BILL ANALYSIS
AB 2127
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2127 (Nestande) - As Introduced: February 18, 2010
SUBJECT : Medi-Cal: nonemergency transportation services: broker
pilot program.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to establish a two-year pilot program to evaluate the provision
of non-emergency medical transportation (NEMT) services in the
Medi-Cal Program using a broker model. Specifically, this bill :
1)Defines "NEMT broker model" as an arrangement in which the
state contracts with a broker to provide services ranging from
the management of the administrative task of screening
transport requests to the management of the full scope of the
NEMT Medi-Cal benefit.
2)Requires DHCS to establish monitor and evaluate outcomes and
savings of a two-year pilot program using the non-emergency
medical transportation broker model program.
3)Requires DHCS to select at least three consenting counties to
participate representing rural and urban areas.
4)Requires DHCS to report its findings and recommendations of
the results to the fiscal committees of the Legislature.
5)Authorizes DHCS to implement the program statewide at any time
and continue operation of the program indefinitely.
EXISTING LAW :
1)Establishes the federal Medicaid Program, Medi-Cal in
California, administered by DHCS, to provide comprehensive
health care services and long-term care to pregnant women,
children, and people who are aged, blind, and disabled.
2)Provides, as a Medi-Cal covered benefit, necessary NEMT to and
from health care providers for specified eligible
beneficiaries.
3)Establishes a Treatment Authorization Request (TAR) system for
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certain Medi-Cal benefits that are reimbursed on a
Fee-For-Services (FFS) reimbursement basis.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
intended to implement the recommendation of a 2009 Legislative
Analyst's Office (LAO) Report. The LAO found that the
existing NEMT system showed potential for improvement and that
it was not functioning as well as it could. Specifically, the
LAO concluded that the TAR process was cumbersome and
expensive and that the availability of the NEMT service was
uneven around the state. The LAO concluded that NEMT program
improvements, including service delivery and cost savings
might be possible through the development of a broker model.
2)BACKGROUND . Federal law requires Medi-Cal to provide specific
benefits and will reimburse for certain additional benefits
called "optional benefits." NEMT is a mandatory benefit for
those enrollees who have a documented medical condition that
prevents them from traveling via ordinary means of
transportation such as taxies or buses. The most common
example is a person who routinely receives dialysis treatments
which tend to leave the recipient unsteady for a time after
the treatment. The Medi-Cal Program offers three forms of
NEMT: a wheelchair van, a gurney van, and an ambulance. The
NEMT benefit is available both to Medi-Cal enrollees in
managed care plans and to enrollees who receive treatment
through FFS providers. The 2009 LAO Report estimated that
Medi-Cal provides about $100 million ($50 million General
Fund) in NEMT services through FFS arrangements at that time.
(This was based on the 50/50 sharing ratio of federal/state
funds in effect at the time. A temporary 62/35 federal/state
sharing ratio is in effect currently.) According to the LAO,
comprehensive data regarding how much Medi-Cal managed care
plans spend on NEMT is not available because these costs are
embedded in the rates paid to the health plans.
3)TARS . In order to ensure that enrollees have a condition that
requires NEMT services, Medi-Cal requires the transportation
provider to submit a TAR to Medi-Cal Program staff. The TARs
are approved, modified, or denied. Providers must submit
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documentation along with each TAR, such as a prescription or
order signed by a physician, dentist, or podiatrist that
confirms the medical reasons necessitating the use of NEMT.
According to a 2003 Medi-Cal Policy Institute (MPIR) Report,
"Medi-Cal Treatment Authorization and Claims Processing:
Improving Efficiency and Access to Care," Outlook Associates,
Inc., the Medi-Cal TAR system does not meet the standards of
most other systems. It requires submission of a form, usually
by mail, and turnaround time is up to two weeks, as compared
to two days in other systems.
The 2003 MPIR Report also states that it has become more of a
retroactive payment approval process for services that have
been already rendered than the review of medical necessity and
quality that was originally intended and is typical in other
systems. The 2003 MPIR Report criticized Medi-Cal for not
performing routine cost-benefit analysis to identify whether a
particular service warrants a TAR.
Finally, with regard to NEMT, the 2003 MPIR Report pointed out
that a beneficiary requiring hemodialysis could also require
transportation to the hemodialysis center. However, the TARs
for these related services aren't coordinated and may even be
sent to different offices. The 2009 LAO Report states that
discussions with industry participants indicate that most
Medi-Cal NEMT recipients are dialysis patients. This is due
in part to the administrative effort needed to obtain TAR
approvals and NEMT companies are more likely to make the
effort for those requiring dialysis on an ongoing basis, since
each approved TAR is good for up to a year of services. The
2003 MPIR Report recommended that hemodialysis transportation
be approved at the same time the service is requested.
1)LAO 2009 BUDGET ANALYSIS . According to the 2009 LAO Budget
Analysis, access to NEMT providers may be uneven around the
state. Enrollees who are aged, blind, or disabled use nearly
all of the FFS NEMT wheelchair van services. Roughly
one-third of these enrollees live in Los Angeles County, but
over one-half of all wheelchair van services in the state
occur in Los Angeles County. The LAO concludes that
transportation brokers could manage NEMT more efficiently and
that a number of other states have achieved Medicaid program
improvements by contracting some or all of their NEMT services
to a transportation broker. LAO asserts that by managing the
NEMT benefit more efficiently, such brokers can better match
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patients with appropriate providers, improve the quality of
services provided, and reduce costs.
2)TRANSPORTATION BROKERS . The LAO describes these brokers as
offering a range of service levels, from handling only the
administrative tasks of screening transport requests to
managing the full scope of the NEMT benefit. Under the
full-scope approach, the broker may be likened to a managed
care plan specifically for NEMT. Brokers often contract on a
per member, per month basis for their services, similar to
more traditional managed care plans that provide comprehensive
benefits. In exchange, the broker screens NEMT companies and
subcontracts with vendors it chooses to establish a network of
service providers. The broker also establishes a single point
of contact for patients to call when they need transportation
services. When a patient calls to request transportation, the
broker determines whether a wheelchair van or other level of
service would be more appropriate, depending on the patient's
individual circumstances. The broker then finds a provider
that serves that patient's area and arranges with the provider
to pick up the patient.
3)RISKS. The LAO also cites the risk of broker management. As
with other managed care arrangements, brokers with capitation
contracts benefit financially by providing fewer services to
Medicaid enrollees, creating the incentive to deny more
services than may be appropriate under program requirements.
Also, some NEMT providers who serve FFS Medi-Cal may not wish
to contract with a broker or may not meet the broker's
standards for quality of service. A switch to a broker may
create disruptive situations for some Medi-Cal beneficiaries
in cases in which a Medi-Cal enrollee's customary FFS
transportation provider is not part of the broker's network.
4)PILOT PROJECT APROACH . The LAO recommended implementation as
a pilot project because it is such a substantial shift in
policy and it is not clear whether a statewide FFS benefit or
a regional contracting system operated by one or more brokers
would be more cost-effective and best improve service
delivery. The recommendation is to operate a pilot in several
counties and include both rural and urban areas to allow the
state to evaluate the model in both settings. The state could
ensure that the pilot project costs no more than the present
cost of these services to the Medi-Cal Program by limiting the
total reimbursement to the broker to the amount budgeted for
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NEMT in the counties where this new approach would be tried.
5)OPPOSITION . the California Medical Transportation Association
(CMTA) writes in opposition that the broker system adds
nothing to California's existing method of very tightly
controlling the service, while just adding an extra
"middleman," much like health maintenance organizations or
HMOs insinuate themselves betweens patients and providers.
CMTA explains that all NEMT vehicles must be specially
equipped to meet specific (and costly) requirements (e.g. 58
inch doors, emergency exits, lift ramps floor fasteners for
wheelchairs, etc.) set forth in Title 22 of the California
Code of Regulations. All NEMT providers must be approved by
Medi-Cal Enrollment and produce evidence of having an
established place of business, insurance (liability, vehicle,
and workers' compensation), and ability to perform pursuant to
an agreement with DHCS. NEMT reimbursement rates were last
increased in 2000 which was the first increase since 1985.
The 2000 increase was 20%, the only upward adjustment in 25
years. While Medi-Cal rates increased less than 1% a year, it
was far exceeded by the NEMT costs of doing business (vehicle
acquisition and maintenance, fuel, insurance, wages and
taxes). In other words, the 20% increase in 2000 was quickly
eaten up by increased business costs years ago and now many of
the companies providing this cost effective service are going
out of business. CMTA further states that adding a "broker"
to the mix is just adding one more mouth to the ever shrinking
payment pie.
CMTA also explains that the current allowance of patient
choice would be replaced by broker selection. To a
considerable extent, NEMT presently is a highly personalized
service. Patients are able to move from one NEMT provider to
another if the service is not reliable or acceptable. This is
vitally important especially for dialysis patients. To gain
full value of their treatment, they need to be on a dialysis
machine for a full four hours. Dialysis clinics run on tight
time schedules in order to accommodate patient appointments.
A late arrival means less treatment time. Waiting for long
periods for transportation after treatment causes unnecessary
discomfort and pain. Elderly and disabled patients do not
deal well with change; stable and predictable relationships
are important to them. Many of these patients also have
communication/language difficulties that brokers may be
ill-equipped to handle or just plain not sensitive to in the
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first place. Additionally, a broker system could seriously be
open to fraud as many in the transportation industry and the
ethnic communities it serves have experienced.
6)POLICY CONERNS:
a) Statewide Implementation . This bill authorizes DHCS to
implement the program statewide at any time and continue
operation of the program indefinitely and only requires a
report to the fiscal committees. Shouldn't the report be
received by the policy committee as well and reviewed,
prior to statewide implementation? Does the Legislature
wish to delegate such a broad authority to the executive
branch?
b) Broker Model Service Provider . Neither the author, nor
the LAO have indicated any providers interested in becoming
a broker. Given the opposition of the CMTA and the low
Medi-Cal reimbursement level, is it likely that there will
be any providers interested in participating?
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
California Medical Transportation Association
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097