BILL ANALYSIS �
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THIRD READING
Bill No: SB 1457
Author: Evans (D)
Amended: 3/28/14
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 3/26/14
AYES: Hernandez, Anderson, Beall, DeSaulnier, Evans, Monning,
Wolk
NO VOTE RECORDED: De Le�n, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 5-0, 4/28/14
AYES: De Le�n, Gaines, Hill, Lara, Steinberg
NO VOTE RECORDED: Walters, Padilla
SUBJECT : Medical care: electronic treatment authorization
requests
SOURCE : Department of Health Care Services
DIGEST : This bill requires requests for authorization for
treatment or services in the Medi-Cal program, California
Children's Services (CCS) Program, and the Genetically
Handicapped Persons Program (GHPP), excluding those submitted by
dental providers enrolled in the Medi-Cal Dental Program, to be
submitted in an electronic format determined by the Department
of Health Care Services (DHCS) via DHCS' Internet Web site or
other electronic means designated by DHCS. Requires DHCS to
implement an alternate format for submission when DHCS' Internet
Web site is unavailable due to a system disruption. Implements
this requirement by July 1, 2015, or a subsequent date
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determined by DHCS.
ANALYSIS :
Existing law:
1.Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
benefits.
2.Requires DHCS to administer various health programs, including
the CCS Program and the GHPP. The CCS Program provides
diagnostic and treatment services, medical case management,
and medical and occupational therapy services to eligible
children and young adults less than 21 years of age.
Eligibility includes diagnosis of specified medical conditions
such as cancer, congenital heart disease, and sickle cell
anemia. GHPP provides medical care to individuals with
genetically handicapping conditions, including cystic
fibrosis, hemophilia, sickle cell disease, Huntington's
disease, Friedreich's Ataxia, and certain hereditary metabolic
disorders.
3.Requires the Director of DHCS to require fully documented
medical justification from Medi-Cal providers that requested
services are medically necessary to prevent significant
illness, alleviate severe pain, protect life, or prevent
significant disability, on all requests for prior
authorization.
4.Requires prior authorization by DHCS or its designee for CCS
services provided, except as specified. Makes prior
authorization contingent on determination by DHCS or its
designee of all of the following:
A. The child receiving the services is confirmed to be
medically eligible for the CCS Program;
B. The provider of the services is approved in accordance
with the standards of the CCS Program; and
C. The services authorized are medically necessary to treat
the child's CCS Program-eligible medical condition.
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This bill:
1.Requires, by July 1, 2015, or a subsequent date determined by
DHCS, requests for authorization for treatment or services in
CCS Program, GHPP, and Medi-Cal, excluding requests for
authorization of services submitted by dental providers
enrolled in the Medi-Cal Dental Program, to be submitted in an
electronic format determined by DHCS via DHCS' Internet Web
site or other electronic means designated by DHCS. Permits
DHCS to implement this requirement in phases.
2.Requires DHCS to designate an alternate format for submitting
requests for authorization of services when DHCS' Internet Web
site or other electronic means designated in (1) above are
unavailable due to an unplanned disruption.
3.Permits DHCS, without taking regulatory action, to implement,
interpret, or make specific this bill and any applicable
waivers and state plan amendments by means of all-county
letters, plan letters, plan or provider bulletins, or similar
instructions. Requires DHCS to adopt regulations by July 1,
2017, in accordance with the requirements of the
Administrative Procedure Act. Requires DHCS to consult with
interested parties and appropriate stakeholders in
implementing these provisions.
Background
Current authorization process . DHCS made electronic submissions
of Treatment Authorization Requests (TARs) available to Medi-Cal
providers statewide starting in 2005. Since then, the use of
the internet-based submittal process has steadily grown. In
fiscal year 2012-13, DHCS received approximately 2.2 million
TARs requiring adjudication. As of July 2013, DHCS received 84%
of pharmacy TARs and 70% of medical TARs electronically.
Medi-Cal providers can submit TARs electronically through a
secure DHCS internet-based system, via mail, or by fax. When
providers electronically submit TARs, the accompanying documents
can be uploaded along with the TAR. DHCS staff can then review
the documentation directly from their computers and adjudicate
the TAR, and there is no paper for Xerox staff (DHCS' fiscal
intermediary) to prepare, route, or file.
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In contrast, under CCS and GHPP, providers/counties submit all
Service Authorization Requests (SARs) via mail or fax, which
requires staff to manually log and convert the files to a
portable document format. Although CCS uses a web-based tool
that allows providers to electronically access SARs (referred to
as the Children's Medical Services Network or CMS Net), CMS Net
does not allow for electronic submission of required medical
justification. As a result, all CCS Program medical eligibility
reviews are performed manually.
When DHCS receives a paper TAR via mail or fax, Xerox staff must
first complete an intake process (date/time stamp, sorting,
routing, etc.) and then manually enter data from the TAR into
the Service Utilization Review, Guidance, and Evaluation (SURGE)
application that DHCS uses to adjudicate TARs. In addition,
there may be medical documentation, such as medical records,
that accompanies the TAR. This documentation cannot be entered
(or uploaded) into SURGE, and is instead made available to DHCS
staff when the TAR is adjudicated. When Xerox staff has entered
the TAR data into SURGE and DHCS staff has the medical
documentation, the TAR can be adjudicated. Once the TAR is
adjudicated, Xerox staff must then file the paper TAR and the
accompanying documentation. This process requires additional
staff resources and maintaining a secured storage location.
DHCS is planning to implement a new electronic TAR submission
system, with a tentative implementation date of July 1, 2015.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time costs of less than $100,000 to develop and adopt
regulations by DHCS (75% federal funds and 25% General Fund).
Unknown long-term cost savings by reducing administrative
workload to process paper requests for authorization of
treatment (General Fund and federal funds).
SUPPORT : (Verified 4/29/14)
Department of Health Care Services (source)
ARGUMENTS IN SUPPORT : This bill is sponsored by DHCS to
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streamline the current TAR/SAR process by requiring all Medi-Cal
providers, excluding dental providers enrolled in the Denti-Cal
Program, to submit TARs and SARs electronically. DHCS argues
the current TAR and SAR submission methods involving different
processing methods reduces the overall efficiency of the TAR and
SAR review process as DHCS staff will have the ability to route
all incoming TARs/SARs to the appropriate office for
adjudication based on workload, volumes, and staff availability.
Additionally, paper submissions (by mail or fax) place clients
at an increased risk for unauthorized disclosure of confidential
protected health information because the data is not directly
transmitted from the provider to the DHCS computer system. The
proposed statutory change would allow DHCS to have one uniform
submission and adjudication system, as opposed to the current
separate electronic and paper-based systems. The uniform system
will improve efficiency and consistency of TAR/SAR processing
including the adjudication timeframes, and there will be a
reduced risk of information security breaches because fewer
individuals will view or handle documents and the possibility of
losing, misfiling, or incorrectly mailing or faxing the TAR/SAR
or related documents will also be reduced. Finally, DHCS
anticipates that it will be able to reduce or eliminate
administrative costs associated with paper and fax submissions
of TARs/SARs, such as fax machines and toner, fax machine
maintenance agreements, storage space, paper purchases, postage
costs, and support staff.
JL:e 4/29/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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