BILL ANALYSIS Ó
AB 2084
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2084 (Wood) - As Introduced February 17, 2016
-----------------------------------------------------------------
|Policy |Health |Vote:|17 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill provides Medi-Cal coverage for comprehensive medication
management (CMM), which is defined as the process of care that
ensures each beneficiary's medications are appropriate, safe, and
effective, and are being used as intended. It also defines
AB 2084
Page 2
beneficiaries, goals, and related requirements, and requires DHCS
to study the effectiveness and costs.
FISCAL EFFECT:
1)Unknown net cost pressure to Medi-Cal managed care for CMM
services. Return on investment (ROI) could range from positive
(net savings) to negative (net costs), but the bill appears
likely to result in a net cost based on the bill's broad
definition of who is eligible and the comprehensive nature of
the service. Costs would depend on utilization and actual ROI.
For example, if 20,000 used the service per year at a cost of
$300 annually and the ROI was 0.8, Medi-Cal managed care plans
would experience a net cost increase of $480,000, which would
be reflected in rates paid to managed care plans (GF/federal).
2)Unknown net costs to FFS Medi-Cal for CMM services. Similarly,
if 10,000 used the service per year at a cost of $300 annually
and the ROI was 0.8, FFS Medi-Cal would experience a net cost
increase of $240,000 (GF/federal).
3)Significant administrative costs, likely in the low hundreds of
thousands of dollars in staff costs, in the FFS Medi-Cal
program to develop this program in FFS (GF/federal).
According to DHCS, pharmacists currently do not bill Medi-Cal
directly, but reimbursement is provided to a pharmacy. For FFS
Medi-Cal, this bill might necessitate a new payment arrangement
for pharmacist services.
AB 2084
Page 3
4)Costs in the range of $100,000 (GF/federal) to DHCS to contract
for an assessment of the effectiveness of CMM on care quality,
patient outcomes, and total program costs, including cost
savings.
COMMENTS:
1)Purpose. The California Pharmacists Association, sponsor of
this bill, believes this bill will assist patients with chronic
conditions who may visit an array of health care providers and
take multiple medications. Insufficient coordination among
those providers has resulted in an overwhelming need for
ongoing assessment of patients' medications, which this bill
would provide to Medi-Cal enrollees.
2)CHBRP Analysis. CHBRP analyzed this bill and noted the
following:
a) Medical Effectiveness: CHBRP could not assess CMM as
proposed in this bill because the eligibility criteria is
so broad and there were few studies available. CHBRP
notes overall that related, less comprehensive
pharmacist-led interventions such as Medication Therapy
Management (MTM) improve care and decrease utilization,
cost, and mortality, but these findings may not generalize
to CMM.
b) Costs: CHBRP could not assess costs of CMM as
AB 2084
Page 4
proposed in this bill. CHBRP notes a potential return on
investment for MTM was 0.8:10 (a slight net cost) to
3.5:1.0 (significant cost savings). The higher ROI figures
are for more narrowly targeted interventions with stricter
eligibility criteria; the lower figures are for programs
with broad eligibility criteria and higher costs to
identify beneficiaries. CHBRP did not conclude that MTM
programs are consistently
cost-effective-cost-effectiveness depends on the target
populations and administrative costs and burden.
3)High-Cost Medi-Cal Enrollees. The Department of Health Care
Services' Research and Analytic Studies Division released a
study in March 2015 examining high-cost populations in
Medi-Cal. They found that a small percentage of individuals
accounted for a disproportionately large share of Medi-Cal's
total spending; generally, care for individuals with chronic
conditions that impact multiple body systems generated the most
cost. In 2011, 5% of enrollees accounted for over 50% of the
total program costs.
4)Interaction with Medicare. Medicare offers a MTM program, for
those enrolled in a Medicare drug plan and who take multiple
medications for different medical conditions. In these
programs, a pharmacist or other health professional gives
patients a comprehensive review of all medications. Patients
receive a written summary of discussion, including an action
plan that recommends how to make the best use of medications.
CMM is different from MTM in that CMM services, as defined in
this bill, are more comprehensive than MTM. Also, CMM services
are designed to provide ongoing disease-oriented care, with a
requirement to: 1) assess or obtain the patient's clinical
status and goals of therapy; 2) develop a treatment plan; and;
3) provide ongoing follow-up to monitor and adjust the
treatment plan as necessary.
AB 2084
Page 5
5)CDPH Paper. A CDPH report on CMM Pilot Programs in Southern
California noted improvements in clinical, fiscal, and quality
measures among participants, but also notes challenges to
implementing CMM related to reimbursement mechanisms, alignment
of financial incentives, robust electronic health information
exchange, outcomes and quality tracking, patient and provider
awareness, and adequate staffing.
6)Staff Comments.
a) Applicability to Fee for Service? The construct of
this bill appears to suffer from trying to fit a square
peg (CMM) into a round hole (fee-for-service payment
system). Ideally, CMM appears to be less a one-time
service and more a best practice- an integrated, ongoing
part of team-based health care delivery for high-risk
patients with multiple chronic conditions. In other words,
philosophically it seems CMM is addressing more a question
of "how" (ensuring medications are optimized and meeting
clinical goals) than "what" (delivering CMM as a distinct
service). Thus, it does not appear to be something that
is neatly defined and billed on a FFS basis. If the
author wishes to move forward with including CMM in FFS
Medi-Cal, it may need further clarification to separately
describe the implementation of CMM on a FFS basis.
However, it should also be noted as Medicare Part D is the
primary payer for drug costs for dually eligible
enrollees, many of whom are in FFS, and there could be a
misalignment between costs and benefits from a state
perspective. Medi-Cal would incur the cost for the
medication management services, but Medicare would reap
the cost savings from reduced spending on drug and medical
AB 2084
Page 6
services.
b) Drafting issues. This bill contains two sets of
definitions of covered services: the first, a definition
of CMM as a "process of care," as well as another
definition of services that are covered. Consolidating
these definitions may provide better clarity as to what is
proposed for coverage. Also, the bill contains
requirements that are unclear and could be redrafted. For
example, the bill requires that CMM services "shall be
offered" to a beneficiary who meets specified criteria,
instead of stating that Medi-Cal will reimburse for
services delivered to beneficiaries who meet one of the
specified criteria. In another example, the bill states
the typical intervention "shall include" an average of
three to four visits per year. It is not clear how this
could be measured nor who would enforce it, and appears to
be more a description of how these programs tend to
function than a requirement.
c) Return on Investment. There would be a higher
likelihood of positive ROI if services were focused on
individuals with higher drug costs, or conditions that
made people at high risk of negative health outcomes based
on poor medication management. The target population as
defined by this bill is broad, only requiring three drugs
for one or more chronic conditions. Another current
program in use by a Medi-Cal managed care plan, as
reviewed by CHBRP, has a minimum criteria of six or more
medications for six or more chronic disease states, and
quarterly drug spending of $784, for example. Medi-Cal
data on high-cost populations, along with CHBRP's
assessment of ROI, suggest a highly targeted program could
be quite cost-effective.
AB 2084
Page 7
d) CMM as defined here is intensive and broad. CHBRP
compared CMM to medication therapy management (MTM)
programs, about which more research has been conducted.
MTM, which Medicare requires to be provided through Part D
drug plans, consists of an annual comprehensive medication
review, and targeted quarterly medication reviews, as
needed. The criteria for inclusion are narrower than
proposed in this bill, and the services are more narrowly
defined as well. At this time, Medi-Cal beneficiaries do
not systemically have access to MTM programs, which are
better studied and less expensive than CMM, in addition to
being available to a more narrowly defined eligible
population. This bill's definition of CMM and eligibility
criteria in Medi-Cal would essentially leapfrog over these
narrower, better-studied MTM programs to require something
that is much more robust and comprehensive, and available
to a lot more beneficiaries. Given the lack of published
research on CMM programs, it is worth considering either a
narrower, less ambitious offering or a pilot project that
can test a comprehensive offering. It should also be
noted that, as discussed above in the CDPH paper,
significant implementation challenges remain for CMM as an
ongoing, comprehensive part of care delivery.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081