BILL ANALYSIS Ó AB 1231 Page 1 ASSEMBLY THIRD READING AB 1231 (Wood) As Introduced May 28, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+--------------------+----------------------| |Health |18-0 |Bonta, Maienschein, | | | | |Bonilla, Burke, | | | | |Chiu, Gomez, | | | | |Gonzalez, Roger | | | | |Hernández, Lackey, | | | | |Nazarian, | | | | |Patterson, | | | | |Ridley-Thomas, | | | | |Rodriguez, | | | | |Santiago, | | | | |Steinorth, | | | | |Thurmond, Waldron, | | | | |Wood | | | | | | | |----------------+------+--------------------+----------------------| |Appropriations |17-0 |Gomez, Bigelow, | | | | |Bonta, Calderon, | | | | |Chang, Daly, | | | | |Eggman, Gallagher, | | | | | | | | | | | | AB 1231 Page 2 | | |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 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 AB 1231 Page 3 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 standards. 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. 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 AB 1231 Page 4 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 network. OPPOSITION: There is no opposition to this bill. Analysis Prepared by: An-Chi Tsou / HEALTH / (916) 319-2097 FN: 0000863