BILL ANALYSIS �
AB 1327
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Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 1327 (Portantino) - As Amended: April 7, 2011
SUBJECT : Medi-Cal services.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to determine a Medi-Cal managed care (MCMC) per capita payment
rate for services provided to enrollees with HIV or AIDS.
Specifically, this bill :
1)Requires DHCS to use coding elements of the definition of AIDS
issued by the United States Centers for Disease Control and
Prevention and (CDC) and by the National Drug Code for
antiretroviral medication.
2)Requires the rate to be an average of medical treatment costs
for the Medi-Cal population with HIV and the Medi-Cal
beneficiary population with AIDS.
3)Requires the rate to be used to reimburse managed care plans
for an enrollee with HIV or AIDS.
EXISTING LAW :
1)Provides for the Medi-Cal Program, which is administered by
DHCS and under which qualified low-income persons receive
health care services either through a managed care plan or on
a fee-for-service (FFS) basis.
2)Authorizes DHCS to contract, on a bid or nonbid basis, with
any qualified individual, organization, or entity to provide
services to, arrange for, or case manage, the care of Medi-Cal
enrollees and requires, under federal law, that the rate paid
to the entity be actuarially sound.
3)Defines a MCMC plan as any entity that enters into one of
several types of contracts with DHCS including County
Organized Health System (COHS), geographic managed care (GMC)
plans, commercial plans, and Local Initiatives.
4)Requires specified categories of Medi-Cal enrollees to enroll
in a managed care plan.
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5)Requires health care providers and laboratories to report
cases of HIV infection to local public health officers using
patient names. Local health officers (LHO) are required to
report unduplicated HIV cases by name to the Department of
Public Health (DPH).
6)Makes any person who willfully, maliciously, or negligently
discloses the content of any "confidential public health
record" to any third party, except pursuant to a written
authorization, as described, or as otherwise authorized by
law, resulting in economic, bodily, or psychological harm to
the person whose confidential public health record was
disclosed, guilty of a misdemeanor and subject to specified
civil penalties.
7)Defines "confidential public health record or records" as any
paper or electronic record maintained by DPH or a local health
department or agency, or its agent, that includes data or
information in a manner that identifies personal information,
including, but not limited to, name, social security number,
address, employer, or other information that may, directly or
indirectly, lead to the identification of the individual who
is the subject of the record.
FISCAL EFFECT : This bill, as amended, has not been analyzed by
a fiscal committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, traditionally
there were clinical reasons to treat a person diagnosed with
AIDS differently that a person with HIV. The author states
that medical treatment has evolved to the point that treatment
intervention occurs at the earliest possible stage of the
virus in order to minimize the acuity of the disease.
According to the author medical providers no longer wait until
a clinical diagnosis of AIDS before prescribing
anti-retrovirals to arrest the virus and other drugs to
address co-morbidities.
The author asserts that historically, the state has blended the
FFS costs for people with HIV and people with AIDS and blended
them into a single rate that they pay for people with AIDS
only. The author argues that this had not been a problem in
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the past as most people with HIV/AIDS have not been in managed
care. According to the author, there is a dramatic shift of
more Californians into MCMC, but the reimbursement structure
for managed care still distinguishes between HIV and AIDS and
pays the AIDS rate only for people with a clinical diagnosis.
The author argues that if that disparity continues, the
difference between the cost of care and the reimbursement will
grow larger. The author concludes that MCMC plans must be
paid the blended AIDS rate on all managed care beneficiaries
with HIV and AIDS, or the state will default to the much lower
disabled rate which prevents access to even minimal medical
care.
2)BACKGROUND . The delivery of basic health care services in the
Medi-Cal Program is done through MCMC or by FFS. Within
managed care there are three different models: COHSs, GMCs,
and the Two-Plan Model. The Two-Plan Model serves about 2.9
million enrollees in 14 counties: Alameda, Contra Costa,
Fresno, Kern, Kings, Los Angeles, Madera, Riverside, San
Bernardino, San Francisco, San Joaquin, Santa Clara,
Stanislaus, and Tulare. The GMC model serves about 433,000
enrollees in two counties: Sacramento and San Diego. COHS
serve about 864,000 enrollees through five health plans in 11
counties: Merced, Monterey, Napa, Orange, San Mateo, San Luis
Obispo, Santa Barbara, Santa Cruz, Solano, Sonoma, and Yolo
and will soon include a COHS in Ventura.
Approximately half of all Medi-Cal eligible persons in Two-Plan
and GMC counties, primarily children, pregnant women, and
non-disabled parents, are required to enroll in a managed care
plan. Seniors and People with Disabilities (SPD) were allowed
to voluntarily enroll in Two-Plan and GMC counties and
approximately 300,000 did enroll. In the 11 counties with a
COHS, the SPD population is also mandated to enroll.
Effective November 2010, the 2010 Section 1115(a) Medi-Cal
Demonstration Waiver entitled "Bridge to Reform" authorized
DHCS to begin mandatory enrollment of all SPDs in the GMC and
Two-Plan counties, approximately 600,000 additional persons
beginning June 1, 2011.
DHCS also operated a number of small scale care management
programs for specific populations such as a Disease Management
program for SPDs with certain chronic diseases and a
coordinated care management program for persons who may be
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seriously ill and near the end of life or have a serious
mental illness. These programs are opt-out programs.
Enrollees are automatically signed up for the program, but may
opt-out if they do not wish to participate. The sponsor of
this bill, AIDS Healthcare Foundation (AHF), has contracted
with DHCS to operate a capitated Primary Care Case Management
(PCCM) project in Los Angeles since April 1995 for people with
HIV/AIDS. As of December 2010, there were a little less than
800 average monthly enrollees. AHF is in the process of
obtaining a license through the Knox-Keene Health Care Service
Plan Act of 1975 (Knox-Keene) from the Department of Managed
Health Care in order to operate as a full risk managed care
plan.
3)MANAGED CARE ENROLLMENT PROCESS . SB 208 (Steinberg), Chapter
714, Statutes of 2010, implemented the provisions of the
"Bridge to Reform" relating to enrollment in managed care
plans. Specifically, SB 208 authorized mandatory enrollment
of SPDs in two-plan and GMC counties beginning June 1, 2011.
DHCS has implemented a rolling enrollment process by birth
month. In other words, all FFS enrollees born in the month of
May were notified in March 2011 of the option to choose a plan
by May 2011. Those with a June birth month will be enrolled
in July, and so forth.
DHCS contracts with a vendor to operate an enrollment process
for all two-plan and GMC counties. Except in a COHS county,
where enrollment into the COHS is automatic, the potential
enrollee is mailed an informing packet and provided with a
choice of plan. In the absence of a choice, the enrollee is
default enrolled into a plan using an algorithm that is based
partially on quality measures and partially on the plan's use
of traditional safety net providers in the network. Plan
assignment may also be based on continuity of care with an
existing provider.
In implementing the mandatory enrollment of SPDs, additional
steps were required by the federal Centers for Medicare and
Medicaid Services (CMS) and the Legislature to provide for
continuity of care with existing providers. For instance, the
SPD population, as compared to the families and children,
consists of a higher percentage of persons with chronic
diseases, mental illness and disabling conditions. Because
this population has a much higher utilization of services and
is chronically ill, there is more likely to be current data
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linking them to a regular provider. The enrollment process
requires that if a person does not choose a plan efforts are
made to enroll the person in the plan that contracts with the
person's existing providers instead of random default. In
addition, in Los Angeles County only, any SPD who is eligible
for the AHF PCCM Project may select AHF or the successor
Knox-Keene plan instead of one of the two plans offered.
4)CAPITATION RATE . One of the distinguishing characteristics of
MCMC is that the plan is paid a capitated rate for each
enrollee and is at risk for the provision of all covered
health care services. Some costly or unpredictable services
may continue to be reimbursed directly by DHCS on a FFS basis,
such as Long-Term Care. Since the 2008 contract year, federal
law requires the capitation rate ranges to be actuarially
sound and developed in accordance with rate-setting guidelines
established by the CMS. DHCS has contracted with Mercer
Consulting to develop a rate setting process by aid code that
has been approved by CMS. In addition each individual
contract must be approved by CMS. Aid codes are the
eligibility code used by the Medi-Cal system to classify a
person by category of eligibility. Managed care rates are set
for eight different aid codes including AIDS/Medi-Cal Only,
AIDS/Dual Eligible, Adult & Family and Aged/Disabled Medi-Cal
Only.
Mercer develops a rate range for each county and for each plan
that is based on enrollment, eligibility, claims data,
reimbursement level, benefit design, and financial data and
information. DHCS negotiates a specific rate with each plan
within the range.
5)HIV/AIDS REPORTING . California requires health care providers
to confidentially report more than 80 diseases and conditions
to LHOs, who then report that data to DPH. HIV and AIDS are
reportable conditions in California using patients' names.
California made name-based reporting mandatory for HIV through
SB 699 (Soto), Chapter 20, Statutes of 2005. California's HIV
reporting statute coupled with the protection of "confidential
public health records" imposes penalties for disclosing the
results of an HIV test except pursuant to a written
authorization.
6)SUPPORT . AHF, sponsor of this bill, states that as federal
health care reform and California's Medi-Cal waiver are
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implemented, complications will arise for Californians with
HIV/AIDS. According to AHF, because the HIV/AIDS system,
through the federal Ryan White CARE Act, has been largely a
stand-alone medical care delivery structure, the mechanisms in
place do not easily translate to the MCMC system. According
to AHF, this bill responds to one of those challenges. AHF
argues that historically, the state has taken all fee for
service medical costs for people with HIV and people with AIDS
and blended them into a single managed care rate that they
then pay for people with AIDS only. According to AHF, this
has not been a problem since most people with HIV/AIDS have
not been in managed care. However, AHF asserts, the
reimbursement structure for managed care still distinguishes
between HIV and AIDS and pays the AIDS rate only on people
with a clinical diagnosis of AIDS. AHF argues in support that
MCMC must pay the blended AIDS rate on all managed care
beneficiaries with HIV and AIDS, otherwise the state will
default to the much lower disabled rate for a person with HIV,
which will prevent access to even minimal medical care.
7)RELATED LEGISLATION . AB 1066 (John A. P�rez) of 2011 enacts
technical and conforming statutory changes necessary to
implement the Special Terms and Conditions required by CMS in
the approval of the Section 1115 Medi-Cal Demonstration
Project entitled "California's Bridge to Reform," approved on
Nov 2, 2010.
8)PREVIOUS LEGISLATION . SB 208 (Steinberg), Chapter 714,
Statutes of 2010, implemented provisions of the 2010 Section
1115 replacement waiver including establishing the Public
Hospital Investment, Improvement and Incentive Fund 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 designated public hospitals and the affiliated
governmental entities (Counties and UC), authorized DHCS to
require the mandatory enrollment of SPDs in an MCMC plan
commencing the later of either June 1, 2011 or obtaining
federal approval and required DHCS to implement pilot projects
to provide coordinated care to children in the California
Children's Services and to persons who are eligible for both
Medi-Cal and Medicare.
SB 699 (Soto), Chapter 20, Statutes of 2005, requires health
care providers and laboratories to report cases of HIV
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infection to the local health officer using patient names, in
order to assure that California remains competitive for
federal HIV and AIDS funding. SB 699 requires local health
officers to report unduplicated HIV cases by name to DPH. SB
699 made various other changes related to the disclosure of
information on HIV cases to federal, state, and local health
agencies
9)POLICY ISSUES .
a) Ambiguity . It is not clear that it would be possible to
develop a per capita rate as required by this bill. This
bill requires the use of specified "coding elements" which
the sponsor has identified as an American Medical
Association developed list of diagnosis codes, adopted by
the CDC and that include codes for various diagnoses of HIV
and AIDS and a code for every prescribed drug, including
anti-retroviral drugs. It is not clear how these coding
elements are to be used to develop a rate.
b) Feasibility . This bill further specifies that the rate
is to be an average of medical treatment costs for the
Medi-Cal enrollee population with HIV and with AIDS. It is
not clear how all the medical treatment costs for a person
with HIV, including medical costs not related to HIV, can
be determined without in effect disclosing the results of
an HIV test without written permission as it would require
the plan and DHCS to match a person with HIV with the
claims data from other medical costs. Nor is it clear how
the payment could be made to the plan for this person
without the same problem. A person with HIV will be
enrolled under a particular aid code such as disabled or
Adult & Family, not as a person with HIV.
c) Use of anti-retroviral drugs . Some HIV/AIDS
antiretroviral drugs are paid for on a FFS basis and are
"carved out" of the MCMC rate calculation. The purpose of
referring to a code for these drugs is incomprehensible.
The PCCM rate paid to AHF for the capitated HIV/AIDS case
management project includes all drugs used to treat
HIV/AIDS approved by the federal Food and Drug
Administration prior to January 1, 2007. It is not clear
whether the intent is to include all anti-retroviral drugs.
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d) Impact on Capitation Rate. Assuming it is possible;
separating out the medical costs for a person with HIV will
have an unknown ripple effect on the capitation rate for
the over 3 million enrollees of plans other than the
sponsor of this bill. Plans that serve only a small number
of persons with HIV or AIDS have not requested this change
and the impact on them is unknown. It could potentially
lower the SPD capitation rate if the result is to separate
out higher cost users with HIV. As for the sponsor, the
impact could be to lower the rate they receive for AIDS
patients as it would be blended with lower cost persons
with HIV. This bill does not define a managed care plan
and it is not clear if it is intended to apply to all GMC,
Two-Plan and COHS plans.
e) Actuarial Process . The current process is based on
identified aid codes that can be used to connect actual
enrollees to specific services. It has been developed over
a period of three years in consultation with actuarial
experts, CMS, plans and other stakeholders. It reflects
generally accepted actuarial practices and principles, as
well as policy priorities developed through the budget act.
This includes use of a blended plan and county specific
methodology that accounts for the relative risks in each
county, plan specific risks and is designed to encourage
and reward cost efficiencies and effectiveness in a manner
that does not result in significant year over year rate
alterations. The methodology proposed by this bill
disregards the existing process.
REGISTERED SUPPORT / OPPOSITION :
Support
AIDS Healthcare Foundation (sponsor)
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
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