BILL ANALYSIS
AB 1076
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1076 (Jones) - As Amended: May 5, 2009
Policy Committee: Health Vote:19-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill expands a current Medi-Cal medical case management
program (MCM) and administered by the California Department of
Health Care Services (DHCS) to include frequent users of health
care. Specifically, this bill:
1)Requires DHCS to include additional Medi-Cal beneficiaries in
MCM, if they have more than four emergency department visits
in the past year, two or more chronic conditions, are not
enrolled in managed care or eligible for Medicare, and are in
need of preventive health care.
2)Establishes a patient's medical home with their primary care
provider within a current disease management program
administered by DHCS. The term medical home refers to the
concept that appropriate medical care managed and coordinated
by a personal physician leads to better health outcomes.
FISCAL EFFECT
1)Annual increased costs of $1 million (25% GF) to $2 million
(25% GF) to DHCS to expand the MCM program. This estimate
assumes 1,000 to 2,000 additional MCM enrollees as a result of
the expanded scope of this bill.
2)Significant annual savings of $4 million (50% GF) to $8
million (50% GF) to the extent MCM improves access to care,
the provision of preventive care, and reduces costs by
shifting health care to more appropriate care settings.
Earlier estimates by DHCS in 2001-02 and 2002-03 assumed
savings of more than $400,000 per year per nurse case manager
in the MCM program. An estimate of a similar Senate Bill last
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year included savings of $12.5 million (50% GF) when heard in
this committee.
COMMENTS
1)Rationale . This bill requires DHCS to expand MCM to focus on
some high-cost Medi-Cal beneficiaries to improve health
outcomes, stabilize care, and reduce Medi-Cal costs in a
relatively short period of time. According to data, 5% of
Medi-Cal enrollees account for 60% of program costs, which
were more than $35 billion in 2007-08. The author indicates
the Frequent Users of Health Services Initiative recently
funded by philanthropy provides strong evidence for the
efficacy and cost savings of such efforts.
2)Case management programs target members with an array of
health conditions and risks, including multiple chronic
conditions, such as diabetes and asthma. Staff in the MCM
establish care plans individualized for patients. MCM staff
are registered nurses who coordinate and authorize outpatient
services to expedite a Medi-Cal beneficiary's hospital
discharge to a private residence or keep patients safely at
home. Nurse case managers do not provide direct patient care,
but instead work directly with hospitals, home health
agencies, physicians, and other Medi-Cal providers to ensure
the appropriate and expedited authorization of medically
necessary services. The goals of MCM are to ensure safe
hospital discharges, continuity of medical care, and to
stabilize recipients with complex, chronic and/or catastrophic
medical conditions.
3)The Frequent Users of Health Services Initiative is a
five-year, $10-million project recently funded by the
California Endowment and the California HealthCare Foundation.
The significant cost of the pilot project that has been
conducted is largely due to the lack of public funding from a
program such as Medi-Cal. The pilot program literally had to
purchase a range of medical, social, and employment services,
with no federal or state matching funds.
This bill creates more public support and savings for this kind
of effort. The initiative has focused on a small group of
frequent users of emergency medical services to provide less
intensive and more appropriate on-going care. The participants
have multiple risk factors, including mental illness,
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substance abuse, homelessness, and a lack of social supports.
Local pilot sites have included Alameda, Santa Clara, Santa
Cruz, Tulare, Los Angeles, and Sacramento counties.
Statistically significant pilot results show major cost
reductions over a two-year period. For example, the frequent
users in the pilot program initially had an average of 13
emergency room visits per year and related costs of $13,000.
With supportive services and intervention provided under the
pilot, costs and visits dropped by 60% over a two-year period.
Hospital in-patient charges showed an even greater drop in the
pre- and post-pilot enrollment periods, with hospital charges
starting at more than $60,000 and dropping by 80% to $12,000.
4)Related Legislation . SB 1738 (Steinberg) in 2008 required DHCS
to establish the Frequent Users of Health Care Services Pilot
Program until 2013 at six sites statewide and with a combined
enrollment of 2,500 beneficiaries. SB 1738 was vetoed due to
cost concerns.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081