BILL ANALYSIS
AB 1817
Page 1
Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1817 (Arambula) - As Amended: April 26, 2010
Policy Committee: HealthVote:18-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Department of Corrections and
Rehabilitation (CDCR) to maintain a statewide utilization
management (UM) program, defined as a strategy to ensure health
care expenditures are restricted to those most needed and
appropriate by reviewing patient-inmate medical records through
defined criteria, expert opinion, or both. Specifically, this
bill requires CDCR to:
1)Maintain a statewide UM program that includes:
a) objective, evidence-based medical necessity criteria and
guidelines;
b) review and approval of referrals to specialty medical
services;
c) management of community hospital bed use;
d) case management for high medical risk and cost patients;
e) a preferred provider organization (PPO) and contract
initiatives to improve care.
2)Ensure all adult prisons employ the same UM program.
3)Establish annual quantitative UM performance objectives.
4)Provide reports to the Legislature regarding policies and
procedures, objectives and performance outcomes.
FISCAL EFFECT
No new net costs as this bill essentially codifies current
CDCR/federal medical receivership practice and planning. The
AB 1817
Page 2
receivership estimates continued implementation of the UM
program will result in annual GF savings in the range of $100
million. UM is a significant component of the receiver's ongoing
prison health care "turn-around plan" as well as the governor's
proposal to reduce correctional health care spending by $800
million in 2010-11.
COMMENTS
1)Rationale . According to the receivership, the sponsor of this
measure, while this bill is not necessary for implementation
of the ongoing UM program, it is important to "to ensure the
sustainability of a cost-effective prison health care system
once the Receivership has returned control of prison health
care back to some State entity. By codifying these nationally
recognized standards of effective medicine, the legislature
will establish some oversight of the State prison health care
system in order to ensure that it does not once again
backslide to an unconstitutional level in the future."
2)The problem as stated by the receivership in its October 2009
Utilization Management Project Charter, is a lack of a
standardized process of access to specialty care, which has
contributed to appointment backlogs, resulting in delayed
access to care. In addition, the lack of standardized
processes related to long-term bed needs, results in infirmary
beds used for non-intended purposes and longer stays.
According to the receivership in its April 2010 Cost
Containment Report, the current UM referral management and
institutional bed management processes are improving care and
reducing costs.
3)Background - The California Prison Health Care Receivership is
a non-profit organization created to house the activities of
the federal Receiver. The Receivership was established by U.S.
District Court Judge Thelton E. Henderson as the result of a
2001 class action law suit (Plata v. Schwarzenegger) over the
quality of medical care in the state's 33 prisons. The court
found that the care violated the Eighth Amendment of the U.S.
Constitution, which forbids cruel and unusual punishment of
the incarcerated.
In 2006, the court appointed the receiver to oversee the
delivery of inmate medical care within CDCR. According to the
AB 1817
Page 3
Department of Finance (DOF) in a 2010-11 budget change
proposal, since 2006 the receiver has significantly increased
the number of clinical staff, clinician pay, access to CDCR
clinicians, and referrals to specialists and contracted
providers, which has resulted in the cost of inmate medical
services increasing from $883 million in 2005-06 to $2 billion
in 2008-09 with a slight reduction in expenditures anticipated
for 2009-10 and 2010-11.
4)Related Legislation .
a) AB 1785 (Galgiani), also before the committee today, and
also sponsored by the receiver, requires CDCR to maintain a
statewide telemedicine services program.
b) AB 2747 (Lowenthal), also before the committee today,
and also sponsored by the receiver, requires CDCR to
maintain and operate a comprehensive pharmacy services
program.
c) AB 2668 (Galgiani), on this committee's Suspense File,
requires CDCR to install telemedicine fixtures and
broadband infrastructure in the CDCR Medical Facility.
d) AB 2222 (Galgiani), on this committee's Suspense File,
authorizes CDCR to install telemedicine fixtures and
broadband infrastructure in new or existing buildings
authorized pursuant to phase II of AB 900.
e) AB 2233 (Nielsen), on this committee's Suspense File,
requires CDCR to create a new system of inmate health care
delivery and work with UC and the receiver to assess the
concept of turning inmate health care over to the UC
system.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081