BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1696


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          ASSEMBLY THIRD READING


          AB  
          1696 (Holden)


          As Amended  May 31, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Health          |17-1 |Wood, Maienschein,    |Patterson           |
          |                |     |Bonilla, Burke,       |                    |
          |                |     |Campos, Dababneh,     |                    |
          |                |     |Cooley, Roger         |                    |
          |                |     |Hernández, Lackey,    |                    |
          |                |     |Nazarian, Olsen,      |                    |
          |                |     |Ridley-Thomas,        |                    |
          |                |     |Rodriguez, Santiago,  |                    |
          |                |     |Steinorth, Thurmond,  |                    |
          |                |     |Waldron               |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |14-6 |Gonzalez, Bloom,      |Bigelow, Chang,     |
          |                |     |Bonilla, Bonta,       |Gallagher, Jones,   |
          |                |     |Calderon, Daly,       |Obernolte, Wagner   |
          |                |     |Eggman, Eduardo       |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Weber, Wood           |                    |








                                                                    AB 1696


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          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  
               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  








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               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)Specifies that beneficiaries who are covered under this bill  
            shall not be required to receive a particular form of tobacco  
            cessation service as a condition of receiving any form or  
            tobacco cessation service.


          5)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.


          6)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, to directly furnish at least one  
            form of OTC nicotine replacement therapy as described by  
            USPSTF to Medi-Cal beneficiaries enrolled in smoking cessation  
            services provided by the state tobacco use cessation quit  
            line.


          7)Requires the guidelines specified in 5) above to address  
            requirements for pharmacists and physicians in furnishing  
            nicotine replacement products under this bill to be consistent  
            with existing requirements that applies to pharmacists.


          8)Requires DHCS, by December 1, 2017, to include medical  
            assistance with smoking and tobacco use cessation rates among  
            adults enrolled in Medi-Cal managed care plans in its  








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            Healthcare Effectiveness Data and Information Set (HEDIS).   
            Authorizes DHCS to use data collected under this bill for  
            quality improvement projects to increase cessation by Medi-Cal  
            enrollees who use tobacco products.  


          9)Prohibits tobacco status to be used by DHCS or MCPs to deny  
            coverage or treatment of tobacco-related illnesses.


          10)Provides that this bill will be implemented only to the  
            extent federal financial participation is available, as  
            specified.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:  


          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%, the bill  
            would result in increased costs of $400,000 to $800,000 per  
            year (General Fund (GF)/federal).


          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  








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            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 (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)Unknown, potentially significant costs to DHCS to add a  
            tobacco-related measure to the HEDIS survey that is  
            administered for health plans (GF/federal). 


          COMMENTS:  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.


          On September 3, 2014, DHCS released policy letter 14-006 to  








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          provide managed care plans (MCPs) with minimum requirements for  
          comprehensive tobacco cessation services.  The requirements,  
          similar to federal guidance on the issue, are for the following:


          1)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; 


          2)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;


          3)MCPs may not require members to attend counseling sessions or  
            classes prior to receiving a prescription for an FDA-approved  
            tobacco cessation medication;


          4)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,


          5)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  








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          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.




          Analysis Prepared by:                                             
                          Rosielyn Pulmano / HEALTH / (916) 319-2097  FN:  
          0003274