BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 2207             
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          |AUTHOR:        |Wood                                           |
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          |VERSION:       |June 9, 2016                                   |
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          |HEARING DATE:  |June 22, 2016  |               |               |
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          |CONSULTANT:    |Scott Bain                                     |
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           SUBJECT  :  Medi-Cal: dental program

           SUMMARY  : Requires the Department of Health Care Services (DHCS) to  
          expedite the Medi-Cal dental program (Denti-Cal) provider  
          enrollment process, including an alternative automatic  
          enrollment process for a provider already commercially enrolled,  
          subject to federal approval. Requires automatic disenrollment of  
          a dental provider who has not submitted a claim over a  
          continuous 12-month period, after notice to the provider.  
          Requires DHCS to monitor access and utilization of Denti-Cal  
          services to assess opportunities to improve access and  
          utilization. Expands and aligns Denti-Cal fee-for-service and  
          Denti-Cal managed care annual reporting requirements, and  
          requires quarterly data reporting requirements. Codifies the  
          data reporting and evaluation requirements for the Dental  
          Transformation Initiative in the state's "Medi-Cal 2020" Section  
          1115 waiver.

          Existing law:
          1)Establishes the Medi-Cal program, which is administered by  
            DHCS, under which qualified low-income individuals receive  
            health care services, including certain dental services, as  
            specified. Dental services are delivered through the  
            fee-for-service (FFS) Denti-Cal program, except in Sacramento  
            County, where enrollment in a dental managed care plan is  
            required (with exceptions), and in Los Angeles County, where  
            beneficiaries have the option to enroll in a dental managed  
            care plan. 

          2)Requires DHCS to establish a list of performance measures to  
            ensure the FFS Denti-Cal program meets quality and access  
            criteria required by DHCS. Requires the performance measures  
            to be designed to evaluate utilization, access, availability,  
            and effectiveness of preventive care and treatment.






          AB 2207 (Wood)                                      Page 2 of ?
          
          

          3)Requires DHCS to establish measures to monitor the dental FFS  
            Denti-Cal program, and requires specific performance measures  
            for children, and a more limited set of performance measures  
            for adults. 

          4)Requires DHCS to establish a list of performance measures to  
            ensure Denti-Cal dental health plans meet quality criteria  
            required by DHCS. Requires the list to specify the benchmarks  
            used by DHCS to determine whether and the extent to which a  
            dental health plan meets each performance measure.
          
          This bill:
          1)Requires the FFS Denti-Cal performance measures for adults and  
            children to include the total number of patients seen, on a  
            per-provider basis, and the total number of preventive dental  
            services, dental treatment services, and examinations and oral  
            health evaluations rendered by each provider during each  
            calendar year.

          2)Requires quarterly (instead of annual) posting of the data of  
            the Denti-Cal dental FFS and managed care program performance  
            measures to be posted on DHCS' Internet Web site, beginning  
            April 1, 2017. Aligns the timing of the Denti-Cal FFS and  
            managed care reports.

          3)Requires DHCS to ensure, to the greatest degree possible, that  
            the categories of data and performance measures selected for  
            Denti-Cal FFS are consistent with the categories of data and  
            performance measures selected for Denti-Cal managed care  
            plans.

          4)Requires DHCS to expedite the enrollment of Medi-Cal dental  
            providers by streamlining the Medi-Cal provider enrollment  
            process. Requires DHCS to pursue and implement all of the  
            following activities, to the extent permitted by federal law:

               a)     Create a dental-specific enrollment form.
               b)     Pursue an alternative automatic enrollment process  
                 for a provider already commercially credentialed by  
                 either a dental FFS contractor or an administrative  
                 services contractor for the purpose of providing services  
                 as a commercial provider.
               c)     Discontinue requiring providers to resubmit an  
                 enrollment application that has been deemed incomplete if  
                 the missing information is available elsewhere within the  







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                 application packet; and,
               d)     To publish the criteria for those processes in  
                 applicable provider bulletins and manuals, to the extent  
                 that DHCS expedites the enrollment of Medi-Cal dental  
                 providers by streamlining the Medi-Cal provider  
                 enrollment process.

          5)Requires DHCS to maintain the provider network by disenrolling  
            a billing and rendering provider who has not, over a  
            continuous 12-month period, submitted a claim for  
            reimbursement for services rendered.

          6)Requires DHCS, prior to disenrolling a provider, to send a  
            notice to the provider that the provider will be disenrolled  
            from the dental program six months after the date of the  
            notice. Prohibits DHCS from disenrolling a provider until six  
            months after the date of that notice.

          7)Requires DHCS, in order to improve the quality of the dental  
            provider network, to also exercise additional measures as  
            appropriate and permitted by law, including, but not limited  
            to, temporary suspensions. Requires the parameters and  
            criteria developed by DHCS for additional measures for  
            disenrollments to be published in applicable provider  
            bulletins and manuals.

          8)Requires DHCS to monitor access and utilization of Medi-Cal  
            dental services in the FFS and managed care delivery systems  
            to assess opportunities to improve access and utilization.

          9)Requires DHCS to assess opportunities to develop and implement  
            innovative payment reform proposals within the Medi-Cal dental  
            programs.

          10)Requires DHCS to explore additional opportunities to improve  
            the Medi-Cal Dental Program, in consultation with stakeholders  
            and as deemed appropriate by the DHCS and to the extent  
            permitted by federal law, including, but not limited to, the  
            following:

                 a)       Aligning the provision of dental anesthesia  
                   services with that of medical anesthesia services,  
                   including the ability to bill for applicable facility  
                   fees and ancillary services;
                 b)       Adjusting other utilization controls for  
                   specialty services, as appropriate, to promote access  







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                   to care while still protecting program integrity; and,
                 c)       Expanding the scope of beneficiary outreach  
                   activities required by an entity that is contracted  
                   with DHCS to more broadly address underutilization  
                   throughout the state.

          1)Requires DHCS, prior to implementing an action pursuant to 10)  
            above, to post the proposed action on its Internet Web site at  
            least 30 days before implementation.

          2)Requires DHCS to work with Denti-Cal managed care plans that  
            contract with DHCS to provide beneficiaries with access to  
            dental plan liaisons to assist in the coordination of care for  
            enrolled members.

          3)Requires a Medi-Cal managed care health plan to do all of the  
            following:

                 a)       Provide dental screenings for every eligible  
                   beneficiary as a part of the beneficiary's initial  
                   health assessment;
                 b)       Ensure that an eligible beneficiary is referred  
                   to an appropriate Medi-Cal dental provider; and,
                 c)       Identify plan liaisons available to dental  
                   managed care contractors and dental FFS contractors to  
                   assist with referrals to health plan covered services  
                   that may be needed by the beneficiary to aid in the  
                   treatment of an identified oral health care condition.

          1)Exempts any contract amendment, modification, or change order  
            to any contract entered into by DHCS for the purpose of  
            implementing the state Medi-Cal Dental Program from specified  
            provisions of the Public Contract and Government Codes, in  
            addition to any policies, procedures, or regulations  
            authorized by those provisions. Prohibits this provision from  
            exempting DHCS from establishing a competitive bid process for  
            awarding new fiscal intermediary contracts, as well as for  
            awarding new Denti-Cal managed care contracts.

          2)Requires DHCS, prior to implementing any change under this  
            bill, to consult with, and provide notification to,  
            stakeholders, including representatives from counties, local  
            dental societies, nonprofit entities, legal aid entities, and  
            other interested parties.

          3)Requires DHCS to implement, interpret, or make specific  







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            policies and procedures pertaining to the dental FFS program  
            and dental managed care plans, as well as applicable federal  
            waivers and state plan amendments, including the provisions  
            set forth in this bill, by means of all-county letters, plan  
            letters, plan or provider bulletins, or similar instructions  
            without taking regulatory action, until regulations are  
            adopted.

          4)Requires DHCS, no later than December 31, 2018, to adopt  
            regulations in accordance with the Administrative Procedures  
            Act. Requires DHCS to provide a status report to the  
            Legislature on a semiannual basis until regulations have been  
            adopted beginning six months after the effective date of this  
            bill. 

          5)Implements this bill only to the extent that DHCS obtains any  
            federal approvals necessary to implement this bill and obtains  
            federal matching funds to the extent permitted by federal law.

          6)Codifies the Dental Transformation Initiative (DTI) data  
            reporting and evaluation quality measure requirements required  
            to be reported to the federal government and made publicly  
            available for each of the four DTI domains contained in the  
            Special Terms and Conditions (STCs) of Medi-Cal 2020, the  
            state's Section 1115 Medicaid waiver.

           FISCAL  
          EFFECT  :  According to the Assembly Appropriations Committee:
           
          1)DHCS states most activities required by this bill are simply  
            aligning statute with their current contracts or current  
            activities to improve Denti-Cal, and that this bill does not  
            result in a direct staff cost increase. Despite this, the bill  
            makes implementation of the bill's major provisions contingent  
            on an appropriation for the specific purpose of its  
            implementation. 

          2)This bill also contains a provision that could result in  
            ongoing state cost pressure, namely the requirement that DHCS  
            assess opportunities to improve access and utilization.  
            Improving access and boosting utilization, however  
            appropriate, is likely to have unknown, significant, ongoing  
            costs for increased Denti-Cal services, likely offset to some  
            extent by a reduction in costs to treat more serious dental  
            disease (GF/federal).








          AB 2207 (Wood)                                      Page 6 of ?
          
          

          3)This bill also requires DHCS to assess opportunities to  
            implement innovative payment reform proposals, which are  
            unlikely to result in a net ongoing cost increase, but could  
            result in significant one-time development and implementation  
            costs (GF/federal). 

           PRIOR  
          VOTES  :  
          
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          |Assembly Floor:                     |80 - 0                      |
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          |Assembly Appropriations Committee:  |20 - 0                      |
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          |Assembly Health Committee:          |16 - 0                      |
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          COMMENTS  :
          1)Author's statement.  According to the author, dental care  
            consistently ranks with the public as the most important type  
            of health care after medical. The impact that good dental  
            hygiene and health has on people's self-esteem and quality of  
            life cannot be understated.  Dentistry is about prevention in  
            order to avoid costly intervention at a later date; however,  
            California's system for participation and enrollment does not  
            currently reflect that.  

            The Denti-Cal system is so broken that many dentists provide  
            pro-bono care as opposed to taking Denti-Cal because they both  
            give back to their community and society and manage it in a  
            way that it is not financially devastating to their practices.  
            The real loss in this system rests with beneficiaries. A 2014  
            California State Auditor report indicated that the  
            insufficient number of dental providers willing to participate  
            in Denti-Cal, low reimbursement rates, and a failure to  
            adequately monitor the program, led to limited access to care  
            and low utilization rates for Denti-Cal beneficiaries across  
            the state. The Audit found that almost half of eligible  
            beneficiaries did not receive dental care they were eligible  
            for.  Additionally, an April 2016 Little Hoover Commission  
            (LHC) Report indicated that with dreadful reimbursement rates  
            for dentists and slow, outdated paper-based administrative and  
            billing processes that compare poorly with those of commercial  
            insurers, Denti-Cal has thoroughly alienated its partners in  







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            the dental profession. Most California dentists want nothing  
            to do with Denti-Cal and consequently, more than 13 million  
            people eligible for coverage have limited or no access to  
            dentists.

            This is unacceptable, and we must take action to change the  
            system. While the provisions in this bill seem modest, they  
            are significant steps towards improving the Denti-Cal program.  
            This measure will streamline the enrollment process for  
            providers, ensure that provider networks are up-to-date so  
            that beneficiaries can more easily access providers, improve  
            coordination of care for beneficiaries, and increases DHCS  
            oversight of the Denti-Cal program.
          
          2)Medi-Cal has two different models for delivering dental  
            services. The Medi-Cal Program is administered by DHCS and  
            covers dental services for children under age 21 and a more  
            limited benefit for adults. Adult dental coverage was  
            eliminated in 2009 in AB 5 (Committee on Budget, Chapter 20,  
            Statutes of 2009), which also eliminated other optional  
            benefits for adults that had been covered under Medi-Cal. A  
            more limited adult dental benefit was restored in AB 82  
            (Budget Committee, Chapter 23, Statutes of 2013), the 2013-14  
            budget health trailer bill.

            Medi-Cal uses two different models for delivering dental  
            services to children: FFS and Dental Managed Care:

                 a)       FFS. In the FFS dental model, beneficiaries may  
                   receive dental services from any provider who accepts  
                   Medi-Cal payments and agrees to see them. Dental  
                   providers receive a payment for each service provided  
                   to the Medi-Cal beneficiary. FFS Denti-Cal expenditures  
                   are projected to be $1.05 billion total funds ($357.6  
                   million GF) in 2016-17; and, 
                 b)       Denti-Cal managed care. In the dental managed  
                   care model, Medi-Cal pays dental plans a set amount per  
                   member per month (also known as a capitation rate) to  
                   provide dental care to beneficiaries enrolled in the  
                   plan. For most eligibles, the monthly per person rate  
                   is between $7.80 and $13.50 (monthly capitation rates  
                   are different for adults and children and refugees) for  
                   every Medi-Cal beneficiary enrolled in their plan.  
                   Generally, enrollees may only receive services from  
                   providers that are within the plan's provider network. 








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                 Only two counties have dental managed care. In  
                   Sacramento, almost all children and adults are  
                   mandatorily enrolled in a dental managed care plan. If  
                   a beneficiary does choose a dental managed care plan,  
                   the beneficiary will be automatically assigned to one.  
                   In Los Angeles County, beneficiaries may voluntarily  
                   enroll in a dental managed care plan. If a beneficiary  
                   in Los Angeles County does not choose to enroll in a  
                   dental managed care plan, they are automatically  
                   enrolled in FFS. Denti-Cal managed care expenditures  
                   are projected to be $166.8 million total funds ($65.7  
                   million GF).

               Denti-Cal utilization is low, with different estimates for  
               different time frames. According to the Little Hoover  
               Commission report, only 26% of eligible California adults  
               with FFS Denti-Cal coverage saw a dentist in 2014,  
               according to February 2016 DHCS data. DHCS stated that  
               51.8% of children 20 and under with Denti-Cal FFS coverage  
               had a dental visit from October 2014 through September  
               2015. In December 2015, the Centers for Medicare and  
               Medicaid Services (CMS), in approving the California  
               Medi-Cal 2020 waiver, cited a figure of 37.8% of children  
               20 and under making a dental visit during the calendar year  
               2014. In December 2014, the California State Auditor cited  
               CMS data to report that only 44% of California's 5.1  
               million Denti-Cal-eligible children aged 20 and under saw a  
               dentist from October 2012 through September 2013.

               DHCS currently has a small workgroup effort regarding  
               implementation of the Dental Transformation Initiative  
               under the Medi-Cal 2020 Waiver. The purpose of this  
               workgroup is to collaborate with DHCS on the planning and  
               implementation efforts that are needed to ensure the  
               success of the dental component of the waiver.

          1)Dental provider enrollment. This bill requires DHCS to  
            expedite the enrollment of Medi-Cal dental providers by  
            streamlining the Medi-Cal provider enrollment process. To the  
            extent allowed by federal law, DHCS would be required to:

               a)     Create a dental-specific enrollment form, 
               b)     Pursue an alternative automatic enrollment process  
                 for a provider already commercially credentialed by  
                 either a dental FFS contractor or an administrative  
                 services contractor for the purpose of providing services  







          AB 2207 (Wood)                                      Page 9 of ?
          
          
                 as a commercial provider, and to 
               c)     Discontinue requiring providers to resubmit an  
                 enrollment application that has been deemed incomplete if  
                 the missing information is available elsewhere within the  
                 application packet.

            DHCS indicates Denti-Cal providers do not get enrolled through  
            the Medi-Cal Provider Enrollment Division. Instead, dental  
            providers use a paper application similar to the FFS Medi-Cal  
            provider application, which DHCS indicates is very thorough  
            and requires extensive review. Delta Dental handles Denti-Cal  
            enrollment, and DHCS indicates the review is equally as  
            thorough as the medical enrollment process. Prior to the  
            introduction of this bill, Denti-Cal was evaluating the  
            creation of a dental specific application because medical  
            providers were moving toward on-line enrollment through PAVE,  
            and many concerns had been raised to DHCS that the application  
            questions may not pertain to dentists. In addition, because  
            Delta Dental currently operates commercial dental coverage, it  
            has can verify credentials and identify the dentists that  
            serve in the commercial side who are also seeking Denti-Cal  
            enrollment. DHCS indicates it has developed a revised paper  
            application that will be going out shortly for stakeholder  
            review, which will serve as an interim step before moving  
            towards the use of PAVE for dental providers.

          1)Denti-Cal rates. On July 1, 2016, DHCS released its  
            statutorily required "Medi-Cal Dental Services Rate Review" in  
            which it compared the reimbursement rates of Denti-Cal FFS' 25  
            most utilized procedures to the same 25 procedure codes from  
            other states' Medicaid dental fee schedules. These 25  
            procedures made up approximately 85% of billed procedures in  
            FY 2012-13 and FY 2013-14. California's Denti-Cal FFS pays an  
            average of 86.1% of Florida's Medicaid Program's dental fee  
            schedule, 65.5% of Texas', 75.4% of New York's, and 129.2%  of  
            Illinois' Medicaid Program's dental fee index. The report  
            found that Denti-Cal paid, on average, 28.3% of commercial  
            rates in the Pacific Area in 2013-14.

          2)Dental Transformation Initiative of Medi-Cal Section 1115  
            Waiver. The DTI is a new feature of Medi-Cal 2020, the state's  
            most recent Section 1115 waiver. It is funded at $750 million  
            total funds ($375 million in federal funds) generated from  
            federal waiver funding drawn down for Designated State Health  
            Programs. Of this amount, $10 million in total funds is  
            contingent upon the state meeting statewide metrics. AB 1568  







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            (Bonta and Atkins) would codify the DTI provisions of the  
            Special Terms and Conditions of the waiver. DTI consists of  
            four domain areas as follows:

             a)   Domain 1: Increase Preventive Services Utilization for  
               Children;
             b)   Domain 2: Caries Risk Assessment and Disease Management;  

             c)   Domain 3: Increase Continuity of Care; and,
             d)   Domain 4: Local Dental Pilot Programs. 
                                                      
            This bill would codify the STCs provisions regarding DHCS  
            reporting DTI data and quality measures. Under the STCs, this  
            information is required to be sent to the federal Centers for  
            Medicare and Medicaid Services and made publicly available.

          1)Related legislation.
               a)     SB 1098 (Cannella) establishes in DHCS the 13-member  
                 Denti-Cal Advisory Group (Advisory Group), and specifies  
                 the duties of the advisory group to include studying the  
                 policies and priorities of Denti-Cal with the goal of  
                 raising the Denti-Cal utilization rate among eligible  
                 child beneficiaries to 60% or greater and providing  
                 assistance and advice to DHCS, the Legislature, and the  
                 Governor regarding proposed decisions relating to the  
                 Denti-Cal program to ensure that those decisions are  
                 based on the best available evidence. SB 1098 is in the  
                 Assembly Health Committee.

               b)     AB 1051 (Maienschein) appropriates $200 million from  
                 the GF to DHCS for the Denti-Cal program. DHCS would be  
                 required to allocate the funds to increase reimbursement  
                 rates for the 15 most common prevention, treatment, and  
                 oral evaluation services to the Medicaid national  
                 average, and to increase funding for preventative care  
                 and case management services, as appropriate, to achieve  
                 significant long-term cost savings, increased provider  
                 participation, and increased beneficiary utilization  
                 under Denti-Cal. AB 1051 is in the Senate Health  
                 Committee and is scheduled for hearing on June 29, 2016.


               c)     AB 1586 (Bonta and Atkins) and SB 815 (Hernandez and  
                 De Leon) are companion urgency bills to enact specified  
                 statutory provisions of "Medi-Cal 2020," the state's  
                 recently approved five-year federal Section 1115 waiver,  







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                 which runs through December 31, 2020. AB 1586 includes  
                 the DTI, the Whole Person Care program and the  
                 evaluations required under the Special Terms of  
                 Conditions (STCs) of Medi-Cal 2020, and requires DHCS to  
                 conduct or arrange to have conducted studies, reports and  
                 assessments required under the STCs. SB 815 (Hernandez  
                 and De Leon) contains the provisions implementing the  
                 Global Payment Program and the Public Hospital Redesign  
                 Incentive Program and the access assessment requirements.  
                 SB 815 passed out of the Assembly Appropriations  
                 Committee on June 15, 2016 and AB 1568 is scheduled to be  
                 heard in the Senate Appropriations Committee on June 20,  
                 2016.


          1)Prior legislation. SB 694 (Padilla of 2011-12), would have  
            established the Statewide Office of Oral Health (Office)  
            within the Department of Public Health and authorized the  
            Office to conduct a study to assess the safety, quality,  
            cost-effectiveness, and patient satisfaction of expanded  
            dental procedures performed by specified dental health care  
            providers. SB 694 was held on the Assembly Appropriations  
            Committee suspense file.

            AB 82 (Committee on Budget, Chapter 23, Statutes of 2013),  
            restored partial adult optional dental benefits, including  
            full mouth dentures, effective May 1, 2014. The fiscal impact  
            of the restoration is $183.8 million for 2015-16 and $339.9  
            million for 2016-17.

            SB 75 (Committee on Budget and Fiscal Review, Chapter 18,  
            Statutes of 2015), the health budget trailer bill of 2015,  
            exempted FFS and dental managed care dental services and  
            applicable ancillary services for dates of service on or after  
            July 1, 2015, or the effective date of any necessary federal  
            approvals, whichever is later from the 10% Denti-Cal rate  
            reduction. The total funds cost for this change is $105  
            million.

          2)Support.  The Little Hoover Commission (LHC), in its 2016  
            report, Fixing Denti-Cal, found the program to be lacking in  
            multiple areas. The LHC made several recommendations aimed at  
            expanding access to Denti-Cal services, with an ultimate goal  
            of 66% of Denti-Cal-eligible children making annual dental  
            visits. Several of those recommendations would require DHCS to  
            take administrative actions to improve Denti-Cal. This bill  







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            would call on DHCS to expedite provider enrollment by creating  
            a dental-specific enrollment form and pursuing alternative  
            automatic enrollment for dentists already established  
            commercially. This bill would also require DHCS to monitor  
            access and utilization and explore additional opportunities to  
            improve Denti-Cal. The LHC indicates it supports this bill  
            because it requires DHCS to improve and expand Denti-Cal  
            provider enrollment, and shares the LHC's overall goal of  
            expanding access to care. 

            The County Health Executives Association of California state  
            that this bill proposes modest changes to the program,  
            including expediting dental provider enrollment into the  
            Medi-Cal program, ensuring screenings are provided for every  
            eligible Medi-Cal beneficiary as part of their initial health  
            assessment, and ensuring beneficiaries are referred to  
            appropriate Medi-Cal dental providers, which could improve the  
            delivery of dental services to those most in need in  
            California.
            
          3)Proposed author's amendments. The author is proposing  
            amendments to address concerns amendments requested by several  
            stakeholder groups. These changes include three changes  
            requested by Western Center on Law and Poverty to broaden the  
            Denti-Cal performance measures for adults to align those  
            measures with the measures for children, to require DHCS to  
            "continuously" maintain the Denti-Cal provider network, and to  
            include an annual review of the Denti-Cal Treatment  
            Authorization Review process as part of DHCS' requirement  
            under this bill to monitor access and utilization. In  
            addition, the author's proposed amendments include a request  
            by health plans to clarify the scope of the requirement in  
            this bill that Medi-Cal managed care plans identify plan  
            liaisons available to dental managed care and FFS contractors.  
            This amendment would delete language in the requiring health  
            plans to assist with referrals "that may be needed by the  
            beneficiary to aid in the treatment of an identified oral  
            health care condition." Finally, the author is proposing  
            amendments to add the number of applications of fluoride  
            varnishes and the number of beneficiaries requiring general  
            anesthesia to the list of Denti-Cal performance measures.

         10)Clarifying amendments. To clarify the Denti-Cal FFS child and  
            adult performance measure monitoring requirements changes made  
            by this bill, staff recommends these provisions be re-worded  
            to clarify which provisions are required to be reported in  







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            aggregate versus on a per dental provider basis.
           
          SUPPORT AND OPPOSITION  :
          Support:  California Coverage and Health Initiatives
                    California Dental Association 
                    California Pan-Ethnic Health Network
                    California Primary Care Association 
                    Children Now
                    Children's Defense Fund-California
                    Children's Partnership
                    County Health Executives Association of California 
                    First 5 Association of California 
                    National Association of Social Workers, California  
                    Chapter
                    Nurse-Family Partnership
                    The Little Hoover Commission
          
          Oppose:   None received




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