BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1162

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          Date of Hearing:  April 21, 2015

                            ASSEMBLY COMMITTEE ON HEALTH

                                  Rob Bonta, Chair

          AB 1162  
          (Holden) - As Introduced February 27, 2015

          SUBJECT:  Medi-Cal:  tobacco cessation.

          SUMMARY:  Requires tobacco cessation services to be a covered  
          benefit under the Medi-Cal program, as specified.  Specifically,  
          this bill:

          1)Defines a quit attempt as:

             a)   At least four tobacco cessation counseling sessions,  
               which may be conducted in-person or by phone, individually  
               or as a group; or,

             b)   A 90-day treatment regimen of any medication approved by  
               the federal Food and Drug Administration (FDA) for tobacco  
               cessation, including prescription and over-the-counter  

          2)Requires the Medi-Cal program to cover tobacco cessation  
            services, including unlimited quit attempts and no requirement  
            for a break between attempts for beneficiaries of any age.


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          3)Exempts coverage of quit attempts from being subject to  
            requirements, including prior authorization, and requires only  
            a prescription from an authorized provider and proof of  
            Medi-Cal coverage as sufficient documentation to fill  

          4)Prohibits a beneficiary from being required to receive a  
            specific service as a condition of receiving any other form of  

          EXISTING LAW:  

          1)Establishes the Medi-Cal Program under the direction of the  
            Department of Health Care Services (DHCS), as California's  
            Medicaid program, to provide qualifying low-income individuals  
            health care and a uniform schedule of benefits.

          2)Requires prior authorization for coverage of specified  
            Medi-Cal services.

          3)Requires all preventive services that are assigned a grade of  
            A or B by the United States Preventive Services Task Force to  
            be provided without any cost sharing by Medi-Cal  
            beneficiaries, so the state can receive an increased federal  
            medical assistance percentage for these services.

          FISCAL EFFECT:  This bill has not yet been analyzed by a fiscal  



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          1)PURPOSE OF THIS BILL.  According to the author, tobacco use is  
            the leading preventable cause of death in the U.S. and, though  
            the dangers of smoking are better understood now than fifty  
            years ago, smoking rates in the Medi-Cal population are still  
            too high.  The author states the low success rate of quitting  
            is due to the fact that smokers often try quit without help,  
            which is typically ineffective.  The author asserts that  
            FDA-approved tobacco cessation medications and counseling are  
            very effective methods of having smokers quit, yet maintains  
            that access to these services is sometimes difficult for  
            Medi-Cal recipients due to the many barriers to access  
            including requiring prior-authorization and step therapy. The  
            author concludes that these barriers, along with the inherent  
            difficulty of quitting, lead many to give up before they even  
            get started.


             a)   Tobacco use in California and the United States.  In  
               2011, the Centers for Disease Control and Prevention (CDC)  
               reported that California ranked second lowest in the  
               country in percentage of adults who currently smoke  
               cigarettes at 13.7%.  Studies by the American Lung  
               Association have found that Medicaid enrollees have a  
               higher prevalence of smoking than the general population.   
               A separate study conducted in 2004 by CDC estimated that  
               approximately 45% of California's Medi-Cal population  
               smoked, and that total annual Medi-Cal expenditures  
               attributed to smoking were approximately 2.25 million  

             b)   Tobacco cessation treatments and coverage in the ACA.   
               Section 2502 of the Patient Protection and Affordable Care  
               Act (ACA) requires that smoking cessation drugs be removed  
               from the list of drugs that States may exclude from  


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               coverage in their Medicaid program, effective January 1,  
               2014.  This section also explicitly prohibited State  
               Medicaid programs from excluding FDA-approved cessation  
               medications from coverage.  The Centers for Medicare and  
               Medicaid Services issued guidance to states, specifying  
               that over-the-counter smoking cessation drugs are also no  
               longer excluded from coverage or otherwise restricted under  
               the Medicaid program.

             Federal guidance in the ACA recommends the following coverage  
               for each cessation attempt:  i) four tobacco cessation  
               counseling sessions of at least 10 minutes each (including  
               telephone counseling, group counseling, and individual  
               counseling) without prior authorization; and, ii) all  
               FDA-approved tobacco cessation medications (including both  
               prescription and over-the-counter medications) for a 90-day  
               treatment regimen when prescribed by a health care provider  
               without prior authorization.
             c)   Drugs Approved by the FDA.  There are currently a  
               variety of FDA-approved over-the-counter nicotine  
               replacement products, including skin patches, lozenges and  
               chewing gum; these products are available under brand or  
               generic names to individuals over the age of 18.  The only  
               prescription nicotine replacement product approved by the  
               FDA is Nicotrol.  The FDA has also approved two products  
               for tobacco cessation that do not contain nicotine:  
               Chantix, a drug aimed at reducing cravings, and Zyban, an  
               anti-depressant focused on maintaining chemical balance as  
               a patient receives treatment.  

             d)   DHCS Policy on Tobacco Cessation. On September 3, 2014,  
               DHCS released policy letter 14-006 to provide Medi-Cal  
               managed care health plans (MCPs) with minimum requirements  
               for comprehensive tobacco cessation services.  The  
               requirements, similar to federal guidance on the issue, for  
               the following: 


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               i)     Coverage of all seven FDA-approved tobacco cessation  
                 medications, at least one of which must be available  
                 without prior authorization - a cost-containment  
                 procedure that requires a prescriber to obtain permission  
                 to prescribe a medication prior to prescribing it - and  
                 any additional tobacco cessation medications once  
                 approved by the FDA; 

               ii)    Coverage of a 90-day treatment regimen of  
                 medications with other requirements, restrictions, or  
                 barriers; and a minimum of two separate quit attempts per  
                 year, with no mandatory break required between quit  

               iii)   MCPs may not require members to attend counseling  
                 sessions or classes prior to receiving a prescription for  
                 an FDA-approved tobacco cessation medication;

               iv)    MCPs must ensure that individual, group, and  
                 telephone counseling is offered to members who wish to  
                 quit smoking, whether or not those members opt to use  
                 tobacco cessation medications; and,

               v)     Four counseling sessions of at least ten minutes  
                 each in length for at least two separate quit attempts a  
                 year without prior authorization.

               The DHCS policy letter also specified requirements for  
               annual assessments, services for pregnant tobacco users,  
               provider training, and referral to the California Smokers'  


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          3)SUPPORT.  The American Heart Association/American Stroke  
            Association, the American Lung Association, and the American  
            Cancer Society Cancer Action Network, the sponsors of this  
            bill, state that the success rate of smokers quitting their  
            addiction to tobacco is still very low, due in part because  
            many smokers try to quit without the assistance of tobacco  
            cessation services.  The sponsors note that although the ACA  
            has made tobacco cessation treatments more accessible, current  
            guidelines as to how to implement these treatments are  
            unclear, thereby resulting in differences in coverage between  
            health plans.  In addition, the sponsors state that Medi-Cal  
            patients face barriers to treatment services due to prior  
            authorization and step therapy treatment requirements.  The  
            sponsors conclude that the bill provides clarity to both  
            Medi-Cal patients and plans on tobacco cessation coverage and  
            brings California in compliance with federal requirements  
            outlined in the expansion of the ACA.

          Supporters of the bill argue smoking is the leading preventable  
            cause of death in the United States and patients who attempt  
            to quit smoking face barriers to cessation treatments.   
            Supporters state this bill provides needed clarity for  
            Medi-Cal participants on tobacco cessation services and  
            ensures access to comprehensive insurance coverage for these  
          4)OPPOSITION.  The California Association of Health Plans states  
            the bill will increase costs to the state by requiring  
            Medi-Cal managed care plans to pay for tobacco cessation drugs  
            in a manner that is inconsistent with policies of both DHCS  
            and sound medical management.  The association also states  
            MCPs already comply with the requirements of the DHCS Policy  
            letter.  Opposition also asserts that removing all prior  
            authorization protocols and requiring plans to cover all  
            specific medications would create a new benefit mandate, which  
            would result in higher state costs in Medi-Cal reimbursement  
            rates to plans in order to reflect the benefit expansion.  


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             a)   SB 220 (Yee) of 2010 would have required a health care  
               service plan contract or health insurance policy issued,  
               amended, renewed or delivered after January 1, 2011, to  
               cover specified tobacco cessation treatments and requested  
               the California Health Benefits Review Program to prepare an  
               analysis of the cost savings as a result of the bill  
               provisions.  This bill was vetoed by the Governor.

             b)   AB 2662 (Dymally) of 2007 would have provided that the  
               provision of one form of Medi-Cal covered tobacco cessation  
               services benefits, either pharmacotherapy or counseling,  
               shall not be a precondition to receive the other.  This  
               bill was held in the Senate Appropriations Committee.

             c)   SB 576 (Ortiz) of 2005 would have required health plans  
               and health insurers to provide coverage for two courses of  
               tobacco cessation treatments per year, including counseling  
               and prescription and over-the-counter medications, and  
               prohibited plans and insurers from applying deductibles but  
               allowed specific co-payments for those benefits.  This bill  
               was vetoed by the Governor.

          6)POLICY CONSIDERATIONS.  The bill implements coverage generally  
            in line with federal guidance for coverage of tobacco  
            cessation products, with the exception of the number of quit  
            attempts allowed by the bill go beyond federal guidelines.   
            This practice is not uncommon in California law as the  
            Legislature often views federal guidelines and law as a  
            minimum standard for state law.


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          The Committee may wish to consider whether an unlimited number  
            of quit attempts is effective in helping beneficiaries quit  
            smoking in the long-term, or whether a limited number of quit  
            attempts, followed by an alternative treatment may be valuable  
            to beneficiaries who are particularly difficult to treat.

          The Committee may also wish to define the minimum length of time  
            for each counseling session defined in the bill; as stated in  
            a previous section, the federal guidance recommends a minimum  
            of ten minutes per counseling session.
          7)SUGGESTED TECHNICAL AMENDMENTS.  The author has stated the  
            intent of the bill is to eliminate barriers to access for  
            tobacco cessation services, including step therapy.  The bill  
            language, as currently written, is unclear.  The committee  
            suggests the following amendment:

                 Strike subdivision c of Section 14134.25 and insert: 

                 (c) Beneficiaries covered under this section shall not be  
                 required to receive a particular form of tobacco  
                 cessation service as a condition of receiving any other  
                 form of tobacco cessation service.



          American Cancer Society Cancer Action Network (cosponsor)


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          American Heart Association/American Stroke Association  

          American Lung Association in California (cosponsor)


          California Academy of Family Physicians

          California American College of Emergency Physicians 

          California Black Health Network

          California Healthcare Institute

          California Medical Association

          California Pan-Ethnic Health Network

          California Primary Care Association

          Western Center on Law and Poverty



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          California Association of Health Plans

          Analysis Prepared by:An-Chi Tsou / HEALTH / (916) 319-2097