BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2077


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2077 (Burke and Bonilla)


          As Amended  August 19, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |80-0  |(June 2, 2016) |SENATE: | 39-0 | (August 25,     |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  HEALTH


          SUMMARY:  Prohibits Medi-Cal benefits from being terminated  
          until at least 20 days after the county sends the notice of  
          action (NOA) terminating Medi-Cal eligibility if the individual  
          is eligible to enroll in a qualified health plan (QHP) through  
          Covered California, to the extent federal financial  
          participation is available.  Establishes application processing  
          timelines for counties for individuals who were enrolled in  
          California's Health Benefit Exchange (also known as Covered  
          California) and who are determined newly eligible for Medi-Cal  
          through the application processing system known as the  
          California Healthcare Eligibility, Enrollment and Retention  
          System (CalHEERS).


          The Senate amendments:


          1)Delete language specifying that individuals who effectuated  








                                                                    AB 2077


                                                                    Page  2


            enrollment in a QHP prior to the termination date specified in  
            the NOA, then Medi-Cal eligibility will be terminated as of  
            the QHP enrollment date.


          2)Delete language specifying that for individuals enrolled in a  
            QHP and newly eligible for Medi-Cal, cases received by the  
            county prior to the 15th day of the month be processed for  
            final Medi-Cal eligibility by the end of the month and cases  
            received by the county after the 15th of the month be  
            processed for final Medi-Cal eligibility by the 15th day of  
            the following month.  


          3)Add language specifying that for referrals of a Modified  
            Adjusted Gross Income Medi-Cal eligible individual, the county  
            is required to prioritize the referral for processing to  
            ensure the individual's Medi-Cal eligibility is effective  
            according to either of the following timelines, as applicable:


             a)   Requires the county to prioritize the referral for  
               processing to ensure the individual's Medi-Cal eligibility  
               is effective on the first day of the following month if the  
               referral is received with at least five business days  
               remaining in the month; and, 


             b)   Requires the county to prioritize the referral for  
               processing to ensure the individual's eligibility is  
               effective no later than the first day of the second month  
               following receipt of the referral if the referral is  
               received with less than five business days remaining in the  
               month.


          4)Add language requiring the county to prioritize the referral  
            for processing to ensure the individual's Medi-Cal eligibility  
            is effective no later than the first day of the second month  
            following receipt of the referral if the referral requires  
            follow-up to establish Medi-Cal eligibility.  









                                                                    AB 2077


                                                                    Page  3



          5)Delete the Medi-Cal enrollment procedure requirements for  
            newly eligible Medi-Cal individuals, specifically:


             a)   For individuals previously enrolled through Covered  
               California and the QHP is available as a Medi-Cal managed  
               care plan in the same county and the health plan has the  
               same or substantially similar provider network; 


             b)   For individuals assigned to a health plan using the  
               usual Medi-Cal managed care default algorithm; and, 


             c)   For individuals enrolled into the county organized  
               health system plan.


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee:


          1)One-time costs in the hundreds of thousands, for the  
            Department of Health Care Services (DHCS) to change internal  
            processes, revise regulations, and seek any necessary federal  
            approvals (General Fund and federal funds).


          2)One-time costs in the hundreds of thousands to make system  
            changes to several information technology systems used to  
            determine eligibility for Medi-Cal and Covered California  
            coverage and to manage Medi-Cal enrollment (General Fund and  
            federal funds).  In order to facilitate the requirements of  
            this bill, system changes will be needed to CalHEERS (the  
            system used to process applications for Medi-Cal and Covered  
            California coverage) and MEDS (the system used to managed  
            Medi-Cal enrollment).  It is possible that those costs would  
            be eligible for enhanced federal matching rate of 90%.


          3)One-time costs of $2.5 million to make system changes to the  








                                                                    AB 2077


                                                                    Page  4


            SAWS (the systems used by counties to determine eligibility  
            for Medi-Cal) (General Fund and federal funds).


          4)Ongoing costs of $3 million to $5 million per year from  
            extended Medi-Cal eligibility during transitions to Covered  
            California coverage (General Fund and federal funds).  Under  
            current practice, when an individual loses eligibility for  
            Medi-Cal (generally because of an increase in income), the  
            individual is given 10 days notice before coverage is  
            terminated.  This bill would require individuals to be given  
            20 days notice before coverage is terminated.  Medi-Cal  
            coverage would be terminated before 20 days, if the individual  
            enrolls in coverage through Covered California.  Because  
            Medi-Cal enrollment is granted monthly, extending the  
            transition period from 10 to 20 days will result in roughly a  
            third of transitioning individuals receiving an additional  
            month of coverage.  According to data published by DHCS, there  
            are 5,000-6,000 individuals per month who transition from  
            Covered California to Medi-Cal. Staff assumes that a roughly  
            similar number of individuals transition from Medi-Cal to  
            Covered California each month.


          5)Ongoing costs, potentially in the low millions due to  
            increased enrollment in Medi-Cal of individuals transitioning  
            from Covered California coverage to Medi-Cal (General Fund and  
            federal funds).  This bill would impose new deadlines on  
            counties to determine Medi-Cal eligibility for individuals who  
            have lost their Covered California coverage.  By imposing such  
            deadlines, this bill may result in earlier Medi-Cal  
            enrollment.  If 10% of individuals in that situation become  
            eligible for Medi-Cal for one extra month under this bill, the  
            annual cost would be about $3 million.


          COMMENTS:  According to the author, this bill eases the  
          transition between plans for those moving from Covered  
          California plans to Medi-Cal and vice versa.  For individuals  
          moving from Medi-Cal to Covered California, they will have 20  
          days before their Medi-Cal benefits expire.  Those moving from  
          Covered California to Medi-Cal will also have additional time to  








                                                                    AB 2077


                                                                    Page  5


          select a plan, and receive guidance on how to select a plan.  By  
          providing a coverage bridge for Californians transitioning  
          between plans, we can make sure that no one falls through a  
          coverage gap.


          DHCS concerns.  The problems with transitions between Covered  
          California and Medi-Cal has been discussed with DHCS and Covered  
          California, and the improved notices regarding the need to  
          promptly pick a plan for new Covered California enrollees are  
          currently scheduled to take effect in the CalHEERS release in  
          September 2016.  With regard to the 20 day NOA (instead of the  
          current 10 day NOA), DHCS indicates this change would treat  
          individuals in a transition differently than new applicants for  
          Medi-Cal coverage.  This change would require changes to DHCS'  
          existing infrastructure for a subset of individuals, and is  
          counter to DHCS' desire to treat individuals the same.  If the  
          NOA timeframe were changed to 20 days for all Medi-Cal  
          beneficiaries, DHCS indicates this would have an impact on  
          Medi-Cal costs as more individuals would remain on the program  
          an additional month. 


          Analysis Prepared by:                                             
                          Kristene Mapile / HEALTH / (916) 319-2097  FN:  
          0004758