BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1696 (Holden) - Medi-Cal: tobacco cessation services
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|Version: June 27, 2016 |Policy Vote: HEALTH 8 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1696 would require tobacco cessation services to be
a covered benefit in the Medi-Cal program with specified
requirements for benefits.
Fiscal
Impact:
Minor administrative costs to update existing Medi-Cal
policies for the provision of smoking cessation services
(General Fund and federal funds).
Annual costs of about $140,000 per year for four years for the
development and implementation of a new HEDIS measurement
relating to smoking cessation by the Department of Health Care
Services (General Fund and federal funds).
Unknown 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
AB 1696 (Holden) Page 1 of
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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 and federal funds).
The bill requires the Department to contract with California
Smokers' Helpline to directly furnish over-the-counter
nicotine replacement therapy to Medi-Cal beneficiaries. Under
a recently concluded pilot project, about 90% of Medi-Cal
beneficiaries who called the Helpline (and were not included
in a control group) were furnished with over-the-counter
nicotine replacement therapy, at a per capita cost of $74. On
average, about 20,000 Medi-Cal beneficiaries call the Helpline
each year, and under the bill most of those individuals would
likely receive over-the-counter nicotine replacement therapy,
at a projected annual cost of about $1.3 million per year.
However, it is important to note that providing nicotine
replacement therapy directly through the Helpline is likely to
reduce provision of such services by Medi-Cal managed care
plans, including utilization of such services that is
currently occurring. Therefore, most of the cost to provide
over-the-counter medications through the Smokers' Helpline are
likely to be offset by reduced Medi-Cal managed care plan
expenditures to provide such services.
Unknown short term cost savings due to reduced smoking-related
health care costs for Medi-Cal beneficiaries. A review of a
new 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 the
utilization increase above, potential cost savings of $800,000
to $1.7 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 increased longevity.
Background: Under state and federal law, the Department of Health Care
Services operates the Medi-Cal program, which provides health
care coverage to low income individuals, families, and children.
Medi-Cal provides coverage to childless adults and parents with
household incomes up to 138% of the federal poverty level and to
children with household incomes up to 266% of the federal
AB 1696 (Holden) Page 2 of
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poverty level. The federal government provides matching funds
that vary from 50% to 90% of expenditures depending on the
category of beneficiary.
Smoking cessation services are not specifically mandated as a
benefit in the Medi-Cal program. However, current state and
federal law require Medi-Cal to provide coverage for medically
necessary, FDA approved drugs. In addition, state and federal
law require coverage for preventative services assigned a grade
of A or B by the United States Preventative Services Task Force.
The Task Force has adopted a grade of A for all FDA approved
drugs and behavioral interventions for smoking cessation.
In September 2014, the Department of Health Care Services
updated its policy for coverage of smoking cessation services.
Current policy requires coverage of at least two quit attempts
per year, at least four counseling sessions, and seven
FDA-approved drugs (with at least one available without prior
authorization).
The University of San Diego, under contract with the Department
of Public Health, operates the California Smokers' Helpline. The
Helpline provides counseling to individuals who wish to quit
smoking. Certain populations are also eligible to be sent
over-the-counter nicotine replacement therapy, depending on the
source of funding received by the Helpline. (The primary source
of funding for the Helpline, Proposition 99 educational funds,
cannot be used to pay for medication.) Under a federal grant,
the Helpline ran a pilot program to provide over-the-counter
nicotine replacement therapy to Medi-Cal beneficiaries. That
pilot program has been concluded and the results are being
analyzed. Each year, the Helpline receives about 40,000 calls,
about half of which come from Medi-Cal beneficiaries.
Proposed Law:
AB 1696 would require tobacco cessation services to be a
covered benefit in the Medi-Cal program with specified
requirements for benefits.
Specific provisions of the bill would:
Require tobacco cessation services to be a covered benefit in
AB 1696 (Holden) Page 3 of
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the Medi-Cal program, subject to utilization controls;
Require all intervention recommendations of the United State
Preventative Services Task Force assigned a grade of A or B to
be covered;
Include at least four quit attempts per year;
Include at least four counseling sessions per quit attempt, in
person, on the telephone, or as part of a group, at the
beneficiary's option;
Include a 12-week treatment regimen of any drug approved by
the FDA for smoking cessation;
Require at least one prescription and all-over-the counter
medications to be available without prior authorization;
Prohibit requiring a beneficiary to receive any form of
service (e.g. counseling) as a condition of receiving another
form of service (e.g. medication);
Require the Department of Health Care Services to enter into
an agreement that authorizes the California Smokers' Helpline
to directly furnish over-the-counter nicotine replacement
therapy to Medi-Cal beneficiaries;
Require the Department, by December 31, 2017, to include
medical assistance with smoking and tobacco use cessation
rates in its HEDIS measures (a system for measuring Medi-Cal
managed care plan quality).
Related
Legislation: AB 1162 (Holden, 2015) was substantially similar
to this bill. That bill was vetoed by Governor Brown.
Staff
Comments: As noted above, the Department of Health Care
Services revised its policy on coverage of smoking cessation
services in September 2014. The requirements of this bill are
similar to those requirements, but this bill expands certain
requirements. For example, this bill increases the number of
quit attempts per year from two to four. In addition, the
Department policy requires coverage for seven specific FDA
approved tobacco cessation medications, whereas this bill would
require coverage for any FDA approved drug for tobacco
cessation.
The Department of Health Care Services typically received
rebates from drug manufacturers to incentivize the state to put
certain drugs on the Medi-Cal formulary. The Department
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indicates that the bill's requirement that most drugs be
included in the Medi-Cal formulary could reduce the incentive
for drug manufacturers to offer the state rebates. However, the
bill allows Medi-Cal managed care plans to use utilization
controls and only requires one prescription medication to be
provided without prior authorization. Therefore, it is likely
that the Department and Medi-Cal managed care plans would still
have some ability to negotiate rebates with drug manufactures.
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