BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 2352
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AUTHOR: John A. Perez
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AMENDED: As Introduced
HEARING DATE: June 23, 2010
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CONSULTANT:
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Dunstan/jl
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SUBJECT
Medi-Cal: organ transplants: antirejection medication
SUMMARY
Requires Medi-Cal beneficiaries to remain eligible to
receive Medi-Cal coverage for anti-rejection medication for
up to two years following an organ transplant, unless
during that time the beneficiary becomes eligible for
Medicare or private health insurance that would cover the
medication.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes the Medicaid program to provide comprehensive
health benefits to low-income persons. Mandates states
that elect to provide Medicaid benefits to cover certain
eligibility groups, such as low-income children, those
receiving supplemental security income (SSI) and others.
Allows states the option of providing Medicaid benefits to
other groups, including disabled persons who are not
eligible for SSI or children in families with incomes above
the mandatory coverage level.
Continued---
STAFF ANALYSIS OF ASSEMBLY BILL 2352 (John A. Perez) Page
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Existing state law:
Establishes the Medi-Cal program as California's Medicaid
program, administered by the Department of Health Care
Services (DHCS), which provides comprehensive health care
coverage for low-income individuals and their families;
pregnant women; elderly, blind, or disabled persons;
nursing home residents; and refugees who meet specified
eligibility criteria. Establishes that the Medi-Cal
program comprises a uniform schedule of health care
benefits, including transplants for eligible beneficiaries,
subject to utilization controls. Provides limited Medi-Cal
benefits for specified life-sustaining treatments,
including dialysis. Establishes eligibility criteria for
dialysis-only benefits related to diagnosis, net worth and
absence of other coverage. Provides that eligible
beneficiaries for dialysis benefits shall pay a share of
cost based on their net worth.
STAFF ANALYSIS OF ASSEMBLY BILL 2352 (John A. Perez) Page
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This bill:
Requires Medi-Cal beneficiaries to remain eligible to
receive Medi-Cal coverage for anti-rejection medication for
up to two years following an organ transplant unless during
that time the beneficiary becomes eligible for Medicare or
private health insurance that would cover the medication.
FISCAL IMPACT
According to the Assembly Appropriations Committee
analysis, this bill would result in annual costs of
$500,000 (100 percent General Fund) to provide
post-transplant anti-rejection medication to Medi-Cal
beneficiaries who had formerly been on dialysis-only
Medi-Cal and who would either return to that program or
require a new kidney transplant. In addition, this bill
would result in reduced Medi-Cal costs to the extent this
bill reduces the need for a return to Medi-Cal for the
purposes of receiving dialysis or a new transplant. An
additional transplant or continuation of dialysis-only
treatment costs between $50,000 and $100,000 per year.
BACKGROUND AND DISCUSSION
According to the author, there are currently some patients
that qualify for Medi-Cal under a federal rule allowing
coverage for patients with end-stage renal disease (on
dialysis). The author notes that those patients, if they
are able to receive a kidney and have an organ transplant,
will only receive coverage for their immunosuppressive
medication for one year post-transplant, as the person's
Medi-Cal eligibility ends when he or she no longer meets
the eligibility requirement of end-stage renal disease.
The author states that patients in this particular group
may not be eligible for Medi-Cal under any other
eligibility criteria, and they may also be ineligible for
Medicare, either because they have not paid into Social
Security for a sufficient time or because of their
immigration status. The author states that if these
patients were dual-eligible for Medicare and Medi-Cal,
Medicare would pay for immunosuppressive coverage for an
additional two years, so the patient would have
immunosuppressive drugs for a total of three years
STAFF ANALYSIS OF ASSEMBLY BILL 2352 (John A. Perez) Page
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post-transplant. The author says that because patients who
have had a kidney transplant must have immunosuppressive
drugs or their body will naturally reject the organ, they
have a medical need for the antirejection medication to
prevent kidney failure, being placed back on dialysis or,
in a worst-case scenario, death. The author argues the
state has already paid for the organ transplant surgery
(the cost of transplant surgery is $50,000 to $100,000
according to the author) and it makes no sense to drop
Medi-Cal coverage for these patients after only a year when
many organ transplant patients are not yet stable or ready
to enter the workforce.
Background
This bill would address the situation of a Medi-Cal
beneficiary who has received an organ transplant. The
beneficiary may have gained Medi-Cal eligibility through
the special treatment eligibility option for persons with
end stage renal disease, or by meeting other Medi-Cal
eligibility criteria. The renal disease eligibility is not
full scope and covers only dialysis and related services.
As the renal disease advances, the beneficiary is likely to
become disabled and then become eligible for full scope
Medi-Cal. Medi-Cal covers the cost of the major organ
transplant procedure and the anti-rejection medication.
However, as the beneficiary improves, they may lose their
Medi-Cal eligibility if they no longer meet the criteria
for disability, as determined by a review team. If the
beneficiary no longer is considered disabled, they will
lose their Medi-Cal eligibility, unless they retain
eligibility by meeting other criteria. Once they have lost
their eligibility, they will not have their antirejection
medicines covered by Medi-Cal.
While the beneficiary is enrolled in Medi-Cal, the federal
government is paying its share, generally 50 percent, of
the medical costs. This bill's eligibility expansion is
not a mandatory or optional coverage under federal law.
Because there is no federal match, the bill creates a
program for which the state pays the entire costs, also
known as a "state only" program. Federal matching funds
would only be available if the state were to pursue what is
known as a waiver. Under federal law, certain federal
requirements can be waived and federal matching funds
obtained. The state already has a number of waivers in its
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Medi-Cal program, but these do not include the population
addressed by this bill.
Transplants under the Medi-Cal program.
DHCS indicates fee-for-service Medi-Cal provided coverage
for 2,447 major organ transplants in 2008. Medi-Cal
managed care provides coverage for additional procedures.
Major organ transplants are heart, heart and lung, lung,
kidney and liver, of which kidney is the most common
transplanted organ.
Because of the high cost and the complex nature of the
procedures, the state has taken important steps to ensure
that Medi-Cal patients are protected and the state's funds
are well spent. DHCS convenes panels of medical and
surgical experts that provide written standards for
Medi-Cal coverage and develop criteria for facility and
patient selection. These standards and criteria are
continually revised and updated for use by the program.
According to DHCS, some third-party health-care payers use
Medi-Cal's organ transplant criteria for their own coverage
decisions.
Through the use of the developed standards, DHCS identifies
"centers of excellence" where DHCS will permit and
reimburse for transplants performed under the Medi-Cal
program. To be a center, facilities must demonstrate that
they have the professional staff and hospital
infrastructure to ensure the greatest success for organ
transplants. In addition, a transplant center must
demonstrate performance of a specific number of transplants
annually with the requisite survival rate, along with other
detailed criteria. DHCS regularly updates adopted criteria
and reviews the operations of the centers, in conjunction
with panels of medical and surgical experts.
To receive continuing approval as a Medi-Cal center of
excellence, facilities must provide DHCS with annual
performance and survival data as well as information
regarding major staff changes in their transplant programs.
According to DHCS, they routinely access and review this
information in order to ensure compliance.
Medical professionals define end stage renal disease (ESRD)
as that stage of kidney impairment which is irreversible,
STAFF ANALYSIS OF ASSEMBLY BILL 2352 (John A. Perez) Page
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cannot be controlled by conservative management alone, and
requires dialysis or kidney transplantation to maintain
life. Dialysis is a substitute for the normal functioning
of the kidneys. It filters waste products from the blood.
Following a kidney transplant, these patients no longer
require dialysis and are no longer deemed disabled for the
purposes of their very narrow Medi-Cal coverage. If a
patient has no Medi-Cal, private insurance, or Medicare
coverage, they are at risk for organ failure, a return to
dialysis, death, or a new transplant. The author indicates
a significant investment has already been made via the
transplant and patients should be afforded continuity of
care at a much lower costs than alternatives.
Prior legislation
AB 998 (John A. Perez) of 2009, was substantially similar
to AB 2352, but would have provided that Medi-Cal
beneficiaries remain eligible to receive Medi-Cal coverage
for antirejection medication for up to a period of three
years, instead of two years. AB 998 died on the Assembly
Appropriations Committee suspense file.
Arguments in support
Supporters argue that that access to antirejection drugs is
necessary and must be a priority in the health care
delivery system for transplant patients because they help
to suppress the immune system rejection of the new organ.
They also note that advances in antirejection medications
have decreased the incidence of adverse reactions to a
donated organ significantly, but it still remains one of
the gravest dangers facing transplant recipients. They
argue that extending the Medi-Cal coverage period gives
transplant recipients another year of guaranteed access to
these products, and they can continue to recover and grow
stronger.
COMMENTS
The Department of Health Care Services is not granted
customary statutory authority to implement this bill. This
bill is not self implementing. For example, the coverage
added by this bill would end when the beneficiary becomes
eligible for private health insurance that would cover the
medication. The term "cover" is not defined, so it is left
STAFF ANALYSIS OF ASSEMBLY BILL 2352 (John A. Perez) Page
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to the judgment of DHCS to determine the appropriate
standard. Would the appropriate standard be insurance that
would pay for 50 percent of the drug cost or would a larger
share be required to meet the statute? Absent the grant of
authority, DHCS would have to develop regulations which
would require at least several years.
Proposed amendment
Page 2, line 3
(b) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the department may implement, interpret, or make
specific this section by means of all-county letters,
provider bulletins, or other instructions, without taking
any further regulatory action.
PRIOR ACTIONS
Assembly Health: 17- 0
Assembly Appropriations: 12- 0
Assembly Floor: 62-12
POSITIONS
Support: American Federation of State, County and
Municipal Employees, AFL-CIO
Astellas Pharma, U.S., Inc.
California Healthcare Institute
California Medical Association
California Transplant Donor Network
Donate Life California
National Kidney Foundation
Western Center on Law & Poverty
An individual
Oppose: None received
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