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