BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 635


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          Date of Hearing:  April 22, 2015





                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair





          AB  
          635 (Atkins) - As Introduced February 24, 2015





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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No








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          SUMMARY:





          This bill establishes a medical interpretation services program  
          at the Department of Health Care Services (DHCS) to provide and  
          reimburse for certified medical interpretation (CMI) services to  
          limited English proficient (LEP) Medi-Cal enrollees in both the  
          fee-for service and managed care. Additionally, this bill:





          1)Authorizes Medi-Cal providers and any providers contracting  
            with Medi-Cal managed care organizations (MCOs) to use the  
            program.



          2)Requires all contracts between MCOs and their subcontractors  
            to include provisions describing access to CMI services under  
            the program.



          3)Requires DHCS to create a community advisory committee  
            consisting of stakeholders and health care providers to advise  
            DHCS on the program's implementation.
          


          FISCAL EFFECT:









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          1)One-time administrative costs in the range of $1 million  
            (GF/federal) to DHCS to seek federal approvals, create system  
            protocols, develop an IT infrastructure, design communications  
            and guidance, promulgate regulations, and other initial  
            program development activities.

          2)An exact estimate of the cost of language services is  
            difficult given a lack of accurate projections about how, by  
            whom, and with what frequency a centralized system would be  
            used.  Assuming 2 million LEP individuals receive one  
            additional office visit annually with interpretive services  
            provided through this program at a cost of $20 per visit,  
            additional costs would be about $40 million annually.  This  
            overall cost increase would be experienced as direct costs in  
            the case of fee-for-service Medi-Cal, and cost pressure on  
            rates in the case of Medi-Cal managed care.  The majority of  
            enrollees are now in managed care plans.

          3)Medi-Cal costs would be at a 50% GF, 50% federal funds  
            matching rate, except for the following:



               a)     Costs associated with individuals found newly  
                 eligible for Medi-Cal pursuant to the expansion related  
                 to the Patient Protection and Affordable Care Act and  
                 subsequent 2013 state legislation, which expanded  
                 Medi-Cal to childless adults.  Costs for these  
                 individuals are funded at a rate of 100% federal funds  
                 until 2017, after which the federal matching rate  
                 gradually decreases to 90% for 2020 and beyond.

               b)     Costs associated with services provided to CHIP- and  
                 Medi-Cal eligible children. CHIP provides federal  
                 reimbursement for health care for low-income children up  








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                 to 250% of the federal poverty level.  A 75% federal  
                 funds matching rate is available for language services  
                 for CHIP- and Medi-Cal eligible children, pursuant to the  
                 Children's Health Insurance Program Reauthorization Act  
                 of 2010 (CHIPRA), and a two-year funding extension until  
                 federal fiscal year 2017 signed into law April 16, 2015.   
                 The law authorizing the higher matching rate does not  
                 expire, but in practical terms the availability of  
                 enhanced match is contingent on CHIP funding.  

          4)Improved access to high-quality interpretive services is  
            likely to improve access to care and increase overall medical  
            costs to the Medi-Cal program for LEP beneficiaries.  It would  
            also likely result in some offsetting cost savings associated  
            with the provision of higher-quality care and fewer medical  
            errors.  The magnitude of savings as compared to costs is  
            unknown, but evidence suggests that, on balance, the Medi-Cal  
            program would experience increased medical costs if  
            centralized, high-quality interpretive services were  
            available.  

          COMMENTS:



          1)Purpose.  Various federal and state laws require health  
            providers and health plans receiving federal funding to  
            provide interpreter services to patients.  Despite these  
            requirements in law, there are indications not all Medi-Cal  
            beneficiaries receive care in a linguistically appropriate  
            manner. The author notes, "Language barriers can contribute to  
            inadequate patient evaluation and diagnosis, lack of  
            appropriate and/or timely treatment or other medical errors  
            than can jeopardize patient safety."   Enhanced federal  
            funding opportunities allow California to develop a more  
            comprehensive language assistance program. 

          2)Background. It is well-documented that limited proficiency in  
            English is a risk factor for reduced access to health  








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            services, decreased satisfaction with care, poor understanding  
            of instructions, longer hospital stays, and increased risk of  
            medical errors and misdiagnoses.  A recent study found LEP  
            hospital patients are more likely than their English-speaking  
            counterparts to experience adverse events that result in harm,  
            and the severity of that harm is often greater.

            Title VI of the federal Civil Rights Act of 1964 requires  
            health care providers accepting federal funds to provide  
            linguistically accessible services to all patients. Linguistic  
            accessibility standards have been upheld and further clarified  
            through a number of related court decisions, regulations,  
            guidance, and executive orders. However, these standards  
            appear flexible and do not appear adequate to ensure  
            high-quality services are available everywhere.  For example,  
            the Federal Health and Human Services Agency (HHS) guidance  
            indicates smaller recipients of federal funds with more  
            limited budgets are not expected to provide the same level of  
            language services as larger recipients with larger budgets.   
            The provision of language services in current practice appears  
            to be highly variable across the state, varying based on the  
            proportion of LEP persons served, health care  
            provider/facility priorities, and available resources. 
             
             This bill intends to establish medical interpreter services as  
            a separate program that would be made uniformly available to  
            all LEP Medi-Cal beneficiaries. 

          3)Prior legislation.  

             a)   AB 2325 (John A. Pérez) of 2014, AB 1263 (John A. Pérez)  
               of 2013, and AB 2392 (John A. Pérez) of 2012, were similar  
               to this bill in the creation of a medical interpreter  
               program, but also included registration and certification  
               provisions for interpreters, as well as collective  
               bargaining provisions.  
               1)     AB 2392 passed both houses of the legislature but  
                 was not taken up for concurrence in the Assembly.  
               2)     AB 1263 was vetoed by the governor, citing his  








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                 concern about introducing yet another complex element as  
                 the state embarks on an unprecedented expansion of  
                 Medi-Cal. 
               3)     AB 2325 was vetoed by the Governor, citing ongoing  
                 challenges in Medi-Cal and concerns about the scope of  
                 collective bargaining allowed under the bill.  The veto  
                 message indicated a willingness to "work together on  
                 appropriate cost-effective initiatives to help patients  
                 in need, to the extent that interpretation services under  
                 Medi-Cal are insufficient."

             a)   AB 505 (Nazarian), Chapter 788, Statutes of 2014,  
               codified existing Medi-Cal MCO requirements to provide  
               language assistance, translation, and interpretation  
               services when populations reach specified thresholds.    

             b)   SB 853 (Escutia), Chapter 713, Statutes of 2003,  
               requires the Department of Managed Health Care and the  
               California Department of Insurance to adopt regulations to  
               ensure enrollees have access to language assistance in  
               obtaining health care services.
             
        1)Staff Comments. 
          
             a)   Potential Cost Shift. The program envisioned in this  
               bill may increase the availability and improve the quality  
               of language services to Medi-Cal enrollees, but it also  
               would encourage a significant cost shift from private  
               providers, who are currently required to provide these  
               services under federal law and/or managed care plan  
               contracts.  In addition, some of the providers that do  
               offer quality interpretive services already receive  
               indirect reimbursement for these services. For example,  
               public hospitals have well-established interpretive  
               networks.  These hospitals have unique funding arrangements  
               whereby they do not receive direct reimbursement from the  
               state, but instead certify their own expenditures for  
               language services as eligible for federal matching dollars.  
                Many federally qualified health centers (FQHCs) also  








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               provide interpretive services, and receive reimbursement  
               for these services as part of an all-inclusive per-visit  
               rate that is based on the FQHC's total costs.  

             b)   Increased Access = More Medical Costs. Increasing access  
               to high-quality language services in the Medi-Cal program  
               would likely reduce health disparities, improve LEP patient  
               satisfaction, improve the quality of care provided to LEP  
               patients, and increase the use of preventative care.   
               However, it is also likely to increase total medical  
               expenditures for LEP patients.  


          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081