BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1162
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|AUTHOR: |Holden |
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|VERSION: |June 1, 2015 |
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|HEARING DATE: |July 8, 2015 | | |
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|CONSULTANT: |Scott Bain |
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SUBJECT : Medi-Cal: tobacco cessation.
SUMMARY : Requires tobacco cessation services to be a covered benefit
under the Medi-Cal program. Requires the benefit to include
unlimited quit attempts with no required break between attempts,
at least four tobacco cessation counseling sessions per quit
attempt, and a 90-day treatment regimen of any prescription or
over-the-counter medication approved by the federal Food and
Drug Administration for tobacco cessation that was covered under
the Medi-Cal program as of January 1, 2015. Prohibits tobacco
cessation medication coverage for drugs covered under Medi-Cal
as of January 1, 2015, from being subject to any barriers,
requirements, or restrictions, including, but not limited to,
prior authorization.
Existing law:
1)Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which basic
health care services are provided to qualified low-income
persons.
2)Establishes a schedule of benefits under the Medi-Cal program,
which includes the purchase of prescribed drugs, subject to
the Medi-Cal List of Contract Drugs and utilization controls.
3)Requires that preventive services assigned a grade of A or B
by the U.S. Preventive Services Task Force be provided to
Medi-Cal beneficiaries without any cost sharing by the
beneficiary in order for the state to receive increased
federal contributions for those services, as specified.
This bill:
AB 1162 (Holden) Page 2 of ?
1)Requires tobacco cessation services to be a covered benefit
under the Medi-Cal program. Requires the tobacco cessation
services to include, at minimum, unlimited quit attempts, with
no required break between attempts, for beneficiaries of any
age who use tobacco.
2)Requires tobacco cessation services to include:
a) At least four tobacco cessation counseling sessions
per quit attempt, which may be conducted in person or by
telephone and individually or as part of a group, at the
beneficiary's option.
b) A 90-day treatment regimen of any medication
approved by the federal Food and Drug Administration
(FDA) for tobacco cessation, including prescription and
over-the-counter (OTC) medications approved by the FDA
that were covered under the Medi-Cal program as of
January 1, 2015.
3)Requires that a prescription from a provider with authority to
prescribe and proof of Medi-Cal coverage to be sufficient
documentation to fill a prescription for OTC tobacco cessation
medications.
4)Prohibits tobacco cessation medication coverage described in
b) from being subject to any barriers, requirements, or
restrictions, including, but not limited to, prior
authorization.
5)Prohibits Medi-Cal beneficiaries from being required to
receive a particular form of tobacco cessation service as a
condition of receiving any other form of tobacco cessation
service.
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
AB 1162 (Holden) Page 3 of ?
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 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 (FFS) formulary, and a similar dynamic
would exist for Medi-Cal managed care.
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.
PRIOR
VOTES :
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|Assembly Floor: |67 - 12 |
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|Assembly Appropriations Committee: |12 - 5 |
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|Assembly Health Committee: |18 - 0 |
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COMMENTS :
1)Author's statement. According to the author, quitting tobacco
products is a difficult feat that many attempt every year but
few accomplish. It can cause cancer, respiratory and heart
AB 1162 (Holden) Page 4 of ?
diseases, birth defects and is still the leading preventable
cause of death in the United States. Though the dangers of
smoking are better understood now than 50 years ago,
cigarettes are more addictive than ever and smoking rates in
the Medi-Cal population are still too high. In addition to
efforts to discourage people from smoking, this bill fights
against tobacco dependence by giving smokers the tools to
fight the addiction. The coverage mandated by this bill
ensures that Medi-Cal patients have access to clinically
proven treatments like counseling, medication, and nicotine
replacement treatments. Studies have shown that the
comprehensive coverage of these treatments has led to
decreases in the smoking population. Tobacco companies make it
hard enough for smokers to quit, as a state we must remove all
barriers to treatments that make quitting possible.
2)Background. According to the Centers for Disease Control and
Prevention, tobacco use is the leading preventable cause of
death in the United States. Every year, smoking kills 480,000
Americans and costs the nation at least $130 billion in
medical care costs for adults and more than $150 billion in
lost productivity, imposing a heavy economic burden on private
employers, private health plans, and federal, state, and local
governments. The cost of tobacco use to California is
estimated to be $18.1 billion annually. According to data from
2001 to 2010 published by the Centers for Disease Control and
Prevention in 2011, most smokers want to quit smoking (69%),
and over half (52%) tried to quit in the previous year, but
only 6% were successful.
The U.S. Preventive Services Task Force (USPSFT) reviewed new
evidence in the U.S. Public Health Service's 2008 clinical
practice guideline and determined that the net benefits of
tobacco cessation interventions in adults and pregnant remain
well established. The USPSTF found convincing evidence that
smoking cessation interventions, including brief behavioral
counseling sessions and pharmacotherapy delivered in primary
care settings are effective in increasing the proportion of
smokers who successfully quit and remain abstinent for one
year. The USPSTF concluded that there is high certainty that
the net benefit of tobacco cessation interventions in adults
is substantial, and there is high certainty that the net
benefit of augmented, pregnancy-tailored counseling in
pregnant women is substantial.
AB 1162 (Holden) Page 5 of ?
3)Affordable Care Act Changes to Tobacco Cessation Coverage.
Section 2502 of the Patient Protection and Affordable Care Act
(ACA) prohibited drugs used to promote smoking cessation,
including agents approved by the FDA for over-the-counter for
purposes of promoting tobacco cessation, from being excluded
from Medicaid coverage. In addition, Section 4107 of the ACA
required Medicaid coverage of tobacco cessation counseling and
pharmacotherapy (FDA-approved OTC and prescription drugs) for
pregnant women, and prohibited cost-sharing for these
services.
The seven FDA-approved medications include five forms of
nicotine replacement therapy (NRT): the patch, gum, inhaler,
nasal spray, and lozenge, as well as two non-NRT medications,
bupropion SR (brand name Zyban if used for tobacco cessation
and Wellbutrin if used as an antidepressant), and varenicline
(brand name Chantix). Three forms of NRT - the patch, gum, and
the lozenge - are available OTC. The other two forms of NRT
(the inhaler and the nasal spray), as well as the two non-NRT
medications, are available by prescription. The patch is
available by prescription as well as OTC.
4)Current Medi-Cal coverage of tobacco cessation. Medi-Cal
beneficiaries have a higher prevalence of tobacco use than the
general California population. In the 2011-12 California
Health Interview Survey, 16.1% of adult and teen Medi-Cal
beneficiaries were current smokers, as compared to 12.1% of
adults and teens not covered by Medi-Cal. DHCS indicates
expenditures on smoking deterrents in 2014 was $1 million in
FFS and $3.1 million in managed care. Coverage of tobacco
cessation medication varies, depending upon whether the
beneficiary is in FFS Medi-Cal or Medi-Cal managed care plan,
and the particular Medi-Cal managed care plan the beneficiary
is enrolled in. In 2015-16, Medi-Cal is projected to enroll
12.4 million individuals, of whom 76.6% (9.5 million people)
are projected to be in managed care plans. For FFS Medi-Cal,
DHCS is required to use the following criteria when adding a
drug to the Medi-Cal contract drug list: (a) the safety of the
drug; (b) the effectiveness of the drug; (c) the essential
need for the drug; (d) the potential for misuse of the drug;
and, (e) the cost of the drug.
In September 2014, DHCS released Policy Letter 14-006 to provide
Medi-Cal managed care health plans with minimum requirements
AB 1162 (Holden) Page 6 of ?
for comprehensive tobacco cessation services. The chart below
shows the differences between this bill and current DHCS
policy set forth in the Policy Letter:
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|Tobacco | AB 1162 | DHCS Policy for |
|Cessation | | Medi-Cal Managed |
|Requirements | | Care Plans |
|-----------------+------------------+-------------------|
|Number of quit | Unlimited | At least 2 |
|attempts | | separate quit |
| | | attempts per year |
|-----------------+------------------+-------------------|
|Prohibition on | Yes | Yes |
|requiring a | | |
|break between | | |
|quit attempts | | |
|-----------------+------------------+-------------------|
|Number of | At least 4 per | At least 4 of at |
|tobacco | quit attempt. | least 10 minutes |
|cessation | | duration |
|counseling | | |
|services | | |
|-----------------+------------------+-------------------|
|Counseling | In person, | Plans must ensure |
|Session | telephone, | that individual, |
| | individual or | group and |
| | group, at | telephone |
| | beneficiary | counseling is |
| | option | offered. Does not |
| | | specify at |
| | |beneficiary option |
|-----------------+------------------+-------------------|
|Tobacco | 90 days |90 |
|cessation drug | |days |
|treatment | | |
|regimen duration | | |
|-----------------+------------------+-------------------|
|Coverage of | All FDA-approved | Must cover 7 |
|tobacco | prescription and | FDA-approved |
|cessation | OTC medications | tobacco cessation |
|approved by the | for tobacco | medications, at |
|federal FDA for |cessation covered | least one without |
|tobacco |under Medi-Cal as | prior |
|cessation, | of January 1, | authorization. |
AB 1162 (Holden) Page 7 of ?
|including | 2015 | Must cover |
|prescription and | | additional |
|OTC | | medications once |
| | | FDA-approved. |
|-----------------+------------------+-------------------|
|Prohibits | Yes | Must cover 7 |
|tobacco | | FDA-approved |
|cessation drug | | tobacco cessation |
|coverage from | | medications, at |
|being subject to | | least one without |
|barriers, | | prior |
|requirements or | | authorization. |
|restrictions, | |Does not otherwise |
|including but | | prohibit |
|not limited to, | | utilization |
|utilization | | review. |
|review | | |
|-----------------+------------------+-------------------|
|Prohibition on | Yes | Prohibits plans |
|receiving one | | from requiring |
|form of tobacco | | beneficiaries to |
|cessation as a | | attend classes or |
|condition of | | counseling |
|receiving any | | sessions prior to |
|form of tobacco | | receiving a |
|cessation | | prescription for |
| | | an FDA-approved |
| | | tobacco cessation |
| | |medication. |
| | | |
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5)2006 Massachusetts Law. In April 2006, the Massachusetts
legislature passed Chapter 58 of the Acts of 2006 (''An Act
Providing Access to Affordable, Quality, Accountable Health
Care'') requiring all individuals in Massachusetts to have
health insurance. In an effort to reduce smoking prevalence in
the Medicaid population, the law mandated coverage for two
types of tobacco cessation treatment: behavioral counseling
and all Food and Drug Administration (FDA)-approved
medications.
AB 1162 (Holden) Page 8 of ?
A 2010 study of Medicaid coverage for tobacco cessation in
Massachusetts stated that, prior to 2006, MassHealth (the
Massachusetts Medicaid program) did not provide tobacco
cessation benefits. With the implementation of this benefit,
MassHealth subscribers are allowed two 90-day courses per year
of FDA-approved medications for smoking cessation, including
OTC medications like nicotine replacement therapy, and up to
16 individual or group counseling sessions. Medications
require written prescriptions following an office visit. Prior
authorization is not required to prescribe the nicotine patch,
gum, lozenge, Chantix, or bupropion/Wellbutrin. With prior
authorization, the nicotine inhaler and nasal spray may also
be covered. The co-payment is minimal at $1 or $3. The 2010
study found the smoking rate in the pre-benefit period
decreased from 38.3% to 28.3% in the post-benefit period,
representing a decline of 26%. The study concluded that these
findings suggest that a tobacco cessation benefit that
includes coverage for medication and behavioral treatments,
has few barriers to access, and involves broad promotion can
significantly reduce smoking prevlence.
6)Prior legislation. SB 220 (Yee, 2010) would have required a
health plans and insurers to cover over a minimum of two
courses of treatment in a 12-month period for all smoking
cessation treatments rated "A" or "B" by the United States
Preventive Services Task Force, which shall include counseling
and over-the-counter medication and prescription
pharmacotherapy approved by the FDA. SB 220 also requested the
California Health Benefits Review Program to prepare an
analysis of the state cost savings as a result of the bill
provisions. SB 220 was vetoed by the Governor.
AB 2662 (Dymally, 2007) would have prohibited the provision of
one form of Medi-Cal covered tobacco cessation service (either
pharmacotherapy or counseling) as a condition of receiving the
other service. AB 2662 was held on the Senate Appropriations
Committee suspense file.
SB 576 (Ortiz, 2005) would have required health plans and
insurers to provide coverage for two courses of tobacco
cessation treatments per year, including counseling and
prescription and over-the-counter medications, and prohibited
plans and insurers from applying deductibles but allowed
AB 1162 (Holden) Page 9 of ?
specific co-payments for those benefits. SB 576 was vetoed by
the Governor.
7)Related legislation. AB 73 (Waldron) would have required a
drug from one of four classes of drugs to be covered by
Medi-Cal if the treating provider demonstrates, that in his or
her reasonable, professional judgment, the drug is medically
necessary and consistent with the FDA's labeling and use rules
and regulations, and the drug is not on the formulary for the
Medi-Cal managed care plan. AB 73 was held on the Assembly
Appropriations Committee Suspense File.
AB 68 (Waldron) requires, if any drug used in the treatment of
seizures and epilepsy is prescribed by a Medi-Cal
beneficiary's treating provider for the treatment of seizures
and epilepsy, and coverage for that prescribed drug is denied
by a Medi-Cal managed care plan, that denial to be subject to
the automatic urgent appeal process in which the plan
immediately notifies DHCS of the denial of coverage, and the
beneficiary is not required to take any further action. AB 68
requires the automatic urgent appeal to be resolved within 48
hours after denial by the plan. AB 68 is scheduled for hearing
on July 15, 2015 in the Senate Health Committee.
8)Support. This bill is jointly sponsored by the American Heart
Association/American Stroke Association, the American Lung
Association, and the American Cancer Society Cancer Action
Network to ensure all Medi-Cal patients are able to access
tobacco cessation treatments. The sponsors argue 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 ACA 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 argue this
bill provides needed clarity for Medi-Cal participants on
tobacco cessation services and ensures access to comprehensive
insurance coverage for these services. Supporters conclude
that increased access to smoking cessation treatments and
eliminating barriers will reduce the incidence of
AB 1162 (Holden) Page 10 of ?
tobacco-related diseases and will lower health care costs.
9)Opposition. The California Association of Health Plans (CAHP)
writes in opposition that this bill will increase costs to the
state by requiring Medi-Cal managed care plans to pay for
tobacco cessation drugs in a manner that is inconsistent with
policies of DHCS. CAHP argues Medi-Cal managed care plans
already comply with the requirements of the DHCS policy
letter, and 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. CAHP also argues the
removing prior authorization can be risky as certain smoking
cessation treatments are indicated only for limited time use,
and allowing indefinite access to them with weakened oversight
or approval will increase the risk of side-effects.
10)Policy issues.
a) Requirement for coverage of FDA-approved tobacco
cessation drugs without prior authorization and
utilization review. This bill requires Medi-Cal to
provide coverage for a 90-day treatment regimen of any
FDA-approved tobacco cessation medication, including
prescription medication and OTC drugs that were covered
under the Medi-Cal program as of January 1, 2015. In
addition, this bill prohibits tobacco cessation
medication coverage from being subject to any barriers,
requirements, or restrictions, including, but not limited
to, prior authorization.
A prohibition on utilization review and prior
authorization enables providers to prescribe and patients
to receive a greater variety of medication to treat
diseases and conditions, and ensures prompter access to
prescribed medications that might otherwise be subject to
prior authorization. To the extent that broader tobacco
cessation coverage makes it easier to access medication
and results in greater success in successfully quitting
tobacco use, long-term cost savings from a reduction in
tobacco-related diseases would result.
However, when third payors negotiate prescription drug
coverage, they use prior authorization and utilization
controls as a mechanism to obtain price discounts from
AB 1162 (Holden) Page 11 of ?
drug manufacturers and to ensure appropriate use of the
medication. For example, when DHCS establishes its
contract drug list in FFS Medi-Cal, it uses its ability
to put drugs on prior authorization (through a Treatment
Authorization Request or "TAR") to obtain rebates from
drug manufacturers. For tobacco cessation drugs on the
Medi-Cal contract drug list, DHCS has a limit on the
number of tablets (for example, one drug has a 60 tablet
limit per dispensing), duration limits (for example, 12
weeks) and restrictions on dispensing within a time
period (for example, one dispensing in a 25-day period
and eight dispensings within a 12 month period). By
requiring coverage of FDA-approved medication and
prohibiting utilization controls, these tools would not
be available by Medi-Cal managed care plans and DHCS to
obtain price concessions from drug manufacturers or to
ensure appropriate utilization.
b) Recent DHCS policy. DHCS policy for Medi-Cal managed
care plans was released in September 2014 and has been in
effect for less than a year. This bill expands the scope
of that coverage in several ways. Has sufficient time
elapsed to know whether the provisions of that policy are
adversely affecting tobacco cessation services and should
be expanded?
SUPPORT AND OPPOSITION :
Support: American Cancer Society Cancer Action Network
(co-sponsor)
American Heart Association/American Stroke Association
(co-sponsor)
American Lung Association in California (co-sponsor)
Association of California Healthcare Districts
Association of Northern California Oncologists
Biocom
California Academy of Physician Assistants
California Academy of Preventative Medicine
California Black Health Network
California Chapter of the American College of
Emergency Physicians
California Chronic Care Coalition
California Dental Association
California Healthcare Institute
California Life Sciences Association
California Medical Association
AB 1162 (Holden) Page 12 of ?
California Pan-Ethnic Health Network
California Society of Addiction Medicine
Community Clinic Association of Los Angeles County
County Health Executives Association of California
First 5 California
Health Officers Association of California
March of Dimes California Chapter
Medical Oncology Association of Southern California
Tobacco Education and Research Oversight Committee
Western Center on Law and Poverty
Opposition:California Association of Health Plans
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