BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 393 (Hernandez)
Hearing Date: 5/23/2011 Amended: As Introduced
Consultant: Katie Johnson Policy Vote: Health 9-0
_________________________________________________________________
____
BILL SUMMARY: SB 393 would enact the Patient-Centered Medical
Home Act of 2011 and would establish a definition for a medical
home based upon specified standards.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Potential increased costs cost pressure likely in the
millions General/*
to Medi-Cal, Healthy of dollars commencing Federal/
Families, CalPERS, January 1, 2012 Special
and other publicly-funded
health care coverage
*See Staff Comments.
_________________________________________________________________
____
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
In enacting the Patient-Centered Medical Home Act of 2011 (Act),
this bill would state legislative intent to encourage licensed
health care providers and patients to partner in a
patient-centered medical home that promotes access to
high-quality, comprehensive care and ultimately to ensure that
all Californians have a medical home, as specified.
It would state further intent that payers take into account the
increased services and overhead associated with this type of
practice and the potential savings from better managing chronic
diseases and conditions.
This bill would define a medical home to mean a health care
delivery model in which a patient establishes an ongoing
relationship with a physician or other provider who would work
SB 393 (Hernandez)
Page 1
in a physician-directed team to provide comprehensive,
accessible, and continuous, evidence-based primary and
preventative care, and to coordinate the patient's health care
needs across the health care system in order to improve quality
and health outcomes in a cost-effective manner. This bill would
also require a medical home to include specified team-based,
culturally and linguistically appropriate care coordination,
quality, and safety characteristics, unless otherwise provided
by statute. This bill would specifically state that nothing in
these provisions should be construed to 1) apply to managed care
plan activities or those of their contracted providers when
those activities are part of a Medi-Cal Section 1115 Waiver, as
specified, and 2) prevent participation in the Patient
Protection and Affordable Care Act, as amended by the federal
Health Care and Education Reconciliation Act of 2010 (ACA).
However, this would not exempt the Department of Health Care
Services, the department that administers Medi-Cal, as a payer
from all of these provisions. To the extent that Medi-Cal
managed care plans, county organized health systems, and their
contracted providers conform to the medical home model created
by this bill, there would be cost pressure on the state, as
described below.
This definition of medical home would join the definition of
medical home included in existing law for the purposes of the
Medi-Cal Section 1115 Waiver, AB 342 (J. Perez), Chapter 723,
Statutes of 2010. Additionally, Section 3502 of the Patient
Protection and Affordable Care Act (Pub. L. 111-148) as amended
by the federal Health Care and Education Reconciliation Act of
2010 (Public Law 111-152), (ACA) also codifies a definition of
patient-centered medical homes that is dissimilar from this bill
and AB 342.
In order to encourage physicians and other licensed health care
professionals, and consumers, their families, and their
representatives to engage and to recognize their participation
in a comprehensive patient-centered medical home model, as well
as to achieve increased quality and cost efficiency, as
described by these provisions, public and private payers alike,
including Medi-Cal, the Healthy Families Program, and the
California Public Employees Retirement System (CalPERS), would
likely need to provide financial incentives to their contracted
plans and providers since these provisions would represent an
SB 393 (Hernandez)
Page 2
augmentation of the level of services beyond what is currently
provided to most consumers.
Collectively, the cost pressure to provide these incentives
could reach into the millions to tens of millions of dollars
annually. For example, if Healthy Families were to pay an
incentive payment of $1 per subscriber per month for its 800,000
- 900,000 subscribers, costs would be $9.6 million - $10.8
million annually. If federal financial participation were
available, costs could be shared 35 percent General Fund and 65
percent federal funds. Medi-Cal costs would be shared
approximately 50 percent General Fund and 50 percent federal
funds. CalPERS costs are generally shared 55 percent General
Fund and 45 percent special funds and provide coverage for
approximately 800,000 state employees, retirees, and their
dependents.
SB 393 is nearly identical to AB 1542 (Jones, 2010), which was
held on the Senate Appropriations Committee Suspense File and
then withdrawn from committee; it died on the Assembly Floor
when the Assembly failed to concur in Senate amendments.