BILL ANALYSIS
AB 1817
Page 1
ASSEMBLY THIRD READING
AB 1817 (Arambula)
As Amended April 26, 2010
Majority vote
HEALTH 18-0 APPROPRIATIONS 16-0
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|Ayes:|Monning, Fletcher, |Ayes:|Fuentes, Conway, Ammiano, |
| |Ammiano, Carter, Conway, | |Bradford, Coto, Davis, |
| |Caballero, Emmerson, Eng, | |Hill, Hall, Harkey, |
| |Gaines, Hayashi, | |Miller, Nielsen, Norby, |
| |Hernandez, Jones, Bonnie | |Skinner, Solorio, |
| |Lowenthal, Nava, | |Torlakson, Torrico |
| |V. Manuel Perez, Salas, | | |
| |Smyth, Audra Strickland | | |
| | | | |
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SUMMARY : Requires the California Department of Corrections and
Rehabilitation (CDCR) to maintain a statewide utilization
management (UM) program, ensure that each adult prison employ
the same program, and annually report to the Legislature, as
specified. Specifically, this bill :
1)Makes specified Legislative findings and declarations related
to rising pharmacy and medical costs for state prison inmates
and states that controlling such costs is a top priority for
the Legislature.
2)Defines "UM program" as a strategy designed to ensure that
health care expenditures are restricted to those that are
needed and appropriate by reviewing patient-inmate medical
records through defined criteria or expert opinion, or both.
3)Requires CDCR to do the following:
a) Maintain a statewide UM program that includes, but is
not limited to objective, evidence-based medical necessity
criteria and utilization guidelines; the review, approval,
and oversight of referrals to specialty medical services;
management and oversight of community hospital bed usage
and supervision of bed eligibility; case management for
high medical risk and cost patients; and, a preferred
provider organization (PPO) and related contract
AB 1817
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initiatives that improve the quality of care;
b) Develop and implement policies and procedures to ensure
that all adult prisons employ the same UM program that
supports specified CDCR goals and provide the Joint
Legislative Budget Committee and the appropriate fiscal and
policy committees of the Legislature with a copy of these
policies and procedures by January 1, 2011;
c) Establish annual quantitative UM performance objectives
to promote greater consistency in health outcomes and other
specified goals, report to the Legislature the specific
objectives it intends to accomplish in each adult prison
during the next 12 months by January 1, 2011, and makes the
requirement for submitting the report inoperative on
January 1, 2015; and,
d) Report to the Legislature on March 1, 2012, and each
March 1 thereafter until March 1, 2016, the following
information:
i) The extent to which CDCR achieved specified
objectives issued the previous March and the most
significant reasons for achieving or not achieving these
objectives;
ii) A list of adult prisons that achieved and did not
achieve specified objectives and the most significant
reasons for the success or failure in achieving these
objectives;
iii) Specific objectives CDCR and each adult prison
intends to accomplish in the next 12 months; a
description of planned and implemented initiatives
necessary to accomplish the next 12 months' objectives
statewide and for each prison; and, describe initiatives
that were considered and rejected and reasons for their
rejection; and,
iv) The costs for inmate health care for the previous
fiscal year, both statewide and at each adult state
prison and a comparison of costs from the prior and
current fiscal year both statewide and at prison.
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4)States the Legislature's intent that specified requirements on
CDCR will result in no increases in cost to the state.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill imposes no new net costs as this bill
essentially codifies current CDCR/federal medical receivership
practice and planning.
COMMENTS : The author states that this bill, which is sponsored
by the federal Receiver, will reduce the high cost of prison
health care that results from over-utilization of contract
physicians and hospital beds. Specifically, this bill will
maintain the operation of the restructured CDCR UM program and
couple it with strong legislative oversight. The author states
that instituting the management tools contained in this bill,
according to estimates from the Receiver, would reduce contract
medical care costs by up to $100 million.
This bill is part of a package of bills that are sponsored by
the Federal Receiver (Receiver) to reduce prison health care
costs and bring the system up to Constitutional levels. The
Receiver states that this bill is necessary to ensure that CDCR
maintains the statewide UM program, which was established under
the Receiver. Health Management Systems (HMS) also supports
this bill as it would bring significant cost savings to
California by implanting a new UM function for California
inmates. HMS states that it has worked with state and federal
governments, including Medicaid and CDCR to improve quality and
contain costs. While HMS is supportive of the bill, the
organization recommends that the bill include language to
clearly separate the functions of the UM program from the entity
responsible for paying PPO claims, which will limit perceived
conflicts of interest.
Analysis Prepared by : Martin Radosevich / HEALTH / (916)
319-2097
FN: 0004365