BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           966 (Alquist)
          
          Hearing Date:  5/10/2010        Amended: As Introduced
          Consultant: Katie Johnson       Policy Vote: Health 5-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 966 would require the Department of Health  
          Care Services (DHCS) to develop a definition of "medical home"  
          and to establish a timetable for Medi-Cal managed care plans to  
          provide beneficiaries with a medical home.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          Increased MMCP           unknown, likely significant in  
          theGeneral/*
          reimbursement            hundreds of thousands to  
          millionsFederal
                                   of dollars

          Stakeholder staff               unknown, likely in the low  
          hundreds      General/*
                                   of thousands of dollars       Federal

          *50 percent General Funds, 50 percent federal funds
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          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.

          This bill would require DHCS to develop a definition of a  
          medical home based on the 2008 Physician Practice  
          Connections-Patient-Centered Medical Home Standards and  
          Guidelines established by the National Committee for Quality  
          Assurance (NCQA) and would require the department to establish a  
          timetable for Medi-Cal managed care plans (MMCPs) to provide  
          beneficiaries with a medical home. The goals of a medical home  
          include improving the quality of care, providing a person with a  
          personal physician, and coordinating care across the entire  
          delivery system. The department would likely initiate a  










          stakeholder process to define "medical home" that could require  
          staff support, potentially in the low hundreds of thousands of  
          dollars one-time. Administrative costs would be shared 50  
          percent General Fund and 50 percent federal funds.

          The state pays MMCPs a "capitated" amount, or a flat per member  
          per month amount, with which the MMCP is expected to manage the  
          patient's care. Rates are based on the cost of providing care  
          and are determined by DHCS annually. Approximately 50 percent of  
          California's 6.7 million Medi-Cal beneficiaries are members  
          MMCPs. To the extent that MMCPs do not already provide a medical  
          home and associated care coordination consistent with these  
          standards for their beneficiaries, there would be an increase in  
          MMCP reimbursement rates likely in the millions of dollars to  
          provide the services that the stakeholder group would determine  
          would be part of a medical home. The payments are generally 50  
          percent General Fund and 50 percent federal funds. 


          Page 2
          SB 966 (Alquist)

          To the extent that the medical homes improve care coordination  
          and the delivery of preventive care and to the extent that those  
          improvements lead to the avoidance of unnecessary emergency room  
          visits, hospitalizations, and chronic illness, there could be  
          offsetting savings to the Medi-Cal program. However, those  
          savings are indeterminate, would likely be in the future, and  
          would require up-front investment in MMCPs.