BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1162| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1162 Author: Holden (D) Amended: 8/31/15 in Senate 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: 6-1, 8/27/15 AYES: Lara, Beall, Hill, Leyva, Mendoza, Nielsen NOES: Bates ASSEMBLY FLOOR: 67-12, 6/3/15 - See last page for vote SUBJECT: Medi-Cal: tobacco cessation SOURCE: American Cancer Society Cancer Action Network American Heart Association/American Stroke Association American Lung Association in California DIGEST: This bill requires tobacco cessation services to be a covered benefit under the Medi-Cal program, and requires tobacco cessation services to include all intervention recommendations, as periodically updated, assigned a grade A or B by the United States Preventive Services Task Force (USPSTF). ANALYSIS: Existing law: AB 1162 Page 2 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: 1)Requires tobacco cessation services to be covered benefits under the Medi-Cal program, subject to utilization controls. 2)Requires tobacco cessation services to include all intervention recommendations, as periodically updated, that are assigned a grade A or B by the USPSTF. 3)Requires, in addition to 2) above, tobacco cessation services to include a minimum of four quit attempts per year, with no required break between attempts, for all beneficiaries 18 year of age and older who use tobacco. 4)Requires, for beneficiaries under 18 years of age, tobacco cessation services to be provided in accordance with the American Academy of Pediatrics guidelines and the intervention recommendations, as periodically updated, assigned a grade A or B by the USPSTF. 5)Requires, in addition to the services described above, and only to the extent consistent with the intervention recommendations, as periodically updated, assigned a grade A or B by the USPSTF, 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 AB 1162 Page 3 beneficiary's option. b) A 12-week treatment regimen of any medication approved by the federal Food and Drug Administration (FDA) for tobacco cessation, including prescription and over-the-counter medications. 6)Requires at least one prescription medication and all over-the-counter medications (OTC) to be available without prior authorization. 7)Requires 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. 8)Requires DHCS, effective January 1, 2016, to seek any federal approvals necessary to implement this bill that DHCS determines are necessary to implement its provisions. 9)Requires this bill to be implemented only to the extent that federal financial participation is available, and any necessary federal approvals have been obtained. 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 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. AB 1162 Page 4 2)Background on tobacco. 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. 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)Tobacco use prevalence and 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 AB 1162 Page 5 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 for comprehensive tobacco cessation services. The main differences between current DHCS policy and this bill is this requires coverage for more quit attempts (4 quit attempts per years vs. 2 per year in DHCS policy) and has broader coverage of FDA-approved OTC products without prior authorization (this bill requires coverage for all OTC products without prior authorization, while DHCS policy requires coverage of at least one OTC). FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: 1)Minor administrative costs to update existing Medi-Cal policies for the provision of smoking cessation services (General Fund and federal funds). 2)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 would result in increased costs of $400,000 to $800,000 per year (General Fund and federal funds). 3)Unknown short term cost savings due to reduced smoking-related AB 1162 Page 6 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. SUPPORT: (Verified 8/28/15) American Cancer Society Cancer Action Network (co-source) American Heart Association/American Stroke Association (co-source) American Lung Association in California (co-source) 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 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 AB 1162 Page 7 OPPOSITION: (Verified8/28/15) California Association of Health Plans ARGUMENTS IN 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 tobacco-related diseases and will lower health care costs. ARGUMENTS IN 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 this bill will result in higher state costs in Medi-Cal reimbursement rates to plans in order to reflect the benefit expansion. ASSEMBLY FLOOR: 67-12, 6/3/15 AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, AB 1162 Page 8 Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Ting, Waldron, Weber, Wilk, Williams, Wood, Atkins NOES: Travis Allen, Bigelow, Brough, Chang, Beth Gaines, Grove, Jones, Kim, Mayes, Obernolte, Patterson, Wagner NO VOTE RECORDED: Thurmond Prepared by:Scott Bain / HEALTH / 8/31/15 16:46:54 **** END ****