BILL ANALYSIS
SB 56
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Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 56 (Alquist) - As Amended: June 3, 2010
Policy Committee: Health Vote:12-4
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes specified health plans to form joint
ventures to offer health coverage to individuals and groups.
Specifically, this bill:
1)Authorizes a health plan governed, owned, or operated by a
county board of supervisors, a county special commission, a
county-organized health system (COHS), a county health
authority, or a County Medical Services Program (CMSP) to form
joint ventures to offer health coverage to individuals and
groups.
2)Requires any joint ventures established pursuant to this bill
to be licensed as Knox-Keene health plans. The Knox-Keene Act
regulates California managed care plans.
3)Authorizes joint ventures to consist of either:
a) Contractual relationships to pool risk and/or to share
provider networks or
b) Contractual relationships for the joint offering or
marketing of health coverage.
4)Requires joint ventures to pursue contracts with designated
public hospitals, county health clinics, community health
centers, and other traditional safety net providers.
FISCAL EFFECT
One-time fee-supported special fund costs to DMHC in the range
of $200,000 to $500,000 (health plan fees) to license two to
five joint ventures established pursuant to authority created in
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this bill.
COMMENTS
1)Rationale . This bill, supported by a variety of consumer and
labor groups, increases health coverage options statewide by
increasing public alternatives to commercial health coverage.
This bill authorizes new alliances between specified local
health entities. This bill requires newly formed joint
ventures to emphasize care provided by safety net providers.
According to the author, local managed care entities have
proven the ability to deliver cost-effective health care. The
author intends to provide more alternatives to commercial
coverage than are currently available. This bill establishes
clear authority for local health plans to establish joint
ventures without relying on less clear current law related to
joint powers agreements.
2)County Health Delivery Modes . This bill authorizes expansions
of health coverage through new arrangements between health
delivery entities at the local level. California utilizes
three managed care delivery models to provide health care to
about half of the total Medi-Cal enrollees statewide. These
models are the County-Operated Health System (COHS) model, the
Two-Plan model and Geographic Managed Care. The County Medical
Services Program (CMSP) is a county-administered coverage
program to allow smaller counties to provide health coverage
to medically indigent adults. Additional detail on these
health delivery modes is provided below:
a) COHS are managed care arrangements organized and
operated by a governing board appointed by a county board
of supervisors. There are currently five COHS providing
services to 800,000 Medi-Cal beneficiaries in 11 California
counties: Merced, Monterey, Napa, Orange, Santa Barbara,
Santa Cruz, San Luis Obispo, San Mateo, Solano, Sonoma, and
Yolo.
b) Two-Plan model counties provide Medi-Cal managed care
services via contracts with a commercial plan selected
through competitive bidding and a local initiative. Local
initiatives provide services through networks comprised of
county health system providers, safety net providers, and
county hospitals. Currently, local initiatives serve 2.6
million Medi-Cal beneficiaries in 12 counties: Alameda,
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Contra Costa, Fresno, Kern, Los Angeles, Riverside, San
Bernardino, San Francisco, San Joaquin, Santa Clara,
Stanislaus, and Tulare.
c) Geographic Managed Care (GMC), found only in Sacramento
and San Diego, allows Medi-Cal beneficiaries to choose
among competing commercial health plans. GMC is distinct
from the COHS model because of the availability of multiple
health plans and beneficiary choice of a health plan. There
are 400,000 Medi-Cal patients receiving care through GMC.
d) CMSP provides medical care services in smaller counties
to indigent adults 18-64 years of age with incomes at or
below 200% of the federal poverty level (FPL) who are not
eligible for Medi-Cal and who are U.S. citizens or legal
residents. Individuals above 200% FPL may be eligible with
a share of cost. County welfare departments determine
eligibility. Most individuals on CMSP are on the program
for only three to seven months and the average monthly
enrollment is 40,000.
3)Related Legislation . . SB 973 (Simitian) in 2007 and SB 1622
(Simitian) in 2008 created the California Health Benefits
Service Program within DHCS to facilitate the creation of
joint ventures and to authorize local health plans to enter
into joint ventures in order to pool risk and share provider
networks. SB 973 was vetoed due to concerns about a piecemeal
approach to health reform. SB 1622 was held on the Suspense
File of the Senate Appropriations Committee.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081