BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1098 (Cannella) - Medi-Cal: dental services: advisory group ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 21, 2016 |Policy Vote: HEALTH 9 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 9, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- 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. SB 1098 (Cannella) Page 1 of ? 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 SB 1098 (Cannella) Page 2 of ? 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. SB 1098 (Cannella) Page 3 of ? -- END --