BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 1542
A
AUTHOR: Jones
B
AMENDED: June 24, 2010
HEARING DATE: June 30, 2010
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CONSULTANT:
5
Dunstan/cjt
4
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SUBJECT
Medical homes
SUMMARY
Establishes a definition of a medical home and prohibits
health care practitioners from representing that they are
provide medical homes unless they meet specified standards.
CHANGES TO EXISTING LAW
Existing law:
Establishes the Health Care Coverage Initiative and
provides that it shall operate pursuant to the special
Terms and Conditions of California's Section 1115
Demonstration Waiver on hospital financing in the Medi-Cal
program. Provides that coverage initiatives shall expand
health care coverage to low-income, uninsured residents of
10 selected counties for fiscal year (FY) 2007-08 through
FY 2009-10. Defines, for the purposes of the coverage
initiatives, a medical home as a "single provider or
facility that maintains all of an individual's medical
information" for the purposes of the coverage initiatives.
Continued---
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Provides that community and free clinics are eligible for
licensure as a primary care clinic and exempts other types
of primary care clinics. Exempts from licensing as a
clinic any place or establishment operated as a clinic or
office by one or more licensed health care practitioners
and used as an office for the practice of their profession.
This bill:
States legislative intent that medical homes should be
encouraged provided they adhere to quality standards and
that payors should recognize the added value of a medical
home by providing additional payment for the increased
services and overhead.
Defines "medical home" to mean, in part, a health care
delivery model in which a patient establishes an ongoing
relationship with a physician or other licensed health care
provider acting within his or her scope of practice,
working in a physician-led practice team to provide
comprehensive, accessible and continuous evidence-based
primary and preventative care and to coordinate the patient
health care needs across the health care system..
Restricts a practice or entity from calling itself a
medical home unless it met the following criteria:
Individual patients have an ongoing relationship
with a licensed health care provider, as specified.
A team of individuals at the practice level
collectively take responsibility for the ongoing
health care of patients.
The team is responsible for providing for all of a
patient's health care needs or taking responsibility
for appropriately arranging health care by other
qualified health care professionals.
Health care is provided or arranged for at all
stages of life including provisions of acute care,
chronic care, preventive services, and end-of-life
care.
Care is coordinated and integrated across all
elements of the complex health care system and the
patient's community.
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Contains specific quality and safety components.
Enhanced access to health care is available through
systems such as open scheduling, expanded hours, and
new options for communication between the patient, the
patient's licensed health care provider and other
health care professionals working in a team.
Establishes that medical homes can be provided only by a
community or a free clinic, a clinic or office that is
exempt from licensure as a primary care clinic, a county or
University of California, or a hospital-based clinic.
States that nothing in the bill shall be construed to:
Allow contracting that may result in the unlicensed
practice of medicine.
Change the scope of practice of any health care
provider.
Affect the ability of a nurse to operate under
standard procedures as allowed by law.
FISCAL IMPACT
AB 1542 has not been analyzed by a fiscal committee. The
bill is keyed nonfiscal.
BACKGROUND AND DISCUSSION
The author contends that high-cost, low quality
compartmentalized care, combined with a growing shortage of
physicians and a shrinking primary care infrastructure,
highlight the need to implement medical homes in
California. According to the author, AB 1542 defines what
is known as a patient centered medical homes (PCMHs), which
is a medical practice consists of a physician-directed team
of health care professionals who collectively take
responsibility for the ongoing care of the patient,
including acute care, chronic care, preventive services,
and end-of-life care. The author notes, that in the PCMH
model, the patient actively participates in decision making
and care is coordinated across the patient's community,
including hospitals, home health agencies, nursing homes,
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consultants, and other components of the health care
system, to assure that patients get the indicated care when
and where they need it. The PCMH uses evidence-based
medicine and information technology, including clinical
decision-support tools, guide decision making to improve
quality and safety and support optimal patient care,
performance measurement, patient education and
communication. The author states that developing a
standard, uniform definition of a PCMH could pave the way
to reducing health disparities, reining in costs, and
improving quality and outcomes in health care.
Background on medical homes
Many states have adopted medical home legislation and
programs, mostly for Medicaid and Children's Health
Insurance Program (CHIP) enrollees. Some states, such as
Iowa, Oregon, Pennsylvania and Vermont, also allow or
encourage private sector participation. Community Care of
North Carolina, the state's Medicaid program, is a working
example of a patient centered medical home. The goals of
the program are to improve the care of the Medicaid
population, control costs, develop community-based networks
to manage care of populations in partnership with the
state, and fully develop the medical home model. The
program has demonstrated excellent quality and cost
outcomes through disease management, evidence-based
clinical practice, and an emphasis on a physician-led team
approach. Two evaluations of this program indicate it
saved the State of North Carolina $195 to $215 million in
2003 and between $230 and $260 million in 2004 when
compared to historical fee-for-service.
In a 2008 report to the U.S. Congress, the federal Medicare
Payment Advisory Commission recommended that Congress
establish a budget-neutral payment increase for primary
care services furnished by primary-care-focused
practitioners (defined as those whose specialty designation
is defined as primary care or whose pattern of claims meets
a minimum threshold of furnishing primary care services).
The commission also recommended that Congress initiate a
Medicare medical home pilot project, with stringent
specified criteria and a physician pay-for-performance
program.
According to a 2007 Commonwealth Fund report, "Closing the
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Divide: How Medical Homes Promote Equity in Health Care,"
when adults have health insurance coverage and a medical
home, racial and ethnic disparities in access and quality
tend to disappear. The analysis, based on a national
survey, reveals that linking minority patients to a medical
home can help them better manage chronic conditions and
obtain critical preventive care.
The issue of medical homes is being closely examined in the
effort by the administration, Legislature and stakeholders
to fashion a new Medicaid Section 1115 waiver. Because a
hospital waiver renewal is a once-in-a-five-year
opportunity to ask the federal government to provide the
state flexibility and to seek federal funding for
demonstration projects that achieve federal budget
neutrality, the state has embarked upon a fairly
comprehensive waiver proposal. The discussions about
medical homes, in the context of the waiver, however, have
focused on specific enrollees such as seniors and persons
with disabilities.
The Senate Health Committee held a hearing entitled,
"Redesigning California's Medi-Cal Program: Examining the
Potential for Cost Savings and Program Improvements." The
focus was on the Department of Health Care Services (DHCS)
concept paper for the Medicaid Section 1115 waiver, which
emphasized possible changes for the SPD population. A
number of the witnesses at the hearing testified about
medical homes and the usefulness in controlling costs and
improving care with in Medicaid programs. DHCS testified
that they want to see a medical home concept instituted
that built on the delivery of services by the existing
managed care plans. Those intentions have been reflected
in the implementation plan and the proposal submitted to
the federal government.
Enactment of federal health care reform has given a boost
to medical homes. Among the major provisions of this
year's health care reform legislation and earlier
legislation that relate broadly to the issue of medical
homes:
State option to provide health home for those with
chronic diseases.
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Increased payments to primary care physicians in
Medicaid.
Grants for training in family medicine, general
internal medicine, general pediatrics and physician
assistantship.
Creation of a medical home pilot in Medicare for
physicians who elect to make their practice a medical
home.
Establishment of a state option to provide health
homes for Medicaid enrollees with chronic conditions.
The federal government will provide increased matching
funds, i.e. 90 percent of the costs, to states for 5
years.
Establishment of community health teams to support
the patient-centered medical home.
Organizations criticizing the model
The medical home model has its critics, including the
following major organizations:
The American College of Emergency Physicians
expresses caution because of their concerns there
could be a shifting of financial and other resources
to support the medical home model which could have
adverse effects on sectors of the health care system,
including emergency care. They also note that there
should be proven value in health care outcomes for
patients and reduced costs to the health care system
before there is widespread implementation of this
model.
The American Optometric Association is concerned
that medical homes may restrict access to eye and
vision care and requests that optometry be recognized
as a principal provider of eye and vision care
services within the PCMH.
The American Psychological Association states that
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Congress should ensure that careful consideration is
paid to the role of psychologists and non-physician
providers in the medical home model, which should be
more appropriately named the health home model.
Related bills
AB 342 (John A. P?rez), among its other provisions, defines
a medical home and requires seniors and persons with
disabilities enrolled in Medi-Cal and those enrolled in the
health care coverage initiative to be provided with medical
homes. This bill is set in Senate Health Committee June
30, 2010.
SB 208 (Steinberg and Alquist) is identical to AB 342.
This bill is set in Assembly Health Committee June 29,
2010.
SB 966 (Alquist) directs DHCS to establish a definition of
medical home, consistent with specified guidelines and to
establish a timetable for Medi-Cal managed care plans to
provide beneficiaries with a medical home. This bill is on
the Senate Appropriations suspense file.
AB 1076 (Jones) would have required DHCS to expand the
Medical Case Management and requires the Medi-Cal disease
management benefit to include the designation of a primary
care provider as a patient's medical home. This bill has
been amended to a different subject.
SB 771 (Alquist) would have required a health care service
plan or a health insurer, or a medical group that contracts
with a plan, that uses a pay-for-performance system for the
payment of providers to provide a differential payment to
providers who provide patients with a patient-centered
medical home. This bill has been amended to a different
subject.
Arguments in support
Supporters state that AB 1542 will add a functional
definition of "patient-centered medical home" to California
law. They argue that care delivered though a medical home
should be both better quality care and ultimately more
cost-effective care. They point out that medical home is a
term used to describe a model in which individuals use
medical practices as the basis for accessible, continuous,
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comprehensive and integrated care. Supporters assert that
that given the popularity of this concept among both
consumers and providers, it is important to have some
standards, and AB 1542 will ensure uniform standards of
quality and access. They also argue that more than 40
states have adopted medical home legislation and, as a
notable example, they point to North Carolina with a
Medicaid medical home program that saved the state several
hundred million dollars annually.
The California Association of Nurse Practitioners supports
AB 1542, if certain amendments are adopted. They are
concerned that the medical home definition is not inclusive
of all licensed primary care providers. They note that
many physicians in California rely on nurse practitioners
to provide high quality, cost effective care to their
patients and have integrated nurse practitioners into their
practice. They argue it is important to acknowledge the
importance of referrals as the medical home team does not
have to provide all of the services. They are also
concerned that the definition could impede the state's
implementation of federal health care reform.
PRIOR ACTIONS
Prior version of the bill
Assembly Health: 19-0
Assembly Floor: 72-0
COMMENTS
1. Broad definition of medical homes is needed. Due to
federal health care reform, there will be a dramatic
increase in health coverage Health care reform will extend
coverage to an estimated 4 million currently uninsured
individuals and will improve coverage for 21 million stat
residents. This unprecedented coverage expansion could
seriously strain the ability of health care providers to
meet the increased demand. The definition of medical homes
should be strong enough to ensure that health care is
delivered efficiently, but flexible enough to include a
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significant number and variety of practitioners.
The bill attempts to construct a broad definition of
medical homes, however, some additional amendments are
needed. The first amendment makes it clear that a
physician is in charge but does not need to be present when
the practice team is providing care. The second amendment
removes what could be interpreted as an unnecessary
restriction on the facility or entity that can call itself
a medical home. The third amendment deletes what can be
construed as a limitation on the care to be provided and
adds language on referrals. In many cases, especially for
those individuals who are chronically ill, the medical home
will not be able to provide the care, but will coordinate
the care and provide appropriate referrals.
Suggested amendments
Page 3, line 11
(a) (1) "Medical home," "patient-centered medical home,"
"advanced practice primary care," "health home," and
"primary care home" all mean a health care delivery model
in which a patient establishes an ongoing relationship with
a physician or other licensed health care provider acting
within the scope of his or her practice, working in a
physician- led directed practice team to provide
comprehensive, accessible, and continuous evidence-based
primary and preventative care, and to coordinate the
patient's health care needs across the health care system
in order to improve quality and health outcomes in a
cost-effective manner.
Page 3, line 26
(b) "Practice" means a clinic that is exempt from licensure
pursuant to subdivision (a) of Section 1206 that is owned
and operated by persons authorized by law to provide
comprehensive medical services to patients or a primary
care clinic that is licensed under subdivision (a) of
Section 1204.
(c) "Other entity" means a hospital-affiliated primary care
clinic or a clinic that is owned and operated by a county
or the University of California.
Suggested amendments
Page 4, beginning line 3
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b) A team of individuals at the practice level
collectively take responsibility for the ongoing health
care of patients. The team is responsible for providing for
all of a patient's health care needs or taking
responsibility for appropriately arranging health care by
other qualified health care professionals, including making
appropriate referrals. This responsibility includes health
care at all stages of life including provision of acute
care, chronic care, preventive services, and end-of-life
care.
2. There may be instances where the definition contained
in the bill should not describe or define a medical home.
For example, federal health care reform promotes the use of
medical homes. A practice should be able to call itself a
medical home for the purposes of applying for and being
eligible for receiving federal grants. Another exception
would be if a different definition of medical home is
specifically authorized by another statute, such as the
health care coverage initiative.
Suggested amendments
Page 5, after line 11
(h) Nothing in this section shall be construed to:
(4) Impede the ability of a practice or entity to call
themselves a medical home if specifically authorized by
statute and the use of the term medical home is for the
purposes of complying with that statute.
(5) Prevent or limit the ability of a practice or entity
to call themselves a medical home for the purposes of
participating in specific federal activities, including,
but not limited to, participating as a health home pursuant
to Section 2703, of the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the
federal Health Care and Education Reconciliation Act of
2010 (Public Law 111-152).
3. Health care providers must adhere to the bill's
definition, but the bill would not affect other entities,
such as health plans and insurers. For example, a health
plan could advertise that it offers subscribers a "medical
home," but the contracting physicians may not meet the
definition and could not represent themselves as providing
a medical home.
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Suggested amendment
Page 3, line 34
Notwithstanding any other provision of law, no practice or
other entity shall represent itself as a medical home
unless it must include includes all of the following
characteristics:
POSITIONS
Support: California Academy of Family Physicians (sponsor)
American Congress of Obstetricians and
Gynecologists, District IX
California Academy of Physician Assistants
California Association for Nurse Practitioners
(support if amended)
California Association of Physician Groups
California Chapters of the American College of
Physicians
California Chiropractic Association
California Medical Association
California Psychiatric Association
Latino Coalition for a Healthy California
Osteopathic Physicians and Surgeons of California
Oppose: None received
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