BILL ANALYSIS Ó AB 187 Page 1 Date of Hearing: April 7, 2015 ASSEMBLY COMMITTEE ON HEALTH Rob Bonta, Chair AB 187 (Bonta) - As Amended March 4, 2015 SUBJECT: Medi-Cal: managed care: California Children's Services program. SUMMARY: Extends the sunset date on the prohibition on incorporating California Children's Services (CCS) covered services in a Medi-Cal managed care (MCMC) contract until the Department of Health Care Services (DHCS) has completed evaluations of CCS pilot programs. EXISTING LAW: 1)Establishes the Medi-Cal Program, administered by DHCS, which provides comprehensive health benefits to low-income children, their parents or caretaker relatives, pregnant women, elderly, blind or disabled persons, nursing home residents, and refugees who meet specified eligibility criteria. 2)Establishes the CCS Program to provide specified medical care and therapy services to children with eligible conditions. 3)Authorizes the state to contract for comprehensive managed health care services for Medi-Cal beneficiaries and requires mandatory enrollment of beneficiaries in specified eligibility AB 187 Page 2 categories. 4)Prohibits, until January 1, 2016, CCS covered services from being incorporated into MCMC contracts, except in county organized health systems (COHS) plans originally established. 5)Requires DHCS to seek proposals to establish models of organized health care delivery for Medi-Cal eligible children with CCS-eligible conditions and conduct an evaluation. FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee. COMMENTS: 1)PURPOSE OF THIS BILL. According to the author, CCS is a vital program that our most medically vulnerable children rely on to provide them with timely and adequate access to specialty health care services. The author states that the most recent CCS carve-out is expiring in January of 2016, and the Legislature has a responsibility to ensure that future administration of the CCS program maintains high standards of care, continues to allow providers to make fiscally disinterested decisions and strengthens care coordination for families. This bill continues excluding the CCS program from MCMC until DHCS has completed an evaluation of two CCS pilots that were authorized in 2010. The author concludes that after the evaluations are completed, stakeholders, the Legislature and administration will have more information which will allow an adequate evaluation of the future of CCS. 2)BACKGROUND. Originally established in 1927, the CCS Program provides diagnostic and treatment services, medical case management, and physical and occupational therapy services to children under age 21 with CCS-eligible medical conditions. Some examples of CCS-eligible conditions include chronic medical conditions such as cystic fibrosis, hemophilia, AB 187 Page 3 cerebral palsy, heart disease, cancer, traumatic injuries, and certain infectious diseases. CCS also provides medical therapy services that are delivered at public schools. The CCS program is administered as a partnership between county health departments and DHCS. As of January, 2010, there were 178,530 children enrolled in CCS. According to DHCS, 90% of CCS enrollees are also eligible for Medi-Cal and 10% were CCS-only or were covered by other insurance. The Medi-Cal Program reimburses providers for Medi-Cal eligible beneficiaries. CCS is a statewide program. In counties with populations greater than 200,000 (independent counties), county staff perform all case management activities for eligible children residing within their county. This includes determining all phases of program eligibility, evaluating needs for specific services, determining the appropriate provider(s), and authorizing for medically necessary care. For counties with populations under 200,000 (dependent counties), the Children's Medical Services Branch of DHCS provides medical case management and eligibility and benefits determination through its regional offices located in Sacramento, San Francisco, and Los Angeles. CCS authorizes and pays for specific medical services and equipment provided by CCS-approved specialists. 3)MCMC. MCMC contracts for health care services through established networks of organized systems of care, which emphasize primary and preventive care. Managed care plans are a cost-effective use of health care resources that improve health care access and assure quality of care. Approximately 8.8 million Medi-Cal beneficiaries in all 58 California counties receive their health care through six different models of managed care. Mandatory enrollment of families and children into a MCMC full risk plan was authorized as part of the state budget of 1992. In implementing this mandatory enrollment, the former Department of Health Services (now DHCS) released a strategic AB 187 Page 4 plan in 1993. With regard to CCS, the Strategic Plan stated that the department desired Medi-Cal children participating in managed care to continue to have direct access to the level of highly specialized services provided under the CCS Program. In order to assure that CCS-eligible children received the benefit of fully-coordinated care, it would be the responsibility of the managed care plan to identify children with CCS-eligible conditions, arrange for referral to the local CCS office and coordinate the provision of care. CCS services would continue to be provided through the CCS program while children would be mandatorily enrolled in a health plan in the counties covered by the managed care expansion for purposes of receiving primary care and other services unrelated to the conditions being treated by the CCS Program. 4)CCS "CARVE OUT." Consistent with the Strategic Plan, SB 1371 (Bergeson), Chapter 917, Statutes of 1994, was enacted to provide that CCS-covered services, for CCS-eligible children, would not be incorporated into managed care, termed a "carve out" and would be provided and paid for on a fee-for service basis through the CCS Program for three years. Also in line with the Strategic Plan, SB 1371 authorized pilot projects to test alternative managed care models tailored to the special health care needs of CCS program, including using different payment and incentive models. No pilot projects were ever approved. The carve out has been extended repeatedly since then, usually for three or four year periods. The first extension allowed the COHS in the counties of San Mateo, Santa Barbara, Solano, and Napa to include CCS services. Later extensions also allowed Yolo and Marin counties to include CCS services 5)CCS REDESIGN STAKEHOLDER ADVISORY BOARD. DHCS has implemented a stakeholder process to investigate potential improvements or changes to the CCS program, in partnership with the University of California, Los Angeles Center for Health Policy Research. A CCS Redesign Stakeholder Advisory Board (RSAB) composed of individuals from various organizations and backgrounds with AB 187 Page 5 expertise in both the CCS program and care for children and youth with special health care needs, was assembled in September of 2014 to lead this process. RSAB meets on a bi-monthly bases and the last convening will be in July of 2015. According to DHCS, the CCS RSAB goals are to: a) Implement Patient and Family Centered Approach: provide comprehensive treatment, and focus on the whole-child rather than only their CCS eligible conditions. b) Improve Care Coordination through an Organized Delivery System: provide enhanced care coordination among primary, specialty, inpatient, outpatient, mental health, and behavioral health services through an organized delivery system that improves the care experience of the patient and family. c) Maintain Quality: ensure providers and organized delivery systems meet quality standards and outcome measures specific to the CCS population. d) Streamline Care Delivery: improve the efficiency and effectiveness of the CCS health care delivery system. e) Build on Lessons Learned: consider lessons learned from current pilots and prior reform efforts, as well as delivery system changes for other Medi-Cal populations. f) Cost-Effective: ensure costs are no more than the projected cost that would otherwise occur for CCS children, including all state-funded delivery systems. Consider simplification of the funding structure and value-based payments, to support a coordinated service delivery approach. 6)SECTION 1115 WAIVERS. Section 1115 of the Social Security Act authorizes the federal Secretary of Health and Human Services AB 187 Page 6 to allow states to receive federal Medicaid matching funds without complying with all of the federal Medicaid rules. On November 1, 2010, California received federal approval for a five year Section 1115 Medi-Cal Demonstration Project Waiver, entitled "A Bridge to Reform." Authorization for the Bridge to Reform Waiver expires on October 2, 2015. Traditionally designed as research and demonstration programs to test innovative program improvements and to facilitate coverage expansions to populations not otherwise eligible, they are also used to modify benefits structures and financing mechanisms. The 2010 Bridge to Reform Waiver included authorization for CCS pilot programs aimed at improving health outcomes, improving cost-effectiveness, creating clearer accountability, improving satisfaction with care, and promoting timely access to care and family-centered care. Four potential models for CCS pilot projects emerged from the CCS Technical Working Group and the Stakeholder Advisory Committee: a) Existing Medi-Cal Managed Care Organization Plans (MCOs); b) Specialty Health Care Plan; c) Enhanced Primary Care Case Management, and d) Provider-based Accountable Care Organization. Five counties were awarded grants to carry out the four pilots on October 12, 2011. On March 27, 2015, DHCS submitted a request to renew the state's section 1115 Medicaid Waiver for a new five-year term. The new Waiver, "Medi-Cal 2020," seeks approximately $17 billion in federal investment to further the achievements California has made in health care reform through a set of payment and delivery system transformation strategies. The Medi-Cal 2020 Waiver program includes extended authorization for the CCS pilot programs authorized in 2010. AB 187 Page 7 7)CCS PILOTS. SB 208 (Steinberg), Chapter 714, Statutes of 2010, requires DHCS to seek proposals to test these models either statewide or on a more limited geographic basis and not limited to the provision of CCS services. SB 208 requires the models to be established by January 1, 2012 and requires they be selected from among the models developed by the Children with Special Health Care Needs Technical Workgroup. There was no specified number of pilots and no ending date. Five CCS pilots were ultimately authorized under the 2010 1115 Waiver, focused on exploring new service delivery models that would improve the CCS Program and meet both stakeholder and the state's needs. The proposed pilots varied by types of providers participating, enrollment criteria, and eligibility criteria. Only two pilot projects were undertaken, the San Mateo Health Plan MCO pilot and the Rady Children's Hospital Provider Based MCO pilot. a) Rady Children's Hospital San Diego. The County CCS program determines if CCS children met the criteria to be in the accountable care organization demonstration project based on three qualifying health conditions. They estimated 625 members would be eligible. Beneficiaries are placed in a delivery system designed to meet his/her needs. b) Health Plan of San Mateo. All 2,000 CCS children in San Mateo would be eligible for the MCO plan. They will provide holistic care including primary care, specialty care, social and psychological care, as well as whatever services are necessary to address the child and family's well-being. The pilot launched in April of 2013. AB 187 Page 8 These models were required to meet specified standards including establishing a network that includes CCS-approved providers and maintain the current system of regionalized pediatric specialty and subspecialty services. SB 208 also requires DHCS to conduct a simultaneous evaluation, to assess the effectiveness of each model in improving the delivery of health care services for these children and specifies the measures for the evaluation. These measures included, at minimum, the following: a) The types of services and expenditures for services; b) Improvement in the coordination of care for children; c) Improvement in the quality of care; d) Improvement in the value of care provided; e) The rate of growth of expenditures; and, f) Parent/Provider satisfaction. 8) SUPPORT. According to the Children's Specialty Care Coalition, CCS carve-out has been extended repeatedly to protect access to the specialty care for this vulnerable population. Recently, DHCS, in its effort to strengthen the program, assembled the CCS RSAB. The RSAB is composed of stakeholders including the Children's Specialty Care Coalition to assess the CCS program in its current state and develop a framework for a new model of care going forward. The development and implementation of any new model will take time, and must be phased in slowly. The Children's Specialty AB 187 Page 9 Care Coalition believes that this bill is necessary to ensure the care that children receive through CCS is not disrupted, while efforts are underway by DHCS and RSAB to explore new ways to enhance delivery of care. 9)RELATED LEGISLATION. SB 586 (Ed Hernandez), removes the CCS carve-out sunset date and creates a new health plan, the Kids Integrated Delivery System (KIDS) plan. The KIDS plan is required to coordinate, integrate, and provide or arrange for the full range of Medi-Cal and CCS services. This bill is scheduled to be heard on April 22, 2014 in the Senate Health Committee. 10) PREVIOUS LEGISLATION. a) AB 301 (Pan), Chapter 460, Statutes of 2011, extends the sunset date from January 1, 2012, to January 1, 2016 on the CCS carve-out. b) SB 208 (Steinberg), Chapter 714, Statutes of 2010, implements the new 2010 Medi-Cal Section 1115 Waiver, and requires DHCS to establish a pilot project and seek proposals to test four models exploring potential options to redesign the CCS Program. c) AB 2379 (Chan), Chapter 333, Statutes of 2007, extends the sunset date from August 1, 2008, to January 1, 2012 on the CCS carve-out. d) SB 1103 (Committee on Budget and Fiscal Review), Chapter 228, Statutes of 2004, extends the sunset on the carve-out from August 1, 2005 to September 1, 2008. AB 187 Page 10 e) AB 3049 (Committee on Health), Chapter 536, Statutes of 2002, extends the sunset on the carve-out from August 1, 2003 to August 1, 2005 and added COHS in Yolo and Marin counties to the list of exceptions to the carve-out. f) AB 1107 (Cedillo), Chapter 146, Statutes of 1999, extends the sunset on the carve-out until August 1, 2003. g) AB 469 (Papan) of 1999 would have allowed Medi-Cal beneficiaries in the CCS Program to disenroll from mandatory managed care if certain conditions are met. AB 469 was vetoed by then Governor Davis. h) SB 391 (Solis), Chapter 294, Statutes of 1997, extended the CCS carve-out until August 1, 2000, except for contracts entered into for COHS in the counties of San Mateo, Santa Barbara, Solano, and Napa. i) SB 1371 (Bergeson), Chapter 917, Statutes of 1994, required that CCS-eligible services be carved out of any MCMC contract until three years after the effective date of the contract. REGISTERED SUPPORT / OPPOSITION: Support American Academy of Pediatrics, California Children's Specialty Care Coalition AB 187 Page 11 Opposition None on file. Analysis Prepared by:Paula Villescaz / HEALTH / (916) 319-2097