BILL ANALYSIS �
AB 2002
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Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2002 (Cedillo) - As Amended: April 30, 2012
Policy Committee: HealthVote:16-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill defines "safety net provider" for the purpose of
determining which Medi-Cal managed care (MCMC) plan a
beneficiary will be assigned to if they do not choose a plan.
Specifically, this appends bill the following to the current
definition used by the Department of Health Care Services (DHCS)
of safety net provider:
1)A medical group, independent practice association (IPA),
physician office, or clinic with more than 10 physicians that
has a Medi-Cal or medically indigent encounter rate of at
least 50% of total patients served in a calendar year, based
on claims or encounter data.
2)A medical practice of 10 or fewer physicians in which at least
30% of the patients served in a calendar year are enrolled in
Medi-Cal.
FISCAL EFFECT
1)One-time costs in the range of $50,000 (50% GF, 50% federal
funds) to DHCS to establish criteria and an application, issue
regulations, and communicate the new definition of safety net
provider.
2)Ongoing costs to DHCS potentially exceeding $200,000 (50% GF,
50% federal) to modify the definition of safety net provider
for purposes of the auto-assignment program. Workload would
include tracking, verifying, providing technical assistance,
and auditing data submitted by providers and provider groups
in order to establish designation as a safety net provider, as
well as collecting and validating data on contractual
AB 2002
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arrangements between plans and newly designated safety net
providers. Costs could be more or less depending on the
number of providers who applied. New IT infrastructure could
reduce ongoing costs, but would require an up-front
investment.
3)Uncertain costs or cost savings associated with changes in
default plan assignment, depending upon whether the plan that
gains default enrollment through this bill is more
cost-efficient than alternative plans. Managed care rates
reflect the risk of the population, so increased costs should
only emerge over the longer term if a plan that gains default
enrollment under this new definition manages this risk less
efficiently than the alternative plan.
COMMENTS
1)Rationale . According to the author, this bill would help
create a level playing field for all primary care providers in
the Medi-Cal program by adding two additional categories of
providers, based on patient encounter data, to the definition
of safety net provider. The author asserts there are private
providers who are committed to the Medi-Cal population, and
that the current system encourages plans to contract with
"traditional" safety net providers over private providers.
2)Auto-Assignment . If a Medi-Cal eligible person is required to
enroll in MCMC and does not choose a plan, they are assigned
by default according to a formula developed by DHCS.
According to DHCS, the department first implemented the
performance-based Auto Assignment Incentive Program in
December 2005. This program rewards better-performing plans
with a greater percentage of assigned mandatory enrollees
(those who do not choose a plan) based on an assessment of
comparative plan performance on eight performance measures.
Six measures are Healthcare Effectiveness Data and Information
Set (HEDIS) measures related to the quality, access and
timeliness of care provided by plans to Medi-Cal managed care
plan members. The other two measures relate to plans'
continued commitment to safety net providers in their
contracted networks. Safety net providers are currently
defined as federally qualified health centers, Rural Health
Centers, Indian or Tribal Clinics, non-profit community or
free clinic licenses by state as primary care clinic, or
clinics affiliated with disproportionate share hospital
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facilities.
DHCS convenes a stakeholder workgroup every year consisting of
plan representatives, advocates, and DHCS staff to review
prior-year results and recommend changes or additions to the
performance measures included in the auto-assignment
algorithm.
3)Budget Proposal: Adding Cost as a Factor into Auto-Assignment
Algorithm . In fiscal year (FY) 2012-13, the administration
proposes considering health plan cost in addition to quality
of care and safety net population factors, for purposes of
default assignment. Savings would be recognized by rewarding
plans with lower costs with additional default enrollment, for
a total of $2.4 million GF in FY 2012-13 and $5.8 million in
FY 2013-14. DHCS believes this change can be implemented
administratively. This bill would not appear to preclude this
budget savings option, but could change the amount of savings
by an unknown amount.
4)Support . Molina Healthcare of California, the sponsor of this
bill, states this bill creates a fair definition of safety net
provider for the purposes of the MCMC default assignment
algorithm. According to Molina and other supporters, the
current definition fails to recognize private providers who
make a significant contribution to the safety net. These
supporters assert this bill would reward those providers who
have made an important investment in this program as we move
forward toward federal health care reform.
5)Opposition . This bill is opposed by a wide coalition of safety
net providers, including community clinics and public
hospitals, as well as local (public) Medi-Cal managed care
plans. SEIU also opposes this bill, indicating it will reduce
the viability of county hospitals.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081