BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
830 (Cook)
Hearing Date: 8/24/2009 Amended: 8/17/2009
Consultant: Katie Johnson Policy Vote: Health 10-0
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BILL SUMMARY: AB 830 would delete current statutory references
to specific drug compendia and would replace them with drug
compendia approved by the federal Centers for Medicare and
Medicaid Services (CMS) for mandated "off-label" coverage of
medication by health care service plans, health insurers, and
Medi-Cal.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Increase in reimbursement unknown, but
likely in General/*
for off-label drug use by the hundreds of
thousands Federal
Medi-Cal beneficiaries or millions of dollars
*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.
For drugs that are prescribed, but ineligible for FMAP,
reimbursements would be paid 100% by the General Fund.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Existing state law references various drug compendia for
purposes of the coverage of off-label drug use by health care
service plans, health insurers, and Medi-Cal. Off-label drug use
refers to the use of drugs to treat conditions that are not
specifically approved by the federal Food and Drug
Administration (FDA) for that purpose. If an off-label drug is
listed in a compendium recognized by CMS, Medi-Cal, Medicare,
and health plans and insurers are required to pay for it as a
treatment, as specified. Drugs are prescribed "off-label" to
treat life-threatening or chronic conditions such as cancer,
HIV, and AIDS.
This bill would delete references to the American Medical
Association Drug Evaluations, which is no longer in publication,
and the United States Pharmacopoeia Dispensing Information,
which was purchased by the Thomson Micromedex DrugDex.
This bill would insert references to the following compendia, as
approved by CMS:
1) the American Hospital Formulary Service Drug Information,
where not already referenced;
2) the Elselvier Gold Standard's Clinical Pharmacology;
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AB 830 (Cook)
3) the National Comprehensive Cancer Network Drug and Biologics
Compendium; and 4) the Thomson Micromedex DrugDex.
In federal law, Medi-Cal is required to cover fewer drugs for
off-label use in chemotherapeutic and HIV/AIDS treatment when
compared to Medicare and other health plans and insurers;
Medi-Cal is only required to cover drugs in the American
Hospital Formulary Service Drug Information, the United States
Pharmacopeia Drug Information (or its successor publications),
and the DrugDex Information System.
Since federal Medicaid law lists two of the four compendia added
to state law by this bill, these provisions could require
Medi-Cal to cover off-label drug use, if all other conditions
were met, from more compendia than are prescribed in federal law
and that would be eligible for federal financial participation.
To the extent that Medi-Cal providers prescribe drugs that are
included in a compendia not approved for federal matching funds
in federal law, there would be an increase in General Fund
expenditures for off-label drug use by Medi-Cal beneficiaries in
an unknown amount, likely in the hundreds of thousands or
millions of dollars.
Staff recommends that the bill be amended to specify that only
compendia that are authorized by federal law for Medicaid
programs may be used by Medi-Cal in order to mitigate any
potential unmatched General Fund expenditures for off-label drug
use.