BILL ANALYSIS �
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THIRD READING
Bill No: SB 986
Author: Hernandez (D)
Amended: 5/27/14
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 4/30/14
AYES: Hernandez, Morrell, De Le�n, DeSaulnier, Evans, Monning,
Wolk
NO VOTE RECORDED: Beall, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/14
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Medi-Cal: managed care: exemption from plan
enrollment
SOURCE : City of Hope
DIGEST : This bill requires, for a Medi-Cal beneficiary who
has received a medical exemption request (MER) from mandatory
enrollment in a Medi-Cal managed care plan and who is to receive
or has received a specified transplantation, an extension of the
MER for up to 12 months if the treating physician determines
that it is medically necessary. Requires additional MER
extensions to be granted, subject to specified criteria,
including if the patient's condition is not stable enough to
transfer. Prohibits the existence of a contract between a
health care provider, provider's medical group or hospital and a
Medi-Cal managed care plan from being considered as a factor in
determining the extension of a MER. This bill sunsets on
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January 1, 2018.
ANALYSIS :
Existing law:
1. Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which
qualified low-income individuals receive health care
services. The Medi-Cal program is, in part, governed and
funded by federal Medicaid Program provisions. One of the
methods by which Medi-Cal services are provided is through
contracts with various types of managed care health plans.
2. Authorizes DHCS to require certain populations, including
seniors and persons with disabilities who do not have other
health coverage, to be assigned as mandatory enrollees into
new or existing Medi-Cal managed care health plans. Requires
enrollment in a Medi-Cal managed health care plan to be
mandatory in order to receive services under Medi-Cal in
specified rural counties, except as otherwise provided by
law.
3. Requires each Medi-Cal beneficiary or eligible applicant to
be informed that he/she may choose to continue an established
patient-provider relationship if his or her treating provider
is a primary care provider or clinic contracting with the
managed health care plan, has the available capacity, and
agrees to continue to treat that beneficiary or eligible
applicant.
This bill:
1. Requires a Medi-Cal beneficiary who has received a MER
exempting the beneficiary from mandatory enrollment in a
Medi-Cal managed care plan to receive an extension of the MER
beyond the initial 12-month exemption period if both of the
following conditions are met:
A. The beneficiary is to receive or has received an
allogeneic bone marrow transplantation, allogeneic blood
stem cell transplantation, cord blood transplantation,
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or haploidentical transplantation; and
B. If the treating physician who provided or oversaw the
transplantation or who is providing the follow-up care
to the beneficiary determines that it is medically
necessary for the beneficiary to remain under the care
of the treating physician.
2. Requires the MER to be provided for up to 12 months, after
which the treating physician who provided or oversaw the
transplant, or who is providing the follow-up care, is
required to assess the beneficiary's condition to determine
whether the beneficiary's medical condition has stabilized to
a level that enables the beneficiary to be safely transferred
to a physician within a Medi-Cal managed care health plan
without any deleterious effects to the beneficiary's health.
3. Requires the MER to be extended for up to an additional 12
months if, at the end of the first extension, the treating
physician determines that the beneficiary's condition is not
sufficiently stable to enable a transfer without deleterious
effects to the beneficiary. Requires additional extension
requests to be handled pursuant to the process above.
4. Prohibits a beneficiary who requests an extension of a MER
from being transitioned into a Medi-Cal managed care plan
until all appeals, fair hearings processes, litigation, and
other means of redress have been exhausted.
5. Prohibits the existence of a contract between a health care
provider, a provider's medical group, or a hospital that
provided the transplantation or follow-up care and a Medi-Cal
managed care plan and a Medi-Cal managed care plan, or the
beneficiary's prior enrollment in a managed care plan from
being considered as a factor in determining the extension of
a MER under this bill. Prohibits the contracts from being
used as a reason or basis for returning a beneficiary who has
received one or more of these procedures to a Medi-Cal
managed care plan.
6. Sunsets on January 1, 2018.
Background
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Medi-Cal managed care . There are two main Medi-Cal systems for
the delivery of medical services: fee-for-service (FFS) and
managed care. In a FFS system, a health care provider receives
an individual payment from DHCS for each medical service
delivered to a beneficiary. Beneficiaries in Medi-Cal FFS
generally may obtain services from any provider who has agreed
to accept Medi-Cal FFS payments. In managed care, DHCS contracts
with managed care plans to provide health care coverage for
Medi-Cal beneficiaries. Managed care enrollees may obtain
services from providers who contract with the managed care plan,
also known as a plan's "provider network."
Managed care is increasingly becoming the dominant delivery
system in the Medi-Cal program as both the number and the%age of
Medi-Cal beneficiaries required to enroll in managed care
continues to grow. With the exception of certain populations
(former foster youth, beneficiaries eligible for limited scope
services, individuals dually eligible for Medicare and Medi-Cal
in most counties, and individuals receiving a MER), enrollment
in managed care is mandatory for Medi-Cal beneficiaries.
Roughly 65% of Medi-Cal beneficiaries were enrolled in managed
care in 2012-13. The Governor's budget projects that, on
average, 70% of beneficiaries will be enrolled in managed care
in 2013-14 and 73% (about 7.5 million Medi-Cal beneficiaries)
will be enrolled in managed care in 2014-15.
Medical Exemption Request . A Medi-Cal beneficiary with a
complex medical condition can request to remain in
fee-for-service Medi-Cal for up to 12 months as an alternative
to mandatory enrollment in a Medi-Cal managed care plan by
submitting a MER.
A Med-Cal beneficiary granted a MER must be allowed to remain
with the FFS provider only until the medical condition has
stabilized to a level that would enable the individual to change
physicians and begin receiving care from a plan provider without
deleterious medical effects, as determined by a beneficiary's
treating FFS physician, up to 12 months from the date the MER
was first approved. MERs are not approved for an eligible
beneficiary who has been a member of either plan on a combined
basis for more than 90 calendar days, who has a current Medi-Cal
provider who is contracting with either plan, or who began, or
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was scheduled to begin, treatment after the date of plan
enrollment. Extensions of the MER can be granted if the
eligible beneficiary continues to meet MER eligibility
requirements.
DHCS indicates MERS can be approved by a nurse, but MERS can
only be denied by a physician. DHCS' handling of MERS is the
subject of litigation by legal aid groups on behalf of
beneficiaries who were denied MERS by DHCS.
Data on MER extensions . In discussions regarding this bill
between proponents and DHCS regarding how MERS are currently
addressed, City of Hope forwarded information on 16 Medi-Cal
beneficiaries who have received care at the hospital. DHCS
indicates, for two beneficiaries, there was no record of a MER
being filed. For the fourteen remaining beneficiaries, there
were 42 MERs filed. DHCS indicates about 55% was approved and
45% were denied. DHCS states that no MERs were denied for
clinical considerations (denials were due to forms not being
filled out correctly or MERS being filed on behalf of
beneficiaries who already have access to the provider who filed
the MER). Specifically, DHCS indicates MER denials were due to
the following:
1. Forms being illegible or not filled out completely by the
provider (7);
2. The provider was within the managed care plan network and
therefore a MER was not needed (6);
3. A exemption was already on file (5); and
4. The beneficiary was already in fee-for-service (1).
For MER denials based on illegible or incomplete forms, DHCS
indicates its vendor would have faxed the provider and made five
outbound calls in an attempt to obtain the missing information
prior to the MER being denied. The beneficiary would then be
mailed a denial letter that outlines appeal rights and a 30 day
mandatory enrollment process if the beneficiary does not file an
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additional MER or appeal the denial.
Prior legislation
AB 1553 (Monning, of 2012) would have established requirements
and a process for MERS in Medi-Cal Managed Care by codifying and
revising existing regulations. AB 1553 was never heard in the
Senate Health Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time likely costs of about $75,000 to revise existing
regulations and procedures by the DHCS (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 will 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 this bill and
communicate with treating physicians about potential
extensions (General Fund and federal funds). According to
DHCS, there have been on average about 1,000 medical
exemption requests (and emergency disenrollment requests) per
year in recent years that will be eligible for extension
under this bill. It is likely that the state's fiscal
intermediary will need additional staff to track those
beneficiaries, contact treating physicians to determine
whether additional extensions will be requested, and process
extension requests.
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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 will 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 will request one or
more extensions for their follow up care. According to the
DHCS, 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 this bill request
two one-year exemptions of their initial exemption, annual
costs to the state will likely be about $3 million per year.
SUPPORT : (Verified 5/27/14)
City of Hope (source)
AFSCME, AFL-CIO
California Healthcare Institute
Leukemia and Lymphoma Society
Stanford Hospital & Clinics
ARGUMENTS IN SUPPORT : This bill is sponsored by the City of
Hope (COH), which writes that this bill would allow patients who
have received allogeneic bone marrow/blood stem cell transplants
to receive subsequent MERs when the treating provider indicates
that a transition to another provider would be deleterious to
their medical condition and would compromise their prognosis and
outcome. COH states that Medi-Cal beneficiaries who are
eligible for allogeneic transplantation can receive a MER, but
the MER may expire before the patient is fully ready to be
released from the care of its transplant physicians. Despite
efforts to seek extensions, COH states the patients are often
sent back to community physicians who lack adequate training and
expertise to manage immunosuppressive drugs, spot emerging signs
of graft versus host disease or recognize potentially lethal
viral and opportunistic infections, resulting in patients whose
care has been severely and potentially irrevocably compromised.
If these patients ultimately return to COH, their cancer may
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have relapsed, or they may have severe infections, tumors or
disabling symptoms of graft versus host disease which can cost
these patients their lives and also cost the Medi-Cal program
significantly more when patients have to be re-hospitalized and
undergo more aggressive treatment. COH argues these tragedies
occur even when it has a contract with the Medi-Cal managed care
plan because often it lacks a contract with the patient's
delegated medical group, thus making the patient ineligible for
a MER. This bill addresses these problems by requiring a MER be
extended despite the presence of a contract between the plan and
COH, and would preclude any transition of these patients until
all avenues of redress are exhausted.
JL:d 5/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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