SB 447: Medi-Cal: clinics: drugs, devices, and supplies.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2016-08-01
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. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
The Medi-Cal program administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Program, to provide comprehensive clinical family planning services to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those services. Existing law specifies various requirements relating to reimbursement for the provision of drugs and supplies under the Medi-Cal program and the Family PACT Program that are applicable to licensed community clinics, free clinics, or intermittent clinics. Existing law requires reimbursement for drugs and supplies covered under the Medi-Cal program and the Family PACT Program and provided by these clinics to be the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of the drugs or products as provided by retail pharmacies under the Medi-Cal program. Existing law sets the costs for drugs and supplies covered under those programs at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law also sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or fewer days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription.
Existing law requires the State Department of Health Care Services to approve the application of an affiliate clinic, as defined, for enrollment into the Family PACT Program within 30 days of receiving the application, as specified. Existing law also requires the State Department of Public Health to implement a process that allows an applicant for licensure as a primary care clinic, as defined, to submit an application for review of the clinics qualifications for enrollment and certification in the Medi-Cal program, and, among others, the Family PACT Program. Existing law requires the State Department of Health Care Services, within 30 days after receiving confirmation of certification for enrollment of an affiliate clinic in the Medi-Cal program, to enroll the clinic in the Medi-Cal program retroactive to the date of certification.
This bill would eliminate the requirement that the State Department of Health Care Services approve an application for enrollment into the Family PACT Program, and would instead require a primary care clinic or an affiliate clinic that is seeking to enroll in the program to submit an application to the State Department of Public Health. The bill would require a clinic not enrolled in the Medi-Cal program to submit a consolidated application for enrollment in both the Medi-Cal program and the Family PACT program, and would require a clinic already enrolled in the Medi-Cal program to submit an application for enrollment in the Family PACT Program. The bill would require the State Department of Public Health to review that application to certify the clinic for enrollment in those programs, as applicable, and to notify the State Department of Health Care Services of that certification within 15 days after it is granted. The bill would require the State Department of Health Care Services to enroll the clinic in those programs within 15 days after receiving notification from the State Department of Public Health, as specified. The bill would require the State Department of Public Health to develop consolidated application forms, as specified.
This bill would also require reimbursement for devices covered under the Medi-Cal Program and the Family PACT Program. The bill would revise the reimbursement formula described above and would instead specify separate reimbursement formulas for contraceptive drugs, devices, and supplies, and non-contraceptive drugs, devices, and supplies. The bill would, for contraceptive drugs, devices, and supplies, require a clinic to bill the Medi-Cal program and the Family PACT Program at the Medi-Cal reimbursement rate. The bill would, for non-contraceptive drugs, devices, and supplies, require a clinic to bill the Medi-Cal program or the Family PACT Program at the lesser of the clinics usual charge made to the general public, or its cost, defined as an aggregate amount equivalent to the sum of the actual acquisition cost of the drug, device, or supply plus a clinic dispensing fee. The bill would provide that the clinic dispensing fee shall be determined by the department, as specified, or, if not determined by the department, shall be the difference between the actual acquisition cost and the Medi-Cal reimbursement rate. The bill would require reimbursement for non-contraceptive drugs, devices, and supplies to be the lesser of the amount billed, as described above, or the Medi-Cal reimbursement rate, and would cap reimbursement at the net cost of the drug, device, or supply when provided by retail pharmacies under the Medi-Cal program. The bill would require the department to seek federal approval of any state plan amendments necessary to implement these provisions. The bill would require the department, by July 1, 2018, to adopt regulations to implement these provisions, as specified. Until those regulations are adopted the bill would require the department to implement these provisions by provider bulletins or similar instructions and provide the Legislature with a semiannual status report, as specified.
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. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
The Medi-Cal program, pursuant to a federal waiver, program administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Program, to provide comprehensive clinical family planning services to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those services pursuant to the waiver. Existing law requires reimbursement for drugs and supplies covered under the Medi-Cal program and Family PACT Program by a licensed community clinic or free clinic, or an intermittent clinic, to be the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of the drugs or products as provided to retail pharmacies under the Medi-Cal program. Existing law sets the costs for drugs and supplies covered under those programs at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law also sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or less days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription. services.
This bill would revise this reimbursement formula and would instead require the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply, to be calculated not less than annually, and the Medi-Cal reimbursement rate. The bill would remove the cap on reimbursement that is based on the net cost of drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Existing law requires the State Department of Health Care Services to approve the application of an affiliate clinic, as defined, for enrollment into the Family PACT Program within 30 days of receiving the application, as specified. Existing law also requires the State Department of Public Health to implement a process that allows an applicant for licensure as a primary care clinic, as defined, to submit an application for review of the clinics qualifications for enrollment and certification in the Medi-Cal program, and, among others, the Family PACT Program. Existing law requires the State Department of Health Care Services, within 30 days after receiving confirmation of certification for enrollment of an affiliate clinic in the Medi-Cal program, to enroll the clinic in the Medi-Cal program retroactive to the date of certification.
This bill would eliminate the requirement that the State Department of Health Care Services approve an application for enrollment into the Family PACT Program, and would instead require a primary care clinic or an affiliate clinic that is seeking to enroll in the program to submit an application to the State Department of Public Health. The bill would require a clinic not enrolled in the Medi-Cal program to submit a consolidated application for enrollment in both the Medi-Cal program and the Family PACT program, and would require a clinic already enrolled in the Medi-Cal program to submit an application for enrollment in the Family PACT Program. The bill would require the State Department of Public Health to review that application to certify the clinic for enrollment in those programs, as applicable, and to notify the State Department of Health Care Services of that certification within 15 days after it is granted. The bill would require the State Department of Health Care Services to enroll the clinic in those programs within 15 days after receiving notification from the State Department of Public Health, as specified. The bill would require the State Department of Public Health to develop consolidated application forms, as specified.
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. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
The Medi-Cal program, pursuant to a federal waiver, administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Program, to provide comprehensive clinical family planning services to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those services pursuant to the waiver. Existing law requires reimbursement for drugs and supplies covered under the Medi-Cal program and Family PACT Program by a licensed community clinic or free clinic, or an intermittent clinic, to be the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of the drugs or products as provided to retail pharmacies under the Medi-Cal program. Existing law sets the costs for drugs and supplies covered under those programs at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law also sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or less days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription.
This bill would revise this reimbursement formula for those drugs subject to a rebate under specified federal law, and would instead require the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply, to be calculated not less than annually, and the Medi-Cal reimbursement rate. The bill would remove the cap on reimbursement that is based on the net cost of drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
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. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
The Medi-Cal program, pursuant to a federal waiver, administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Program, to provide comprehensive clinical family planning services to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those services pursuant to the waiver. Existing law requires reimbursement for drugs and supplies covered under the Medi-Cal program and Family PACT Program by a licensed community clinic or free clinic, or an intermittent clinic, to be the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of the drugs or products as provided to retail pharmacies under the Medi-Cal program. Existing law sets the costs for drugs and supplies covered under those programs at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law also sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or less days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription.
This bill would revise this reimbursement formula, formula for those drugs subject to a rebate under specified federal law, and would instead require the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply, to be calculated not less than annually, and the Medi-Cal reimbursement rate. The bill would remove the cap on reimbursement that is based on the net cost of drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
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. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.
The Medi-Cal program, pursuant to a federal waiver, administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Program, to provide comprehensive clinical family planning services to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those services pursuant to the waiver. Existing law requires reimbursement for drugs and supplies covered under the Medi-Cal program and Family PACT Program by a licensed community clinic or free clinic, or an intermittent clinic, to be the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of the drugs or products as provided to retail pharmacies under the Medi-Cal program. Existing law sets the costs for drugs and supplies covered under those programs at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law also sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or less days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription.
This bill would revise this reimbursement formula, and would instead require the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply, to be calculated not less than annually, and the Medi-Cal reimbursement rate. The bill would remove the cap on reimbursement that is based on the net cost of drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
(a)Notwithstanding any other provision of law, a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code shall bill and be reimbursed, as described in this section, for drugs drugs, devices, and supplies covered under the Medi-Cal program and Family PACT Waiver Program.
(b)(1)A clinic described in subdivision (a) shall bill the Medi-Cal program and Family PACT Waiver Program for drugs contraceptive drugs, devices, and supplies covered under those programs at the lesser of cost or the clinics usual charge made to the general public. Medi-Cal reimbursement rate.
(2)For purposes of this section, cost means an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed twelve dollars ($12) per billing unit as identified in either the Family PACT Policies, Procedures, and Billing Instructions Manual, or the Medi-Cal Inpatient/Outpatient Provider Manual governing outpatient clinic billing for drugs and supplies, as applicable. For purposes of this section, cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of five or less days from the date medically indicated means actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed seventeen dollars ($17) per prescription. Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate, and shall not exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
(c)(1)A clinic described in subdivision (a) shall bill the Medi-Cal program or the Family PACT Program for non-contraceptive drugs, devices, and supplies covered under those programs at the lesser of cost or the clinics usual charge made to the general public.
(2)For purposes of this subdivision only, cost means an aggregate amount equivalent to the actual acquisition cost of a non-contraceptive drug, device, or supply plus a clinic dispensing fee as determined by the department and identified in either the Medi-Cal Provider Manual or the Family PACT Policies, Procedures, and Billing Instructions Manual. If the department does not identify a clinic dispensing fee in either the Medi-Cal Provider Manual or the Family PACT Policies, Procedures, and Billing Instructions Manual, the clinic dispensing fee shall be the difference between the actual acquisition cost and the Medi-Cal reimbursement rate.
(3)Reimbursement for non-contraceptive drugs, devices, and supplies shall be the lesser of the amount billed or the Medi-Cal reimbursement rate, and shall not exceed the net cost of the non-contraceptive drugs, devices, and supplies when provided by retail pharmacies under the Medi-Cal program.
(c)
(d)A clinic described in subdivision (a) that furnishes services free of charge, or at a nominal charge, as defined in subsection (a) of Section 413.13 of Title 42 of the Code of Federal Regulations, or that can demonstrate to the department, upon request, that it serves primarily low-income patients, and its customary practice is to charge patients on the basis of their ability to pay, shall not be subject to reimbursement reductions based on its usual charge to the general public.
(d)
(e)Federally qualified health centers and rural health clinics that are clinics as described in subdivision (a) may bill and be reimbursed as described in this section, upon electing to be reimbursed for pharmaceutical goods and services drugs, devices, and supplies delivered through their dispensaries on a fee-for-service basis, as permitted by subdivision (k) of Section 14132.100.
(e)
(f)A clinic that otherwise meets the qualifications set forth in subdivision (a), that is eligible to, but that has elected not to, utilize drugs purchased under the 340B Discount Drug Program for its Medi-Cal patients, shall provide notification to the Health Resources and Services Administrations Office of Pharmacy Affairs that it is utilizing non-340B drugs for its Medi-Cal patients in the manner and to the extent required by federal law.
(g)The department shall seek federal approval of any state plan amendments necessary to implement this section.
(h)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section by means of provider bulletins or similar instructions until the time any necessary regulations are adopted. Thereafter, by July 1, 2018, the department shall adopt regulations in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Until those regulations have been adopted, the department shall provide a status report to the Legislature on a semiannual basis and pursuant to Section 9795 of the Government Code.
(i)This section shall be implemented only if and to the extent that federal financial participation is available and any necessary federal approvals have been obtained.
SECTION 1.Section 1222.1 is added to the Health and Safety Code, to read:1222.1.(a)(1)As part of the application for licensure either as a primary care clinic, as described in subdivision (a) of Section 1204, or as an affiliate clinic, as described in Section 1218.1, the department shall accept a consolidated application for enrollment in both the Medi-Cal program and the Family PACT Program that is submitted by a clinic pursuant to subparagraph (A) of paragraph (1) of subdivision (t) of Section 24005 of the Welfare and Institutions Code. The department shall review the clinics qualifications for enrollment in both the Medi-Cal program and the Family PACT Program, and, if approved, shall transmit its certification for enrollment in both programs to the State Department of Health Care Services within 15 calendar days of the date approval is granted.
(2)The department shall accept an application for enrollment in both the Medi-Cal program and the Family PACT Program, or for enrollment in the Family PACT Program, from a licensed primary care clinic, as described in subdivision (a) of Section 1204, or from a licensed affiliate clinic, as described in Section 1218.1. The department shall review the clinics qualifications for enrollment in the Medi-Cal program and the Family PACT Program, as applicable, and, if approved, shall transmit its certification for enrollment in those programs to the State Department of Health Care Services within 15 calendar days of the date approval is granted.
(b)If a clinic submits an initial application for enrollment in both the Medi-Cal program and the Family PACT Program pursuant to paragraph (1) or (2) of subdivision (a), the department shall apply the same certification date to its approval for enrollment in both programs.
(c)No later than June 30, 2016, the department shall develop a consolidated Medi-Cal program and Family PACT Program initial application form, and a Family PACT Program initial application form for a clinic already enrolled in the Medi-Cal program, subject to all of the following:
(1)The department shall not require an applicant for enrollment in the Family PACT Program to disclose any additional information beyond what was required of a community clinic for enrollment in the Family PACT Program as of December 31, 2014.
(2)The department shall not require an applicant to attend a provider orientation if the applicant is owned by a nonprofit corporation that owns at least one other primary care clinic that has held an active enrollment in the Family PACT Program for the immediately preceding five years, and during that period has had no demonstrated history of a repeated or uncorrected violation of this chapter or any regulation adopted after the enactment of this chapter that poses an immediate jeopardy to a patient, as that term is defined in subdivision (f) of Section 1218.1.
(d)Nothing in this section shall be construed to modify the requirement that the department issue a license to an affiliate clinic within 30 days of receipt of a completed application, as set forth in subdivision (d) of Section 1218.1.
(e)A subsequent change to information reported on the initial application described in this section shall be reported to the centralized application unit of the department within 35 calendar days. The department shall review the clinics changes, and, if approved, shall transmit its approval to the State Department of Health Care Services within 15 calendar days after approval is granted. A provider that reports a change under this section other than a change of ownership shall not be required to reenroll in either the Medi-Cal program or the Family PACT Program.
SEC. 2.Section 14043.17 of the Welfare and Institutions Code is amended to read:14043.17.(a)Notwithstanding any other law, within 15 calendar days of receiving confirmation of certification for enrollment as a Medi-Cal provider for a primary care clinic, as described in subdivision (a) of Section 1204 of the Health and Safety Code, or an affiliate primary care clinic that is licensed pursuant to Section 1218.1 of the Health and Safety Code, the department shall provide written notice to the applicant informing the applicant that its Medi-Cal enrollment is approved.
(b)The department shall enroll the primary care clinic or the affiliate clinic retroactive to the date of certification.
(c)This section shall not be construed to limit the departments authority pursuant to Section 14043.37, 14043.4, or 14043.7 to conduct background checks, preenrollment inspections, or unannounced visits.
SEC. 3.Section 24005 of the Welfare and Institutions Code is amended to read:24005.(a)This section shall apply to the Family Planning, Access, Care, and Treatment (Family PACT) Program identified in subdivision (aa) of Section 14132 and this program.
(b)Only licensed medical personnel with family planning skills, knowledge, and competency may provide the full range of family planning medical services covered in this program.
(c)Medi-Cal enrolled providers, as determined by the department, shall be eligible to provide family planning services under the program when these services are within their scope of practice and licensure. Those clinical providers electing to participate in the program and approved by the department shall provide the full scope of family planning education, counseling, and medical services specified for the program, either directly or by referral, consistent with standards of care issued by the department.
(d)The department shall require providers to enter into clinical agreements with the department to ensure compliance with standards and requirements to maintain the fiscal integrity of the program. Provider applicants, providers, and persons with an ownership or control interest, as defined in federal Medicaid regulations, shall be required to submit to the department their social security numbers to the full extent allowed under federal law. All state and federal statutes and regulations pertaining to the audit or examination of Medi-Cal providers shall apply to this program.
(e)Clinical provider agreements shall be signed by the provider under penalty of perjury. The department may screen applicants at the initial application and at any reapplication pursuant to requirements developed by the department to determine provider suitability for the program.
(f)The department may complete a background check on clinical provider applicants for the purpose of verifying the accuracy of information provided to the department for purposes of enrolling in the program and in order to prevent fraud and abuse. The background check may include, but not be limited to, unannounced onsite inspection prior to enrollment, review of business records, and data searches. If discrepancies are found to exist during the preenrollment period, the department may conduct additional inspections prior to enrollment. Failure to remediate significant discrepancies as prescribed by the director may result in denial of the application for enrollment. Providers that do not provide services consistent with the standards of care or that do not comply with the departments rules related to the fiscal integrity of the program may be disenrolled as a provider from the program at the sole discretion of the department.
(g)The department shall not enroll any applicant who, within the previous 10 years:
(1)Has been convicted of any felony or misdemeanor that involves fraud or abuse in any government program, that relates to neglect or abuse of a patient in connection with the delivery of a health care item or service, or that is in connection with the interference with, or obstruction of, any investigation into health care related fraud or abuse.
(2)Has been found liable for fraud or abuse in any civil proceeding, or that has entered into a settlement in lieu of conviction for fraud or abuse in any government program.
(h)In addition, the department may deny enrollment to any applicant that, at the time of application, is under investigation by the department or any local, state, or federal government law enforcement agency for fraud or abuse. The department shall not deny enrollment to an otherwise qualified applicant whose felony or misdemeanor charges did not result in a conviction solely on the basis of the prior charges. If it is discovered that a provider is under investigation by the department or any local, state, or federal government law enforcement agency for fraud or abuse, that provider shall be subject to immediate disenrollment from the program.
(i)(1)The program shall disenroll as a program provider any individual who, or any entity that, has a license, certificate, or other approval to provide health care, which is revoked or suspended by a federal, California, or other states licensing, certification, or other approval authority, has otherwise lost that license, certificate, or approval, or has surrendered that license, certificate, or approval while a disciplinary hearing on the license, certificate, or approval was pending. The disenrollment shall be effective on the date the license, certificate, or approval is revoked, lost, or surrendered.
(2)A provider shall be subject to disenrollment if the provider submits claims for payment for the services, goods, supplies, or merchandise provided, directly or indirectly, to a program beneficiary, by an individual or entity that has been previously suspended, excluded, or otherwise made ineligible to receive, directly or indirectly, reimbursement from the program or from the Medi-Cal program and the individual has previously been listed on either the Suspended and Ineligible Provider List, which is published by the department, to identify suspended and otherwise ineligible providers or any list published by the federal Office of the Inspector General regarding the suspension or exclusion of individuals or entities from the federal Medicare and Medicaid programs, to identify suspended, excluded, or otherwise ineligible providers.
(3)The department shall deactivate, immediately and without prior notice, the provider numbers used by a provider to obtain reimbursement from the program when warrants or documents mailed to a providers mailing address, its pay to address, or its service address, if any, are returned by the United States Postal Service as not deliverable or when a provider has not submitted a claim for reimbursement from the program for one year. Prior to taking this action, the department shall use due diligence in attempting to contact the provider at its last known telephone number and to ascertain if the return by the United States Postal Service is by mistake and shall use due diligence in attempting to contact the provider by telephone or in writing to ascertain whether the provider wishes to continue to participate in the Medi-Cal program. If deactivation pursuant to this section occurs, the provider shall meet the requirements for reapplication as specified in regulation.
(4)For purposes of this subdivision:
(A)Mailing address means the address that the provider has identified to the department in its application for enrollment as the address at which it wishes to receive general program correspondence.
(B)Pay to address means the address that the provider has identified to the department in its application for enrollment as the address at which it wishes to receive warrants.
(C)Service address means the address that the provider has identified to the department in its application for enrollment as the address at which the provider will provide services to program beneficiaries.
(j)Subject to Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, the department may enter into contracts to secure consultant services or information technology including, but not limited to, software, data, or analytical techniques or methodologies for the purpose of fraud or abuse detection and prevention. Contracts under this section shall be exempt from the Public Contract Code.
(k)Except as provided in Section 1222.1 of the Health and Safety Code, enrolled providers shall attend specific orientation approved by the department in comprehensive family planning services. Enrolled providers who insert IUDs or contraceptive implants shall have received prior clinical training specific to these procedures.
(l)Upon receipt of reliable evidence that would be admissible under the administrative adjudication provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, of fraud or willful misrepresentation by a provider under the program or commencement of a suspension under Section 14123, the department may do any of the following:
(1)Collect any State-Only Family Planning program or Family Planning, Access, Care, and Treatment Program overpayment identified through an audit or examination, or any portion thereof from any provider. Notwithstanding Section 100171 of the Health and Safety Code, a provider may appeal the collection of overpayments under this section pursuant to procedures established in Article 5.3 (commencing with Section 14170) of Chapter 7 of Part 3 of Division 9. Overpayments collected under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings, if the findings are against the provider. Overpayments shall be returned to a provider with interest if findings are in favor of the provider.
(2)Withhold payment for any goods or services, or any portion thereof, from any State-Only Family Planning program or Family Planning, Access, Care, and Treatment Program provider. The department shall notify the provider within five days of any withholding of payment under this section. The notice shall do all of the following:
(A)State that payments are being withheld in accordance with this paragraph and that the withholding is for a temporary period and will not continue after it is determined that the evidence of fraud or willful misrepresentation is insufficient or when legal proceedings relating to the alleged fraud or willful misrepresentation are completed.
(B)Cite the circumstances under which the withholding of the payments will be terminated.
(C)Specify, when appropriate, the type or types of claimed payments being withheld.
(D)Inform the provider of the right to submit written evidence that is evidence that would be admissible under the administrative adjudication provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, for consideration by the department.
(3)Notwithstanding Section 100171 of the Health and Safety Code, a provider may appeal a withholding of payment under this section pursuant to Section 14043.65. Payments withheld under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings.
(m)As used in this section:
(1)Abuse means either of the following:
(A)Practices that are inconsistent with sound fiscal or business practices and result in unnecessary cost to the Medicaid program, the Medicare program, the Medi-Cal program, including the Family Planning, Access, Care, and Treatment Program, identified in subdivision (aa) of Section 14132, another states Medicaid program, or the State-Only Family Planning program, or other health care programs operated, or financed in whole or in part, by the federal government or any state or local agency in this state or any other state.
(B)Practices that are inconsistent with sound medical practices and result in reimbursement, by any of the programs referred to in subparagraph (A) or other health care programs operated, or financed in whole or in part, by the federal government or any state or local agency in this state or any other state, for services that are unnecessary or for substandard items or services that fail to meet professionally recognized standards for health care.
(2)Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or herself or some other person. It includes any act that constitutes fraud under applicable federal or state law.
(3)Provider means any individual, partnership, group, association, corporation, institution, or entity, and the officers, directors, owners, managing employees, or agents of any partnership, group, association, corporation, institution, or entity, that provides services, goods, supplies, or merchandise, directly or indirectly, to a beneficiary and that has been enrolled in the program.
(4)Convicted means any of the following:
(A)A judgment of conviction has been entered against an individual or entity by a federal, state, or local court, regardless of whether there is a post-trial motion or an appeal pending or the judgment of conviction or other record relating to the criminal conduct has been expunged or otherwise removed.
(B)A federal, state, or local court has made a finding of guilt against an individual or entity.
(C)A federal, state, or local court has accepted a plea of guilty or nolo contendere by an individual or entity.
(D)An individual or entity has entered into participation in a first offender, deferred adjudication, or other program or arrangement where judgment of conviction has been withheld.
(5)Professionally recognized standards of health care means statewide or national standards of care, whether in writing or not, that professional peers of the individual or entity whose provision of care is an issue, recognize as applying to those peers practicing or providing care within a state. When the United States Department of Health and Human Services has declared a treatment modality not to be safe and effective, practitioners that employ that treatment modality shall be deemed not to meet professionally recognized standards of health care. This definition shall not be construed to mean that all other treatments meet professionally recognized standards of care.
(6)Unnecessary or substandard items or services means those that are either of the following:
(A)Substantially in excess of the providers usual charges or costs for the items or services.
(B)Furnished, or caused to be furnished, to patients, whether or not covered by Medicare, Medicaid, or any of the state health care programs to which the definitions of applicant and provider apply, and which are substantially in excess of the patients needs, or of a quality that fails to meet professionally recognized standards of health care. The departments determination that the items or services furnished were excessive or of unacceptable quality shall be made on the basis of information, including sanction reports, from the following sources:
(i)The professional review organization for the area served by the individual or entity.
(ii)State or local licensing or certification authorities.
(iii)Fiscal agents or contractors, or private insurance companies.
(iv)State or local professional societies.
(v)Any other sources deemed appropriate by the department.
(7)Enrolled or enrollment in the program means authorized under any and all processes by the department or its agents or contractors to receive, directly or indirectly, reimbursement for the provision of services, goods, supplies, or merchandise to a program beneficiary.
(n)In lieu of, or in addition to, the imposition of any other sanctions available, including the imposition of a civil penalty under Sections 14123.2 or 14171.6, the program may impose on providers any or all of the penalties pursuant to Section 14123.25, in accordance with the provisions of that section. In addition, program providers shall be subject to the penalties contained in Section 14107.
(o)(1)Notwithstanding any other provision of law, every primary supplier of pharmaceuticals, medical equipment, or supplies shall maintain accounting records to demonstrate the manufacture, assembly, purchase, or acquisition and subsequent sale, of any pharmaceuticals, medical equipment, or supplies, to providers. Accounting records shall include, but not be limited to, inventory records, general ledgers, financial statements, purchase and sales journals, and invoices, prescription records, bills of lading, and delivery records.
(2)For purposes of this subdivision, the term primary supplier means any manufacturer, principal labeler, assembler, wholesaler, or retailer.
(3)Accounting records maintained pursuant to paragraph (1) shall be subject to audit or examination by the department or its agents. The audit or examination may include, but is not limited to, verification of what was claimed by the provider. These accounting records shall be maintained for three years from the date of sale or the date of service.
(p)Each provider of health care services rendered to any program beneficiary shall keep and maintain records of each service rendered, the beneficiary to whom rendered, the date, and such additional information as the department may by regulation require. Records required to be kept and maintained pursuant to this subdivision shall be retained by the provider for a period of three years from the date the service was rendered.
(q)A program provider applicant or a program provider shall furnish information or copies of records and documentation requested by the department. Failure to comply with the departments request shall be grounds for denial of the application or automatic disenrollment of the provider.
(r)A program provider may assign signature authority for transmission of claims to a billing agent subject to Sections 14040, 14040.1, and 14040.5.
(s)Moneys payable or rights existing under this division shall be subject to any claim, lien, or offset of the State of California, and any claim of the United States of America made pursuant to federal statute, but shall not otherwise be subject to enforcement of a money judgment or other legal process, and no transfer or assignment, at law or in equity, of any right of a provider of health care to any payment shall be enforceable against the state, a fiscal intermediary, or carrier.
(t)(1)(A)Notwithstanding any other law, a primary care clinic, as described in subdivision (a) of Section 1204 of the Health and Safety Code, or an affiliate clinic, as described in Section 1218.1 of the Health and Safety Code, that is seeking to enroll as a provider in both the Medi-Cal program and the Family PACT Program, shall submit one consolidated application for enrollment in both the Medi-Cal program and the Family PACT Program to the State Department of Public Health, using the forms described in Section 1222.1 of the Health and Safety Code. The effective date of enrollment for a clinic enrolling in both programs at the same time shall be the date the State Department of Public Health certifies the clinic for enrollment in those programs.
(B)A primary care clinic, as described in subdivision (a) of Section 1204 of the Health and Safety Code, or an affiliate clinic, as described in Section 1218.1 of the Health and Safety Code, that is enrolled in the Medi-Cal program and that is seeking to enroll as a provider in the Family PACT Program, shall submit an application for enrollment in the Family PACT Program to the State Department of Public Health using the forms described in Section 1222.1 of the Health and Safety Code. The effective date of enrollment in the Family PACT program for a clinic that was enrolled in the Medi-Cal program at the time it applied to the Family PACT Program shall be the date the State Department of Public Health certifies the clinic for enrollment in the Family PACT Program.
(2)Within 15 calendar days of receiving notification from the State Department of Public Health that a clinic described in subparagraph (A) or (B) of paragraph (1) is certified for enrollment, the department shall enroll the clinic in the Family PACT Program.
(3)A subsequent change to information reported on the initial enrollment application described in this subdivision shall be reported to the State Department of Public Health in a manner determined by the State Department of Public Health within 35 calendar days. Within 15 calendar days of receiving notification from the State Department of Public Health that a clinics reported changes are approved, the department shall update the clinics provider master file for the Medi-Cal program and the Family PACT Program enrollments, as applicable. A provider described in this subdivision that reports a change other than a change of ownership shall not be required to reenroll in either the Medi-Cal program or the Family PACT Program.
(u)Providers, or the enrolling entity, shall make available to all applicants and beneficiaries prior to, or concurrent with, enrollment, information on the manner in which to apply for insurance affordability programs, in a manner determined by the State Department of Health Care Services. The information provided shall include the manner in which applications can be submitted for insurance affordability programs, information about the open enrollment periods for the California Health Benefit Exchange, and the continuous enrollment aspect of the Medi-Cal program.
(a)(1)As part of the application for licensure either as a primary care clinic, as described in subdivision (a) of Section 1204, or as an affiliate clinic, as described in Section 1218.1, the department shall accept a consolidated application for enrollment in both the Medi-Cal program and the Family PACT Program that is submitted by a clinic pursuant to subparagraph (A) of paragraph (1) of subdivision (t) of Section 24005 of the Welfare and Institutions Code. The department shall review the clinics qualifications for enrollment in both the Medi-Cal program and the Family PACT Program, and, if approved, shall transmit its certification for enrollment in both programs to the State Department of Health Care Services within 15 calendar days of the date approval is granted.
(2)The department shall accept an application for enrollment in both the Medi-Cal program and the Family PACT Program, or for enrollment in the Family PACT Program, from a licensed primary care clinic, as described in subdivision (a) of Section 1204, or from a licensed affiliate clinic, as described in Section 1218.1. The department shall review the clinics qualifications for enrollment in the Medi-Cal program and the Family PACT Program, as applicable, and, if approved, shall transmit its certification for enrollment in those programs to the State Department of Health Care Services within 15 calendar days of the date approval is granted.
(b)If a clinic submits an initial application for enrollment in both the Medi-Cal program and the Family PACT Program pursuant to paragraph (1) or (2) of subdivision (a), the department shall apply the same certification date to its approval for enrollment in both programs.
(c)No later than June 30, 2016, the department shall develop a consolidated Medi-Cal program and Family PACT Program initial application form, and a Family PACT Program initial application form for a clinic already enrolled in the Medi-Cal program, subject to all of the following:
(1)The department shall not require an applicant for enrollment in the Family PACT Program to disclose any additional information beyond what was required of a community clinic for enrollment in the Family PACT Program as of December 31, 2014.
(2)The department shall not require an applicant to attend a provider orientation if the applicant is owned by a nonprofit corporation that owns at least one other primary care clinic that has held an active enrollment in the Family PACT Program for the immediately preceding five years, and during that period has had no demonstrated history of a repeated or uncorrected violation of this chapter or any regulation adopted after the enactment of this chapter that poses an immediate jeopardy to a patient, as that term is defined in subdivision (f) of Section 1218.1.
(d)Nothing in this section shall be construed to modify the requirement that the department issue a license to an affiliate clinic within 30 days of receipt of a completed application, as set forth in subdivision (d) of Section 1218.1.
(e)A subsequent change to information reported on the initial application described in this section shall be reported to the centralized application unit of the department within 35 calendar days. The department shall review the clinics changes, and, if approved, shall transmit its approval to the State Department of Health Care Services within 15 calendar days after approval is granted. A provider that reports a change under this section other than a change of ownership shall not be required to reenroll in either the Medi-Cal program or the Family PACT Program.
SEC. 2.Section 14043.17 of the Welfare and Institutions Code is amended to read:14043.17.(a)Notwithstanding any other law, within 30 15 calendar days of receiving confirmation of certification for enrollment as a Medi-Cal provider for a primary care clinic, as described in subdivision (a) of Section 1204 of the Health and Safety Code, or an affiliate primary care clinic that is licensed pursuant to Section 1218.1 of the Health and Safety Code, the department shall provide written notice to the applicant informing the applicant that its Medi-Cal enrollment is approved.
(b)The department shall enroll the affiliate primary care clinic or the affiliate clinic retroactive to the date of certification.
(c)This section shall not be construed to limit the departments authority pursuant to Section 14043.37, 14043.4, or 14043.7 to conduct background checks, preenrollment inspections, or unannounced visits.
SEC. 3.Section 24005 of the Welfare and Institutions Code is amended to read:24005.(a)This section shall apply to the Family Planning, Access, Care, and Treatment (Family PACT) Program identified in subdivision (aa) of Section 14132 and this program.
(b)Only licensed medical personnel with family planning skills, knowledge, and competency may provide the full range of family planning medical services covered in this program.
(c)Medi-Cal enrolled providers, as determined by the department, shall be eligible to provide family planning services under the program when these services are within their scope of practice and licensure. Those clinical providers electing to participate in the program and approved by the department shall provide the full scope of family planning education, counseling, and medical services specified for the program, either directly or by referral, consistent with standards of care issued by the department.
(d)The department shall require providers to enter into clinical agreements with the department to ensure compliance with standards and requirements to maintain the fiscal integrity of the program. Provider applicants, providers, and persons with an ownership or control interest, as defined in federal Medicaid regulations, shall be required to submit to the department their social security numbers to the full extent allowed under federal law. All state and federal statutes and regulations pertaining to the audit or examination of Medi-Cal providers shall apply to this program.
(e)Clinical provider agreements shall be signed by the provider under penalty of perjury. The department may screen applicants at the initial application and at any reapplication pursuant to requirements developed by the department to determine provider suitability for the program.
(f)The department may complete a background check on clinical provider applicants for the purpose of verifying the accuracy of information provided to the department for purposes of enrolling in the program and in order to prevent fraud and abuse. The background check may include, but not be limited to, unannounced onsite inspection prior to enrollment, review of business records, and data searches. If discrepancies are found to exist during the preenrollment period, the department may conduct additional inspections prior to enrollment. Failure to remediate significant discrepancies as prescribed by the director may result in denial of the application for enrollment. Providers that do not provide services consistent with the standards of care or that do not comply with the departments rules related to the fiscal integrity of the program may be disenrolled as a provider from the program at the sole discretion of the department.
(g)The department shall not enroll any applicant who, within the previous 10 years:
(1)Has been convicted of any felony or misdemeanor that involves fraud or abuse in any government program, that relates to neglect or abuse of a patient in connection with the delivery of a health care item or service, or that is in connection with the interference with, or obstruction of, any investigation into health care related fraud or abuse.
(2)Has been found liable for fraud or abuse in any civil proceeding, or that has entered into a settlement in lieu of conviction for fraud or abuse in any government program.
(h)In addition, the department may deny enrollment to any applicant that, at the time of application, is under investigation by the department or any local, state, or federal government law enforcement agency for fraud or abuse. The department shall not deny enrollment to an otherwise qualified applicant whose felony or misdemeanor charges did not result in a conviction solely on the basis of the prior charges. If it is discovered that a provider is under investigation by the department or any local, state, or federal government law enforcement agency for fraud or abuse, that provider shall be subject to immediate disenrollment from the program.
(i)(1)The program shall disenroll as a program provider any individual who, or any entity that, has a license, certificate, or other approval to provide health care, which is revoked or suspended by a federal, California, or other states licensing, certification, or other approval authority, has otherwise lost that license, certificate, or approval, or has surrendered that license, certificate, or approval while a disciplinary hearing on the license, certificate, or approval was pending. The disenrollment shall be effective on the date the license, certificate, or approval is revoked, lost, or surrendered.
(2)A provider shall be subject to disenrollment if the provider submits claims for payment for the services, goods, supplies, or merchandise provided, directly or indirectly, to a program beneficiary, by an individual or entity that has been previously suspended, excluded, or otherwise made ineligible to receive, directly or indirectly, reimbursement from the program or from the Medi-Cal program and the individual has previously been listed on either the Suspended and Ineligible Provider List, which is published by the department, to identify suspended and otherwise ineligible providers or any list published by the federal Office of the Inspector General regarding the suspension or exclusion of individuals or entities from the federal Medicare and Medicaid programs, to identify suspended, excluded, or otherwise ineligible providers.
(3)The department shall deactivate, immediately and without prior notice, the provider numbers used by a provider to obtain reimbursement from the program when warrants or documents mailed to a providers mailing address, its pay to address, or its service address, if any, are returned by the United States Postal Service as not deliverable or when a provider has not submitted a claim for reimbursement from the program for one year. Prior to taking this action, the department shall use due diligence in attempting to contact the provider at its last known telephone number and to ascertain if the return by the United States Postal Service is by mistake and shall use due diligence in attempting to contact the provider by telephone or in writing to ascertain whether the provider wishes to continue to participate in the Medi-Cal program. If deactivation pursuant to this section occurs, the provider shall meet the requirements for reapplication as specified in regulation.
(4)For purposes of this subdivision:
(A)Mailing address means the address that the provider has identified to the department in its application for enrollment as the address at which it wishes to receive general program correspondence.
(B)Pay to address means the address that the provider has identified to the department in its application for enrollment as the address at which it wishes to receive warrants.
(C)Service address means the address that the provider has identified to the department in its application for enrollment as the address at which the provider will provide services to program beneficiaries.
(j)Subject to Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, the department may enter into contracts to secure consultant services or information technology including, but not limited to, software, data, or analytical techniques or methodologies for the purpose of fraud or abuse detection and prevention. Contracts under this section shall be exempt from the Public Contract Code.
(k)Enrolled Except as provided in Section 1222.1 of the Health and Safety Code, enrolled providers shall attend specific orientation approved by the department in comprehensive family planning services. Enrolled providers who insert IUDs or contraceptive implants shall have received prior clinical training specific to these procedures.
(l)Upon receipt of reliable evidence that would be admissible under the administrative adjudication provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, of fraud or willful misrepresentation by a provider under the program or commencement of a suspension under Section 14123, the department may do any of the following:
(1)Collect any State-Only Family Planning program or Family Planning, Access, Care, and Treatment Program overpayment identified through an audit or examination, or any portion thereof from any provider. Notwithstanding Section 100171 of the Health and Safety Code, a provider may appeal the collection of overpayments under this section pursuant to procedures established in Article 5.3 (commencing with Section 14170) of Chapter 7 of Part 3 of Division 9. Overpayments collected under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings, if the findings are against the provider. Overpayments shall be returned to a provider with interest if findings are in favor of the provider.
(2)Withhold payment for any goods or services, or any portion thereof, from any State-Only Family Planning program or Family Planning, Access, Care, and Treatment Program provider. The department shall notify the provider within five days of any withholding of payment under this section. The notice shall do all of the following:
(A)State that payments are being withheld in accordance with this paragraph and that the withholding is for a temporary period and will not continue after it is determined that the evidence of fraud or willful misrepresentation is insufficient or when legal proceedings relating to the alleged fraud or willful misrepresentation are completed.
(B)Cite the circumstances under which the withholding of the payments will be terminated.
(C)Specify, when appropriate, the type or types of claimed payments being withheld.
(D)Inform the provider of the right to submit written evidence that is evidence that would be admissible under the administrative adjudication provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, for consideration by the department.
(3)Notwithstanding Section 100171 of the Health and Safety Code, a provider may appeal a withholding of payment under this section pursuant to Section 14043.65. Payments withheld under this section shall not be returned to the provider during the pendency of any appeal and may be offset to satisfy audit or appeal findings.
(m)As used in this section:
(1)Abuse means either of the following:
(A)Practices that are inconsistent with sound fiscal or business practices and result in unnecessary cost to the Medicaid program, the Medicare program, the Medi-Cal program, including the Family Planning, Access, Care, and Treatment Program, identified in subdivision (aa) of Section 14132, another states Medicaid program, or the State-Only Family Planning program, or other health care programs operated, or financed in whole or in part, by the federal government or any state or local agency in this state or any other state.
(B)Practices that are inconsistent with sound medical practices and result in reimbursement, by any of the programs referred to in subparagraph (A) or other health care programs operated, or financed in whole or in part, by the federal government or any state or local agency in this state or any other state, for services that are unnecessary or for substandard items or services that fail to meet professionally recognized standards for health care.
(2)Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or herself or some other person. It includes any act that constitutes fraud under applicable federal or state law.
(3)Provider means any individual, partnership, group, association, corporation, institution, or entity, and the officers, directors, owners, managing employees, or agents of any partnership, group, association, corporation, institution, or entity, that provides services, goods, supplies, or merchandise, directly or indirectly, to a beneficiary and that has been enrolled in the program.
(4)Convicted means any of the following:
(A)A judgment of conviction has been entered against an individual or entity by a federal, state, or local court, regardless of whether there is a post-trial motion or an appeal pending or the judgment of conviction or other record relating to the criminal conduct has been expunged or otherwise removed.
(B)A federal, state, or local court has made a finding of guilt against an individual or entity.
(C)A federal, state, or local court has accepted a plea of guilty or nolo contendere by an individual or entity.
(D)An individual or entity has entered into participation in a first offender, deferred adjudication, or other program or arrangement where judgment of conviction has been withheld.
(5)Professionally recognized standards of health care means statewide or national standards of care, whether in writing or not, that professional peers of the individual or entity whose provision of care is an issue, recognize as applying to those peers practicing or providing care within a state. When the United States Department of Health and Human Services has declared a treatment modality not to be safe and effective, practitioners that employ that treatment modality shall be deemed not to meet professionally recognized standards of health care. This definition shall not be construed to mean that all other treatments meet professionally recognized standards of care.
(6)Unnecessary or substandard items or services means those that are either of the following:
(A)Substantially in excess of the providers usual charges or costs for the items or services.
(B)Furnished, or caused to be furnished, to patients, whether or not covered by Medicare, Medicaid, or any of the state health care programs to which the definitions of applicant and provider apply, and which are substantially in excess of the patients needs, or of a quality that fails to meet professionally recognized standards of health care. The departments determination that the items or services furnished were excessive or of unacceptable quality shall be made on the basis of information, including sanction reports, from the following sources:
(i)The professional review organization for the area served by the individual or entity.
(ii)State or local licensing or certification authorities.
(iii)Fiscal agents or contractors, or private insurance companies.
(iv)State or local professional societies.
(v)Any other sources deemed appropriate by the department.
(7)Enrolled or enrollment in the program means authorized under any and all processes by the department or its agents or contractors to receive, directly or indirectly, reimbursement for the provision of services, goods, supplies, or merchandise to a program beneficiary.
(n)In lieu of, or in addition to, the imposition of any other sanctions available, including the imposition of a civil penalty under Sections 14123.2 or 14171.6, the program may impose on providers any or all of the penalties pursuant to Section 14123.25, in accordance with the provisions of that section. In addition, program providers shall be subject to the penalties contained in Section 14107.
(o)(1)Notwithstanding any other provision of law, every primary supplier of pharmaceuticals, medical equipment, or supplies shall maintain accounting records to demonstrate the manufacture, assembly, purchase, or acquisition and subsequent sale, of any pharmaceuticals, medical equipment, or supplies, to providers. Accounting records shall include, but not be limited to, inventory records, general ledgers, financial statements, purchase and sales journals, and invoices, prescription records, bills of lading, and delivery records.
(2)For purposes of this subdivision, the term primary supplier means any manufacturer, principal labeler, assembler, wholesaler, or retailer.
(3)Accounting records maintained pursuant to paragraph (1) shall be subject to audit or examination by the department or its agents. The audit or examination may include, but is not limited to, verification of what was claimed by the provider. These accounting records shall be maintained for three years from the date of sale or the date of service.
(p)Each provider of health care services rendered to any program beneficiary shall keep and maintain records of each service rendered, the beneficiary to whom rendered, the date, and such additional information as the department may by regulation require. Records required to be kept and maintained pursuant to this subdivision shall be retained by the provider for a period of three years from the date the service was rendered.
(q)A program provider applicant or a program provider shall furnish information or copies of records and documentation requested by the department. Failure to comply with the departments request shall be grounds for denial of the application or automatic disenrollment of the provider.
(r)A program provider may assign signature authority for transmission of claims to a billing agent subject to Sections 14040, 14040.1, and 14040.5.
(s)Moneys payable or rights existing under this division shall be subject to any claim, lien, or offset of the State of California, and any claim of the United States of America made pursuant to federal statute, but shall not otherwise be subject to enforcement of a money judgment or other legal process, and no transfer or assignment, at law or in equity, of any right of a provider of health care to any payment shall be enforceable against the state, a fiscal intermediary, or carrier.
(t)(1)Notwithstanding any other law, within 30 calendar days of receiving a complete application for enrollment into the Family PACT Program from an affiliate primary care clinic licensed under Section 1218.1 of the Health and Safety Code, the department shall do one of the following:
(A)Approve the providers Family PACT Program application, provided the applicant meets the Family PACT Program provider enrollment requirements set forth in this section.
(B)If the provider is an enrolled Medi-Cal provider in good standing, notify the applicant in writing of any discrepancies in the Family PACT Program enrollment application. The applicant shall have 30 days from the date of written notice to correct any identified discrepancies. Upon receipt of all requested corrections, the department shall approve the application within 30 calendar days.
(C)If the provider is not an enrolled Medi-Cal provider in good standing, the department shall not proceed with the actions described in this subdivision until the department receives confirmation of good standing and enrollment as a Medi-Cal provider.
(2)The effective date of enrollment into the Family PACT Program shall be the later of the date the department receives confirmation of enrollment as a Medi-Cal provider, or the date the applicant meets all Family PACT Program provider enrollment requirements set forth in this section.
(t)(1)(A)Notwithstanding any other law, a primary care clinic, as described in subdivision (a) of Section 1204 of the Health and Safety Code, or an affiliate clinic, as described in Section 1218.1 of the Health and Safety Code, that is seeking to enroll as a provider in both the Medi-Cal program and the Family PACT Program, shall submit one consolidated application for enrollment in both the Medi-Cal program and the Family PACT Program to the State Department of Public Health, using the forms described in Section 1222.1 of the Health and Safety Code. The effective date of enrollment for a clinic enrolling in both programs at the same time shall be the date the State Department of Public Health certifies the clinic for enrollment in those programs.
(B)A primary care clinic, as described in subdivision (a) of Section 1204 of the Health and Safety Code, or an affiliate clinic, as described in Section 1218.1 of the Health and Safety Code, that is enrolled in the Medi-Cal program and that is seeking to enroll as a provider in the Family PACT Program, shall submit an application for enrollment in the Family PACT Program to the State Department of Public Health using the forms described in Section 1222.1 of the Health and Safety Code. The effective date of enrollment in the Family PACT program for a clinic that was enrolled in the Medi-Cal program at the time it applied to the Family PACT Program shall be the date the State Department of Public Health certifies the clinic for enrollment in the Family PACT Program.
(2)Within 15 calendar days of receiving notification from the State Department of Public Health that a clinic described in subparagraph (A) or (B) of paragraph (1) is certified for enrollment, the department shall enroll the clinic in the Family PACT Program.
(3)A subsequent change to information reported on the initial enrollment application described in this subdivision shall be reported to the State Department of Public Health in a manner determined by the State Department of Public Health within 35 calendar days. Within 15 calendar days of receiving notification from the State Department of Public Health that a clinics reported changes are approved, the department shall update the clinics provider master file for the Medi-Cal program and the Family PACT Program enrollments, as applicable. A provider described in this subdivision that reports a change other than a change of ownership shall not be required to reenroll in either the Medi-Cal program or the Family PACT Program.
(u)Providers, or the enrolling entity, shall make available to all applicants and beneficiaries prior to, or concurrent with, enrollment, information on the manner in which to apply for insurance affordability programs, in a manner determined by the State Department of Health Care Services. The information provided shall include the manner in which applications can be submitted for insurance affordability programs, information about the open enrollment periods for the California Health Benefit Exchange, and the continuous enrollment aspect of the Medi-Cal program.
SECTION 1.Section 14132.01 of the Welfare and Institutions Code is amended to read:14132.01.(a)Notwithstanding any other law, a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code shall bill and be reimbursed, as described in this section, for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program.
(b)(1)A clinic described in subdivision (a) shall bill the Medi-Cal program and Family PACT Waiver Program for drugs and supplies covered under those programs at the lesser of cost or the clinics usual charge made to the general public.
(2)For purposes of this section, cost means an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee. The actual acquisition cost of a drug or supply shall be calculated not less than annually. The clinic dispensing fee shall be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
(c)Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate.
(d)A clinic described in subdivision (a) that furnishes services free of charge, or at a nominal charge, as defined in subsection (a) of Section 413.13 of Title 42 of the Code of Federal Regulations, or that can demonstrate to the department, upon request, that it serves primarily low-income patients, and its customary practice is to charge patients on the basis of their ability to pay, shall not be subject to reimbursement reductions based on its usual charge to the general public.
(e)Federally qualified health centers and rural health clinics that are clinics as described in subdivision (a) may bill and be reimbursed as described in this section, upon electing to be reimbursed for pharmaceutical goods and services delivered through their dispensaries on a fee-for-service basis, as permitted by subdivision (k) of Section 14132.100.
(f)A clinic that otherwise meets the qualifications set forth in subdivision (a), that is eligible to, but that has elected not to, utilize drugs purchased under the 340B Discount Drug Program for its Medi-Cal patients, shall provide notification to the Health Resources and Services Administrations Office of Pharmacy Affairs that it is utilizing non-340B drugs for its Medi-Cal patients in the manner and to the extent required by federal law.
(a)Notwithstanding any other law, a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code shall bill and be reimbursed, as described in this section, for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program.
(b)(1)With respect to those drugs that are subject to a rebate under Section 1396r-8 of Title 42 of the United States Code, a A clinic described in subdivision (a) shall bill the Medi-Cal program and Family PACT Waiver Program for drugs and supplies covered under those programs at the lesser of cost or the clinics usual charge made to the general public.
(2)For purposes of this section, cost means an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee. The actual acquisition cost of a drug or supply shall be calculated not less than annually. The clinic dispensing fee shall be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
(c)Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate.
(d)A clinic described in subdivision (a) that furnishes services free of charge, or at a nominal charge, as defined in subsection (a) of Section 413.13 of Title 42 of the Code of Federal Regulations, or that can demonstrate to the department, upon request, that it serves primarily low-income patients, and its customary practice is to charge patients on the basis of their ability to pay, shall not be subject to reimbursement reductions based on its usual charge to the general public.
(e)Federally qualified health centers and rural health clinics that are clinics as described in subdivision (a) may bill and be reimbursed as described in this section, upon electing to be reimbursed for pharmaceutical goods and services delivered through their dispensaries on a fee-for-service basis, as permitted by subdivision (k) of Section 14132.100.
(f)A clinic that otherwise meets the qualifications set forth in subdivision (a), that is eligible to, but that has elected not to, utilize drugs purchased under the 340B Discount Drug Program for its Medi-Cal patients, shall provide notification to the Health Resources and Services Administrations Office of Pharmacy Affairs that it is utilizing non-340B drugs for its Medi-Cal patients in the manner and to the extent required by federal law.
(a)Notwithstanding any other law, a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code shall bill and be reimbursed, as described in this section, for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program.
(b)(1)A With respect to those drugs that are subject to a rebate under Section 1396r-8 of Title 42 of the United States Code, a clinic described in subdivision (a) shall bill the Medi-Cal program and Family PACT Waiver Program for drugs and supplies covered under those programs at the lesser of cost or the clinics usual charge made to the general public.
(2)For purposes of this section, cost means an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee. The actual acquisition cost of a drug or supply shall be calculated not less than annually. The clinic dispensing fee shall be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
(c)Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate.
(d)A clinic described in subdivision (a) that furnishes services free of charge, or at a nominal charge, as defined in subsection (a) of Section 413.13 of Title 42 of the Code of Federal Regulations, or that can demonstrate to the department, upon request, that it serves primarily low-income patients, and its customary practice is to charge patients on the basis of their ability to pay, shall not be subject to reimbursement reductions based on its usual charge to the general public.
(e)Federally qualified health centers and rural health clinics that are clinics as described in subdivision (a) may bill and be reimbursed as described in this section, upon electing to be reimbursed for pharmaceutical goods and services delivered through their dispensaries on a fee-for-service basis, as permitted by subdivision (k) of Section 14132.100.
(f)A clinic that otherwise meets the qualifications set forth in subdivision (a), that is eligible to, but that has elected not to, utilize drugs purchased under the 340B Discount Drug Program for its Medi-Cal patients, shall provide notification to the Health Resources and Services Administrations Office of Pharmacy Affairs that it is utilizing non-340B drugs for its Medi-Cal patients in the manner and to the extent required by federal law.
(a)Notwithstanding any other provision of law, a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code shall bill and be reimbursed, as described in this section, for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program.
(b)(1)A clinic described in subdivision (a) shall bill the Medi-Cal program and Family PACT Waiver Program for drugs and supplies covered under those programs at the lesser of cost or the clinics usual charge made to the general public.
(2)For purposes of this section, cost means an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed twelve dollars ($12) per billing unit as identified in either the Family PACT Policies, Procedures, and Billing Instructions Manual, or the Medi-Cal Inpatient/Outpatient Provider Manual governing outpatient clinic billing for drugs and supplies, as applicable. For purposes of this section, cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of five or less days from the date medically indicated means actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed seventeen dollars ($17) per prescription. Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate, and shall not exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program. fee. The actual acquisition cost of a drug or supply shall be calculated not less than annually. The clinic dispensing fee shall be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
(c)Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate.
(c)
(d)A clinic described in subdivision (a) that furnishes services free of charge, or at a nominal charge, as defined in subsection (a) of Section 413.13 of Title 42 of the Code of Federal Regulations, or that can demonstrate to the department, upon request, that it serves primarily low-income patients, and its customary practice is to charge patients on the basis of their ability to pay, shall not be subject to reimbursement reductions based on its usual charge to the general public.
(d)
(e)Federally qualified health centers and rural health clinics that are clinics as described in subdivision (a) may bill and be reimbursed as described in this section, upon electing to be reimbursed for pharmaceutical goods and services on a fee-for-service basis, as permitted by subdivision (k) of Section 14132.100.
(e)
(f)A clinic that otherwise meets the qualifications set forth in subdivision (a), that is eligible to, but that has elected not to, utilize drugs purchased under the 340B Discount Drug Program for its Medi-Cal patients, shall provide notification to the Health Resources and Services Administrations Office of Pharmacy Affairs that it is utilizing non-340B drugs for its Medi-Cal patients in the manner and to the extent required by federal law.
|
Date
|
Status
|
|---|---|
| May 28, 2015 | From committee: Do pass as amended. (Ayes 5. Noes 1. Page 1154.) (May 28). |
| Aug 11, 2016 | August 11 hearing. Held in committee and under submission. |
| 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. |
| Aug 26, 2015 | August 26 hearing postponed by committee. |
| Aug 24, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| Jul 8, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 18. Noes 0.) (July 7). Re-referred to Com. on APPR. |
| Jun 18, 2015 | Referred to Com. on HEALTH. |
| Jun 2, 2015 | Read third time. Passed. (Ayes 27. Noes 4.) Ordered to the Assembly. |
| Jun 2, 2015 | Read third time. Passed. (Ayes 27. Noes 4. Page 1254.) Ordered to the Assembly. |
| Jun 2, 2015 | In Assembly. Read first time. Held at Desk. |
| Jun 1, 2015 | Read second time and amended. Ordered to third reading. |
| May 28, 2015 | From committee: Do pass as amended. (Ayes 5. Noes 1.) (May 28). |
| Feb 25, 2015 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| May 23, 2015 | Set for hearing May 28. |
| May 11, 2015 | May 11 hearing: Placed on APPR. suspense file. |
| May 1, 2015 | Set for hearing May 11. |
| Apr 30, 2015 | May 4 hearing postponed by committee. |
| Apr 24, 2015 | Set for hearing May 4. |
| Apr 16, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0. Page 651.) (April 15). Re-referred to Com. on APPR. |
| Apr 6, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| Mar 27, 2015 | Set for hearing April 15. |
| Mar 26, 2015 | April 8 set for first hearing canceled at the request of author. |
| Mar 20, 2015 | Set for hearing April 8. |
| Mar 5, 2015 | Referred to Com. on HEALTH. |
| Feb 26, 2015 | From printer. May be acted upon on or after March 28. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jul 7, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Health |
Passed |
|
| Jun 2, 2015 | Senate 3rd Reading SB447 Allen | Senate Floor |
Passed |
|
| May 28, 2015 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| May 11, 2015 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 15, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | 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
|
|---|---|---|
| American Federation Of State, County And Municipal Employees, Afl-Cio | ** Support | Jun 2, 2015 |
| California Family Health Council Inc. | ** Support | Jun 2, 2015 |
| California Primary Care Association | * Support | Jul 7, 2015 |
| Community Clinic Association of Los Angeles | ** Support | Jul 7, 2015 |
| Planned Parenthood Action Fund of the Pacific Southwest | ** Support | Jul 7, 2015 |
| Planned Parenthood Advocacy Project Los Angeles County | ** Support | Jul 7, 2015 |
| Planned Parenthood Affiliates Of California | ** Support | Jul 7, 2015 |
| Planned Parenthood Mar Monte | ** Support | Jul 7, 2015 |
| Planned Parenthood Northern California Action Fund | ** Support | Jul 7, 2015 |
| Planned Parenthood Pasadena and San Gabriel Valley | ** Support | Jul 7, 2015 |
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SBPCA Bill Id:SB 447
Author:(Allen) – As Amended Ver:August 1, 2016
Policy Committee: | Health | Vote: | 18 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill revises the Medi-Cal reimbursement methodology for community clinics, free clinics, and intermittent clinics (clinics) that dispense drugs, with different methodologies for contraceptive versus non-contraceptive drugs. Specifically, this bill makes the following changes:
- For contraceptive drugs, devices, and supplies, changes the reimbursement methodology from a more complicated methodology (which accounts for the acquisition cost of a drug, various dispensing fees, and defines allowable billing and reimbursement amounts as "the lesser of" specified amounts), to one that simply reimburses for contraceptive drugs, devices, and supplies at the Medi-Cal rate.
- For non-contraceptive drugs, devices, and supplies:
- Removes current limits on dispensing fees, and leaves dispensing fee amounts at the discretion of the Department of Health Care Services (DHCS) (current law specifies a limit of $12).
- Specifies if DHCS does not identify dispensing fees in certain provider manuals, the dispensing fee is the difference between the actual acquisition cost and the Medi-Cal reimbursement rate, which essentially allows for reimbursement at the Medi-Cal rate.
- Expands the section governing clinic reimbursement to "devices" (current law only specifies drugs and supplies).
- Requires DHCS to seek federal approval, authorizes non-regulatory means of implementing the changes, and specifies the section is only to be implemented if, and to the extent, federal funds are available and federal approvals have been obtained.
FISCAL EFFECT:
- For contraceptive drugs, devices, and supplies, increased Medi-Cal drug costs projected at $49 million ($11 million GF) plus an additional $3.9 million GF impact from lost rebate revenue based on an assumption that a slightly higher number of drugs will be dispensed by clinics instead of being filled via prescription in pharmacies.
- For all other non-contraceptive drugs, devices, and supplies, the bill could result in additional unknown cost pressure to the extent dispensing fees are increased. This bill removes limits on dispensing fees and authorizes DHCS to define fee amounts (GF/federal).
COMMENTS:
- Purpose. The author states the current billing system for drugs dispensed on-site at clinics is overly complex and burdensome. In addition, the author contends the system leads to numerous billing errors which require staff time at both the clinic and the state to resolve. These errors can take months to resolve and chronically deny the clinics Medi-Cal fees to which they are entitled. This bill seeks to simplify reimbursement rates for family planning drugs. In so doing, it also increases reimbursement overall. This bill is sponsored by Planned Parenthood Affiliates of California.
- Background. A physician-administered drug is any covered outpatient drug provided or administered to a Medi-Cal beneficiary and billed by a provider other than a pharmacy. In 2004, legislation provided for a dispensing fee through Medi-Cal and Family PACT for physician-administered drugs dispensed by a community clinic, a free clinic or an intermittent clinic. Drugs reimbursed under these provisions are typically birth control medication (oral contraception, emergency contraception and birth control patches and rings) and antibiotics.
Current law sets limits on both what clinics are allowed to bill, and what DHCS must reimburse. Under existing law, DHCS reimburses at the lower of the amount billed or the Medi-Cal reimbursement rate, except that reimbursement cannot exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program. The amount billed is limited to the lesser of (a) the acquisition cost plus a dispensing fee or (b) the usual amount billed to the public. The acquisition cost can vary by the type of clinic purchasing (for example, some clinics may receive volume discounts from drug manufacturers). Dispensing fees vary by the type of drug or supply, but not by type of clinic. The Medi-Cal rate is higher in many cases that what clinics are allowed to bill based on their drug acquisition costs.
This bill eliminates entirely the reimbursement structure described above with respect to contraceptive drugs, and makes changes to the dispensing fees for all other drugs.
- Recent Amendments. This bill was heard in substantially the same form in the Assembly Health Committee on July 8, 2015. Since that date, it was amended to a different subject but never heard in this committee, and was subsequently amended on August 1, 2016, back to a form very similar to the version heard in the Assembly Health Committee. Today is the bill's first hearing in this committee.
- Related Budget Action. A substantially similar proposal was adopted by the Assembly Budget Subcommittee #1 on Health and Human Services this year. The proposal was discussed in the Budget Conference Committee but was not included in the final 2016-17 budget.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
SB 447
Page 5
Date of Hearing: July 7, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
SB 447
(Allen) – As Amended June 1, 2015
SENATE VOTE: 27-4
SUBJECT: Medi-Cal: clinics: drugs and supplies.
SUMMARY:
Revises the Medi-Cal and
Family Planning, Access, Care, and Treatment (Family PACT)
reimbursement formula for drugs and supplies dispensed by specified
clinics. Specifically, this bill:
Defines “cost” as the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee, for the purposes of reimbursement by the Department of Health Care Services (DHCS) to specified clinics for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program.
Requires the actual acquisition cost of a drug or supply to be calculated at least once a year.
Defines the clinic dispensing fee as the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate. Removes caps to clinic dispensing fees.
Requires the reimbursement provided by DHCS to be equal to the amount billed or the Medi-Cal reimbursement rate, whichever is less.
Clarifies that clinics designated as federally qualified health centers and rural health clinics are authorized to bill and be reimbursed upon electing to be reimbursed for pharmaceutical goods and services on a fee-for-service basis that are specifically delivered through their dispensaries.
EXISTING LAW:
Establishes the Medi-Cal program under the direction of DHCS to provide low-income qualifying individuals health care and a uniform schedule of benefits.
Establishes the Family PACT program under the direction of the Office of Family Planning to provide eligible low-income individuals comprehensive family planning services.
Requires licensed community clinics, free clinics, and intermittent clinics (clinics) to bill and be reimbursed for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program at either cost or the clinic’s usual charge made to the general public, whichever is less.
Defines “cost” as both of the following:
An amount equal to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee which does not exceed $12 per billing unit, as defined; and,
The actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription, for a take-home drug that is dispensed for use by the patient within a specific timeframe of five days or less from the date medically indicated.
Requires the reimbursement to be the Medi-Cal reimbursement rate or the amount billed, whichever is less, and for reimbursement to not exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Prohibits DHCS from subjecting a clinic to reimbursement reductions based on a clinic’s usual charge to the general public, if a clinic either: a) furnishes services free of charge; b) furnishes services at a nominal charge, as defined by federal law; or, c) can demonstrate, upon request, that it serves primarily low-income patients, and its customary practice is to charge patients based on their ability to pay.
Authorizes clinics designated as federally qualified health centers or rural health clinics to bill and be reimbursed if they choose to be reimbursed for pharmaceutical goods and services on a fee-for-service basis.
Requires a clinic that is eligible to, but has not chosen to, utilize drugs purchase under the federal drug discount program (340B Discount Drug Program) for its Medi-Cal patients, to provide notification to the federal Health Resources and Services Administration’s Office of Pharmacy Affairs that it is using non-340B drugs for its Medi-Cal patients in the manner and to the extent required by federal law.
FISCAL EFFECT: According to the Senate Appropriations Committee, increased annual costs of at least $6 million (General Fund (GF)) and $19 million (federal funds) per year to pay increased reimbursement rates for drugs covered by Medi-Cal. Would modify the existing statutory limits on Medi-Cal reimbursement for drugs dispensed by certain clinics. In doing so, this bill will increase the payment rates by the state for certain drugs. The cost estimates above are based on 2013-14 expenditures for contraceptive drugs and drugs covered under the Medi-Cal and Family PACT program for contraceptive drugs and drugs related to family-planning services. Because this bill does not specifically limit the increased reimbursement to those types of drugs, it is possible that actual costs could be lager. Minor administrative costs to revise existing payment rules and procedures by DHCS (GF and federal funds).
COMMENTS:
PURPOSE OF THIS BILL. According to the author, California’s 1152 community health clinics offer a unique option for low-income patients to receive quality, affordable medical care. The author contends clinics that dispense medication onsite provide the additional convenience of allowing patients to leave their health care provider with medication in hand. The author maintains that this has led to improved access to health care and better patient health outcomes. The author explains the current billing system the clinics must use is overly complex and leads to numerous billing errors which require staff resources for both the clinics and the state. The author states these errors can take months to resolve and chronically deny clinics the fees to which they are entitled.
The author points to existing law, stating community clinics are
currently allowed to receive a dispensing fee in addition to the
purchasing cost of the medications they dispense to Medi-Cal and
Family PACT patients, which enables and encourages clinics to
dispense medication onsite. The author states the original intent of
the statutes related to clinic dispensing fees was for clinics to
recover the cost of storing and dispensing the drugs and to provide
clinics with funds to either expand services or increase the number
of patients they could serve. The author contends further clarity is
needed to define cost in existing law; in some cases clinics are only
reimbursed for the purchasing cost of a drug and without any
additional funds to cover the overhead needed to store the drug or
pay a provider to dispense it to patients. The author concludes this
bill will clarify the obligation of DHCS to provide a reasonable
dispensing fee and specifically set that fee.
BACKGROUND.
Physician-administered drugs. A physician-administered drug is any covered outpatient drug provided or administered to a recipient, and billed by a provider other than a pharmacy. Such providers include, but are not limited to, physician offices, clinics, and hospitals. A covered outpatient drug is broadly defined as a drug that may be dispensed only upon prescription, and is approved for safety and effectiveness as a prescription drug under the Federal Food, Drug and Cosmetic Act. Physician-administered drugs include both injectable and non-injectable drugs.
AB 2151 (Jackson), Chapter 2051, Statutes of 2004, provided a
dispensing fee through Medi-Cal and Family PACT for
physician-administered drugs dispensed by a community clinic, a free
clinic or an intermittent clinic. Prior to the enactment of AB 2151,
Medi-Cal regulations prohibited a dispensing fee or mark-up for
take-home drugs dispensed by a clinic. The reimbursement provisions
of AB 2151 were modified the following year by AB 77 (Frommer),
Chapter 503, Statutes of 2005. Drugs reimbursed under these
provisions are typically birth control medication (oral
contraception, emergency contraception and birth control patches and
rings) and antibiotics.
340B drug pricing program. The 340B Drug Pricing Program is a federal program that requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. The 340B Program enables covered entities to stretch federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The program provides access to reduced price prescription drugs to over 16,869 health care facilities (as of October 2011) certified by the U.S. Department of Health and Human Services as covered entities. These clinics, centers, and hospitals in turn serve more than 10 million people in all 50 states, plus commonwealths and territories.
Clinic reimbursements. Under existing law, clinics bill at the lower of cost or the usual charge to the public. “Cost” is defined to include a maximum dispensing fee amount per unit of $12 (an example of a unit would be calendar month’s supply). There is a separate maximum dispensing fee amount of $17 for emergency contraception.
Existing law also requires DHCS to reimburse at the lower of the amount billed or the Medi-Cal reimbursement rate, except that reimbursement cannot exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program. The sponsor of this bill (Planned Parenthood Affiliates of California PPAC)) indicates this bill deletes the reference to the retail pharmacy cap as DHCS has not implemented this cap. The acquisition cost can vary by the type of clinic purchasing (for example, some clinics may receive volume discounts from drug manufacturers). Dispensing fees vary by the type of drug or supply, but not by type of clinic. Under this bill, the clinic dispensing fee is defined as the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
SUPPORT. PPAC, the sponsor of this bill, state this bill will streamline the process that community clinics use to bill and be reimbursed for medications that are dispensed onsite. The sponsor maintains the current reimbursement process is complicated and often takes month or years to complete, leaving Planned Parenthood health clinics with millions of dollars in outstanding reimbursements owed to them. The sponsor contends that maintaining a reimbursement system that denies clinics a reasonable dispensing fee undermines the ability of clinics to provide quality, low cost care to patients who need it. The sponsor concludes this bill will simplify the existing reimbursement system by setting the dispensing fee at the difference between the acquisition cost and the Medi-Cal reimbursement rate, allowing clinics to bill and be reimbursed at one rate.
Supporters of this bill state California’s community clinics and
health centers offer a unique option for low-income patients to
receive quality, affordable medical care. Supporters contend clinics
that dispense medication onsite provide patients with the added
convenience of leaving their health care provider with their
medication in hand, which removes barriers to care, increases access
to care, and improves health outcomes. Supporters state this bill
will help provide consistent and equitable reimbursement to clinics
for the health care services they provide, and reduce the
administrative burden clinics face when dispensing medication.
PREVIOUS LEGISLATION.
AB 2340 (Garcia) of 2014 was gutted and amended last year in the Senate Health Committee with the contents of the introduced version of this bill, but was never heard.
SB 77 revises the reimbursement formulary for federally qualified health centers and rural health clinics.
AB 2151 establishes the reimbursement formulary for community care clinics, free clinics, and intermittent clinics that dispense prescription drugs in the Medi-Cal and Family PACT program, including a dispensing fee for physician-administered drugs.
REGISTERED SUPPORT / OPPOSITION:
Support
Planned Parenthood Affiliates of California (sponsor)
California Primary
Care Association
Community Action Fund of Planned Parenthood of
Orange and San Bernardino Counties
Community Clinic Association
of Los Angeles
Planned Parenthood Action Fund of the Pacific
Southwest
Planned Parenthood Action Fund of Santa Barbara,
Ventura, and San Luis Obispo Counties, Inc.
Planned Parenthood
Advocacy Project Los Angeles County
Planned Parenthood Mar Monte
Planned Parenthood Northern California Action Fund
Planned
Parenthood Pasadena and San Gabriel Valley
Opposition
None on file.
Analysis Prepared by: An-Chi Tsou / HEALTH / (916) 319-2097
SB 447
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: SB 447
Amended: 6/1/15
SENATE HEALTH COMMITTEE: 9-0, 4/15/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 5-1, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Nielsen
NO VOTE RECORDED: Bates
SUBJECT: Medi-Cal: clinics: drugs and supplies
SOURCE: Planned Parenthood Affiliates of California
DIGEST: This bill revises the Medi-Cal and Family Planning Access and Treatment reimbursement formula for drugs and supplies dispensed by specified clinics by requiring the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate, and removes the maximum dispensing fee caps in existing law.
Existing law:
Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions.
Establishes the Family Planning Access and Treatment Program (Family PACT Program) to provide comprehensive clinical family planning services to individuals who meet specified income requirements.
Requires a community clinic, a free clinic or an intermittent clinic to be reimbursed for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program from exceeding the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Defines “cost” for purposes of 3) above as:
An amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit as identified in either the Family PACT Policies, Procedures, and Billing Instructions Manual, or the Medi-Cal Inpatient/Outpatient Provider Manual governing outpatient clinic billing for drugs and supplies, as applicable; and,
The actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription for a take-home drug that is dispensed for use by the patient within a specific timeframe of five or less days from the date medically indicated (effectively, emergency contraception).
Requires reimbursement to be at the lesser of the amount billed or the Medi-Cal reimbursement rate. Prohibits reimbursement from exceeding the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Allows federally qualified health centers (FQHCs) and rural health clinics (RHCs) that are community clinics, free clinics or intermittent clinics to bill and be reimbursed under the above-described provisions, upon electing to be reimbursed for pharmaceutical goods and services on a fee-for-service basis.
This bill:
Revises the Medi-Cal and Family PACT reimbursement formula for drugs and supplies dispensed by specified clinics by requiring the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
Deletes the $12 and $17 maximum dispensing fee caps in existing law.
Deletes a prohibition on reimbursement exceeding the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Requires the actual acquisition cost of drugs and supplies to be calculated not less than annually.
Clarifies that the authority of FQHCs and RHCs that are authorized to bill for a dispensing fee under the above-described provisions of existing law is for pharmaceutical goods and services dispensed through their dispensaries.
Background
A physician-administered drug is any covered outpatient drug provided or administered to a Medi-Cal beneficiary and billed by a provider other than a pharmacy. AB 2151 (Jackson, Chapter 2051, Statutes of 2004) provided a dispensing fee through Medi-Cal and Family PACT for physician-administered drugs dispensed by a community clinic, a free clinic or an intermittent clinic. Prior to the enactment of AB 2151, Medi-Cal regulations prohibited a dispensing fee or mark-up for take-home drugs dispensed by a clinic. The reimbursement provisions of AB 2151 were modified the following year by SB 77 (Frommer, Chapter 503, Statutes of 2005). Drugs reimbursed under these provisions are typically birth control medication (oral contraception, emergency contraception and birth control patches and rings) and antibiotics.
Change in reimbursement made by bill. This bill redefines “cost” for purposes of the physician administered drugs and supplies in clinics affected by this bill. Under existing law, clinics bill at the lower of cost or the usual charge to the public. “Cost” is defined to include a maximum dispensing fee amount per unit of $12 (an example of a unit would be calendar month’s supply). There is a separate maximum dispensing fee amount of $17 for emergency contraception.
Under existing law, DHCS reimburses at the lower of the amount billed or the Medi-Cal reimbursement rate, except that reimbursement cannot exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program. The sponsor of this bill (Planned Parenthood Affiliates of California) indicates this bill deletes the reference to the retail pharmacy cap as DHCS has not implemented this cap. The acquisition cost can vary by the type of clinic purchasing (for example, some clinics may receive volume discounts from drug manufacturers). Dispensing fees vary by the type of drug or supply, but not by type of clinic.
Under this bill, the clinic dispensing fee is the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate. One example, provided by an affiliate clinic of the sponsor, of the change in reimbursement for two types of drugs dispensed by clinics and how the reimbursement would change under this bill is as follows:
Type of Medication |
Medi-Cal rate on file |
Current reimbursement amount billed (cost + dispensing fee) |
Current reimbursement |
Amount billed and reimbursed under SB 447 (the Medi-Cal rate on file) |
Oral Contraceptive |
$12 |
$22 |
$12 |
$12 |
Emergency contraceptive |
$31 |
$22.75 |
$22.75 |
$31 |
Comments
Author’s statement. According to the author, California’s 1,152 community health clinics offer a unique option for low-income patients to receive quality, affordable medical care. Clinics that dispense medication onsite provide the added benefit of a “one stop shop” that allows patients to leave their health care provider with mediation in hand. This convenience has led to improved access to health care and to better patient health outcomes. Existing law enables these community clinics to receive a dispensing fee in addition to the purchasing cost of the medications they dispense to Medi-Cal and Family PACT patients. This enables and encourages clinics to dispense medication onsite. However, the current billing system the clinics must use is overly complex, and leads to numerous billing errors which require staff time at both the clinic and the state to resolve. These errors can take months to resolve and chronically deny the clinics Medi-Cal fees to which they are entitled.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, increased annual costs of at least $6 million (General Fund) and $19 million (federal funds) per year to pay increased reimbursement rates for drugs covered by Medi-Cal. This bill modifies the existing statutory limits on Medi-Cal reimbursement for drugs dispensed by certain clinics. In doing so, this bill will increase the payment rates by the state for certain drugs. The cost estimates above are based on 2013-14 expenditures for contraceptive drugs and drugs covered under the Medi-Cal and Family PACT Program for contraceptive drugs and drugs related to family-planning services. Because this bill does not specifically limit the increased reimbursement to those types of drugs, it is possible that actual costs could be lager. Minor administrative costs to revise existing payment rules and procedures by the DHCS (General Fund and federal funds).
Planned Parenthood Affiliates of California (source)
American Federation of State, County and Municipal Employees, AFL-CIO
California Family Health Council
California Primary Care Association
Community Action Fund of Planned Parenthood of Orange and San Bernardino Counties
Planned Parenthood Action Fund of the Pacific Southwest
Planned Parenthood Los Angeles
Planned Parenthood Mar Monte
Planned Parenthood Northern California Action Fund
Planned Parenthood Pasadena and San Gabriel Valley
OPPOSITION: (Verified 5/28/15)
None received
ARGUMENTS IN SUPPORT: This bill is sponsored by Planned Parenthood Affiliates of California (PPAC), which argues this bill will streamline the process that community clinics use to bill and be reimbursed for medications that are dispensed onsite. PPAC states community clinics that dispense drugs offer a “one stop shop” that removes barriers to care, improving access and patient health outcomes, but the complicated system that denies clinics a dispensing fee undermines their ability to provide quality, low cost care to those who need it. PPAC states the actual acquisition cost of a drug and the Medi-Cal rate are reevaluated at least quarterly, and these shifting amounts, along with the “lesser of” standard in existing law for both billing and reimbursement, makes it nearly impossible for its clinics to budget, and it stringently limits the reimbursement received for medications dispensed. PPAC states this complexity has led to massive billing errors that require an inordinate amount of time by both its clinics and the state to resolve, and the reconciliation process is very complicated and often takes months to complete, leaving its clinics with millions of dollars in outstanding reimbursements. PPAC argues it is unconscionable that clinics be expected to shoulder the burden of delayed payments resulting from these errors, essentially subsidizing the state’s promise of health care to low-income Medi-Cal enrollees. PPAC states that this bill will simplify the system by setting the dispensing fee at the difference between the acquisition cost and the Medi-Cal reimbursement rate, allowing clinics to bill and be reimbursed at one rate. PPAC concludes that this simplification will go a long way towards providing consistent and equitable reimbursement for the health care services clinics provide and reduce the administration burden clinics face when dispensing medication.
Prepared by: Scott Bain / HEALTH /
6/1/15 13:53:34
**** END ****
SB 447 (Allen) Page 2 of 2
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 447 (Allen) - Medi-Cal: clinics: drugs and supplies
|
|
Version: April 6, 2015 |
Policy Vote: HEALTH 9 - 0 |
Urgency: No |
Mandate: No |
Hearing Date: May 11, 2015 |
Consultant: Brendan McCarthy |
SUSPENSE FILE. AS AMENDED.
Bill Summary:
SB 447 would increase the rates at which the Medi-Cal program reimburses certain clinics for dispensing medications, by revising existing formulas for determining payments.
Fiscal Impact (as approved on May 28, 2015):
Increased annual costs of at least $6 million (General Fund) and $19 million (federal funds) per year to pay increased reimbursement rates for drugs covered by Medi-Cal. The bill would modify the existing statutory limits on Medi-Cal reimbursement for drugs dispensed by certain clinics. In doing so, the bill will increase the payment rates by the state for certain drugs. The cost estimates above are based on 2013-14 expenditures for contraceptive drugs and drugs covered under the Medi-Cal and Family PACT program for contraceptive drugs and drugs related to family-planning services. Because the bill does not specifically limit the increased reimbursement to those types of drugs, it is possible that actual costs could be lager.
Minor administrative costs to revise existing payment rules and procedures by the Department of Health Care Services (General Fund and federal funds).
Background:
Under state and federal law, the Department of Health Care Services operates the Medi-Cal program, which provides health care coverage to low income individuals, families, and children. Medi-Cal provides coverage to childless adults and parents with household incomes up to 138 percent of the federal poverty level and to children with household incomes up to 266 percent of the federal poverty level. The federal government provides matching funds that vary from 50 percent to 90 percent of expenditures depending on the category of beneficiary.
The state also operates the Family PACT program which provides clinical family planning services to individuals who meet certain income requirements.
Current law limits reimbursement for drugs dispensed directly by certain clinics to Medi-Cal or Family PACT beneficiaries. Under current law, clinics bill the state at the lower of their cost to acquire the drugs (plus a specified dispensing fee) or the usual charge to the public. In addition, the Department reimburses clinics at the lower of the amount billed by the clinic or the Medi-Cal reimbursement rate, which is set by the Department based on the rate at which pharmacies are reimbursed or Medicare rates (if applicable).
Proposed Law:
SB 447 would increase the rates at which the Medi-Cal program reimburses certain clinics for dispensing medications, by revising existing formulas for determining payments.
Specific provisions of the bill would:
Require the Medi-Cal and Family PACT reimbursement formula for drugs and supplies dispensed by specified clinics to include a dispensing fee equal to the difference between the clinic’s actual acquisition cost for the drug and the Medi-Cal reimbursement rate (effectively requiring reimbursement at the Medi-Cal reimbursement rate);
Delete the specific dispensing fee amounts in law;
Delete a prohibition on reimbursement rates exceeding the net cost of those drugs when dispensed by a retail pharmacy in the Medi-Cal program;
Require the actual acquisition price of drugs to be calculated annually;
Limit the changes above to those drugs that are subject to rebates from drug manufacturers under federal law.
Related Legislation:
AB 2340 (C. Garcia, 2014) was gut and amended in the Senate to include the provisions included in this bill. That bill was not heard in the Senate.
Staff Comments:
Under federal law, drug manufacturers are required to sell prescription drugs at a discount to certain entities who provide health care services to vulnerable populations, such as community clinics. Thus, certain clinics that dispense drugs directly to patients are able to purchase drugs from manufacturers at discounted rates that are not available to pharmacies (although pharmacies are often able to negotiate various discounts and other incentives that reduce their acquisition costs for drugs).
Under this bill, reimbursement to specified clinics would go up for certain drugs, but it would not go down for any drugs. As drafted, if the existing Medi-Cal reimbursement rate (generally set based on pharmacy reimbursement rates) is higher than the cost of the drug to the clinic (plus a dispensing fee), the clinic would continue to get the Medi-Cal rate. However, in instances where the Medi-Cal rate is higher than the clinic’s cost (plus the dispensing fee), the clinic would receive the Medi-Cal rate.
Author’s amendments (as adopted May 28, 2015): delete the provision of the bill requiring the payment methodology amended by the bill to only apply to those drugs that are subject to rebates under federal law.
-- END --
SB 447 (Allen) Page 2 of 2
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 447 (Allen) - Medi-Cal: clinics: drugs and supplies
|
|
Version: April 6, 2015 |
Policy Vote: HEALTH 9 - 0 |
Urgency: No |
Mandate: No |
Hearing Date: May 11, 2015 |
Consultant: Brendan McCarthy |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
SB 447 would increase the rates at which the Medi-Cal program reimburses certain clinics for dispensing medications, by revising existing formulas for determining payments.
Fiscal Impact:
Increased annual costs of at least $6 million (General Fund) and $19 million (federal funds) per year to pay increased reimbursement rates for drugs covered by Medi-Cal. The bill would modify the existing statutory limits on Medi-Cal reimbursement for drugs dispensed by certain clinics. In doing so, the bill will increase the payment rates by the state for certain drugs. The cost estimates above are based on 2013-14 expenditures for contraceptive drugs and drugs covered under the Medi-Cal and Family PACT program for contraceptive drugs and drugs related to family-planning services. Because the bill does not specifically limit the increased reimbursement to those types of drugs, it is possible that actual costs could be lager.
Minor administrative costs to revise existing payment rules and procedures by the Department of Health Care Services (General Fund and federal funds).
Background:
Under state and federal law, the Department of Health Care Services operates the Medi-Cal program, which provides health care coverage to low income individuals, families, and children. Medi-Cal provides coverage to childless adults and parents with household incomes up to 138 percent of the federal poverty level and to children with household incomes up to 266 percent of the federal poverty level. The federal government provides matching funds that vary from 50 percent to 90 percent of expenditures depending on the category of beneficiary.
The state also operates the Family PACT program which provides clinical family planning services to individuals who meet certain income requirements.
Current law limits reimbursement for drugs dispensed directly by certain clinics to Medi-Cal or Family PACT beneficiaries. Under current law, clinics bill the state at the lower of their cost to acquire the drugs (plus a specified dispensing fee) or the usual charge to the public. In addition, the Department reimburses clinics at the lower of the amount billed by the clinic or the Medi-Cal reimbursement rate, which is set by the Department based on the rate at which pharmacies are reimbursed or Medicare rates (if applicable).
Proposed Law:
SB 447 would increase the rates at which the Medi-Cal program reimburses certain clinics for dispensing medications, by revising existing formulas for determining payments.
Specific provisions of the bill would:
Require the Medi-Cal and Family PACT reimbursement formula for drugs and supplies dispensed by specified clinics to include a dispensing fee equal to the difference between the clinic’s actual acquisition cost for the drug and the Medi-Cal reimbursement rate (effectively requiring reimbursement at the Medi-Cal reimbursement rate);
Delete the specific dispensing fee amounts in law;
Delete a prohibition on reimbursement rates exceeding the net cost of those drugs when dispensed by a retail pharmacy in the Medi-Cal program;
Require the actual acquisition price of drugs to be calculated annually;
Limit the changes above to those drugs that are subject to rebates from drug manufacturers under federal law.
Related Legislation:
AB 2340 (C. Garcia, 2014) was gut and amended in the Senate to include the provisions included in this bill. That bill was not heard in the Senate.
Staff Comments:
Under federal law, drug manufacturers are required to sell prescription drugs at a discount to certain entities who provide health care services to vulnerable populations, such as community clinics. Thus, certain clinics that dispense drugs directly to patients are able to purchase drugs from manufacturers at discounted rates that are not available to pharmacies (although pharmacies are often able to negotiate various discounts and other incentives that reduce their acquisition costs for drugs).
Under this bill, reimbursement to specified clinics would go up for certain drugs, but it would not go down for any drugs. As drafted, if the existing Medi-Cal reimbursement rate (generally set based on pharmacy reimbursement rates) is higher than the cost of the drug to the clinic (plus a dispensing fee), the clinic would continue to get the Medi-Cal rate. However, in instances where the Medi-Cal rate is higher than the clinic’s cost (plus the dispensing fee), the clinic would receive the Medi-Cal rate.
-- END --
SB 447 (Allen) Page 4 of 4
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 447
AUTHOR: |
Allen |
||
VERSION: |
April 6, 2015 |
||
HEARING DATE: |
April 15, 2015 |
|
|
CONSULTANT: |
Scott Bain |
||
SUBJECT: Medi-Cal: clinics: drugs and supplies
SUMMARY:
Revises the Medi-Cal and Family PACT reimbursement formula for drugs and supplies dispensed by specified clinics by requiring the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate, and removes the maximum dispensing fee caps in existing law.
Existing law:
Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions.
Establishes the Family Planning Access and Treatment Program (Family PACT Program) to provide comprehensive clinical family planning services to individuals who meet specified income requirements.
Requires a community clinic, a free clinic or an intermittent clinic to be reimbursed for drugs and supplies covered under the Medi-Cal program and Family PACT Waiver Program from exceeding the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Defines “cost” for purposes of 3) above as:
An amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit as identified in either the Family PACT Policies, Procedures, and Billing Instructions Manual, or the Medi-Cal Inpatient/Outpatient Provider Manual governing outpatient clinic billing for drugs and supplies, as applicable; and,
The actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription for a take-home drug that is dispensed for use by the patient within a specific timeframe of five or less days from the date medically indicated (effectively, emergency contraception).
Requires reimbursement to be at the lesser of the amount billed or the Medi-Cal reimbursement rate. Prohibits reimbursement from exceeding the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Allows federally qualified health centers (FQHCs) and rural health clinics (RHCs) that are community clinics, free clinics or intermittent clinics to bill and be reimbursed under the above-described provisions, upon electing to be reimbursed for pharmaceutical goods and services on a fee-for-service basis.
This bill:
Revises the Medi-Cal and Family PACT reimbursement formula for drugs and supplies dispensed by specified clinics by requiring the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate.
Deletes the $12 and $17 maximum dispensing fee caps in existing law.
Deletes a prohibition on reimbursement exceeding the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.
Requires the actual acquisition cost of drugs and supplies to be calculated not less than annually.
Limits the application of the above-described provisions of existing law providing reimbursement and a dispensing fee for physician-administered drugs and supplies in clinics to only those drugs that are subject to a rebate under the Section 340b provision of federal law (340b requires drug manufacturers to provide outpatient drugs to eligible health care organizations at reduced prices).
Clarifies that the authority of FQHCs and RHCs that are authorized to bill for a dispensing fee under the above-described provisions of existing law is for pharmaceutical goods and services dispensed through their dispensaries.
FISCAL EFFECT:
This bill has not been analyzed by a fiscal committee.
COMMENTS:
Author’s statement. According to the author, California’s 1,152 community health clinics offer a unique option for low-income patients to receive quality, affordable medical care. Clinics that dispense medication onsite provide the added benefit of a “one stop shop” that allows patients to leave their health care provider with mediation in hand. This convenience has led to improved access to health care and to better patient health outcomes. Current law enables these community clinics to receive a dispensing fee in addition to the purchasing cost of the medications they dispense to Medi-Cal and Family PACT patients. This enables and encourages clinics to dispense medication onsite. However, the current billing system the clinics must use is overly complex, and leads to numerous billing errors which require staff time at both the clinic and the state to resolve. These errors can take months to resolve and chronically deny the clinics Medi-Cal fees to which they are entitled.
Background. A physician-administered drug is any covered outpatient drug provided or administered to a Medi-Cal beneficiary and billed by a provider other than a pharmacy. AB 2151 (Jackson), Chapter 2051, Statutes of 2004, provided a dispensing fee through Medi-Cal and Family PACT for physician-administered drugs dispensed by a community clinic, a free clinic or an intermittent clinic. Prior to the enactment of AB 2151, Medi-Cal regulations prohibited a dispensing fee or mark-up for take-home drugs dispensed by a clinic. The reimbursement provisions of AB 2151 were modified the following year by SB 77 (Frommer), Chapter 503, Statutes of 2005. Drugs reimbursed under these provisions are typically birth control medication (oral contraception, emergency contraception and birth control patches and rings) and antibiotics.
Change in reimbursement made by bill. This bill redefines “cost” for purposes of the physician administered drugs and supplies in clinics affected by this bill. Under existing law, clinics bill at the lower of cost or the usual charge to the public. “Cost” is defined to include a maximum dispensing fee amount per unit of $12 (an example of a unit would be calendar month’s supply). There is a separate maximum dispensing fee amount of $17 for emergency contraception.
Under existing law, DHCS reimburses at the lower of the amount billed or the Medi-Cal reimbursement rate, except that reimbursement cannot exceed the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program. The sponsor of this bill (Planned Parenthood Affiliates of California) indicates this bill deletes the reference to the retail pharmacy cap as DHCS has not implemented this cap. The acquisition cost can vary by the type of clinic purchasing (for example, some clinics may receive volume discounts from drug manufacturers). Dispensing fees vary by the type of drug or supply, but not by type of clinic.
Under this bill, the clinic dispensing fee is the difference between the actual acquisition cost of a drug or supply and the Medi-Cal reimbursement rate. One example, provided by an affiliate clinic of the sponsor, of the change in reimbursement for two types of drugs dispensed by clinics and how the reimbursement would change under this bill is as follows:
Type of Medication |
Medi-Cal rate on file |
Current reimbursement amount billed (cost + dispensing fee) |
Current reimbursement |
Amount billed and reimbursed under SB 447 (the Medi-Cal rate on file) |
Oral Contraceptive |
$12 |
$22 |
$12 |
$12 |
Emergency contraceptive |
$31 |
$22.75 |
$22.75 |
$31 |
Prior legislation. AB 2340 (C. Garcia), of 2014, was gutted and amended last year in this committee with the contents of the introduced version of this bill, but was never heard.
Support. This bill is sponsored by Planned Parenthood Affiliates of California (PPAC), which argues it would streamline the process that community clinics use to bill and be reimbursed for medications that are dispensed onsite. PPAC states community clinics that dispense drugs offer a “one stop shop” that removes barriers to care, improving access and patient health outcomes, but the complicated system that denies clinics a dispensing fee undermines their ability to provide quality, low cost care to those who need it. PPAC states the actual acquisition cost of a drug and the Medi-Cal rate are reevaluated at least quarterly, and these shifting amounts, along with the “lesser of” standard in existing law for both billing and reimbursement, makes it nearly impossible for its clinics to budget, and it stringently limits the reimbursement received for medications dispensed. PPAC states this complexity has led to massive billing errors that require an inordinate amount of time by both its clinics and the state to resolve, and the reconciliation process is very complicated and often takes months to complete, leaving its clinics with millions of dollars in outstanding reimbursements. PPAC argues it is unconscionable that clinics be expected to shoulder the burden of delayed payments resulting from these errors, essentially subsidizing the state’s promise of health care to low-income Medi-Cal enrollees. PPAC states that this bill will simplify the system by setting the dispensing fee at the difference between the acquisition cost and the Medi-Cal reimbursement rate, allowing clinics to bill and be reimbursed at one rate. PPAC concludes that this simplification will go a long way towards providing consistent and equitable reimbursement for the health care services clinics provide and reduce the administration burden clinics face when dispensing medication.
SUPPORT AND OPPOSITION:
Support:
Planned Parenthood Affiliates of California (sponsor)
California Family Health Council
Community Action Fund of Planned Parenthood of Orange and San Bernardino Counties
Planned Parenthood Action Fund of the Pacific Southwest
Planned Parenthood Los Angeles
Planned Parenthood Mar Monte
Planned Parenthood Pasadena and San Gabriel Valley
Oppose: None received
-- END --
Discussed in Hearing
4MIN
Assembly Standing Committee on Health
3MIN
Senate Floor
9MIN
Senate Standing Committee on Health
Bill Author
Bill Co-Author(s):