BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2266
AUTHOR: Mitchell
AMENDED: May 25, 2012
HEARING DATE: June 20, 2012
CONSULTANT: Bain
SUBJECT : Medi-Cal: Enhanced Health Homes for Frequent Hospital
Users with Chronic Conditions.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to establish a program to provide health home services designed
to reduce a participating individual's avoidable use of
hospitals when more effective care can be provided in less
costly settings. Defines the population of individuals eligible
to receive health home services, the required services, and the
criteria for health care providers selected through a request
for proposal (RFP) process. Requires DHCS to prepare or contract
for an evaluation of the program, to complete the evaluation,
and to submit a report to the appropriate policy and fiscal
committees of the Legislature. Implements this bill only if
federal financial participation (FFP) is available and the
federal Centers for Medicare and Medicaid Services (CMS)
approves the State Plan Amendment (SPA) to implement this bill.
Existing law:
1.Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
services.
2.Authorizes, under the federal Patient Protection and
Affordable Care Act (ACA) (Public Law 111-148), as amended by
the Health Care Education and Reconciliation Act of 2010
(Public Law 111-152), states to offer health home services, as
defined, to eligible individuals with chronic conditions who
select a designated provider, a team of health care
professionals operating with such a provider, or a health team
as the individual's health home for purpose of providing the
individual with health home services.
3.Provides, under the ACA, 90 percent federal matching funds for
the first 8 quarters the health home option is in effect.
Thereafter, the state's regular federal matching rate would be
in effect (typically 50 percent in California).
Continued---
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This bill:
1.Requires DHCS, no later than January 1, 2014, to do all of the
following:
a. Design, with opportunity for public comment, a program
to provide enhanced health home services to persons at high
risk of avoidable and frequent use of hospital services due
to complex co-occurring health and behavioral health
conditions.
b. Upon a RFP process, select providers as designated
providers working in coordination with health care
providers under the Health Homes option SPA.
c. Submit any necessary applications to CMS for a SPA under
the Health Homes option to provide enhanced health home
services to Medi-Cal beneficiaries, to newly eligible
Medi-Cal beneficiaries upon Medicaid expansion under the
ACA, and to Low Income Health Program (LIHP) enrollees, if
applicable, in counties with LIHPs willing to match federal
funds.
2.Requires the program established to provide services to
Medi-Cal beneficiaries, to newly enrolled Medi-Cal
beneficiaries upon implementation of Medicaid expansion under
the ACA, and, if applicable, in counties with a LIHP, willing
to match federal funds, to enrollees of the LIHP. Requires the
program to be designed to reduce a participating individual's
avoidable use of hospitals when more effective care, including
primary and specialty care, and social services can be
provided in less costly settings.
3.Requires DHCS to seek, to the extent permitted by federal law
and to the extent federal approval is obtained, to define the
population of eligible individuals as individuals experiencing
two or more specified diagnoses (mental health disorder,
substance abuse disorder, chronic or life-threatening
condition, or significant cognitive impairment) and two or
more specified indicators of severity (inpatient
hospitalizations, excessive use of crisis or emergency
services, failed linkages to primary care, chronic
homelessness, inadequate follow-through, two or more episodes
of detoxification services, medication resistance,
self-harm/threats of harm to others, or significant
complications in health conditions).
4.Permits DHCS to develop a payment methodology other than a
fee-for-service payment, including a per member, per month
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3
payment to designated providers.
5.Requires services provided under the program to include all of
the following:
a. Comprehensive and individualized case management;
b. Care coordination and health promotion, including
connection to medical, mental health, and substance abuse
care;
c. Comprehensive transitional care from inpatient to other
settings, including appropriate follow-up;
d. Individual and family support, including authorized
representatives;
e. Referral, if relevant, to other community and social
services supports, including transportation to appointments
needed to manage health needs, connection to housing for
participants who are homeless or unstably housed, and peer
and recovery support; and
f. Health information technology to identify eligible
individuals and link services, if feasible and appropriate.
6.Permits the state to limit the availability of services
geographically, provided that providers meet criteria
identified below in each county designated.
7.Requires DHCS to select designated providers operating with a
team of health care professionals that have all of the
following:
a. A designated lead provider that is a community clinic, a
provider of mental health services pursuant to the Adult
and Older Adult Mental Health System of Care Act, or a
hospital;
b. Demonstrated experience working with frequent hospital
users and with documentation of experience reducing
emergency department (ED) visits and hospital inpatient
days among the population served;
c. Demonstrated experience working with people experiencing
chronic homelessness;
d. The capacity and administrative infrastructure to
participate in the program, including the ability to meet
requirements of federal guidelines;
e. Documented ability to provide or to link clients with
appropriate community-based services, including intensive
individualized face-to-face care coordination, primary
care, specialty care, mental health treatment, substance
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abuse treatment, peer and recovery support, permanent or
transitional housing, and transportation;
f. Experience working with supportive or other permanent
housing providers;
g. Current partnership with essential community hospitals,
particularly the hospital or hospitals serving a high
proportion of Medi-Cal patients, such as disproportionate
share hospitals; and
h. A viable plan, with roles identified among providers of
the enhanced health home, to do all of the following:
i. Reach out to and engage frequent hospital
users and chronically homeless eligible individuals;
ii. Connect eligible individuals who are
homeless or experiencing housing instability to
permanent housing, including supportive housing;
iii. Ensure eligible individuals receive whatever
integrated services are needed to access and maintain
health stability, including medical, mental health, and
substance abuse care and social services to address
social determinants of health;
iv. Track, maintain, and provide outcome data to
the evaluator;
v. Identify appropriate funding sources for the
nonfederal share of costs of services for the first
eight quarters of implementation of the program; and
vi. Identify appropriate funding sources for the
nonfederal share of costs of services to sustain program
funding beyond the first eight quarters of
implementation of the program, which may include a plan
to partner with managed care organizations, counties,
hospitals, private funders, or others.
8.Permits DHCS to designate providers working under a managed
care organization contract or as a fee-for-service provider.
9.Prohibits a specified provision of this bill from being
construed to preclude local entities, health plans, or
foundations from contributing the nonfederal share of costs
for services provided under this program, as specified.
10. Prohibits this bill from being construed to limit
DHCS in targeting additional populations or creating
additional programs under the Health Homes option.
11. Permits DHCS to implement this bill through
provider bulletins or similar instructions, without taking
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regulatory action under the Administrative Procedure Act.
12. Requires DHCS, if FFP is available, to prepare, or
contract for the preparation of, an evaluation of the program
identified in this bill. Requires DHCS to seek out and utilize
only non-state public funds or private funds to fund the
nonfederal share of costs of the evaluation. Requires DHCS,
within 18 months after designated providers have been selected
and have begun to seek payment, to complete the evaluation and
submit a report to the appropriate policy and fiscal
committees of the Legislature.
13. Requires this bill to be implemented only if
non-state public funds or private funds are available to fully
fund the creation, implementation, administration, and service
costs during the first eight quarters of implementation, and
thereafter. Allows DHCS to use state funds to fund the program
costs if, after the first eight quarters of implementation,
DHCS finds that Medi-Cal costs avoided by the participants of
the program are adequate to fully fund the program costs.
14. Permits DHCS to revise or terminate the enhanced
health home program any time after the first eight quarters of
implementation if DHCS finds that the program fails to result
in improved health outcomes or fails to decrease total
Medi-Cal costs, including managed care organization costs, if
applicable, for the population it is serving. Permits DHCS to
also designate additional providers, with federal approval, or
remove providers operating under the program if those
providers are unable to provide the nonfederal matching funds
or do not meet DHCS' guidelines.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1.This bill specifies that funding sources for the nonfederal
share of Health Home services costs for the first eight
quarters must be identified by participating providers, and
requires the continued provision of these services to be
cost-neutral to the state after eight quarters.
2.Direct costs to DHCS include:
a. Program development. One-time administrative costs to
DHCS in the hundreds of thousands of dollars or more,
depending upon the ultimate size and scope of the program.
DHCS has applied for and received a total of $1 million for
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planning (50 percent federal, 50 percent matching funds
from The California Endowment).
b. Program administration. This annual cost could be up to
the low millions of dollars, depending on the scope of the
program, the number and type of providers, and other
factors.
c. Evaluation. DHCS indicates evaluations for similar
projects generally cost upwards of $1 million.
3.This bill specifies it is only to be implemented if non-state
public or private funds are available to fully fund the
creation, implementation, administration, and evaluation
costs. Thus, the impact to the General Fund is projected to
be minimal.
4.Limited DHCS resources. This project will compete with other
projects for limited administrative resources for developing
and implementing health home pilots
5.Savings. Significant medical cost savings may be possible.
Similar projects targeting frequent hospital users have
demonstrated dramatic reductions in costs over a two-year
period. However, cost savings may also be realized by other
Health Home options DHCS is already considering.
6.Societal benefit. Enhanced services to stabilize high-needs,
high-cost Medi-Cal beneficiaries could have positive spillover
effects in local communities through reduced demand on social,
public health, and public safety services.
PRIOR VOTES :
Assembly Health: 14- 5
Assembly Appropriations:12- 5
Assembly Floor: 53- 25
COMMENTS :
1.Author's statement. Frequent users of emergency department
hospital care who are homeless face significant difficulties
accessing regular or preventive care and complying with
treatment protocols. Without a home, frequent users cannot
improve health outcomes or reduce their costly use of acute
care services, with no place to store medications, an
inability to adhere to a healthy diet or maintain appropriate
hygiene, and an inability to rest sufficiently to recover from
illness. Homeless Medi-Cal enrollees will in fact, continue to
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7
use costly acute care services and actually increase their
inpatient days, even if receiving medical home services to
reduce their return to the hospital.
2.Federal law and guidance on State Option to Provide Health
Homes for Enrollees with Chronic Conditions. Section 2703 of
the ACA allows states to elect the Health Home option in their
Medicaid program and receive a 90 percent federal matching
rate for 2 years for these services. Federal law defines the
individuals eligible for health home services as individuals
meeting one of the following: (a) having at least two chronic
conditions; (b) having one chronic condition and are at risk
of having a second chronic condition; or (c) having one
serious and persistent mental health condition.
Federal law defines "health home services" as services provided
by a designated provider, a team of health care professionals
operating with such a provider, or a health team that
provides:
� Comprehensive care management;
� Care coordination and health promotion;
� Comprehensive transitional care, including appropriate
follow-up, from inpatient to other settings;
� Patient and family support (including authorized
representatives);
� Referral to community and social support services, if
relevant; and
� Use of health information technology to link services,
as feasible and appropriate.
In preliminary guidance provided to State Medicaid Directors
in November 2010, CMS stated that this ACA provision is an
important opportunity for states to address and receive
additional federal support for the enhanced integration and
coordination of primary, acute, behavioral health (mental
health and substance use), and long-term services and supports
for persons across the lifespan with chronic illness. CMS
stated that the health home provision provides an opportunity
to build a person-centered system of care that achieves
improved outcomes for beneficiaries and better services and
value for Medicaid programs. CMS indicated it expects that use
of the health home service delivery model will result in lower
rates of ED use, reduction in hospital admissions and
re-admissions, reduction in health care costs, less reliance
on long-term care facilities, and improved experience of care
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and quality of care outcomes for the individual.
1.Related legislation. SB 393 (Hernandez) would enact the
Patient-Centered Medical Home (PCMH) Act of 2011 and would
define "medical home," "patient-centered medical home,"
"advanced practice primary care," "health home,"
"person-centered-health care home," and "primary care home" to
mean a health care delivery model using the definition in a
specified provision of the ACA and any federal rules or
regulations issued pursuant to that ACA provision. SB 393 is
pending in the Assembly Health Committee.
2.Prior legislation. AB 1542 (Jones) of 2009 would have defined
a PCMH to mean, in part, a health care delivery model in which
a patient establishes an ongoing relationship with a physician
or other licensed health care provider, working in a
physician-directed practice team to provide comprehensive,
accessible and continuous evidence-based primary care and
coordinate the patient's health care needs across the health
care system. AB 1542 failed passage on the Assembly Floor on
concurrence.
SB 1738 (Steinberg) of 2008 would have required DHCS to
establish a three-year pilot program to provide intensive
multidisciplinary services to Medi-Cal beneficiaries
identified as frequent users of health care. SB 1738 was
vetoed by Governor Schwarzenegger who stated in his veto
message that he could not support the bill because of the
state's ongoing fiscal challenges and asked the author and
stakeholders to work with his Administration to identify
strategies to ensure these beneficiaries receive the right
care, at the right time, in the right setting.
3.Support. The Corporation for Supportive Housing (CSH) argues
overwhelming data show that the services this bill would fund
could save Medi-Cal significant costs, and most importantly,
would save the lives of potentially thousands of Californians,
getting people off the streets, out of hospitals and into
decent, appropriate care. CSH states using 90 percent federal
Medi-Cal funding through the ACA option, this bill would fund
health home services to coordinate and integrate the medical,
behavioral health, and social services needed to reduce
avoidable hospitalizations. CSH states it administered the
Frequent Users of Health Services Initiative, a
foundation-funded five-year program, supporting six projects
throughout California that offered community-based
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multidisciplinary services to people who frequently incur
inpatient stays or ED visits for avoidable reasons. Frequent
users experience psychosocial complexities, like chronic
disease, mental disability, substance abuse, or homelessness
(often a combination of these conditions). Intensive
face-to-face services that coordinate and help beneficiaries
manage their care not only improve health outcomes among these
individuals but decrease hospital costs. Medi-Cal
beneficiaries participating in the Frequent Users of Health
Services Initiative programs experienced a 60 percent decrease
in ED visits and a 69 percent decrease in inpatient days. The
state incurred significant cost savings as a result. In fact,
data from similar programs across the country show these
services save between $7,500 and $29,000 per year, per
beneficiary in Medicaid costs. CSH states this bill
complements the state's health reform goals and promotes
easy-to-implement proven strategies.
4.Technical amendments. On page 8, line 34, the reference to
"section" should instead be a reference to "article."
SUPPORT AND OPPOSITION :
Support: California Association for Health Services at Home
California Association of Alcohol and Drug Programs
Executives, Inc.
California Center for Rural Policy
California Chapter of the American College of
Emergency Physicians
California Council of Community Mental Health Agencies
California Primary Care Association
Century Housing
Compass Family Services
Corporation for Supportive Housing
Disability Rights California
Health Access California
Homeward Bound of Marin
Housing California
LifeSTEPS
Mental Health America of California
National Association of Social Workers, California
Chapter
The Non-Profit Housing Association of Northern
California
Santa Clara County Board of Supervisors
Western Center on Law and Poverty
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One individual
Oppose: None received.
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