BILL ANALYSIS �
SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Mark Leno, Chair
Bill No: AB 1494
Author: Committee on Budget
As Amended: June 25, 2012
Consultant: Michelle Baass
Fiscal: Yes
Hearing Date: June 25, 2012
Subject: Budget Act of 2012
Summary: This bill transitions children in the Healthy
Families Program to the Medi-Cal program beginning January
1, 2013. This transition achieves $13.1 million General
Fund savings in 2012-13, $58.4 million in 2013-14, and
$72.9 million in 2014-15.
This bill also reduces rates for laboratory services in the
Medi-Cal program and rescinds prior Senate action on the
funding source for certain California Children's Services
therapies.
Specifically, this bill:
1. Healthy Families Program Transition to Medi-Cal.
Transitions approximately 880,000 children from the
Healthy Families Program (HFP) to the Medi-Cal program
beginning January 1, 2013.
Transition Phases. Provides that the transition occur in
four phases.
o Phase 1 - Begins January 1, 2013 and includes
about 415,000 children in Healthy Families Program
(HFP) health plan that matches a Medi-Cal health
plan.
o Phase 2 - Begins April 1, 2013 and includes
about 249,000 children in a HFP health plan that is
a subcontractor of a Medi-Cal managed care health
plan.
o Phase 3 - Begins August 1, 2013 and transitions
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about 173,000 children enrolled in a HFP plan that
is not a Medi-Cal managed care plan and does not
contract or subcontract with a Medi-Cal managed care
plan into a Medi-Cal managed care plan in that
county.
o Phase 4 - Begins no earlier than September 1,
2013 and transitions about 43,000 children in HFP
residing in a county that is not Medi-Cal managed
care into the Medi-Cal fee-for-service delivery
system.
Transition Plan. Requires the California Health and
Human Services Agency to work with the Managed Risk
Medical Insurance Board, the Department of Health Care
Services (DHCS), and the Department of Managed Health
Care to develop a transition plan for this transition of
children from HFP to Medi-Cal no later than October 1,
2012. This plan shall include at least the following
information:
o State, county, and local administrative
activities that will facilitate a successful
transition.
o Methods and processes for stakeholder
engagement to assist in the transition.
o State monitoring of managed care health plans'
performance and accountability for provision of
services.
Also requires the Administration to convene a stakeholder
workgroup process for preparation and transition, as well
as to have ongoing meetings during the phases.
Implementation Plans. Requires DHCS to submit an
implementation plan for each phase prior to transitioning
children to Medi-Cal to ensure continuity of care with
the goal of ensuring there is no interruption in services
and there is continued access to coverage for
transitioning individuals. Requires department to
consult with stakeholders on the development of the
implementation plans.
Readiness Requirements. Specifies requirements that must
be in place prior to implementation of phase 1, such that
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Medi-Cal managed care plan performance measures shall be
integrated and coordinated with the HFP performance
standards. Requires the Department of Managed Health Care
to verify health plan and network readiness prior to any
transition.
Monitoring of Transition. Requires monthly status
reports on the transition to be submitted to the
Legislature. These reports must include, but not be
limited to, information on health plan grievances related
to access to care, continuity of care requests and
outcomes, changes to provider networks (including
provider enrollment and disenrollment).
Dental Coverage. For Sacramento and Los Angeles
counties, requires that dental coverage for individuals
transferring continue to be provided by their current
dental managed care plan if the HFP dental plan is a
Medi-Cal dental managed care plan. For Sacramento
County, if their plan is not a Medi-Cal dental managed
care plan, the individual shall be assigned to a plan
with preference to a plan with which their current
provider is a contracted provider. For Los Angeles
County, if their plan is not a Medi-Cal dental managed
care plan, the individual may select a Medi-Cal dental
managed care plan or choose to move into Medi-Cal
fee-for-service dental coverage. For all other counties,
dental coverage for these children would transition to
Medi-Cal fee-for-service dental coverage.
County Eligibility Determinations. Specifies county
performance standards with regard to county eligibility
determinations for individuals transitioning from HFP to
Medi-Cal.
Notification to Individuals Transitioning. Ensures that
individuals who are transitioning from HFP to Medi-Cal
are notified of this transition at least 60 days prior to
the phase 1 transition and at least 90 days prior to the
phase 2, 3, and 4 transitions.
Department of Managed Health Care - Consumer Assistance.
This bill appropriates $400,000 from the Managed Care
Fund to the Department of Managed Health Care for
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administration of the call center to assist individuals
with the Healthy Families transition, and health plan
readiness and coordination functions with DHCS.
2. Laboratory Rate Reduction. This bill provides DHCS
the authority to establish a reimbursement rate
methodology for setting Medi-Cal rates of reimbursement
for clinical lab services provided to Medi-Cal
beneficiaries. The proposed methodology would develop
rates that are based on the lowest amounts other payers
are paying for similar clinical laboratory services.
Until the implementation of the new methodology, payments
for clinical laboratory services would be subject to an
additional 10 percent provider payment reduction. This
bill would exempt the Family Planning, Access, Care, and
Treatment (FPACT) program from the 10 percent rate
reduction. This achieves $7.7 million in General Fund
savings. (This proposal was originally included in AB
1467, the omnibus health trailer bill, but is amended in
this bill.)
3. California Children's Services (CCS) Medical Therapy
Program. This bill rescinds the changes in AB 1467 (the
omnibus health trailer bill) which would have required
that all services assessed and determined as
educationally necessary by the Individualized Education
Program (IEP) team and contained in the child's IEP shall
be provided in accordance with the federal Individuals
with Disabilities Education Act (IDEA), rather than the
CCS program. This change would have provided for $24.6
million in savings ($12.2 million General Fund and $12.4
million county funds).
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