BILL ANALYSIS Ó
AB 1162
Page 1
ASSEMBLY THIRD READING
AB
1162 (Holden)
As Amended June 1, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+---------------------+---------------------|
|Health |18-0 |Bonta, Maienschein, | |
| | |Bonilla, Burke, | |
| | |Chávez, Chiu, Gomez, | |
| | |Gonzalez, Roger | |
| | |Hernández, Lackey, | |
| | |Patterson, | |
| | | | |
| | | | |
| | |Ridley-Thomas, | |
| | |Rodriguez, Santiago, | |
| | |Steinorth, Thurmond, | |
| | |Waldron, Wood | |
| | | | |
|----------------+------+---------------------+---------------------|
|Appropriations |12-5 |Gomez, Bonta, |Bigelow, Chang, |
| | |Calderon, Daly, |Gallagher, Jones, |
| | |Eggman, |Wagner |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
AB 1162
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| | |Quirk, Rendon, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Requires tobacco cessation services to be a covered
benefit under the Medi-Cal program, as specified. Specifically,
this bill:
1)Defines tobacco cessation services as:
a) At least four tobacco cessation counseling sessions per
quit attempt, which may be conducted in-person or by phone,
individually or as a group; or,
b) A 90-day treatment regimen of any medication approved by
the federal Food and Drug Administration (FDA) as of January
1, 2015 for tobacco cessation, including prescription and
over-the-counter medications.
2)Requires the Medi-Cal program to cover tobacco cessation
services, including unlimited quit attempts and no requirement
for a break between attempts for beneficiaries of any age.
3)Exempts coverage of quit attempts from being subject to
requirements, including prior authorization, and requires only a
prescription from an authorized provider and proof of Medi-Cal
coverage as sufficient documentation to fill prescriptions.
4)Prohibits a beneficiary from being required to receive a
specific service as a condition of receiving any other form of
AB 1162
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treatment.
FISCAL EFFECT: According to the Assembly Appropriations Committee:
1)Costs in the range of $650,000 (General Fund/federal funds) to
Medi-Cal annually, based on an approximate 10% increase in
utilization of tobacco cessation services. A California Health
Benefits Review Program analysis is not available, but certain
assumptions from prior analysis were used to construct this
estimate. The utilization estimate is subject to significant
uncertainty. We estimate 2,500 individuals will attempt to quit
and 100 will successfully quit based on the increased
utilization of services.
2)Potential additional increased costs in the same $650,000 range,
or greater, due to increased drug prices. This bill would
reduce the ability of the Department of Health Care Services
(DHCS) to negotiate supplemental rebates with manufacturers of
tobacco cessation products since all tobacco cessation products
would automatically be included in the Fee-for-Service
formulary, and a similar dynamic would exist for Medi-Cal
managed care. In addition, new drugs would automatically be
covered without restriction, leading to unknown future increased
costs.
3)Potential short-term (one to three year) reductions in health
care costs associated with Medi-Cal enrollees who successfully
quit. A 2012 study of the Massachusetts Medicaid program found
each $1 spent on medications, counseling, and promotion and
outreach for Medicaid smokers was associated with a reduction of
$3.12 (range $3.00 to $3.25) in Medicaid expenditures for
cardiovascular hospital admissions, resulting in net savings
between $2.00 and $2.25. Long-term cost savings are also
possible, but are subject to significant uncertainty. Potential
long-term savings are also offset by increased longevity.
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COMMENTS: According to the author, tobacco use is the leading
preventable cause of death in the United States and, though the
dangers of smoking are better understood now than 50 years ago,
smoking rates in the Medi-Cal population are still too high. The
author states the low success rate of quitting is due to the fact
that smokers often try quit without help, which is typically
ineffective. The author asserts that FDA-approved tobacco
cessation medications and counseling are very effective methods of
having smokers quit, yet maintains that access to these services
is sometimes difficult for Medi-Cal recipients due to the many
barriers to access including requiring prior-authorization and
step therapy. The author concludes that these barriers, along
with the inherent difficulty of quitting, lead many to give up
before they even get started.
On a previous version of this bill, the American Heart
Association/American Stroke Association, the American Lung
Association, and the American Cancer Society Cancer Action
Network, the sponsors of this bill, stated that the success rate
of smokers quitting their addiction to tobacco is still very low,
due in part because many smokers try to quit without the
assistance of tobacco cessation services. The sponsors noted that
although the Affordable Care Act has made tobacco cessation
treatments more accessible, current guidelines as to how to
implement these treatments are unclear, thereby resulting in
differences in coverage between health plans. In addition, the
sponsors stated that Medi-Cal patients face barriers to treatment
services due to prior authorization and step therapy treatment
requirements. Supporters stated this bill provides needed clarity
for Medi-Cal participants on tobacco cessation services and
ensures access to comprehensive insurance coverage for these
services.
On a previous version of this bill, the California Association of
Health Plans stated the bill will increase costs to the state by
AB 1162
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requiring Medi-Cal managed care plans to pay for tobacco cessation
drugs in a manner that is inconsistent with policies of both DHCS
and sound medical management. The association also stated
Medi-Cal programs already comply with the requirements of the DHCS
Policy letter. Opposition also asserted that removing all prior
authorization protocols and requiring plans to cover all specific
medications would create a new benefit mandate, which would result
in higher state costs in Medi-Cal reimbursement rates to plans in
order to reflect the benefit expansion.
Analysis Prepared by: An-Chi Tsou / HEALTH /
(916) 319-2097 FN: 0000846