BILL ANALYSIS Ó AB 1162 Page 1 GOVERNOR'S VETO AB 1162 (Holden) As Enrolled September 14, 2015 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |67-12 |(June 3, 2015) |SENATE: |30-10 |(September 9, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- -------------------------------------------------------------------- |ASSEMBLY: |67-12 |(September 10, | | | | | | |2015) | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: HEALTH SUMMARY: Requires tobacco cessation services to be a covered benefit under the Medi-Cal program, as specified. The Senate amendments: AB 1162 Page 2 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 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. AB 1162 Page 3 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 Committee: 1)Minor administrative costs to update existing Medi-Cal 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 AB 1162 Page 4 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 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. 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 AB 1162 Page 5 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 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 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. GOVERNOR'S VETO MESSAGE: I am returning the following six bills without my signature; Assembly Bill 50 Assembly Bill 858 Assembly Bill 1162 Assembly Bill 1231 Assembly Bill 1261 AB 1162 Page 6 Senate Bill 610 These bills unnecessarily codify certain existing health care benefits or require the expansion or development of new benefits and procedures in the Medi-Cal program. Taken together, these bills would require new spending at a time when there is considerable uncertainty in the funding of this program. Until the fiscal outlook for Medi-Cal is stabilized, I cannot support any of these measures. Analysis Prepared by: An-Chi Tsou / HEALTH / (916) 319-2097 FN: 0002508