BILL ANALYSIS                                                                                                                                                                                                    Ó



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

          SB 960 (Hernandez) - Medi-Cal:  telehealth:  reproductive health  
          care
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version: April 26, 2016         |Policy Vote: HEALTH 6 - 0       |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency: No                     |Mandate: No                     |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date: May 23, 2016      |Consultant: Brendan McCarthy    |
          |                                |                                |
           ----------------------------------------------------------------- 
          
          This bill meets the criteria for referral to the Suspense File.


          Bill  
          Summary:  SB 960 would require reproductive health care services  
          provided through telehealth to be covered by the Medi-Cal  
          program. The bill would require telephonic and electronic  
          patient management services to be covered by the Medi-Cal  
          program.


          Fiscal  
          Impact:  
           Likely one-time costs in the low hundreds of thousands for the  
            Department of Health Care Services to gain federal approvals,  
            adopt regulations, and make any necessary system changes to  
            allow for the provision of services under the bill (General  
            Fund and federal funds).

           Unknown impact on Medi-Cal spending for reproductive health  
            care services (General Fund and federal funds). By allowing  
            reproductive services to be provided through telehealth, the  
            bill is likely to make it easier for Medi-Cal beneficiaries to  







          SB 960 (Hernandez)                                     Page 1 of  
          ?
          
          
            access such services. Whether this will actually increase the  
            utilization of services is uncertain. To a large extent, the  
            authority to use telehealth to access such services will make  
            ordering such services more convenient for beneficiaries, but  
            will not increase overall utilization (since a beneficiary  
            would most likely have sought out services in another manner  
            without the bill). There also may be some increase in  
            utilization of services. For example a beneficiary may request  
            a test for a sexually transmitted infection for symptoms that  
            would have resolved on their own before the beneficiary sought  
            a test through traditional health care settings. The extent to  
            which that would happen is unknown.

           Increased costs in the tens of millions per year for Medi-Cal  
            coverage of telephonic and electronic patient management  
            services (General Fund and federal funds). The requirement in  
            the bill for Medi-Cal coverage of telephonic and electronic  
            patient management services goes beyond reproductive health  
            care and would be available for all appropriate health care  
            services. Based to an analysis of a similar requirement in  
            another bill by the California Health Benefits Review Program,  
            staff estimates that the overall increase in Medi-Cal spending  
            from this requirement could be between $10 million and $40  
            million per year.


          Background:  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 income up to 138% of the federal poverty level and to  
          children with household income 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.
          Current law provides that a face-to-face visit is not required  
          between a patient and a provider for Medi-Cal coverage of  
          teleopthamology, teledermatology, and teledentistry by store and  
          forward. In this case, store and forward means technologies that  
          capture information from a patient and send it to a provider at  
          a different location, for example an x-ray image taken in a  
          clinic and then sent to a dentist in another location for  
          examination. To date, the use of store and forward telehealth  
          technology in Medi-Cal does not allow patients to directly  








          SB 960 (Hernandez)                                     Page 2 of  
          ?
          
          
          request services or send information about symptoms directly to  
          health care providers (for example using a smart phone).




          Proposed Law:  
            SB 960 would require reproductive health care services  
          provided through telehealth to be covered by the Medi-Cal  
          program The bill would require telephonic and electronic patient  
          management services to be covered by the Medi-Cal program.
          Specific provisions of the bill would:
                 Add reproductive health care services to those  
               telehealth services that are covered under the Medi-Cal  
               program without the need for a face-to-face visit;
                 Require Medi-Cal managed care plans to cover  
               reproductive health care provided by telehealth store and  
               forward;
                 Specify the medical provider types that can provide  
               reproductive health care by telehealth store and forward;
                 Require telephonic and electronic patient management  
               services to be a benefit in the Medi-Cal program, in both  
               fee-for-service and managed care;
                 Limit the required reimbursement for services when the  
               telephonic or electronic patient management service is  
               related to another service or procedure provided to the  
               patient, when the telephonic or electronic patient  
               management service leads to a related service or visit,  
               when the health care provider receives a bundled or  
               capitated payment, or when the telephonic or electronic  
               patient management service is not initiated by the patient;
                 Define reproductive health care, by reference to another  
               statute.


          Related  
          Legislation:  
                 AB 2507 (Gordon) would expand the definition of  
               telehealth to include telephone, email, and synchronous  
               text. That bill is pending in the Assembly Appropriations  
               Committee.
                 SB 289 (Mitchell, 2015) would have mandated that health  
               insurers and health plans provide coverage for telephonic  
               and electronic patient management services provided by a  








          SB 960 (Hernandez)                                     Page 3 of  
          ?
          
          
               contracted physician or non-physician health care provider.  
               That bill was held on this committee's Suspense File.


          Staff  
          Comments:  SB 289 (Mitchell, 2015) would have mandated the  
          coverage of telephonic and electronic patient management  
          services for all health plans and insurers. According to the  
          analysis of that bill by the California Health Benefits Review  
          Program, the requirements to cover those service modalities  
          would have had an overall effect of increasing utilization of  
          health care services. As is described in the analysis of that  
          bill provided by Program, there is a good deal of uncertainty  
          about how the behavior of patients and providers would change  
          under that bill. By requiring reimbursement to providers for  
          telephonic and electronic patient management services, that bill  
          was very likely have to increased providers' willingness to use  
          such services with their patients, increasing utilization. Some  
          of the increased utilization of telephonic and electronic  
          patient management services would have reduced in person visits  
          with providers. For example, a patient may have found it more  
          convenient to call or email a provider with a question about an  
          ongoing health issue, rather than making an in person  
          appointment. In that case, the bill would not have reduced  
          overall utilization of services: it would have resulted in a  
          substitute visit. On the other hand, the ability to communicate  
          with a provider on the phone or through electronic means would  
          also have resulted in supplemental visits (i.e. more utilization  
          than would occur under current law). For example, a patient with  
          a minor question or who is experiencing a minor illness that  
          would not necessarily have led to an in person visit with a  
          provider would have been more likely to make a phone call or use  
          an electronic means to communicate with a provider. In those  
          cases, the bill would have resulted in an increase in overall  
          utilization of health care services.  
          The California Health Benefits Review Program modelled a variety  
          of scenarios for utilization under SB 289. Under all scenarios,  
          there would have been both substitution and supplementation of  
          in person visits. In all scenarios, however, the supplementation  
          would have resulted in an overall increase of utilization of  
          services and therefore an increase of health care costs. 


          The California Health Benefits Review Program analysis for SB  








          SB 960 (Hernandez)                                     Page 4 of  
          ?
          
          
          289 assumed that Medi-Cal managed care plans would not have been  
          able to pass the cost of the benefit mandate along to the state,  
          due to the state's bargaining power. However, the requirement in  
          this bill is specific to the Medi-Cal program and explicitly  
          includes both fee-for-service and managed care. Because Medi-Cal  
          managed care rates are required to be actuarially sound, staff  
          anticipates that Medi-Cal managed care plans would be able to  
          pass along increased costs to the state, once they were able to  
          demonstrate that utilization was occurring.


          Current law are regulation allows Medi-Cal managed care plans to  
          provide services to enrollees not specifically required under  
          law. Therefore, Medi-Cal managed care plans can already contract  
          with providers to allow the use of telehealth for reproductive  
          health care services, provided that the Medi-Cal managed care  
          plan and the provider can agree on the rates and terms that  
          would apply to those services.


          Current federal law and state regulation provides that Medi-Cal  
          enrollees can access family planning (including reproductive  
          health care) from any Medi-Cal provider, even when the provider  
          is not in the enrollee's Medi-Cal managed care plan network. By  
          authorizing the use of telehealth for reproductive health care  
          services, the bill will make it easier for Medi-Cal  
          beneficiaries to seek services outside of their managed care  
          plan network. To the extent that providers and Medi-Cal managed  
          care plans cannot agree on the rates and terms for providing  
          reproductive health care services through telehealth, the bill  
          is likely to result in a shift in the provision of health care  
          services from Medi-Cal managed care plan networks to  
          out-of-network providers.




                                      -- END --