BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
417 (Beall)
Hearing Date: 8/12/2010 Amended: 7/23/2009
Consultant: Katie Johnson Policy Vote: Health 11-0
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BILL SUMMARY: AB 417 would require buprenorphine services to be
included within the scope of Drug Medi-Cal when administered by
a licensed narcotic treatment program to treat opioid addiction
until January 1, 2015.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Increased and expanded $105 - $525 $210 - $1,050 $210 -
$1,050General/*
Drug Medi-Cal benefits Federal
DADP SPA $650 $575 $300
General/**
Development Federal
*October 1, 2008 - December 31, 2010 FMAP = 38%GF / 62%FF
January 1, 2011 - ongoing FMAP = 50%GF / 50%FF
FMAP = Federal Medical Assistance Percentage-the percent of
total costs paid by the federal government.
**January 1, 2012, through January 1, 2015, ongoing costs are
estimated to be $130,000.
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STAFF COMMENTS: SUSPENSE FILE.
Existing law establishes the Medi-Cal Drug Treatment Program
(Drug Medi-Cal). Each county contracts with the Department of
Alcohol and Drug Programs (DADP) for the provision of various
drug treatment services to Medi-Cal recipients. In counties that
elect not to contract with DADP, the department directly
arranges for the provision of services.
Existing law provides for the licensure of narcotic treatment
programs (NTPs) by DADP. NTPs provide treatment planning,
counseling, drug testing, and medical services to people
undergoing replacement narcotic treatment. Existing law defines
the services reimbursable under this program and authorizes
licensed NTPs to use methadone and levoalphacetylmethadol (LAAM)
for replacement narcotic therapy. LAAM is no longer available
and its use as a replacement narcotic treatment has been
discontinued by NTPs.
Commencing January 1, 2010, this bill would require that
buprenorphine services be available for replacement narcotic
therapy at licensed NTPs and would require the department to
establish a separate dosing fee for buprenorphine until January
1, 2015. Buprenorphine is currently available under the fee for
service Medi-Cal program if the
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patient obtains a treatment authorization request (TAR).
Approximately 2 percent of NTP clients use it., in addition to
those established for methadone and LAAM. Existing law requires
NTPs to be reimbursed for ingredient costs of methodone and LAAM
dispensed to Medi-Cal beneficiaries. This bill does not,
however, require NTPs to be reimbursed for buprenorphine
ingredient costs. In order to be consistent with current law,
staff recommends that the bill be amended to require NTPs to be
reimbursed for buprenorphine ingredient costs when the drug is
dispensed to Medi-Cal beneficiaries.
This bill would provide that its provisions should not be
implemented if the Director of the Department of Health Care
Services (DHCS), the administering agency of the Medi-Cal
program, determines that this bill would require an unbundling
of Drug Medi-Cal reimbursement rates.
This bill would require DADP to submit a report by January 1,
2014, to the appropriate committees of the Legislature on the
addition of buprenorphine to Drug Medi-Cal, as specified.
Additionally, to implement this bill DADP would need to research
and write a state plan amendment (SPA) for approval by the
federal Centers for Medicare and Medicaid Services (CMS) and
would need to make modifications to the Drug Medi-Cal billing
system. DADP would also need to employ a research analyst for
the 5 years that the program is in existence in order to track
data and prepare the required report to the Legislature.
Finally, DADP would require computer programmers to create a
program to capture data for the report. Costs for FY 2009-2010
would be approximately $650,000, $575,000 in FY 2010-2011,
$300,000 in FY 2011-2012, and $130,000 annually FY 2012-2013
through FY 2014-2015.
In FY 2009-2010, DADP expects an NTP aggregate caseload of
64,364 admissions, or 16,086 per quarter. Full-service treatment
of an NTP client with buprenorphine would be about $903 each
month, compared to $572 each month for a methodone patient. If 1
to 5 percent of NTP clients currently using methodone were to
switch to buprenorphine, after subtracting the current 2 percent
of NTP caseload that uses buprenorphine, the annual net increase
in costs is estimated to be $210,000 - $1,050,000. To the extent
that new NTP patients choose buprenorphine over methodone
treatments, each buprenorphine case would be $331 more per month
than methodone cases. Additionally, the federal patent
protection for the two buprenorphine products on the market,
Subutex and Suboxone, expires in October 2009. It is possible
that the state could purchase the drug in its generic form for
an unknown, but lower, price than noted above.
Medi-Cal costs are generally shared equally between the federal
government (FF) and state General Fund (GF). However, as a
result of the passage of the American Reinvestment and Recovery
Act (ARRA) in February of 2009, the Federal Medical Assistance
Percentage (FMAP) increased from 50 percent to 61.59 percent.
Thus, retroactively from October 1, 2008 through December 31,
2010, the federal government would pay for approximately 62
percent and the state General Fund would pay for 38
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percent of benefit-related Medi-Cal expenditures. After December
31, 2010, the FMAP reduces to 50 percent FF, 50 percent GF.
In a 2004 Legislative Analyst Office (LAO) report entitled,
"Remodeling" the Drug Medi-Cal Program, the LAO recommended that
buprenorphine be integrated into the Drug Medi-Cal program.
Several studies have been done on the length of the period for
buprenorphine maintenance treatment versus that of methodone. To
the extent that the treatment episode for a case with
buprenorphine treatment is of a shorter duration than that for a
case with methodone, the integration of buprenorphine into Drug
Medi-Cal as a treatment option comparable to methodone, could
work to contain Drug Medi-Cal costs and result in future
savings.
Staff recommends that the bill be amended to address the
conflicting language between Sections 11839.2, which is amended
by this bill, and 11875 of the Health and Safety Code.
Both of these sections were written in their current forms by SB
1838 (Chesbro), Chapter 862, Statutes of 2004. Section 11875
appears to allow a wide variety of replacement narcotic
treatment drugs to be available at an NTP. Section 11839.2
permits an NTP to administer only methodone and LAAM.
11839.2. The following controlled substances are authorized for
use in replacement narcotic therapy by licensed narcotic
treatment programs:
(a) Methadone.
(b) Levoalphacetylmethadol (LAAM) as specified in paragraph
(10) of subdivision (c) of Section 11055.
AND
11875. The following controlled substances are authorized for
use
in replacement narcotic therapy by licensed narcotic treatment
programs:
(a) Methadone.
(b) Levoalphacetylmethadol (LAAM) as specified in paragraph
(10) of subdivision (c) of Section 11055.
(c) Buprenorphine products or combination products approved
by the federal Food and Drug Administration for maintenance or
detoxification of opoid dependence.
(d) Any other federally approved controlled substances used
for the purpose of narcotic replacement treatment.