BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1739 (Waldron) - Medi-Cal:  allergy testing
          
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          |Version: August 2, 2016         |Policy Vote: HEALTH 8 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 8, 2016    |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  AB 1739 would require the Department of Health Care  
          services to use standards of coverage and medical necessity for  
          allergy tests that are consistent with national clinical  
          guidelines.


          Fiscal  
          Impact:  Likely increased Medi-Cal costs in the hundreds of  
          thousands per year (General Fund and federal funds). The fiscal  
          impact of the bill is subject to some uncertainty. The  
          Department of Health Care Services indicates that under the bill  
          it would likely change its current policy that limits the number  
          of allergen units in a blood test from the current limit of 24  
          to the current limit for skin tests of 65. It is not clear to  
          what extent physicians ordering blood tests would actually  
          increase the number of units per test. However, because the per  
          unit cost of blood tests is considerably higher than the per  
          unit costs for skin tests, any increase in the number of units  
          per test would increase state costs. For comparison, the cost  
          difference between the current maximum number of units for blood  
          tests and the maximum number of units allowed for skin tests (at  







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          current utilization rates) would be about $1 million per year.


          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  
          poverty level. The federal government provides matching funds  
          that vary from 50% to 90% of expenditures depending on the  
          category of beneficiary.
          Under current practice in the fee-for-service Medi-Cal system,  
          the Department of Health Care Services places certain limits on  
          the utilization of allergy tests. Department policy limits the  
          number of allergen units that can be included in a blood test to  
          24, whereas policy limits the number of units that can be  
          included in a skin test to 65. (Utilization controls in the  
          Medi-Cal managed care system are determined by the managed care  
          plans.)




          Proposed Law:  
            AB 1739 would require the Department to use standards for  
          coverage and medical necessity for allergy tests that are  
          consistent with consensus standards and recommendations in  
          clinical guidelines from the National Institutes of Health,  
          Clinical and Laboratory Standards Institute, and the most  
          current peer-reviewed medical literature.


          Staff  
          Comments:  Medi-Cal policy does not limit the use of either  
          blood tests or skin prick tests to specialists; primary care  
          physicians can order either test, if medically necessary.  
          However interpretation of those tests is often done by  
          specialists who have more experience interpreting test results.  
          It is not clear whether changes in the bill would substantially  
          change the utilization of specialists to interpret test results.
          Currently, there are about 6,000 IgE blood tests ordered for  
          fee-for-service Medi-Cal beneficiaries per year, versus about  
          1,200 skin prick tests per year.








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