BILL ANALYSIS Ó
AB 1696
Page 1
Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1696 (Holden) - As Amended March 28, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill adds tobacco cessation as a required benefit in the
Medi-Cal program, subject to federal approval, and specifies
coverage parameters, including at least four quit attempts per
year, at least four counseling sessions per quit attempt, the
availability of certain medications without prior authorization,
and that one benefit will not be contingent on receipt of
another (e.g., counseling is not required to obtain medication).
AB 1696
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It also requires the Department of Health Care Services to issue
guidelines:
1)That authorize the California Smokers' Helpline or its
successor, as administered by the California Department of
Public Health (CDPH), to directly furnish over-the-counter
nicotine replacement therapy (such as nicotine patches) to
Medi-Cal beneficiaries enrolled in smoking cessation services
provided by the Helpline;
2)To 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; and
3)To provide instructions to Medi-Cal managed care plans (MCPs)
on requirements to annually report tobacco use rates among
adults enrolled in the MCP.
FISCAL EFFECT:
1)Increased costs due to increased utilization of smoking
cessation services. Under current practice, about 30,000
Medi-Cal beneficiaries access smoking cessation services at a
total annual cost of about $4 million per year. Assuming that
the expanded benefits required in the bill result in increased
demand for smoking cessation services of 10% to 20%, this bill
will result in increased costs of $400,000 to $800,000 per
year (GF/federal).
AB 1696
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2)Short term cost savings due to reduced smoking-related health
care costs for Medi-Cal beneficiaries. A review of a smoking
cessation benefit in the Massachusetts Medicaid program
indicates that reducing smoking by beneficiaries led to a net
reduction in health care costs of about $2 for each $1 spent
on the program. Using the assumptions for utilization increase
above, potential cost savings of $800,000 to $1.6 million per
year. The long-term health care spending impacts of reduced
tobacco use are less clear, because reduced health care
spending on smoking-related conditions will be offset by
people living longer, though such "costs" are generally
considered societally beneficial.
3)Minor administrative costs to update existing Medi-Cal
policies for the provision of smoking cessation services, and
to issue guidelines related to best practices for offering
incentives to beneficiaries to encourage tobacco cessation
(GF/federal).
4)If a new billing process is required to administer the
provision of over-the-counter nicotine patches to Medi-Cal
beneficiaries, potentially significant administrative costs to
DHCS (GF/federal).
5)Potentially significant cost pressure for DHCS to issue
guidelines, collect, and disseminate tobacco use rates by
health plan, and increase managed care rates associated with
the requirement that health plans report tobacco use rates for
their Medi-Cal enrollees. This appears to be a new metric
that is not currently collected at a health plan level
(GF/federal).
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COMMENTS:
1)Purpose. The author asserts access to smoking cessation
services is sometimes difficult for Medi-Cal recipients due to
barriers to access, including prior authorization for
cessation drugs. The purpose of this bill is to reduce
barriers to tobacco cessation services for Medi-Cal enrollees,
who are more likely to smoke than adults with other types of
health insurance, and to provide guidelines on data collection
and incentives to encourage cessation.
2)Federal Guidance. According to CDC, approximately 45% of
California's Medi-Cal population smokes. Section 2502 of the
Patient Protection and Affordable Care Act (ACA) requires
Medicaid programs to cover FDA-approved cessation medications,
and further guidance specifies over-the-counter smoking
cessation drugs must also be covered.
3)DHCS Policy on Tobacco Cessation. On September 3, 2014, DHCS
released policy letter 14-006 to provide Medi-Cal managed care
health plans (MCPs) with minimum requirements for
comprehensive tobacco cessation services. The requirements
are similar to those specified in this bill, but the bill is
more generous in several respects. For example, this bill
requires coverage for a minimum of four quit attempts per year
for adult smokers, whereas federal guidance and DHCS policy
only require coverage for two attempts.
4)Tobacco Helpline. The state Tobacco Helpline provides free
AB 1696
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telephone counseling, self-help materials, and online help in
multiple languages to help Californians quit smoking. It is
administered by the University of California San Diego via
interagency agreements with CDPH using state special funds and
federal grant funds. The Helpline also receives funding from
other sources including various grants from First 5, the
Veteran's Administration, and Los Angeles County. Furthermore,
according to CDPH, the Helpline has an existing reimbursement
arrangement with DHCS whereby the Helpline can bill the
Medi-Cal program up to $1 million for provision of services to
Medi-Cal enrollees.
Pursuant to a federal grant, the Helpline offered gift cards
and free nicotine patches to Medi-Cal enrollees through the
Medi-Cal Incentives to Quit Smoking initiative, which ended
last year. This bill appears to require the department to
issue guidelines based on lessons learned from that program.
5)Cost-effectiveness of cessation drugs. In their 2012 analysis
of AB 1738 (Huffman), which required coverage of tobacco
cessation services, the California Health Benefits Review
Program (CHBRP) notes tobacco cessation services are highly
cost-effective in the long term, producing significant
reductions in mortality and morbidity at a net cost that is
well below commonly accepted "cost per quality-adjusted life
year" thresholds. Thus, it appears increased expenditures on
tobacco cessation can be highly cost-effective even in spite
of marginally higher drug costs. However, prices and
effectiveness of future drugs are unknown. This bill
specifies all FDA-approved cessation drugs must be covered but
allows plans to control high costs though utilization
controls.
6)Quality Measurement and Data for Health Plans and Providers.
Health care quality measurement and improvement is a high
priority for many health care stakeholders, including the
AB 1696
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state. There are many ways to measure and collect data.
Generally, data collection relies on standardized and
well-defined measures, where the numerator, denominator, and
who should be excluded from the count-as well as the
collection mechanism (for example, collection by survey versus
a health care provider)- are described. Measurements are
also generally endorsed by one or more national governmental
or nonprofit entities. For example, there is a National
Committee for Quality Assurance (NCQA)-endorsed measure for
Medi-Cal called "Medical Assistance With Smoking and Tobacco
Use Cessation" that can be collected as part a regular survey
called the Adult CAHPS Health Plan Survey. Ideally, a
well-designed data collection effort will result in data that
is comparable, actionable, and not overly burdensome or costly
to collect.
7)Prior Legislation. 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, based on fiscal uncertainty in the Medi-Cal
program. The author believes the fiscal status of Medi-Cal
has since stabilized due to passage of legislation earlier
this year reforming a health plan tax.
8)Staff Comments. Smoking cessation is difficult and removing
barriers may encourage additional quit attempts, which is
shown to increase cessation. Allowing plans to use
utilization controls appears to soften the fiscal impact of
requiring coverage of all FDA-approved drugs.
However, the component requiring data collection and
stratification of smoking rates by plan could be clarified to
ensure data is collected in a cost-effective manner. The bill
appears to suggest plans will collect the data directly from
enrollees, which is not a common means to collect health
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status data, such as smoking rates. Additionally, it is
unclear what purpose the data will serve. If the goal is to
influence plan behavior to encourage greater use smoking
cessation by Medi-Cal enrollees, which may be warranted given
high smoking rates and low utilization of cessation benefits,
such a quality improvement goal could be referenced as the
purpose, in order to ensure the data is collected in a manner
that is useful for that purpose. Finally, other sections
describing direct furnishing of over-the-counter therapy and
the provision of incentives could be clarified.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081