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