BILL ANALYSIS Ó AB 68 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 68 (Waldron) As Amended August 18, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |78-0 |(June 3, 2015) |SENATE: |40-0 |(September 2, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: HEALTH SUMMARY: Establishes that a beneficiary has a right to an urgent appeal process of a Medi-Cal managed care plan's denial of a drug used in the treatment of seizures and epilepsy and is a drug approved by the federal Food and Drug Administration for the treatment of seizures and epilepsy. The Senate amendments clarify that an urgent appeal process must be requested orally or in writing by a beneficiary or treatment provider with the consent of the beneficiary. EXISTING LAW: 1)Requires states, under the federal Medicaid law, to have a drug use review program for covered outpatient prescription drugs, to ensure drugs are appropriate, medically necessary, AB 68 Page 2 and not likely to result in adverse medical effects. Federal law requires the program to assess data on drug use against predetermined standards, consistent with specified factors, including compendia. 2)Provides a schedule of benefits provided in the Medi-Cal program, including prescription drug benefits. 3)Authorizes the Department of Health Care Services (DHCS) to establish utilization controls for any Medi-Cal services as long as the controls are reasonably related to the purpose of establishing them. Allows the utilization controls include prior authorization, pre- and post-service audits, limitations on the number of services and review pursuant to professional standards. FISCAL EFFECT: According to the Senate Appropriations Committee, likely one-time costs of up to $150,000 to make administrative changes by DHCS, likely minor costs to monitor Medi-Cal managed care plan compliance with the bill's requirements by DHCS, and an unknown impact on the cost to provide prescription drugs by Medi-Cal managed care plans. COMMENTS: The author argues this bill is a reasonable plan to stabilize those with life-threatening conditions by ensuring a timely appeal if there is a denial by a managed care plan. The author notes those who can afford private insurance plans have doctors who may have more time to work through the existing pre-authorization processes to attain a higher tier drug for their patients, however, those in vulnerable low-income situations are seeing their doctors most likely in clinics, where doctors are short on time and do not have the resources to follow-up on preauthorization appeals. The author concludes this bill levels the playing field for access to medically necessary drugs for low income patients with serious, chronic or life threatening conditions by granting them the right to an urgent appeal. Medi-Cal is one of the largest drug purchasers in the state. AB 68 Page 3 The program spends about $4 billion on prescription drugs, including indirect expenditures through payment to managed care plans and direct expenditures in fee for service and for prescription drugs that are "carved out" of managed care. Carved out means that the state pays directly for the drug rather than indirectly through a capitated or fixed rate payment to a Medi-Cal managed care plan. Facing significantly rising costs, the federal and state governments have grappled with various cost control measures. California, to help manage costs, has established a formulary for the fee-for service program. The formulary is not binding on Medi-Cal managed care plans, each of which creates their own formulary. A variety of utilization tools also are used. These include limiting prescriptions to six per month, although many beneficiaries receive more but only after a prior authorization has been approved. Frequent and high cost prescription drug users can be identified and case management interventions can be used if appropriate to reduce drug costs. Epilepsy is a chronic disorder, the hallmark of which is recurrent, unprovoked seizures. Many people with epilepsy have more than one type of seizure and may have other symptoms of neurological problems as well. Although the symptoms of a seizure may affect any part of the body, the electrical events that produce the symptoms occur in the brain. The location of that event, how it spreads and how much of the brain is affected, and how long it lasts all have profound effects. These factors determine the character of a seizure and its impact on the individual. Having seizures and epilepsy can affect one's safety, relationships, work, driving and so much more. How epilepsy is perceived or how people are treated can become a bigger problem than the seizures. Anti-epileptic drugs (AEDs) are the main form of treatment for people with epilepsy. And up to 70% people with epilepsy could have their seizures completely controlled with AEDs. There are around 25 AEDs used to treat seizures, and different AEDs work for different seizures. AB 68 Page 4 Supporters note, on a prior version of the bill, that epilepsy is a serious medical condition that produces seizures and one seizure can have significant consequences, including head injury limitations in driving or employment, hospitalization and sudden unexpected death. They argue that failure to effectively manage epilepsy and prevent breakthrough seizures results in higher costs to the Medi-Cal program and society through increased hospitalizations, relapses and deteriorating conditions which necessitate additional and expensive care. There is no known opposition to this bill. Analysis Prepared by: Roger Dunstan / HEALTH / (916) 319-2097 FN: 0001881