BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1568|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  AB 1568
          Author:   Bonta (D) and Atkins (D), et al.
          Amended:  6/2/16 in Senate
          Vote:     27 - Urgency

           SENATE HEALTH COMMITTEE:  7-0, 6/8/16
           AYES:  Hernandez, Nguyen, Mitchell, Monning, Nielsen, Pan, Roth
           NO VOTE RECORDED:  Hall, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 6/20/16
           AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           ASSEMBLY FLOOR:  80-0, 5/31/16 - See last page for vote

           SUBJECT:   Medi-Cal:  demonstration project


          SOURCE:    Author


          DIGEST:  This bill enacts specified statutory provisions of  
          Medi-Cal 2020, the states recently approved five-year federal  
          Section 1115 waiver, which runs through December 31, 2020,  
          including the Dental Transformation Initiative, the Whole Person  
          Care program and the evaluations required under the Special  
          Terms of Conditions (STCs) of Medi-Cal 2020. Requires the  
          Department of Health Care Services to conduct or arrange to have  
          conducted studies, reports and assessments required under the  
          STCs.

          ANALYSIS:  Existing law establishes the Medi-Cal program, which  
          is administered by the Department of Health Care Services (DHCS)  
          and under which qualified low-income persons receive health care  








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          benefits. Emergency and essential diagnostic and restorative  
          dental services are part of the covered benefits of the  
          Denti-Cal program.

          This bill:

           1) Requires DHCS to establish and operate the Whole Person Care  
             (WPC) pilot program as authorized under Medi-Cal 2020 to  
             allow for development of WPC pilots focused on target  
             populations of high-risk, high-utilizing Medi-Cal  
             beneficiaries in local geographic areas. 

           2) Requires WPC pilots to provide an option to a county, city  
             and county, a health or hospital authority or a consortium of  
             any of these entities to receive support to integrate care  
             for particularly vulnerable Medi-Cal beneficiaries who have  
             been identified as high users of multiple systems and who  
             continue to have or are at-risk of poor health outcomes. 

           3) Defines the WPC target population as the population or  
             populations identified by a WPC pilot through a collaborative  
             data approach across partnering entities that identifies  
             common Medi-Cal high-risk, high-utilizing beneficiaries who  
             frequently access urgent and emergency services, including  
             across multiple systems. Permits, at the discretion of the  
             WPC lead entity, and in accordance with guidance as may be  
             issued by DHCS during the application process and approved by  
             DHCS, the WPC target population to include individuals who  
             are not Medi-Cal patients, subject to the funding  
             restrictions in the STCs regarding the availability of  
             federal financial participation (FFP) for services provided  
             to these individuals.

           4) Requires WPC pilots to include specific strategies to  
             increase integration among local governmental agencies,  
             health plans, providers, and other entities that serve  
             high-risk, high-utilizing beneficiaries, increase  
             coordination and appropriate access to care, reduce  
             inappropriate inpatient and emergency room utilization,  
             improve data collection and sharing among local entities,  
             improve health outcomes for the WPC target population and  
             permits it to include other strategies to increase access to  
             housing and supportive services.








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           5) Requires the WPC lead entity to be responsible for operating  
             the WPC pilot, conducting ongoing monitoring of WPC  
             participating entities, arranging for the required reporting,  
             ensuring an appropriate financial structure is in place, and  
             identifying and securing a permissible source of the  
             nonfederal share for WPC pilot payments.

           6) Requires each WPC pilot to include, at a minimum, specified  
             entities as WPC participating entities in addition to the WPC  
             lead entity, including at least one Medi-Cal managed care  
             plan, the health service agency where the WPC operates, the  
             local agency responsible for specialty mental health  
             services, at least two community partners and at least one  
             other public agency. Permits a WPC lead entity to request an  
             exemption from this requirement from DHCS if a WPC lead  
             entity cannot reach an agreement with a required participant.

           7) Requires DHCS to enter into a pilot agreement with each WPC  
             lead entity approved for participation in the WPC pilot  
             program. 

           8) Permits the sharing of health information, records, and  
             other data with and among WPC lead entities, and allows WPC  
             participating entities to share health information, records,  
             and other data with and among prospective WPC lead entities  
             and WPC participating entities in the process of identifying  
             a proposed target population and preparing an application for  
             a WPC pilot.

           9) Requires payments to WPC pilots to be disbursed twice a year  
             to the WPC lead entity following the submission of required  
             reports.

           10)Requires that payments to the WPC pilot are intended to  
             support infrastructure to integrate services among local  
             entities that serve the WPC target population, to support the  
             availability of services not otherwise covered or directly  
             reimbursed by Medi-Cal to improve care for the WPC target  
             population, and to foster other strategies to improve  
             integration, reduce unnecessary utilization of health care  
             services, and improve health outcomes. 

           11)Requires WPC lead entities to submit mid-year and annual  
             reports to DHCS, in accordance with the schedules and  







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             guidelines established by DHCS and consistent with the STCs. 

           12)Requires the nonfederal share of any payments under the WPC  
             pilot program to consist of voluntary intergovernmental  
             transfers (IGTs) of funds provided by participating  
             governmental agencies or entities, in accordance with this  
             bill and the terms of the pilot agreement.

           13)Requires DHCS to claim FFP for WPC pilot payments using  
             moneys from the IGTs and FFP, and requires moneys disbursed  
             from the fund, and all associated FFP to be distributed to  
             WPC lead entities.

           14)Requires DHCS to implement the Dental Transformation  
             Initiative (DTI) in accordance with the STCs, with the goal  
             of improving the oral health care for Medi-Cal children zero  
             to 20, inclusive, years of age.

           15)Establishes as the purpose of the DTI is to improve the oral  
             health care for Medi-Cal children with a particular focus on  
             increasing the statewide proportion of qualifying children  
             enrolled in the Medi-Cal Dental Program who receive a  
             preventive dental service by 10 percentage points over a  
             five-year period.

           16)Requires the DTI to include the following four domains as  
             outlined in the STCs:

              a)    Increase Preventive Services Utilization for Children;
              b)    Caries Risk Assessment and Disease Management Pilot; 
              c)    Increase continuity of care; and,
              d)    Local Dental Pilot Projects (LDPPs).

           17)Requires the DTI to be funded at a maximum of $148 million  
             annually, and for five years totaling a maximum of $740  
             million, except as provided in the STCs. Permits unspent  
             funds to be rolled over to subsequent years.

           18)Permits DHCS to earn additional demonstration authority, up  
             to a maximum of $10 million to be added to the DTI Pool for  
             use in paying incentives to qualifying providers under DTI by  
             achieving higher performance improvement, as indicated in the  
             STCs.








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           19)Permits providers in either the dental FFS or dental managed  
             care Medi-Cal delivery systems to participate in the DTI. 

           20)Requires that incentive payments from the DTI Pool are  
             intended to support and reward eligible service office  
             locations for achievements within one or more of the project  
             domains. Prohibits incentive payments from being considered  
             as a direct reimbursement for dental services under Medi-Cal.

           21)Requires DHCS to conduct or arrange to have conducted any  
             study, report, assessment, evaluation or other similar  
             demonstration project activity required under the STCs,  
             including the two evaluations of the Global Payment Program,  
             the PRIME evaluation, the WPC evaluations, and the DTI  
             evaluation.

           22)Makes this bill operative contingent upon the enactment of  
             SB 815 (Hernandez and DeLeón).

           23)Takes effect immediately as an urgency statute


          Comments
          
          1)Author's statement. According to the author, this bill is  
            needed to provide the statutory framework for implementation  
            of "Medi-Cal 2020." While the STCs outline the programmatic  
            and financing elements of Medi-Cal 2020, state law changes are  
            required, to appropriate funds for the waiver-related WPC  
            provisions, to enable data sharing as part of WPC projects,  
            and to codify the provisions of the STCs establishing the DTI  
            and the WPC. In addition, this bill would require DHCS to  
            conduct or contract for the waiver-required evaluations. This  
            bill is a companion measure to SB 815 (Hernandez and De Leon).  


          FISCAL EFFECT: Appropriation:   Yes    Fiscal Com.:   Yes     
          Local:   No

          According to the Senate Appropriations Committee: 

          The following information represents the fiscal impact of the  
          entire Section 1115 waiver. Although AB 1568 contains only a  
          portion of the implementing language for the new waiver, this  







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          bill is contingent on SB 815 (the other implementing bill) and  
          the federal government has approved Medi-Cal 2020 as a single  
          waiver. Therefore, the fiscal information below reflects the  
          complete fiscal impact of the waiver. 

          Over the course of the five-year waiver period, the state will  
          be able to access at least $6.2 billion in additional federal  
          funding that the state would not be eligible for without the  
          waiver. The state is eligible for the additional funding under  
          the waiver for two primary reasons. First, the state's  
          continuing use of Medi-Cal managed care reduces costs relative  
          to the alternative fee-for-service system. The federal  
          government will allow the state to use a portion of those  
          projected savings for waiver programs. Second, the federal  
          government will allow the state draw down federal matching funds  
          for certain "state only" health care programs that are not  
          currently eligible for federal funding. The General Fund savings  
          from receiving those additional federal funds will be redirected  
          to a specific waiver program. 
          The following are the major elements of Medi-Cal 2020. Note that  
          the funding amounts are for the five-year waiver period, unless  
          otherwise noted. 

          1)PRIME - $3.7 billion (federal funds). The PRIME program  
            authorizes federal matching funds to make incentive payments  
            to Designated Public Hospitals and District/Municipal Public  
            Hospitals in order to improve care delivery and strengthen  
            their ability to take on risk-based payments. 

          2)Global Payment Program - at least $236 million (federal  
            funds). The Global Payment Program restructures the  
            distribution of federal funding for uncompensated care. This  
            includes disproportionate share hospital funding (DSH) to  
            designated public hospitals (excluding University of  
            California hospitals) in order to incentivize improvements in  
            care delivery and provision of care in appropriate settings.  
            Medi-Cal 2020 maintains the DSH funding methodology for other  
            hospitals, with DSH funding for UC hospitals capped by fiscal  
            year. The $236 million in federal funding is only for the  
            first year of the waiver. Additional funding in subsequent  
            years will be determined based on future uncompensated care.  
            Also, the figures above do not include existing DSH funding of  
            about $5.9 billion in federal funds over the waiver period. 








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          3)Dental Transformation Initiative - $375 million (federal  
            funds). The Dental Transformation Initiative permits incentive  
            payments to qualified dental providers to improve dental care  
            and utilization among children enrolled in Medi-Cal. The state  
            share of funding for this program is provided through the  
            redirection of existing General Fund support for specific  
            state only health care programs which will be eligible for  
            federal matching funds under the waiver.

          4)Designated State Health Programs - $375 million (federal  
            funds). The waiver authorizes the state to access federal  
            matching funds for several existing health care programs that  
            are currently funded only with state and local funds. By  
            making these programs eligible for federal matching funds, the  
            waiver frees up state funding to support the Dental  
            Transformation Initiative and to draw down federal matching  
            funds. 

          5)Whole Person Care - $1.5 billion (federal funds). This program  
            allows participating lead entities (primarily counties) to  
            claim federal matching funds for efforts to coordinate health,  
            behavioral health, and social services for high-risk Medi-Cal  
            beneficiaries who are high-utilizers of health care services.  
            Federal matching funds will be available for a variety of  
            social services and supports that are not eligible for federal  
            matching funds absent the waiver. 

          DHCS has requested additional administrative funding to oversee  
          Medi-Cal 2020 of $34 million over the five-year waiver period,  
          including $11 million in the Budget Year (General Fund and  
          federal funds).


          SUPPORT:   (Verified6/21/16)


          Antelope Valley Hospital 
          Association of California Healthcare Districts 
          Bear Valley Community Healthcare District 
          California Association of Public Hospitals and Health Systems 
          California Hospital Association 
          California Primary Care Association 
          California State Association of Counties 
          Coalinga Regional Medical Center 







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          Contra Costa County 
          County Health Executives Association of California 
          County of San Bernardino 
          District Hospital Leadership Forum 
          El Camino Hospital 
          Hazel Hawkins Memorial Hospital
          Health Access California
          Kern County Hospital Authority 
          Kern Valley Healthcare District 
          Mammoth Hospital 
          Marin General Hospital 
          Mayers Memorial Hospital District
          Northern Inyo Hospital 
          Palo Verde Hospital 
          Palomar Health 
          Pioneers Memorial Healthcare District 
          Plumas District Hospital 
          Salinas Valley Memorial Healthcare System 
          San Bernardino Mountains Community Hospital District 
          San Gorgonio Memorial Hospital 
          San Joaquin General Hospital 
          Santa Clara County Board of Supervisors 
          SEIU California 
          Seneca Healthcare District 
          Sierra View Medical Center 
          Tahoe Forest Hospital District 
          Tri-City Medical Center 
          University of California 
          Urban Counties of California 
          Western Center on Law and Poverty
          Ventura County Board of Supervisors 
          Washington Hospital Healthcare System


          OPPOSITION:   (Verified6/21/16)


          None received

          ARGUMENTS IN SUPPORT:  This bill is supported by hospitals and  
          consumer and labor groups, which write in support of the $6.2  
          billion in federal funds and the new waiver funding components,  
          including PRIME, GPP and WPC. The California State Association  
          of Counties (CSAC) states that the WPC Pilots will test new care  







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          innovations and leverage lessons learned to improve outcomes;  
          contain costs; and more effectively coordinate care beyond  
          traditional health services. CSAC concludes that the Medi-Cal  
          2020 Waiver renewal is a strong and ambitious blueprint for  
          building on the success of the Medi-Cal program and its  
          continued transformation. 

          ASSEMBLY FLOOR:  80-0, 5/31/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth  
            Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

          Prepared by:Scott Bain / HEALTH / (916) 651-4111
          6/22/16 17:53:47


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