BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 1162 --------------------------------------------------------------- |AUTHOR: |Holden | |---------------+-----------------------------------------------| |VERSION: |June 1, 2015 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |July 8, 2015 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- SUBJECT : Medi-Cal: tobacco cessation. SUMMARY : Requires tobacco cessation services to be a covered benefit under the Medi-Cal program. Requires the benefit to include unlimited quit attempts with no required break between attempts, at least four tobacco cessation counseling sessions per quit attempt, and a 90-day treatment regimen of any prescription or over-the-counter medication approved by the federal Food and Drug Administration for tobacco cessation that was covered under the Medi-Cal program as of January 1, 2015. Prohibits tobacco cessation medication coverage for drugs covered under Medi-Cal as of January 1, 2015, from being subject to any barriers, requirements, or restrictions, including, but not limited to, prior authorization. Existing law: 1)Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which basic health care services are provided to qualified low-income persons. 2)Establishes a schedule of benefits under the Medi-Cal program, which includes the purchase of prescribed drugs, subject to the Medi-Cal List of Contract Drugs and utilization controls. 3)Requires that preventive services assigned a grade of A or B by the U.S. Preventive Services Task Force be provided to Medi-Cal beneficiaries without any cost sharing by the beneficiary in order for the state to receive increased federal contributions for those services, as specified. This bill: AB 1162 (Holden) Page 2 of ? 1)Requires tobacco cessation services to be a covered benefit under the Medi-Cal program. Requires the tobacco cessation services to include, at minimum, unlimited quit attempts, with no required break between attempts, for beneficiaries of any age who use tobacco. 2)Requires tobacco cessation services to include: a) At least four tobacco cessation counseling sessions per quit attempt, which may be conducted in person or by telephone and individually or as part of a group, at the beneficiary's option. 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 (OTC) medications approved by the FDA that were covered under the Medi-Cal program as of January 1, 2015. 3)Requires that a prescription from a provider with authority to prescribe and proof of Medi-Cal coverage to be sufficient documentation to fill a prescription for OTC tobacco cessation medications. 4)Prohibits tobacco cessation medication coverage described in b) from being subject to any barriers, requirements, or restrictions, including, but not limited to, prior authorization. 5)Prohibits Medi-Cal beneficiaries from being required to receive a particular form of tobacco cessation service as a condition of receiving any other form of tobacco cessation service. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)Costs in the range of $650,000 (General Fund/federal funds) to Medi-Cal annually, based on an approximate 10% increase in utilization of tobacco cessation services. A California Health Benefits Review Program analysis is not available, but certain AB 1162 (Holden) Page 3 of ? assumptions from prior analysis were used to construct this estimate. The utilization estimate is subject to significant uncertainty. We estimate 2,500 individuals will attempt to quit and 100 will successfully quit based on the increased utilization of services. 2)Potential additional increased costs in the same $650,000 range, or greater, due to increased drug prices. This bill would reduce the ability of DHCS to negotiate supplemental rebates with manufacturers of tobacco cessation products since all tobacco cessation products would automatically be included in the fee-for-service (FFS) formulary, and a similar dynamic would exist for Medi-Cal managed care. 3)Potential short-term (one to three year) reductions in health care costs associated with Medi-Cal enrollees who successfully quit. A 2012 study of the Massachusetts Medicaid program found each $1 spent on medications, counseling, and promotion and outreach for Medicaid smokers was associated with a reduction of $3.12 (range $3.00 to $3.25) in Medicaid expenditures for cardiovascular hospital admissions, resulting in net savings between $2.00 and $2.25. Long-term cost savings are also possible, but are subject to significant uncertainty. Potential long-term savings are also offset by increased longevity. PRIOR VOTES : ----------------------------------------------------------------- |Assembly Floor: |67 - 12 | |------------------------------------+----------------------------| |Assembly Appropriations Committee: |12 - 5 | |------------------------------------+----------------------------| |Assembly Health Committee: |18 - 0 | | | | ----------------------------------------------------------------- COMMENTS : 1)Author's statement. According to the author, quitting tobacco products is a difficult feat that many attempt every year but few accomplish. It can cause cancer, respiratory and heart AB 1162 (Holden) Page 4 of ? diseases, birth defects and is still the leading preventable cause of death in the United States. Though the dangers of smoking are better understood now than 50 years ago, cigarettes are more addictive than ever and smoking rates in the Medi-Cal population are still too high. In addition to efforts to discourage people from smoking, this bill fights against tobacco dependence by giving smokers the tools to fight the addiction. The coverage mandated by this bill ensures that Medi-Cal patients have access to clinically proven treatments like counseling, medication, and nicotine replacement treatments. Studies have shown that the comprehensive coverage of these treatments has led to decreases in the smoking population. Tobacco companies make it hard enough for smokers to quit, as a state we must remove all barriers to treatments that make quitting possible. 2)Background. According to the Centers for Disease Control and Prevention, tobacco use is the leading preventable cause of death in the United States. Every year, smoking kills 480,000 Americans and costs the nation at least $130 billion in medical care costs for adults and more than $150 billion in lost productivity, imposing a heavy economic burden on private employers, private health plans, and federal, state, and local governments. The cost of tobacco use to California is estimated to be $18.1 billion annually. According to data from 2001 to 2010 published by the Centers for Disease Control and Prevention in 2011, most smokers want to quit smoking (69%), and over half (52%) tried to quit in the previous year, but only 6% were successful. The U.S. Preventive Services Task Force (USPSFT) reviewed new evidence in the U.S. Public Health Service's 2008 clinical practice guideline and determined that the net benefits of tobacco cessation interventions in adults and pregnant remain well established. The USPSTF found convincing evidence that smoking cessation interventions, including brief behavioral counseling sessions and pharmacotherapy delivered in primary care settings are effective in increasing the proportion of smokers who successfully quit and remain abstinent for one year. The USPSTF concluded that there is high certainty that the net benefit of tobacco cessation interventions in adults is substantial, and there is high certainty that the net benefit of augmented, pregnancy-tailored counseling in pregnant women is substantial. AB 1162 (Holden) Page 5 of ? 3)Affordable Care Act Changes to Tobacco Cessation Coverage. Section 2502 of the Patient Protection and Affordable Care Act (ACA) prohibited drugs used to promote smoking cessation, including agents approved by the FDA for over-the-counter for purposes of promoting tobacco cessation, from being excluded from Medicaid coverage. In addition, Section 4107 of the ACA required Medicaid coverage of tobacco cessation counseling and pharmacotherapy (FDA-approved OTC and prescription drugs) for pregnant women, and prohibited cost-sharing for these services. The seven FDA-approved medications include five forms of nicotine replacement therapy (NRT): the patch, gum, inhaler, nasal spray, and lozenge, as well as two non-NRT medications, bupropion SR (brand name Zyban if used for tobacco cessation and Wellbutrin if used as an antidepressant), and varenicline (brand name Chantix). Three forms of NRT - the patch, gum, and the lozenge - are available OTC. The other two forms of NRT (the inhaler and the nasal spray), as well as the two non-NRT medications, are available by prescription. The patch is available by prescription as well as OTC. 4)Current Medi-Cal coverage of tobacco cessation. Medi-Cal beneficiaries have a higher prevalence of tobacco use than the general California population. In the 2011-12 California Health Interview Survey, 16.1% of adult and teen Medi-Cal beneficiaries were current smokers, as compared to 12.1% of adults and teens not covered by Medi-Cal. DHCS indicates expenditures on smoking deterrents in 2014 was $1 million in FFS and $3.1 million in managed care. Coverage of tobacco cessation medication varies, depending upon whether the beneficiary is in FFS Medi-Cal or Medi-Cal managed care plan, and the particular Medi-Cal managed care plan the beneficiary is enrolled in. In 2015-16, Medi-Cal is projected to enroll 12.4 million individuals, of whom 76.6% (9.5 million people) are projected to be in managed care plans. For FFS Medi-Cal, DHCS is required to use the following criteria when adding a drug to the Medi-Cal contract drug list: (a) the safety of the drug; (b) the effectiveness of the drug; (c) the essential need for the drug; (d) the potential for misuse of the drug; and, (e) the cost of the drug. In September 2014, DHCS released Policy Letter 14-006 to provide Medi-Cal managed care health plans with minimum requirements AB 1162 (Holden) Page 6 of ? for comprehensive tobacco cessation services. The chart below shows the differences between this bill and current DHCS policy set forth in the Policy Letter: -------------------------------------------------------- |Tobacco | AB 1162 | DHCS Policy for | |Cessation | | Medi-Cal Managed | |Requirements | | Care Plans | |-----------------+------------------+-------------------| |Number of quit | Unlimited | At least 2 | |attempts | | separate quit | | | | attempts per year | |-----------------+------------------+-------------------| |Prohibition on | Yes | Yes | |requiring a | | | |break between | | | |quit attempts | | | |-----------------+------------------+-------------------| |Number of | At least 4 per | At least 4 of at | |tobacco | quit attempt. | least 10 minutes | |cessation | | duration | |counseling | | | |services | | | |-----------------+------------------+-------------------| |Counseling | In person, | Plans must ensure | |Session | telephone, | that individual, | | | individual or | group and | | | group, at | telephone | | | beneficiary | counseling is | | | option | offered. Does not | | | | specify at | | | |beneficiary option | |-----------------+------------------+-------------------| |Tobacco | 90 days |90 | |cessation drug | |days | |treatment | | | |regimen duration | | | |-----------------+------------------+-------------------| |Coverage of | All FDA-approved | Must cover 7 | |tobacco | prescription and | FDA-approved | |cessation | OTC medications | tobacco cessation | |approved by the | for tobacco | medications, at | |federal FDA for |cessation covered | least one without | |tobacco |under Medi-Cal as | prior | |cessation, | of January 1, | authorization. | AB 1162 (Holden) Page 7 of ? |including | 2015 | Must cover | |prescription and | | additional | |OTC | | medications once | | | | FDA-approved. | |-----------------+------------------+-------------------| |Prohibits | Yes | Must cover 7 | |tobacco | | FDA-approved | |cessation drug | | tobacco cessation | |coverage from | | medications, at | |being subject to | | least one without | |barriers, | | prior | |requirements or | | authorization. | |restrictions, | |Does not otherwise | |including but | | prohibit | |not limited to, | | utilization | |utilization | | review. | |review | | | |-----------------+------------------+-------------------| |Prohibition on | Yes | Prohibits plans | |receiving one | | from requiring | |form of tobacco | | beneficiaries to | |cessation as a | | attend classes or | |condition of | | counseling | |receiving any | | sessions prior to | |form of tobacco | | receiving a | |cessation | | prescription for | | | | an FDA-approved | | | | tobacco cessation | | | |medication. | | | | | -------------------------------------------------------- 5)2006 Massachusetts Law. In April 2006, the Massachusetts legislature passed Chapter 58 of the Acts of 2006 (''An Act Providing Access to Affordable, Quality, Accountable Health Care'') requiring all individuals in Massachusetts to have health insurance. In an effort to reduce smoking prevalence in the Medicaid population, the law mandated coverage for two types of tobacco cessation treatment: behavioral counseling and all Food and Drug Administration (FDA)-approved medications. AB 1162 (Holden) Page 8 of ? A 2010 study of Medicaid coverage for tobacco cessation in Massachusetts stated that, prior to 2006, MassHealth (the Massachusetts Medicaid program) did not provide tobacco cessation benefits. With the implementation of this benefit, MassHealth subscribers are allowed two 90-day courses per year of FDA-approved medications for smoking cessation, including OTC medications like nicotine replacement therapy, and up to 16 individual or group counseling sessions. Medications require written prescriptions following an office visit. Prior authorization is not required to prescribe the nicotine patch, gum, lozenge, Chantix, or bupropion/Wellbutrin. With prior authorization, the nicotine inhaler and nasal spray may also be covered. The co-payment is minimal at $1 or $3. The 2010 study found the smoking rate in the pre-benefit period decreased from 38.3% to 28.3% in the post-benefit period, representing a decline of 26%. The study concluded that these findings suggest that a tobacco cessation benefit that includes coverage for medication and behavioral treatments, has few barriers to access, and involves broad promotion can significantly reduce smoking prevlence. 6)Prior legislation. SB 220 (Yee, 2010) would have required a health plans and insurers to cover over a minimum of two courses of treatment in a 12-month period for all smoking cessation treatments rated "A" or "B" by the United States Preventive Services Task Force, which shall include counseling and over-the-counter medication and prescription pharmacotherapy approved by the FDA. SB 220 also requested the California Health Benefits Review Program to prepare an analysis of the state cost savings as a result of the bill provisions. SB 220 was vetoed by the Governor. AB 2662 (Dymally, 2007) would have prohibited the provision of one form of Medi-Cal covered tobacco cessation service (either pharmacotherapy or counseling) as a condition of receiving the other service. AB 2662 was held on the Senate Appropriations Committee suspense file. SB 576 (Ortiz, 2005) would have required health plans and 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 AB 1162 (Holden) Page 9 of ? specific co-payments for those benefits. SB 576 was vetoed by the Governor. 7)Related legislation. AB 73 (Waldron) would have required a drug from one of four classes of drugs to be covered by Medi-Cal if the treating provider demonstrates, that in his or her reasonable, professional judgment, the drug is medically necessary and consistent with the FDA's labeling and use rules and regulations, and the drug is not on the formulary for the Medi-Cal managed care plan. AB 73 was held on the Assembly Appropriations Committee Suspense File. AB 68 (Waldron) requires, if any drug used in the treatment of seizures and epilepsy is prescribed by a Medi-Cal beneficiary's treating provider for the treatment of seizures and epilepsy, and coverage for that prescribed drug is denied by a Medi-Cal managed care plan, that denial to be subject to the automatic urgent appeal process in which the plan immediately notifies DHCS of the denial of coverage, and the beneficiary is not required to take any further action. AB 68 requires the automatic urgent appeal to be resolved within 48 hours after denial by the plan. AB 68 is scheduled for hearing on July 15, 2015 in the Senate Health Committee. 8)Support. This bill is jointly sponsored by the American Heart Association/American Stroke Association, the American Lung Association, and the American Cancer Society Cancer Action Network to ensure all Medi-Cal patients are able to access tobacco cessation treatments. The sponsors argue 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 noted 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 stated that Medi-Cal patients face barriers to treatment services due to prior authorization and step therapy treatment requirements. Supporters argue this bill provides needed clarity for Medi-Cal participants on tobacco cessation services and ensures access to comprehensive insurance coverage for these services. Supporters conclude that increased access to smoking cessation treatments and eliminating barriers will reduce the incidence of AB 1162 (Holden) Page 10 of ? tobacco-related diseases and will lower health care costs. 9)Opposition. The California Association of Health Plans (CAHP) writes in opposition that this 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 DHCS. CAHP argues Medi-Cal managed care plans already comply with the requirements of the DHCS policy letter, and 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. CAHP also argues the removing prior authorization can be risky as certain smoking cessation treatments are indicated only for limited time use, and allowing indefinite access to them with weakened oversight or approval will increase the risk of side-effects. 10)Policy issues. a) Requirement for coverage of FDA-approved tobacco cessation drugs without prior authorization and utilization review. This bill requires Medi-Cal to provide coverage for a 90-day treatment regimen of any FDA-approved tobacco cessation medication, including prescription medication and OTC drugs that were covered under the Medi-Cal program as of January 1, 2015. In addition, this bill prohibits tobacco cessation medication coverage from being subject to any barriers, requirements, or restrictions, including, but not limited to, prior authorization. A prohibition on utilization review and prior authorization enables providers to prescribe and patients to receive a greater variety of medication to treat diseases and conditions, and ensures prompter access to prescribed medications that might otherwise be subject to prior authorization. To the extent that broader tobacco cessation coverage makes it easier to access medication and results in greater success in successfully quitting tobacco use, long-term cost savings from a reduction in tobacco-related diseases would result. However, when third payors negotiate prescription drug coverage, they use prior authorization and utilization controls as a mechanism to obtain price discounts from AB 1162 (Holden) Page 11 of ? drug manufacturers and to ensure appropriate use of the medication. For example, when DHCS establishes its contract drug list in FFS Medi-Cal, it uses its ability to put drugs on prior authorization (through a Treatment Authorization Request or "TAR") to obtain rebates from drug manufacturers. For tobacco cessation drugs on the Medi-Cal contract drug list, DHCS has a limit on the number of tablets (for example, one drug has a 60 tablet limit per dispensing), duration limits (for example, 12 weeks) and restrictions on dispensing within a time period (for example, one dispensing in a 25-day period and eight dispensings within a 12 month period). By requiring coverage of FDA-approved medication and prohibiting utilization controls, these tools would not be available by Medi-Cal managed care plans and DHCS to obtain price concessions from drug manufacturers or to ensure appropriate utilization. b) Recent DHCS policy. DHCS policy for Medi-Cal managed care plans was released in September 2014 and has been in effect for less than a year. This bill expands the scope of that coverage in several ways. Has sufficient time elapsed to know whether the provisions of that policy are adversely affecting tobacco cessation services and should be expanded? SUPPORT AND OPPOSITION : Support: American Cancer Society Cancer Action Network (co-sponsor) American Heart Association/American Stroke Association (co-sponsor) American Lung Association in California (co-sponsor) Association of California Healthcare Districts Association of Northern California Oncologists Biocom California Academy of Physician Assistants California Academy of Preventative Medicine California Black Health Network California Chapter of the American College of Emergency Physicians California Chronic Care Coalition California Dental Association California Healthcare Institute California Life Sciences Association California Medical Association AB 1162 (Holden) Page 12 of ? California Pan-Ethnic Health Network California Society of Addiction Medicine Community Clinic Association of Los Angeles County County Health Executives Association of California First 5 California Health Officers Association of California March of Dimes California Chapter Medical Oncology Association of Southern California Tobacco Education and Research Oversight Committee Western Center on Law and Poverty Opposition:California Association of Health Plans -- END --