BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1739 (Waldron) - Medi-Cal: allergy testing ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 2, 2016 |Policy Vote: HEALTH 8 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 8, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- 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 AB 1739 (Waldron) Page 1 of ? 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. AB 1739 (Waldron) Page 2 of ? -- END --