BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                        AB 68

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          68 (Waldron)

          As Amended  June 1, 2015

          Majority vote

          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |Health          |19-0  |Bonta, Maienschein, |                      |
          |                |      |Bonilla, Burke,     |                      |
          |                |      |Chávez, Chiu,       |                      |
          |                |      |Gomez, Gonzalez,    |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |                |      |Roger Hernández,    |                      |
          |                |      |Lackey, Nazarian,   |                      |
          |                |      |Patterson,          |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |                |      |Ridley-Thomas,      |                      |
          |                |      |Rodriguez,          |                      |
          |                |      |Santiago,           |                      |
          |                |      |Steinorth,          |                      |
          |                |      |Thurmond, Waldron,  |                      |
          |                |      |Wood                |                      |
          |                |      |                    |                      |
          |Appropriations  |17-0  |Gomez, Bigelow,     |                      |
          |                |      |Bonta, Calderon,    |                      |


                                                                        AB 68

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          |                |      |Chang, Daly,        |                      |
          |                |      |Eggman, Gallagher,  |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |                |      |Eduardo Garcia,     |                      |
          |                |      |Gordon, Holden,     |                      |
          |                |      |Jones, Quirk,       |                      |
          |                |      |Rendon, Wagner,     |                      |
          |                |      |Weber, Wood         |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |

          SUMMARY:  Establishes that a beneficiary has a right to an urgent  
          appeal process of a Medi-Cal managed care plan's denial of a drug  
          used in the treatment of seizures and epilepsy and is a drug  
          approved by the federal Food and Drug Administration for the  
          treatment of seizures and epilepsy.
          EXISTING LAW:

          1)Requires states, under the federal Medicaid law, to have a drug  
            use review program for covered outpatient prescription drugs, to  
            ensure drugs are appropriate, medically necessary, and not  
            likely to result in adverse medical effects.  Federal law  
            requires the program to assess data on drug use against  
            predetermined standards, consistent with specified factors,  
            including compendia.
          2)Provides a schedule of benefits provided in the Medi-Cal  
            program, including prescription drug benefits.

          3)Authorizes the Department of Health Care Services to establish  
            utilization controls for any Medi-Cal services as long as the  
            controls are reasonably related to the purpose of establishing  
            them.  Allows the utilization controls include prior  
            authorization, pre- and post-service audits, limitations on the  
            number of services and review pursuant to professional  


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          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, unknown, likely minor, potential increased  
          administrative costs for the fee-for-service Medi-Cal, and cost  
          pressure to managed care, for an additional number of appeals.  

          COMMENTS:  The author argues this bill is a reasonable plan to  
          stabilize those with life-threatening conditions by ensuring a  
          timely appeal if there is a denial by a managed care plan.  The  
          author notes those who can afford private insurance plans have  
          doctors who may have more time to work through the existing  
          pre-authorization processes to attain a higher tier drug for their  
          patients, however, those in vulnerable low-income situations are  
          seeing their doctors most likely in clinics, where doctors are  
          short on time and do not have the resources to follow-up on  
          preauthorization appeals.  The author concludes this bill levels  
          the playing field for access to medically necessary drugs for low  
          income patients with serious, chronic or life threatening  
          conditions by granting them the right to an urgent appeal.

          Medi-Cal is one of the largest drug purchasers in the state.  The  
          program spends about $4 billion on prescription drugs, including  
          indirect expenditures through payment to managed care plans and  
          direct expenditures in fee for service and for prescription drugs  
          that are "carved out" of managed care.  Carved out means that the  
          state pays directly for the drug rather than indirectly through a  
          capitated or fixed rate payment to a Medi-Cal managed care plan. 

          Facing significantly rising costs, the federal and state  
          governments have grappled with various cost control measures.   
          California, to help manage costs, has established a formulary for  
          the fee-for service program.  The formulary is not binding on  
          Medi-Cal managed care plans, each of which creates their own  
          formulary.  A variety of utilization tools also are used.  These  


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          include limiting prescriptions to six per month, although many  
          beneficiaries receive more but only after a prior authorization  
          has been approved.  Frequent and high cost prescription drug users  
          can be identified and case management interventions can be used if  
          appropriate to reduce drug costs.

          Epilepsy is a chronic disorder, the hallmark of which is  
          recurrent, unprovoked seizures.  Many people with epilepsy have  
          more than one type of seizure and may have other symptoms of  
          neurological problems as well.  Although the symptoms of a seizure  
          may affect any part of the body, the electrical events that  
          produce the symptoms occur in the brain.  The location of that  
          event, how it spreads and how much of the brain is affected, and  
          how long it lasts all have profound effects. These factors  
          determine the character of a seizure and its impact on the  
          individual.  Having seizures and epilepsy can affect one's safety,  
          relationships, work, driving and so much more.  How epilepsy is  
          perceived or how people are treated can become a bigger problem  
          than the seizures.

          Anti-epileptic drugs (AEDs) are the main form of treatment for  
          people with epilepsy. And up to 70% people with epilepsy could  
          have their seizures completely controlled with AEDs. There are  
          around 25 AEDs used to treat seizures, and different AEDs work for  
          different seizures.

          Supporters note, on a prior version of this bill, that epilepsy is  
          a serious medical condition that produces seizures and one seizure  
          can have significant consequences, including head injury,  
          limitations in driving or employment, hospitalization and sudden  
          unexpected death.  They argue that failure to effectively manage  
          epilepsy and prevent breakthrough seizures results in higher costs  
          to the Medi-Cal program and society through increased  
          hospitalizations, relapses and deteriorating conditions which  
          necessitate additional and expensive care.  


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          There is no known opposition to this bill.

          Analysis Prepared by:                                               
                          Roger Dunstan / HEALTH / (916) 319-2097  FN: