BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1568| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 AB 1568 Page 2 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. AB 1568 Page 3 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 AB 1568 Page 4 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. AB 1568 Page 5 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 AB 1568 Page 6 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. AB 1568 Page 7 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 AB 1568 Page 8 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 AB 1568 Page 9 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 **** END ****