BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        AB 187|
          |Office of Senate Floor Analyses   |                              |
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                                   THIRD READING 

          Bill No:  AB 187
          Author:   Bonta (D)
          Amended:  5/28/15 in Assembly
          Vote:     21  

           SENATE HEALTH COMMITTEE:  8-0, 7/8/15
           AYES:  Hernandez, Nguyen, Hall, Monning, Nielsen, Pan, Roth,  
           NO VOTE RECORDED:  Mitchell

           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           ASSEMBLY FLOOR:  78-0, 6/2/15 - See last page for vote

           SUBJECT:   Medi-Cal: managed care: California Childrens  
                     Services program.

          SOURCE:    Author

          DIGEST:  This bill extends the sunset date on the California  
          Children's Services (CCS) carve out" by an additional one year,  
          under which CCS-covered services are prohibited from being  
          incorporated in a Medi-Cal managed care plan.


          Existing law:


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          1)Establishes the Medi-Cal Program, administered by the  
            Department of Health Care Services (DHCS), which provides  
            comprehensive health benefits to low-income children up to  
            266% of the federal poverty level (FPL), parents and adults up  
            to 138% of the FPL, pregnant women, and elderly, blind or  
            disabled persons, who meet specified eligibility criteria.

          2)Establishes the CCS Program to provide specified medical care  
            and therapy services to children with eligible conditions.

          3)Authorizes the state to contract for comprehensive managed  
            health care services for Medi-Cal beneficiaries, and to  
            require mandatory enrollment of Medi-Cal beneficiaries in  
            specified eligibility categories into managed care plans.

          4)Prohibits CCS covered services from being be incorporated into  
            any Medi-Cal managed care (MCMC) plan contract entered into  
            after August 1, 1994, until January 1, 2016, except for  
            contracts entered into for county organized health systems  
            (COHS) or Regional Health Authority in the Counties of San  
            Mateo, Santa Barbara, Solano, Yolo, Marin, and Napa. This is  
            known as the CCS "carve out."

          5)Requires the Director of DHCS to establish, by January 1,  
            2012, organized health care delivery models for CCS-eligible  
            children. Requires these models to be chosen from the  

             a)   An enhanced primary care case management program;
             b)   A provider-based accountable care organization;
             c)   A specialty health care plan; or,
             d)   A Medi-Cal managed care plan that includes payment and  
               coverage for CCS-eligible conditions.

          This bill extends the sunset date on the CCS "carve out" by an  
          additional one year, until January 1, 2017. Under the CCS carve  
          out, CCS-covered services are prohibited from being incorporated  
          in a MCMC plan.

          1)Author's statement.  According to the author, CCS is a vital  
            program that the state's most medically vulnerable children  
            rely on to provide them with timely and adequate access to  


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            specialty health care services. The most recent CCS carve-out  
            is expiring in January of 2016, and this bill extends the CCS  
            carve-out from Medi-Cal Managed Care until 2017. DHCS has  
            convened workgroups with stakeholders to determine the future  
            of the CCS program, however, any large change in the program  
            will need adequate time for implementation. The Legislature  
            has a responsibility to ensure that future administration of  
            the CCS program maintains high standards of care, continues to  
            allow providers to make fiscally disinterested decisions and  
            strengthens care coordination for families.
          2)CCS. The CCS program provides diagnostic and treatment  
            services, medical case management, and physical and  
            occupational therapy health care services to children under 21  
            years of age with CCS-eligible conditions (e.g., severe  
            genetic diseases, chronic medical conditions, infectious  
            diseases producing major sequelae, and traumatic injuries)  
            from families unable to afford catastrophic health care costs.  
            A child eligible for CCS must be a resident of California,  
            have a CCS-eligible condition, and be in a family with an  
            adjusted gross income of $40,000 or less in the most recent  
            tax year. Children in families with higher incomes may still  
            be eligible for CCS if the estimated cost of care to the  
            family in one year is expected to exceed 20% of the family's  
            adjusted gross income. 

          The CCS program is administered as a partnership between county  
            health departments and DHCS. In counties with populations  
            greater than 200,000 (independent counties), county staff  
            perform all case management activities for eligible children  
            residing within their county. This includes determining all  
            phases of program eligibility, evaluating needs for specific  
            services, determining the appropriate provider(s), and  
            authorizing for medically necessary care. For counties with  
            populations under 200,000 (dependent counties), the Children's  
            Medical Services Branch of DHCS provides medical case  
            management and eligibility and benefits determination through  
            its regional offices. CCS authorizes and pays for specific  
            medical services and equipment provided by CCS-approved  
            specialists. CCS rates for physician services provided under  
            CCS are reimbursed at rates which are 39.7% greater than  
            applicable Medi-Cal rate. CCS hospital inpatient rates are the  
            same as those in Medi-Cal.


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          As of January 2010, there were 178,530 children enrolled in CCS.  
            According to DHCS, 90% of CCS enrollees are also eligible for  
            Medi-Cal and 10% were CCS-only or were covered by other  

          3)Medi-Cal managed care and the CCS carve out. Most Medi-Cal  
            beneficiaries, including children, are required to enroll in  
            Medi-Cal managed care plans. However, for children who are  
            enrolled in both Medi-Cal and CCS, CCS services were carved  
            out of Medi-Cal managed care pursuant to SB 1371 (Bergeson,  
            Chapter 917, Statutes of 1994). Under the carve out,  
            CCS-covered services for CCS-eligible children are not  
            incorporated into Medi-Cal managed care, and are instead  
            provided and paid for on a fee-for-service basis through the  
            CCS Program. The initial carve out under SB 1371 was for three  
            years. The CCS carve out has been extended repeatedly since  
            then, usually for three or four year periods. The first  
            extension allowed the COHS in the counties of San Mateo, Santa  
            Barbara, Solano, and Napa to include CCS services. Later  
            extensions also allowed Yolo and Marin counties to include CCS  
            services. DHCS indicates the division of payment and care  
            between CCS and the primary Medi-Cal managed care plan has  
            posed challenges, including delays in care for children,  
            fragmentation and a lack of coordination, and increased cost  
            to the state.

          4)Medi-Cal Waiver and CCS pilots. SB 208 (Steinberg, Chapter  
            714, Statutes of 2010), was one of two bills in 2010  
            implementing the 2010 Medi-Cal waiver renewal. One provision  
            of SB 208 was a requirement that the DHCS director establish,  
            by January 1, 2012, organized health care delivery models for  
            CCS-eligible children, from four specified models. Five  
            demonstration applicants (San Mateo Health Plan, Alameda  
            County, L.A. Care, Children's Hospital Orange County, and Rady  
            Children's Hospital in San Diego) were approved in 2011, but  
            only the San Mateo Health Plan pilot has been implemented. The  
            Rady Children's Hospital in San Diego is for a subset of  
            CCS-eligible children with specified conditions but it has not  
            been implemented. 

          5)DHCS CCS proposal. DHCS has implemented a stakeholder process  


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            to investigate potential improvements or changes to the CCS  
            program in partnership with the UCLA Center for Health Policy  
            Research. A CCS Redesign Stakeholder Advisory Board (RSAB)  
            composed of individuals from various organizations and  
            backgrounds with expertise in both the CCS program and care  
            for children and youth with special health care needs, was  
            assembled in September of 2014 to lead this process. 

          In June 2015, DHCS released its proposal for the CCS program  
            based on a "whole-child model." DHCS released its proposed CCS  
            legislative language on July 16, 2015, and released revised  
            language on August 27, 2015. To date, the DHCS language has  
            not been amended into a bill.

            Under DHCS' proposed language, the CCS carve-in would be  
            implemented in specified counties no sooner than January 2017.  
            The first phase would allow DHCS to incorporate CCS services  
            into Medi-Cal managed care plans into three COHS plans in 14  
            additional counties upon DHCS review and certification of the  
            COHS meeting readiness criteria. Those counties are Del Norte,  
            Humboldt, Lake, Lassen, Mendocino, Merced, Modoc, Monterey,  
            Santa Cruz, San Luis Obispo, Shasta, Siskiyou, Sonoma, and  
            Trinity. DHCS would be authorized to incorporate CCS into  
            Orange County (also a COHS county) upon DHCS review and  
            certification of COHS readiness no sooner than July 1, 2017.

            Under the whole-child model, health plans would be at full  
            financial risk for CCS. In addition, DHCS proposes to repeal  
            the requirement that there be a separate actuarially sound  
            rate for CCS-eligible children. Medi-Cal managed care plans  
            would be required to demonstrate support from stakeholders and  
            be subject to a readiness review by DHCS prior to  
            implementation. The readiness review would include evidence of  
            adequate network of CCS-paneled providers, evidence of  
            policies and procedures regarding access to specialty care  
            outside of designated catchment area, a CCS family advisory  
            committee in each county, and an integrated electronic health  
            records system. Under the "whole-child model," care  
            coordination and service authorization will shift from  
            counties to health plans. Counties and health plans will  
            jointly develop Memorandums of Understanding (MOU) to document  
            transition plans for these activities. Counties (or the state,  
            for dependent counties) will continue to perform initial and  


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            periodic financial, residential, and medical eligibility  
            determinations. Counties will maintain responsibility for  
            medical therapy programs, and MOUs will be required with  
            health plans and counties. To improve continuity of care and  
            access to specialty providers for youth aging out of CCS and  
            transitioning to Medi-Cal managed care, DHCS is requiring all  
            Medi-Cal managed care plans, on a phased-in basis, to contract  
            with CCS providers or providers who meet the CCS panel  

            In addition to the COHS counties, the whole-child model could  
            also be implemented in up to four non-COHS counties. The  
            determination of these counties will be based on an  
            application of interest to DHCS from at least one plan in the  
            county, a demonstration of support from stakeholders and a  
            readiness review by DHCS. Based on the application and subject  
            to federal approval, DHCS may propose that CCS be incorporated  
            into only one Medi-Cal managed care plan in a two plan model  
            county. In the remaining 33 counties where the whole-child  
            model is not offered, DHCS is proposing to extend the  
            carve-out for three additional years, until January 1, 2019,  
            or until completion and submission of a newly required  
            evaluation of the CCS carve in that is implemented in COHS  
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Senate Appropriations Committee, 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.


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          SUPPORT:   (Verified8/28/15)

          Alameda County Department of Public Health 
          Alta California Regional Center 
          American Academy of Pediatrics
          American Federation of State, County and Municipal Employees
          California Academy of Physician Assistants 
          California Asian Americans Advancing Justice - Los Angeles 
          California Association of Health Plans
          California Children's Hospital Association 
          California Chronic Care Coalition 
          California Downs Syndrome Advocacy Coalition 
          California Hepatitis C Task Force 
          California Medical Association 
          California Pharmacists Association 
          California Women, Infants and Children Association
          Children Now Children's Defense Fund-California 
          Children's Specialty Care Coalition
          Disability Rights California
          Down Syndrome Association of Orange County 
          Down Syndrome Information Alliance 
          Epilepsy California 
          Exceptional Parents Unlimited 
          Family Soup 
          Hemophilia Council of California 
          International Foundation for Autoimmune Arthritis 
          Lucile Packard Children's Hospital at Stanford 
          March of Dimes 
          Maternal and Child Health Access
          Miller Children's and Women's Hospital Long Beach 
          National Association of Hepatitis Task Forces 
          National Downs Syndrome Congress 
          National Downs Syndrome Society 
          National Health Law Program 
          SEIU California
          Sickle Cell Disease Foundation of California
          The Children's Partnership 
          The FAIR Foundation 
          The Los Angeles Trust for Children's Health 
          UCSF Benioff Children's Hospital at Oakland 
          United Ways of California 
          University of California
          Valley Children's Healthcare


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          OPPOSITION:   (Verified8/28/15)

          None received

          ARGUMENTS IN SUPPORT:     The Children's Specialty Care  
          Coalition (CSCC) writes in support that the CCS carve-out has  
          been extended repeatedly to protect access to the specialty care  
          for this vulnerable population. CSCC believes that this bill is  
          necessary to ensure the care that children receive through CCS  
          is not disrupted, while efforts are underway by DHCS and RSAB to  
          explore new ways to enhance delivery of care. The CSCC writes  
          that, while it appreciates the DHCS stakeholder process, it has  
          significant concerns with the DHCS proposal regarding network  
          adequacy, monitoring of CCS standards of care, and the lack of  
          experience that some of the plans have in dealing with children  
          with chronic and serious health conditions. CSCC states the DHCS  
          bill language has not been released, and it believes that with  
          nearly two months left in the legislative session, the CCS  
          transition must be done thoroughly and correctly and passing  
          legislation in haste could have serious unintended consequences.

          ASSEMBLY FLOOR:  78-0, 6/2/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,  
            Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,  
            Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,  
            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, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Chávez, Grove

          Prepared by:Scott Bain / HEALTH / 
          8/31/15 8:32:45
                                   ****  END  ****


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