BILL ANALYSIS �
AB 2206
Page 1
Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2206 (Atkins) - As Introduced: February 23, 2012
SUBJECT : Medi-Cal: dual eligible: pilot projects.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to include the Program for All-Inclusive Care for the Elderly
(PACE), if available, as an option for enrollment in all
enrollment materials, enrollment assistance programs, and
outreach programs related to the State's demonstration project
to integrate care for individuals who are eligible for Medi-Cal
and Medicare (dual-eligible). Requires the PACE plan to be made
available to potential enrollees whenever enrollment choices and
options are presented.
EXISTING LAW :
1)Establishes the federal Medicaid Program, Medi-Cal in
California, administered by DHCS, to provide comprehensive
health care and long-term care and support services (LTCSS) to
pregnant women, children, and people who are seniors and
people with disabilities (SPDs).
2)Requires children, families, and SPDs, who are not also
eligible for Medicare, to enroll in a Medi-Cal managed care
(MCMC) plan in counties with geographic managed care (GMC) or
the two-plan model. Allows persons eligible for a PACE plan
to select one if available.
3)Requires all Medi-Cal beneficiaries who live in a county with
a County Organized Health System (COHS) to receive most
Medi-Cal services through the COHS.
4)Establishes the federal Medicare program, which is a public
health insurance program for individuals age 65 and older and
specified persons with disabilities who are under age 65.
5)Requires DHCS, to the extent that federal financial
participation is available, and pursuant to a demonstration
project or waiver, to establish pilot projects in up to four
counties, to develop coordinated care models to provide
services to persons who are dually eligible under both the
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Medi-Cal and Medicare programs. Allows persons eligible for a
PACE plan to select one if available.
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 ensure that enrollment material and information for PACE is
available to beneficiaries whenever managed care enrollment
options are presented under the "dual eligibles" pilot
programs. This is accomplished by requiring that PACE
programs be provided with equal access to mailings,
informational seminars, and training. The author states that
PACE is a proven model of care for frail seniors on Medi-Cal
and Medicare. According to the author, studies show that
enrollment in PACE is associated with several beneficial
outcomes, including fewer hospitalizations and nursing home
admissions, an increased number of days in the community,
better health, better quality of life, greater satisfaction
with care, and better functional status. PACE programs
provide, and are at financial risk for, all Medi-Cal and
Medicare covered services, and also provide supplemental
services such as home modifications and ramps that allow
beneficiaries to safely remain in their homes and out of
nursing homes. The author argues that it is in the state's
interest to ensure that beneficiaries who are eligible for and
can benefit from PACE have access to PACE, which this bill
would help ensure by making sure dual eligible beneficiaries
are informed about it as an enrollment option.
2)BACKGROUND . The PACE program provides integrated health and
social services care for the elderly. To qualify for PACE, a
recipient must: a) be over the age of 55; b) meet the level of
care necessary for placement in a skilled nursing facility
(SNF) or intermediate care facility; c) live in an area where
PACE is available; and, d) be able to safely remain in the
community if PACE is provided. The PACE program receives a
capitated rate to coordinate and provide long-term social and
medical care for recipients, the majority of whom are dually
eligible for Medicaid and Medicare. Generally, this capitated
rate is less than what it would cost if the recipient enters a
nursing home. This creates the incentive for the PACE plans
to provide services in the community rather than in an
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institutional setting. The PACE site is fully responsible for
the cost of all medical and social services each participant
requires. Statewide, there are roughly 2,800 PACE
participants. Each PACE site employs an interdisciplinary
team that is responsible for conducting assessments,
delivering services, and coordinating care. Examples of
members of this team are doctors, nurses, social workers,
transportation operators, and nutritionists. If not in a SNF
or hospital, most PACE recipients receive medical and social
services at the PACE site.
Originally put forward as a demonstration program, PACE is now
a mainstream benefit under both the Med-Cal and Medicare
programs. Five fully operational PACE programs provide
services through 23 PACE centers in seven large counties; in
addition, two to three additional PACE programs are expected
to become operational in 2013, bringing the PACE model to
three additional large counties. Applications are also
pending that, if approved, could bring PACE to even more
counties by 2014.
3)DUAL ELIGIBLES . Under the current system Medicare is
administered and funded by the federal government and
generally covers primary and acute care and pharmacy.
Medi-Cal is the secondary payer for low-income beneficiaries
and covers primary and acute care, medical equipment, and
long-term care (LTC). Medi-Cal also pays for home and
community-based services (HCBS) but these may be administered
separately such as In Home Support Services. According to
DHCS, there are 1.1 million dually eligible Medi-Cal
enrollees. Although they constitute roughly 10% of the
Medi-Cal population, they account for nearly 25% of annual
Medi-Cal costs. Dual eligibles also account for 75% of the
total Medi-Cal costs for LTC. DHCS states that dual eligible
enrollees are the most chronically ill individuals within both
Medicare and Medicaid, requiring a complex range of services
from multiple providers. According to DHCS, despite the
complexity of their needs, the vast majority of California's
dual eligibles remain in the fragmented Fee-For-Service (FFS)
delivery system.
4)CARE INTEGRATION DEMONSTRATION PROJECTS . The Patient
Protection and Affordable Care Act (ACA) established two new
offices within the Center for Medicare and Medicaid Services
(CMS)-the Federal Coordinated Health Care Office (Duals
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Office) and the Center for Medicare and Medicaid Innovation
(CMMI). The goal of the Duals Office is to ensure dual
eligibles have full access to seamless, high quality health
care, while making the system as cost-effective as possible.
While the Duals Office is more narrowly focused on the
population of dual eligibles, the role of the CMMI is more
broadly aimed at improving Medicare, Medicaid, and the
Children's Health Insurance Program for all Americans.
Specifically, the CMMI identifies, tests, and promotes
innovative models of payment and service delivery to lower
costs and improve the quality of health care for all
Americans. In cooperation with the Duals Office, the CMMI
awarded 15 states, including California, design contracts of
up to $1 million to develop new ways to meet the needs of dual
eligibles. These states are expected to develop strategies
for implementing models of care that fully coordinate primary,
acute, behavioral, and LTSS for dual eligibles. This
integration of Medicare and Medicaid funding and services is
expected to result in savings for the state and federal
government. States are expected to work with beneficiaries,
their families, and other stakeholders to develop their
demonstration proposals. After a federal review of the
proposals, CMS is working with states to implement the plans
that they decide have the most promise.
5)California Demonstration Project . Among other things, SB 208,
(Steinberg), Chapter 714, Statutes of 2010, directed the state
to implement a coordinated care demonstration pilot project
for dual eligibles in up to four counties. SB 208 requires
that the demonstration include at least one county that
provides Medicaid under a COHS, and at least one county that
provides Medicaid services through a two-plan model. To
implement SB 208, DHCS is planning the California's Dual
Eligibles Demonstration Project (demonstration), a three-year
demonstration launching on January 1, 2013. Sites interested
in participating in this demonstration were required to submit
their response to a Request for Solutions (RFS) by February
24, 2012. In selecting the sites for the demonstration, SB
208 required DHCS consider: a) local support for integrating
medical care, LTC, and HCBS networks; and, b) a local
stakeholder process that includes health plans, providers,
community programs, consumers, and other interested
stakeholders in the development, implementation, and continued
operation of the demonstration. On April 4, 2012, DHCS
announced that Los Angeles, Orange, San Diego, and San Mateo
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counties would be the initial participants in the proposed
three-year demonstration project. According to DHCS, a team
involving departments across the California Health and Human
Services Agency reviewed 22 proposals from health plans
operating in ten counties. The review team determined that
the selected health plans would, upon implementation, improve
dual eligible beneficiaries' care experiences and health
outcomes. As part of the announcement, the state released a
comprehensive draft proposal for a 30-day public comment that
outlines the demonstration project. It is funded by the ACA
and requires the approval of CMS.
6)DUAL ELIGIBLE ENROLLMENT PROCESS . The RFS states that the
dual eligibles in counties selected for the pilot will be
passively enrolled in the managed care plans. Passive
enrollment means that, unless the beneficiary makes a choice
to opt out of the managed care plan, they will be
automatically enrolled. Once beneficiaries are enrolled in a
plan, pending federal approval, they will be locked in to that
plan for a period of six months. After the six months, the
beneficiary would be allowed to switch plans or return to FFS.
Enrollment of beneficiaries will be phased in. The details
of how this phase-in will work will be determined by DHCS
after consulting with health plans, stakeholders,
beneficiaries, and the federal government on strategies for
implementing models of care that fully coordinate primary,
acute, behavioral, and LTSS for dual eligibles. DHCS is
collaborating with state offices and external partners on the
development of a series of stakeholder work groups. One of
the work groups, Beneficiary Notifications, Appeals and
Protections will make recommendations on the enrollment
process for the demonstration including specific text and
design principles for beneficiary notices. The work group
will also provide feedback on a coordinated appeals and
grievance procedures in order to ensure a more coordinated
process, while maintaining beneficiary protections. The first
meeting was held on April 12, 2012.
7)EXISTING ENROLLMENT . 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 included three significant
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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.
Enrollment began on June 1, 2011 and is being implemented in
all two-plan and GMC counties over a 12-month period. SB 208,
the implementing legislation specifically required PACE to be
offered as an enrollment option. The Assembly and Senate
Health Committees held an informational hearing in December
2011 on the implementation of mandatory enrollment of the SPD
population. Providers and advocates reported a variety of
problems with the enrollment process including difficulties
exercising their rights to medical exemptions and continuity
of care. In addition, there were reports of enrollees who
were unknowingly default enrolled and did not discover this
until they tried to see a provider.
According to the testimony of Dr. Jay Luxenberg, Chief Medical
Officer of On Lok, based on this experience with the managed
care transition for SPDs, unless duals who may benefit from
PACE are identified and given an option to enroll directly in
PACE, many will default into managed care plans and will end
up in nursing homes or opting back into FFS Medi-Cal before
PACE programs have a chance to work with them to keep them in
the community. On Lok was the first PACE program in the
country and is the nationally recognized model. PACE was not
included in all enrollment and reenrollment materials, not
listed as an option on the enrollment form, and enrollment
contractors were not trained to understand PACE. According to
this testimony, the PACE programs had to do a supplemental
mailing to beneficiaries with information about PACE,
resulting in confusion and many beneficiaries missing an
opportunity to select PACE.
8)Coordinated Care Initiative for Medi-Cal BENEFICIARIES . As
part of the 2012-13 Budget, the Administration is proposing to
expand the enrollment of dual eligibles statewide into MCMC
from the four demonstration pilots described above. The
transition of this population, their Medicare benefits and
LTCSS into MCMC would be phased-in. Starting January 1, 2013,
dual eligibles would be mandatorily enrolled into MCMC and
would receive their Medi-Cal benefits via managed care. Also
starting January 1, 2013, but only in 10 counties, Medicare
benefits for dual eligibles would be provided via managed
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care. Medicare benefits would be phased-in to managed care
throughout the state over three years. Twenty more counties
would join the dual eligible demonstration on January 1, 2014,
and the remaining 28 counties would participate in this
demonstration as of January 1, 2015. Medicare and Medi-Cal
funding would be combined into a single payment to a managed
care plan with this transaction. Furthermore, the
Administration proposes to integrate long-term supports and
services into the MCMC benefit starting January 1, 2013, and
phased in over three years. Finally, the budget proposes to
expand managed care into the remaining 28 rural counties that
are now FFS only beginning in June 2013.
9)SUPPORT CalPACE, the sponsor of this bill and the statewide
association of PACE programs, as a result of not including the
PACE programs in the state's enrollment materials, frail
seniors who could benefit from PACE programs are not fully
aware of the program. St. Paul's PACE program writes in
support of this bill that participants, after enrolling in
PACE, experience marked improvement in their daily living;
that on-site studies conducted in 2011 showed a reduction in
hospitalizations by 79%, a 21% improvement in fall risks, and
an increase range of motion by 63% of the seniors. St. Paul's
PACE further states in support that PACE programs are an
option for individuals enrolling in MCMC. However, the PACE
programs enrollment materials have not been included in a
meaningful way in communications by the State and managed care
plans. According to St. Paul's PACE, this bill goes a long
way to correct that. Centers for Elders Independence (CEI)
also writes in support that the dual eligible demonstration
poses a significant challenge to PACE. According to CEI,
during mandatory enrollment of SPDs, beneficiaries lacked
notification, education, and enrollment information on PACE
despite SB 208 specifying PACE's role in this process. CEI
writes in support that to ensure PACE is adequately
represented as an enrollment option in the demonstration, this
bill requires that beneficiaries who qualify for PACE are
notified of their choice to enroll in PACE in counties where
PACE is available. In addition, this bill allows PACE
programs to have equal access to marketing material and
activities relating to the mandatory enrollment of dual
eligible beneficiaries into managed care.
10)RELATED LEGISLATION . AB 62 (Monning) permits DHCS to
establish pilot projects for dual eligibles pursuant to a
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request for proposal from CMS. Requires DHCS to consult with
specified stakeholders on a regular basis throughout the
development and implementation of the dual eligible pilot
projects. AB 62 is pending in the Senate.
11)PREVIOUS LEGISLATION .
a) SB 208 implemented provisions of the 2010 Section 1115
replacement waiver including establishing the Public
Hospital Investment, Improvement and Incentive Fund
consisting of intergovernmental transfers from counties or
other specified governmental entities, to be matched with
federal funds and to be used for investment, improvement
and incentive payments for designated public hospitals and
the affiliated governmental entities (Counties and
University of California), authorized DHCS to require the
mandatory enrollment of SPDs in a MCMC plan commencing the
later of either June 1, 2011 or obtaining federal approval
and required DHCS to implement pilot projects to provide
coordinated care to children in the California Children's
Service and to persons who are eligible for Medi-Cal and
Medicare.
b) AB 577 (Bonnie Lowenthal), Chapter 456, Statutes of
2009, authorized specified state departments to apply
approved exemption requests of a PACE to all locations of a
PACE organization, modified the exemption for PACE that may
be granted under existing law to require the exemption to
be from duplicative, conflicting or inconsistent
requirements, and prohibits specific federal requirements
of the PACE model from being waived.
c) AB 847 (Berg), Chapter 315, Statutes of 2005, provided
DHCS and other state departments authority to grant
exemptions to existing regulations for PACE programs in
instances where DHCS finds that the licensing requirements
do not fit the PACE model and that granting the exemption
does not jeopardize the health and welfare of participants
in PACE.
REGISTERED SUPPORT / OPPOSITION :
Support
CalPACE, sponsor
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AltaMed Health Services
Centers for Elders' Independence
National Association of Social Workers - California Chapter
On Lok Senior Health Services
St. Paul's PACE
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097