BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2206
AUTHOR: Atkins
AMENDED: June 12, 2012
HEARING DATE: June 27, 2012
CONSULTANT: Bain
SUBJECT : Medi-Cal: dual eligibles: pilot projects.
SUMMARY : Requires, in areas where a Programs for the
All-Inclusive Care for the Elderly (PACE) plan is available,
that the plan be presented as an enrollment option in the same
manner as managed care health plans participating in the
Medi-Cal pilot project for individuals dually eligible for
Medi-Cal and Medicare. Authorizes individuals who are enrolled
in a PACE plan to continue to receive their Medi-Cal and
Medicare benefits through the PACE plan without having to
reselect the PACE plan. Authorizes individuals eligible for the
PACE program to disenroll from a managed care health plan and
enroll in a PACE plan at any time. Requires Medi-Cal pilot
program managed care health plans to identify and notify certain
beneficiaries of their potential eligibility for the PACE
program.
Existing law:
1.Establishes the Medi-Cal Program, administered by the
Department of Health Care Services (DHCS), to provide
comprehensive health care and long-term services and supports
(LTSS) to pregnant women, children, seniors, and people with
disabilities (SPDs).
2.Requires DHCS to seek federal approval to establish a pilot
program in up to four counties for Medi-Cal beneficiaries who
are dually eligible for Medicare and Medi-Cal (dual
eligibles), under which DHCS can require that dual eligibles
are assigned as mandatory enrollees into Medi-Cal managed care
plans.
3.Permits the Director of DHCS to establish PACE to promote the
development of community-based, risk-based capitated,
long-term care programs. Permits the DHCS Director to contract
with up to 15 demonstration projects to develop risk-based
long-term care pilot programs modeled upon On Lok Senior
Health Services in San Francisco.
Continued---
AB 2206 | Page 2
4.Establishes the PACE program as a Medi-Cal benefit, subject to
utilization controls and eligibility criteria that require
that the beneficiary be certified as eligible for nursing
facility services based on Medi-Cal criteria.
This bill:
1.Requires, in areas where a PACE plan is available to dual
eligibles as part of the demonstration project established
under existing law, the PACE plan to be presented as an
enrollment option in the same manner as managed care health
plans participating in the demonstration project, to be
included in all enrollment materials, enrollment assistance
programs, and outreach programs related to the pilot project,
and to be made available to beneficiaries whenever enrollment
choices and options are presented.
2.Requires that individuals who choose a PACE plan remain in
fee-for-service (FFS) Medi-Cal and Medicare and not be
assigned to a managed care health plan until they are assessed
for eligibility and determined not to be eligible for the PACE
plan.
3.Requires individuals enrolled in a PACE plan to receive all
Medi-Cal and Medicare services from the PACE plan.
4.Requires that individuals who are already enrolled in a PACE
plan at the time of the enrollment period for the
demonstration project to remain in and continue to receive
their Medi-Cal and Medicare benefits through the PACE plan,
and prohibits these individuals from being provided with
enrollment materials or being required to select the PACE plan
to remain in the plan.
5.Allows individuals who become eligible for the PACE program
and are enrolled in a Medi-Cal managed care plan to dis-enroll
from the plan and enroll in a PACE plan at any time to receive
their Medi-Cal and Medicare benefits by providing an exception
from any required lock-in that may apply to the demonstration
project for receipt of Medi-Cal or Medicare benefits.
6.Requires managed care health plans to identify in their
assessments of enrollees that occur during the transition to
managed care and at regularly scheduled intervals
beneficiaries, who are 55 years of age and older who are at
risk of being placed in a nursing home. Requires managed care
AB 2206 | Page
3
health plans to notify these beneficiaries of their potential
eligibility for the PACE program.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis of the previous version of this bill,
required enrollee notification costs should be minor and
absorbable.
PRIOR VOTES :
Assembly Health: 19- 0
Assembly Appropriations:17- 0
Assembly Floor: 73- 0
COMMENTS :
1.Author's statement. AB 2206 would ensure that enrollment
information for PACE is available to beneficiaries whenever
managed care enrollment options are presented under the
"dual eligibles" pilot programs. Although PACE is currently
an enrollment option for dual eligibles, information on
enrolling in them has not been meaningfully included in
communications by the state and managed care plans. The
exclusion of enrollment materials means that the frailest
seniors who could benefit from PACE programs are not fully
aware of this option. Experience with the managed care
transition for seniors and persons with disabilities
indicates that, unless dual eligibles who may benefit from
PACE are identified and given the option to enroll
directly, many seniors will default into managed care plans
and end up in nursing homes or opting back into fee-for
service Medi-Cal before PACE programs have a chance to work
with them to keep them in the community. The notification
materials that have been used in a similar pilot for
seniors with disabilities did not treat PACE programs the
same way as managed care plans, and enrollment in PACE
programs suffered. For the dual-eligible pilot programs to
succeed, PACE needs to operate side-by-side with managed
care plans. AB 2206 would ensure that seniors are informed
about their full enrollment options into managed care by
requiring information about PACE to be presented to
dual-eligible beneficiaries whenever other enrollment
options are presented. To achieve the state's goals of
improving outcomes for dual eligibles and reducing costs,
they need to be able to direct enroll in PACE programs -
both at the point they are making enrollment choices and
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after they have enrolled in a plan as their needs change.
2.PACE. PACE is a capitated benefit provided primarily to
certain Medi-Cal and Medicare beneficiaries that offers a
comprehensive service delivery system and integrates Medicare
and Medicaid financing. The program was modeled after the
acute and long-term care services of On Lok Senior Health
Services in San Francisco.
Participants must be at least 55 years old, live in the PACE
service area, and be certified as eligible for nursing home
care. Enrollment in PACE is voluntary. An interdisciplinary
team, consisting of professional and paraprofessional staff,
assesses participants' needs, develops care plans, and
delivers all services (including acute care services and when
necessary, nursing facility services). The PACE service
package must include all Medicare and Medicaid covered
services and other services determined necessary by the
interdisciplinary team for the care of the PACE participant.
PACE providers assume full financial risk for participants'
care without limits on amount, duration, or scope of services.
Existing state law allows DHCS to contract with up to 15 PACE
organizations. The Governor's 2012-13 May Revise budget
estimates average monthly enrollment in PACE statewide to be
3,566 and projects total payments to PACE plans of $175.4
million ($87.7 million General Fund). DHCS indicates it
currently has contracts with five PACE organizations and six
new PACE organizations will begin operation in 2012-13.
3.Governor's budget proposal. The Governor's 2012-13 budget
proposes a Coordinated Care Initiative phased in over three
years with the goal of improving beneficiary health outcomes
and care quality while achieving substantial savings from the
rebalancing of care delivery away from institutional settings
and into people's homes and communities. The proposal consists
of three major components: an expansion of mandatory
enrollment of dual eligibles into Medi-Cal managed care, an
expansion of geographic regions covered by Medi-Cal managed
care, and an expansion of the scope of services covered within
a Medi-Cal managed care plan (instead of FFS).
The Administration's proposal would expand the existing
four-county, dual-eligible demonstration project to up to 8
counties in 2013, by an additional 20 counties in 2014, and
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statewide in 2015. Under these pilots, dual-eligible
individuals would be required to enroll in a Medi-Cal managed
care plan for Medi-Cal services (instead of receiving services
through FFS Medi-Cal), and would be passively enrolled for
Medicare services (meaning individuals could "opt out" of
managed care for Medicare services). Second, the proposal
requires LTSS programs (including In Home Supportive Services)
to be provided through managed care plans, instead of through
FFS. Third, the proposal requires the geographic expansion of
the mandatory enrollment of individuals into Medi-Cal managed
care in the 28 counties that are still currently FFS.
Part of the Administration's proposal is a "lock-in" where DHCS
can require any beneficiary to remain enrolled in the Medicare
portion of the demonstration project on a mandatory basis for
six months from the date of enrollment. After six months, a
dual-eligible beneficiary can enroll in a different
demonstration site plan, a Medicare Advantage plan,
fee-for-service Medicare, PACE or AIDS HealthCare Foundation
(if the individual is HIV positive or has been diagnosed with
AIDS). Federal approval is required for the Coordinated Care
Initiative generally and specifically for the Medicare lock-in
provision.
The Administration's proposal to the Center for Medicare and
Medicaid Innovation entitled "Coordinated Care Initiative:
State Demonstration to Integrate Care for Dual Eligible
Individuals" was submitted in May 31, 2012 following a 30 day
public comment period. The proposal describes the role of PACE
in the Coordinated Care Imitative. In demonstration areas
where PACE is available, PACE enrollees will not be passively
enrolled in the demonstration, and PACE will remain a clear
enrollment option for dual eligible beneficiaries that meet
the PACE enrollment criteria. Additionally, in counties where
PACE is available, several demonstration health plans will
coordinate closely with PACE to offer this option to
nursing-home eligible dual eligible beneficiaries who wish to
remain in the community. The enrollment process for the
Coordinated Care Initiative will include a special focus on
enabling beneficiaries to obtain information about PACE and
how to access the program. Finally, the proposal states that
some health plans participating in the demonstration have
expressed interest in contracting with PACE providers, to
provide an additional option for members that meet the
criteria for enrollment in PACE. The proposal indicates the
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State will work with the Centers for Medicare and Medicaid
Services to determine if any amendments to current authority
for PACE are needed for this contracting option.
4.Current PACE enrollment information process. PACE is not
currently part of the Health Care Options (HCO) presentation
process, under which Medi-Cal beneficiaries are given
enrollment information on their choice of Medi-Cal managed
care plans and a form to return indicating their choice of
plan. Currently, DHCS/HCO health plan choice enrollment
packets mailed to seniors and SPDs include a PACE fact sheet
for beneficiaries residing in the PACE service area. The PACE
documents, included in the HCO health plan choice enrollment
packet mailings, are approved and mailed by DHCS.
DHCS' Long-Term Care Division facilitated a separate mailer to
SPDs regarding PACE. The mailer contained a cover letter and
fact sheet specific to the available PACE organization. DHCS
reviewed and approved the mailer contents developed by each
PACE organization. Printing, stuffing and mailing was done by
the Office of State Publishing (OSP), and each PACE plan was
billed by DHCS for each month of the mailer to pay for system
costs (compiling, filtering, and transmitting address file to
the OSP) and OSP costs (printing, labor/supplies, and
postage). The PACE SPD mailer was set up to specifically
mirror the SPD-mandatory enrollment transition phased over the
period of one year by birth month. The PACE SPD mailer
discontinued at the end of one year phased-notification on
SPD-mandatory enrollment mailer (targeted to existing SPDs)
processed by the Medi-Cal Managed Care Division/HCO. The last
PACE SPD mailer went out in March 2012. DHCS indicates that
federal privacy law prohibits DHCS from providing PACE plans
with the contact information of Medi-Cal beneficiaries.
5.Related legislation. SB 1503 (Steinberg) would require the
Director of the Department of Social Services and the Director
of DHCS to convene a stakeholder group to design a plan for
the integration of LTSS programs, and would require the plan
to include specified components. This bill is a vehicle for
discussions involving the proposed integration of LTSS. SB
1503 is currently pending before the Assembly Committee on
Human Services.
6.Prior legislation. SB 208 (Steinberg), Chapter 714, Statutes
of 2010, requires DHCS to seek federal approval to establish
pilot projects in up to four counties under a Medicare or
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Medicaid demonstration project or waiver (or a combination of
the two). The purpose of the pilot projects is to develop
effective health care models that integrate Medicare and
Medicaid services.
AB 574 (Lowenthal), Chapter 367, Statutes of 2011, among other
provisions, increased the number of PACE organizations DHCS
can enter into contracts with, from 10 to 15.
7.Support. This bill is sponsored by CalPACE, the statewide
association of PACE programs, to ensure that dual-eligible
beneficiaries are able to access PACE programs under the
state's Coordinated Care Initiative. AB 2206 would ensure that
PACE is clearly presented as an enrollment option for
dual-eligible beneficiaries who will be subject to mandatory
enrollment in managed care under the state's dual-eligibles
demonstration program. It also ensures that beneficiaries who
meet PACE eligibility criteria are informed about and can
enroll in PACE when their care needs reach that level.
CalPACE states that PACE is widely known as the gold standard
for providing integrated care, and research shows that PACE
programs achieve important outcomes for beneficiaries,
including reducing hospitalizations and nursing home stays. To
date, PACE programs have not been included in the state's
enrollment process and options for beneficiaries who are
subject to mandatory enrollment in managed care plans. As a
result, frail seniors who could benefit from PACE programs are
often not aware of the program.
Western Center on Law & Poverty writes in support that PACE
programs are unique in that they already have experience in
dealing with this vulnerable population, which is by default,
low-income, and elderly or disabled, but often both. PACE
programs have a proven track record in delivering high-quality
services that enhance participants' quality of life, while
also ensuring fiscal solvency by reducing hospitalizations and
nursing home stays.
8.Amendments. This bill requires DHCS to seek, through waivers
or other means, flexibility for PACE plans to facilitate the
growth of the PACE program, including, but not limited to, the
ability to use alternative care settings and community-based
physicians to provide services, interdisciplinary teams that
are based on the needs of each beneficiary, and marketing
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materials and enrollment brokers in a simplified manner to
create awareness in the community of available PACE plans.
Following discussions with Committee staff about the language
being overly broad, the author has agreed to remove this
provision from the bill. This bill has been analyzed to
reflect the anticipated adoption of this proposed amendment.
9.Policy issues
a. Lock-in exception. The Administration's coordinated care
proposal demonstration site proposal contains a six month
"lock in" that would allow DHCS to require a beneficiary to
remain enrolled in the Medicare portion of the
demonstration project on a mandatory basis for six months
from the date of initial enrollment. This six month
"lock-in" requires federal approval. The Administration's
trailer bill language is not currently in print in a bill.
This bill provides an exception to the lock-in for people who
become PACE-eligible. The sponsors argue the state's dual
eligibles demonstration proposal has not taken into account
the effect of the proposed lock-in provisions on frail
elderly beneficiaries who meet the nursing home level of
care, and on PACE programs, who specialize in caring for
this subpopulation. CalPACE states enrollment lock-ins
dramatically limit the enrollment choices and options for
frail elderly beneficiaries and also affect the ongoing
viability of PACE programs, as PACE programs depend on the
ability of elderly beneficiaries, whose conditions place
them at risk of nursing home placement, to enroll in PACE
when they reach that level of care. Due to their
concentration of older beneficiaries who have higher levels
of impairment, PACE programs rely on being able to enroll
these beneficiaries on an ongoing basis in order to
maintain their enrollment and remain viable. AB 2206
addresses these problems by ensuring that dual-eligible
beneficiaries can access the proven model of care that PACE
represents through the initial enrollment process and over
time, as their care needs change.
b. PACE rates and the exemption from the lock-in. Existing
law requires DHCS to establish capitation rates for each
PACE organization at no less than 90 percent of the FFS
equivalent cost (including DHCS' cost of administration)
that DHCS estimates would be payable for all services
covered under the PACE organization contract if all those
services were to be furnished under the FFS Medi-Cal
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program.
By contrast, Medi-Cal managed care plans are paid an
actuarial rate through what is referred to as "the Mercer
methodology." DHCS believes its actuarial rate setting
methodology is the most appropriate to move to overall DHCS
believes it appropriately calculates rates based on the
cost of the services to the health plans. During
discussions on the Administration's proposed Coordinated
Care Initiative trailer bill language regarding an
exception from the lock-in for people who become
PACE-eligible while they are in a Medi-Cal managed care
plan, the Administration expressed concern that providing
an exception to the lock in for PACE would affect the
savings from the Coordinated Care Initiative because people
could move to a higher cost option (PACE), PACE is not paid
on an actuarial basis like Medi-Cal managed care plans, and
rates paid to Medi-Cal managed care plans would potentially
be too high if people meeting PACE-eligibility criteria
were allowed to opt out of PACE.
SUPPORT AND OPPOSITION :
Support: CalPACE (sponsor)
National Association of Social Workers, California
Chapter
St. Pauls Homes and Services for the Aging
Western Center on Law & Poverty
Oppose: None received.
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