BILL ANALYSIS �
AB 1553
Page 1
ASSEMBLY THIRD READING
AB 1553 (Monning)
As Amended May 25, 2012
Majority vote
HEALTH 14-5 APPROPRIATIONS 12-5
-----------------------------------------------------------------
|Ayes:|Monning, Logue, Ammiano, |Ayes:|Fuentes, Blumenfield, |
| |Atkins, Bonilla, Eng, | |Bradford, Charles |
| |Gordon, Hayashi, Roger | |Calderon, Campos, Davis, |
| |Hern�ndez, Bonnie | |Gatto, Ammiano, Hill, |
| |Lowenthal, Mitchell, Pan, | |Lara, Mitchell, Solorio |
| |V. Manuel P�rez, Williams | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Garrick, Mansoor, |Nays:|Harkey, Donnelly, |
| |Nestande, Silva, Smyth | |Nielsen, Norby, Wagner |
| | | | |
-----------------------------------------------------------------
SUMMARY : Establishes requirements and a process for medical
exemptions from mandatory enrollment in Medi-Cal Managed Care
(MCMC) by codifying and revising existing regulations.
Specifically, this bill :
1)Applies to persons who are required to enroll in a managed
care plan in a county with a geographic managed care or
two-plan model and who are receiving fee-for-service (FFS)
Medi-Cal services from a specified provider who is not
contracting with one of the plans in the county or to a person
who is receiving services through Indian Health Services.
2)Specifies qualifying medical conditions such as pregnancy;
testing positive for human immunodeficiency virus (HIV) or
having received a diagnosis of acquired immune deficiency
disorder (AIDS); receiving chronic renal dialysis treatment;
having a cancer diagnosis and currently receiving radiation or
chemotherapy treatment; or, receiving treatment for other
complex disorders as specified and the interruption of such
treatment would put the person at risk for deleterious
effects.
3)Except for pregnancy, provides that the eligible person may
remain in FFS Medi-Cal for up to 12 months, allows for the
AB 1553
Page 2
exemption to be renewed and limits the period for pregnancy to
be through delivery and 90 days postpartum.
4)Provides for the verification, approval or denial of medical
exemption requests (MERs), notice and appeal of denials, but
prohibits the Department of Health Care Services (DHCS) from
overruling a treating physician's determination that a
person's medical condition is not stable enough for transfer
to a MCMC plan and allows the person to remain in FFS Medi-Cal
pending an appeal.
5)Requires tracking of denials and transmittal of specified
information to the MCMC plan in the case of a denial.
6)Authorizes DHCS to deny the MER if the person has been a
member of the plan more than 90 days or has received services
that are the financial responsibility of the plan.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Uncertain, but potentially significant state costs to the
extent this bill allows more people to opt out of managed care
(50% General Fund (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. 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, increased costs of $600,000 annually (50% GF, 50%
federal).
2)Likely minor, absorbable increased costs associated with
tracking and notification requirements.
COMMENTS : 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
AB 1553
Page 3
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 Seniors and People with Disabilities (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 SPDs. 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.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0003830