BILL ANALYSIS �
SB 986
Page 1
Date of Hearing: June 17, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 986 (Ed Hernandez) - As Amended: May 27, 2014
SENATE VOTE : 34-0
SUBJECT : Medi-Cal: managed care: exemption from plan
enrollment.
SUMMARY : Establishes requirements for extending the duration of
a medical exemption request (MER) that was granted to allow a
beneficiary receiving a specified transplant to be exempt from
mandatory enrollment in Medi-Cal managed care (MCMC).
Specifically, this bill :
1)Allows a Medi-Cal beneficiary to receive an extension of the
MER beyond the initial 12-month exemption period provided both
of the following conditions are met:
a) The beneficiary is to receive or has received any of the
following transplants: allogeneic bone marrow, allogeneic
blood stem cell, cord blood, or haploidentical; and,
b) The treating physician who provided or oversaw the
transplant or who is providing the follow-up care
determines it is medically necessary for the beneficiary to
remain under the care of the treating physician.
2)Allows the MER to be extended for up to 12 months and allows
additional time as authorized by the physician who provided or
oversaw the transplant if the physician determines it is
medically necessary.
3)Prohibits a beneficiary who requests an extension of a MER
from being transitioned into a MCMC plan until all appeals,
fair hearings processes, litigation, and other means of
redress have been exhausted.
4)Prohibits the existence of a contract between a health care
provider, a provider's medical group, or a hospital that
provided the transplant or follow-up care and a MCMC plan from
being considered as a factor in determining the extension of a
MER under this bill.
SB 986
Page 2
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
federal government provides significant funding for Medi-Cal
and federal Medicaid law provides much of the framework for
the program. One of the methods by which Medi-Cal services
are provided is through contracts with 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 MCMC health plans.
3)Requires each Medi-Cal beneficiary or eligible applicant to be
informed that he or 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.
FISCAL EFFECT : According to the Senate Committee on
Appropriations:
1)One-time likely costs of about $75,000 to revise existing
regulations and procedures by DHCS (General Fund and federal
funds).
2)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.
3)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 DHCS, there have been on
SB 986
Page 3
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 treating physicians to
determine whether additional extensions will be requested, and
process extension requests.
4)Estimated increased Medi-Cal costs of about $3 million per year
to provide care to eligible beneficiaries in the
fee-for-service (FFS) 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 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 FFS 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.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, Medi-Cal
beneficiaries in Los Angeles County needing cancer care often
begin as FFS enrollees and receive their cancer care through
City of Hope (COH). Because these beneficiaries must enroll
in a MCMC plan, they file a MER. When patients receive an
exemption, they must return to a MCMC plan after 12 months
unless the exemption is extended. In addition, the patient is
ineligible for a MER if their treating provider has a contract
with the patient's managed care plan.
For patients receiving complex cancer care involving
transplantation, any interruption in their continuity of care
has the potential for catastrophic consequences, up to and
including loss of life, according to the author. This is
particularly true of cancer care involving transplants as
appropriate and follow-up care is crucial in preventing
adverse treatment outcomes. The author states this bill
SB 986
Page 4
would allow cancer patients who have already received a MER,
and who normally would be required to go back into MCMC, to
obtain an additional 12-month extension on their MER so they
can remain with their treating physician. It would also allow
a patient to continue seeing his or her treating provider when
that provider has a contract with a MCMC plan to address a
situation when a community provider or medical group fails to
return a patient to COH because the community provider
believes it can manage that patient's cancer care. The author
argues this bill would prohibit transitioning a patient into
MCMC prior to any and all appeals by the patient protesting
the transition are exhausted.
2)BACKGROUND . There are two main Medi-Cal systems for the
delivery of medical services: FFS (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
percentage 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 and the Governor's
budget projects the proportion to continue to increase.
3)Medical Exemption. A Medi-Cal beneficiary with a complex
medical condition can request to remain in FFS Medi-Cal for up
to 12 months as an alternative to mandatory enrollment in a
MCMC plan by submitting a MER. Among the qualifying complex
medical conditions are pregnancy, need for an organ
transplant, and cancer.
In 2013 DHCS reported it received over 50,000 MERs and 68%
SB 986
Page 5
were approved. Individual patients may have had multiple MERs
filed with DHCS. Based on information provided by the bill's
sponsor, COH, there were 1,000 patients receiving transplants
that would be affected by this bill. DHCS states that MERs
for these types of patients have not been denied for clinical
reasons but for administrative reasons, including forms not
properly filled out and the existence of a contract between
the facility and the managed care plan. For MERs 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 additional MER or appeal the denial.
4)SUPPORT . This bill is sponsored by COH, which states this bill
would allow patients receiving 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
these Medi-Cal beneficiaries 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, resulting in patients whose care has been severely
compromised and, in some instances, irrevocably compromised.
If these patients ultimately return to COH, their cancer may
have relapsed, or they may have severe infections, tumors or
disabling symptoms of graft versus host where the transplanted
cells attack the person receiving the transplant. These
conditions can 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 MCMC plan because often it
lacks a contract with the patient's delegated medical group,
thus making the patient ineligible for a MER. They argue this
bill would address 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.
5)PREVIOUS LEGISLATION . AB 1553 (Monning) of 2012 would have
SB 986
Page 6
established requirements and a process for MERs in MCMC. AB
1553 was referred to Senate Health Committee but not heard.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Hope (sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Children's Hospital Association
California Healthcare Institute
California Medical Association
Stanford Hospital & Clinics
University of Southern California
USC Norris Cancer Hospital
Opposition
None on file.
Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097