BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 986 (Hernandez) - Medi-Cal: managed care: exemption from plan
enrollment.
Amended: April 10, 2014 Policy Vote: Health 7-0
Urgency: No Mandate: No
Hearing Date: May 12, 2014 Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 986 would authorize a Medi-Cal beneficiary who
has received a specific type of transplant to receive an
extension of his or her medical exemption request from mandatory
enrollment in Medi-Cal managed care, provided the treating
physician determines that it is medically necessary for the
patient to remain under the physician's care.
Fiscal Impact:
One-time likely costs of about $75,000 to revise existing
regulations and procedures by the Department of Health Care
Services (General Fund and federal funds).
Unknown one-time costs to make system changes to allow the
Medi-Cal fiscal intermediary to track eligible medical
exemption requests (General Fund and federal funds). The
fiscal intermediary would have to make certain changes to
allow staff to track and record extensions of medical
exemption requests under the bill. At this time it is not
known whether such changes could be incorporated into
ongoing system maintenance or would impose additional costs.
Potential ongoing staff costs to the fiscal intermediary up
to $150,000 per year to track existing medical exemption
requests eligible for extension under the bill and
communicate with treating physicians about potential
extensions (General Fund and federal funds). According to
the Department of Health Care Services, there have been on
average about 1,000 medical exemption requests (and
emergency disenrollment requests) per year in recent years
that would be eligible for extension under this bill. It is
likely that the state's fiscal intermediary would need
additional staff to track those beneficiaries, contact
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treating physicians to determine whether additional
extensions will be requested, and process extension
requests.
Estimated increased Medi-Cal costs of about $3 million per
year to provide care to eligible beneficiaries in the
fee-for-service system (General Fund and federal funds). In
recent years, about 1,000 Medi-Cal beneficiaries have
requested an exemption from enrollment in managed care due
to a transplant that would qualify for extension under this
bill. Given the medical complexity of the medical conditions
necessitating a transplant and the complexity of
transplantation and follow-up care, it is likely that most
of those requesting an initial exemption would request one
or more extensions for their follow up care. According to
the Department, the average annual cost to Medi-Cal for
medical care to transplant recipients in the managed care
system is about $1,300 per year less than in the
fee-for-service system. Assuming that eligible beneficiaries
under the bill request two one-year exemptions of their
initial exemption, annual costs to the state would likely be
about $3 million per year.
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with low incomes, as well as blind, disabled, and
certain other populations. Generally, the federal government
provides a 50 percent federal match for state Medi-Cal
expenditures.
The federal Affordable Care Act allows states to expand Medicaid
(Medi-Cal in California) eligibility to individuals with income
up to 138 percent of the federal poverty level. California has
opted to expand eligibility for Medi-Cal up to 138 percent of
the federal poverty level. The Affordable Care Act provides a
significantly enhanced federal match for the expansion. Under
the law, the federal government will pay for 100 percent of the
cost of the expansion in 2013-14 declining to a 90 percent
federal match in the 2020 federal fiscal year and thereafter.
With the exception of certain populations (for example,
individuals eligible for limited scope Medi-Cal benefits or
individuals dually eligible for Medi-Cal and Medicare in most
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counties), managed care is the primary system for providing
Medi-Cal benefits. The Department estimates that in 2014-15, 7.5
million Medi-Cal beneficiaries (73 percent of total enrollment)
will receive care through the managed care system.
Proposed Law: SB 986 would authorize a Medi-Cal beneficiary who
has received a specific type of transplant to receive an
extension of his or her medical exemption request from mandatory
enrollment in Medi-Cal managed care, provided the treating
physician determines that it is medically necessary for the
patient to remain under the physician's care.
Specific provisions of the bill would:
Allow 12 month extensions of exemptions from mandatory
enrollment in Medi-Cal managed care;
Limit eligibility for an extension under the bill to a
beneficiary who has received or is to receive an allogeneic
bone marrow transplantation, allogeneic blood stem cell
transplantation, cord blood transplantation, or
haploidentical transplantation and whose treating physician
determines that it is medically necessary for the
beneficiary to remain under the care of the treating
physician;
Allow additional 12 month extensions if the criteria above
are still met;
Prohibit the contract status between a provider or medical
group and a Medi-Cal managed care plan from influencing the
decision about granting an extension under the bill.
Related Legislation: AB 1533 (Monning, 2012) would have codified
existing requirements for medical exemption requests. That bill
was not heard in the Senate Health Committee.
Staff Comments: The increased costs that the state would incur
under the bill would be split between the state and the federal
government. Traditionally, the federal government has paid 50
percent of the costs for most Medi-Cal beneficiaries (children
formerly eligible for the Healthy Families Program and now
enrolled in Medi-Cal are eligible for an increased federal cost
share). Under the Medi-Cal expansion, the federal government
will pay for 100 percent of the Medi-Cal costs initially,
declining to 90 percent by 2020. The share of additional costs
incurred by the state under the bill that would be paid by the
federal government will vary depending on the individual
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patient's specific Medi-Cal eligibility (i.e. whether he or she
would have previously been eligible for Medi-Cal, or whether he
or she is newly eligible).