BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1117 (Cristina Garcia) - Medi-Cal: vaccination rates ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 1, 2015 |Policy Vote: HEALTH 6 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 17, 2015 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 1117 would require the Department of Health Care Services to create a program to provide incentive payments to Medi-Cal managed care plans for fully vaccinated children. The incentive payments would be supported with voluntary donations by Medi-Cal managed care plans. Fiscal Impact: One-time costs of $315,000 for the Department of Health Care Services to develop program rules and methodologies for distributing incentive payments, apply for federal approval to implement the program, and contract with an independent evaluator (General Fund and federal funds). One-time costs likely in the low hundreds of thousands for an independent evaluation of the program (private funds and federal funds). Ongoing administrative costs of $125,000 per year to AB 1117 (Cristina Garcia) Page 1 of ? administer the program and ensure the correct processing of incentive payments (private funds and federal funds). Ongoing costs up to $50 million per year to make incentive payments to Medi-Cal managed care plans for children who are currently fully vaccinated and additional incentive payments of about $4 million per year for each additional 5% increase in the rate of fully vaccinated children. There are about 540,000 children under age two enrolled in Medi-Cal managed care and currently 75% of two year olds have been fully vaccinated. The bill requires incentive payments of $125 to be made to Medi-Cal managed care plans per fully vaccinated child. The cost to provide incentive payments for children in managed care who are currently fully vaccinated would be about $50 million. To the extent that the bill successfully incentivizes managed care plans to increase vaccination rates, each increase in the vaccination rate of 5% would increase incentive payments by about $4 million. The bill requires the program to be implemented to the extent that federal matching funds are available. Under federal law, voluntary contributions can be made to state Medicaid programs to support program activities. However, federal law generally prohibits "bona fide provider-related donations" from including provisions that hold donors harmless or a practice under which donations are returned to the donors. Under this bill, Medi-Cal managed care plans would be making donations that would be paid directly back to managed care plans, and plans that have the highest vaccination rates are most likely to be those plans making donations. Therefore, the program is not likely to meet federal requirements and federal matching funds may not be provided. 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. Medi-Cal covers all recommended childhood vaccines. One of the AB 1117 (Cristina Garcia) Page 2 of ? quality measures used by the state to evaluate the performance of Medi-Cal managed care plans is the HEDIS measure system, which includes vaccination rates for children under age two. According to the most recent data, the statewide average rate for fully vaccinated children was about 75%. The state does not currently use HEDIS or other performance measures to provide financial incentives to Medi-Cal managed care plans. However, in counties where there are more than one Medi-Cal managed care plan, the state does use certain performance measures to assign new managed care enrollees to higher scoring plans when the enrollee does not select a specific plan. Proposed Law: AB 1117 would require the Department of Health Care Services to create a program to provide incentive payments to Medi-Cal managed care plans for fully vaccinated children. The incentive payments would be supported with voluntary donations by Medi-Cal managed care plans. Specific provisions of the bill would: Require the Department of Health Care services to develop an incentive program to improve childhood immunization rates; Require the Department to apply for federal approval to conduct the program and receive federal matching funds; Make the program operational for five years; Authorize the program to be financed by donations from Medi-Cal managed care plans and matching federal funds; Allocate 33% of program funds for Department administrative costs, training for providers, and other strategies to increase immunization rates; Allocate 67% of funds for $125 incentive payments to Medi-Cal managed care plans for each enrollee who receives all the recommended vaccinations by age two; Require at least 20% of incentive payments made to managed care plans to be passed through to providers; Require an independent evaluation of the program; Require the bill to be implemented only to the extent that federal funding is available; AB 1117 (Cristina Garcia) Page 3 of ? Sunset the bill upon a declaration of the Director of Health Care Services that the program has concluded. Related Legislation: SB 277 (Pan and Allen, Statutes of 2015) eliminates the personal belief exemption from the requirement that children entering school receive specified vaccinations. Staff Comments: As noted above, current federal law and regulation seem to prohibit the use of federal funds to match donations to Medicaid programs that will be returned to the donors. It would appear that the financing mechanism in this bill would not meet the necessary criteria for the receipt of federal matching funds. -- END --