BILL ANALYSIS                                                                                                                                                                                                    Ó



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

          SB 1098 (Cannella) - Medi-Cal:  dental services:  advisory group
          
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          |Version: April 21, 2016         |Policy Vote: HEALTH 9 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 9, 2016       |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  SB 1098 would establish a Denti-Cal Advisory Group  
          within the Department of Health Care Services to study and  
          oversee the policies and priorities of the Denti-Cal program and  
          to provide assistance and advice to the Department, the  
          Legislature, and the Governor.


          Fiscal  
          Impact:  
           Ongoing costs, likely between $50,000 and $150,000 per year to  
            provide staff support to the Advisory Group (General Fund and  
            federal funds). It is likely that the Advisory Group will need  
            staff support from the Department to assist it with gathering  
            information, interpreting data and program requirements, and  
            formulating recommendations.

           Unknown additional costs to provide Denti-Cal benefits to  
            children, to the extent that the Advisory Group is successful  
            in improving the utilization of Denti-Cal services (General  
            Fund and federal funds). Currently, the state spends about  
            $1.2 billion per year on Denti-Cal for adults and children.  







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            Estimates of the utilization rate for children vary, but are  
            all well below the goal set in the bill of 60% annual  
            utilization. On its own, the Advisory Group would not have the  
            authority to raise reimbursement rates or streamline program  
            requirements. However, to the extent that the Advisory Group  
            is able to work with the Department to take actions that  
            improve access to services, there will be increased  
            utilization costs. For every 5% increase in annual utilization  
            by children, the cost would be about $35 million per year.

           Unknown potential cost-savings due to increased use of  
            preventative dental services (General Fund and federal funds).  
            Regular dental care for children is likely to prevent dental  
            conditions, such as cavities, from becoming more serious  
            health problems that require more costly interventions later.  
            To the extent that the bill results in increased utilization  
            of preventative dental services by children in Medi-Cal, there  
            are likely to be reduced costs for more serious dental  
            services. Whether those avoided costs are greater than the  
            cost of providing greater access to preventative services is  
            unknown.


          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 incomes up to 138% of the federal poverty level and to  
          children with household incomes 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. Medi-Cal coverage includes full dental  
          coverage for children and limited dental coverage for adults.  
          (Adult coverage had been eliminated from the program in 2009 but  
          was partially restored in 2013.) Dental services in Medi-Cal,  
          referred to as Denti-Cal, are provided through the  
          fee-for-service system in most of the state. Denti-Cal services  
          are provided through dental managed care in Sacramento and Los  
          Angeles Counties (enrollment in dental managed care is mandatory  
          in Sacramento but not in Los Angeles).
          Recent analyses of the Denti-Cal program by the Bureau of State  
          Audits and the Little Hoover Commission have found low levels of  
          utilization (particularly by children), low provider  
          reimbursement rates, and a complicated system for providers to  








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          navigate. Estimates of the annual usage vary. According to the  
          Little Hoover Commission, in 2014 only 26% of eligible adults  
          saw a dentist. According to the Department, in 52% of eligible  
          children saw a dentist in 2015. According to the federal  
          government, 38% of eligible children saw a dentist in 2014.




          Proposed Law:  
            SB 1098 would establish a Denti-Cal Advisory Group within the  
          Department of Health Care Services to study and oversee the  
          policies and priorities of the Denti-Cal program and to provide  
          assistance and advice to the Department, the Legislature and the  
          Governor.
          Specific provisions of the bill would:
                 Establish a Dental Advisory Group within the Department;
                 Establish the duties of the Advisory Group to include  
               studying and overseeing the policies and priorities of  
               Denti-Cal with the goal of raising the utilization rate for  
               eligible children to 60% or greater and to provide  
               assistance and advice to the Department, the Legislature,  
               and the Governor regarding the program;
                 Establish the membership of the Advisory Group;
                 Prohibit compensation to the members of the Advisory  
               Group, except for per diems and reimbursement for expenses.


          Related  
          Legislation:  AB 2207 (Wood) would require the Department of  
          Health Care Services to undertake specified activities to  
          improve the Denti-Cal program. That bill is pending in the  
          Assembly Appropriations Committee.


          Staff  
          Comments:  There have been several actions taken recently to  
          improve the provision of dental services in Medi-Cal. In 2015,  
          the state eliminated the 10% rate reduction for dental services  
          that was enacted in 2009 (at a cost of $60 million per year). In  
          addition, the recently approved Medi-Cal 2020 waiver includes  
          $750 million over five years for incentive payments to increase  
          Denti-Cal utilization and improve outcomes for children.









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