BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1739|
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                                   THIRD READING 


          Bill No:  AB 1739
          Author:   Waldron (R)
          Amended:  8/2/16 in Senate
          Vote:     21 

           SENATE HEALTH COMMITTEE:  8-0, 6/29/16
           AYES:  Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,  
            Pan, Roth
           NO VOTE RECORDED:  Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/11/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           ASSEMBLY FLOOR:  79-0, 5/5/16 (Consent) - See last page for  
            vote

           SUBJECT:   Medi-Cal: allergy testing


          SOURCE:    Thermo-Fisher Scientifics


          DIGEST:  This bill requires the Medi-Cal standard of coverage  
          and medical necessity for allergy tests to be 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 pertaining to the utilization of modern  
          serologic-specific IgE tests (a type of blood test).


          ANALYSIS:  









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          Existing law:

          1)Establishes the Medi-Cal program, which is administered by the  
            Department of Health Care Services (DHCS), under which  
            qualified low-income individuals receive health care services.

          2)Establishes a schedule of benefits under the Medi-Cal program,  
            and authorizes the use of utilization controls, including  
            prior authorization, that may be applied to those covered  
            benefits and that are reviewed for, among other things,  
            medical necessity. Physician services are a covered benefit,  
            subject to utilization controls.

          3)Requires, pursuant to Medi-Cal regulation, outpatient  
            physician services to be covered if they are medically  
            necessary to protect life, to prevent significant illness or  
            significant disability, or to alleviate severe pain, subject  
            to limitations.

          This bill:

          1)Requires the Medi-Cal standard of coverage and medical  
            necessity for allergy tests to be 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 pertaining to the utilization of modern  
            serologic-specific IgE tests.

          2)Requires DHCS to update its provider bulletins, as necessary,  
            to reference the most current professional literature and  
            guidance related to allergy testing.


          Comments


          1)Author's statement.  According to the author, historically,  
            allergies were diagnosed by an allergy specialist who used a  
            "skin-prick" test to infect the skin of a patient and waited  
            to see what the patient reacted to. This requires a patient to  
            be referred to an allergist by their primary care doctor and  
            requires the patient to undergo a series of pricks to their  
            skin. But now blood tests are equally effective in diagnosing  







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            allergies and can be ordered directly by a primary care  
            physician without referring the patient to a specialist.  
            Medi-Cal's provider manual explicitly favors skin testing over  
            blood testing by requiring a primary doctor to identify a  
            "Contraindication" to skin testing before ordering a blood  
            test. This is contrary to National Guidelines. Combined with  
            too few allergy specialists, this creates an access to care  
            problem for Medical patients who need an efficient diagnosis  
            and treatment of allergies. This bill corrects this inequity  
            by requiring DHCS to treat blood allergy tests and skin  
            allergy tests as equivalent in their sensitivity and accuracy  
            for confirming allergies. This bill also requires DHCS to  
            update its provider bulletins to reference the most current  
            professional literature and guidance related to allergy  
            testing.
          
          2)Medi-Cal Manual of Criteria. Under existing law, DHCS is  
            authorized to use utilization controls for covered Medi-Cal  
            benefits. The DHCS Manual of Criteria sets for the procedures  
            and codes for providers to use to bill allergy testing and  
            desensitization. It contains the procedure codes and  
            instructions for billing, and the medical reference for the  
            coverage criteria. The Manual of Criteria for allergy testing  
            and desensitization was changed by DHCS in March 2009, June  
            2012, April 2013, December 2014, and June 2015. 

            Medi-Cal coverage policy of allergy testing was the subject of  
            an August 12, 2014 Assembly Health Committee informational  
            hearing entitled "Medi-Cal: When Reimbursement Policies  
            Interfere with the Standard of Care." Subsequent to the  
            hearing, on May 15, 2015, Medi-Cal removed the requirement  
            that laboratories submit documentation of medical necessity  
            with claims for IgE testing reimbursement. However,  
            limitations on Medi-Cal coverage for IgE did not apply to skin  
            testing remain. For example, current coverage for the allergen  
            specific IgE test must include documentation in the patient's  
            medical record, with one of the following numbered criteria:

             a)   The patient has persistent asthma and the test is needed  
               to determine the potential sensitivity to perennial indoor  
               allergens to which the patient is exposed; 


             b)   At least one of the following conditions is documented  







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               in the patient's medical record: 


                i)      Widespread skin disease;


                ii)     Patients receiving medications that may confound  
                  the results of skin testing or interfere with the  
                  detection or management of anaphylaxis;  


                iii)    Uncooperative patients;  


                iv)     When the history suggests significant risk of  
                  anaphylaxis from skin testing; or,  


                v)      Patients undergoing work-up for major allergic  
                  reaction, including possible anaphylaxis or severe  
                  urticarial.

          3)Medical literature on blood and skin tests for allergies. In a  
            February 2010 article in the Journal of Allergy and Clinical  
            Immunology from Johns Hopkins School of Medicine entitled  
            Clinical Laboratory Assessment of Immediate-type  
            Hypersensitivity it is stated that: "For food and respiratory  
            allergy, IgE antibody as detected in the serum by using  
            current autoanalyzer technology and in the skin by using the  
            epicutaneous test are considered equivalent as confirmatory  
            tests in terms of their sensitivity and accuracy."


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, 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. DHCS 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  







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


          SUPPORT:  (Verified  8/9/16)

          Thermo-Fisher Scientific (source)
          American Federation of State, County and Municipal Employees,  
                    AFL-CIO
          California Health+ Advocates
          California Life Sciences Association
          One individual


          OPPOSITION:   (Verified  8/9/16)


          Department of Finance
          Department of Health Care Services


          ARGUMENTS IN SUPPORT:  Thermo-Fisher Scientific, the sponsor of  
          this bill, argues that Medi-Cal's coverage policy for allergy  
          testing is inconsistent with national guidelines, best  
          practices, and the most recent scientific literature. Food  
          allergy guidelines of the National Institute of Allergy and  
          Infectious Diseases and the asthma guidelines of the National  
          Heart, Lung, and Blood Institute's recognize that blood tests  
          and skin tests are equivalent in their efficacy for diagnosing  
          allergic sensitizations. 

          A physician from Miller Children's Hospital in Long Beach states  
          that updating testing guidelines will have a major positive  
          impact on Medi-Cal patients suffering from allergies. The  
          physician writes that, in a perfect world, every patient  
          suffering from an allergic disease would receive their care from  
          a specialist. Unfortunately, allergy specialists are a very  
          scarce resource, especially for the Medi-Cal population, with  







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          unacceptably long wait times. It is not realistic for DHCS, or  
          any payer, to rely solely on the efforts of specialists to be  
          able to skin test every Medi-Cal patient that requires an  
          allergy test. 

          The CaliforniaHealth+ Advocates (CH+A) writes in support that  
          this bill will improve patient care, eliminate unnecessary  
          restrictions on primary care physicians' ability to utilize  
          blood tests as a diagnostic tool for determining sensitivity to  
          allergens in Medi-Cal patients, save money by ensuring timely  
          diagnosis of allergies in Medi-Cal patients, and eliminate  
          unnecessary referrals to an allergist for skin testing. In doing  
          so, CH+A writes this bill eliminate unnecessary barriers to care  
          and create greater equity across our health system.


          ARGUMENTS IN OPPOSITION:  The Department of Finance (DOF) writes  
          in opposition that this bill could potentially result in  
          increased costs in the low millions of dollars, and General Fund  
          resources to implement these provisions are not included in the  
          2016 Budget Act. DOF argues this bill limits DHCS' flexibility  
          to form its Medi-Cal allergy testing policy according to the  
          most appropriate clinical guidelines and consensus standards,  
          and that DHCS already takes into account information available  
          from the National Institutes of Health as required by this bill,  
          but also relies on research from the American Academy of  
          Allergy, Asthma & Immunology, and has the discretion to also  
          consider research from other entities. DOF states DHCS already  
          has the authority to update its provider bulletins and updates  
          them as appropriate, so this bill is unnecessary, and DOF states  
          it is arguable whether access problems to blood tests exist due  
          to current policy, as nearly six times as many Medi-Cal  
          beneficiaries received blood tests versus skin prick tests in  
          2015. It is unclear if conforming with the specific entities'  
          standards for allergy testing will have any impact on access.


          ASSEMBLY FLOOR:  79-0, 5/5/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  







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            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  
            McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Beth Gaines

          Prepared by:Scott Bain / HEALTH / (916) 651-4111
          8/15/16 20:17:19


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