BILL ANALYSIS Ó AB 1231 Page 1 Date of Hearing: May 20, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1231 (Wood) - As Introduced February 27, 2015 ----------------------------------------------------------------- |Policy |Health |Vote:|18 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill adds "nonmedical transportation" (NMT) to the schedule of Medi-Cal benefits, where nonmedical transportation means transportation by public or private conveyance for a beneficiary to obtain covered specialty care Medi-Cal services, if those AB 1231 Page 2 services are more than 60 minutes or 30 miles from the beneficiary's place of residence. FISCAL EFFECT: Unknown cost pressure, potentially in the range of $1 million in Medi-Cal managed care, and low hundreds of thousands in direct costs in fee-for-service (FFS) Medi-Cal annually (GF/majority federal). Due to data limitations this estimate is fairly rough, it assumes a small percentage of rural Medi-Cal enrollees receives transportation services each year for a single specialty visit; is based on 20,000 additional transports in managed care, and 5,000 in FFS annually at a cost of $50 per transport. The cost of mandating NMT as a covered benefit in Medi-Cal depends on several factors, which are in turn subject to significant uncertainty and change. Some additional cost dynamics and cost offsets are described below: 1)To the extent better access to transportation increases utilization of specialty care services, additional unknown costs in FFS and cost pressure on managed care rates for more specialty care visits. These increased costs for specialty care would be offset to some extent by cost savings from better management of chronic conditions, fewer complications, and reduced emergency room use. It is difficult to say, based on the number of increased transports, what percentage of specialty visits would be made regardless of the availability of transportation. 2)Managed care plans, as well as the Department of Health Care Services (DHCS), are likely to experience some administrative costs to institute policies and procedures to ensure coverage complies with the defined standards. The coverage of a benefit subject to geographic standards based on an enrollee's home location and the potential location of services appears AB 1231 Page 3 to be novel within Medi-Cal, and would necessitate some tool, either automated or manual, to decide whether services are indeed covered, as well as to facilitate audits and oversight of the provision of this benefit. 3)The actual impact on managed care rates from the potential increased cost pressure identified here is unknown and may depend in part on how it compares to what plans currently provide. Since some plans already provide NMT at their option, mandating broader coverage of transportation services for specialty care visits with specified distance criteria is likely to affect different plans differently. Voluntary NMT coverage by some plans suggests potential benefits and/or cost savings may be significant compared to cost. However, many plans that cover NMT also impose conditions on such coverage. 4)Since the coverage of NMT is only available for visits that meet a certain time/distance standard, to the extent provider networks in both managed care plans and FFS Medi-Cal grow more robust, the demand for transportation services would decrease. The inverse is also true; if networks grew more sparse, demand for transportation would increase based on a higher likelihood that visits meet the defined standard. 5)Utilization of transportation services for specialty visits, and corresponding costs, could also vary dramatically based on whether beneficiaries and providers know it is a covered benefit, and how easy it is to access. 6)The bill requires the transportation be provided "in a form and manner that is the most beneficial and accessible, in terms of physical and geographic accessibility, for the beneficiary." This provision could pose significant additional fiscal risk beyond what is assumed here, as the "most beneficial" methods are likely to be the most expensive-for AB 1231 Page 4 example, private conveyance is arguably more beneficial than public conveyance. COMMENTS: 1)Purpose. The author states this bill ensures low-income beneficiaries in rural areas have access to transportation for their specialty care needs. It is sponsored by the Western Center on Law and Poverty, who works closely with health law programs throughout the state that report severe accessibility challenges for specialty visits, particularly among rural Medi-Cal enrollees and particularly given the recent expansion of managed care to rural counties. 2)Background. DHCS distinguishes between Non-Emergency Medical Transportation (NEMT), which is medical transportation but on a non-emergency basis, and Non-Medical Transportation (NMT), which is ordinary transport to medical services by passenger car, taxicabs, or other forms of public or private conveyances. NEMT is a covered benefit for all enrollees as it is provided when transport by ordinary means of public or private conveyance is medically contraindicated, and transportation is required for the purpose of obtaining needed medical care. However, NMT (i.e., "ordinary" transportation of enrollee to medical services) is only provided to children and individuals enrolled in the Coordinated Care Initiative, a demonstration project in certain counties for those dually eligible for Medicare and Medi-Cal. This bill would make NMT a covered benefit for all enrollees, but only for visits to specialty care providers that meet certain time/distance standards. Federal regulations require the state to provide "necessary" transportation services to and from medical appointments. Supporters note the Medi-Cal state plan "assures" AB 1231 Page 5 transportation to and from health care services, and consider this bill further clarification of what the state plan already requires, but is not being implemented. 3)Staff Comments. As discussed in fiscal comment (6), the provision requiring the "most beneficial" form of transport could drive up costs unnecessarily. If the author's intent is to ensure accessibility for individuals with disabilities, this provision should be clarified to allow reasonable cost management as it pertains to transportation methods. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081