BILL ANALYSIS �
AB 1553
Page 1
Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 1553 (Monning) - As Amended: April 16, 2012
SUBJECT : Medi-Cal: managed care: exemption from plan
enrollment.
SUMMARY : Establishes requirements and a process by which a
Medi-Cal-eligible person, except in a County Organized Health
System (COHS) county, can request an exemption from mandatory
enrollment in a Medi-Cal managed care plan (MCMC).
Specifically, this bill :
1)Defines a person who is eligible to request an exemption as
follows:
a) An American Indian, member of an American Indian
household or is receiving services from an Indian Health
Services facility on a fee-for-service basis (FFS), as
specified; or,
b) Is receiving FFS Medi-Cal treatment or services for a
complex medical condition from a Medi-Cal provider as
specified and who is not a provider contracting with a
Medi-Cal plan in the person's county of residence.
2)Specifies conditions that meet the criteria for a complex
medical condition as including:
a) Pregnancy;
b) Specified organ transplants or potential transplant;
c) Receiving chronic renal dialysis treatment;
d) Positive for HIV/AIDS;
e) A cancer diagnosis and receiving cancer therapy as
specified;
f) Having received approval for a major surgical procedure,
as specified;
g) Receiving medical treatment, the interruption of which
would put the person at risk for deleterious medical effect
because of a complex neurological disorder, complex
hematological disorder, or other complex progressive
disorder such as amytrophic lateral sclerosis; or, a
disease or condition affecting more than one disorder or
requiring coordinated care and not all the specialists are
contracting providers, and the person requires ongoing
medical supervision or has been approved for or is
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receiving complex medical treatment;
h) Enrolled in a home and community based care Medi-Cal
waiver program or is under 21 and qualifies for similar in
home nursing;
i) Receiving treatment services that are not available in
the person's home county;
j) Receiving treatment or palliative services for a disease
or condition that is expected to result in death within the
next 24 months; or,
aa) Participating in specified pilot projects.
3)Authorizes DHCS to deny an exemption request if:
a) The person has been a member of the plan for more than
90 days and has received services that the plan is
financially liable for; or,
b) Treatment is scheduled to begin after the date of
enrollment.
4)Provides, that except for pregnancy, an eligible person
granted an exemption shall remain in FFS Medi-Cal only until
the medical condition has stabilized, as determined by the FFS
treating physician, sufficiently that the person could begin
receiving care from a plan provider without risk of
deleterious medical effects.
5)Provides that a pregnant woman granted a medical exemption may
remain with the FFS Medi-Cal provider through delivery and for
90 days postpartum.
6)Requires the request for exemptions to be use forms developed
by the Department of Health Care Services (DHCS), as specified
and submitted to the Health Care Options (HCO) Program by the
FFS provider or providers or the by the Indian Health Service
Facility by mail or fax and may not be submitted by a plan.
7)Requires the HCO Program to approve each request that meets
the requirements as specified. Authorizes DHCS to verify the
complexity, validity, and status of the medical condition and
treatment plan and verify that the provider is not contracted
or otherwise affiliated with a plan. Verification may include
documentation from more than one provider under specified
circumstances.
8)Allows a request to be denied or an approved request to be
revoked if a provider fails to fully cooperate with
verification. Provides that these requirements shall not be
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construed as authorizing HCO Program or DHCS from overruling a
treating physician's determination regarding stabilization
pursuant to 4) above.
9)Applies the same processing timelines as are applicable to
enrollment and disenrollment requests.
10)Requires DHCS to provide written notice to the person
requesting the exemption and the requesting provider if a
request for exemption is denied. Requires the notice to
specify the reasons, provide information on the right and
process to appeal the denial, and information regarding plan
enrollment if the denial is not appealed and the possibility
of continued access to an out-of-network provider after plan
enrollment.
11)Specifies that a person who has not been enrolled in a plan
shall remain in FFS if a request for exemption or appeal has
been submitted, until the final resolution.
12)Requires DHCS to develop a process to track persons who have
been denied a request for exemption and to notify the plan and
provide information identifying the requesting provider.
13)Authorizes the HCO Program or DHCS to revoke an approved
request for exemption at any time, if it is determined to have
been based on false or misleading information, treatment has
been completed, or the requesting provider is not providing
services to the person.
14)Requires DHCS to provide written notice to the person that
the approved request from exemption has been revoked, that he
or she shall enroll in a Medi-Cal plan and how that enrollment
shall occur.
EXISTING LAW :
1)Establishes the Medi-Cal Program, administered by DHCS, to
provide comprehensive health care services and long-term care
to pregnant women, children, and people who are aged, blind,
and disabled. Services are reimbursed through FFS, capitated
payments to managed care plans, COHS or other contractual
arrangements.
2)Authorizes DHCS to contract, on a bid or nonbid basis, with
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any qualified individual, organization, or entity to provide
services to, arrange for, or case manage, the care of Medi-Cal
beneficiaries. Defines a MCMC plan as any entity that enters
into one of several types of contracts with DHCS including
COHS, geographic managed care (GMC) plans and Local
Initiatives (LI).
3)Requires DHCS to implement mandatory enrollment of most women,
children and Seniors and Persons with Disabilities (SPDs), who
are not also eligible for Medicare, into a MCMC plan in any
county with a COHS, two-plan model or GMC.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
to codify and clarify the process and standards by which a
Medi-Cal eligible person may continue to receive benefits on a
FFS basis and be exempt from mandatory enrollment in a managed
care plan for a limited period of time. The author points out
that currently there are no statutory guidelines and the
applicable regulations have not been revised since 2000.
According to the author, these regulations were first adopted
in 1997 and primarily applied to pregnant women and children.
They were revised in 2000 to update and strengthen the process
and to respond to an investigation that uncovered some
fraudulent medical exemptions in Los Angeles. The author
states that the recent mandatory enrollment of SPDs has
exposed a number of new problems with these regulations and
the process by which they are applied.
The Assembly and Senate Health Committees held an informational
hearing in December 2011 on the implementation of mandatory
enrollment of the SPD population. At that hearing, various
stakeholders reported that the standards for obtaining a
medical exemption were being applied in an inconsistent
fashion and that the regulations were vague and subject to
varying interpretations. Furthermore, there was widespread
ignorance and misunderstanding of the actual policy. The
author argues that in view of the testimony at the hearing,
there is a demonstrated need for legislation to clarify the
policy, correct ambiguities, and make the policies and
procedures more widely known.
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2)BACKGROUND . In MCMC, as in commercial managed care, the
enrollee's choice of providers may be limited to those in the
plan's network, but the plan is required to ensure timely
access to care. As of September 2011, MCMC in California
served about 4.4 million enrollees in 30 counties, or about
60% of the total Medi-Cal population. California employs
three models of managed care. In two of these models, the
Two-Plan and GMC, FFS Medi-Cal is also still available.
Fourteen counties are part of the Two-Plan model. In most
two-plan model counties, there is an "LI" and a "commercial
plan." The Two-Plan model serves about three million
beneficiaries in 14 counties: Alameda, Contra Costa, Fresno,
Kern, Kings, Los Angeles, Madera, Riverside, San Bernardino,
San Francisco, San Joaquin, Santa Clara, Stanislaus, and
Tulare. Two-counties employ the GMC model: Sacramento and San
Diego serving about 450,000 beneficiaries. In a GMC county,
DHCS contracts with several commercial plans. The third model
is a COHS where everyone is in the same plan and there is no
FFS alternative.
Children, families, and pregnant women have been required to
enroll in MCMC since the 1990s. On November 2, 2010, the
federal Secretary of Health and Human Services approved a new
five year "Bridge to Reform" Section 1115 Medicaid
Demonstration Waiver for California which makes up to $10
billion in federal matching funds available over a five-year
period. The new waiver continued much of the hospital funding
from a 2005 waiver and included three significant new
initiatives that are considered to be a model for transition
to health reform in 2014. One of the initiatives in the 2010
waiver is the mandatory enrollment of SPDs into managed care
plans. The savings from managed care enrollment is intended
to offset the cost of the other initiatives. Implementation
began on June 1, 2011 and is being implemented in all two-plan
and GMC counties over a 12-month period.
3)Enrollment in MCMC . Enrollment in a MCMC plan varies
depending on the circumstances in each county. In a COHS
county everyone is automatically enrolled in the one county
plan regardless of age, disability, or other eligibility
category. In two-plan counties and in the Sacramento GMC, a
Medi-Cal enrollee who is in a mandatory enrollment category is
sent an enrollment packet that provides information about plan
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choices and includes lists of providers that are available in
the network. Ideally, the enrollee chooses a plan based on
personal choice of providers in the contracted network. If
the person does not return the packet with a plan choice, they
are enrolled in a plan by default. An auto-assignment
algorithm is used that is based on quality measures and the
plan's use of traditional safety-net providers in the network.
Traditionally in California, about 30% of the enrollees
actually choose a plan. Except for San Diego which runs its
own enrollment activities, California utilizes a third party
enrollment broker to provide the plan information to potential
enrollees and to handle enrollment. This HCO Program is
currently operated by Maximus. Prior to implementation of
mandatory SPD enrollment, DHCS and the HCO Program undertook a
number of preparatory efforts. Even before receiving
authority for mandatory enrollment, DHCS began encouraging
voluntary enrollment through outreach and awareness
activities. This included pilot testing a special guide for
SPDs. A measureable increase in voluntary enrollment resulted
from these efforts. Nonetheless, under mandatory enrollment
of the SPD population, the rate of choice, meaning the person
proactively chooses a plan, is still running only about 30% to
40% based on initial data.
Under SB 208 (Steinberg), Chapter 714, Statutes of 2010 which
implemented the new waiver and the Special Terms and
Conditions imposed by the Center for Medicare and Medicaid
Services (CMS), there are a number of requirements relating to
enrollment intended to ensure a seamless transition. For
instance, DHCS was required to develop a SPD sensitivity
training manual and all appropriate plan and state staff were
required to receive training. There are requirements to
conduct outreach activities including community presentations,
involvement of stakeholder groups, and to make available
materials in multiple languages and formats and to provide
in-person assistance. In order to minimize disruption in care
for those who don't choose, CMS also directed DHCS to make
repeated efforts to contact individuals and encourage choice.
Secondly, DHCS is required to utilize claims data to make a
default selection into a plan based on the person's usual and
known providers, including specialty providers. Finally, SB
208 also provided an opportunity for extended continuity of
care that allows an enrollee to continue to receive services
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from a current Medi-Cal FFS provider, including a specialist,
who is not in one of the plan networks. Health plans are
required to allow the enrollee to have access to this provider
for 12 months as long as there is an ongoing prior
relationship and the provider agrees to accept the health
plan's contracted rate or the FFS rate, whichever is higher.
If the provider does not agree the plan must work with the
enrollee to find in-network alternatives. On September 21,
2011, the DHCS MCMC Division notified plans of the details of
this continuity of care policy in an All Plan Letter.
4)MER . Existing regulations provide that a person who is
receiving Medi-Cal FFS treatment or services for a complex
medical condition from a physician, a certified nurse midwife,
or a licensed midwife who is participating in the Medi-Cal
program but does not contract with one of the plans available
through mandatory enrollment may request a medical exemption
to continue FFS Medi-Cal for the purposes of continuity of
care up for to 12 months or until the medical condition has
stabilized to a level that would enable the individual to
change physicians without deleterious medical effects. A form
is included with the enrollment packet and must be filled out
by the physician and submitted to HCO/Maximus. A MER is an
option for a limited number of conditions, such as cancer,
HIV, or dialysis. The original mandatory population was a
relatively healthy population of parents and children. This
is partially due to the exemption of disabled children and the
fact that treatment of children for certain chronic conditions
was "carved-out" or delivered outside the plans through the
California Children's Services Program. When mandatory
enrollment was extended to SPDs, including children, it was
agreed that a more expansive continuity of care should also be
available for this population which was more likely to have
chronic conditions and an existing relationship with a
Medi-Cal FFS provider. However, the number of MERs also
increased and the interaction with the new continuity of care
provisions led to some confusion. As a result, DHCS is in the
process of clarifying the MERS policy and process and is
circulating a draft Provider Bulletin. According to this
draft, a patient receiving maintenance care or being seen for
routine follow-up of their complex medical conditions will not
be granted an exemption from plan enrollment. In addition, as
dictated by the current regulations, a MER will not be granted
if the person had been in the plan more than 90 days, has a
current provider who is in the plan network or has begun or
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was scheduled to begin treatment after the date of enrollment.
Furthermore, even though substantial documentation has
traditionally been required, DHCS is now asking for additional
documentation to verify the MER.
Advocates and providers have petitioned DHCS for a number of
modifications at various meetings, legislative hearings and in
writing. They have also brought numerous cases to the
attention of DHCS. DHCS has tried to resolve individual cases
brought to their attention but has represented the problem to
be not widespread and has declined to revise its policies. In
a response to one such request in February of 2012, the
Director of DHCS acknowledged that DHCS was now requiring more
information than in the past due to the complexity of the
cases. He cited for example that in some cases documentation
from the last five visits was required whereas it had not been
previously. The Director also reported that DHCS was
developing a MERS survey and was creating a MERS denial
report. As of April 1, 2012, over 200,000 SPDs have been
enrolled. There have been 12,800 MERS filed, which is 4% of
the SPD population. Of these, 1,900 were approved, 3,400 were
denied and 7,500 were returned as incomplete.
5)SUPPORT . In support of this bill, Western Center on Law &
Poverty (WCLP), writes that for many years the MER process
worked effectively and there was not an overwhelming demand
for MERs because most beneficiaries with complex medical
conditions were not subject to mandatory enrollment.
According to WCLP, with the implementation of California's
"Bridge to Reform" 1115 Waiver Demonstration Project that
changed. WCLP states that SPDs began to be mandatorily
enrolled in May 2011. WCLP points out that these are the
Medi-Cal beneficiaries who are the most fragile and
vulnerable. According to WCLP, many of these individuals with
complex needs have been relying on a delicate web of specialty
providers and support systems for years to keep them safe and
stable in the community. WCLP further states in support that
in these complex medical cases, a beneficiary's mandatory
enrollment into a health plan can result in a loss of
providers and a safety-net that can put the beneficiary's
health and stability at serious risk. WCLP points out that
the MER process was intended to avoid such a consequence by
allowing a patient's doctor to make a specific request to be
exempted from mandatory enrollment for a limited period of
time to keep them safe and ensure they remained stable. WCLP
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further argues in support that with the implementation of the
SPD mandatory managed care enrollment over the last ten
months, the effective implementation of the MER process fell
apart. Advocates and providers for this population have found
repeatedly the MER process has failed to protect their clients
as it was intended to do.
The National Health Law Program (NHeLP), also in support, writes
that advocates have presented case after case demonstrating
DHCS's failure to implement the MER process as written, and
highlighting administrative barriers that have been added to
render the MER process essentially unavailable. NHeLP further
states that this has resulted in destabilization of
beneficiaries and a loss of continuity of providers for
hundreds, and potentially thousands, of beneficiaries with
complex medical conditions. Because this MER process is no
longer working, this bill is necessary to clarify and codify
the MER process in statute.
According to supporters, making the law clear - for example,
requiring the DHCS to follow the expertise and knowledge of
the beneficiary's own treating physicians to determine their
patients' safety - is essential to enable the MER process to
work as intended. Supporters further state that this
legislation is a critical step towards protecting these
vulnerable individuals to stop them from getting cut off from
their regular and necessary care. According to these
supporters, DHCS claim that beneficiaries' providers can still
see them after they are enrolled in a plan is simply not true.
The supporters argue that there are too many barriers to
making this work and these individuals often have numerous
specialists that would need to navigate the requirements of
the plan without being a part of the network, thus the need
for this bill.
The California Medical Transportation Association (CMTA) writes
in support that the lack of implementation of the existing
exemption has come into focus since the involuntary transfers
of SPDs began last year. According to CMTA, beneficiaries
receiving chronic dialysis treatment qualify for the exemption
but have been routinely denied. CMTA states that this has
resulted in loss of ongoing non-emergency medical
transportation among other services. As a consequence, CMTA
supports this bill in the hope that the exemption process can
be properly carried out and the continuity of care preserved
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for the SPDs that need it.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
BIOCOM
California Advocates for Nursing Home Reform
California Commission on Aging
California Healthcare Institute
California Medical Transportation Association
Developmental Disabilities Area Board 10
Disability Rights Education and Defense Fund
Health Access California
National Health Law Program
Maternal and Child Health Access
Western Center on Law & Poverty
Opposition
None on file
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097