persons Program (GHPP), excluding those submitted by dental providers enrolled in the Medi-Cal Dental Program, to be submitted in an electronic format determined by the Department of Health Care Services (DHCS) via DHCS' Internet Web site or other electronic means designated by DHCS. Requires DHCS to implement an alternate format for submission when DHCS' Internet Web site is unavailable due to a system disruption. Implements this requirement by July 1, 2015, or a subsequent date determined by DHCS. Assembly Amendments (1) change the implementation date for requests for authorization for treatment or services to be submitted electronically from 2015 to 2016, and (2) clarify that DHCS consider the capacity of independent and rural providers to comply with this bill's provisions. ANALYSIS : Existing law: 1.Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income individuals receive health care benefits. 2.Requires DHCS to administer various health programs, including the CCS Program and the GHPP. The CCS Program provides diagnostic and treatment services, medical case management, and medical and occupational therapy services to eligible children and young adults less than 21 years of age. Eligibility includes diagnosis of specified medical conditions such as cancer, congenital heart disease, and sickle cell anemia. GHPP provides medical care to individuals with genetically handicapping conditions, including cystic fibrosis, hemophilia, sickle cell disease, Huntington's disease, Friedreich's Ataxia, and certain hereditary metabolic disorders. 3.Requires the Director of DHCS to require fully documented medical justification from Medi-Cal providers that requested services are medically necessary to prevent significant illness, alleviate severe pain, protect life, or prevent CONTINUED SB 1457 Page 3 significant disability, on all requests for prior authorization. 4.Requires prior authorization by DHCS or its designee for CCS services provided, except as specified. Makes prior authorization contingent on determination by DHCS or its designee of all of the following: A. The child receiving the services is confirmed to be medically eligible for the CCS Program; B. The provider of the services is approved in accordance with the standards of the CCS Program; and C. The services authorized are medically necessary to treat the child's CCS Program-eligible medical condition. This bill: 1.Requires, by July 1, 2016, or a subsequent date determined by DHCS, requests for authorization for treatment or services in CCS Program, GHPP, and Medi-Cal, excluding requests for authorization of services submitted by dental providers enrolled in the Medi-Cal Dental Program, to be submitted in an electronic format determined by DHCS via DHCS' Internet Web site or other electronic means designated by DHCS. Permits DHCS to implement this requirement in phases. 2.Requires DHCS to designate an alternate format for submitting requests for authorization of services when DHCS' Internet Web site or other electronic means designated in #1 above are unavailable due to an unplanned disruption. 3.Permits DHCS, without taking regulatory action, to implement, interpret, or make specific this bill and any applicable waivers and state plan amendments by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions. Requires DHCS to adopt regulations by July 1, 2017, in accordance with the requirements of the Administrative Procedure Act. Requires DHCS to consult with interested parties and appropriate stakeholders in implementing these provisions. 4.Requires DHCS to consider the capacity of independent sole CONTINUED SB 1457 Page 4 practitioners, small independent provider-owned clinics, and rural providers to comply with the requirements of these provisions, and requires implementation of the electronic submission process to be in a manner that offers these providers both of the following: A. Reasonable time to establish the infrastructure necessary for the generation of electronic treatment authorization requests. B. An opportunity to participate in education and training regarding the generation and submission of electronic treatment authorization requests provided by DHCS or its agents. 1.Requires DHCS to consult with interested parties and appropriate stakeholders in implementing these provisions. Background Current authorization process . DHCS made electronic submissions of Treatment Authorization Requests (TARs) available to Medi-Cal providers statewide starting in 2005. Since then, the use of the internet-based submittal process has steadily grown. In fiscal year 2012-13, DHCS received approximately 2.2 million TARs requiring adjudication. As of July 2013, DHCS received 84% of pharmacy TARs and 70% of medical TARs electronically. Medi-Cal providers can submit TARs electronically through a secure DHCS internet-based system, via mail, or by fax. When providers electronically submit TARs, the accompanying documents can be uploaded along with the TAR. DHCS staff can then review the documentation directly from their computers and adjudicate the TAR, and there is no paper for Xerox staff (DHCS' fiscal intermediary) to prepare, route, or file. In contrast, under CCS and GHPP, providers/counties submit all Service Authorization Requests (SARs) via mail or fax, which requires staff to manually log and convert the files to a portable document format. Although CCS uses a web-based tool that allows providers to electronically access SARs (referred to as the Children's Medical Services Network or CMS Net), CMS Net does not allow for electronic submission of required medical justification. As a result, all CCS Program medical eligibility CONTINUED SB 1457 Page 5 reviews are performed manually. When DHCS receives a paper TAR via mail or fax, Xerox staff must first complete an intake process (date/time stamp, sorting, routing, etc.) and then manually enter data from the TAR into the Service Utilization Review, Guidance, and Evaluation (SURGE) application that DHCS uses to adjudicate TARs. In addition, there may be medical documentation, such as medical records, that accompanies the TAR. This documentation cannot be entered (or uploaded) into SURGE, and is instead made available to DHCS staff when the TAR is adjudicated. When Xerox staff has entered the TAR data into SURGE and DHCS staff has the medical documentation, the TAR can be adjudicated. Once the TAR is adjudicated, Xerox staff must then file the paper TAR and the accompanying documentation. This process requires additional staff resources and maintaining a secured storage location. DHCS is planning to implement a new electronic TAR submission system, with a tentative implementation date of July 1, 2015. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Assembly Appropriations Committee: One-time costs to DHCS of less than $100,000 to develop and adopt policies and regulations (25% General Fund / 75% federal). DHCS indicates that the existing contract with their fiscal intermediary requires it to be able to process additional electronic submissions and provide any training or customer service needed by health care providers during the transition to electronic requests, so no additional administrative or information technology costs are expected. Unknown, likely significant ongoing cost savings by reducing administrative workload to process paper requests for treatment authorizations in Medi-Cal (General Fund/federal). SUPPORT : (Verified 8/15/14) Department of Health Care Services (source) California Society of Health-System Pharmacists ARGUMENTS IN SUPPORT : This bill is sponsored by DHCS to streamline the current TAR/SAR process by requiring all Medi-Cal CONTINUED SB 1457 Page 6 providers, excluding dental providers enrolled in the Denti-Cal Program, to submit TARs and SARs electronically. DHCS argues the current TAR and SAR submission methods involving different processing methods reduces the overall efficiency of the TAR and SAR review process as DHCS staff will have the ability to route all incoming TARs/SARs to the appropriate office for adjudication based on workload, volumes, and staff availability. Additionally, paper submissions (by mail or fax) place clients at an increased risk for unauthorized disclosure of confidential protected health information because the data is not directly transmitted from the provider to the DHCS computer system. The proposed statutory change would allow DHCS to have one uniform submission and adjudication system, as opposed to the current separate electronic and paper-based systems. The uniform system will improve efficiency and consistency of TAR/SAR processing including the adjudication timeframes, and there will be a reduced risk of information security breaches because fewer individuals will view or handle documents and the possibility of losing, misfiling, or incorrectly mailing or faxing the TAR/SAR or related documents will also be reduced. Finally, DHCS anticipates that it will be able to reduce or eliminate administrative costs associated with paper and fax submissions of TARs/SARs, such as fax machines and toner, fax machine maintenance agreements, storage space, paper purchases, postage costs, and support staff. ASSEMBLY FLOOR : 78-0, 8/14/14 AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Hall, Harkey, Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins NO VOTE RECORDED: Roger Hernández, Vacancy JL:e 8/15/14 Senate Floor Analyses CONTINUED SB 1457 Page 7 SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED