BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                      AB 1231

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          1231 (Wood)

          As Introduced  May 28, 2015

          Majority vote

          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |Health          |18-0  |Bonta, Maienschein, |                      |
          |                |      |Bonilla, Burke,     |                      |
          |                |      |Chiu, Gomez,        |                      |
          |                |      |Gonzalez, Roger     |                      |
          |                |      |HernŠndez, Lackey,  |                      |
          |                |      |Nazarian,           |                      |
          |                |      |Patterson,          |                      |
          |                |      |Ridley-Thomas,      |                      |
          |                |      |Rodriguez,          |                      |
          |                |      |Santiago,           |                      |
          |                |      |Steinorth,          |                      |
          |                |      |Thurmond, Waldron,  |                      |
          |                |      |Wood                |                      |
          |                |      |                    |                      |
          |Appropriations  |17-0  |Gomez, Bigelow,     |                      |
          |                |      |Bonta, Calderon,    |                      |
          |                |      |Chang, Daly,        |                      |
          |                |      |Eggman, Gallagher,  |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |


                                                                      AB 1231

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          |                |      |Eduardo Garcia,     |                      |
          |                |      |Gordon, Holden,     |                      |
          |                |      |Jones, Quirk,       |                      |
          |                |      |Rendon, Wagner,     |                      |
          |                |      |Weber, Wood         |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |

          SUMMARY:  Adds nonmedical transportation, as defined, to the  
          schedule of benefits in the Medi-Cal program administrated by the  
          Department of Health Care Services (DHCS) for beneficiaries who  
          receive services, as specified, and that are located more than 60  
          minutes or 30 miles from the beneficiary's place of residence.   
          Authorizes DHCS to seek federal approval and conditions providing  
          the benefit on DHCS obtaining federal matching funds.

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, 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 (General  
          Fund/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 "nonmedical transportation"  
          (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  

          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  


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            would be offset to some extent by cost savings from better  
            management of chronic conditions, fewer complications, and  
            reduced emergency room use.

          2)Managed care plans, as well as the DHCS, are likely to  
            experience some administrative costs to institute policies and  
            procedures to ensure coverage complies with the defined  

          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  

          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.

          The Western Center on Law and Poverty, the sponsor of this bill,  
          asserts access to transportation services is critical for  
          residents in rural areas where public transport is scarce and  
          low-income beneficiaries cannot afford the limited transportation  
          options available.  Although transportation to and from health  
          care services is assured through the Medicaid State Plan,  
          variation in implementation of this benefit leaves uncertainty to  


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          availability and criteria for receiving such benefits.  Supporters  
          of this bill note specialty care often requires multiple trips to  
          a specialist, which can be difficult for Medi-Cal beneficiaries in  
          rural areas.  This problem is exacerbated by the mandatory  
          transition to managed care for Medi-Cal consumers in 28, mostly  
          rural, counties who are reporting farther travel distances to  
          access medically needed specialty services within the plan's  

          OPPOSITION:  There is no opposition to this bill.

          Analysis Prepared by:                                               
          An-Chi Tsou / HEALTH / (916) 319-2097  FN: 0000863