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 --