SB 1335: Medi-Cal benefits: federally qualified health centers and rural health centers: Drug Medi-Cal and specialty mental health services.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2016-08-18
Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits, including specialty mental health services. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions. Under existing law, specialty mental health services are generally provided by mental health plans that contract with the department.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county for various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries, or the department is required to directly arrange for these services if a county elects not to do so.
Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. Existing law authorizes FQHCs and RHCs to elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services and requires those costs to be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes.
This bill additionally would authorize FQHCs and RHCs to elect to provide services under Drug Medi-Cal and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and the county or the department, pursuant to specified requirements. enroll as a Drug Medi-Cal certified provider under Drug Medi-Cal to provide Drug Medi-Cal services and would set forth the reimbursement requirements for these services. The bill would require the costs of providing Drug Medi-Cal services to be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes, as specified, and would prohibit the FQHC or RHC from billing the per-visit prospective payment system (PPS) rate for services reimbursed by Drug Medi-Cal. The bill would authorize a county to contract with the FQHCs and RHCs for these Drug Medi-Cal services. The bill would authorize an FQHC or RHC that entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to continue to provide, and be reimbursed for, those specialty mental health services if the costs of providing specialty mental health services are reimbursed outside of the per-visit rate.
The bills requirements would be implemented only to the extent that federal financial participation is available and any federal approvals have been obtained.
This bill would incorporate additional changes in Section 14132.100 of the Welfare and Institutions Code proposed by AB 1863, that would become operative only if AB 1863 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.
Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits, including specialty mental health services. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions. Under existing law, specialty mental health services are generally provided by mental health plans that contract with the department.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county for various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries. Specialty mental health services and Drug Medi-Cal Services and provided pursuant to waivers from the federal Centers for Medicare and Medicaid Services. beneficiaries, or the department is required to directly arrange for these services if a county elects not to do so.
Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. Existing law authorizes FQHCs and RHCs to elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services and requires those costs to be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes.
This bill additionally would authorize FQHCs and RHCs to elect to provide services under Drug Medi-Cal and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and the county or the department, pursuant to specified requirements. The bill also would authorize FQHCs and RHCs to elect to provide specialty mental health services and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and mental health plans that contract with the state. The bill would authorize the counties and the mental health plans would authorize a county to contract with the FQHCs and RHCs for these Drug Medi-Cal services. The bill would authorize an FQHC or RHC that entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to continue to provide, and be reimbursed for, those specialty mental health services if the costs of providing specialty mental health services are reimbursed outside of the per-visit rate.
The bills requirements would be implemented only to the extent that federal financial participation is available and any federal approvals have been obtained.
This bill would incorporate additional changes in Section 14132.100 of the Welfare and Institutions Code proposed by AB 1863, that would become operative only if AB 1863 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.
Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits, including specialty mental health services. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county for various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries. Specialty mental health services and Drug Medi-Cal Services and provided pursuant to waivers from the federal Centers for Medicare and Medicaid Services.
Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. Existing law authorizes FQHCs and RHCs to elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services and requires those costs to be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes.
This bill additionally would authorize FQHCs and RHCs to elect to provide Drug Medi-Cal and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and the county or the department, pursuant to specified requirements. The bill also would authorize FQHCs and RHCs to elect to provide specialty mental health services and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and mental health plans that contract with the state. The bill would authorize the counties and the mental health plans to contract with the FQHCs and RHCs for these services.
The bills requirements would be implemented only to the extent that federal financial participation is available and any federal approvals have been obtained.
Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits, including specialty mental health services. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county for various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries. Specialty mental health services and Drug Medi-Cal Services and provided pursuant to waivers from the federal Centers for Medicare and Medicaid Services.
Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. Existing law authorizes FQHCs and RHCs to elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services and requires those costs to be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes.
This bill additionally would authorize FQHCs and RHCs to elect to have provide Drug Medi-Cal and specialty mental health services reimbursed on a fee-for-service basis, according to the same criteria as applied to pharmacy and dental services. to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and the county or the department, pursuant to specified requirements. The bill also would authorize FQHCs and RHCs to elect to provide specialty mental health services and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and mental health plans that contract with the state.
The bills requirements would be implemented only to the extent that federal financial participation is available and any federal approvals have been obtained.
Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits, including specialty mental health services. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county for various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries. Specialty mental health services and Drug Medi-Cal Services and provided pursuant to waivers from the federal Centers for Medicare and Medicaid Services.
Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. Existing law authorizes FQHCs and RHCs to elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services and requires those costs to be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes.
This bill would authorize FQHCs and RHCs to elect to have Drug Medi-Cal and specialty mental health services reimbursed on a fee-for-service basis, according to the same criteria as applied to pharmacy and dental services.
(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1 thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all both of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal services practitioner, as defined in Section 51179.1 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice.
(B)Notwithstanding subdivision (e), an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice for the purposes of establishing its FQHC or RHC rate shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHCs rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist or dental hygienist in alternative practice services, and later elects to add these services, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) Program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis until it is informed of its enrollment as an FQHC or RHC, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)(1)Notwithstanding any other provision of this section requiring the use of a per-visit reimbursement rate, as described in subdivision (c), this subdivision shall govern reimbursement for services identified in this subdivision.
(2)An FQHC or RHC may elect to have pharmacy services or dental services reimbursed on a fee-for-services basis, utilizing the current fee schedules established for those services.
(3)An FQHC or RHC may elect to become certified to provide services in the Drug Medi-Cal program, and reimbursement for those services shall be governed by this paragraph. enroll as a Drug Medi-Cal certified provider. If an FQHC or RHC elects to enroll as a Drug Medi-Cal certified provider, the costs associated with the Drug Medi-Cal services shall not be included in the FQHCs or RHCs per-visit PPS rate and the reimbursement for those services shall be governed by subparagraph (A) or (B).
(A)If the FQHC is located or RHC elects to provide Drug Medi-Cal services in a county that has elected to participate in the Drug Medi-Cal organized delivery system, the FQHC or RHC may elect to shall receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC. If an FQHC or RHC is denied a contract by the county, the FQHC or RHC may follow the contract denial process set forth in the Special Terms and Conditions.
(B)If the FQHC or RHC elects to provide Drug Medi-Cal services in a county that does not elect to participate in the Drug Medi-Cal organized delivery system, an the FQHC or RHC may elect to contract through the department as a Drug Medi-Cal provider. shall receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC. If the county refuses to contract with the FQHC or RHC, the FQHC or RHC may request to contract directly with the department and shall be reimbursed for those services at the fee-for-service rate.
(4)(A)If an FQHC or RHC elects reimbursement pursuant to paragraph (2) or (3), pursuant to which the costs associated with providing the services are part of the FQHCs or RHCs clinic base rate, those costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes and payment pursuant to subdivision (h) shall not apply.
(B)An FQHC or RHC that reverses its election under paragraph (2) or (3) shall revert to its prior rate, subject to an increase to account for all MEI increases occurring during the intervening time period, and subject to any increases or decreases associated with applicable scope-of-service adjustments as provided in subdivision (e).
(5)(A)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after January 1, 2017, if, during the FQHCs or RHCs prior fiscal year, both of the following occurred:
(i)The FQHC or RHC elected reimbursement pursuant to paragraph (3).
(ii)The costs of providing Drug Medi-Cal services were included in the per-visit PPS rate and the removal of those costs would have resulted in a significantly lower per-visit PPS rate. For purposes of this subparagraph, significantly lower means an average per-visit PPS rate decrease in excess of 2.5 percent.
(B)Within 90 days of receipt of the request for a scope-of-service change, the department shall issue the FQHC or RHC an interim rate equal to 90 percent of the FQHCs or RHCs projected allowable cost as determined by the department. The audit performed to determine the final rate shall be performed in accordance with Section 14170.
(6)If an FQHC or RHC makes an election pursuant to paragraph (3) and a scope-of-service change is necessary pursuant to paragraphs (4) and (5), the FQHC or RHC shall comply with both of the following:
(A)After the department approves the request for a scope-of-service change and adjusts the per-visit PPS rate pursuant to paragraph (4), the FQHC or RHC shall not bill the per-visit PPS rate for services reimbursed by the Drug Medi-Cal organized delivery system.
(B)For the purpose of calculating a per-visit PPS rate, the FQHC or RHC shall provide verifiable documentation of the costs of an employee who provides both FQHC services and Drug Medi-Cal services. Documentation shall attribute costs proportionally between FQHC services and Drug Medi-Cal services. Only the costs attributable to FQHC services shall be included in the per-visit PPS rate.
(7)If an FQHC or RHC was enrolled as a Drug Medi-Cal certified provider on or before January 1, 2017, the FQHC or RHC may continue to provide, and be reimbursed for, Drug Medi-Cal services pursuant to the terms of the contract if the costs of providing Drug Medi-Cal services are reimbursed outside of the per-visit PPS rate described in subdivision (c).
(5)
(8)(A)If an FQHC or RHC entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC may continue to provide, and be reimbursed for, those specialty mental health services pursuant to the terms of the contract with the mental health plan if the costs of providing specialty mental health services are reimbursed outside of the per-visit PPS rate described in subdivision (c).
(B)For purposes of this paragraph, mental health plan means any mental health plan contracting with the department to provide specialty mental health services to enrolled Medi-Cal beneficiaries under Article 5 (commencing with Section 14680) of Chapter 8.8 or Chapter 8.9 (commencing with Section 14700).
(9)Nothing in this subdivision shall be construed to alter or otherwise change the process applicable to an FQHC or RHC making an election pursuant to paragraph (2).
(10)For purposes of this subdivision, the following definitions shall apply:
(A)Drug Medi-Cal organized delivery system means the Drug Medi-Cal organized delivery system authorized under the California Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the federal Centers for Medicare and Medicaid Services and described in the Special Terms and Conditions.
(B)Special Terms and Conditions shall have the same meaning as set forth in subdivision (o) of Section 14184.10.
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
SEC. 1.5.Section 14132.100 of the Welfare and Institutions Code is amended to read:14132.100.(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1 thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all both of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, osteopath, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal practitioner, as defined in Section 51179.7 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist, a dental hygienist in alternative practice, or a marriage and family therapist.
(B)Notwithstanding subdivision (e), if an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice, or a marriage and family therapist for the purposes of establishing its FQHC or RHC rate chooses to bill these services as a separate visit, the FQHC or RHC shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals or marriage and family therapists that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHCs rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist, a dental hygienist in alternative practice, or a marriage and family therapist has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist, dental hygienist in alternative practice, or marriage and family therapist services, and later elects to add these services and bill these services as a separate visit, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) Program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis under its existing provider number until it is informed of its FQHC or RHC enrollment approval, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)(1)Notwithstanding any other provision of this section requiring the use of a per-visit reimbursement rate, as described in subdivision (c), this subdivision shall govern reimbursement for services identified in this subdivision.
(2)An FQHC or RHC may elect to have pharmacy services or dental services reimbursed on a fee-for-services basis, utilizing the current fee schedules established for those services.
(3)An FQHC or RHC may elect to become certified to provide services in the Drug Medi-Cal program, and reimbursement for those services shall be governed by this paragraph. enroll as a Drug Medi-Cal certified provider. If an FQHC or RHC elects to enroll as a Drug Medi-Cal certified provider, the costs associated with the Drug Medi-Cal services shall not be included in the FQHCs or RHCs per-visit PPS rate and the reimbursement for those services shall be governed by subparagraph (A) or (B).
(A)If the FQHC is located or RHC elects to provide Drug Medi-Cal services in a county that has elected to participate in the Drug Medi-Cal organized delivery system, the FQHC or RHC may elect to shall receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC. If an FQHC or RHC is denied a contract by the county, the FQHC or RHC may follow the contract denial process set forth in the Special Terms and Conditions.
(B)If the FQHC or RHC elects to provide Drug Medi-Cal services in a county that does not elect to participate in the Drug Medi-Cal organized delivery system, an FQHC or RHC may elect to contract through the department as a Drug Medi-Cal provider. the FQHC or RHC shall receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC. If the county refuses to contract with the FQHC or RHC, the FQHC or RHC may request to contract directly with the department and shall be reimbursed for those services at the fee-for-service rate.
(4)(A)If an FQHC or RHC elects reimbursement pursuant to paragraph (2) or (3), pursuant to which the costs associated with providing the services are part of the FQHCs or RHCs clinic base rate, those costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes and payment pursuant to subdivision (h) shall not apply.
(B)An FQHC or RHC that reverses its election under paragraph (2) or (3) shall revert to its prior rate, subject to an increase to account for all Medicare Economic Index increases occurring during the intervening time period, and subject to any increases or decreases associated with applicable scope-of-service adjustments as provided in subdivision (e).
(5)(A)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after January 1, 2017, if, during the FQHCs or RHCs prior fiscal year, both of the following occurred:
(i)The FQHC or RHC elected reimbursement pursuant to paragraph (3).
(ii)The costs of providing Drug Medi-Cal services were included in the per-visit PPS rate and the removal of those costs would have resulted in a significantly lower per-visit PPS rate. For purposes of this subparagraph, significantly lower means an average per-visit PPS rate decrease in excess of 2.5 percent.
(B)Within 90 days of receipt of the request for a scope-of-service change, the department shall issue the FQHC or RHC an interim rate equal to 90 percent of the FQHCs or RHCs projected allowable cost as determined by the department. The audit performed to determine the final rate shall be performed in accordance with Section 14170.
(6)If an FQHC or RHC makes an election pursuant to paragraph (3) and a scope-of-service change is necessary pursuant to paragraphs (4) and (5), the FQHC or RHC shall comply with both of the following:
(A)After the department approves the request for a scope-of-service change and adjusts the per-visit PPS rate pursuant to paragraph (4), the FQHC or RHC shall not bill the per-visit PPS rate for services reimbursed by the Drug Medi-Cal organized delivery system.
(B)For the purpose of calculating a per-visit PPS rate, the FQHC or RHC shall provide verifiable documentation of the costs of an employee who provides both FQHC services and Drug Medi-Cal services. Documentation shall attribute costs proportionally between FQHC services and Drug Medi-Cal services. Only the costs attributable to FQHC services shall be included in the per-visit PPS rate.
(7)If an FQHC or RHC was enrolled as a Drug Medi-Cal certified provider on or before January 1, 2017, the FQHC or RHC may continue to provide, and be reimbursed for, Drug Medi-Cal services pursuant to the terms of the contract if the costs of providing Drug Medi-Cal services are reimbursed outside of the per-visit PPS rate described in subdivision (c).
(5)
(8)(A)If an FQHC or RHC entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC may continue to provide, and be reimbursed for, those specialty mental health services pursuant to the terms of the contract with the mental health plan if the costs of providing specialty mental health services are reimbursed outside of the per-visit PPS rate described in subdivision (c).
(B)For purposes of this paragraph, mental health plan means any mental health plan contracting with the department to provide specialty mental health services to enrolled Medi-Cal beneficiaries under Article 5 (commencing with Section 14680) of Chapter 8.8 or Chapter 8.9 (commencing with Section 14700).
(9)Nothing in this subdivision shall be construed to alter or otherwise change the process applicable to an FQHC or RHC making an election pursuant to paragraph (2).
(10)For purposes of this subdivision, the following definitions shall apply:
(A)Drug Medi-Cal organized delivery system means the Drug Medi-Cal organized delivery system authorized under the California Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the federal Centers for Medicare and Medicaid Services and described in the Special Terms and Conditions.
(B)Special Terms and Conditions shall have the same meaning as set forth in subdivision (o) of Section 14184.10.
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
SEC. 2.Section 14124.28 is added to the Welfare and Institutions Code, immediately following Section 14124.26, to read:14124.28.Notwithstanding any other provision of this article or regulation adopted thereunder, a county may contract with a federally qualified health center (FQHC) or rural health center (RHC), in accordance with subdivision (k) of Section 14132.100, for the provision of alcohol and drug use services within the county service area.
SEC. 3.The amendments made by this act to subdivision (k) of Section 14132.100 of, and the changes made by this act by the addition of Section 14124.28 to, the Welfare and Institutions Code shall be implemented only to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 14132.100 of the Welfare and Institutions Code proposed by both this bill and Assembly Bill 1863. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2017, (2) each bill amends Section 14132.100 of the Welfare and Institutions Code, and (3) this bill is enacted after Assembly Bill 1863, in which case Section 1 of this bill shall not become operative.
(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1, 1 thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal services practitioner, as defined in Section 51179.1 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice.
(B)Notwithstanding subdivision (e), an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice for the purposes of establishing its FQHC or RHC rate shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHC RHCs rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist or dental hygienist in alternative practice services, and later elects to add these services, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) program, Program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis until it is informed of its enrollment as an FQHC or RHC, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)(1)Notwithstanding any other provision of this section requiring the use of a per-visit reimbursement rate, as described in subdivision (a), (c), this subdivision shall govern reimbursement for services identified in this subdivision.
(2)An FQHC or RHC may elect to have pharmacy services or dental services reimbursed on a fee-for-services basis, utilizing the current fee schedules established for those services.
(3)If an FQHC or RHC and one or more mental health plans that contract with the department pursuant to Section 14712 mutually agree to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC shall elect to have specialty mental health services reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
(4)
(3)An FQHC or RHC may elect to become certified to provide services in the Drug Medi-Cal program, and reimbursement for those services shall be governed by this paragraph.
(A)If the FQHC is located in a county that has elected to participate in the Drug Medi-Cal organized delivery system, the FQHC or RHC may elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC.
(B)If the county does not elect to participate in the Drug Medi-Cal organized delivery system, an FQHC or RHC may elect to contract through the department as a Drug Medi-Cal provider.
(5)
(4)(A)If an FQHC or RHC elects reimbursement pursuant to paragraph (2), (3), or (4), (2) or (3), pursuant to which the costs associated with providing the services are part of the FQHCs or RHCs clinic base rate, those costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes and payment pursuant to subdivision (h) shall not apply.
(B)An FQHC or RHC that reverses its election under this subdivision paragraph (2) or (3) shall revert to its prior rate, subject to an increase to account for all MEI increases occurring during the intervening time period, and subject to any increases or decreases associated with applicable scope-of-services scope-of-service adjustments as provided in subdivision (e).
(5)(A)If an FQHC or RHC entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC may continue to provide, and be reimbursed for, those specialty mental health services pursuant to the terms of the contract with the mental health plan if the costs of providing specialty mental health services are reimbursed outside of the per-visit PPS rate described in subdivision (c).
(B)For purposes of this paragraph, mental health plan means any mental health plan contracting with the department to provide specialty mental health services to enrolled Medi-Cal beneficiaries under Article 5 (commencing with Section 14680) of Chapter 8.8 or Chapter 8.9 (commencing with Section 14700).
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
SEC. 1.5.Section 14132.100 of the Welfare and Institutions Code is amended to read:14132.100.(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1, 1 thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Service Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, osteopath, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal services practitioner, as defined in Section 51179.1 51179.7 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist or hygienist, a dental hygienist in alternative practice. practice, or a marriage and family therapist.
(B)Notwithstanding subdivision (e), if an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice practice, or a marriage and family therapist for the purposes of establishing its FQHC or RHC rate chooses to bill these services as a separate visit, the FQHC or RHC shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals or marriage and family therapists that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHC RHCs rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist or hygienist, a dental hygienist in alternative practice practice, or a marriage and family therapist has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist or hygienist, dental hygienist in alternative practice practice, or marriage and family therapist services, and later elects to add these services, services and bill these services as a separate visit, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) program, Program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis under its existing provider number until it is informed of its enrollment as an FQHC or RHC, RHC enrollment approval, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)(1)Notwithstanding any other provision of this section requiring the use of a per-visit reimbursement rate, as described in subdivision (c), this subdivision shall govern reimbursement for services identified in this subdivision.
(2)An FQHC or RHC may elect to have pharmacy services or dental services reimbursed on a fee-for-services basis, utilizing the current fee schedules established for those services.
(3)An FQHC or RHC may elect to become certified to provide services in the Drug Medi-Cal program, and reimbursement for those services shall be governed by this paragraph.
(A)If the FQHC is located in a county that has elected to participate in the Drug Medi-Cal organized delivery system, the FQHC or RHC may elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC.
(B)If the county does not elect to participate in the Drug Medi-Cal organized delivery system, an FQHC or RHC may elect to contract through the department as a Drug Medi-Cal provider.
(4)(A)If an FQHC or RHC elects reimbursement pursuant to paragraph (2) or (3), pursuant to which the costs associated with providing the services are part of the FQHCs or RHCs clinic base rate, those costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes and payment pursuant to subdivision (h) shall not apply.
(k)
(B)An FQHC or RHC may elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services. These costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes. An FQHC or RHC that reverses its election under this subdivision paragraph (2) or (3) shall revert to its prior rate, subject to an increase to account for all MEI Medicare Economic Index increases occurring during the intervening time period, and subject to any increase increases or decrease decreases associated with applicable scope-of-services scope-of-service adjustments as provided in subdivision (e).
(5)(A)If an FQHC or RHC entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC may continue to provide, and be reimbursed for, those specialty mental health services pursuant to the terms of the contract with the mental health plan if the costs of providing specialty mental health services are reimbursed outside of the per-visit PPS rate described in subdivision (c).
(B)For purposes of this paragraph, mental health plan means any mental health plan contracting with the department to provide specialty mental health services to enrolled Medi-Cal beneficiaries under Article 5 (commencing with Section 14680) of Chapter 8.8 or Chapter 8.9 (commencing with Section 14700).
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, by no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
SEC. 2.Section 14124.28 is added to the Welfare and Institutions Code, immediately following Section 14124.26, to read:14124.28.Notwithstanding any other provision of this article or regulation adopted thereunder, a county may contract with a federally qualified health center (FQHC) or rural health center (RHC), in accordance with subdivision (k) of Section 14132.100, for the provision of alcohol and drug use services within the county service area.
SEC. 3.Section 14687 is added to the Welfare and Institutions Code, to read:14687.Notwithstanding any other provision of this article or regulation adopted thereunder, a mental health plan may contract with a federally qualified health center (FQHC) or rural health center (RHC), in accordance with subdivision (k) of Section 14132.100, for the provision of specialty mental health services.
SEC. 4.SEC. 3.The amendments made by this act to subdivision (k) of Section 14132.100 of, and the changes made by this act by the addition of Sections Section 14124.28 and 14687 to, the Welfare and Institutions Code shall be implemented only to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 14132.100 of the Welfare and Institutions Code proposed by both this bill and Assembly Bill 1863. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2017, (2) each bill amends Section 14132.100 of the Welfare and Institutions Code, and (3) this bill is enacted after Assembly Bill 1863, in which case Section 1 of this bill shall not become operative.
(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1, thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal services practitioner, as defined in Section 51179.1 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice.
(B)Notwithstanding subdivision (e), an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice for the purposes of establishing its FQHC or RHC rate shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHC rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist or dental hygienist in alternative practice services, and later elects to add these services, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis until it is informed of its enrollment as an FQHC or RHC, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)(1)Notwithstanding any other provision of this section requiring the use of a per-visit reimbursement rate, as described in subdivision (a), this subdivision shall govern reimbursement for services identified in this subdivision.
(2)An FQHC or RHC may elect to have pharmacy services or dental services reimbursed on a fee-for-services basis, utilizing the current fee schedules established for those services.
(3)If an FQHC or RHC and one or more mental health plans that contract with the department pursuant to Section 14712 mutually agree to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC shall elect to have specialty mental health services reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
(4)An FQHC or RHC may elect to become certified to provide services in the Drug Medi-Cal program, and reimbursement for those services shall be governed by this paragraph.
(A)If the FQHC is located in a county that has elected to participate in the Drug Medi-Cal organized delivery system, the FQHC or RHC may elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC.
(B)If the county does not elect to participate in the Drug Medi-Cal organized delivery system, an FQHC or RHC may elect to contract through the department as a Drug Medi-Cal provider.
(5)(A)If an FQHC or RHC elects reimbursement pursuant to paragraph (2), (3), or (4), pursuant to which the costs associated with providing the services are part of the FQHCs or RHCs clinic base rate, those costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes and payment pursuant to subdivision (h) shall not apply.
(B)An FQHC or RHC that reverses its election under this subdivision shall revert to its prior rate, subject to an increase to account for all MEI increases occurring during the intervening time period, and subject to any increases or decreases associated with applicable scope-of-services adjustments as provided in subdivision (e).
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
SEC. 2.Section 14124.28 is added to the Welfare and Institutions Code, immediately following Section 14124.26, to read:14124.28.Notwithstanding any other provision of this article or regulation adopted thereunder, a county may contract with a federally qualified health center (FQHC) or rural health center (RHC), in accordance with subdivision (k) of Section 14132.100, for the provision of alcohol and drug use services within the county service area.
SEC. 3.Section 14687 is added to the Welfare and Institutions Code, to read:14687.Notwithstanding any other provision of this article or regulation adopted thereunder, a mental health plan may contract with a federally qualified health center (FQHC) or rural health center (RHC), in accordance with subdivision (k) of Section 14132.100, for the provision of specialty mental health services.
SEC. 2.SEC. 4.The amendments made by this act to subdivision (k) of Section 14132.100 of of, and the changes made by this act by the addition of Sections 14124.28 and 14687 to, the Welfare and Institutions Code shall be implemented only to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1, thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal services practitioner, as defined in Section 51179.1 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice.
(B)Notwithstanding subdivision (e), an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice for the purposes of establishing its FQHC or RHC rate shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHC rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist or dental hygienist in alternative practice services, and later elects to add these services, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis until it is informed of its enrollment as an FQHC or RHC, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)An FQHC or RHC may elect to have Drug Medi-Cal services, specialty mental health services, pharmacy services, or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services. These costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes. An FQHC or RHC that reverses its election under this subdivision shall revert to its prior rate, subject to an increase to account for all MEI increases occurring during the intervening time period, and subject to any increase or decrease associated with applicable scope-of-services adjustments as provided in subdivision (e).
(k)(1)Notwithstanding any other provision of this section requiring the use of a per-visit reimbursement rate, as described in subdivision (a), this subdivision shall govern reimbursement for services identified in this subdivision.
(2)An FQHC or RHC may elect to have pharmacy services or dental services reimbursed on a fee-for-services basis, utilizing the current fee schedules established for those services.
(3)If an FQHC or RHC and one or more mental health plans that contract with the department pursuant to Section 14712 mutually agree to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plans network, the FQHC or RHC shall elect to have specialty mental health services reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
(4)An FQHC or RHC may elect to become certified to provide services in the Drug Medi-Cal program, and reimbursement for those services shall be governed by this paragraph.
(A)If the FQHC is located in a county that has elected to participate in the Drug Medi-Cal organized delivery system, the FQHC or RHC may elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC.
(B)If the county does not elect to participate in the Drug Medi-Cal organized delivery system, an FQHC or RHC may elect to contract through the department as a Drug Medi-Cal provider.
(5)(A)If an FQHC or RHC elects reimbursement pursuant to paragraph (2), (3), or (4), pursuant to which the costs associated with providing the services are part of the FQHCs or RHCs clinic base rate, those costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes and payment pursuant to subdivision (h) shall not apply.
(B)An FQHC or RHC that reverses its election under this subdivision shall revert to its prior rate, subject to an increase to account for all MEI increases occurring during the intervening time period, and subject to any increases or decreases associated with applicable scope-of-services adjustments as provided in subdivision (e).
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
SEC. 2.The amendments made by this act to subdivision (k) of Section 14132.100 of the Welfare and Institutions Code shall be implemented only to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
(a)The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b)The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c)Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of visit set forth in subdivision (g).
(d)Effective October 1, 2004, and on each October 1, thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e)(1)An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Rate changes based on a change in the scope of services provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2)Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A)The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B)A change in service due to amended regulatory requirements or rules.
(C)A change in service resulting from relocating or remodeling an FQHC or RHC.
(D)A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E)An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F)Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G)Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H)Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I)Any changes in the scope of a project approved by the federal Health Resources and Service Services Administration (HRSA).
(3)No change in costs shall, in and of itself, be considered a scope-of-service change unless all of the following apply:
(A)The increase or decrease in cost is attributable to an increase or decrease in the scope of services defined in subdivisions (a) and (b), as applicable.
(B)The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 of Title 42 of the Code of Federal Regulations, or its successor.
(C)The change in the scope of services is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D)The net change in the FQHCs or RHCs rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. Net change means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4)An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHCs or RHCs fiscal year. Any approved increase or decrease in the providers rate shall be retroactive to the beginning of the FQHCs or RHCs fiscal year in which the request is submitted.
(5)An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHCs or RHCs prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, significantly lower means an average per-visit rate decrease in excess of 2.5 percent.
(6)Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHCs or RHCs fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHCs or RHCs fiscal year ending in 2003.
(7)All references in this subdivision to fiscal year shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f)(1)An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHCs or RHCs PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2)The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3)Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include all of the following:
(A)A presentation of data to demonstrate reasons for the FQHCs or RHCs request for a supplemental payment.
(B)Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facilitys total costs, whichever is less.
(4)A request shall be submitted for each affected year.
(5)Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6)The department shall notify the provider of the departments discretionary decision in writing.
(g)(1)An FQHC or RHC visit means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, physician shall be interpreted in a manner consistent with the Centers for Medicare and Medicaid Services Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal services practitioner, as defined in Section 51179.1 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plans definition of an FQHC or RHC visit.
(2)(A)A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice.
(B)Notwithstanding subdivision (e), an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice for the purposes of establishing its FQHC or RHC rate shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHCs or RHC rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHCs or RHCs application for, or the departments approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist or a dental hygienist in alternative practice has been approved. Any approved increase or decrease in the providers rate shall be made within six months after the date of receipt of the departments rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C)An FQHC or RHC that does not provide dental hygienist or dental hygienist in alternative practice services, and later elects to add these services, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(h)If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity (as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the Medicare Program, or the Child Health and Disability Prevention (CHDP) program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i)(1)An entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC, and any entity that is an existing FQHC or RHC that is relocated to a new site shall each have its reimbursement rate established in accordance with one of the following methods, as selected by the FQHC or RHC:
(A)The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B)In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C)At a new entitys one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D)The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(2)In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(3)The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis until it is informed of its enrollment as an FQHC or RHC, and the department shall reconcile the difference between the fee-for-service payments and the FQHCs or RHCs prospective payment rate at that time.
(j)Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, or in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, shall be billed by and reimbursed at the same rate as the FQHC or RHC establishing the intermittent clinic site or the mobile unit, subject to the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k)An FQHC or RHC may elect to have pharmacy Drug Medi-Cal services, specialty mental health services, pharmacy services, or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services. These costs shall be adjusted out of the FQHCs or RHCs clinic base rate as scope-of-service changes. An FQHC or RHC that reverses its election under this subdivision shall revert to its prior rate, subject to an increase to account for all MEI increases occurring during the intervening time period, and subject to any increase or decrease associated with applicable scope-of-services adjustments as provided in subdivision (e).
(l)FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(m)The department shall, by no later than March 30, 2008, promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(n)The department shall implement this section only to the extent that federal financial participation is obtained.
|
Date
|
Status
|
|---|---|
| May 27, 2016 | From committee: Do pass. (Ayes 7. Noes 0. Page 4008.) (May 27). |
| Aug 29, 2016 | Ordered to inactive file on request of Assembly Member Calderon. |
| Aug 18, 2016 | Read third time and amended. |
| Aug 18, 2016 | Ordered to third reading. |
| Aug 15, 2016 | Read second time. Ordered to third reading. |
| Aug 12, 2016 | From committee: Do pass. (Ayes 20. Noes 0.) (August 11). |
| Aug 3, 2016 | August 3 set for first hearing. Placed on APPR. suspense file. |
| Aug 1, 2016 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| Jun 22, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 17. Noes 0.) (June 21). Re-referred to Com. on APPR. |
| Jun 13, 2016 | Referred to Com. on HEALTH. |
| Jun 1, 2016 | In Assembly. Read first time. Held at Desk. |
| May 31, 2016 | Read third time. Passed. (Ayes 39. Noes 0.) Ordered to the Assembly. |
| May 31, 2016 | Read third time. Passed. (Ayes 39. Noes 0. Page 4053.) Ordered to the Assembly. |
| May 27, 2016 | Read second time. Ordered to third reading. |
| May 27, 2016 | From committee: Do pass. (Ayes 7. Noes 0.) (May 27). |
| Feb 19, 2016 | Introduced. To Com. on RLS. for assignment. To print. |
| May 20, 2016 | Set for hearing May 27. |
| May 9, 2016 | May 9 hearing: Placed on APPR. suspense file. |
| Apr 29, 2016 | Set for hearing May 9. |
| Apr 20, 2016 | Read second time and amended. Re-referred to Com. on APPR. |
| Apr 19, 2016 | From committee: Do pass as amended and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 9. Noes 0.) (April 13). |
| Apr 19, 2016 | From committee: Do pass as amended and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 9. Noes 0. Page 3559.) (April 13). |
| Apr 5, 2016 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| Mar 30, 2016 | Set for hearing April 13. |
| Mar 29, 2016 | April 6 set for first hearing canceled at the request of author. |
| Mar 16, 2016 | Set for hearing April 6. |
| Mar 3, 2016 | Referred to Com. on HEALTH. |
| Feb 22, 2016 | Read first time. |
| Feb 22, 2016 | From printer. May be acted upon on or after March 23. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 11, 2016 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 21, 2016 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Health |
Passed |
|
| May 31, 2016 | Senate 3rd Reading SB1335 Mitchell | Senate Floor |
Passed |
|
| May 27, 2016 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| May 9, 2016 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 13, 2016 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Aids Project Los Angeles | ** Support | Aug 18, 2016 |
| Alliance for Rural Community Health | ** Support | Aug 18, 2016 |
| Altamed Health Services Corporation | ** Support | Aug 18, 2016 |
| American Chemistry Council | * Against | Jun 25, 2018 |
| Asian Health Services | ** Support | Aug 18, 2016 |
| California Chamber Of Commerce | * Against | Jun 25, 2018 |
| California Chapter of the American College of Emergency Physicians | ** Support | Aug 18, 2016 |
| California Health+Advocates | ** Support | Aug 18, 2016 |
| California Pan-Ethnic Health Network | ** Support | Aug 18, 2016 |
| California Primary Care Association | ** Support | Aug 18, 2016 |
| California Restaurant Association | * Neutral | Jun 25, 2018 |
| California State Park Foundation | * Support | Jun 25, 2018 |
| Californians Against Waste | * Support | Jun 25, 2018 |
| CalPERS | * Support | Jun 25, 2018 |
| Capitol Advocacy LLC | * Against | Jun 25, 2018 |
| Community Clinic Association of Los Angeles County | ** Support | Aug 18, 2016 |
| Community Clinic Consortium | ** Support | Aug 18, 2016 |
| County Health Executives Association Of California | ** Support | Aug 18, 2016 |
| County Of Los Angeles | ** Support | Aug 18, 2016 |
| Defenders Of Wildlife | * Support | Jun 25, 2018 |
| East Valley Community Health Center | ** Support | Aug 18, 2016 |
| Environment California | * Support | Jun 25, 2018 |
| Health and Life Organization, Inc. | ** Support | Aug 18, 2016 |
| Health Center Partners of Southern California | ** Support | Aug 18, 2016 |
| Kheir Center | ** Support | Aug 18, 2016 |
| L.A. Care Health Plan | ** Support | Aug 18, 2016 |
| La Clinica de la Raza | ** Support | Aug 18, 2016 |
| Los Angeles County Board of Supervisors | ** Support | Aug 18, 2016 |
| Los Angeles LGBT Center | ** Support | Aug 18, 2016 |
| McHugh, Koepke & Associates | * Against | Jun 25, 2018 |
| Mountain Valleys Health Centers | ** Support | Aug 18, 2016 |
| National Federation Of Independent Business | * Against | Jun 25, 2018 |
| Natural Resources Defence Council | * Support | Jun 25, 2018 |
| Neighborhood Healthcare | ** Support | Aug 18, 2016 |
| North East Medical Services | ** Support | Aug 18, 2016 |
| Northeast Valley Health Corporation | ** Support | Aug 18, 2016 |
| Plastics Industry Association | * Against | Jun 25, 2018 |
| Republic Services | * Support | Jun 25, 2018 |
| Sacramento Native American Health Center, Inc. | ** Support | Aug 18, 2016 |
| San Ysidro Health Center | ** Support | Aug 18, 2016 |
| Sierra Club | * Support | Jun 25, 2018 |
| South Central Family Health Center | ** Support | Aug 18, 2016 |
| Technet | * Against | Jun 25, 2018 |
| The Coalition of Orange County | ** Support | May 31, 2016 |
| Western Plastics Association | * Against | Jun 25, 2018 |
SENATE THIRD READING
STR Bill Id:SB 1335
Author:(Mitchell)
As Amended Ver:August 1, 2016
Majority vote
SENATE VOTE: 39-0
Committee | Votes | Ayes | Noes |
Health | 17-0 | Wood, Maienschein, Bonilla, Burke, Campos, Chiu, Gomez, Roger Hernández, Lackey, Nazarian, Patterson, Ridley-Thomas, Rodriguez, Santiago, Steinorth, Thurmond, Waldron | |
Appropriations | 20-0 | Gonzalez, Bigelow, Bloom, Bonilla, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Holden, Jones, Obernolte, Quirk, Santiago, Wagner, Weber, Wood, McCarty |
|
SUMMARY: Authorizes federally qualified health centers (FQHCs) and rural health clinics (RHCs) to provide specialty mental health and Drug Medi-Cal (DMC) services and be reimbursed for such services. Specifically, this bill:
- Permits an FQHC or RHC to elect to become certified to provide services in the DMC program, and reimbursement for those services is as follows:
- If the FQHC or RHC is located in a county that has elected to participate in the DMC organized delivery system, the FQHC or RHC may elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC; and,
- If the county does not elect to participate in the DMC organized delivery system, an FQHC or RHC may elect to contract through the Department of Health Care Services as a DMC provider;
- Provides that if an FQHC or RHC elects reimbursement for DMC services, pursuant to which the costs associated with providing the services are part of the FQHC's or RHC's clinic base rate, those costs must be adjusted out of the FQHC's or RHC's clinic base rate as scope-of-service changes, as specified.
- Indicates that if an FQHC or RHC that reverses its election under 1) above, then the FQHC or RHC must revert to its prior rate, subject to an increase to account for all Medicare Economic Index increases or decreases associated with applicable scope-of-service adjustments, as specified.
- Provides that if an FQHC or RHC entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plan's network, the FQHC or RHC may continue to provide, and be reimbursed for, those specialty mental health services pursuant to the terms of the contract with the mental health plan if the costs of providing specialty mental health services are reimbursed outside of the per visit the prospective payment system (PPS) rate, as specified.
- Defines mental health plan as any mental health plan contracting with the Department of Health Care Services (DHCS) to provide specialty mental health services to enrolled Medi-Cal beneficiaries, as specified.
- Makes other technical and conforming changes.
FISCAL EFFECT: According to Assembly Appropriations Committee:
- Minor one-time costs for revising regulations and seeking any necessary federal approvals to allow the payment procedures authorized under the bill (General Fund (GF)/federal).
- Unknown, potentially significant costs for DHCS to conduct provider enrollment activities, contract directly with clinics, and to recalculate the PPS rate for clinics that wish to carve out costs associated with DMC services or contract directly with the department (GF/federal). The bill requires that if clinics elect to contract directly for DMC services, and costs associated with providing the services are part of the clinic's base PPS rate, the costs must be adjusted out of the clinic's base rate as a "scope-of-service change." In addition, current law requires DHCS to enroll providers and provides for state direct contracting in certain situations.
Recalculating a PPS rate requires a detailed review of utilization and expenditures by clinics. For example, assuming the cost per review is about $10,000 and 30 clinics seek a recalculation, the administrative costs to DHCS would be about $300,000, plus costs for provider enrollment and related activities (GF/federal). It is unclear how many clinics currently contract for DMC services, or who would elect to contract and apply for a scope-of-service change to ensure DMC services are carved out of the PPS rate.
- Although clarification that clinics can contract with counties for DMC services may improve access, no significant increase in utilization or costs for services is assumed to be directly attributable to this bill.
COMMENTS: According to the author, as the growing need for behavioral health care services continues to go unmet, barriers that impair the ability of community clinics and health centers to participate as providers in the DMC and as providers contracted with county specialty mental health plans (MHPs) should be eliminated. This bill will help community clinics more easily provide substance use disorder treatment and medically necessary specialty mental health services to our most vulnerable communities by allowing FQHCs and RHCs to elect reimbursement on a Free-for-Service (FFS) basis instead of the PPS basis, thereby expanding the services offered and provider types available at FQHCs and RHCs.
Reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS. For Medi-Cal managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its per-visit PPS rate and the payment made by the plan. This payment is known as a "wrap around" payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate.
The Medi-Cal Specialty Mental Health Services Program and DMC are "carved-out" of the broader Medi-Cal program, are administered by DHCS, and operated under federal waivers approved by the Centers for Medicare and Medicaid Services. DHCS contracts with a MHP in each county to provide or arrange for the provision of Medi-Cal specialty mental health services. Under the terms of the specialty mental health waiver and state regulation, FQHC services are not covered by county mental health plans.
Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097 FN: 0004126
SENATE THIRD READING
STR Bill Id:SB 1335
Author:(Mitchell)
As Amended Ver:August 18, 2016
Majority vote
SENATE VOTE: 39-0
Committee | Votes | Ayes | Noes |
Health | 17-0 | Wood, Maienschein, Bonilla, Burke, Campos, Chiu, Gomez, Roger Hernández, Lackey, Nazarian, Patterson, Ridley-Thomas, Rodriguez, Santiago, Steinorth, Thurmond, Waldron | |
Appropriations | 20-0 | Gonzalez, Bigelow, Bloom, Bonilla, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Holden, Jones, Obernolte, Quirk, Santiago, Wagner, Weber, Wood, McCarty |
SUMMARY: Authorizes federally qualified health centers (FQHCs) and rural health clinics (RHCs) to provide Drug Medi-Cal (DMC) services and be reimbursed for such services. Specifically, this bill:
- Permits an FQHC or RHC to elect to enroll as a DMC certified provider and provides that the costs associated with the DMC services shall not be included in the FQHC's or RHC's per visit prospective payment system (PPS) rate and reimbursement for those services is as follows:
- If the FQHC or RHC elects to provide DMC services in a county that has elected to participate in the DMC organized delivery system, the FQHC or RHC shall receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC; and,
- If the FQHC or RHC elects to provide DMC services in a county that does not elect to participate in the DMC organized delivery system, the FQHC or RHC shall receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC. If the county refuses to contract with the FQHC or RHC, the FQHC or RHC may request to contract directly with the Department of Health Care Services (DHCS) and shall be reimbursed for those services at the fee-for-service (FFS) rate.
- Provides that if an FQHC or RHC elects reimbursement for DMC services, pursuant to which the costs associated with providing the services are part of the FQHC's or RHC's clinic base rate, those costs must be adjusted out of the FQHC's or RHC's clinic base rate as scope-of-service changes, as specified.
- Indicates that if an FQHC or RHC that reverses its election under 1) above, then the FQHC or RHC must revert to its prior rate, subject to an increase to account for all Medicare Economic Index increases or decreases associated with applicable scope-of-service adjustments, as specified.
- Requires an FQHC or RHC to submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after January 1, 2017, if, during the FQHC's or RHC's prior fiscal year, both of the following occurred:
- The FQHC or RHC elected reimbursement under 1) above;
- The costs of providing DMC services were included in the per-visit PPS rate and the removal of those costs would have resulted in a significantly lower per-visit PPS rate. Specifies that "significantly lower" means an average per-visit PPS rate decrease in excess of 2.5%.
- Requires, within 90 days of receipt of the request for a scope-of-service change, the DHCS to issue the FQHC or RHC an interim rate equal to 90% of the FQHC's or RHC's projected allowable cost as determined by DHCS. Requires the audit for the final rate to comply with existing requirements.
- Provides that if an FQHC or RHC elects to enroll as a DMC provider under 1) above, and a scope-of-service change is necessary, as specified, the FQHC or RHC must comply with both of the following:
- After DHCS approves the request for a scope-of-service change and adjusts the per-visit PPS rate, the FQHC or RHC shall not bill the per-visit PPS rate for services reimbursed by the DMC organized delivery system; and,
- For the purpose of calculating a per-visit PPS rate, the FQHC or RHC shall provide verifiable documentation of the costs of an employee who provides both FQHC services and DMC services. Documentation shall attribute costs proportionally between FQHC services and DMC services. Only the costs attributable to FQHC services shall be included in the per-visit PPS rate.
- Specifies that if an FQHC or RHC was enrolled as a DMC certified provider on or before January 1, 2017, the FQHC or RHC may continue to provide, and be reimbursed for, DMC services pursuant to the terms of the contract if the costs of providing DMC services are reimbursed outside of the per-visit PPS rate, as specified.
- Provides that if an FQHC or RHC entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plan's network, the FQHC or RHC may continue to provide, and be reimbursed for, those specialty mental health services pursuant to the terms of the contract with the mental health plan if the costs of providing specialty mental health services are reimbursed outside of the per visit the PPS rate, as specified.
- Defines mental health plan as any mental health plan contracting with DHCS to provide specialty mental health services to enrolled Medi-Cal beneficiaries, as specified.
- Makes other technical and conforming changes, including chaptering out amendments.
FISCAL EFFECT: According to Assembly Appropriations Committee:
- Minor one-time costs for revising regulations and seeking any necessary federal approvals to allow the payment procedures authorized under the bill (General Fund (GF)/federal).
- Unknown, potentially significant costs for DHCS to conduct provider enrollment activities, contract directly with clinics, and to recalculate the PPS rate for clinics that wish to carve out costs associated with DMC services or contract directly with the department (GF/federal). The bill requires that if clinics elect to contract directly for DMC services, and costs associated with providing the services are part of the clinic's base PPS rate, the costs must be adjusted out of the clinic's base rate as a "scope-of-service change." In addition, current law requires DHCS to enroll providers and provides for state direct contracting in certain situations.
Recalculating a PPS rate requires a detailed review of utilization and expenditures by clinics. For example, assuming the cost per review is about $10,000 and 30 clinics seek a recalculation, the administrative costs to DHCS would be about $300,000, plus costs for provider enrollment and related activities (GF/federal). It is unclear how many clinics currently contract for DMC services, or who would elect to contract and apply for a scope-of-service change to ensure DMC services are carved out of the PPS rate.
- Although clarification that clinics can contract with counties for DMC services may improve access, no significant increase in utilization or costs for services is assumed to be directly attributable to this bill.
COMMENTS: According to the author, as the growing need for behavioral health care services continues to go unmet, barriers that impair the ability of community clinics and health centers to participate as providers in the DMC and as providers contracted with county specialty mental health plans (MHPs) should be eliminated. This bill will help community clinics more easily provide substance use disorder treatment and medically necessary specialty mental health services to our most vulnerable communities by allowing FQHCs and RHCs to elect reimbursement on a FFS basis instead of the PPS basis, thereby expanding the services offered and provider types available at FQHCs and RHCs.
Reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS. For Medi-Cal managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its per-visit PPS rate and the payment made by the plan. This payment is known as a "wrap around" payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate.
The Medi-Cal Specialty Mental Health Services Program and DMC are "carved-out" of the broader Medi-Cal program, are administered by DHCS, and operated under federal waivers approved by the Centers for Medicare and Medicaid Services. DHCS contracts with a MHP in each county to provide or arrange for the provision of Medi-Cal specialty mental health services. Under the terms of the specialty mental health waiver and state regulation, FQHC services are not covered by county mental health plans.
Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097 FN: 0004540
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SBPCA Bill Id:SB 1335
Author:(Mitchell) – As Amended Ver:August 1, 2016
Policy Committee: | Health | Vote: | 17 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill authorizes federally qualified health centers (FQHCs) and rural health clinics (RHCs) (clinics) to provide Drug Medi-Cal (DMC) services, and describes payment and contracting arrangements. Specifically, this bill:
- Permits clinics to elect to become certified to provide services in the DMC program, and receive reimbursement for these services either through a contract with counties or the state, as applicable.
- Authorizes the reimbursement to be outside the regular prospective payment system (PPS) rate reimbursement structure that applies to clinics.
- Requires adjustment to a clinic's base PPS rate if a clinic's PPS rate already accounts for DMC services.
- Requires Department of Health Care Services (DHCS) to implement this bill only to the extent that federal financial participation is obtained.
- Allows clinics with existing contracts with county mental health plans to provide specialty mental health services to continue to provide and be reimbursed for such services, as long as reimbursement is outside of the per-visit PPS rate.
- Makes other technical and conforming changes.
- Includes chaptering amendments to address conflicts with AB 1863 (Wood).
FISCAL EFFECT:
- Minor one-time costs for revising regulations and seeking any necessary federal approvals to allow the payment procedures authorized under the bill (GF/federal).
- Unknown, potentially significant costs for DHCS to conduct provider enrollment activities, contract directly with clinics, and to recalculate the prospective payment system (PPS) rate for clinics that wish to carve out costs associated with DMC services or contract directly with the department (GF/federal). The bill requires that if clinics elect to contract directly for DMC services, and costs associated with providing the services are part of the clinic's base PPS rate, the costs must be adjusted out of the clinic's base rate as a "scope-of-service change." In addition, current law requires DHCS to enroll providers and provides for state direct contracting in certain situations.
Recalculating a PPS rate requires a detailed review of utilization and expenditures by clinics. For example, assuming the cost per review is about $10,000 and 30 clinics seek a recalculation, the administrative costs to DHCS would be about $300,000, plus costs for provider enrollment and related activities (GF/federal). It is unclear how many clinics currently contract for DMC services, or who would elect to contract and apply for a scope-of-service change to ensure DMC services are carved out of the PPS rate.
- Although clarification that clinics can contract with counties for Drug Medi-Cal services may improve access, no significant increase in utilization or costs for services is assumed to be directly attributable to this bill.
COMMENTS:
- Purpose. According to the author, as the growing need for behavioral health care services continues to go unmet, barriers that impair the ability of community clinics and health centers to participate as providers in the DMC should be eliminated. This bill will help community clinics more easily provide substance use disorder treatment services to our most vulnerable communities by allowing clinics to elect reimbursement on a fee-for-service basis pursuant to contracts with counties, instead of the PPS basis. This expands the services offered and provider types available at clinics.
- Clinic Reimbursement. Because of their unique role in providing health care to underserved communities and the uninsured, policymakers have historically attempted to ensure that community clinics remain financially viable. Federal law requires federally funded health programs to pay clinics using a special reimbursement structure commonly called a prospective payment system (PPS). According to DHCS Form 3090, the Freestanding FQHC Cost Report Form, PPS rates are a clinic-specific per-visit rate, and are calculated by dividing costs for Medi-Cal-reimbursable services by Medi-Cal reimbursable visits. PPS rates are also adjusted by a growth rate to account for inflation. In addition, clinics can request a recalculation of their PPS rates based on a change in their scope of services. All clinics must provide at least a defined scope of primary care and mental health services, but may provide additional services as well. For Medi-Cal, current PPS rates vary from around $80 to over $650 per visit, depending on the mix of services provided at each clinic.
- Drug Medi-Cal (DMC). The DMC Treatment Program is a county-funded Medi-Cal benefit that provides medically necessary substance use disorder treatment services for eligible Medi-Cal beneficiaries. Services include outpatient drug free, narcotic replacement therapy, day care rehabilitative, Naltrexone, and counseling in residential facilities for pregnant and post-partum women. DHCS is in the midst of implementing a DMC organized delivery system waiver, under which participating counties are creating organized networks of substance abuse care. Participating counties will also offer an enhanced level of drug treatment services.
- Related Legislation. Chapter 760, Statutes of 2015 (SB 147, Hernández) authorizes a three-year payment reform pilot project for federally qualified health centers (FQHCs) using an alternative payment methodology (APM) to the PPS rate.
- Staff Comment. DHCS notes this bill's explicit authorization to contract with counties for DMC services, and the authorization to continue existing contracts for specialty mental health, could reduce the department's flexibility to ensure appropriate alignment of financial and programmatic responsibility for DMC and specialty mental health services between the state and the county mental health plans.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: June 21, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
SBPCA Bill Id:SB 1335
Author:(Mitchell) – As Amended Ver:April 20, 2016
SENATE VOTE: 39-0
SUBJECT: Medi-Cal benefits: federally qualified health centers and rural health centers: Drug Medi-Cal and specialty mental health services.
SUMMARY: Authorizes federally qualified health centers (FQHCs) and rural health clinics (RHCs) to provide specialty mental health and Drug Medi-Cal (DMC) services and be reimbursed for such services under a contract with the county or the Department of Health Care Services (DHCS) and authorizes the reimbursement to be outside the regular Medi-Cal reimbursement structure that applies to FQHCs and RHCs. Specifically, this bill:
- Permits an FQHC or RHC to do the following:
- Elect to have specialty mental health services reimbursed pursuant to the terms of the contract/s and outside of the per-visit prospective payment system (PPS) if an FQHC or RHC and one or more mental health plans that contract with DHCS for specialty mental health mutually agree to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plan’s (MHP) network; and,
- Elect to become certified to provide services in the DMC program, and receive reimbursement for these services as follows:
- If the FQHC is located in a county that has elected to participated in the DMC organized delivery system (ODS), elect to receive reimbursement under a contract mutually agreed upon between the county and an FQHC or RHC; or,
- If the county does not elect to participate in DMC, the FQHC or RHC can elect to contract through DHCS as a DMC provider.
- Requires, if an FQHC or RHC elects reimbursement under 1) above, pursuant to which the costs associated with providing the services are part of the FQHC’s or RHC’s clinic base rate, those costs must be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service changes, and the PPS payment would not apply.
- Requires DHCS to implement this bill only to the extent that federal financial participation is obtained.
- Makes other technical and conforming changes.
EXISTING LAW:
- Establishes the Medi-Cal program as California’s Medicaid program, administered by DHCS, which provides comprehensive health care coverage for low-income individuals. FQHC and RHC services are covered benefits under the Medi-Cal program.
- Requires FQHCs and RHCs to be reimbursed on a per-visit basis. Defines a “visit” as a face-to-face encounter between an FQHC or RHC patient and specified health care providers. The Medi-Cal reimbursement to FQHCs and RHCs on a per-visit rate is known as PPS.
- Permits an FQHC or RHC to elect to have pharmacy or dental services reimbursed on a fee-for-service (FFS) basis, utilizing the current fee schedules established for those services. Requires these costs to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service change.
- Establishes DMC, under which DHCS is authorized to enter into contracts with each county for various alcohol and drug treatment services for Medi-Cal beneficiaries.
- Requires DHCS to implement managed mental health care for Medi-Cal beneficiaries through contracts with mental health plans. Allows MHPs to include individual counties, counties acting jointly, or an organization or nongovernmental entity determined by DHCS to meet MHP standards.
- Requires MHPs to provide specialty mental health services to eligible Medi-Cal beneficiaries, including both adults and children.
FISCAL EFFECT: According to the Senate Appropriations Committee:
- One-time costs, likely in the low hundreds of thousands for revising regulations and seeking any necessary federal approvals to allow the payment procedures authorized under the bill (General Fund (GF)/federal funds (FF)).
- One-time costs, likely less than $200,000, to recalculate the PPS rate for clinics that contract with counties or the state to provide specialty mental health services or services under DMC (GF/FF).
The bill would require clinics that contract to provide those additional services to be paid pursuant to the contract for those services. The bill would require the DHCS to recalculate the PPS for those clinics to adjust the costs for providing such services out of the clinic’s PPS rate base. The process for recalculating a PPS rate requires a detailed review of utilization and expenditures by clinics. The PPS rate paid to clinics is likely to be much higher than the rates paid by counties for specialty mental health services or DMC. Therefore, most clinics would probably not elect to contract for services that would require them to recalculate their PPS rate.
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, as the growing need for behavioral health care services continues to go unmet, barriers that impair the ability of community clinics and health centers to participate as providers in the DMC and as providers contracted with county specialty MHPs should be eliminated. This bill will help community clinics more easily provide substance use disorder treatment and medically necessary specialty mental health services to our most vulnerable communities by allowing FQHCs and RHCs to elect reimbursement on a FFS basis instead of the PPS basis, thereby expanding the services offered and provider types available at FQHCs and RHCs.
- BACKGROUND. FQHCs and RHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs and 350 RHCs in California. All FQHCs, and a majority of the RHCs, are either non-profit community clinics or government entities. Because clinics are safety net providers, their continued survival depends heavily on the stability and adequacy of revenues from the Medi-Cal program. FQHCs and RHCs are paid by Medi-Cal on a "per visit" basis in an amount equal to the clinic's cost of delivering services. Essentially, DHCS calculates the annual cost of care provided by each clinic and divides the total by the number of visits to determine a per visit rate.
Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers. Mental health and substance abuse services are part of the essential health care benefits under the Patient Protection and Affordable Care Act. As such, they are a part of Medi-Cal. Along with the expansion of these benefits, the expansion of the Medi-Cal program overall has increased the number of beneficiaries to over 14 million, placing even greater demands on Medi-Cal providers.
Reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS. For Medi-Cal managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its per-visit PPS rate and the payment made by the plan. This payment is known as a “wrap around” payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate.
The Medi-Cal Specialty Mental Health Services Program and DMC are “carved-out” of the broader Medi-Cal program, are administered by DHCS, and operated under federal waivers approved by the Centers for Medicare and Medicaid Services. DHCS contracts with a MHP in each county to provide or arrange for the provision of Medi-Cal specialty mental health services. Under the terms of the specialty mental health waiver and state regulation, FQHC services are not covered by county mental health plans.
DHCS is in the process of implementing the new DMC waiver referred to as DMC ODS, under which counties can elect to opt-in to administer the benefit, and Medi-Cal beneficiaries will receive a richer drug treatment benefit package than in counties that do not opt-in. As counties have begun planning to implement the new DMC ODS, at least one county counsel in Los Angeles County has questioned whether county specialty mental health plans can claim FFP if they contract with FQHCs. This bill would clarify that contracting with county specialty mental health plans and county or state DMC programs is allowed, and that contracting would be through contract and outside the normal PPS Medi-Cal rate paid to FQHCs and RHCs.
- SUPPORT. The California Primary Care Association, the sponsor of this bill, and the California Pan-Ethnic Health Network state that this bill clarifies that FQHCs and RHCs can contract with DMC or MHP providers and receive reimbursement for DMC and MHP-contracted services outside of the PPS rate and this bill will have little or no cost to the state while increasing access for these services for Medi-Cal enrollees. The California Chapter of the American College of Emergency Physicians notes that this bill will improve access to addiction and mental health treatment. The County Health Executives Association of California points out that this bill will help to increase counties’ ability to recruit FQHCs and RHCs to provide behavioral health and substance use disorder services and to improve counties’ ability to deliver integrated services for Medi-Cal eligible individuals.
- RELATED LEGISLATION. AB 1863 (Wood) adds marriage and family therapists (MFTs) to the list of healthcare professionals that qualify for a face-to-face encounter with a patient at FQHCs or RHCs for purposes of a per-visit Medi-Cal payment under the PPS. Makes conforming changes, including requiring an FQHC or an RHC that includes the costs of the services of an MFT that chooses to bill these services as a separate visit, to apply for an adjustment to its per-visit rate; that multiple encounters with an MFT on the same day constitutes a single visit; adjustment of rates; and, change in scope of service requirements. AB 1863 is pending in Senate Health Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
California Primary Care Association (co-sponsor)
Community Clinic Association of Los Angeles County (co-sponsor)
Los Angeles County Board of Supervisors (co-sponsor)
AIDS Project Los Angeles
Alliance for Rural Community Health
AltaMed Health Services Corporation
Asian Health Services
California Chapter of the American College of Emergency Physicians
California Health+Advocates
California Pan-Ethnic Health Network
Coalition of Orange County
Community Clinic Consortium
County Health Executives Association of California
County of Los Angeles
East Valley Community Health Center
Health and Life Organization, Inc.
Health Center Partners of Southern California
Kheir Center
L.A. Care Health Plan
La Clinica de La Raza
Los Angeles LGBT Center
Mountain Valleys Health Centers
Neighborhood Healthcare
North East Medical Services
Northeast Valley Health Corporation
Sacramento Native American Health Center, Inc.
San Ysidro Health Center
South Central Family Health Center
Opposition
None on file.
Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 1335 |
THIRD READING
Bill No: SB 1335
Amended: 4/20/16
SENATE HEALTH COMMITTEE: 9-0, 4/13/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SUBJECT: Med-Cal benefits: federally qualified health centers and rural health centers: Drug Medi-Cal and specialty mental health services
SOURCE: California Primary Care Association
Community Clinic Association of Los Angeles County
Los Angeles County Board of Supervisors
DIGEST: This bill authorizes federally qualified health centers (FQHCs) and rural health clinics (RHCs) to receive reimbursement from county specialty mental health plans and through Drug Medi-Cal under the terms of a contract between the FQHC and RHC and either the county or the Department of Health Care Services (DHCS) outside of the regular Medi-Cal reimbursement structure that applies to FQHCs and RHCs.
Existing law:
- Establishes the Medi-Cal program as California’s Medicaid program, administered by DHCS, which provides comprehensive health care coverage for low-income individuals. FQHC and RHC services are covered benefits under the Medi-Cal program.
- Requires FQHCs and RHCs to be reimbursed on a per-visit basis. Defines a “visit” as a face-to-face encounter between an FQHC or RHC patient and specified health care providers. The Medi-Cal reimbursement to FQHCs and RHCs on a per-visit rate is known as the Prospective Payment System (PPS).
- Permits an FQHC or RHC to elect to have pharmacy or dental services reimbursed on a fee-for-service (FFS) basis, utilizing the current fee schedules established for those services. Requires these costs to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service change.
- Establishes the Drug Medi-Cal program, under which the DHCS is authorized to enter into contracts with each county for various alcohol and drug treatment services for Medi-Cal beneficiaries.
- Requires DHCS to implement managed mental health care for Medi-Cal beneficiaries through contracts with mental health plans. Mental health plans may include individual counties, counties acting jointly, or an organization or nongovernmental entity determined by DHCS to meet mental health plan standards.
- Requires mental health plans to provide specialty mental health services to eligible Medi-Cal beneficiaries, including both adults and children.
This bill:
- Requires, if an FQHC or RHC and a county specialty mental health plan mutually agree to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plan’s network, the FQHC or RHC to elect to have specialty mental health services reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
- Permits an FQHC or RHC to elect to become certified to provide services in the Drug Medi-Cal program. Requires reimbursement for Drug Medi-Cal program services to be reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
- Permits, if the FQHC or RHC is located in a county that has elected to participate in the Drug Medi-Cal Organized Delivery System (ODS), the FQHC or RHC to elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC.
- Permits, if the county does not elect to participate in the Drug Medi-Cal ODS, an FQHC or RHC to elect to contract through DHCS as a Drug Medi-Cal provider.
- Requires, if an FQHC or RHC elects to receive from a county specialty mental health plan or from Drug Medi-Cal, the reimbursement the FQHC or RHC receives to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service changes, and the PPS payment would not apply.
- Permits a county and a county mental health plan to contract with FQHCs or RHCs under this bill for the provision of alcohol and drug use services within the county service area, and for the provision of specialty mental health services.
- Implements this bill only to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
Comments
- Author’s statement. According to the author, as the growing need for behavioral health care services continues to go unmet, barriers that impair the ability of community clinics and health centers to participate as providers in the Drug Medi-Cal Program and as providers contracted with county specialty mental health plans should be eliminated. This bill will help community clinics more easily provide substance use disorder treatment and medically necessary specialty mental health services to our most vulnerable communities by allowing FQHCs and RHCs to elect reimbursement on a FFS basis instead of the PPS basis, thereby expanding the services offered and provider types available at FQHCs and RHCs.
- FQHCs and RHCs. FQHCs and RHCs are federal designated clinics that are required to serve medically underserved populations that provide primary care services. Medi-Cal reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS, which is higher than the typical Medi-Cal FFS reimbursement rate. For Medi-Cal managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its per-visit PPS rate and the payment made by the plan. This payment is known as a “wrap around” payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate.
- Specialty mental health and Drug Medi-Cal “carve out” and contracting with FQHCs. The Medi-Cal Specialty Mental Health Services Program and Drug Medi-Cal are “carved-out” of the broader Medi-Cal program and is administered by DHCS and operated under federal waivers approved by the Centers for Medicare and Medicaid Services (CMS). DHCS contracts with a Mental Health Plan in each county to provide or arrange for the provision of Medi-Cal specialty mental health services. Under the terms of the specialty mental health waiver and state regulation, FQHC services are not covered by county mental health plans.
DHCS is in the process of implementing the new Drug Medi-Cal waiver referred to as the Drug Medi-Cal ODS, under which counties can elect to opt-in to administering the benefit. Medi-Cal beneficiaries will receive a richer drug treatment benefit package than in counties that do not opt-in. As counties have begun planning to implement the new Drug Medi-Cal ODS, at least one county counsel in Los Angeles County has questioned whether county specialty mental health plans can claim FFP if they contract with FQHCs. This bill would clarify that contracting with county specialty mental health plans and county and state Drug Medi-Cal programs is allowed, and that contracting would be through contract and outside the normal PPS Medi-Cal rate paid to FQHCs and RHCs.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee:
- One-time costs, likely in the low hundreds of thousands for revising regulations and seeking any necessary federal approvals to allow the payment procedures authorized under the bill (General Fund and federal funds).
- One-time costs, likely in the low millions, to recalculate the PPS rate for clinics that contract with counties or the state to provide specialty mental health services or services under Drug Medi-Cal (General Fund and federal funds).
The bill requires clinics that contract to provide those additional services to be paid pursuant to the contract for those services. This bill requires DHCS to recalculate the PPS for those clinics to adjust the costs for providing such services out of the clinic’s PPS rate base. The process for recalculating a PPS rate requires a detailed review of utilization and expenditures by clinics. For example, assuming that the cost of performing such a review is about $10,000 and that 500 clinics seek a recalculation, the administrative costs to DHCS would be about $5 million.
- Unknown potential state cost savings from shifting services currently being provided under the PPS rate (paid by the state) to specialty mental health or Drug Medi-Cal which are funded by counties (General Fund). Overall, the bill is likely to increase utilization of services at FQHCs and RHCs, by allowing them to receive direct reimbursement for those services from counties. Under current law, FQHCs and RHCs can provide mental health services and may provide services that could be reimbursed under Drug Medi-Cal. Currently, the cost of providing those services to Medi-Cal beneficiaries is included in the PPS rate paid to clinics. To the extent that services currently being provided are removed from the PPS rate and paid for under those contracts, there could be some cost shifting from the state to the counties. The extent of that impact is unknown.
California Primary Care Association (co-source)
Community Clinic Association of Los Angeles County (co-source)
Los Angeles County Board of Supervisors (co-source)
AIDS Project Los Angeles
Alliance for Rural Community Health
AltaMed Health Services Corporation
Asian Health Services
California Pan-Ethnic Health Network
Community Clinic Consortium
County Health Executives Association of California
East Valley Community Health Center
Health and Life Organization, Inc.
Health Center Partners of Southern California
Kheir Center
La Clinica de La Raza
Los Angeles LGBT Center
Mountain Valleys Health Centers
Neighborhood Healthcare
North East Medical Services
Northeast Valley Health Corporation
Sacramento Native American Health Center, Inc.
San Ysidro Health Center
South Central Family Health Center
The Coalition of Orange County
OPPOSITION: (Verified 5/26/16)
None received
ARGUMENTS IN SUPPORT: This bill is jointly sponsored by the California Primary Care Association (CPCA), the Los Angeles County Board of Supervisors, and the Community Clinic Association of Los Angeles County. CPCA writes that this bill will improve Californian’s access to substance use disorder treatment by eliminating a barrier which prevents community health centers from participating in Drug Medi-Cal and county specialty mental health programs by allowing FQHCs the option to contract with their counties for these services and be reimbursed on par with other health care providers. CPCA states that, under the Medi-Cal expansion and new Drug Medi-Cal ODS waiver, FQHCs are critically needed in the behavioral health continuum of care, but find it difficult to contract with counties, even when the counties want to contract with health centers. This contracting is important to better integrate FQHCs into the county specialty mental health plan or Drug Medi-Cal System. Such contracting also allows FQHCs to provide different types of services with different types of providers (i.e. peer support specialists, group counseling, drug abuse counselors) which may be more limited under the current FQHC PPS payment system. CPCA concludes that this bill will improve access to behavioral health service by providing legal certainty and clarify that FQHCs and RHCs can provide these important behavioral health services outside of the PPS rate.
Prepared by: Scott Bain / HEALTH /
5/28/16 17:00:37
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SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1335 (Mitchell) - Med-Cal benefits: federally qualified health centers and rural health centers: Drug Medi-Cal and specialty mental health services
Version: April 20, 2016 | Policy Vote: HEALTH 9 - 0 |
Urgency: No | Mandate: No |
Hearing Date: May 9, 2016 | Consultant: Brendan McCarthy |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
SB 1335 would authorize federally qualified health centers (FQHCs) and rural health clinics (RHCs) to receive reimbursement for services provided for specialty mental health services or Drug Medi-Cal outside of the normal reimbursement structure for FQHCs and RHCs.
Fiscal Impact:
- One-time costs, likely in the low hundreds of thousands for revising regulations and seeking any necessary federal approvals to allow the payment procedures authorized under the bill (General Fund and federal funds).
- One-time costs, likely less than $200,000, to recalculate the prospective payment system (PPS) rate for clinics that contract with counties or the state to provide specialty mental health services or services under Drug Medi-Cal (General Fund and federal funds).
The would bill require clinics that contract to provide those additional services to be paid pursuant to the contract for those services. The bill would require the Department to recalculate the PPS for those clinics to adjust the costs for providing such services out of the clinic’s PPS rate base. The process for recalculating a PPS rate requires a detailed review of utilization and expenditures by clinics. The PPS rate paid to clinics is likely to be much higher than the rates paid by counties for specialty mental health services or drug Medi-Cal. Therefore, most clinics would probably not elect to contract for services that would require them to recalculate their PPS rate.
Background:
Under current law, the Medi-Cal program provides health care coverage for certain low income and disabled individuals.
In the Medi-Cal fee-for-service system, federally qualified health centers (FQHCs) and rural health clinics (RHCs) are paid a per-visit payment known as the prospective payment system (PPS). The PPS rate is based on a baseline rate that reflects a clinic’s costs to provide services in 1999-2000, adjusted for inflation. Those costs include the costs of eligible face-to-face visits (e.g. with a physician) and other services provided to Medi-Cal beneficiaries that are not eligible for billing as a face-to-face visit (e.g. visits with a registered nurse). When a Medi-Cal beneficiary in the managed care system receives care from an FQHC or RHC, the managed care plan makes a per-visit payment to the clinic. Because the rates paid by managed care plans are significantly below the PPS rate, the state makes a supplemental “wrap-around” payment to the clinic to bring the total payment up to the PPS rate.
Under current law, specialty mental health and Drug Medi-Cal are “carved out” of the regular Medi-Cal managed care program. Specialty mental health is provided by county mental health plans that contract with the Department of Health Care Services. Historically, Drug Medi-Cal has been operated on a fee-for-services basis, with providers contracting with counties or directly with the state. The Department is in the process of implementing a new Drug Medi-Cal waiver that will allow counties that opt-in to provide Drug Medi-Cal benefits through an organized delivery system (a kind of managed care system). The non-federal share of the costs for both specialty mental health and Drug Medi-Cal are paid for by counties, generally using realignment funds.
Proposed Law:
SB 1335 would authorize federally qualified health centers (FQHCs) and rural health clinics (RHCs) to receive reimbursement for services provided for specialty mental health services or Drug Medi-Cal outside of the normal reimbursement structure for FQHCs and RHCs.
Specific provisions of the bill would:
- Require FQHCs and RHCs that elect to contract with a county mental health plan to provide specialty mental health services to be reimbursed for those services pursuant to the contract and not through the PPS rate;
- Require FQHCs and RHCs that elect to provide Drug Medi-Cal services (either under contract with a county or the Department of Health Care Services) to be reimbursed for those services pursuant to the contract and not through the PPS rate;
- Require FQHCs and RHCs that elect to accept reimbursement described above to have their PPS rate adjusted to remove the cost of those services from the PPS rate;
- Specifically authorize FQHCs and RHCs to provide specialty mental health services and Drug Medi-Cal services under contract;
- Provide that the provisions of the bill shall only be implemented to the extent that federal approval has been received and federal financial participation is available.
Related Legislation:
AB 858 (Wood, 2015) would have added marriage and family therapists to the list of health care providers that qualify for face-to-face encounter payments from the Medi-Cal program to federally qualified health centers and rural health clinics. That bill was vetoed by Governor Brown.
Staff comments: As noted above, the PPS rate paid to clinics is generally higher than the rates paid by counties for specialty mental health services or for Drug Medi-Cal services. Therefore, it is unlikely that many clinics would opt to shift payment for those services out of their PPS rate to the contract rate paid by counties. Rather, clinics are more likely to contract with counties to provide specialty mental health or Drug Medi-Cal services that are not included in their PPS rate (for example, group therapy sessions).
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SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1335
AUTHOR: | Mitchell | ||
VERSION: | April 5, 2016 | ||
HEARING DATE: | April 13, 2016 | ||
CONSULTANT: | Scott Bain | ||
SUBJECT: Med-Cal benefits: federally qualified health centers and rural health centers: Drug Medi-Cal and specialty mental health services
SUMMARY:
Authorizes federally qualified health centers (FQHCs) and rural health clinics (RHCs) to receive reimbursement from county specialty mental health plans and through Drug Medi-Cal under the terms of a contract between the FQHC and RHC and either the county or the Department of Health Care Services outside of the regular Medi-Cal reimbursement structure that applies to FQHCs and RHCs.
Existing law:
- Establishes the Medi-Cal program as California’s Medicaid program, administered by the Department of Health Care Services (DHCS), which provides comprehensive health care coverage for low-income individuals. FQHC and RHC services are covered benefits under the Medi-Cal program.
- Requires FQHCs and RHCs to be reimbursed on a per-visit basis. Defines a “visit” as a face-to-face encounter between an FQHC or RHC patient and specified health care providers. The Medi-Cal reimbursement to FQHCs and RHCs on a per-visit rate is known as the Prospective Payment System (PPS).
- Permits an FQHC or RHC to elect to have pharmacy or dental services reimbursed on a fee-for-service (FFS) basis, utilizing the current fee schedules established for those services. Requires these costs to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service change.
- Establishes the Drug Medi-Cal program, under which the DHCS is authorized to enter into contracts with each county for various alcohol and drug treatment services for Medi-Cal beneficiaries.
- Requires DHCS to implement managed mental health care for Medi-Cal beneficiaries through contracts with mental health plans. Mental health plans may include individual counties, counties acting jointly, or an organization or nongovernmental entity determined by DHCS to meet mental health plan standards.
- Requires mental health plans to provide specialty mental health services to eligible Medi-Cal beneficiaries, including both adults and children.
This bill:
- Requires, if an FQHC or RHC and a county specialty mental health plan mutually agree to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plan’s network, the FQHC or RHC to elect to have specialty mental health services reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
- Permits an FQHC or RHC to elect to become certified to provide services in the Drug Medi-Cal program. Requires reimbursement for Drug Medi-Cal program services to be reimbursed pursuant to the terms of the contract or contracts and outside of the per-visit PPS rate.
- Permits, if the FQHC or RHC is located in a county that has elected to participate in the Drug Medi-Cal Organized Delivery System (ODS), the FQHC or RHC to elect to receive reimbursement pursuant to a mutually agreed upon contract between the county and the FQHC or RHC.
- Permits, if the county does not elect to participate in the Drug Medi-Cal ODS, an FQHC or RHC to elect to contract through DHCS as a Drug Medi-Cal provider.
- Requires, if an FQHC or RHC elects to receive from a county specialty mental health plan or from Drug Medi-Cal, the reimbursement the FQHC or RHC receives to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service changes, and the PPS payment would not apply.
- Implements this bill only to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
FISCAL EFFECT:
This bill has not been analyzed by a fiscal committee.
COMMENTS:
- Author’s statement. According to the author, as the growing need for behavioral health care services continues to go unmet, barriers that impair the ability of community clinics and health centers to participate as providers in the Drug Medi-Cal Program and as providers contracted with county specialty mental health plans should be eliminated. This bill will help community clinics more easily provide substance use disorder treatment and medically necessary specialty mental health services to our most vulnerable communities by allowing FQHCs and RHCs to elect reimbursement on a FFS basis instead of the PPS basis, thereby expanding the services offered and provider types available at FQHCs and RHCs.
- Background on FQHCs and RHCs. FQHCs and RHCs are federal designated clinics that are required to serve medically underserved populations that provide primary care services. FQHCs and RHCs provided over 10.5 million Medi-Cal visits in 2013. Medi-Cal reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS. For Medi-Cal managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its per-visit PPS rate and the payment made by the plan. This payment is known as a “wrap around” payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate.
- Specialty mental health and Drug Medi-Cal “carve out” and contracting with FQHCs. The Medi-Cal Specialty Mental Health Services Program and Drug Medi-Cal are “carved-out” of the broader Medi-Cal program and is administered by DHCS and operated under federal waivers approved by the Centers for Medicare and Medicaid Services (CMS). DHCS contracts with a MHP in each county to provide or arrange for the provision of Medi-Cal specialty mental health services. Under the terms of the specialty mental health waiver and state regulation, FQHC services are not covered by county mental health plans.
DHCS is in the process of implementing the new Drug Medi-Cal waiver referred to as the Drug Medi-Cal ODS, under which counties can elect to opt-in to administering the benefit, and Medi-Cal beneficiaries will receive a richer drug treatment benefit package than in counties that do not opt-in. As counties have begun planning to implement the new Drug Medi-Cal ODS, at least one county counsel in Los Angeles County has questioned whether county specialty mental health plans can claim FFP if they contract with FQHCs. This bill would clarify that contracting with county specialty mental health plans and county and state Drug Medi-Cal programs is allowed, and that contracting would be through contract and outside the normal PPS Medi-Cal rate paid to FQHCs and RHCs.
- Support. This bill is jointly sponsored by the California Primary Care Association (CPCA), the Los Angeles County Board of Supervisors, and the Community Clinic Association of Los Angeles County. CPCA writes that this bill will improve Californian’s access to substance use disorder treatment by eliminating a barrier which prevents community health centers from participating in Drug Medi-Cal and county specialty mental health programs by allowing FQHCs the option to contract with their counties for these services and be reimbursed on par with other health care providers. CPCA states that, under the Medi-Cal expansion and new DMC-ODS waiver, FQHCs are critically needed in the behavioral health continuum of care, but find it difficult to contract with counties, even when the counties want to contract with health centers. This contracting is important to better integrate FQHCs into the county specialty mental health plan or Drug Medi-Cal System. Such contracting also allows FQHCs to provide different types of services with different types of providers (i.e. peer support specialists, group counseling, drug abuse counselors) which may be more limited under the current FQHC PPS payment system. CPCA concludes that this bill will improve access to behavioral health service by providing legal certainty and clarify that FQHCs and RHCs can provide these important behavioral health services outside of the PPS rate.
- Drafting issue. FQHCs currently contract in some counties for specialty mental health and Drug Medi-Cal services. While this bill would clarify in the FQHC/RHC statute that FQHCs and RHCs can contract for these services, the Los Angeles county counsel memo that raised the contracting issue discusses a different area in state county mental health plan regulation as a barrier to contracting with FQHCs. The memo cites the exclusion of FQHC services from county specialty mental health plans in regulation, and a regulation that makes county specialty mental health plans ineligible for federal financial participation (FFP) for excluded services as barriers to contracting with FQHCs under specialty mental health. The author may wish to consider a clarifying amendment to the body of law dealing with county specialty mental health plans that clarifies their ability to contract with FQHC and RHCs and be eligible for FFP.
SUPPORT AND OPPOSITION:
Support: Community Clinic Association of Los Angeles County (co-sponsor)
California Primary Care Association (co-sponsor)
Los Angeles County Board of Supervisors (co-sponsor)
AIDS Project Los Angeles
Alliance for Rural Community Health
AltaMed Health Services Corporation
Asian Health Services
California Pan-Ethnic Health Network
Community Clinic Consortium
East Valley Community Health Center
Health and Life Organization, Inc.
Health Center Partners of Southern California
Kheir Center
La Clinica de La Raza
Los Angeles LGBT Center
Mountain Valleys Health Centers
Neighborhood Healthcare
North East Medical Services
Northeast Valley Health Corporation
Sacramento Native American Health Center, Inc.
San Ysidro Health Center
South Central Family Health Center
The Coalition of Orange County
Oppose: None received
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Bill Author
Bill Co-Author(s):
