BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1739| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: AB 1739 Page 2 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 AB 1739 Page 3 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 AB 1739 Page 4 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 AB 1739 Page 5 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 AB 1739 Page 6 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 AB 1739 Page 7 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 **** END ****