BILL ANALYSIS �
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THIRD READING
Bill No: AB 2266
Author: Mitchell (D), et al.
Amended: 8/24/12 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 7-2, 6/20/12
AYES: Hernandez, Alquist, Blakeslee, De Le�n, DeSaulnier,
Rubio, Wolk
NOES: Harman, Anderson
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : 53-25, 5/30/12 - See last page for vote
SUBJECT : Medi-Cal: Enhanced Health Homes for Frequent
Hospital Users with Chronic Conditions
SOURCE : Author
DIGEST : This bill requires the Department of Health Care
Services (DHCS) to establish a program to provide specified
health home services, with the intent of reducing avoidable
hospitalization or use of emergency medical services.
Senate Floor Amendments of 8/24/12 narrow the scope of the
bill to address concerns expressed by DHCS.
ANALYSIS :
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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% federal matching funds for
the first eight quarters the health home option is in
effect. Thereafter, the state's regular federal matching
rate would be in effect (typically 50% in California).
This bill requires DHCS to develop and implement a health
home program. Specifically, this bill:
1. Requires that DHCS design a health home program and
designate eligible providers.
2. Requires that DHCS submit a state plan amendment to the
federal government.
3. Defines the population eligible for health homes, based
on specified diagnoses (including mental health
disorders, substance abuse, chronic or life-threatening
conditions, and cognitive impairments) and indications
of severity (including frequent hospitalization,
excessing use of emergency services, chronic
homelessness, and others).
4. Authorizes DHCS to limit the program to certain
geographic areas and to use both managed care and
fee-for-service models.
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5. Specifies the types of services that must be provided.
6. Requires that the lead provider be either a community
clinic, a provider of mental health services, or a
hospital.
7. Requires that DHCS prepare a program evaluation, using
non-state public funds, private funds, and federal
matching funds.
8. Requires that the bill only be implemented to the extent
federal matching funds are available.
9. Requires that for the first eight quarters, the program
be funded only with non-state public funds or private
funds.
10.A requirement that DHCS continue implementation of the
program after the initial eight quarters if it finds
that the program results in avoided costs to Medi-Cal
sufficient to offset program costs.
11.Modifies the definition of "health home" to specify that
a provider or a team of providers designated by DHCS
that satisfies all of the following requirements:
A. Offers a whole person approach, such as including,
but not limited to coordinating health home services
and linkages to other available services for the
needs affecting the health of an eligible individual.
B. Offers services in a range of settings, as
appropriate, to meet the needs of an eligible
individual for health home services.
12.Permits health home partners to include, but are not
limited to, a health plan, community clinic, a mental
health plan, a hospital, physicians, a clinical practice
or clinical group practice, rural health clinic,
community health center, community mental health center,
home health agency, nurse practitioners, social workers,
and paraprofessionals.
13.Permits DHCS, for purposes of serving eligible
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individuals, to require that a lead provider be a
community clinic, a mental health plan, or a hospital.
14.Permits the DHCS payment methodology for the health home
program to include tiered payment rates that taken into
account the intensity of services necessary to perform
outreach to, engage, and serve the populations DHCS
identifies.
15.Permits DHCS to submit applications and operate, to the
extent permitted by federal law and to the extent
federal approval is obtained, more than one health home
program for distinct populations, different providers or
contractors, or multiple geographic areas.
16.Permits DHCS to create one or more health home programs
for children or adults, and in consultation with
stakeholders, to develop the geography, beneficiary
eligibility criteria, and provider eligibility criteria
for each program.
17.Requires the health home program identified in this bill
to include, but not be limited to, an eligible
individual who meets the following criteria:
A. Current diagnoses of chronic co-occurring physical
health and mental health or substance use disorders
prevalent among frequent hospital users at an acuity
level to be determined by the DHCS; and one or more
of the following indicators of severity, at an level
to be determined by DHCS:
(1) Frequent inpatient hospital admissions,
including long-term hospitalization for medical,
psychiatric, or substance abuse related
conditions;
(2) Excessive use of crisis or emergency
services or inpatient hospital care, or
(3) Chronic homelessness.
18.Requires DHCS to design program elements specific to the
populations listed above after consultation with
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stakeholder groups who have expertise in engagement and
services for the specified populations.
19.Revises the criteria health home providers must meet in
order to be selected as a health home provider, and
permits DHCS to design additional provider criteria in
addition to those specified in the bill after
consultation with stakeholder groups with expertise in
engagement and services for individuals who meet the
eligibility criteria for health home services.
20.Requires DHCS to design a health home program with
specific elements to engage and serve the populations
eligible and this bill, and requires these populations
to be a specific focus for health home program outreach
and enrollment.
21.Permits the use of General Fund (GF) funding to fund
program costs if DHCS determines implementation of the
health home program has not resulted in a net increase
in ongoing state GF costs.
22.Permits DHCS to enter into exclusive or nonexclusive
contracts on a bid or negotiated basis to amend existing
managed care contracts.
Background
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 two years for these services. Federal
law defines the individuals eligible for health home
services as individuals meeting one of the following: (1)
having at least two chronic conditions, (2) having one
chronic condition and are at risk of having a second
chronic condition, or (3) 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:
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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 emergency
department (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 and quality of care outcomes for the
individual.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time administrative costs likely in the hundreds of
thousands of dollars to develop program guidelines,
determine eligibility standards, adopt a Medicaid State
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Plan Amendment, and select providers. DHCS has about
$650,000 in available federal planning grant funding that
may be used for these costs.
Ongoing costs likely in the hundreds of thousands to
millions of dollars to oversee and administer the
program. This bill requires that all costs to implement
the program be funded with non-state public funds or
private funds for the first eight quarters of
implementation. After the first eight quarters, should
the Department elect to continue implementation of the
program, administrative costs would be funded at the
standard federal financial participation rate (50%
General Fund, 50% federal funds).
One-time costs in the low millions of dollars to perform
an evaluation of program outcomes during the first eight
quarters. DHCS indicates that prior program evaluations
similar in scope have cost between $1 million and $5
million. This bill specifies that DHCS is only required
to complete the evaluation if federal financial
participation is available and if non-state public funds
or private funds are available.
The long-term program costs are unknown, but likely to be
cost-neutral to the state. Under the health home option
in federal law, enhanced federal financial participation
at 90% is available for the first eight quarters of
program implementation - increasing state funding that
can be used for the program. On the other hand, federal
law and guidance requires health home programs to provide
more intensive services than are typically provided by
Medi-Cal. The intent of the bill is to both improve
health outcomes for participants and to reduce overall
costs, by providing more intensive primary care and
support services while reducing costly hospitalization
and emergency medical services. Based on other programs
similar in nature, including the Frequent Users of Health
Services Initiative, this is a reasonable assumption. In
addition, this bill requires DHCS to continue
implementation of the program after the initial eight
quarters only if it finds that the avoided costs are
sufficient to fully fund the ongoing costs of
implementation.
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SUPPORT : (Verified 8/27/12)
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
Non-Profit Housing Association of Northern California
Santa Clara County Board of Supervisors
Western Center on Law and Poverty
ARGUMENTS IN 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% 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
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).
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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% decrease in ED visits and a 69% 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.
ASSEMBLY FLOOR : 53-25, 5/30/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes,
Furutani, Galgiani, Gatto, Gordon, Hall, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Lara, Bonnie
Lowenthal, Ma, Mendoza, Mitchell, Monning, Nestande, Pan,
Perea, V. Manuel P�rez, Portantino, Skinner, Solorio,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
P�rez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Beth Gaines, Garrick, Gorell, Grove, Hagman, Halderman,
Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Morrell, Nielsen, Norby, Olsen, Silva, Smyth, Wagner
NO VOTE RECORDED: Fletcher, Valadao
CTW:m 8/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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