BILL ANALYSIS �
AB 2472
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Date of Hearing: April 18, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2472 (Butler and Bonnie Lowenthal) - As Introduced:
February 24, 2012
Policy Committee: HealthVote:13-4
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill specifies a new health care plan rate development
process that would apply to a single Medi-Cal plan administered
by the AIDS Healthcare Foundation (AHF). Specifically, this
bill requires the Department of Health Care Services (DHCS) to
use fee-for-service data to set rates for this plan in the same
way as this data is used for setting rates for all Medi-Cal
managed care plans.
FISCAL EFFECT
The fiscal impact of this bill is unclear, because it is not
certain whether AHF will gain full licensure status as a
Knox-Keene plan or whether the Medi-Cal program will contract
with them in that capacity. If these things both occurred and
AHF maintained similar enrollment, reduced flexibility in DHCS's
rate-setting process could hypothetically cost up to $1.5
million annually (50% GF, 50% federal funds), assuming that the
state would be required to base the rates on 100% of the FFS
equivalent rates. Compared to current practice, the reduced
flexibility would likely result in costs of over $250,000
annually (50% GF, 50% federal funds).
COMMENTS
1)Rationale . The author intends this bill to ensure that the
Department of Health Care Services develops a new capitated
rate for AHF in the same manner it currently uses to develop
rates for its other contracting managed care plans. The author
indicates that rates for all other managed care organizations
are actuarially based, but that its rate is artificially
AB 2472
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capped at 100% of the fee-for-service equivalent rate. Thus,
the intent appears to be to allow AHF to receive reimbursement
at rates 100% of the fee-for-service equivalent rate or
higher.
The sponsor of this bill, AHF, has contracted with DHCS to
operate a capitated Primary Care Case Management (PCCM)
project in Los Angeles since April 1995 for people with
HIV/AIDS. AHF has approximately 800 average monthly enrollees
and indicates it is in the process of obtaining a license from
the Department of Managed Health Care in order to operate as a
full-risk managed care plan. The bill refers to a PCCM plan
that later gains its full-risk managed care plan status. AHF
is the only such plan currently operating in California.
2)Rate-setting in Medi-Cal Managed Care . Current federal and
state law requires the rates paid to managed care plans
contracted with the department through one of three service
delivery models (county organized health system, local
initiative, or two-plan model) must be adequate to cover costs
of care and meet certain tests of "actuarial soundness." A
variety of data are used to develop an actuarially sound rate
within a small range. The rates are plan- and
county-specific, as well as risk-adjusted.
The language in this bill is vague in that it indicates that
fee-for-service (FFS) data must be used to calculate the rates
for an AHF successor full-service Medi-Cal managed care plan,
but it is unclear whether other data commonly used by DHCS to
calculate rates could also be used, and it does not indicate
the extent to which the rate can be discounted from the FFS
equivalent rate, if at all. According to DHCS, managed care
is generally assumed to provide savings relative to FFS
expenditures.
3)Previous Legislation . AB 1327 (Portantino) 2011, required the
Department of Health Care Services (DHCS) to conduct a
three-year pilot project to determine the feasibility of
developing a blended per-capita payment rate for services
provided to enrollees with HIV or AIDS in Medi-Cal PCCM. This
bill also required DHCS to pay these rates to a Medi-Cal
primary care case management plan or successor Knox-Keene plan
for beneficiaries with HIV or AIDS. AB 1327 was held on the
Suspense File of this committee.
AB 2472
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Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081