BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 72|
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THIRD READING
Bill No: AB 72
Author: Bonta (D) and Atkins(D)
Introduced:12/18/14
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE: 9-0, 7/15/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/17/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Nielsen
ASSEMBLY FLOOR: 78-0, 4/23/15 (Consent) - See last page for
vote
SUBJECT: Medi-Cal: demonstration project
SOURCE: Author
DIGEST: This bill requires the Department of Health Care
Services to submit an application to the federal Centers for
Medicare and Medicaid Services for a waiver to implement a
demonstration project that furthers the delivery of high-quality
and cost-efficient care for Medi-Cal beneficiaries, ensures the
long-term viability of the delivery system following the
expansion of Medi-Cal eligibility under the federal Patient
Protection and Affordable Care Act, and continues California's
momentum and successes in innovation achieved under the 2010
"Bridge to Reform" Waiver.
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ANALYSIS:
Existing law:
1)Establishes the Medi-Cal program, which is administered by the
Department of Health Care Services (DHCS) and under which
qualified low-income persons receive health care benefits.
2)Establishes a demonstration project under the Medi-Cal program
until October 31, 2015, to implement specified objectives,
including better care coordination for Seniors and Persons
with Disabilities (SPDs) and maximization of opportunities to
reduce the number of uninsured individuals.
This bill:
1)Requires DHCS to submit an application to the federal Centers
for Medicare and Medicaid Services (CMS) for a waiver to
implement a demonstration project that does all of the
following:
a) Furthers the delivery of high-quality and cost-efficient
care for Medi-Cal beneficiaries;
b) Ensures the long-term viability of the delivery system
following the expansion of Medi-Cal eligibility under the
federal Patient Protection and Affordable Care Act (ACA);
and,
c) Continues California's momentum and successes in
innovation achieved under the 2010 "Bridge to Reform"
Waiver.
2)Requires DHCS to consult with interested stakeholders and the
Legislature in developing the waiver application.
3)Contains an urgency clause that will make this bill effective
upon enactment.
Comments
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1)Author's statement. According to the author, this bill is one
of two legislative vehicles to make the necessary statutory
changes to implement a new Section 1115 Medicaid waiver as the
2010 California Bridge to Reform Waiver (Waiver) expires on
October 31, 2015. The Waiver renewal is critical to the
long-term fiscal sustainability of the Medi-Cal program and to
California's ability to continue to provide high quality
health care to Medi-Cal beneficiaries. The goals of the Waiver
are to continue to support ACA implementation, improve the
health care quality and outcomes of the over 12 million
individuals enrolled in Medi-Cal, and provide for the
long-term fiscal stability of the Medi-Cal program through
delivery system transformation. Specific strategies
anticipated to be included in the waiver renewal include a
federal-state shared savings initiative; housing and
supportive services for vulnerable populations; various health
plan and provider delivery system transformation and alignment
incentive programs, including a new Delivery System Reform
Incentive Program (DSRIP) at designated public hospitals and
non-designated public hospitals; workforce development
strategies to expand provider access and capacity; and safety
net payment and delivery system transformation.
2)Federal Section 1115 Waiver and Expenditure Authority.
Medicaid, known as Medi-Cal in California, is a joint
federal-state program to provide health coverage to low-income
individuals. Section 1115 of the federal Social Security Act
(Act) gives the Secretary of the Department of Health and
Human Services (HHS) authority to waive provisions of major
health and welfare programs authorized under the Act. This
includes certain federal Medicaid requirements in any
experimental pilot or demonstration project which, in the
judgment of the Secretary, is likely to assist in promoting
the objectives of Medicaid. In addition, Section 1115 also
allows states to use federal Medicaid funds to reimburse for
costs in ways that are not otherwise allowed under federal
Medicaid law. Section 1115 waivers are approved at the
discretion of the Secretary of HHS through negotiations
between a state and CMS for projects that the Secretary
determines promote Medicaid program objectives. Section 1115
waivers are generally approved for a five-year period and then
must be renewed. Although not required by statute or
regulation, longstanding federal administrative policy has
required waivers to be "budget neutral" for the federal
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government, meaning that federal spending under a waiver must
not be more than projected federal spending in the state
without the waiver.
3)Bridge to Reform Waiver. California's existing Section 1115
"California Bridge to Reform Demonstration" Waiver is a
five-year demonstration of health care reform initiatives that
was projected to provide an additional $10 billion in federal
funds over the lifetime of the waiver. The waiver prepared the
state for successful implementation of health care reform
through an early expansion of Medicaid, and tested innovations
in health care support for safety net providers. California is
currently in the fourth year of this waiver, which began
November 1, 2010, and expires October 31, 2015. California
also operates its Medi-Cal managed care delivery system under
this federal waiver. The Bridge to Reform Waiver enabled
California to:
a) Implement an early expansion of Medicaid to low-income
adults without minor children under the ACA through the Low
Income Health Program, which enrolled 650,000 individuals;
b) Require the mandatory enrollment of SPDs into Medi-Cal
managed care plans in specified counties;
c) Provide federal funding for delivery system reform and
uncompensated care in designated public hospital systems
(21 county and University of California hospitals) through
the DSRIP and Safety Net Care Pool Uncompensated Care
(SNCP);
d) Provided federal funding for designated state health
care programs and workforce development programs related to
medically disadvantaged service areas; and,
e) Operate its Medi-Cal managed care program,
Community-Based Adult Services (CBAS) program, and seven
county Coordinated Care Initiative (under the CCI,
individuals dually eligible for Medicare and Medi-Cal
receive their Medi-Cal and Medicare benefits through one
health plan).
1)DHCS Waiver Submission. On March 27, 2014, following several
months of waiver-related stakeholder meetings, DHCS submitted
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an application to renew the state's Section 1115 Waiver
Demonstration entitled "Medi-Cal 2020: Key Concepts for
Renewal" (Medi-Cal 2020). DHCS indicates the focus of the
Waiver Renewal will be on continuing to drive the
transformation of its Medi-Cal program, ensuring ongoing
support for the safety net in California, and ensuring the
long-term viability of the program and the Medicaid expansion.
Existing 1115 Waiver authorities and programs that would
continue under the next Waiver include the CCI, the CBAS
waiver, managed care program, Indian Health Services
uncompensated care, Designated State Health Programs, the
pending Drug Medi-Cal Organized Delivery System program, and
the provision of full scope benefits for pregnant women with
incomes between 109 percent to 138 percent of the federal
poverty level.
In addition to the continuation of existing waiver programs,
DHCS will pursue a set of six, cross-cutting approaches that
together will advance delivery system transformation in
California as part of Medi-Cal waiver renewal:
a) Managed Care Systems Transformation & Improvement
Program - Joint incentive pools for Medi-Cal plans,
behavioral health systems and providers to align
incentives, improve health outcomes and reduce overall
costs;
b) Fee-for-Service (FFS) Transformation & Improvement
Program - FFS incentives in dental and maternity care to
expand access to dental services through targeted
incentives to increase provider participation and incenting
delivery of preventative services in lieu of more invasive
and costly procedures;
c) Public Safety Net System Transformation & Improvement
Program - Funding for quality improvement for public
hospitals, and expanding eligibility for this funding to
the 40+ non-designated public hospitals;
d) Workforce Development Program - Waiver funding to
provide financial incentives to (1) health professionals
who have not previously cared for Medi-Cal members, and to
existing Medi-Cal providers who treat additional Medi-Cal
beneficiaries, targeted to health professionals in
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geographic areas with the greatest need for Medi-Cal
participating providers and to professions and specialties
where recruiting is most challenging; (2) voluntary
training opportunities to improve quality for non-clinical
members of the care team to help those new to coverage
navigate the health system through health education and
other outreach efforts; and (3) incentives and programs to
expand cross-training of providers in primary care, mental
health, substance use disorder services, and long-term
services and supports, and to support integration of
multi-disciplinary teams across care settings;
e) Increased Access to Housing and Supportive Services
Program - The Waiver will provide tools to better
coordinate care for the most vulnerable Medi-Cal members
through policies, data analysis and measurement that
facilitate access to supportive services that are also
proven to reduce costs, including improved access to
affordable housing;
f) Whole Person Care Pilots - An option for enhanced model
of regional partnerships requiring proposals for a
geographic region, such as a county or group of counties,
jointly pursued by the county and applicable Medi-Cal plans
for that region whereby managed care plans, counties, and
local partners would provide Whole-Person Care for target
high need patients through collaborative leadership and
systematic coordination with other public and private
entities identified by the county. The pilot design would
encourage innovation in delivery and financing strategies
to improve health outcomes of target populations; and,
g) Public Safety Net System Global Payment for the
Remaining Uninsured - Moving disproportionate share
hospital and SNCP funding into a global budget structure
where care for the remaining uninsured would be provided
within a global budget for all uninsured services, thus
giving public hospital systems the incentive to provide
more coordinated upstream care for the uninsured and reduce
inappropriate utilization.
In support of California's efforts to achieve the goals outlined
above, DHCS seeks to test a new investment strategy in
partnership with the federal government by initiating a
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federal-state shared savings model. California's shared savings
initiative would involve a reinvestment of federal funding in
recognition of the savings that California's Section 1115
demonstration initiatives generate to the benefit of both the
state and the federal government. This reinvestment would
provide the state with a portion of the federal savings that are
generated through the demonstration to facilitate and augment
continued Medi-Cal delivery system transformation. Under this
initiative, California would be required to demonstrate that the
federal savings generated under the waiver are substantial
enough to permit California to retain a portion or percentage of
that savings. The state would need to demonstrate that, even
after reinvestment in the waiver strategies, the federal
government will continue to realize savings. If the waiver
strategies implemented through Medi-Cal 2020 do not result in
the level of federal savings that is projected, California would
be required to limit the spending on waiver reinvestment
initiatives to ensure overall savings and budget neutrality.
The state's waiver request in Medi-Cal 2020 is for $17.1 billion
in federal funds over the five years of the waiver. The state's
waiver request is pending with the federal government.
Related Legislation
SB 36 (Hernandez and De Leon) is identical to this bill. SB 36
is scheduled to be heard in the Assembly Appropriations
Committee on August 19, 2015.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, no new
administrative costs to DHCS are anticipated due to this bill.
DHCS is currently in the process of developing a waiver
application and has been engaged in planning and stakeholder
discussions which will continue in 2015-16. Because DHCS is
already undertaking these efforts, this bill will not impose new
administrative duties on DHCS.
SUPPORT: (Verified8/18/15)
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American Federation of State, County and Municipal Employees
Association of California Health Care Districts
California Association of Physician Groups
California Association of Public Hospitals and Health Systems
California State Association of Counties
California State Council of the Service Employees International
Union
Community Clinic Association of Los Angeles County
District Hospital Leadership Forum
Planned Parenthood Affiliates of California
University of California
OPPOSITION: (Verified8/18/15)
None received
ARGUMENTS IN SUPPORT: The California Association of
Physician Groups (CAPG) writes that it supports policy measures
that encourage the implementation of the Triple Aim which
include decreased cost, improved patient experience and
development of population health management. CAPG writes the new
"Medi-Cal 2020" waiver seeks approximately $17 billion in
federal investment to further the achievements California has
made in health care reform that a set of payment and delivery
system transformation strategies. CAPG states it continues to
support and participate in the waiver renewal stakeholder
process.
The California State Association of Counties (CSAC) writes in
support that DHCS' Medi-Cal 2020 waiver renewal addresses the
counties' priorities, and introduces a new concept transforming
California's public safety net for the remaining uninsured by
creating a global payment system. CSAC states the global
payments offer a unique opportunity for California to serve as
an incubator in testing new payment methods for delivering care
to the uninsured and in transforming care away from high-cost
settings (such as emergency rooms) towards primary care. CSAC
argues these individual payments would allow each hospital
system more certainty about its budget and how much in federal
funds will be available.
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ASSEMBLY FLOOR: 78-0, 4/23/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Salas
Prepared by:Scott Bain / HEALTH /
8/19/15 20:23:19
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