BILL ANALYSIS                                                                                                                                                                                                    

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          1162 (Holden)

          As Amended  September 4, 2015

          Majority vote

          |ASSEMBLY:  |67-12 |(June 3, 2015) |SENATE: |30-10 |(September 9,    |
          |           |      |               |        |      |2015)            |
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          Original Committee Reference:  HEALTH

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

          The Senate amendments:

          1)Require that the tobacco cessation services covered benefit  
            under the Medi-Cal program be subject to utilization controls.

          2)Require tobacco cessation services to include all intervention  
            recommendations assigned a grade A or B by the United States  
            Preventive Services Task Force (USPSTF).

          3)Strikes the inclusion of an unlimited number of quit attempts  
            per year for all Medi-Cal beneficiaries for tobacco cessation  


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            services, and instead limits services to include a minimum of  
            four quit attempt per year for beneficiaries 18 years of age  
            and older.  For beneficiaries less than 18 years of age,  
            requires tobacco cessation services to be provided in  
            accordance with the American Academy of Pediatrics guidelines  
            and intervention recommendations assigned a grade A or B by  
            the USPSTF. 

          4)Requires the definition of tobacco cessation services to be  
            consistent with the intervention recommendations assigned a  
            grade A or B by the USPSTF. 

          5)Expands the definition of tobacco cessation services to  
            include 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, and requires at least one prescription medication  
            and all over-the-counter medications to be available without  
            prior authorization.

          6)Strikes from the definition of tobacco cessation services a  
            90-day treatment regimen of any medication approved by the  
            federal FDA for tobacco cessation, including prescription and  
            over-the-counter medications.

          7)Requires the Department of Health Care Services (DHCS) to seek  
            any federal approvals necessary, and that DHCS determines are  
            necessary, to implement this bill.  Requires this bill to only  
            be implemented to the extent that federal financial  
            participation is available and not otherwise jeopardized, and  
            any necessary federal approvals have been obtained.

          FISCAL EFFECT:  According to the Senate Appropriations  

          1)Minor administrative costs to update existing Medi-Cal  


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            policies for the provision of smoking cessation services  
            (General Fund (GF) 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 (GF and federal funds).

          3)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.

          COMMENTS:  According to the author, tobacco use is the leading  
          preventable cause of death in the United States and, though the  
          dangers of smoking are better understood now than 50 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.


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          On a previous version of this bill, the American Heart  
          Association/American Stroke Association, the American Lung  
          Association, and the American Cancer Society Cancer Action  
          Network, the sponsors of this bill, stated 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 Patient Protection and Affordable Care Act 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 stated this  
          bill provides needed clarity for Medi-Cal participants on  
          tobacco cessation services and ensures access to comprehensive  
          insurance coverage for these services.

          On a previous version of this bill, the California Association  
          of Health Plans stated 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 both DHCS and sound medical management.  The  
          association also stated MCPs already comply with the  
          requirements of the DHCS Policy letter.  Opposition also  
          asserted 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.  

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


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