BILL ANALYSIS Ó
AB 1696
Page 1
Date of Hearing: March 15, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 1696
(Holden) - As Amended March 7, 2016
SUBJECT: Medi-Cal: tobacco cessation services
SUMMARY: Requires Medi-Cal to cover tobacco cessation services.
Specifically, this bill:
1)Requires that the tobacco cessation services covered under
Medi-Cal be subject to utilization controls.
2)Requires tobacco cessation services to include all
intervention recommendations assigned a grade A or B by the
United States Preventive Services Task Force (USPSTF).
3)Requires tobacco cessation services to include the following:
a) A minimum of four quit attempts per year, with no
required break between attempts, for all beneficiaries 18
years of age or older who use tobacco;
b) For beneficiaries under 18 years of age, be provided
AB 1696
Page 2
services in accordance with the American Academy of
Pediatrics guidelines and intervention recommendations,
assigned a grade A or B by the USPSTF;
c) At least four tobacco cessation counseling sessions per
quit attempt, as specified, at the option of the
beneficiary; and,
d) A 12-week treatment regimen of any medication approved
by the federal Food and Drug Administration (FDA) for
tobacco cessation, including prescription and
over-the-counter (OTC) medications, with at least one
prescription and all OTC medications made available without
prior authorization, as specified.
4)Requires the Department of Health Care Services (DHCS) to seek
any federal approvals necessary to implement the provisions of
this bill. Provides that this bill is only to be implemented
to the extent that federal financial participation is
available and not otherwise jeopardized and that the state has
obtained all necessary federal approvals.
5)Requires DHCS, by December 31, 2017, to issue guidelines and
enter into an agreement that authorizes the California
Smokers' Helpline or its successor, as administered by the
Department of Public Health (DPH), to directly furnish OTC
nicotine replacement therapy to Medi-Cal beneficiaries
enrolled in smoking cessation services provided by the state
tobacco use cessation quit line.
6)Requires DHCS, by July 1, 2018, to issue guidelines and to
AB 1696
Page 3
provide incentives to adult Medi-Cal beneficiaries who use
tobacco products to motivate them to enroll and participate in
evidence-based tobacco use cessation services.
7)Requires DHCS, by December 31, 2017, to issue guidelines to
Medi-Cal managed care plans (MCPs) that provide instructions
on requirements to annually report tobacco use rates among
adults enrolled in the MCP, as follows:
a) Allows MCPs to collect tobacco use status from enrollees
at the time of enrollment, and allows primary enrollees to
report the tobacco use status of other adult family members
via proxy;
b) Requires DHCS to publish and post on its Internet
Website annual adult tobacco use rates for each MCP; and,
c) Prohibits the tobacco status to be used by DHCS or MCPs
to deny coverage or treatment of tobacco-related illnesses.
EXISTING LAW:
1)Establishes the Medi-Cal Program under the direction of DHCS,
as California's Medicaid program, to provide qualifying aged,
blind, disabled, and low-income individuals health care and a
uniform schedule of benefits.
2)Requires prior authorization for coverage of specified
Medi-Cal services.
AB 1696
Page 4
3)Requires all preventive services that are assigned a grade of
A or B by the USPSTF to be provided without any cost sharing
by Medi-Cal beneficiaries, so the state can receive an
increased federal medical assistance percentage for these
services.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, quitting
tobacco products is a difficult feat that many individuals
attempt every year with little success on their own. The
author states tobacco products can cause cancer, respiratory
and heart diseases, and birth defects, and their use is still
the leading preventable cause of death in the United States.
The author contends that though the dangers of smoking are
better understood now than 50 years ago, cigarettes are
addictive and smoking rates in the Medi-Cal population are
still too high. The author asserts this bill provides smokers
with the tools necessary to fight their addiction to tobacco
products by mandating Medi-Cal coverage to clinically proven
treatments. The author maintains that studies have shown that
the comprehensive coverage of these treatments has led to
decreases in the population of smokers. The author concludes
that the state must remove all barriers to treatments that
make quitting the use of tobacco products possible.
2)BACKGROUND.
AB 1696
Page 5
a) Tobacco use in California and the United States.
According to a 2015 study done by DPH, California has one
of the lowest smoking rates in the nation, second only to
Utah. A survey done by the Behavioral Risk Factor
Surveillance System shows that California's overall adult
smoking rate was 11.7% in 2013. However, California is the
state with the highest number of smokers because it is by
far the most populous state in the nation. The DPH report
also highlights that although adult smoking rates have
declined significantly - between 1998 and 2013, rates have
dropped by 51% - it also notes that the decline in
California's tobacco use rates has slowed in recent
history. The report warned that a loss in momentum could
lead to an increase in tobacco use rate in the near future,
which could have serious implications for reversing the
substantial progress made in California to reduce
tobacco-related diseases and the associated health care
cost savings that accrued as a result of the decline in
smoking. Nonetheless, rates within California remain
consistently lower than rates in the rest of the United
States.
b) USPSTF Recommendations. Created in 1984, the USPSTF is
an independent, volunteer panel of national experts in
prevention and evidence-based medicine. The USPSTF states
it works to improve the health of all Americans by making
evidence-based recommendations about clinical preventive
services such as screenings, counseling services, and
preventive medications. The USPSTF assigns each
recommendation a letter grade (an A, B, C, or D grade or an
I statement) based on the strength of the evidence and the
balance of benefits and harms of a preventive service. The
recommendations apply only to people who have no signs or
symptoms of the specific disease or condition under
evaluation, and the recommendations address only services
offered in the primary care setting or services referred by
a primary care clinician.
AB 1696
Page 6
The current USPSTF A and B recommendations on tobacco use
are as follows:
i) Clinicians ask all adults about tobacco use, advise
them to stop using tobacco, and provide behavioral
interventions and FDA-approved pharmacotherapy for
cessation to adults who use tobacco (Grade A);
ii) Clinicians ask all pregnant women about tobacco use,
advise them to stop using tobacco, and provide behavioral
interventions for cessation to pregnant women who use
tobacco (Grade A); and,
iii) Clinicians provide interventions, including
education or brief counseling, to prevent initiation of
tobacco use in school-aged children and adolescents
(Grade B).
c) Tobacco Use Cessation Quit Line. In 1992, the
California Smokers' Helpline became the first quit line in
the nation to offer free, statewide services for tobacco
users wanting to quit. According to DPH, the California
Smokers' Helpline is a proven service that doubles a
person's chance of successfully quitting, and served as the
model for the rest of the country. Quit line services are
now available in all 50 states.
California's quit line provides telephone counseling, text
messaging support services, self-help materials, and online
help to callers, free of charge, in six different
AB 1696
Page 7
languages. The quit line Website states Asian-language
speakers and Helpline callers who live with children five
years of age and younger, may be eligible for free nicotine
patches delivered directly to their homes.
d) Drugs Approved by the FDA. There are currently a
variety of FDA-approved OTC nicotine replacement products,
including skin patches, lozenges, and chewing gum; these
products are available under brand or generic names to
individuals over the age of 18. The only prescription
nicotine replacement product approved by the FDA is
Nicotrol. The FDA has also approved two products for
tobacco cessation that do not contain nicotine: Chantix, a
drug aimed at reducing cravings, and Zyban, an
anti-depressant focused on maintaining chemical balance as
a patient receives treatment.
e) Tobacco cessation treatments and coverage in the ACA.
Section 2502 of the Patient Protection and Affordable Care
Act (ACA) requires that smoking cessation drugs be removed
from the list of drugs that states may exclude from
coverage in their Medicaid program, effective January 1,
2014. This section also explicitly prohibited state
Medicaid programs from excluding FDA-approved cessation
medications from coverage. The Centers for Medicare and
Medicaid Services issued guidance to states, specifying
that OTC smoking cessation drugs are also no longer
excluded from coverage or otherwise restricted under the
Medicaid program.
Federal guidance in the ACA recommends the following coverage
for each cessation attempt: i) four tobacco cessation
counseling sessions of at least 10 minutes each (including
telephone counseling, group counseling, and individual
counseling) without prior authorization; and, ii) all
AB 1696
Page 8
FDA-approved tobacco cessation medications (including both
prescription and over-the-counter medications) for a 90-day
treatment regimen when prescribed by a health care provider
without prior authorization.
f) DHCS Policy on Tobacco Cessation. On September 3, 2014,
DHCS released policy letter 14-006 to provide MCPs with
minimum requirements for comprehensive tobacco cessation
services. The requirements, similar to federal guidance on
the issue, are for the following:
i) Coverage of all seven FDA-approved tobacco cessation
medications, at least one of which must be available
without prior authorization - a cost-containment
procedure that requires a prescriber to obtain permission
to prescribe a medication prior to prescribing it - and
any additional tobacco cessation medications once
approved by the FDA;
ii) Coverage of a 90-day treatment regimen of
medications with other requirements, restrictions, or
barriers; and a minimum of two separate quit attempts per
year, with no mandatory break required between quit
attempts;
iii) MCPs may not require members to attend counseling
sessions or classes prior to receiving a prescription for
an FDA-approved tobacco cessation medication;
iv) MCPs must ensure that individual, group, and
telephone counseling is offered to members who wish to
quit smoking, whether or not those members opt to use
tobacco cessation medications; and,
AB 1696
Page 9
v) Four counseling sessions of at least 10 minutes each
in length for at least two separate quit attempts a year
without prior authorization.
The DHCS policy letter also specified requirements for
annual assessments, services for pregnant tobacco users,
provider training, and referral to the California Smokers'
Helpline.
Notable differences between the requirements of this bill
and the requirements under DHCS' policy on coverage of
tobacco cessation products include a minimum requirement
under the DHCS policy and federal guidance for the length
of counseling sessions, and a modestly increased treatment
regimen (90 days under federal guidance and DHCS policy vs.
84 days under this bill). This bill also requires coverage
for a minimum of four quit attempts per year, with no
required break between attempts, for all Medi-Cal
beneficiaries 18 years of age and older who use tobacco,
whereas federal guidance and DHCS policy states coverage
should be for at least two quit attempts. Finally, this
bill requires all OTC medications and at least one
prescription medication be available without prior
authorization, whereas the DHCS policy is to cover all
seven FDA-approved tobacco cessation products, at least one
of which must be available without prior authorization.
g) Second Extraordinary Legislative Session. On June 16,
2015, Governor Jerry Brown issued a proclamation calling
for an Extraordinary Session devoted to matters pertaining
to Medi-Cal and services for people with developmental
disabilities. One of the charges of which is to improve
the efficiency and efficacy of the health care system,
AB 1696
Page 10
reduce the cost of providing health care services, and
improve the health of Californians. To meet the Governor's
request, the Legislature recently passed a package of
tobacco control bills that, if signed by the Governor, will
raise the smoking age to 21, regulate e-cigarettes in the
same manner as traditional tobacco products, allow counties
to tax tobacco products, increase tobacco licensing fees,
close loopholes that allow smoking in the workplace, and
ensure all of Californians schools are smoke-free. Further
details on these bills are noted below.
3)SUPPORT. The American Cancer Society Cancer Action Network
(ACS), a cosponsor of this bill, states the ACA has made
tobacco cessation treatments more accessible by including them
in the Essential Health Benefits that must be covered by all
health plans; however the guidelines as to how to implement
cessation treatments are unclear and results in varying
degrees of coverage between health plans. The American Heart
Association/American Stroke Association, also a cosponsor of
this bill, states that federal funding for tobacco cessation
services has been made available as a result of Medi-Cal
expansion; ensuring Medi-Cal recipients in both
fee-for-service and managed care models have access to
comprehensive cessation coverage will help decrease tobacco
use rates and its associated costs. The American Lung
Association in California, also a cosponsor of this bill,
states this bill will bring California into compliance with
federal guidance.
The Health Officers Association of California supports this
bill, stating that despite its diminishing prevalence over the
last decade, the use of tobacco continues to threaten public
health and drain the state's health care resources, with an
annual cost of $18 billion for California taxpayers. To
reduce the impact of tobacco use, the Health Officers
Association of California states it is important for our state
to invest in making tobacco cessation services more accessible
to tobacco users who are willing to quit.
AB 1696
Page 11
4)OPPOSITION. The California Association of Health Plans (CAHP)
states this bill will increase costs to the state by requiring
Medi-Cal MCPs to pay for tobacco cessation drugs in a manner
that is inconsistent with policies of both DHCS and sound
medical management. CAHP also states MCPs already comply with
the requirements of the DHCS Policy letter. Opposition also
asserts that removing all prior authorization protocols and
requiring plans to cover all specific medications would create
a new benefit mandate, which would result in higher state
costs in Medi-Cal reimbursement rates to plans in order to
reflect the benefit expansion.
5)RELATED LEGISLATION.
a) AB 1594 (McCarty) prohibits the smoking of a tobacco
product or the use of an electronic cigarette on a campus
of the California State University or the California
Community Colleges; authorizes the enforcement by a fine;
and, requires the funds to be used to support educational
programs and tobacco use cessation treatment options for
students. AB 1594 is currently pending in the Assembly
Higher Education Committee.
b) SBX2 5 (Leno) and ABX2 6 (Cooper) define the term
smoking for purposes of the Stop Tobacco Access to Kids
Enforcement Act; expand the definition of a tobacco product
to include e-cigarettes and extend current restrictions and
prohibitions against the use of tobacco products to
electronic cigarettes. SBX2 5 is pending on the Governor's
desk. ABX2 6 is pending on the Assembly Floor.
c) SBX2 6 (Monning) and ABX2 7 (Stone) prohibit smoking in
owner-operated businesses and remove specified exemptions
AB 1696
Page 12
in existing law that allow tobacco smoking in certain
workplaces. SBX2 6 was heard on August 19, 2015 in the
Senate Committee on Public Health and Developmental
Disabilities and passed on a 9 to 2 vote. SBX2 6 passed
out of the Senate on August 27, 2015 and is pending in the
Assembly. SBX2 6 is pending on the Assembly Floor. ABX2 7
is pending on the Governor's desk.
d) SBX2 7 (Ed Hernandez) and ABX2 8 (Wood) increases the
minimum legal age to purchase or consume tobacco from 18 to
21. SBX2 7 is pending on the Governor's desk. ABX2 8 is
pending on the Assembly Floor.
e) SBX2 8 (Liu) and ABX2 9 (Thurmond and Nazarian) clarify
charter school eligibility for tobacco use prevention
program (TUPE) funds; require the California State
Department of Education to require all school districts,
charter schools, and county offices of education receiving
TUPE funds to adopt and enforce a tobacco-free campus
policy; prohibit the use of tobacco and nicotine products
in any county office of education, charter school, or
school district-owned or leased building, on school or
district property, and in school or district vehicles; and,
require all schools, districts, and offices of education to
post a sign reading "Tobacco use is prohibited" at all
entrances. SBX2 8 is pending a vote on the Assembly Floor.
ABX2 9 is pending on the Governor's desk.
f) SBX2 9 (McGuire) and ABX2 10 (Bloom) allow counties to
impose a tax on the privilege of distributing cigarettes
and tobacco products. SBX2 9 is pending on the Assembly
Floor. ABX2 10 is pending on the Governor's desk.
AB 1696
Page 13
g) SBX2 10 (Beall) and ABX2 11 (Nazarian) revise the
Cigarette and Tobacco Products Licensing Act of 2003 to
change the retailer license fee from a $100 one-time fee to
a $265 annual fee, and increase the distributor and
wholesaler license fee from $1,000 to $1,200. SBX2 10 is
pending on the Assembly Floor. ABX2 11 is pending on the
Governor's desk.
h) SBX2 14 (Ed Hernandez) imposes an additional excise tax
of $2 per package of 20 cigarettes, and imposes an
equivalent one-time "floor stock tax" on the cigarettes
held or stored by dealers and wholesalers. Imposes a tax
on e-cigarettes equivalent to the $2 per package tax
imposed on cigarettes by this bill. Requires revenue from
tobacco and e-cigarette taxes to be used for various
tobacco use prevention and research, law enforcement,
medical school education, for improved payments for
Medi-Cal funded services, and to backfill existing
tobacco-tax funded services for any revenue decline
resulting from the additional tax. Imposes a managed care
organization provider tax (MCO tax) on health plans and
continuously appropriates funds from the MCO tax for
purposes of funding the nonfederal share of Medi-Cal
managed care rates, and transfers $230 million, to be used
upon appropriation by the Legislature, to increase the
funding provided to regional centers and to increase rates
paid to providers of service to the developmentally
disabled. Repeals the 7% reduction in hours of service to
each In-Home Supportive Services recipient of services.
SBX2 14 died on Senate Third Reading.
6)PREVIOUS LEGISLATION.
AB 1696
Page 14
a) AB 1162 (Holden) of 2015 was nearly identical to this
bill. AB 1162 would have required tobacco cessation
services to be a covered benefit under the Medi-Cal
program, as specified. AB 1162 was vetoed along with five
other bills. The veto message stated that:
"These bills unnecessarily codify certain existing health
care benefits or require the expansion or development of
new benefits and procedures in the Medi-Cal program.
Taken together, these bills would require new spending at
a time when there is considerable uncertainty in the
funding of this program. Until the fiscal outlook for
Medi-Cal is stabilized, I cannot support any of these
measures."
b) SB 220 (Yee) of 2010 would have required a health plans
and insurers to cover over a minimum of two courses of
treatment in a 12-month period for all smoking cessation
treatments rated "A" or "B" by the USPSTF, which shall
include counseling and over-the-counter medication and
prescription pharmacotherapy approved by the FDA. SB 220
also requested the California Health Benefits Review
Program to prepare an analysis of the state cost savings as
a result of the bill provisions. SB 220 was vetoed by the
Governor.
c) AB 2662 (Dymally) of 2007 would have required that one
provision of one form of Medi-Cal covered tobacco cessation
services benefits, either pharmacotherapy or counseling, to
not be a precondition to receive the other. AB 2662 was
held in the Senate Appropriations Committee.
d) SB 576 (Ortiz) of 2005 would have required health plans
and health insurers to provide specified tobacco cessation
coverage and would have prohibited plans and insurers from
AB 1696
Page 15
applying deductibles or co-payments to those benefits. SB
576 was vetoed by the Governor.
7)POLICY COMMENT. This bill is similar to AB 1162 (Holden) of
2015, which the Governor vetoed last year due to costs
pressures on the Medi-Cal program. The Committee may wish to
ask the author how he will address the Governor's veto.
8)TECHNICAL AMENDMENT. This bill requires DHCS to provide
instructions on requirements to annually report tobacco use
rates among adults enrolled in the MCP. This bill also
requires DHCS to publish and post on its Internet Website
annual adult tobacco use rates for each MCP. It is unclear if
the intent of the latter requirement is to have DHCS publish
the rates of annual use of tobacco products for adults, or to
publish various rates of adult tobacco use (e.g. demographics,
types of tobacco product used, etc.) annually. The Committee
may wish to clarify what data DHCS should publish.
REGISTERED SUPPORT / OPPOSITION:
Support
American Cancer Society Cancer Action Network (cosponsor)
American Heart Association/American Stroke Association
(cosponsor)
American Lung Association in California (cosponsor)
Association of California Healthcare Districts
California Optometric Association
California Pan-Ethnic Health Network
County Health Executives Association of California
Health Officers Association of California
AB 1696
Page 16
Opposition
California Association of Health Plans
Analysis Prepared by:An-Chi Tsou / HEALTH / (916) 319-2097