BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2640 (Gipson) - Public health:  HIV
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version: August 2, 2016         |Policy Vote: HEALTH 7 - 1       |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency: No                     |Mandate: No                     |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date: August 8, 2016    |Consultant: Brendan McCarthy    |
          |                                |                                |
           ----------------------------------------------------------------- 

          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  AB 2640 would require a health care provider  
          administering an HIV test to provide information on preexposure  
          prophylaxis (PrEP) and postexposure prophylaxis (PEP) to a  
          patient determined to be at high risk for HIV infection.


          Fiscal  
          Impact:  
           Likely ongoing costs in the millions to low tens of millions  
            to provide PrEP and PEP to high-risk individuals enrolled in  
            Medi-Cal (General Fund and federal funds). Based on Centers  
            for Disease Control and Prevention estimates for the number of  
            individuals at high risk for HIV infection, staff estimates  
            that there are about 150,000 individuals in the state that  
            would meet CDC guidelines for using PrEP or PEP. For each 1%  
            of that population that elects to begin taking PrEP, the  
            proportional cost to the Medi-Cal program to cover the cost of  
            providing PrEP would be about $4 million per year. (Costs for  
            PEP would be considerable lower, since it is only recommended  
            for 28-day use, as opposed to ongoing use for PrEP.)








          AB 2640 (Gipson)                                       Page 1 of  
          ?
          
          
           Unknown long-term savings to Medi-Cal and the Aids Drug  
            Assistance Program due to lower HIV infection rates (General  
            Fund and federal funds). To the extent that the bill does  
            result in lower HIV infection rates, there would be cost  
            savings to the Medi-Cal and Aids Drug Assistance Programs.  
            However, there are some factors that limit the potential cost  
            savings from the bill. First, it is not known how effective  
            greater knowledge and use of PrEP and PEP are at the  
            population level in reducing HIV infection. There are clinical  
            studies that show a very dramatic decline in HIV infections  
            amongst users of PrEP. Whether those findings would translate  
            to the larger population not part of a research study is  
            unknown. Second, the annual cost to provide PrEP is may not be  
            substantially less than the current cost to provide treatment  
            to HIV positive Medi-Cal beneficiaries. The cost that Medi-Cal  
            would pay for PreP is not public information. However, the New  
            York State Department of Public Health indicates that annual  
            costs range from $8,000 to $14,000 per year. Even assuming  
            that Medi-Cal receives significant discounts, the cost to  
            provide PreP is likely to be in the thousands per patient per  
            year. On the other hand, the current average annual cost of  
            care for an HIV positive Medi-Cal beneficiary is about $15,000  
            per year. 


          Background:  Under current law, patients who have blood drawn at primary  
          care clinics must be offered an HIV test by the clinic.
          Under state and federal law, the Department of Health Care  
          Services operates the Medi-Cal program, which provides health  
          care coverage to low income individuals, families, and children.  
          Medi-Cal provides coverage to childless adults and parents with  
          household incomes up to 138% of the federal poverty level and to  
          children with household incomes up to 266% of the federal  
          poverty level. The federal government provides matching funds  
          that vary from 50% to 90% of expenditures depending on the  
          category of beneficiary.


          In addition, the Department of Public Health manages the Aids  
          Drug Assistance Program which offers coverage for treatment of  
          HIV to those who do not qualify for Medi-Cal. 


          Current law mandates that all individual and group health plans  








          AB 2640 (Gipson)                                       Page 2 of  
          ?
          
          
          and insurance policies provide coverage for HIV testing.


          Under current law, specific information must be provided by a  
          health care provider who is administering an HIV test, for both  
          individuals testing positive and individuals testing negative  
          who are at high risk for HIV infection.




          Proposed Law:  
            AB 2640 would require a health care provider administering an  
          HIV test to provide information on preexposure prophylaxis  
          (PrEP) and postexposure prophylaxis (PEP) to a patient who tests  
          negative but is determined to be at high risk for HIV infection.


          Related  
          Legislation:  AB 2439 (Gipson) would create a pilot project to  
          assess the effectiveness of routinely offering HIV tests in the  
          emergency department of a hospital. That bill will be heard in  
          this committee.


          Staff  
          Comments:  There is a great deal of uncertainty in how  
          individuals at high risk of HIV infection will respond to  
          receiving information about PrEP and PEP. Assuming even a small  
          number of such individuals who test negative for HIV would seek  
          PrEP, costs to the Medi-Cal program could be substantial. Of  
          course, any action that reduces HIV infection would have  
          substantial population health benefits and would lead to cost  
          savings to Medi-Cal. 


                                      -- END --