Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services and under which health care services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed care plans. Existing law requires the department to determine rates of payment for services provided under this chapter for Medi-Cal beneficiaries enrolled in these plans, as specified.

This bill would make a beneficiary with HIV disease who is required to enroll in a Medi-Cal managed care plan in the County of Los Angeles eligible to enroll in a plan that provides comprehensive services to persons with HIV disease in his or her county of residence. The the county.

This bill would define HIV disease to include any stage of HIV infection, as identified by the federal Centers for Disease Control and Prevention. The bill would authorize the department to determine either a separate reimbursement rate for each stage of HIV disease, or a blended rate that covers a person at any stage of the disease.

Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services and under which health care services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed care plans.

This bill would require the department to determine a per capita rate of payment to a managed care plan for services provided to Medi-Cal beneficiaries with HIV or AIDS. make a beneficiary with HIV disease who is required to enroll in a Medi-Cal managed care plan eligible to enroll in a plan that provides comprehensive services to persons with HIV disease in his or her county of residence. The bill would define HIV disease to include any stage of HIV infection, as identified by the federal Centers for Disease Control and Prevention. The bill would authorize the department to determine either a separate reimbursement rate for each stage of HIV disease, or a blended rate that covers a person at any stage of the disease.

Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services and under which health care services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed care plans.

This bill would require the department to determine a per capita rate of payment to a managed care plan for services provided to Medi-Cal beneficiaries with HIV or AIDS.

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 1154 (Portantino) - Medi-Cal: beneficiaries with HIV or AIDS: managed care plans: reimbursement rates

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

Senate Bill 1154 requires a beneficiary with HIV disease who is required to enroll in a Medi-Cal managed care plan be eligible to enroll in a Medi-Cal managed care plan that provides comprehensive services to persons with HIV disease in the beneficiary’s county of residence.

Fiscal Impact:

• Unknown fiscal impact of requiring specified individuals to enroll in a Medi-Cal managed care plan that provides comprehensive services. At this time, it is not know the number of Medi-Cal beneficiaries who are diagnosed with either HIV or AIDS. Depending on the figure, the impact of the enrollment into a comprehensive service plan may be significant.
• Major anticipated cost pressures, to the extent that Department of Health Care Services needs to develop a separate and new HIV rate and apply the rate for all plans in order to cover a person at any stage of HIV.

Background:

The Department of Health Care services must pay capitation rates (established on or after August 1, 2007) to health plans for participating in the Medi-Cal managed care program using actuarial methods, including any Knox-Keene managed care plan organization, for rates established on or after July 1, 2012, that contracts with DHCS as a primary care case management plan to provide services to beneficiaries who are HIV positive or have been diagnosed with AIDS.

In addition, current law requires DHCS to utilize a county- and model-specific rate methodology to develop Medi-Cal managed care capitation rates that includes, but is not limited to, all of the following:

• Health-plan-specific encounter and claims data;
• Supplemental utilization and cost data submitted by the health plans;
• Fee-for-service data for the underlying county of operation or other appropriate counties as deemed necessary by DHCS;
• Department of Managed Health Care financial statement data specific to Medi-Cal operations; and,
• Other demographic factors, such as age, gender, or diagnostic-based risk adjustments, as the department deems appropriate.

Pursuant to federal Medicaid managed care regulation, capitation rates for managed care plans to be reviewed and approved by Center for Medicare and Medicaid Services (CMS) as actuarially sound.

Proposed Law:

The bill requires that a beneficiary with HIV disease, who is required to enroll in a Medi-Cal managed care plan in the county, must be eligible to enroll in a Medi-Cal managed care plan that provides comprehensive services to persons with HIV disease, as defined.

The bill authorizes DHCS to determine either a separate reimbursement rate for each stage of HIV disease, or a blended rate to cover a person at any stage of HIV disease, as defined.

Related Legislation:

AB 1327 (Portantino) of 2011 would have required DHCS, as a three-year pilot project, to determine a per capita rate of payment to a Medi-Cal PCCM or a successor health plan for services provided to Medi-Cal beneficiaries with HIV or AIDS, and reimburse the plan based upon this rate. AB 1327 would have required the rate to be an average of medical treatment costs for the Medi-Cal beneficiary population with HIV and the Medi-Cal beneficiary population with AIDS. In developing the rate, DHCS would also have been required to (a) use all of the coding elements of the definition of AIDS issued by the CDC and by the National Drug Code for antiretroviral medications; and (b) develop the rate in accordance with rate-setting guidelines established by the Centers for Medicare and Medicaid Services. AB 1327 was held on the Assembly Appropriations Committee suspense file.

Staff Comments:

Staff notes that the AIDS Healthcare Foundation is moving to a contract with DHCS as full-service health care service plan (instead of a PCCM), with a target date for transition of July 1, 2018. DHCS indicates that when AHF becomes a full-service plan, AHF will assume responsibility for inpatient hospital services (which are currently not the plan’s responsibility and, therefore, not part of the current rate) and all specialty HIV/AIDS drugs approved by the FDA. Per its contract with DHCS, AHF enrolls individuals over age 21 with a diagnosis of AIDS who reside in Los Angeles County who are in certain aid codes. AHF’s contract does not include Medi-Cal beneficiaries with HIV. DHCS indicates, under its current contract with AHF, specialty HIV/AIDS drugs approved by the FDA after January 1, 2007 are carved out and reimbursed instead through Medi-Cal fee-for-service (FFS). For most Medi-Cal managed care plans, there is no contract limitation based on FDA approval date, and specialty HIV/AIDS drugs in general are “carved out” of plan contracts and reimbursed instead through Medi-Cal FFS.

This bill applies to both AHF and to other Medi-Cal managed care plans. For AHF, this bill will allow it to enroll individuals with HIV (instead of just individuals with AIDS under its current PCCM contract). The main effect of this bill for AHF and other plans is the authority for DHCS to determine either a separate reimbursement rate for each stage of HIV disease, or a blended rate that covers a person at any stage of HIV. DHCS currently has 15 rate categories for Medi-Cal managed care plans, which includes an AIDS rate for duals eligibles and an AIDS rate for non-dual eligibles and a disabled rate for duals and non-duals, but not an HIV rate. In 2015-16, the average statewide AIDS rate for plans was $952 (non-duals) and $185 (duals), as compared to a disabled rate of $688 (non-duals) and $170 (duals) but what plans are at risk for varies by plan type. DHCS indicates it does not anticipate having a separate HIV rate.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: SB 1154

SUBJECT: Medi-Cal: beneficiaries with HIV or AIDS

SUMMARY:

Requires a beneficiary with HIV disease who is required to enroll in a Medi-Cal managed care plan to be eligible to enroll in a Medi-Cal managed care plan that provides comprehensive services to persons with HIV disease in the beneficiary’s county of residence.

Existing law:

1. Requires the Department of Health Care Services (DHCS), for rates established on or after August 1, 2007, to pay capitation rates to health plans participating in the Medi-Cal managed care program using actuarial methods. Permits DHCS to establish health-plan- and county-specific rates. [WIC §14303]
2. Requires 1) above to apply to any Knox-Keene managed care plan organization that has contracted with DHCS as a primary care case management plan (PCCM) to provide services to beneficiaries who are HIV positive or who have been diagnosed with AIDS for rates established on or after July 1, 2012. [WIC §14303]
3. Requires DHCS to utilize a county- and model-specific rate methodology to develop Medi-Cal managed care capitation rates that includes, but is not limited to, all of the following:
4. Health-plan-specific encounter and claims data;
5. Supplemental utilization and cost data submitted by the health plans;
6. Fee-for-service data for the underlying county of operation or other appropriate counties as deemed necessary by DHCS;
7. Department of Managed Health Care financial statement data specific to Medi-Cal operations; and,
8. Other demographic factors, such as age, gender, or diagnostic-based risk adjustments, as the department deems appropriate. [WIC §14303]
9. Requires, pursuant to federal Medicaid managed care regulation, capitation rates for managed care plans to be reviewed and approved by Center for Medicare and Medicaid Services (CMS) as actuarially sound. [42 of the CFR, §438.4]
   

This bill:

1. Requires a beneficiary with HIV disease who is required to enroll in a Medi-Cal managed care plan to be eligible to enroll in a Medi-Cal managed care plan that provides comprehensive services to persons with HIV disease in the beneficiary’s county of residence.
   
2. Defines “HIV disease” to include any stage of HIV infection, as identified by the Centers for Disease Control and Prevention (CDC).
   
3. Permits DHCS to determine either a separate reimbursement rate for each stage of HIV disease, or a blended rate that covers a person at any stage of HIV.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, as HIV/AIDS medical care has become integrated into the general health care system over the last five to six years, one key challenge has been the differing definitions of HIV and AIDS and how that affects the capitation rate paid for beneficiaries with HIV and AIDS. For many years, there were clinical reasons to treat a person with a diagnosis of AIDS differently than a person with HIV. However, in 2014, CDC restructured its HIV classifications into several stages (0-3), depending on the acuity of a person’s condition. CDC’s structure reflects the fact that what was once a disease that was compartmentalized into AIDS, ARC (AIDS-Related Condition) and HIV is now one disease with various stages of acuity. Treatment for HIV has evolved. No longer do we solely treat the opportunistic infections that characterize AIDS; the standard of care now demands treatment intervention at the earliest possible stage of the virus, usually when a test first detects HIV, in order to minimize the acuity of the disease or interrupt its impact altogether. Medical providers no longer wait until a clinical diagnosis of AIDS before prescribing anti-retrovirals and other drugs in order to arrest the virus and address co-morbidities.
   
2. AIDS Healthcare Foundation. Since April 1995, AIDS Healthcare Foundation (AHF) has contracted with DHCS as a PCCM entity known as Positive Healthcare in Los Angeles County for individuals with AIDS. AHF serves approximately 735 Medi-Cal beneficiaries with AIDS. AHF is paid two separate rates: a Medi-Cal only per member per month (PMPM) rate of $$3,676.66 and a PMPM for individuals dually eligible for Medicare and Medi-Cal (where Medicare is the primary payor) of $107.95 (the rate in effect for the period between January and June 2018).
   
   AHF is moving to a contract with DHCS as full-service health care service plan (instead of a PCCM), with a target date for transition of July 1, 2018. DHCS indicates that when AHF becomes a full-service plan, AHF will assume responsibility for inpatient hospital services (which are currently not the plan’s responsibility and, therefore, not part of the current rate) and all specialty HIV/AIDS drugs approved by the FDA. Per its contract with DHCS, AHF enrolls individuals over age 21 with a diagnosis of AIDS who reside in Los Angeles County who are in certain aid codes. AHF’s contract does not include Medi-Cal beneficiaries with HIV. DHCS indicates, under its current contract with AHF, specialty HIV/AIDS drugs approved by the FDA after January 1, 2007 are carved out and reimbursed instead through Medi-Cal fee-for-service (FFS).
   
   For most Medi-Cal managed care plans, there is no contract limitation based on FDA approval date, and specialty HIV/AIDS drugs in general are “carved out” of plan contracts and reimbursed instead through Medi-Cal FFS.
   
   This bill applies to both AHF and to other Medi-Cal managed care plans. For AHF, this bill will allow it to enroll individuals with HIV (instead of just individuals with AIDS under its current PCCM contract). The main effect of this bill for AHF and other plans is the authority for DHCS to determine either a separate reimbursement rate for each stage of HIV disease, or a blended rate that covers a person at any stage of HIV. DHCS currently has 15 rate categories for Medi-Cal managed care plans, which includes an AIDS rate for duals eligibles and an AIDS rate for non-dual eligibles and a disabled rate for duals and non-duals, but not an HIV rate. In 2015-16, the average statewide AIDS rate for plans was $952 (non-duals) and $185 (duals), as compared to a disabled rate of $688 (non-duals) and $170 (duals) but what plans are at risk for varies by plan type. DHCS indicates it does not anticipate having a separate HIV rate.
   
3. HIV and AIDS. HIV is the virus that can lead to AIDS, if not treated. HIV is a virus spread through certain body fluids that attacks the body’s immune system, specifically the CD4 cells, often called T cells. Over time, HIV can destroy so many of these cells that the body cannot fight off infections and disease. These special cells help the immune system fight off infections. Untreated, HIV reduces the number of CD4 cells in the body. This damage to the immune system makes it harder and harder for the body to fight off infections and some other diseases. Opportunistic infections or cancers take advantage of a very weak immune system and signal that the person has AIDS. Without treatment, HIV advances in stages, overwhelming your immune system and getting worse over time. The three stages of HIV infection are: (a) acute HIV infection; (b) clinical latency; and (c) AIDS.
   

The California Needs Assessment for HIV, 2016 outlines the needs of persons at risk for and living with HIV infection, identifies resources available to meet those needs, and determines what gaps and barriers in prevention, care, and treatment services currently exist throughout California. In that document, the Office of AIDS estimates that in 2014 there were approximately 139,000 people living with HIV in California, of whom 91% had been diagnosed.

1. Prior legislation. AB 1327 (Portantino) of 2011 would have required DHCS, as a three-year pilot project, to determine a per capita rate of payment to a Medi-Cal PCCM or a successor health plan for services provided to Medi-Cal beneficiaries with HIV or AIDS, and reimburse the plan based upon this rate. AB 1327 would have required the rate to be an average of medical treatment costs for the Medi-Cal beneficiary population with HIV and the Medi-Cal beneficiary population with AIDS. In developing the rate, DHCS would also have been required to (a) use all of the coding elements of the definition of AIDS issued by the CDC and by the National Drug Code for antiretroviral medications; and (b) develop the rate in accordance with rate-setting guidelines established by the Centers for Medicare and Medicaid Services. AB 1327 was held on the Assembly Appropriations Committee suspense file.
2. Support. This bill is supported by AHF, which writes historically, there were clinical reasons to treat a person with an AIDS diagnosis differently than a person with HIV, but the CDC has restructured its HIV classifications in several stages, and that what was once a disease that compartmentalized into AIDS, AID-Related Condition and HIV is not one disease with various stages of acuity. However, AHF states that Medi-Cal continues to rely on the outdated AIDS definition to determine whether a plan serving that persons receives an AIDS rate or not, and if the patient does not have an AIDS diagnosis, the plan is paid a base rate for a disabled person, which can be as low as five percent of the AIDS rate. This results in plans serving people with HIV being paid couple hundred dollars a month for services that cost substantially more. AHF argues the state must develop managed care rates that reflect the cost experience of treating a person with HIV, not AIDS, and this bill would simply develop a managed care rate that reflects the appropriate treatment services provided to a person with HIV.
3. Recommended amendments. AHF is a PCCM, and this bill is placed near the PCCM body of law. Because AHF is going to be a Medi-Cal managed care plan, staff recommends amendments to move the provisions of this bill allowing a beneficiary with HIV to enroll in a plan that provides comprehensive services to people with HIV disease to the two plan model provision of existing law, and to move the provisions of this bill requiring the establishment of a separate Medi-Cal managed care plan rate to the body of law dealing with plan rate-setting.

SUPPORT AND OPPOSITION:

Support: AIDS Healthcare Foundation

Oppose: None received

-- END --