BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1162 (Holden) - Medi-Cal:  tobacco cessation
          
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          |Version: July 14, 2015          |Policy Vote: HEALTH 8 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 27, 2015   |Consultant: Brendan McCarthy    |
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          *********** ANALYSIS ADDENDUM - SUSPENSE FILE ***********
             The following information is revised to reflect amendments 
                     adopted by the committee on August 27, 2015


          Bill  
          Summary:  AB 1162 would require tobacco cessation services to be  
          a covered benefit in the Medi-Cal program with specified  
          requirements for benefits.


          Fiscal  
          Impact:  
           Minor administrative costs to update existing Medi-Cal  
            policies for the provision of smoking cessation services  
            (General Fund and federal funds).

           Unknown costs due to increased utilization of smoking  
            cessation services. Under current practice, about 30,000  
            Medi-Cal beneficiaries access smoking cessation services at a  
            total annual cost of about $4 million per year. Assuming that  
            the expanded benefits required in the bill result in increased  
            demand for smoking cessation services of 10% to 20%, the bill  







          AB 1162 (Holden)                                       Page 1 of  
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            would result in increased costs of $400,000 to $800,000 per  
            year (General Fund and federal funds).

           Unknown short term cost savings due to reduced smoking-related  
            health care costs for Medi-Cal beneficiaries. A review of a  
            new smoking cessation benefit in the Massachusetts Medicaid  
            program indicates that reducing smoking by beneficiaries led  
            to a net reduction in health care costs of about $2 for each  
            $1 spent on the program. Using the assumptions for utilization  
            increase above, potential cost savings of $800,000 to $1.7  
            million per year. The long-term health care spending impacts  
            of reduced tobacco use are less clear, because reduced health  
            care spending on smoking-related conditions will be offset by  
            increased longevity.


          Author  
          Amendments:  Allow utilization controls to be used for smoking  
          cessation services, require tobacco cessation services to  
          include all A and B recommendations by the United State  
          Preventative Services Task Force, and make other clarifying  
          changes.


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