BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 187| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 187 Author: Bonta (D) Amended: 5/28/15 in Assembly Vote: 21 SENATE HEALTH COMMITTEE: 8-0, 7/8/15 AYES: Hernandez, Nguyen, Hall, Monning, Nielsen, Pan, Roth, Wolk NO VOTE RECORDED: Mitchell SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen ASSEMBLY FLOOR: 78-0, 6/2/15 - See last page for vote SUBJECT: Medi-Cal: managed care: California Childrens Services program. SOURCE: Author DIGEST: This bill extends the sunset date on the California Children's Services (CCS) carve out" by an additional one year, under which CCS-covered services are prohibited from being incorporated in a Medi-Cal managed care plan. ANALYSIS: Existing law: AB 187 Page 2 1)Establishes the Medi-Cal Program, administered by the Department of Health Care Services (DHCS), which provides comprehensive health benefits to low-income children up to 266% of the federal poverty level (FPL), parents and adults up to 138% of the FPL, pregnant women, and elderly, blind or disabled persons, 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 to require mandatory enrollment of Medi-Cal beneficiaries in specified eligibility categories into managed care plans. 4)Prohibits CCS covered services from being be incorporated into any Medi-Cal managed care (MCMC) plan contract entered into after August 1, 1994, until January 1, 2016, except for contracts entered into for county organized health systems (COHS) or Regional Health Authority in the Counties of San Mateo, Santa Barbara, Solano, Yolo, Marin, and Napa. This is known as the CCS "carve out." 5)Requires the Director of DHCS to establish, by January 1, 2012, organized health care delivery models for CCS-eligible children. Requires these models to be chosen from the following: a) An enhanced primary care case management program; b) A provider-based accountable care organization; c) A specialty health care plan; or, d) A Medi-Cal managed care plan that includes payment and coverage for CCS-eligible conditions. This bill extends the sunset date on the CCS "carve out" by an additional one year, until January 1, 2017. Under the CCS carve out, CCS-covered services are prohibited from being incorporated in a MCMC plan. Comments 1)Author's statement. According to the author, CCS is a vital program that the state's most medically vulnerable children rely on to provide them with timely and adequate access to AB 187 Page 3 specialty health care services. The most recent CCS carve-out is expiring in January of 2016, and this bill extends the CCS carve-out from Medi-Cal Managed Care until 2017. DHCS has convened workgroups with stakeholders to determine the future of the CCS program, however, any large change in the program will need adequate time for implementation. 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. 2)CCS. The CCS program provides diagnostic and treatment services, medical case management, and physical and occupational therapy health care services to children under 21 years of age with CCS-eligible conditions (e.g., severe genetic diseases, chronic medical conditions, infectious diseases producing major sequelae, and traumatic injuries) from families unable to afford catastrophic health care costs. A child eligible for CCS must be a resident of California, have a CCS-eligible condition, and be in a family with an adjusted gross income of $40,000 or less in the most recent tax year. Children in families with higher incomes may still be eligible for CCS if the estimated cost of care to the family in one year is expected to exceed 20% of the family's adjusted gross income. The CCS program is administered as a partnership between county health departments and DHCS. 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. CCS authorizes and pays for specific medical services and equipment provided by CCS-approved specialists. CCS rates for physician services provided under CCS are reimbursed at rates which are 39.7% greater than applicable Medi-Cal rate. CCS hospital inpatient rates are the same as those in Medi-Cal. AB 187 Page 4 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. 3)Medi-Cal managed care and the CCS carve out. Most Medi-Cal beneficiaries, including children, are required to enroll in Medi-Cal managed care plans. However, for children who are enrolled in both Medi-Cal and CCS, CCS services were carved out of Medi-Cal managed care pursuant to SB 1371 (Bergeson, Chapter 917, Statutes of 1994). Under the carve out, CCS-covered services for CCS-eligible children are not incorporated into Medi-Cal managed care, and are instead provided and paid for on a fee-for-service basis through the CCS Program. The initial carve out under SB 1371 was for three years. The CCS 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. DHCS indicates the division of payment and care between CCS and the primary Medi-Cal managed care plan has posed challenges, including delays in care for children, fragmentation and a lack of coordination, and increased cost to the state. 4)Medi-Cal Waiver and CCS pilots. SB 208 (Steinberg, Chapter 714, Statutes of 2010), was one of two bills in 2010 implementing the 2010 Medi-Cal waiver renewal. One provision of SB 208 was a requirement that the DHCS director establish, by January 1, 2012, organized health care delivery models for CCS-eligible children, from four specified models. Five demonstration applicants (San Mateo Health Plan, Alameda County, L.A. Care, Children's Hospital Orange County, and Rady Children's Hospital in San Diego) were approved in 2011, but only the San Mateo Health Plan pilot has been implemented. The Rady Children's Hospital in San Diego is for a subset of CCS-eligible children with specified conditions but it has not been implemented. 5)DHCS CCS proposal. DHCS has implemented a stakeholder process AB 187 Page 5 to investigate potential improvements or changes to the CCS program in partnership with the UCLA Center for Health Policy Research. A CCS Redesign Stakeholder Advisory Board (RSAB) composed of individuals from various organizations and backgrounds with 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. In June 2015, DHCS released its proposal for the CCS program based on a "whole-child model." DHCS released its proposed CCS legislative language on July 16, 2015, and released revised language on August 27, 2015. To date, the DHCS language has not been amended into a bill. Under DHCS' proposed language, the CCS carve-in would be implemented in specified counties no sooner than January 2017. The first phase would allow DHCS to incorporate CCS services into Medi-Cal managed care plans into three COHS plans in 14 additional counties upon DHCS review and certification of the COHS meeting readiness criteria. Those counties are Del Norte, Humboldt, Lake, Lassen, Mendocino, Merced, Modoc, Monterey, Santa Cruz, San Luis Obispo, Shasta, Siskiyou, Sonoma, and Trinity. DHCS would be authorized to incorporate CCS into Orange County (also a COHS county) upon DHCS review and certification of COHS readiness no sooner than July 1, 2017. Under the whole-child model, health plans would be at full financial risk for CCS. In addition, DHCS proposes to repeal the requirement that there be a separate actuarially sound rate for CCS-eligible children. Medi-Cal managed care plans would be required to demonstrate support from stakeholders and be subject to a readiness review by DHCS prior to implementation. The readiness review would include evidence of adequate network of CCS-paneled providers, evidence of policies and procedures regarding access to specialty care outside of designated catchment area, a CCS family advisory committee in each county, and an integrated electronic health records system. Under the "whole-child model," care coordination and service authorization will shift from counties to health plans. Counties and health plans will jointly develop Memorandums of Understanding (MOU) to document transition plans for these activities. Counties (or the state, for dependent counties) will continue to perform initial and AB 187 Page 6 periodic financial, residential, and medical eligibility determinations. Counties will maintain responsibility for medical therapy programs, and MOUs will be required with health plans and counties. To improve continuity of care and access to specialty providers for youth aging out of CCS and transitioning to Medi-Cal managed care, DHCS is requiring all Medi-Cal managed care plans, on a phased-in basis, to contract with CCS providers or providers who meet the CCS panel requirements. In addition to the COHS counties, the whole-child model could also be implemented in up to four non-COHS counties. The determination of these counties will be based on an application of interest to DHCS from at least one plan in the county, a demonstration of support from stakeholders and a readiness review by DHCS. Based on the application and subject to federal approval, DHCS may propose that CCS be incorporated into only one Medi-Cal managed care plan in a two plan model county. In the remaining 33 counties where the whole-child model is not offered, DHCS is proposing to extend the carve-out for three additional years, until January 1, 2019, or until completion and submission of a newly required evaluation of the CCS carve in that is implemented in COHS counties. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, unknown impact on overall Medi-Cal expenditures for services provided to CCS-eligible Medi-Cal beneficiaries (General Fund and federal funds). Historically, the state has assumed that shifting Medi-Cal beneficiaries into managed care will reduce costs, relative to the fee-for-service system, due to better coordination of care and less utilization of high-cost services. Whether the Department would actually begin shifting CCS children to managed care after the expiration of the "carve out" is highly uncertain, given the serious health issues experienced by CCS-eligible children. In addition, the serious health issues faced by CCS children make it difficult to determine whether cost savings are likely to be achieved through integration with managed care. AB 187 Page 7 SUPPORT: (Verified8/28/15) Alameda County Department of Public Health Alta California Regional Center American Academy of Pediatrics American Federation of State, County and Municipal Employees California Academy of Physician Assistants California Asian Americans Advancing Justice - Los Angeles California Association of Health Plans California Children's Hospital Association California Chronic Care Coalition California Downs Syndrome Advocacy Coalition California Hepatitis C Task Force California Medical Association California Pharmacists Association California Women, Infants and Children Association Children Now Children's Defense Fund-California Children's Specialty Care Coalition Disability Rights California Down Syndrome Association of Orange County Down Syndrome Information Alliance Epilepsy California Exceptional Parents Unlimited Family Soup Hemophilia Council of California International Foundation for Autoimmune Arthritis Lucile Packard Children's Hospital at Stanford March of Dimes Maternal and Child Health Access Miller Children's and Women's Hospital Long Beach National Association of Hepatitis Task Forces National Downs Syndrome Congress National Downs Syndrome Society National Health Law Program SEIU California Sickle Cell Disease Foundation of California The Children's Partnership The FAIR Foundation The Los Angeles Trust for Children's Health UCSF Benioff Children's Hospital at Oakland United Ways of California University of California Valley Children's Healthcare AB 187 Page 8 OPPOSITION: (Verified8/28/15) None received ARGUMENTS IN SUPPORT: The Children's Specialty Care Coalition (CSCC) writes in support that the CCS carve-out has been extended repeatedly to protect access to the specialty care for this vulnerable population. CSCC 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. The CSCC writes that, while it appreciates the DHCS stakeholder process, it has significant concerns with the DHCS proposal regarding network adequacy, monitoring of CCS standards of care, and the lack of experience that some of the plans have in dealing with children with chronic and serious health conditions. CSCC states the DHCS bill language has not been released, and it believes that with nearly two months left in the legislative session, the CCS transition must be done thoroughly and correctly and passing legislation in haste could have serious unintended consequences. ASSEMBLY FLOOR: 78-0, 6/2/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Chávez, Grove Prepared by:Scott Bain / HEALTH / 8/31/15 8:32:45 **** END **** AB 187 Page 9