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