BILL ANALYSIS Ó
SB 586
Page 1
Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 586
(Hernandez) - As Amended August 2, 2016
-----------------------------------------------------------------
|Policy |Health |Vote:|18 - 0 |
|Committee: | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill extends the California Children's Services (CCS)
"carve out" for most counties until January 1, 2022, and
establishes the Whole Child Model (WCM) program for CCS-eligible
children in counties with county organized health systems for
delivery of Medi-Cal managed care (COHS counties). Specifically,
this bill:
1)Authorizes a WCM pilot no sooner than July 1, 2017, in
specified counties, and establishes goals for the pilot.
SB 586
Page 2
2)Requires monitoring and oversight standards, data reporting
and analysis, and a stakeholder process.
3)Establishes readiness standards, an assessment process, and
other requirements for COHS plans.
4)Delineates responsibility of various functions between COHS
plans and existing CCS staff, including maintaining medical
therapy as a county function.
5)Requires any DHCS-proposed changes in CCS medical eligibility
to trigger notification to the legislature and a stakeholder
process, as specified.
6)Requires DHCS to develop a memorandum of understanding (MOU)
template to be used by participating counties and health
plans, and requires notice to, and consultation with, the
counties in determining their administrative allocation for
the CCS program.
7)Specifies an appeals process in the case of disagreements with
respect to CCS services.
8)Establishes continuity of care provisions that maintain
existing treatment relationships for three years under
specified conditions, and continuity of care for durable
medical equipment for one year.
9)Allows enrollees to continue receiving case management from a
public health nurse with whom they have an existing
relationship, and allows COHS plans to implement this by
SB 586
Page 3
collocating county public health nurses with the plan or
establishing an MOU with the county.
10)Requires the department to pay any managed care plan
participating in the Whole Child Model program a separate,
actuarially sound rate specifically for CCS children and
youth, as long as an actuarially sound rate can be developed
for the managed care plan's CCS population.
11)Requires COHS plans to pay physician provider services at
rates that are equal to or exceed the applicable CCS
fee-for-service rates, unless the physician enters into an
agreement on an alternative payment methodology mutually
agreed to by the physician and surgeon and the Medi-Cal
managed care plan.
12)Requires a robust independent program evaluation by January
1, 2021.
FISCAL EFFECT:
1)This bill largely aligns with existing administrative plans to
implement a WCM program. However, there are several required
activities that will result in costs (GF/federal):
a) Monitoring and oversight standards: $500,000 per year.
b) Stakeholder advisory group: $50,000 per year.
c) Independent evaluation: $300,000-$500,000 one-time.
SB 586
Page 4
2)The requirements for managed care plans to pay providers at
existing rates results in unknown fiscal impact. To the
extent access to care could be maintained with lower payment
rates, this may lead to potential unrealized savings.
3)Extending the carve-out in non-COHS counties results in an
unknown, potentially significant fiscal impact to the extent
it reduces flexibility to provide care in a more
cost-efficient manner. However, there are currently no plans
to eliminate the CCS services carve-out for non-COHS counties,
so it essentially continues current practice.
COMMENTS:
1)Purpose. According to the author, this bill authorizes the
creation of a WCM in counties served by a Medi-Cal COHS. CCS
has been carved out of managed care since 1993 because the
Legislature recognized this population required a unique
approach. In over two decades since that time, the CCS
carve-out has been extended numerous times, and the state has
engaged in periodic efforts to pilot CCS alternative
arrangements. The current carve out ends December 31, 2016,
and the administration has signaled that they will support an
extension of the carve-out only if it is accompanied by a plan
for an organized delivery system that combines CCS-services in
a WCM. This bill responds to that call by establishing a WCM
in COHS plans. This bill extends the carve-out in non-COHS
counties, ensures there is an incentive to continue to
identify CCS-eligible children and adequately funds their care
by requiring a stand-alone capitation payment paid to MCMC
plans, ensures access to physician specialists by requiring a
payment floor for CCS physician services, provides extended
continuity of care so that children can continue to see their
current providers, ensures continuity and consistency of CCS
SB 586
Page 5
program expertise in care coordination and service
authorization, requires an evaluation of the WCM, and ensures
family involvement in the WCM at both the state and local
level.
2)Background. The California Children's Services Program (CCS)
provides diagnostic and treatment services, medical case
management, and physical and occupational therapy services to
children under 21 years of age with CCS-eligible conditions
(e.g., severe genetic diseases, chronic and severe medical
conditions, and traumatic injuries) from families unable to
afford catastrophic health care costs. Established in 1927 to
help children obtain treatment for services that were amenable
to surgery, the CCS program currently serves approximately
180,000 children, 90% of whom are also eligible for Medi-Cal.
Most Medi-Cal beneficiaries, including children, are required
to enroll in Medi-Cal managed care plans. However, for
children who are enrolled in both MediCal and CCS, CCS
services are "carved-out" of Medi-Cal managed care in most
counties until January 1, 2017.
3)Eligibility. A child eligible for CCS must be a resident of
California, have a CCS-eligible condition, and be in a family
with an adjusted gross income (AGI) of $40,000 or less in the
most recent tax year. Children in families with higher incomes
may still be eligible for CCS if the estimated cost of care to
the family in one year is expected to exceed 20% of the
family's adjusted gross income.
4)Funding. The CCS program is administered as a partnership
between county health departments and DHCS. Counties pay a
portion of the nonfederal share of cost. The CCS program is
funded by several different fund sources depending upon the
enrollment status of the child (for example, Medi-Cal versus
state-only CCS) and the types of services received (for
SB 586
Page 6
example, diagnosis and treatment versus medical therapy). CCS
reimburses providers mostly through the fee-for-service
system, and at rates that are substantially higher than
standard Medi-Cal rates.
5)Recent Administrative Initiatives. CCS has been lauded for
high standards and service levels, as well as access to
specialists, but it creates a fragmented delivery system of
care to the eligible child, since only the CCS-eligible
condition is treated by the program. Other health care needs
are generally managed by a managed care plan in which the
child is dually enrolled. In order to improve care
coordination and implement a patient and family-centered
approach, DHCS engaged stakeholders since the fall of 2014 to
investigate potential improvements or changes to the CCS
program.
In mid-2015, the Department of Health Care Services (DHCS)
released its proposal for the CCS program based on a WCM
initiative under which a CCS-eligible child would receive all
of their care through the Medi-Cal managed care plan, rather
than continuing to receive care for their CCS-eligible
conditions outside the plan. For counties outside the
"whole-child model" DHCS proposed a three-year carve-out
extension (until at least January 2019).
This bill largely aligns with the department's existing WCM
initiative, but includes a number of statutory protections
that stakeholders value, such as a floor on provider rates,
continuity of care protections, an evaluation, and numerous
requirements on participating COHS plans.
SB 586
Page 7
6)Prior Legislation. AB 187 (Bonta), Chapter 738, Statutes of
2015, was the most recent sunset extension on the prohibition
on incorporating CCS covered services into managed care.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081