BILL ANALYSIS
AB 2093
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Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2093 (V. Manuel Perez) - As Introduced: February 18, 2010
Policy Committee: Health Vote:15-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases payment by health plans and insurers
(carriers) for pediatric immunizations provided to privately
insured children by establishing reimbursement according to a
fee schedule and physician overhead costs. Specifically, this
bill:
1)Requires a carrier that covers childhood and adolescent
immunizations to reimburse a physician or physician group in
an amount not less than the actual cost of acquiring the
vaccine plus the cost of administration of the vaccine.
2)Requires a health plan to reimburse a physician or physician
group in an amount not less than the actual cost of acquiring
the vaccine plus the cost of administration of the vaccine for
immunizations that are not part of a current contract,
including, but not limited to, immunizations in the most
current versions of the Recommended Childhood and Adolescent
Immunization Schedules jointly approved by the federal
Advisory Committee on Immunization Practices, the American
Academy of Pediatrics, and the American Academy of Family
Physicians.
3)Defines actual cost of acquiring the vaccine as the private
sector cost per dose, as published on the most current
Pediatric Vaccine Price List of the federal Centers for
Disease Control and Prevention (CDC), plus reasonable costs
associated with shipping and handling.
4)Defines the cost of administration of the vaccine to include
physician time, clinical staff time, and office staff time, as
well as other practice expenses associated with providing the
AB 2093
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immunization such a storage, insurance, supplies, and medical
equipment. Requires reimbursement to be an amount not less
than that specified in the most current annual Medicare
physician fee schedule.
5)Exempts Medi-Cal and the Healthy Families Program from #1) but
not #2), above.
FISCAL EFFECT
1)GF costs and cost pressures of $500,000 to $1 million to
CalPERS for increased pediatric immunizations. This estimate
assumes increased costs for children enrolled in
state-supported health plans. Some of these children are in
managed care plans while others are in plans for which the
state pays dollar-for-dollar for increased treatment costs.
2)Periodic GF costs and cost pressures of more than $5 million
to increase payment on behalf of the several million children
enrolled in Medi-Cal and the Healthy Families Program due to
the secondary provision of this bill. According to one local
Medi-Cal managed care plan, this bill would increase a per
vaccine administrative cost from $9 to Medicare's $21.
3)Increased premium pressures across the private insurance
market of millions of dollars. This bill would apply to
approximately 5 million privately insured children. The
American Academy of Pediatrics (AAP) estimates the cost to
providers to acquire vaccines is 17% to 18% above the price of
the vaccine itself. AAP research shows a need for increases in
some vaccine reimbursement of 50%. Because this bill
establishes minimums, but no maximums, premium pressures could
be substantial. In addition, for self-funded employers,
increased costs will sometimes mean dollar-for-dollar
increases.
4)The administrative fee minimum established by this bill ranges
from $10 to $20. Actual total cost increases could be
susbtantial as the bill does not establish or define a maximum
reimbursement level for either the administrative fee or the
reasonable costs for shipping and handling.
5)This bill's main pricing provision does not address 30% of
children statewide with public coverage in Medi-Cal or the
Healthy Families Program. The sponsors of the bill indicate
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this bill addresses access problems privately insured children
may face if physicians start dropping pediatric immunization
due to cost issues. It is assumed the same access may exist in
the publicly funded health care market, but this bill fails to
address possible access issues for low-income children.
COMMENTS
1)Rationale . This bill is co-sponsored by the California
Medical Association (CMA) and the California Academy of Family
Physicians. According to the sponsors, health officials are
concerned that there will be an exodus by doctors providing
pediatric immunization due to low reimbursements.
The sponsors indicate the capitation rate paid by health plans
to pediatricians does not cover the full cost of acquiring and
administering children's vaccines. Current law requires health
plans to offer benefits for children's comprehensive
preventive care, including recommended immunizations, and
requires the costs of new vaccines to be considered in the
contracted rate. This bill goes several steps further to
require pediatric immunizations to be a distinctly priced
service with respect to direct and indirect costs.
2)Concerns . Health plans and insurers oppose this bill due to
ambiguous pricing terms that could lead to significant cost
increases that would lead to premium pressures. In addition,
health plans are concerned about the movement away from
capitated rates, a key feature of managed care.
3)Related Legislation . AB 1201 (V.M. Perez) in 2009 was similar
to this bill and was held on the Suspense File of this
committee. AB 1201 did not exempt Medi-Cal and the Healthy
Families Program from the bill's pricing requirements.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081