BILL ANALYSIS                                                                                                                                                                                                    

                                                                      AB 68

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          68 (Waldron)

          As Amended  August 18, 2015

          Majority vote

          |ASSEMBLY:  |78-0  |(June 3, 2015) |SENATE: |40-0  |(September 2,    |
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          Original Committee Reference:  HEALTH

          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.

          The Senate amendments clarify that an urgent appeal process must  
          be requested orally or in writing by a beneficiary or treatment  
          provider with the consent of the beneficiary.

          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,  


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            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 (DHCS) 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  

          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, likely one-time costs of up to $150,000 to make  
          administrative changes by DHCS, likely minor costs to monitor  
          Medi-Cal managed care plan compliance with the bill's  
          requirements by DHCS, and an unknown impact on the cost to  
          provide prescription drugs by Medi-Cal managed care plans.

          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.   


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          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  
          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.


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          Supporters note, on a prior version of the 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.  

          There is no known opposition to this bill.

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