BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1739


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1739 (Waldron)


          As Amended  August 2, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |79-0  |(May 5, 2016)  |SENATE: |36-0  |(August 18,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  HEALTH


          SUMMARY:  Requires the Department of Health Care Services  
          (DHCS), in the evaluation of patients for allergy under  
          fee-for-service Medi-Cal, to treat serologic-specific IgE tests  
          and skin tests as equivalent confirmatory tests.


          The Senate amendments require the 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.


          FISCAL EFFECT:  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  








                                                                    AB 1739


                                                                    Page  2


          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 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.


          COMMENTS:  According to the author, this bill ensures that  
          Medi-Cal patients with allergies receive the same level of care  
          as private health insurance patients based on nationally  
          recognized professional guidelines.  Under existing coverage and  
          payment policies for fee-for-service Med- Cal patients, allergy  
          testing using an IgE blood test is not treated equally with  
          percutaneous skin testing for allergies.  If a primary care  
          physician wishes to diagnose allergies, a referral to a  
          specialist for skin testing is allowed.  However, if the primary  
          care physician wishes to order a blood test to diagnose  
          allergies without a referral, the physician must document a  
          contraindication to skin testing for the blood test to be  
          ordered.  This bill will ensure that primary care doctors are  
          able to diagnose allergies without referral to a specialist and  
          will therefore save Medi-Cal patients the time and effort it  
          takes to find, make an appointment and see one of the limited  
          number of specialists who accept Medi-Cal patients.  The author  
          believes this will further save the Medi-Cal system money by  
          reducing the costs associated with referrals to specialists.


          Asthma is a chronic inflammatory disease of the airways.  Asthma  
          is widespread; in California an estimated 2.5 million adults  
          have asthma along with about 700,000 children.  It is one of the  
          most common chronic diseases of childhood.  The exact cause of  
          asthma is unknown and it cannot be cured.  Asthma can be  
          controlled with self-management education, appropriate medical  








                                                                    AB 1739


                                                                    Page  3


          care, and avoiding exposure to environmental triggers.  Allergen  
          exposure is a significant trigger that can worsen symptoms for  
          many patients with asthma.


          Food allergies are an immune-based disease that has become a  
          serious health concern in the United States.  A recent study  
          estimates that food allergy affects 5% of children under the age  
          of five years and 4% of teens and adults, and its prevalence  
          appears to be on the increase.  The symptoms of this disease can  
          range from mild to severe and, in rare cases, can lead to  
          anaphylaxis, a severe and potentially life-threatening allergic  
          reaction.  There are no therapies available to prevent or cure  
          food allergies.  The only prevention option for the patient is  
          to avoid the food allergen. 


          How best to determine what those allergens are, and how Medi-Cal  
          coverage policy should approach this issue, was the subject of  
          an August 12, 2014, Assembly Health Committee informational  
          hearing, 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 which did not apply to skin testing remain.


          The current Medi-Cal Provider Manual states that coverage for  
          allergen specific IgE must include documentation in the  
          patient's medical record with one of the following numbered  
          criteria:


          1)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, or


          2)At least one of the following conditions is documented in  
            the patient's medical record:









                                                                    AB 1739


                                                                    Page  4



             a)   Widespread skin disease


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


             c)   Uncooperative patients


             d)   When the history suggests significant risk of  
               anaphylaxis from skin testing;


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


            The provider manual also states that manual review of the  
            claims is no longer required.  Without evidence of medical  
            necessity documented in the patient's medical record, claims  
            billed may be denied.


            In correspondence between the former Chair of the Assembly  
            Health Committee and the Director of DHCS the former Chair  
            expressed his concern that Medi-Cal policy, even with the  
            changes of May 15, 2016, unnecessarily inhibits access and  
            timely care for many Medi-Cal patients and is inconsistent  
            with the latest science or with many policies in the  
            commercial markets and other state Medicaid programs. 


          Anthem Health Insurance and Kaiser Permanente both cover allergy  
          blood tests and skin tests equivalently.  According to  
          information requested by the Committee and provided by the  
          sponsor, two of six Medicare claims processing contractors  
          (representing 20 states) treat blood tests and skin test  
          equivalently, the others currently do not.  The sponsor states  








                                                                    AB 1739


                                                                    Page  5


          that it has embarked on an educational campaign with the other 4  
          contractors.


          In a December 2010 report of the National Institute of Allergy  
          and Infectious Diseases (NIAID) sponsored expert panel entitled  
          Guidelines for the Diagnosis and Management of Food Allergy in  
          the U.S., published in the Journal of Allergy and Clinical  
          Immunology, it is stated that both IgE blood tests and skin  
          tests are safe and useful for identifying food 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."  In a  
          supplement to the March 2008 issue of the Annals of Allergy,  
          Asthma, & Immunology entitled Allergy Diagnostic Testing:  An  
          Updated Practice Parameter, it is stated that:  "There are no  
          clinical scenarios in which immunoassays for allergen specific  
          IgE can be considered either absolutely indicated or  
          contraindicated.  There are some situations in which  
          immunoassays may be preferable to skin testing for the  
          diagnostic evaluation of patients." 


          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 NIAID 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.  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.  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 unacceptably long wait times.  It  








                                                                    AB 1739


                                                                    Page  6


          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.


          Analysis Prepared by:                                             
                          Paula Villescaz / HEALTH / (916) 319-2097  FN:   
          0004158