BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1739


                                                                    Page  1





          GOVERNOR'S VETO


          AB  
          1739 (Waldron)


          As Enrolled  August 30, 2016


          2/3 vote


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



           -------------------------------------------------------------------- 
          |ASSEMBLY:  |80-0  |(August 23,    |        |      |                 |
          |           |      |2016)          |        |      |                 |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  HEALTH


          SUMMARY:  Requires 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  








                                                                    AB 1739


                                                                    Page  2





          immunoglobulin E (IgE) tests, as specified.


          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  
          impact of the bill is subject to some uncertainty.  Department  
          of Healthcare Services (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  








                                                                    AB 1739


                                                                    Page  3





          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  
          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.


          Anthem Health Insurance and Kaiser Permanente both cover allergy  
          blood tests and skin tests equivalently.  According to  








                                                                    AB 1739


                                                                    Page  4





          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  
          that it has embarked on an educational campaign with the other  
          four 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." 


          GOVERNOR'S VETO MESSAGE:


          I am returning Assembly Bill 1739 without my signature.


          This bill codifies a specific standard for allergy testing in  








                                                                    AB 1739


                                                                    Page  5





          Medi-Cal.


          The Department of Health Care Services already has authority to  
          set allergy testing standards and will be updating them later  
          this year.  When it does so, the Department should not be  
          limited, as this bill requires, to considering just the  
          guidelines from National Institutes of Health.




          Analysis Prepared by:                                             
                          Paula Villescaz / HEALTH / (916) 319-2097  FN:  
          0005067