BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 62
A
AUTHOR: Monning
B
AMENDED: June 27, 2011
HEARING DATE: July 6, 2011
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CONSULTANT:
2
Bain
SUBJECT
Medi-Cal: dual eligibles: pilot projects
SUMMARY
Permits the Department of Health Care Services (DHCS) to
establish pilot projects for individuals eligible for both
Medicare and Medi-Cal (dual eligibles) pursuant to a
request for proposal from the federal Centers for Medicare
and Medicaid Services (CMS). Requires DHCS to consult with
specified stakeholders on a regular basis throughout the
development and implementation of the dual eligible pilot
projects.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes the federal Medicare program, which is a public
health insurance program for individuals age 65 years and
older and specified persons with disabilities who are under
age 65.
Establishes, as part of federal health care reform, the
Federal Coordinated Health Care Office (Office) within CMS.
Requires the purpose of the Office to be to bring together
officers and employees of the Medicare and Medicaid
programs at CMS in order to:
Continued---
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� More effectively integrate benefits under the Medicare
and Medicaid programs; and
� Improve the coordination between the federal government
and the states for dual eligibles to ensure that such
individuals get full access to the items and services to
which they are entitled under Medicare and Medicaid.
Existing state law:
Establishes the Medi-Cal program, which is administered by
DHCS and under which qualified low-income persons receive
health care benefits. The Medi-Cal program is, in part,
governed and funded by federal Medicaid provisions.
Requires DHCS, to the extent that federal financial
participation (FFP) is available, and pursuant to a
demonstration project or waiver of federal law, to
establish pilot projects in up to four counties, to develop
effective health care models to provide services to persons
who are dually eligible under both the Medi-Cal and
Medicare programs.
Requires DHCS, not sooner than March 1, 2011, to identify
health care models that can be included in a pilot project,
to develop a timeline and process for selecting, financing,
monitoring, and evaluating the pilot projects, and to
provide this timeline and process to the appropriate fiscal
and policy committees of the Legislature.
This bill:
Permits DHCS to establish pilot projects for dual eligibles
pursuant to a request for proposal (RFP) from CMS, in
addition to the requirement in existing law that requires
DHCS to establish pilot projects in up to four counties to
provide services to persons who are dually eligible under
both the Medi-Cal and Medicare programs.
Requires DHCS to consult with stakeholders, including, but
not limited to, representatives of advocacy organizations,
persons with disabilities, seniors, representatives of
legal services agencies that serve dual eligibles,
specialty care providers, provider associations, labor,
health plans, county government, and the Legislature, on a
regular basis throughout the development and implementation
of the pilot projects.
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FISCAL IMPACT
According to the Assembly Appropriations Committee, this
bill has minor, absorbable federal funds costs to DHCS to
implement a stakeholder process. DHCS has been awarded a
federal grant for the purpose of improving coordination of
individuals dually eligible for Medicaid and Medicare, and
this bill would require DHCS to spend some of these funds
to ensure stakeholder participation.
BACKGROUND AND DISCUSSION
According to the author, this bill provides technical
changes to existing law relating to the "California Bridge
to Reform" waiver approved in 2010. SB 208 (Steinberg),
Chapter 714, Statutes of 2010, included provisions
requiring the establishment of dual eligible pilot projects
in up to four counties for the purpose of developing
effective health care models that integrate Medi-Cal and
Medicare services. The author states that at that time the
authorization was included as part of the waiver
legislation. However, the author states that CMS requested
that the state not include the dual eligible pilot programs
as part of that waiver. The author explains that the
federal Patient Protection and Affordable Care Act created
the Center for Medicare and Medicaid Innovation (CMMI).
The CMMI and the federal Office are working on a new
initiative "State Demonstrations to Integrate Care for Dual
Eligible Individuals" to provide funding for states to
support the design of innovative service delivery and
payment models for dual eligible individuals. According to
the author, DHCS submitted a response to the CMS RFP under
this new initiative on January 28, 2011. The author states
that this bill clarifies that the dual eligible project in
response to the RFP is not a part of the California Bridge
to Reform federal waiver approved last year. The author
also states that this bill requires consultation with
stakeholders to ensure that DHCS continues to be informed
by interested and affected members of the stakeholder
community.
Dual eligible enrollees
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For dual eligibles, Medicaid fills in the gaps in Medicare
coverage. For those who qualify, Medicaid pays the
Medicare Part B premium (Medicare part B premiums are
$96.40 per month for most beneficiaries in 2010), pays the
cost sharing charged for many Medicare services, and covers
a range of benefits not covered by Medicare such as
long-term care. According to DHCS, there are 1.1 million
dually eligible Medi-Cal enrollees. Although they
constitute roughly 10 percent of the Medi-Cal population,
they account for nearly 25 percent of annual Medi-Cal
costs. Dual eligibles also account for 75 percent of the
total Medi-Cal costs for long-term care. DHCS states that
dual eligible enrollees are the most chronically ill
individuals within both Medicare and Medicaid, requiring a
complex range of services from multiple providers.
According to DHCS, despite the complexity of their needs,
the vast majority of California's dual eligibles remain in
the fragmented fee-for-service delivery system. SB 208
directs DHCS to develop a program to provide more
streamlined and effective care for California's dual
eligibles. At the same time, one of the purposes of the
new CMS CMMI and Office of Duals is the improvement of
coordination and addressing cost shifting between Medicare
and Medicaid.
State demonstration
SB 208 requires DHCS to include at least one two-plan
Medi-Cal managed care county and one Medi-Cal county
organized health system plan county. DHCS is required to
identify the models by January 1, 2012 and develop a
timeline and process for selecting, monitoring and
evaluating these pilot projects. The goals for the pilot
project are as follows:
Coordinating Medi-Cal benefits, Medicare benefits,
or both, across health care settings and improving
continuity of acute care, long-term care, and home-
and community-based services.
Coordinating access to acute and long-term care
services for dual eligibles.
Maximizing the ability of dual eligibles to remain
in their homes and communities with appropriate
services and supports in lieu of institutional care.
Increasing the availability of and access to home-
and community-based alternatives.
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According to the response submitted to CMS, DHCS is
planning to implement an integrated care pilot program in
four counties in 2012 with a goal that all dual eligibles
will have an option to enroll in a fully integrated system
of care by 2015. The federal RFP provided for contract
opportunities for up to 15 states with up to $1 million per
state for the design phase. An implementation phase may be
offered in 2012. CMS is looking for person-centered models
that integrate the full range of acute, behavioral health,
and long-term supports and services for dual eligible
individuals.
Stakeholder process
DHCS has convened a Stakeholder Advisory Committee to
advise it on the preparation of the Section 1115(a) waiver
as required by AB 6 X4 (Evans), Chapter 6, Statutes of
2009. The Stakeholder Advisory Committee will also advise
on the implementation of the waiver until its expiration.
The Stakeholder Advisory Committee has been sub-divided
into five technical workgroups which each have held public
meetings to provide technical support to DHCS on the
following aspects:
� Implementation plan for mandatory enrollment of seniors
and persons with disabilities into Medi-Cal managed care,
or an alternative system where managed care is not
appropriate;
� Implementation plan with respect to children with special
health care needs in the California Children's Services
Program;
� Implementation plan to pilot and test different
strategies to integrate primary care and behavioral
health services, including substance abuse, in Medi-Cal;
� Development of the implementation plan for Health Care
Coverage Initiatives to cover the uninsured; and
� Implementation plan for enrollment of dual eligibles in
an organized system of care that more fully integrates
Medicare and Medi-Cal to provide more effective delivery
of home and community-based services.
This bill is intended to clarify that a stakeholder
consultation process should also continue to include the
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dual eligible project even though it is not part of the
Medi-Cal waiver.
Related bills
AB 1066 (John A. P�rez) would make statutory changes to
implement the California Bridge to Reform waiver approved
on November 2, 2010, for funding designated public
hospitals (DPHs). Continues under the new waiver the
fee-for-service, cost-based reimbursement for DPHs, with
those hospitals providing the required federal match using
their own funds through certified public expenditures.
Establishes under the waiver a new distribution methodology
for disproportionate share hospital and Safety Net Care
Pool funds to DPHs, as specified. AB 1066 is currently on
the Senate Floor.
Prior legislation
AB 342 (John A. P�rez), Chapter 723, Statutes of 2010,
enacts the Low Income Health Program and Coverage Expansion
and Enrollment Projects to provide health care benefits to
uninsured adults with incomes up to 200 percent of the
federal poverty level, at county option, through a Medi-Cal
waiver demonstration project.
SB 208 (Steinberg), Chapter 714, Statutes of 2010,
implements provisions of the 2010 Section 1115 waiver
including establishing the Public Hospital Investment,
Improvement and Incentive Fund (known as DRSIP) consisting
of intergovernmental transfers from counties or other
specified governmental entities, to be matched with federal
funds and to be used for investment, improvement and
incentive payments for DPHs and the affiliated governmental
entities (counties and UC). It also authorizes DHCS to
require the mandatory enrollment of seniors and people with
disabilities in a Medi-Cal managed care plan commencing on
the later of either June 1, 2011, or obtaining federal
approval, and requires DHCS to implement pilot projects to
provide coordinated care to children in the California
Children's Service and to persons who are eligible for
Medi-Cal and Medicare.
PRIOR ACTIONS
Assembly Health: 19- 0
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Assembly Appropriations:16- 0
Assembly Floor: 78- 0
POSITIONS
Support: None on file.
Oppose: None on file.
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