BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 187 (Bonta) - Medi-Cal:  managed care:  California Children's  
          Services program
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          |Version: May 28, 2015           |Policy Vote: HEALTH 8 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 17, 2015   |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.

          Summary:  AB 187 would extend the current "carve out" of the  
          California Children's Services program from Medi-Cal managed  
          care for one year.

          Impact:  Unknown impact on overall Medi-Cal expenditures for  
          services provided to CCS-eligible Medi-Cal beneficiaries  
          (General Fund and federal funds). Historically, the state has  
          assumed that shifting Medi-Cal beneficiaries into managed care  
          will reduce costs, relative to the fee-for-service system, due  
          to better coordination of care and less utilization of high-cost  
          services. Whether the Department would actually begin shifting  
          CCS children to managed care after the expiration of the "carve  
          out" is highly uncertain, given the serious health issues  
          experienced by CCS-eligible children. In addition, the serious  
          health issues faced by CCS children make it difficult to  
          determine whether cost savings are likely to be achieved through  
          integration with managed care.


          AB 187 (Bonta)                                         Page 1 of  

          Background:  Under state and federal law, the Department of Health Care  
          Services operates the Medi-Cal program, which provides health  
          care coverage to low income individuals, families, and children.  
          Medi-Cal provides coverage to childless adults and parents with  
          household incomes up to 138% of the federal poverty level and to  
          children with household incomes up to 266% of the federal  
          poverty level. The federal government provides matching funds  
          that vary from 50% to 90% of expenditures depending on the  
          category of beneficiary.
          In addition, the Department operates the California Children's  
          Services program which provides diagnosis, treatment, and case  
          management to children under age 21 who have complex medical  
          needs. (90% of CCS enrollees are Medi-Cal eligible. About 10%  
          are eligible only for CCS services, paid for with county funds).  
          Under current law, the CCS program is "carved out" of Medi-Cal  
          managed care, meaning that the program is operated on a  
          fee-for-service basis. (CCS eligible children receive services  
          related to their CCS eligible condition through the program, but  
          receive other health care services through Medi-Cal managed  
          care.) Under current law, the carve out expires at the end of  
          2015, at which time the Department could transition the CCS  
          population fully into managed care.

          Current law allows the Department to establish pilot projects  
          for integrated care for CCS enrollees. Five demonstration  
          projects have been approved, but only one has been implemented  
          (operated by the San Mateo Health Plan).

          The Department has been conducting a stakeholder process to seek  
          input on the future of the CCS program. In June 2015 the  
          Department released a draft proposal for the redesign of the CCC  
          program, which they have entitled the "Whole-Child Model". Under  
          this proposal, CCS services would be integrated (i.e. "carved  
          in") to Medi-Cal managed care plans in select counties beginning  
          in 2017. Under the proposal, the integration of CCS services  
          into Medi-Cal managed care would begin in the six counties with  
          a county organized health system and would expand over time to  
          19 additional counties.


          AB 187 (Bonta)                                         Page 2 of  

          Proposed Law:  
            AB 187 would extend the current "carve out" of the California  
          Children's Services program from Medi-Cal managed care for one  

          Legislation:  SB 586 (Hernandez) would eliminate the existing  
          sunset of the "carve out" of the California Children's Services  
          (CCS) program from Medi-Cal managed care. Instead, the bill  
          would require the Department of Health Care Services to enter  
          into contracts with one or more Kids Integrated Delivery Systems  
          (KIDS) to provide integrated care that includes both existing  
          CCS benefits and all other health care services provided under  
          the Medi-Cal program. That bill is pending in the Assembly  
          Health Committee.

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