BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 435|
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THIRD READING
Bill No: SB 435
Author: Pan (D)
Amended: 6/2/15
Vote: 21
SENATE HEALTH COMMITTEE: 7-1, 4/22/15
AYES: Hernandez, Nguyen, Mitchell, Monning, Pan, Roth, Wolk
NOES: Nielsen
NO VOTE RECORDED: Hall
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SUBJECT: Medical home: health care delivery model
SOURCE: California Academy of Family Physicians
DIGEST: This bill 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.
ANALYSIS:
Existing law:
1)Permits the Department of Health Care Services (DHCS) to
establish a California Health Home Program to provide health
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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.
2)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 Agency
(HHS) 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.
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) Identify ways to create alignment regarding payment,
reporting, and infrastructure investments;
c) Identify ways to utilize public and private purchasing
power and ways to enable competing payors to work
collaboratively to establish common PCMH initiatives; and
d) Propose participation in relevant federally funded pilot
and demonstration projects.
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4)Requires the Secretary of HHS to convene the working group
only after he or she makes a determination that sufficient
nonstate funds have been received to pay for all costs of
implementing this bill.
Comments
1)Author's statement. According to the author, it is important
that California 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)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 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,
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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 Children's
Health Insurance Program 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
providers and provide capitated payments to primary care
providers. Under this program, PCMH is defined as a model of
care that includes the following: a) personal physicians; b)
whole person orientation; c) coordinated and integrated care;
d) safe and high-quality care through evidence-informed
medicine, appropriate use of health information technology,
and continuous quality improvements; e) expanded access to
care; and, f) 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
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services." This waiver program would provide a 90% 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: a) comprehensive care
management; b) care coordination and health promotion; c)
comprehensive transitional care, including appropriate
follow-up, from inpatient to other settings; d) patient and
family support; e) referral to community and social support
services; and, f) 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% federal match, The California Endowment has
offered to fund the remaining 10 percent 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
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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
prices and rates among payers.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, likely
one-time costs of $150,000 to $300,000 to provide staff support
and technical assistance to the workgroup (private funds).
SUPPORT: (Verified5/29/15)
California Academy of Family Physicians (source)
OPPOSITION: (Verified5/29/15)
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None received
ARGUMENTS IN SUPPORT: This bill is sponsored by the
California Academy of Family Physicians (CAFP), which states
that this bill allows 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.
Prepared by:Vince Marchand / HEALTH /
6/2/15 14:42:40
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