BILL ANALYSIS �
SB 1008
Page 1
SENATE THIRD READING
SB 1008 (Budget and Fiscal Review)
As Amended June 25, 2012
Majority vote. Budget Bill Appropriation Takes Effect Immediately
SENATE VOTE :Vote not relevant
SUMMARY : Contains necessary statutory changes to achieve savings
assumed in the 2012 Budget Act related to the Department of Health
Care Services (DHCS). Specifically, this bill :
1)Establishes Dual Demonstration Projects, and specifically.
2) Expands, from four to eight, the number of counties in which
dual demonstration sites may be established. Current law
authorizes the DHCS to establish dual demonstration projects in
up to four counties to enable dual beneficiaries, who are
eligible for both Medicare and Medicaid services, to receive a
continuum of services that maximizes coordination of benefits
between Medicare and Medicaid programs.
3) Provides that implementation of the demonstration project in
up to eight counties may not begin sooner than March 1, 2013.
Requires that DHCS director consult with the Legislature,
federal government, and stakeholders when determining the
implementation date.
4) States legislative intent for the demonstration project to
expand statewide within three years of the start of the
demonstration project. Requires that expansion beyond the
initial eight counties is contingent upon statutory
authorization and a subsequent budget appropriation.
5) Includes additional goals for the demonstration project:
a) Coordinate access to necessary and appropriate behavioral
health services, including mental health and substance use
disorders services;
b) Improve the quality of care for dual eligible beneficiaries;
and,
c) Promote a system that is both sustainable and person- and
family-centered by providing dual eligible beneficiaries with
SB 1008
Page 2
timely access to appropriate, coordinated health care services
and community resources that enable them to attain or maintain
personal health goals.
6) Requires DHCS to enter into a memorandum of understanding
with the federal government in developing the process for
selecting, financing, monitoring, and evaluating the models for
the demonstration project. Requires the completed memorandum
of understanding to be provided to the Legislature and posted
on the department's Internet Web site.
7) Requires dual beneficiaries to be enrolled into a
demonstration site unless the beneficiary makes an affirmative
choice to opt out of enrollment or is enrolled in the Program
of All-Inclusive Care for the Elderly (PACE) or an AIDS
Healthcare Foundation (AHF) plan as specified.
8) Allows beneficiaries who meet the requirements for PACE or
AHF to select either of these managed care health plans for
their Medicare and Medi-Cal benefits if one is available in
that county. Requires that in areas where a PACE plan is
available, the PACE plan shall be presented as an enrollment
option, included in all enrollment materials, enrollment
assistance programs, and outreach programs related to the
demonstration project, and made available to beneficiaries
whenever enrollment choices and options are presented.
9) Requires that dual beneficiaries who opt out of enrollment
into a demonstration site may choose to remain enrolled in
fee-for-service Medicare or a Medicare Advantage plan for their
Medicare benefits, but shall be mandatorily enrolled into a
Medi-Cal managed care health plan, with exceptions.
10) Allows, to the extent federal approval is obtained, DHCS to
require that any beneficiary, upon enrollment in a
demonstration site, to remain enrolled in the Medicare portion
of the demonstration project on a mandatory basis for six
months from the date of initial enrollment. Includes criteria
for which a beneficiary may continue receiving services from an
out-of-network Medicare provider for primary and specialty care
services. Requires the department to develop a process to
inform providers and beneficiaries of the availability of
continuity of services from an existing provider and ensure
that the beneficiary continues to receive services without
SB 1008
Page 3
interruption.
11) Provides the following exemptions from enrollment in the
dual demonstration project:
a) The beneficiary has a prior diagnosis of end-stage renal
disease. The exemption does not apply to beneficiaries
diagnosed with end-stage renal disease subsequent to enrollment
in the demonstration project;
b) The beneficiary has other health coverage, as specified;
c) The beneficiary is enrolled in a home- and community-based
waiver, as specified, except for persons enrolled in
Community-Based Adult Services or Multipurpose Senior Services
Program services;
d) The beneficiary is receiving services through a regional
center or state developmental center;
e) The beneficiary resides in a geographic area or ZIP Code not
included in managed care; and,
f) The beneficiary resides in one of the Veterans' Homes of
California.
12) Allows beneficiaries who have been diagnosed with HIV/AIDS
to opt out of the demonstration project at the beginning of any
month.
13) Requires that for the 2013 calendar year, DHCS shall offer
federal "Medicare Improvements for Patient and Providers Act of
2008" compliant contracts to existing Medicare Advantage
Special Needs Plans (D-SNP plans) to continue to provide
Medicare benefits to their enrollees in their service areas as
approved on January 1, 2012. Requires that in the 2013
calendar year, beneficiaries in Medicare Advantage and D-SNP
plans shall be exempt from mandatory enrollment in the
demonstration project, but may voluntarily choose to enroll in
the demonstration project.
14) Requires that for the 2013 calendar year, demonstration
sites shall not offer to enroll dual beneficiaries eligible for
SB 1008
Page 4
the demonstration project into the demonstration site's D-SNP.
15) Requires that DHCS shall not terminate contracts in a
demonstration site with AHF or PACE, except as provided in the
contract or pursuant to state or federal law.
16) Requires that to the extent permitted under the
demonstration, demonstration sites shall pay noncontracted
hospitals prevailing Medicare fee-for-service rates for
traditionally Medicare covered benefits and prevailing Medi-Cal
fee-for-service rates for traditionally Medi-Cal covered
benefits.
17) Requires DHCS, in consultation with the hospital industry,
to seek federal approval to ensure that Medicare supplemental
payments for direct graduate medical education and Medicare
add-on payments, including indirect medical education and
disproportionate share hospital adjustments continue to be made
available to hospitals for services provided under the
demonstration. Requires DHCS to seek federal approval to
continue these payments either outside the capitation rates or,
if contained within the capitation rates, and to the extent
permitted under the demonstration requiring demonstration sites
to provide this reimbursement to hospitals.
18) Requires that to the extent allowed under the demonstration,
the default rate for non-contracting providers of physician
services shall be the prevailing Medicare fee schedule for
services covered by the Medicare program and the prevailing
Medi-Cal fee schedule for services covered by the Medi-Cal
program.
19) Includes requirements for payments to nursing facility
services.
20) Requires DHCS to enter into an interagency agreement with
the Department of Managed Health Care to perform some or all of
the department's oversight and readiness review activities,
including providing consumer assistance to beneficiaries and
conducting financial audits, medical surveys, and a review of
the adequacy of provider networks of the managed care plans
participating in the demonstration.
21) Requires DHCS to report to the Legislature on the enrollment
SB 1008
Page 5
status, quality measures, and state costs related to the
demonstration.
22) Requires DHCS to develop, in consultation with the federal
government and stakeholders, quality and fiscal measures for
health plans. Requires DHCS to require health plans to submit
Medicare and Medi-Cal data to determine the results of these
measures. Requires DHCS to publish the results of these
measures, including via posting on DHCS's Internet Web site, on
a quarterly basis.
23)Includes various provisions related to the enrollment of dual
beneficiaries into Medi-Cal Managed Care.
24) Requires that Medi-Cal beneficiaries who have dual
eligibility in Medi-Cal and the Medicare Program be assigned as
mandatory enrollees into new or existing Medi-Cal managed care
health plans for their Medi-Cal benefits in counties
participating in the dual demonstration projects only.
25) Exempts dual beneficiaries from mandatory enrollment in
managed care if the dual beneficiary:
a) Has other health coverage, except in counties with county
organized health systems;
b) Receives services through a foster care program;
c) Is under 21 years of age;
d) Is enrolled in a home- and community-based waiver, as
specified, except for persons enrolled in Community-Based Adult
Services, Multipurpose Senior Services Program services, or a
Section 1915(c) waiver for persons with developmental
disabilities;
e) Is not eligible for enrollment in managed care plans for
medically necessary reasons determined by DHCS;
f) Resides in one of the Veterans Homes of California; and,
g) Is enrolled in PACE or AHF.
26) Allows a beneficiary who has been diagnosed with HIV/AIDS
SB 1008
Page 6
from opting out of managed care enrollment at the beginning of
any month.
27) Requires that to the extent that mandatory enrollment is
required by DHCS, an enrollee's access to fee-for-service
Medi-Cal shall not be terminated until the enrollee has
selected or been assigned to a managed care health plan.
28) Requires DHCS to suspend new enrollment of dual
beneficiaries into a managed care plan if it determines that
the managed care plan does not have sufficient primary or
specialty care providers and long-term service and supports to
meet the needs of its enrollees.
29) Allows DHCS to implement an intergovernmental transfer
arrangement with a public entity that elects to transfer public
funds to the state to be used solely as the nonfederal share of
Medi-Cal payments to managed care plans for the provision of
services to dual beneficiaries.
30) Requires that a managed care plan that contracts with DHCS
for the provision of services shall ensure that beneficiaries
have access to the same categories of licensed providers that
are available under Medicare fee for service. Provides that
nothing shall prevent a managed care plan from contracting with
selected providers within a category of licensure.
31) Includes provisions related to the integration of Long-Term
Services and Supports (LTSS).
32) Requires that, no sooner than March 1, 2013, all Medi-Cal
LTSS services, as defined, shall be services that are covered
under managed care plan contracts and shall be available only
through managed care plans to beneficiaries residing in
counties participating in the dual demonstration counties
only.
33) Defines LTSS services to include In-Home Supportive Services
(IHSS), Community-Based Adult Services (CBAS), Multipurpose
Senior Services Program (MSSP), and skilled nursing facility
services.
34) Defines "home- and community-based services (HCBS) benefits"
that may be covered services that are provided under managed
SB 1008
Page 7
care plan contracts for beneficiaries residing in counties
participating in the dual demonstration counties.
35) Requires that beneficiaries who are not mandatorily enrolled
in managed care pursuant to current law exemptions or specified
new exemptions are not required to receive LTSS, other than
CBAS, through a managed care plan.
36) Exempts beneficiaries from receiving LTSS services through
managed care plans who meet the following:
a) Has other health coverage, except in counties with county
organized health systems;
b) Receives services through a foster care program;
c) Is under 21 years of age;
d) Is enrolled in a home- and community-based waiver, as
specified, except for persons enrolled in Community-Based Adult
Services, Multipurpose Senior Services Program services, or a
Section 1915(c) waiver for persons with developmental
disabilities;
e) Is not eligible for enrollment in managed care plans for
medically necessary reasons determined by DHCS;
f) Resides in one of the Veterans Homes of California; and,
g) Is enrolled in PACE or AHF.
37) Allows DHCS to exempt other categories of beneficiaries
based on extraordinary medical needs of specific patient groups
or to meet federal requirements, in consultation with
stakeholders.
38) Allows beneficiaries who have been diagnosed with HIV/AIDS
to opt out of managed care enrollment at the beginning of any
month.
39) Requires that no sooner than July 1, 2012, CBAS shall be a
Medi-Cal benefit covered under every managed care plan contract
and available only through managed care plans. This provision
SB 1008
Page 8
applies to all counties, except in counties where Medi-Cal
benefits are not covered through managed care plans.
40) Requires that effective January 1, 2015, or 19 months after
the commencement of beneficiary enrollment in the dual
demonstration project, or on the date that any necessary
federal approvals or waivers are obtained, whichever is later,
MSSP services in counties where the dual demonstration project
is implemented shall transition from a federal waiver to a
benefit administered by managed care plans. Includes various
program requirements regarding the transition.
41) Requires that no sooner than March 1, 2013, or on the date
that any necessary federal approvals or waivers are obtained,
whichever is later, nursing facility services and subacute
facility services shall be Medi-Cal benefits available only
through managed care plans in counties participating in the
dual demonstration project.
42) Allows DHCS director, after consulting with the Director of
Finance, stakeholders, and the Legislature, to retain
discretion to forgo provisions of LTSS services integration
into managed care if and to the extent the director determines
that the quality of care for managed care beneficiaries,
efficiency, or cost-effectiveness of the program would be
jeopardized.
43) Requires DHCS to enter into an interagency agreement with
the Department of Managed Health Care to perform some or all of
the department's oversight and readiness review activities,
including providing consumer assistance to beneficiaries and
conducting financial audits, medical surveys, and a review of
the adequacy of provider networks of the managed care plans.
44) Requires DHCS to report to the Legislature on enrollment
status, quality measures, and state costs.
45) Requires DHCS to develop, in consultation with the federal
government and stakeholders, quality and fiscal measures for
health plans. Requires the department to require health plans
to submit Medicare and Medi-Cal data to determine the results
of these measures. Requires DHCS to publish the results of
these measures, including via posting on the department's
Internet Web site, on a quarterly basis.
SB 1008
Page 9
46) Includes Readiness Requirements.
47) Requires that before DHCS contracts with managed care plans
or Medi-Cal providers to furnish Medi-Cal benefits and services
under the dual demonstration project, mandatory enrollment of
dual beneficiaries into Medi-Cal managed care, and LTSS
integration, the department shall do all of the following:
a) Ensure timely and appropriate communications with
beneficiaries;
b) Require that managed care plans perform an assessment
process;
c) Ensure that managed care plans arrange for primary care;
d) Ensure that managed care plans perform care coordination and
care management activities;
e) Ensure that managed care plans comply with network adequacy
requirements;
f) Ensure that managed care plans address medical and social
needs;
g) Ensure that managed care plans provide a grievance and
appeal process;
h) Monitor managed care plans' performance and accountability
for provision of services; and,
i) Develop requirements for managed care plans to solicit
stakeholder and member participation in advisory groups for the
planning and development activities relating to the provision
of services for dual beneficiaries.
48) Requires DHCS to submit, to the Legislature within specified
timelines, the following:
a) Copy of any report submitted to the federal government, as
specified;
b) A transition plan developed together with the Department of
SB 1008
Page 10
Social Services, Department of Aging, Department of Managed
Health Care, in consultation with stakeholders; and,
c) Report on the readiness of managed care plans based on
specified readiness evaluation criteria.
49)Includes provisions related to Medical Exemption Review.
50) Requires DHCS to provide notice to the requesting provider
and any person in the Medi-Cal program who is a senior or a
person with disabilities when a request for a medical exemption
from mandatory enrollment into a Medi-Cal managed care plan is
denied and requires plans to maintain a dedicated liaison to
coordinate continuity of care.
51) Contains an appropriation allowing this bill to take effect
immediately upon enactment.
52) Includes other provisions, including:
a) Revises the rate methodology for AHF plans;
b) Authorizes DHCS director to defer payments to Medi-Cal
managed care plans contracting with the department, as
specified, which are payable to the plans during the final
month of the 2012-13 state fiscal year;
c) Requires that in the event the department has not received,
by February 1, 2013, federal approval, or notification
indicating pending approval, of a mutual ratesetting process,
shared federal savings as defined, and a six-month enrollment
period in the dual demonstration project, then effective March
1, 2013, the provisions of the dual demonstration project,
enrollment of dual beneficiaries into Medi-Cal managed care,
and LTSS integration become inoperative; and,
d) Requires that the bill become operative only if AB 1496 or
SB 1036 of the 2011-12 Regular Session of the Legislature is
enacted and takes effect.
Analysis Prepared by : Andrea Margolis / BUDGET / (916) 319-2099
SB 1008
Page 11
FN: 0004203