BILL ANALYSIS �
AB 1553
Page 1
Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1553 (Monning) - As Amended: April 16, 2012
Policy Committee: HealthVote:14-5
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill specifies standards for medical exemptions (MERs) from
mandatory enrollment in Medi-Cal Managed Care, based in part on
current regulations. Specifically, this bill codifies
exemptions that are currently in regulation, and makes the
following key changes:
1)Removes a 12-month time limit on the exemption from enrollment
in managed care, and allows beneficiaries to stay in the
Medi-Cal fee-for-service (FFS) program.
2)Adds the following conditions as qualifying for exemptions:
a) Diseases or conditions that affect more than one organ
system, or require coordinated care from more than one
specialist, unless all of the specialists providing care to
the beneficiary are contracting providers in one of the
plans.
b) Receipt of nursing services in the home instead of in a
long-term care care facility, for beneficiaries under 21
years of age.
c) Receipt of treatment services not available in the
beneficiary's home county.
d) Receipt of treatment or palliative services for a
disease or condition that is expected to result in death
within the next 24 months.
1)Requires that a MER can only be denied on the basis that a
beneficiary has been a member of a plan for 90 calendar days
if the beneficiary has also received services for which the
plan is financially responsible.
AB 1553
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2)Requires tracking and notification of enrollees requesting
exemption.
FISCAL EFFECT
1)Uncertain, but potentially significant state costs to the
extent this bill allows more people to opt out, and stay out,
of managed care (50% GF, 50% federal funds). Managed care
plans are generally expected to provide a savings relative to
FFS in the range of 5-10%. This bill broadens the criteria for
exemption, and allows beneficiaries permanent exemptions from
managed care enrollment by removing the 12-month time limit on
exemptions. Any cost estimate would be highly speculative.
Costs depend on how many more people would be eligible given
the slightly expanded criteria, how many more would seek
exemption, how many would be approved, and how long
beneficiaries would stay exempt. For example, if 50 more
exemptions were approved per month, and assuming cost savings
from managed care enrollment of $1,000 annually relative to
FFS, costs would increase by $600,000 annually (50% GF, 50%
federal). To the extent beneficiaries also stayed exempt year
after year due to the removal of the 12-month requirement,
these costs would compound.
2)Likely minor, absorbable increased costs associated with
tracking and notification requirements.
COMMENTS
1)Rationale . According to the author, this bill codifies and
clarifies the process by which a Medi-Cal beneficiary can
claim exemption from mandatory enrollment in a managed care
plan and continue to receive benefits on a FFS basis. The
author states that the recent mandatory enrollment of seniors
and persons with disabilities (SPDs) has exposed a number of
new problems with these regulations and the MER process.
Stakeholders have reported widespread problems with mandatory
enrollment in managed care plans and indicate there has been
poor communication, widespread ignorance, and misunderstanding
of the actual policy. Anecdotally, these circumstances
include lack of continuity of care for individuals scheduled
for transplant surgery, or missing scheduled dialysis
appointments. This bill intends to standardize, publicize,
and provide oversight of the medical exemption policy.
AB 1553
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2)Background . Medi-Cal is delivered through two delivery
systems, FFS (where an individual can receive services from
any provider who accepts Medi-Cal) and managed care (where a
Medi-Cal managed care plan limits the choice of providers but
is required to provide timely access to care). A
beneficiary's delivery system depends on their eligibility
category and whether managed care is available in their
county. Children, families, and pregnant women have been
required to enroll in managed care since the 1990s. Recently,
the state began mandatory enrollment in of SPDs into managed
care. When this transition is complete, a large majority of
Medi-Cal beneficiaries will be enrolled in managed care.
3)Existing MER Process . Existing regulations have long provided
for specific medical exemptions to mandatory enrollment in
managed care, but Medi-Cal has recently experienced a large
increase in MER applications associated with the SPD
transition. Beneficiaries are not required to opt in to
managed care-they are being passively enrolled, and are
auto-assigned to a default plan if they do not actively choose
a plan when presented with an enrollment packet. In order to
remain in FFS Medi-Cal, a physician must fill out an MER form
and submit it to the DHCS contractor, who reviews and approves
qualifying exemptions. SPDs are more medically complex than
the previous mandatory managed care population, and many have
existing relationships with providers in the FFS program who
may not contract with managed care plans. Most beneficiaries,
even those with complex medical conditions, will not meet the
current medical exemption standards if they are receiving
treatment and are medically stable. DHCS is in the process of
clarifying and reemphasizing the MER policy and process, and
is circulating a draft Provider Bulletin to this effect.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081