BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 435
---------------------------------------------------------------
|AUTHOR: |Pan |
|---------------+-----------------------------------------------|
|VERSION: |April 6, 2015 |
---------------------------------------------------------------
---------------------------------------------------------------
|HEARING DATE: |April 22, 2015 | | |
---------------------------------------------------------------
---------------------------------------------------------------
|CONSULTANT: |Vince Marchand |
---------------------------------------------------------------
SUBJECT : Medical home: health care delivery model
SUMMARY : Requires the Secretary of the Health and Human Services Agency
to convene a working group to identify appropriate payment
methods to align incentives in support of patient centered
medical homes.
Existing law permits the Department of Health Care Services
(DHCS) to establish a California Health Home Program to provide
health home services, as defined, to Medi-Cal beneficiaries and
Section 1115 waiver demonstration populations with chronic
conditions, and to develop a payment methodology, including
payment structures that may include tiered payment rates that
take into account the intensity of services necessary to
outreach to, engage, and serve the populations the department
identifies. Allows this this Health Home Program to be
implemented only if federal financial participation is
available, necessary federal approval is obtained, and no
additional General Fund moneys are used to fund the
administration or cost of services.
This bill:
1.Requires the Secretary of the Health and Human Services (HHS)
Agency to convene a working group of public payers, private
health insurance carriers, third-party purchasers, and health
care providers to identify appropriate payment methods to
align incentives in support of patient centered medical homes
(PCMHs).
2.Requires the working group convened pursuant to this bill to
consult with, and provide recommendations to, the Legislature
and relevant state agencies on all matters relating to the
implementation of a PCMH care model.
SB 435 (Pan) Page 2 of ?
3.Requires the working group to have the authority to do all of
the following:
a. Develop consensus on strategies for
implementing the PCMH care model and service delivery
change at the practice, community, and health care
system level;
b. Create alignment regarding payment, reporting,
and infrastructure investments;
c. Design and compose pilot projects, including
multipayor pilot projects;
d. Utilize public and private purchasing power
and enable competing payors to work collaboratively to
establish common PCMH initiatives; and,
e. Propose participation in relevant federally
funded pilot and demonstration projects.
4.Requires the state to use existing state resources and
available federal funds to implement this bill, and permits
the Secretary of HHS, if state or federal funds are not
available, to apply for and accept grants, or receive
donations and other financial support from public or private
sources.
FISCAL
EFFECT : This bill has not been analyzed by a fiscal committee.
COMMENTS :
1.Author's statement. According to the author, it is important
that our state supports care that is patient centered, cost
efficient, continuous, focused on prevention, and built on
sound, evidence-based medicine rather than episodic, illness
oriented care. PCMHs provide the needed team-based care that
has proven to decrease costs and improve health outcomes. No
one should have to navigate this complex health system alone
and PCMHs ensure that no one will. This bill will establish a
group that will make sure the best PCMH model is created for
California.
2.Background on the PCMH model. According to a September 2012
brief prepared by the National Conference of State
Legislatures (NCSL), the PCMH model of care offers one method
of transforming the health care delivery system. PCMHs can
reduce costs while improving quality and efficiency through an
innovative approach to delivering comprehensive
SB 435 (Pan) Page 3 of ?
patient-centered preventive and primary care. This model is
designed around patient needs and aims to improve access to
care (e.g. through extended office hours and increased
communication between providers and patients via email and
telephone), increase care coordination and enhance overall
quality, while simultaneously reducing costs. The PCMH relies
on a team of providers-such as physicians, nurses,
nutritionists, pharmacists, and social workers-to meet a
patient's health care needs. Studies have shown that the PCMH
model's attention to the whole-person and integration of all
aspects of health care offer potential to improve physical
health, behavioral health, access to community-based social
services and management of chronic conditions.
NCSL notes that although general agreement exists about the
basic tenets of the PCMH, the model is still evolving. Not
all PCMHs look alike or use the same strategies to reduce
costs, improve quality and coordinate care. Accreditation
offers formal recognition and a stamp of approval to those
that successfully meet specific standards and requirements,
facilitating payment from both public and private payers.
PCMH accreditation is available from national accreditation
organizations, as well as a few states that have developed
their own standards. Although certain health care providers
already embody many elements of the PCMH, many are seeking
formal recognition, due in part to the fact that medical
practices that participate in PCMH pilot programs often
qualify for enhanced reimbursement rates, or receive other
financial incentives for coordinating care.
According to NCSL, as of April 2013, 43 states had policies
promoting the PCMH model for certain Medicaid or CHIP
beneficiaries. States have created pilot projects, reformed
payment structures, invested in health information technology,
restructured Medicaid provider systems, and included the PCMH
model in service delivery.
3.Affordable Care Act (ACA) and AB 361. The ACA contained
several provisions to support and advance the PCMH model of
care. One of these was entitled, "Establishing Community
Health Teams to Support the Patient-Centered Medical Home."
This is a grant program to help establish community-based
interdisciplinary, interprofessional teams to support primary
care practices, and requires grants to be used to establish
health teams to provide support services to primary care
SB 435 (Pan) Page 4 of ?
providers and provide capitated payments to primary care
providers. Under this program, PCMH is defined as a model of
care that includes the following: 1) personal physicians; 2)
whole person orientation; 3) coordinated and integrated care;
4) safe and high-quality care through evidence-informed
medicine, appropriate use of health information technology,
and continuous quality improvements; 5) expanded access to
care; and, 6) payment that recognizes added value from
additional components of patient-centered care.
Another provision of the ACA, entitled "State Option to Provide
Health Homes for Enrollees with Chronic Conditions,"
established a waiver program to give states the option of
enrolling Medicaid beneficiaries with chronic conditions into
a health home. "Health home," for purposes of this program, is
defined as "a designated provider (including a provider that
operates in coordination with a team of health care
professionals) or a health team selected by an eligible
individual with chronic conditions to provide health home
services." This waiver program would provide a 90 percent
federal match for the first two years. States are permitted to
tier payments to reflect a team of health care professionals
operating with a designated provider, as well as the severity
or number of individual's with chronic conditions or the
specific capabilities of the designated provider and health
team. "Health home services" is defined as comprehensive and
timely high-quality services that are provided by a designated
provider or a team of health care professionals operating with
a designated provider and include: 1) comprehensive care
management; 2) care coordination and health promotion; 3)
comprehensive transitional care, including appropriate
follow-up, from inpatient to other settings; 4) patient and
family support; 5) referral to community and social support
services; and, 6) use of health information technology to link
services.
In 2013, the Legislature passed AB 361 (Mitchell), Chapter 642,
Statutes of 2013, which permitted DHCS to submit a waiver
application under the above provision of the ACA to establish
a California Health Home Program to provide health home
services to Medi-Cal beneficiaries and Section 1115 waiver
demonstration populations with chronic conditions. While the
bill required that no General Fund moneys be used, to
supplement the 90 percent federal match, The California
Endowment has offered to fund the remaining 10 percent of
SB 435 (Pan) Page 5 of ?
funds, up to $25 million per year, required for these
additional services for the two years of the federal match.
According to DHCS, through a complementary planning process,
the California State Innovation Model (CalSIM) initiative, it
has developed a recommendation to create "Health Homes for
Patients with Complex Needs" (HHPCN). According to DHCS, in
collaboration with the CalSIM initiative and with respect to
the requirements of the ACA and AB 361, the state has
developed a set of policy goals that will guide the planning
and implementation of the HHPCN. DHCS intends to submit a
state plan amendment application in summer/fall of 2015, which
would provide federal regulatory authority for implementing
the HHPCN model for Medi-Cal beneficiaries.
4.Anti-trust concerns. As described in the supporting arguments
later in this analysis, the sponsor of this bill states in
support that "state participation, especially as a convener,
enables competing payers to work collaboratively to establish
a common initiative without risking antitrust violations." In
July 2013, The Commonwealth Fund published an issue brief
entitled, "State Strategies to Avoid Antitrust Concerns in
Multipayer PCMH Initiatives." According to this issue brief,
convening multiple payers distributes the costs associated
with creating a PCMH and results in greater alignment around
payment, reporting, and infrastructure investments. However,
the issue brief notes that states that promote collaboration
among payers to reach agreement on common or aligned payments
for their PCMH initiatives risk antitrust liability for their
participating payers. The cooperation and collaboration to set
prices and payments among a group of otherwise competitive
payers would be seen as illegal restraint of trade under the
Sherman Act. According to this issue brief, immunity from
federal antitrust laws when convening multiple payers may be
available to states as well as private payers under the state
action doctrine, first articulated in Parker v. Brown in 1943.
The doctrine of Parker v. Brown may extend immunity to both
state actors and private entities if the policy in place meets
two criteria. First, the state must have clearly articulated a
policy to displace competition. This requires that the policy
both justifies the anticompetitive behavior and sufficiently
expresses that such behavior is both expected and endorsed.
Secondly, the state must have committed to active supervision
of activities by health care payers; simple authorization or
regulation of proceedings is not sufficient. The state must be
able to review potential anticompetitive acts such as setting
SB 435 (Pan) Page 6 of ?
prices and rates among payers.
5.Prior legislation. ACR 152 (Pan), Resolution Chapter 143,
Statutes of 2014, stated that the Legislature supports and
encourages the development and expansion of a California
health care delivery system that identifies PCMHs and is based
upon certain principles of coordination of patient care.
AB 1208 (Pan), of 2013 proposed to establish the PCMH Act of
2013 and established a definition for a PCMH based upon
specified standards (similar to SB 393 from 2012). AB 1208 was
later amended on the Senate Floor to address a different
subject matter.
AB 361 (Mitchell), Chapter 642, Statutes of 2013, permitted
DHCS to establish a California Health Home Program to provide
health home services to Medi-Cal beneficiaries and Section
1115 waiver demonstration populations with chronic conditions.
Implements this bill only if federal financial participation
is available and the federal Centers for Medicare and Medicaid
Services approve the state plan amendment.
AB 2266 (Mitchell), of 2012, would have required DHCS to
establish a program to provide specified health home services,
with the intent of reducing avoidable hospitalization or use
of emergency medical services. AB 2266 died on the Senate
Inactive File.
SB 393 (Hernandez), would have enacted the PCMH Act of 2012
and established a definition for a PCMH based upon specified
standards. SB 393 was vetoed by the Governor. In his veto
message, the Governor stated that he commended the author for
trying to improve the delivery of health care by encouraging
the greater use of "patient-centered medical homes" but
because the concept is still evolving, he thought more work
was needed before the definition was codified.
AB 1542 (Jones), of 2010, would have defined a PCMH to mean,
in part, a health care delivery model in which a patient
establishes an ongoing relationship with a physician or other
licensed health care provider, working in a physician-directed
practice team to provide comprehensive, accessible, and
continuous evidence-based primary care and coordinate the
patient's health care needs across the health care system. AB
1542 died on the Assembly Floor.
SB 435 (Pan) Page 7 of ?
SB 1738 (Steinberg), of 2008, would have required DHCS to
establish a three-year pilot program to provide intensive
multidisciplinary services to 2,500 Medi-Cal beneficiaries
identified as frequent users of health care. SB 1738 was
vetoed by Governor Schwarzenegger.
6.Support. This bill is sponsored by the California Academy of
Family Physicians (CAFP), which states that this bill would
allow the Secretary of HHS to act as a "convener," waiving
specific anti-trust liability and bringing together public
payers, private health carriers, third-party purchasers, and
providers in order to identify appropriate payment methods to
align incentives to support the PCMH and improve care of
chronic illnesses. CAFP states that multi-payer projects have
been shown to support high-performing delivery systems by
aligning incentives and reporting requirements. Despite the
obvious benefits of alignment, CAFP states that stakeholders
struggle with a variety of challenges to achieve a more
streamlined system, given conflicting interests and payer
concerns regarding lost autonomy and competitive advantage.
According to CAFP, the state can play an important role to
help overcome these articles. Through its power to waive
specific anti-trust liability, the state can convene payers,
purchasers and providers to develop a consistent payment model
for chronic care management, common performance and outcome
measures, and align incentives to support the PCMH. According
to CAFP, state participation, especially as a convener,
enables competing payers to work collaboratively to establish
a common initiative without risking antitrust violations.
SUPPORT AND OPPOSITION :
Support: California Academy of Family Physicians (sponsor)
Oppose: None received
-- END --