BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1231

                                                                    Page  1

          Date of Hearing:  May 20, 2015


                                 Jimmy Gomez, Chair

          1231 (Wood) - As Introduced February 27, 2015

          |Policy       |Health                         |Vote:|18 - 0       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          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.


          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  

            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)