Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, under fee-for-service or managed care delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Under existing federal law, in accordance with third-party liability rules, Medicaid is generally the payer of last resort if a beneficiary has another source of health care coverage in addition to Medicaid coverage.

Under this bill, in the case of a Medi-Cal managed care plan enrollee who also has other health care coverage and for whom the Medi-Cal program is a payer of last resort, the department would be required to ensure that a provider that is not contracted with the plan and that is billing the plan for Medi-Cal allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system. Under the bill, in the case of an enrollee who meets those coverage criteria, except as specified, a Medi-Cal fee-for-service provider would not be required to contract as an in-network provider with the Medi-Cal managed care plan in order to bill the plan for Medi-Cal allowable costs for covered health care services.

The bill would authorize a Medi-Cal managed care plan to require a letter of agreement, or a similar agreement, under either of the following circumstances: (1) if a covered service requires prior authorization, or if a service is not covered by the other health care coverage but is a covered service under the plan, as specified, or (2) if an enrollee requires a covered service and meets the requirements for continuity of care or the completion of covered services through a Medi-Cal managed care plan pursuant to specified provisions under existing law regarding services by a terminated or nonparticipating provider.

The bill would require the department to solicit input from specified stakeholders regarding the coordination of payment for services between Medi-Cal enrollees other commercial health care coverage and their Medi-Cal managed care plans, with a specific emphasis on Medi-Cal recipients receiving regional center services. The bill would require the department to include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2025 to discuss this topic and, within 6 months of the advisory committee meeting, take the actions that it deems necessary to provide clarification regarding the conditions for billing plans to providers that render services to enrollees who also have other health care coverage. The bill would specify the intent of the Legislature that the department offer educational resources to an enrollee who needs assistance with understanding continuity of care and coordinating Medi-Cal and their other health care coverage when requested by the enrollee.

The bill would require the department, annually from 2025 through 2028, to update the legislative health committees on the effectiveness of implementing these provisions. The bill would authorize the department to implement these provisions through plan letters or similar instructions. The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, under fee-for-service or managed care delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Under existing federal law, in accordance with third-party liability rules, Medicaid is generally the payer of last resort if a beneficiary has another source of health care coverage in addition to Medicaid coverage.

Under the this bill, in the case of a Medi-Cal managed care plan enrollee who has other health coverage, as specified, also has other health care coverage and for whom the Medi-Cal program is a payer of last resort, the department would be required to ensure that a provider billing the managed care plan for that is not contracted with the plan and that is billing the plan for Medi-Cal allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system. Under the bill, in the case of an enrollee who meets those coverage criteria, except as specified, a Medi-Cal fee-for-service provider would not be required to contract as an in-network provider with the Medi-Cal managed care plan in order to bill the plan for Medi-Cal allowable costs for covered health care services.

The bill would require the department to solicit input from specified stakeholders regarding the coordination of other commercial health coverage with Medi-Cal managed care, payment for services between Medi-Cal enrollees other commercial health care coverage and their Medi-Cal managed care plans, with a specific emphasis on Medi-Cal recipients receiving regional center services. The bill would require the department to include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2025 to discuss this topic and, within 12 6 months of the advisory committee meeting, take the actions it deems necessary to ensure to ensure that Medi-Cal managed care enrollees who have other health coverage, including those receiving regional center services, are able to coordinate their care as seamlessly as possible. The that it deems necessary to provide clarification regarding the conditions for billing plans to providers that render services to enrollees who also have other health care coverage. The bill would specify the intent of the Legislature that the department offer educational resources to an enrollee who needs assistance with understanding continuity of care and coordinating Medi-Cal and their other health care coverage when requested by the enrollee.

The bill would require the department, at least annually from 2025 through 2028, to report to update the legislative health committees on the effectiveness of implementing these provisions. The bill would authorize the department to implement these provisions through plan letters or similar instructions. The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, under fee-for-service or managed care delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Under existing federal law, in accordance with third-party liability rules, Medicaid is generally the payer of last resort if a beneficiary has another source of health care coverage in addition to Medicaid coverage.

Under the bill, in the case of a Medi-Cal managed care plan enrollee with the above-described criteria, who has other health coverage, as specified, the department would be required to ensure that a provider billing the managed care plan for allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system.

The bill would require a Medi-Cal managed care plan to provide assistance to Medi-Cal providers and beneficiaries, upon request, on options for maintaining health care relationships between beneficiaries who receive services from a regional center and existing providers that are contracted with, or have agreements with, a beneficiarys primary form of health care coverage, if the beneficiary transitions from receiving services under the Medi-Cal fee-for-service delivery system to being an enrollee of the managed care plan. The bill would also prohibit a Medi-Cal fee-for-service provider from being required to contract with a Medi-Cal managed care plan in order to provide services to an enrollee who fits the above-described criteria and to bill the Medi-Cal managed care plan.

The bill would require the department to solicit input from specified stakeholders regarding the coordination of other commercial health coverage with Medi-Cal managed care, with a specific emphasis on Medi-Cal recipients receiving regional center services. The bill would require the department to include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2025 to discuss this topic and, within 12 months of the advisory committee meeting, take the actions it deems necessary to ensure to ensure that Medi-Cal managed care enrollees who have other health coverage, including those receiving regional center services, are able to coordinate their care as seamlessly as possible. The bill would require the department, at least annually from 2025 through 2028, to report to the legislative health committees on the effectiveness of implementing the provisions in this paragraph. these provisions. The bill would authorize the department to implement these provisions through plan letters or similar instructions. The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.

(1)Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, under fee-for-service or managed care delivery systems. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Under existing federal law, in accordance with third-party liability rules, Medicaid is generally the payer of last resort if a beneficiary has another source of health care coverage in addition to Medicaid coverage.

(2)Under the bill, in the case of a Medi-Cal managed care plan enrollee with the above-described criteria, the department would be required to ensure that a provider billing the managed care plan for allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system.

The bill would require a Medi-Cal managed care plan to provide assistance to Medi-Cal providers and beneficiaries, upon request, on options for maintaining health care relationships between beneficiaries who receive services from a regional center and existing providers that are contracted with, or have agreements with, a beneficiarys primary form of health care coverage, if the beneficiary transitions from receiving services under the Medi-Cal fee-for-service delivery system to being an enrollee of the managed care plan.

The bill would require the department, at least annually from 2025 through 2028, to report to the legislative health committees on the effectiveness of implementing these provisions. the provisions in this paragraph. The bill would authorize the department to implement these provisions through plan letters or similar instructions. The bill would condition implementation of these provisions on receipt of any necessary federal approvals and the availability of federal financial participation.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and 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. Existing law establishes the California Advancing and Innovating Medi-Cal (CalAIM) initiative, subject to receipt of any necessary federal approvals and the availability of federal financial participation, in order to, among other things, improve quality outcomes, reduce health disparities, and increase flexibility.

Existing law authorizes the department to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan across all aid code groups and Medi-Cal managed care models statewide, subject to a Medi-Cal managed care plan readiness, continuity of care transition plan, and disenrollment process developed in consultation with stakeholders, in accordance with specified requirements and as specified, in accordance with the CalAIM Terms and Conditions. Existing law, if the department standardizes those populations subject to mandatory enrollment, exempts certain dual and non-dual beneficiary groups, as defined, eligible and non-dual-eligible beneficiary groups from that mandatory enrollment. Under existing law, a dual eligible beneficiary is an individual 21 years of age or older who is enrolled for benefits under the federal Medicare Program and is eligible for medical assistance under the Medi-Cal program.

This bill would express the intent of the Legislature to enact legislation to exempt dual exempt, from mandatory enrollment in a Medi-Cal managed care plan, dual eligible and non-dual-eligible beneficiaries who receive services from a regional center and use a Medi-Cal fee-for-service delivery system as a secondary form of health coverage from mandatory enrollment in a Medi-Cal managed care plan. coverage. For purposes of this exemption, the bill would require the beneficiary to complete and submit an exemption form every 5 years.

The Lanterman Developmental Disabilities Services Act makes the State Department of Developmental Services responsible for providing various services and supports to individuals with developmental disabilities, and for ensuring the appropriateness and quality of those services and supports. Pursuant to that law, the department contracts with regional centers to provide services and supports to persons with developmental disabilities. The act requires regional centers to pursue all possible sources of funding for consumers receiving regional center services, including, among others, Medi-Cal.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and 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. Existing law establishes the California Advancing and Innovating Medi-Cal (CalAIM) initiative, subject to receipt of any necessary federal approvals and the availability of federal financial participation, in order to, among other things, improve quality outcomes, reduce health disparities, and increase flexibility.

Existing law authorizes the department to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan across all aid code groups and Medi-Cal managed care models statewide, subject to a Medi-Cal managed care plan readiness, continuity of care transition plan, and disenrollment process developed in consultation with stakeholders, in accordance with specified requirements and the CalAIM Terms and Conditions. Existing law, if the department standardizes those populations subject to mandatory enrollment, exempts certain dual and non-dual beneficiary groups, as defined, from that mandatory enrollment.

This bill would express the intent of the Legislature to enact legislation to exempt dual and non-dual-eligible beneficiaries who receive services from a regional center and use a Medi-Cal fee-for-service delivery system as a secondary form of health coverage from mandatory enrollment in a Medi-Cal managed care plan.

GOVERNOR'S VETO

GV Bill Id:AB 3156

Author:(Joe Patterson and Stephanie Nguyen)

As Enrolled Ver:September 5, 2024

2/3 vote

SUMMARY

Implements several changes to help beneficiaries who use Medi-Cal as a payer of last resort to maintain their providers when they transition from fee-for-service (FFS) Medi-Cal to Medi-Cal managed care, including limiting administrative and contracting requirements for providers when billing Medi-Cal managed care plans and stating intent that Department of Health Care Services (DHCS) provide enrollee educational materials upon request. Requires DHCS to report on the bill's implementation and take enforcement actions it deems necessary.

Senate Amendments

1. Revise, recast, and clarify several provisions.
2. Specify when managed care plans may require a letter of agreement with a non-contracted provider.
3. Shifts responsibility for providing consumer assistance, as specified, from managed care plans to DHCS by striking the applicable requirement for a managed care plan and instead stating legislative intent that DHCS offer specified educational resources at enrollee request.
4. Requires DHCS to solicit input from stakeholders, agendize the issue of coordination of benefits between an individual's primary health plan and Medi-Cal at an advisory group meeting, as specified, and take action as deemed necessary, as specified.

Governor’s Veto Message

This bill would require the Department of Health Care Services (DHCS) to ensure that providers do not face administrative requirements that significantly exceed Medi-Cal fee-for-service system requirements when billing for services provided to Medi-Cal managed care plan enrollees who have other health care coverage and for whom Medi-Cal is the payer of last resort.

I am supportive of policies that allow Medi-Cal members with other health coverage to continue to see their providers. However, the timelines specified in this bill are not feasible. DHCS has worked extensively to educate Medi-Cal managed care plans (MCPs) on enrollee rights and how providers who are not enrolled in Medi-Cal can still bill Medi-Cal for appropriate services. DHCS will continue to work with MCPs, stakeholders, and patient advocates to address administrative barriers to ensure continuity of care for Medi-Cal enrollees.

COMMENTS

This bill was prompted by complaints from individuals who have private insurance, but rely on Medi-Cal as a secondary payer to cover significant costs associated with care for individuals with severe disabilities. These individuals indicated they were losing access to providers contracted with their private coverage (referred to other health coverage, or OHC) because of the transition of their Medi-Cal from FFS to managed care, which has been pursued as part of a larger statewide initiative.

1. Medi-Cal is the Payer of Last Resort. Federal law requires state Medicaid programs to take reasonable measures to ascertain the legal liability of third parties, including other health plans and insurers, to pay for services covered under Medicaid. A beneficiary is required to use their private coverage, prior to their Medi-Cal benefits, when the same service or benefit is available under their private health coverage. When this occurs, Medi-Cal will be secondary to the other health coverage, covering allowable costs not paid by the primary insurance (for instance, copayments) up to the Medi-Cal rate.
2. Mandatory Transition to Managed Care. Over the last several years, most of the Medi-Cal population has transitioned into Medi-Cal managed care. DHCS introduced mandatory enrollment in managed care to guarantee a similar beneficiary experience across counties, and to streamline Medi-Cal program administration.

Beneficiaries with OHC who do not have Medicare transitioned on January 1, 2022, while beneficiaries who are dually eligible for Medi-Cal and Medicare transitioned effective January 1, 2023.

State law provides additional, temporary exceptions whereby individuals who transition to a managed care plan can retain relationships with their providers who are not contracted providers with the plan; however, these are restricted and time-limited.

1. How Medi-Cal Managed Care Interacts with OHC. Most private plans have cost-sharing like copayments or coinsurance, which Medi-Cal will pay on behalf of the Medi-Cal enrollee when an individual has OHC. Medi-Cal prohibits billing patients for cost-sharing. Providers must bill Medi-Cal to recover the cost-sharing amount owed by the Medi-Cal enrollee.

Prior to the transition to managed care, a provider would bill Medi-Cal FFS directly for services not covered by their patient's OHC, or to request reimbursement for cost-sharing required by the patient's OHC.

However, once an individual is enrolled in Medi-Cal managed care, an individual's provider must bill the individual's Medi-Cal managed plan for copayments or other costs not covered by the OHC, instead of billing DHCS. These providers must interact with Medi-Cal managed care plans, even if the provider is not in the network of a Medi-Cal managed care plan and the service is primarily being billed to the private plan. Billing multiple plans may be more complicated for the provider, who must validate and bill the appropriate plan instead of simply billing DHCS for all Medi-Cal claims. Furthermore, DHCS's managed care plan contracts prohibit managed care plans from paying claims for services provided to a member with OHC, without proof that the provider has first exhausted all sources of other payment. Administrative processes and documentation requirements are not standardized across plans, meaning plans may require slightly different forms of proof or have different portals or means to accept this information.

Anecdotally, according to the bill's author and affected constituents, these billing requirements have posed an area of friction between certain patients, providers, and managed care plans with the recent expansion of mandatory enrollment into Medi-Cal managed care.

1. Can Individuals With OHC Keep Their Providers when Their Medi-Cal Services Transition to Managed Care? Individuals who rely on OHC as a primary payer for their health care should theoretically should be able to maintain their providers who are paid primarily by the OHC. The providers should be able to simply bill the Medi-Cal managed care plan instead of FFS Medi-Cal for any allowable costs not covered by the OHC.

According to DHCS, if an individual is seeing providers contracted with their OHC who are billing the OHC for services, and Medi-Cal is only paying for other allowable costs such as the patient copayment, the provider is able to bill the Medi-Cal managed care plan for the copayment even if the provider is not contracted with that plan. This guidance is reflected in a fact sheet published by DHCS, titled "Overview of Mandatory Managed Care Enrollment." The fact sheet also reiterates an individual can keep their OHC when they become mandatorily enrolled into managed care.

However, anecdotally, the fact sheet has not resolved issues for individuals seeking to maintain their network of providers. Some providers may refuse to render services to individuals enrolled in Medi-Cal managed care for a variety of reasons, including the providers' choice to adopt a policy of not engaging with Medi-Cal managed care whatsoever, or a lack of understanding that they are allowed to bill the Medi-Cal managed care plan for allowable costs even if they are not contracted with the plan.

According to the Author

Children and adults with developmental disabilities who have private health coverage have been faced with a dilemma whereby accepting enrollment in Medi-Cal managed care to access supplemental services has jeopardized their ability to maintain their existing providers that are part of their private health coverage network.

As DHCS moved these individuals into Medi-Cal managed care plans, the author asserts, it has caused inexplicable confusion with the delivery of their health care, requiring families to request exemptions from DHCS to keep their existing medical teams. The author indicates his office has been working closely with DHCS and that, although DHCS acknowledges that these issues should not be occurring, the problems persist. The author indicates the administrative work families have had to do to retain their trusted providers has caused anxiety and uncertainty for a particularly vulnerable population. The author indicates if the issues were to be addressed administratively, the bill would not be necessary.

Arguments in Support

California Association of Alcohol and Drug Program Executives, writes in support that this bill represents a significant step forward in ensuring that Medi-Cal beneficiaries, particularly those with complex needs and co-occurring disorders, receive seamless and continuous care through improved coordination and support within the Medi-Cal managed care system. California Academy of Family Physicians (CAFP) states in support that this bill aims to fix a systemic glitch for patients that rely on Medi-Cal as a secondary source of health care coverage. CAFP notes that for children and adults with disabilities that access their primary clinicians through private insurance but are eligible for supplemental services through Medi-Cal, administrative hurdles cause undue confusion and barriers to access their care, and that this bill aims to address these issues.

Arguments in Opposition

There is no known opposition.

FISCAL COMMENTS

According to the Senate Appropriations Committee, unknown ongoing costs for the DHCS for state administration (General Fund and federal funds).

VOTES

ASM HEALTH: 16-0-0

YES: Bonta, Waldron, Aguiar-Curry, Arambula, Wendy Carrillo, Flora, Haney, Jones-Sawyer, Maienschein, McCarty, Joe Patterson, Rodriguez, Sanchez, Santiago, Schiavo, Weber

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 66-0-14

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Hoover, Irwin, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Bonta, Cervantes, Megan Dahle, Essayli, Gipson, Holden, Jackson, Jones-Sawyer, Mathis, Luz Rivas, Blanca Rubio, Weber, Wicks, Wilson

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ASSEMBLY FLOOR: 75-0-4

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wicks, Wilson, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Ortega, Weber, Wood

UPDATED

VERSION: September 5, 2024

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0005140

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 3156

Author:(Joe Patterson and Stephanie Nguyen)

As Amended Ver:August 23, 2024

Majority vote

SUMMARY

Implements several changes to help beneficiaries who use Medi-Cal as a payer of last resort to maintain their providers when they transition from fee-for-service (FFS) Medi-Cal to Medi-Cal managed care, including limiting administrative and contracting requirements for providers when billing Medi-Cal managed care plans and stating intent that Department of Health Care Services (DHCS) provide enrollee educational materials upon request. Requires DHCS to report on the bill's implementation and take enforcement actions it deems necessary.

Senate Amendments

1. Revise, recast, and clarify several provisions.
2. Specify when managed care plans may require a letter of agreement with a non-contracted provider.
3. Shifts responsibility for providing consumer assistance, as specified, from managed care plans to DHCS by striking the applicable requirement for a managed care plan and instead stating legislative intent that DHCS offer specified educational resources at enrollee request.
4. Requires DHCS to solicit input from stakeholders, agendize the issue of coordination of benefits between an individual's primary health plan and Medi-Cal at an advisory group meeting, as specified, and take action as deemed necessary, as specified.

COMMENTS

This bill was prompted by complaints from individuals who have private insurance, but rely on Medi-Cal as a secondary payer to cover significant costs associated with care for individuals with severe disabilities. These individuals indicated they were losing access to providers contracted with their private coverage (referred to other health coverage, or OHC) because of the transition of their Medi-Cal from FFS to managed care, which has been pursued as part of a larger statewide initiative.

1. Medi-Cal is the Payer of Last Resort. Federal law requires state Medicaid programs to take reasonable measures to ascertain the legal liability of third parties, including other health plans and insurers, to pay for services covered under Medicaid. A beneficiary is required to use their private coverage, prior to their Medi-Cal benefits, when the same service or benefit is available under their private health coverage. When this occurs, Medi-Cal will be secondary to the other health coverage, covering allowable costs not paid by the primary insurance (for instance, copayments) up to the Medi-Cal rate.
2. Mandatory Transition to Managed Care. Over the last several years, most of the Medi-Cal population has transitioned into Medi-Cal managed care. DHCS introduced mandatory enrollment in managed care to guarantee a similar beneficiary experience across counties, and to streamline Medi-Cal program administration.

Beneficiaries with OHC who do not have Medicare transitioned on January 1, 2022, while beneficiaries who are dually eligible for Medi-Cal and Medicare transitioned effective January 1, 2023.

State law provides additional, temporary exceptions whereby individuals who transition to a managed care plan can retain relationships with their providers who are not contracted providers with the plan; however, these are restricted and time-limited.

1. How Medi-Cal Managed Care Interacts with OHC. Most private plans have cost-sharing like copayments or coinsurance, which Medi-Cal will pay on behalf of the Medi-Cal enrollee when an individual has OHC. Medi-Cal prohibits billing patients for cost-sharing. Providers must bill Medi-Cal to recover the cost-sharing amount owed by the Medi-Cal enrollee.

Prior to the transition to managed care, a provider would bill Medi-Cal FFS directly for services not covered by their patient's OHC, or to request reimbursement for cost-sharing required by the patient's OHC.

However, once an individual is enrolled in Medi-Cal managed care, an individual's provider must bill the individual's Medi-Cal managed plan for copayments or other costs not covered by the OHC, instead of billing DHCS. These providers must interact with Medi-Cal managed care plans, even if the provider is not in the network of a Medi-Cal managed care plan and the service is primarily being billed to the private plan. Billing multiple plans may be more complicated for the provider, who must validate and bill the appropriate plan instead of simply billing DHCS for all Medi-Cal claims. Furthermore, DHCS's managed care plan contracts prohibit managed care plans from paying claims for services provided to a member with OHC, without proof that the provider has first exhausted all sources of other payment. Administrative processes and documentation requirements are not standardized across plans, meaning plans may require slightly different forms of proof or have different portals or means to accept this information.

Anecdotally, according to the bill's author and affected constituents, these billing requirements have posed an area of friction between certain patients, providers, and managed care plans with the recent expansion of mandatory enrollment into Medi-Cal managed care.

1. Can Individuals With OHC Keep Their Providers when Their Medi-Cal Services Transition to Managed Care? Individuals who rely on OHC as a primary payer for their health care should theoretically should be able to maintain their providers who are paid primarily by the OHC. The providers should be able to simply bill the Medi-Cal managed care plan instead of FFS Medi-Cal for any allowable costs not covered by the OHC.

According to DHCS, if an individual is seeing providers contracted with their OHC who are billing the OHC for services, and Medi-Cal is only paying for other allowable costs such as the patient copayment, the provider is able to bill the Medi-Cal managed care plan for the copayment even if the provider is not contracted with that plan. This guidance is reflected in a fact sheet published by DHCS, titled "Overview of Mandatory Managed Care Enrollment." The fact sheet also reiterates an individual can keep their OHC when they become mandatorily enrolled into managed care.

However, anecdotally, the fact sheet has not resolved issues for individuals seeking to maintain their network of providers. Some providers may refuse to render services to individuals enrolled in Medi-Cal managed care for a variety of reasons, including the providers' choice to adopt a policy of not engaging with Medi-Cal managed care whatsoever, or a lack of understanding that they are allowed to bill the Medi-Cal managed care plan for allowable costs even if they are not contracted with the plan.

According to the Author

Children and adults with developmental disabilities who have private health coverage have been faced with a dilemma whereby accepting enrollment in Medi-Cal managed care to access supplemental services has jeopardized their ability to maintain their existing providers that are part of their private health coverage network.

As DHCS moved these individuals into Medi-Cal managed care plans, the author asserts, it has caused inexplicable confusion with the delivery of their health care, requiring families to request exemptions from DHCS to keep their existing medical teams. The author indicates his office has been working closely with DHCS and that, although DHCS acknowledges that these issues should not be occurring, the problems persist. The author indicates the administrative work families have had to do to retain their trusted providers has caused anxiety and uncertainty for a particularly vulnerable population. The author indicates if the issues were to be addressed administratively, the bill would not be necessary.

Arguments in Support

California Association of Alcohol and Drug Program Executives, writes in support that this bill represents a significant step forward in ensuring that Medi-Cal beneficiaries, particularly those with complex needs and co-occurring disorders, receive seamless and continuous care through improved coordination and support within the Medi-Cal managed care system. California Academy of Family Physicians (CAFP) states in support that this bill aims to fix a systemic glitch for patients that rely on Medi-Cal as a secondary source of health care coverage. CAFP notes that for children and adults with disabilities that access their primary clinicians through private insurance but are eligible for supplemental services through Medi-Cal, administrative hurdles cause undue confusion and barriers to access their care, and that this bill aims to address these issues.

Arguments in Opposition

There is no known opposition.

FISCAL COMMENTS

According to the Senate Appropriations Committee, unknown ongoing costs for the DHCS for state administration (General Fund and federal funds).

VOTES:

ASM HEALTH: 16-0-0

YES: Bonta, Waldron, Aguiar-Curry, Arambula, Wendy Carrillo, Flora, Haney, Jones-Sawyer, Maienschein, McCarty, Joe Patterson, Rodriguez, Sanchez, Santiago, Schiavo, Weber

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 66-0-14

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Hoover, Irwin, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Bonta, Cervantes, Megan Dahle, Essayli, Gipson, Holden, Jackson, Jones-Sawyer, Mathis, Luz Rivas, Blanca Rubio, Weber, Wicks, Wilson

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

UPDATED

VERSION: August 23, 2024

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0004598

 THIRD READING  

Bill No: AB 3156

Author: Joe Patterson (R) and Stephanie Nguyen (D)

Amended: 8/23/24 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 11-0, 7/3/24

AYES: Roth, Nguyen, Glazer, Gonzalez, Grove, Hurtado, Limón, Menjivar, Rubio, Smallwood-Cuevas, Wiener

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 66-0, 5/23/24 - See last page for vote

SUBJECT: Medi-Cal managed care plans: enrollees with other health care coverage

SOURCE: Author

DIGEST:

This bill requires (1) the Department of Health Care Services (DHCS) to ensure that providers serving Medi-Cal recipients with another primary form of health coverage do not face administrative requirements significantly in excess of the requirements in the Medi-Cal fee-for-service delivery system; (2) Medi-Cal plans allow providers in the fee-for-service delivery system to bill the plan for services rendered to Medi-Cal recipients with another primary form of coverage excluding Medicare, without requiring an in-network provider contract; and (3) DHCS to obtain stakeholder feedback regarding the coordination of other commercial health coverage with a recipient’s Medi-Cal plan, with a specific emphasis on Medi-Cal recipients receiving regional center services, and to take the actions it deems necessary to provide clarification regarding the conditions for billing Medi-Cal plans when recipients have other health care coverage.

Senate Floor Amendments of 8-23-24: 1) specify that while a fee-for-service provider is not required to enter into a contract with a Medi-Cal plan, the plan may require a letter of agreement in specified circumstances in order to pay the provider; 2) reduce DHCS’s obligation to ensure that provider-plan coordination is as seamless as possible to an obligation to clarify how providers can bill Medi-Cal plans for enrollees with other health coverage; 3) delete the obligation for DHCS to provide enrollee outreach and education and replace it with an intent to offer educational resources when requested by the enrollee; 4) specify that DHCS need not take regulatory action to implement this bill; and, 5) shorten the timeline for DHCS to action after receiving stakeholder input on barriers faced by Medi-Cal enrollees with other health coverage from 12 to 6 months.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), and under which qualified low-income individuals receive health care services. [Welfare and Institutions Code (WIC) §14000, et seq.]
2. Authorizes the DHCS Director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries; and, establishes managed care models that DHCS contracts with in each county. [WIC §14087.3, §14089, §14087.98, §14087.967 and §14087.5]
3. Establishes the California Advancing and Innovating Medi-Cal (CalAIM) Act as a set of Medi-Cal transformation initiatives, and requires the implementation of the time-limited CalAIM initiative to support a number of goals, including transitioning and transforming the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. [WIC §14184.100]
4. Authorizes DHCS to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan (Medi-Cal plan) across all aid code groups and Medi-Cal managed care models statewide, with certain exceptions. [WIC §14184.200]
5. Requires Medi-Cal plans to comply with continuity-of-care requirements that allow recipients to complete covered services with a nonparticipating provider, as specified, when enrolling in a Medi-Cal plan if the covered services involve an acute or serious chronic condition, a pregnancy, a terminal illness, care of a newborn, or performance of a surgery that is part of a course of treatment. Except for treatment related to terminal illness, limits coverage of services with a nonparticipating provider to 12 months after the date of enrollment in the plan. [WIC §14184.200 and Health Safety Code (HSC) §1373.96]
6. Requires states and local agencies administering the Medicaid program to take all reasonable measures to ascertain the legal liability of third parties, including health plans, to pay for care and services available under the plan. [42 United States Code (USC) §1396(a)]
7. Prohibits a person with private health care coverage from receiving the same health care items or services paid for by a publicly funded health care program. If the person does receive health care paid for by a publicly funded health care program, requires the person’s private health care coverage to reimburse the publicly funded health care program for those items or services. [WIC §10020]
8. Requires any provider seeking payment from the Medi-Cal program to first seek payment from any other health coverage that the patient has when the provider is aware of this coverage and the coverage extends to these services before submitting a claim to DHCS for the balance of the services. Allows a provider to submit a claim to DHCS if the other health coverage does not pay the claim within 90 days of billing. [WIC §14023.7]
9. Requires providers to notify DHCS of any potential contractual or legal entitlement or other third-party liability within 60 days of discovery and gives DHCS the right to recover any contractual or legal entitlement or other third-party liability for the cost incurred in rendering care. [WIC §14024]
10. Requires any health insurer or managed care plan to provide to DHCS at least once a month eligibility and coverage information for each subscriber, policyholder, enrollee, or insured so that DHCS can comply with federal law regarding third-party health coverage and be the payer of last resort. [WIC §14124.90]
11. Establishes an entitlement to services for individuals with developmental disabilities under the Lanterman Developmental Disabilities Services Act (Lanterman Act), including a right to treatment and habilitation services and supports in the least restrictive environment, a right to prompt medical care and treatment, and a right to make choices in their own lives. [WIC §4500, et seq. and §4502]
12. Establishes a system of nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires Department of Developmental Services (DDS) to contract with regional centers to provide case management services and arrange for or purchase services that meet the needs of individuals with developmental disabilities, as defined. [WIC §4620, et seq.]

This bill:

1. Requires DHCS to ensure that a provider does not face administrative requirements significantly in excess of the requirements for billing the Medi-Cal fee-for-service delivery system when billing a Medi-Cal plan for allowable costs not paid by a Medi-Cal recipient’s other primary form of health coverage.
2. Specifies that a Medi-Cal provider participating in the Medi-Cal fee-for-service delivery system is not required to have an in-network contract with a Medi-Cal managed care plan in order to provide services to a Medi-Cal plan enrollee with another primary form of health coverage, excluding Medicare. Allows a Medi-Cal plan to require a letter of agreement in order to bill in specified circumstances.
3. Requires DHCS to solicit input from stakeholders, including consumer advocates, Medi-Cal plans, other commercial plans, and, to the extent DHCS has information on, providers that serve regional center clients, regarding the coordination of other commercial health coverage with a Medi-Cal plan, with a specific emphasis on Medi-Cal recipients who receive regional center services. Requires DHCS to also include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2025 to discuss this topic.
4. Requires DHCS, to take the actions it deems necessary to clarify the conditions for billing Medi-Cal plans for recipients who have other health coverage within 6 months of the meeting in 3) above. Specifies that DHCS’s actions may include updating regulations, providing revised guidance to plans and providers, increasing reporting requirements, and taking enforcement action, as it deems necessary.
5. States the intent of the Legislature that DHCS offer educational resources to Medi-Cal recipients needing assistance with understanding continuity of care and coordinating Medi-Cal plan coverage with their other health care coverage when requested by the Medi-Cal recipient.
6. Requires DHCS to report to the Assembly and Senate health committees on the effectiveness of implementing this section annually from 2025 through 2028.
7. Allows DHCS to implement this bill in whole or in part via guidance instead of regulation and conditions implementation on the receipt of any necessary federal approvals and continued federal financial participation.

Comments

1. Author’s statement. According to the author, children and adults with developmental disabilities have been faced with a dilemma of choosing between their existing insurance and medical team or access to their enrolled regional center. Just this past year, DHCS moved to a “managed care” approach for servicing these individuals. For an unknown reason, this has caused confusion with the delivery of their healthcare, requiring families to request an exemption from DHCS to keep their existing medical teams. We have been working closely with DHCS and while they indicate families should not have to make these difficult decisions, the reality is implementation has been rocky, to say the least. The requirement to get approved for exemptions has caused a lot of anxiety and uncertainty for this vulnerable population that seek specialized services through regional centers in conjunction with private pay insurance. While DHCS acknowledges that these issues should not be occurring, the fact is the problems persist. This bill will ensure that these individuals and their medical teams do not have to complete lengthy, 40-page exemption documents multiple times per year. If DHCS fixes the acknowledged problem, this bill would not be necessary.
2. Other health coverage. The Medi-Cal program is open to all who meet the eligibility requirements, including people who might have another form of health coverage such as Medicare or commercial coverage through an employer. However, under federal law, the Medi-Cal program is the payer of last resort and Medi-Cal must seek any payment available from third parties. Medi-Cal recipients must report any other health coverage they have and health plans and insurers must report to DHCS information on all participants in order to identify all Medi-Cal recipients with other health coverage. When a recipient has other health coverage, the other coverage is the primary form of coverage, and the Medi-Cal program covers services that are not included in the other health coverage. While this may be a simple concept in theory, in practice, it has often been difficult for Medi-Cal recipients to coordinate two forms of coverage and obtain the benefits of both, particularly recipients with commercial coverage who are required to enroll in a Medi-Cal plan. Medi-Cal providers must bill the other health coverage for any services covered and bill Medi-Cal only for the excluded services. Medi-Cal recipients also face difficulties finding providers who accept both their primary coverage and have a contract with their Medi-Cal plan.
3. Challenges in coordinating coverage for regional center clients. Individuals with developmental disabilities are eligible for a range of services from California’s regional centers including assessments, eligibility determinations, case management and coordination, counseling, family support, genetic counseling, early intervention services, and purchase of necessary services that are included in their individual program plan. Because regional centers are a payer of last resort, they must enroll eligible individuals in Medi-Cal, even if that individual has another form of health coverage. However, as many regional center clients have significant health needs that go beyond the coverage of traditional commercial plans, enrollment in Medi-Cal helps the individual and family obtain additional services. In particular, Medi-Cal has special programs administered by the Department of Developmental Services, the Home and Community Based Services Waiver for Californians with Developmental Disabilities and the Self-Determination Program Waiver for Individuals with Developmental Disabilities. These programs allow eligible individuals to get all of the Medi-Cal covered services as well as additional care to allow individuals who would otherwise be institutionalized, to stay in the community or allow individuals with developmental disabilities to live with as much independence as possible. These waiver programs are available to individuals in higher income families because the waiver programs have a rule, known as “institutional deeming,” that allows an individual to be determined eligible based on solely their own income without taking into account the income of their parents.

Recently, as part of the CalAIM initiative, DHCS moved many populations into mandatory managed care who were previously receiving services through the Medi-Cal fee-for-service delivery system, including individuals receiving regional center services. This move has created difficulties for many families in trying to preserve relationships with providers that may not be a part of the individual’s new Medi-Cal plan. Individuals who have been mandatorily moved into Medi-Cal plans can use continuity-of-care protections to continue seeing an existing provider who is not part of the Medi-Cal plan for up to 12 months to manage serious acute or chronic conditions. Additionally, in some cases, if an individual is not medically stable, they may seek a temporary exemption from enrollment in a Medi-Cal plan until their condition stabilizes. As mentioned above, Medi-Cal is also a payer of last resort, thus the providers for individuals with another primary form of health coverage must coordinate with both the other form of health coverage and the Medi-Cal plan. If the provider is in-network in both plans, this coordination is far easier, but not all providers are in both networks. Given the higher income limits of the Medi-Cal waiver programs that many regional center clients enroll in, many of these individuals have another form of health coverage through a parent’s commercial coverage.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, this fiscal impact of this bill would be unknown ongoing costs for DHCS for state administration (General Fund and federal funds).

SUPPORT: (Verified 8/13/24)

California Academy of Family Physicians

California Association of Alcohol and Drug Program Executives

OPPOSITION: (Verified 8/13/24)

None received

ARGUMENTS IN SUPPORT: The California Academy of Family Physicians writes that this bill aims to fix a systemic glitch for patients that rely on Medi-Cal as a secondary source of health care coverage. For children and adults with disabilities that access their primary clinicians through private insurance but are eligible for supplemental services through Medi-Cal, this administrative hurdle causes undue confusion and barriers to access their care. It is important to address these issues to prevent such disruptions that can cause delays in treatment and add unnecessary administrative burdens on clinicians taking crucial time away from patient care.

ASSEMBLY FLOOR: 66-0, 5/23/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Hoover, Irwin, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Bonta, Cervantes, Megan Dahle, Essayli, Gipson, Holden, Jackson, Jones-Sawyer, Mathis, Luz Rivas, Blanca Rubio, Weber, Wicks, Wilson

Prepared by: Jen Flory / HEALTH / (916) 651-4111

8/26/24 17:01:38

**** END ****

 THIRD READING  

Bill No: AB 3156

Author: Joe Patterson (R) and Stephanie Nguyen (D)

Amended: 7/3/24 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 11-0, 7/3/24

AYES: Roth, Nguyen, Glazer, Gonzalez, Grove, Hurtado, Limón, Menjivar, Rubio, Smallwood-Cuevas, Wiener

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 66-0, 5/23/24 - See last page for vote

SUBJECT: Medi-Cal managed care plans: regional center services: beneficiaries with other primary coverage

SOURCE: Author

DIGEST: This bill requires (1) the Department of Health Care Services (DHCS) to ensure that providers serving Medi-Cal recipients with another primary form of health coverage do not face administrative requirements significantly in excess of the requirements in the Medi-Cal fee-for-service delivery system; (2) Medi-Cal plans to assist providers and these Medi-Cal recipients on options for maintaining relationships with existing providers in the recipient’s primary form of health care coverage when the beneficiary transitions from the fee-for-service delivery system to a Medi-Cal plan; and (3) DHCS to obtain stakeholder feedback regarding the coordination of other commercial health coverage with a recipient’s Medi-Cal plan, with a specific emphasis on Medi-Cal recipients receiving regional center services and to take the actions it deems necessary to ensure these recipients are able to coordinate their care as seamlessly as possible.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), and under which qualified low-income individuals receive health care services. [Welfare and Institutions Code (WIC) §14000, et seq.]
2. Authorizes the DHCS Director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries; and, establishes managed care models that DHCS contracts with in each county. [WIC §14087.3, §14089, §14087.98, §14087.967 and §14087.5]
3. Establishes the California Advancing and Innovating Medi-Cal (CalAIM) Act as a set of Medi-Cal transformation initiatives, and requires the implementation of the time-limited CalAIM initiative to support a number of goals, including transitioning and transforming the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. [WIC §14184.100]
4. Authorizes DHCS to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan (Medi-Cal plan) across all aid code groups and Medi-Cal managed care models statewide, with certain exceptions. [WIC §14184.200]
5. Requires Medi-Cal plans to comply with continuity-of-care requirements that allow recipients to complete covered services with a nonparticipating provider, as specified, when enrolling in a Medi-Cal plan if the covered services involve an acute or serious chronic condition, a pregnancy, a terminal illness, care of a newborn, or performance of a surgery that is part of a course of treatment. Except for treatment related to terminal illness, limits coverage of services with a nonparticipating provider to 12 months after the date of enrollment in the plan. [WIC §14184.200 and Health Safety Code (HSC) §1373.96]
6. Requires states and local agencies administering the Medicaid program to take all reasonable measures to ascertain the legal liability of third parties, including health plans, to pay for care and services available under the plan. [42 USC §1396(a)]
7. Prohibits a person with private health care coverage from receiving the same health care items or services paid for by a publicly funded health care program. If the person does receive health care paid for by a publicly funded health care program, requires the person’s private health care coverage to reimburse the publicly funded health care program for those items or services. [WIC §10020]
8. Requires any provider seeking payment from the Medi-Cal program to first seek payment from any other health coverage that the patient has when the provider is aware of this coverage and the coverage extends to these services before submitting a claim to DHCS for the balance of the services. Allows a provider to submit a claim to DHCS if the other health coverage does not pay the claim within 90 days of billing. [WIC §14023.7]
9. Requires providers to notify DHCS of any potential contractual or legal entitlement or other third-party liability within 60 days of discovery and gives DHCS the right to recover any contractual or legal entitlement or other third-party liability for the cost incurred in rendering care. [WIC §14024]
10. Requires any health insurer or managed care plan to provide to DHCS at least once a month eligibility and coverage information for each subscriber, policyholder, enrollee, or insured so that DHCS can comply with federal law regarding third-party health coverage and be the payer of last resort. [WIC §14124.90]
11. Establishes an entitlement to services for individuals with developmental disabilities under the Lanterman Developmental Disabilities Services Act (Lanterman Act), including a right to treatment and habilitation services and supports in the least restrictive environment, a right to prompt medical care and treatment, and a right to make choices in their own lives. [WIC §4500, et seq. and §4502]
12. Establishes a system of nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires Department of Developmental Services (DDS) to contract with regional centers to provide case management services and arrange for or purchase services that meet the needs of individuals with developmental disabilities, as defined. [WIC §4620, et seq.]

This bill:

1. Requires DHCS to ensure that a provider does not face administrative requirements significantly in excess of the requirements for billing the Medi-Cal fee-for-service deliver system when billing a Medi-Cal plan for allowable costs not paid by a Medi-Cal recipient’s other primary form of health coverage.
2. Specifies that a Medi-Cal provider participating in the Medi-Cal fee-for-service delivery system is not required to contract with a Medi-Cal managed care plan in order to provide services to a Medi-Cal plan enrollee with another primary form of health coverage, excluding Medicare.
3. Requires Medi-Cal plans to provide assistance to Medi-Cal providers and recipients on options for maintaining health care relationships between the recipients and existing providers that are contracted with, or have agreements with, the recipient’s primary form of health coverage when the recipients transition from Medi-Cal fee-for-service to a Medi-Cal plan.
4. Requires DHCS to solicit input from stakeholders, including consumer advocates, Medi-Cal plans, other commercial plans, and providers that serve regional center clients, regarding the coordination of other commercial health coverage with a Medi-Cal plan, with a specific emphasis on Medi-Cal recipients who receive regional center services. Requires DHCS to also include an item on the agenda of the first meeting of the Medi-Cal Managed Care Advisory Committee of 2025 to discuss this topic.
5. Requires DHCS, to take the actions it deems necessary to ensure that Medi-Cal plan recipients who have other health coverage, including those receiving regional center services, are able to coordinate their care as seamlessly as possible within 12 months of the meeting in 4) above. Specifies that DHCS’s actions may include updating regulations, providing revised guidance to plans and providers, increasing reporting requirements, taking enforcement action, and providing education and outreach to Medi-Cal recipients, especially to those recipients who receive regional center services and have other commercial health coverage.
6. Requires DHCS to report to the Assembly and Senate health committees on the effectiveness of implementing this section at least annually from 2025 through 2028.
7. Allows DHCS to implement this bill via guidance instead of regulation and conditions implementation on the receipt of any necessary federal approvals and continued federal financial participation.

Comments

1. Author’s statement. According to the author, children and adults with developmental disabilities have been faced with a dilemma of choosing between their existing insurance and medical team or access to their enrolled regional center. Just this past year, DHCS moved to a “managed care” approach for servicing these individuals. For an unknown reason, this has caused confusion with the delivery of their healthcare, requiring families to request an exemption from DHCS to keep their existing medical teams. We have been working closely with DHCS and while they indicate families should not have to make these difficult decisions, the reality is implementation has been rocky, to say the least. The requirement to get approved for exemptions has caused a lot of anxiety and uncertainty for this vulnerable population that seek specialized services through regional centers in conjunction with private pay insurance. While DHCS acknowledges that these issues should not be occurring, the fact is the problems persist. This bill will ensure that these individuals and their medical teams do not have to complete lengthy, 40-page exemption documents multiple times per year. If DHCS fixes the acknowledged problem, this bill would not be necessary.
2. Other health coverage. The Medi-Cal program is open to all who meet the eligibility requirements, including people who might have another form of health coverage such as Medicare or commercial coverage through an employer. However, under federal law, the Medi-Cal program is the payer of last resort and Medi-Cal must seek any payment available from third parties. Medi-Cal recipients must report any other health coverage they have and health plans and insurers must report to DHCS information on all participants in order to identify all Medi-Cal recipients with other health coverage. When a recipient has other health coverage, the other coverage is the primary form of coverage, and the Medi-Cal program covers services that are not included in the other health coverage. While this may be a simple concept in theory, in practice, it has often been difficult for Medi-Cal recipients to coordinate two forms of coverage and obtain the benefits of both, particularly recipients with commercial coverage who are required to enroll in a Medi-Cal plan. Medi-Cal providers must bill the other health coverage for any services covered and bill Medi-Cal only for the excluded services. Medi-Cal recipients also face difficulties finding providers who accept both their primary coverage and have a contract with their Medi-Cal plan.
3. Challenges in coordinating coverage for regional center clients. Individuals with developmental disabilities are eligible for a range of services from California’s regional centers including assessments, eligibility determinations, case management and coordination, counseling, family support, genetic counseling, early intervention services, and purchase of necessary services that are included in their individual program plan. Because regional centers are a payer of last resort, they must enroll eligible individuals in Medi-Cal, even if that individual has another form of health coverage. However, as many regional center clients have significant health needs that go beyond the coverage of traditional commercial plans, enrollment in Medi-Cal helps the individual and family obtain additional services. In particular, Medi-Cal has special programs administered by the Department of Developmental Services, the Home and Community Based Services Waiver for Californians with Developmental Disabilities and the Self-Determination Program Waiver for Individuals with Developmental Disabilities. These programs allow eligible individuals to get all of the Medi-Cal covered services as well as additional care to allow individuals who would otherwise be institutionalized, to stay in the community or allow individuals with developmental disabilities to live with as much independence as possible. These waiver programs are available to individuals in higher income families because the waiver programs have a rule, known as “institutional deeming,” that allows an individual to be determined eligible based on solely their own income without taking into account the income of their parents.

Recently, as part of the CalAIM initiative, DHCS moved many populations into mandatory managed care who were previously receiving services through the Medi-Cal fee-for-service delivery system, including individuals receiving regional center services. This move has created difficulties for many families in trying to preserve relationships with providers that may not be a part of the individual’s new Medi-Cal plan. Individuals who have been mandatorily moved into Medi-Cal plans can use continuity-of-care protections to continue seeing an existing provider who is not part of the Medi-Cal plan for up to 12 months to manage serious acute or chronic conditions. Additionally, in some cases, if an individual is not medically stable, they may seek a temporary exemption from enrollment in a Medi-Cal plan until their condition stabilizes. As mentioned above, Medi-Cal is also a payer of last resort, thus the providers for individuals with another primary form of health coverage must coordinate with both the other form of health coverage and the Medi-Cal plan. If the provider is in-network in both plans, this coordination is far easier, but not all providers are in both networks. Given the higher income limits of the Medi-Cal waiver programs that many regional center clients enroll in, many of these individuals have another form of health coverage through a parent’s commercial coverage.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, this fiscal impact of this bill would be unknown ongoing costs for DHCS for state administration (General Fund and federal funds).

SUPPORT: (Verified 8/13/24)

California Academy of Family Physicians

California Association of Alcohol and Drug Program Executives

OPPOSITION: (Verified 8/13/24)

None received

ARGUMENTS IN SUPPORT: The California Academy of Family Physicians writes that this bill aims to fix a systemic glitch for patients that rely on Medi-Cal as a secondary source of health care coverage. For children and adults with disabilities that access their primary clinicians through private insurance but are eligible for supplemental services through Medi-Cal, this administrative hurdle causes undue confusion and barriers to access their care. It is important to address these issues to prevent such disruptions that can cause delays in treatment and add unnecessary administrative burdens on clinicians taking crucial time away from patient care.

ASSEMBLY FLOOR: 66-0, 5/23/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Hoover, Irwin, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Bonta, Cervantes, Megan Dahle, Essayli, Gipson, Holden, Jackson, Jones-Sawyer, Mathis, Luz Rivas, Blanca Rubio, Weber, Wicks, Wilson

Prepared by: Jen Flory / HEALTH / (916) 651-4111

8/18/24 13:37:22

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 3156 (Joe Patterson) - Medi-Cal managed care plans: regional center services: beneficiaries with other primary coverage

Bill Summary:

AB 3156 would impose requirements on Medi-Cal managed care plans to ensure that enrollees who have other health coverage are able to better coordinate their care.

Fiscal Impact:

Unknown ongoing costs for the Department of Health Care Services (DHCS) for state administration (General Fund and federal funds).

Background:

The Medi-Cal program is available to individuals who meet the eligibility requirements, including people who might have another form of health coverage such as Medicare or commercial coverage through an employer. However, under federal law, the Medi-Cal program is the payer of last resort and Medi-Cal must seek any payment available from third parties. Medi-Cal recipients must report any other health coverage they have and health plans and insurers must report to DHCS information on all participants in order to identify all Medi-Cal recipients with other health coverage. When a recipient has other health coverage, the other coverage is the primary form of coverage, and the Medi-Cal program covers services that are not included in the other health coverage. While this may be a simple concept in theory, in practice, it has often been difficult for Medi-Cal recipients to coordinate two forms of coverage and obtain the benefits of both, particularly recipients with commercial coverage who are required to enroll in a Medi-Cal plan. Medi-Cal providers must bill the other health coverage for any services covered and bill Medi-Cal only for the excluded services. Medi-Cal recipients also face difficulties finding providers who accept both their primary coverage and have a contract with their Medi-Cal plan.

Individuals with developmental disabilities are eligible for a range of services from California’s regional centers including assessments, eligibility determinations, case management and coordination, counseling, family support, genetic counseling, early intervention services, and purchase of necessary services that are included in their individual program plan. Because regional centers are a payer of last resort, they must enroll eligible individuals in Medi-Cal, even if that individual has another form of health coverage. As many regional center clients have needs for health services that go beyond the coverage of traditional commercial plans, enrollment in Medi-Cal helps the individual and family obtain additional services.

Proposed Law:

Specific provisions of the bill would:

• Require, in the case of a Medi-Cal enrollee of a Medi-Cal managed care plan who has other health coverage and for whom the Medi-Cal program is a secondary payer, DHCS to ensure that a provider billing the Medi-Cal managed care plan for allowable costs not paid by the other health care coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system.
• Prohibit, in the case of a Medi-Cal enrollee of a Medi-Cal managed care plan who has other health coverage, excluding Medicare, and for whom the Medi-Cal program is a secondary payer, a provider participating in the Medi-Cal fee-for-service delivery system from being required to contract with the Medi-Cal managed care plan in order to provide services to that Medi-Cal enrollee and to bill the Medi-Cal managed care plan.
• Require Medi-Cal managed care plans to provide assistance to Medi-Cal providers and beneficiaries, upon request, on options for maintaining health care relationships between beneficiaries and existing providers that are contracted with, or have agreements with, a beneficiary’s primary form of health care coverage, if the beneficiary transitions from receiving services under the Medi-Cal fee-for-service delivery system to being an enrollee of the Medi-Cal managed care plan.
• Require DHCS, to take actions it deems necessary, as specified, to ensure that Medi-Cal managed care enrollees who have other health coverage, including those receiving regional center services, are able to coordinate their care as seamlessly as possible.
• Require DHCS, at least annually, from 2025 through 2028, to report to the Assembly Committee on Health and the Senate Committee on Health on the effectiveness of implementation.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Richard Roth, Chair

BILL NO: AB 3156

SUBJECT: Medi-Cal managed care plans: regional center services: beneficiaries with other primary coverage

SUMMARY:

Exempts, from mandatory enrollment in a Medi-Cal managed care plan (Medi-Cal plan), recipients who receive services from a regional center, who have coverage under Medicare or another primary form of health coverage, and whose provider for Medi-Cal covered benefits is not participating in the Medi-Cal plan’s provider network, under specified conditions. Permits recipients who meet this criteria but have already enrolled in a Medi-Cal plan to continue receiving services from a non-participating provider, subject to certain conditions. Requires the Department of Health Care Services to ensure that providers serving these Medi-Cal recipients do not face administrative requirements significantly in excess of the requirements in the Medi-Cal fee-for-service delivery system. Requires Medi-Cal plans to assist providers and these Medi-Cal recipients on options for maintaining relationships with existing providers in the recipient’s primary form of health care coverage when the beneficiary transitions from the fee-for-service delivery system to a Medi-Cal plan.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), and under which qualified low-income individuals receive health care services. [WIC §14000, et seq.]
2. Authorizes the DHCS Director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries; and, establishes managed care models that DHCS contracts with in each county. [WIC §14087.3, §14089, §14087.98, §14087.967 and §14087.5]
3. Establishes the California Advancing and Innovating Medi-Cal (CalAIM) Act as a set of Medi-Cal transformation initiatives, and requires the implementation of the time-limited CalAIM initiative to support a number of goals, including transitioning and transforming the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. [WIC §14184.100]
4. Authorizes DHCS to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan (Medi-Cal plan) across all aid code groups and Medi-Cal managed care models statewide, with certain exceptions. [WIC §14184.200]
5. Requires Medi-Cal plans to comply with continuity-of-care requirements that allow recipients to complete covered services with a nonparticipating provider, as specified, when enrolling in a Medi-Cal plan if the covered services involve an acute or serious chronic condition, a pregnancy, a terminal illness, care of a newborn, or performance of a surgery that is part of a course of treatment. Except for treatment related to terminal illness, limits coverage of services with a nonparticipating provider to 12 months after the date of enrollment in the plan. [WIC §14184.200 and HSC §1373.96]
6. Requires states and local agencies administering the Medicaid program to take all reasonable measures to ascertain the legal liability of third parties, including health plans, to pay for care and services available under the plan. [42 USC §1396(a)]
7. Prohibits a person with private health care coverage from receiving the same health care items or services paid for by a publicly funded health care program. If the person does receive health care paid for by a publicly funded health care program, requires the person’s private health care coverage to reimburse the publicly funded health care program for those items or services. [WIC §10020]
8. Requires any provider seeking payment from the Medi-Cal program to first seek payment from any other health coverage that the patient has when the provider is aware of this coverage and the coverage extends to these services before submitting a claim to DHCS for the balance of the services. Allows a provider to submit a claim to DHCS if the other health coverage does not pay the claim within 90 days of billing. [WIC §14023.7]
9. Requires providers to notify DHCS of any potential contractual or legal entitlement or other third-party liability within 60 days of discovery and gives DHCS the right to recover any contractual or legal entitlement or other third-party liability for the cost incurred in rendering care. [WIC §14024]
10. Requires any health insurer or managed care plan to provide to DHCS at least once a month eligibility and coverage information for each subscriber, policyholder, enrollee, or insured so that DHCS can comply with federal law regarding third-party health coverage and be the payer of last resort. [WIC §14124.90]
11. Establishes an entitlement to services for individuals with developmental disabilities under the Lanterman Developmental Disabilities Services Act (Lanterman Act), including a right to treatment and habilitation services and supports in the least restrictive environment, a right to prompt medical care and treatment, and a right to make choices in their own lives. [WIC §4500, et seq. and §4502]
12. Establishes a system of nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires Department of Developmental Services (DDS) to contract with regional centers to provide case management services and arrange for or purchase services that meet the needs of individuals with developmental disabilities, as defined. [WIC §4620, et seq.]

This bill:

1. Allows a Medi-Cal recipient who receives services from a regional center and who has coverage under Medicare or another primary form of coverage, who had Medi-Cal through the fee-for-service delivery system but is now mandatorily enrolled in a Medi-Cal plan, and whose provider for Medi-Cal covered benefits is not participating in the Medi-Cal plan’s network, to have a right to continue receiving Medi-Cal covered benefits from that provider as long as the provider remains enrolled in the Medi-Cal program, whether or not the provider joins the Medi-Cal plan’s network.
2. Exempts a Medi-Cal recipient who receives services from a regional center and also has coverage under Medicare or another primary form of health coverage from mandatory enrollment in a Medi-Cal plan if their provider for covered Medi-Cal services is not in the Medi-Cal plan network and the provider would be unable to bill and receive reimbursement from the recipient’s primary health coverage if they enroll in a Medi-Cal plan. Revokes the exemption upon a determination of the provider’s ability to bill and receive reimbursement from that primary health coverage if the recipient enrolls in the Medi-Cal plan.
3. Requires DHCS to ensure that a provider billing a Medi-Cal plan on behalf of a Medi-Cal recipient who receives services from a regional center and who has coverage under Medicare or another primary form of health coverage does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service delivery system.
4. Requires Medi-Cal plans to provide assistance to Medi-Cal providers and recipients on options for maintaining health care relationships between the recipients who receive services from a regional center and existing providers that are contracted with, or have agreements with, the recipient’s primary form of health coverage when the recipients transition from Medi-Cal fee-for-service to a Medi-Cal plan.
5. Requires DHCS to report to the Assembly and Senate health committees on the effectiveness of implementing this section at least annually from 2025 through 2028.
6. Allows DHCS to implement this bill via guidance instead of regulation and conditions implementation on the receipt of any necessary federal approvals and continued federal financial participation.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, this bill would incur costs to DHCS of an unknown amount, but likely in the hundreds of thousands of dollars to prepare the report and to communicate the provisions of this bill with plans and providers (General Fund, federal funds). Note that this analysis was based on a more limited version of this bill.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, children and adults with developmental disabilities have been faced with a dilemma of choosing between their existing insurance and medical team or access to their enrolled regional center. Just this past year, DHCS moved to a “managed care” approach for servicing these individuals. For an unknown reason, this has caused confusion with the delivery of their healthcare, requiring families to request an exemption from DHCS to keep their existing medical teams. We have been working closely with DHCS and while they indicate families should not have to make these difficult decisions, the reality is implementation has been rocky, to say the least. The requirement to get approved for exemptions has caused a lot of anxiety and uncertainty for this vulnerable population that seek specialized services through regional centers in conjunction with private pay insurance. While DHCS acknowledges that these issues should not be occurring, the fact is the problems persist. This bill will ensure that these individuals and their medical teams do not have to complete lengthy, 40-page exemption documents multiple times per year. If DHCS fixes the acknowledged problem, this bill would not be necessary.
2. Other health coverage. The Medi-Cal program is open to all who meet the eligibility requirements, including people who might have another form of health coverage such as Medicare or commercial coverage through an employer. However, under federal law, the Medi-Cal program is the payer of last resort and Medi-Cal must seek any payment available from third parties. Medi-Cal recipients must report any other health coverage they have and health plans and insurers must report to DHCS information on all participants in order to identify all Medi-Cal recipients with other health coverage. When a recipient has other health coverage, the other coverage is the primary form of coverage, and the Medi-Cal program covers services that are not included in the other health coverage. While this may be a simple concept in theory, in practice, it has often been difficult for Medi-Cal recipients to coordinate two forms of coverage and obtain the benefits of both, particularly recipients with commercial coverage who are required to enroll in a Medi-Cal plan. Medi-Cal providers must bill the other health coverage for any services covered and bill Medi-Cal only for the excluded services. Medi-Cal recipients also face difficulties finding providers who accept both their primary coverage and have a contract with their Medi-Cal plan.
3. Challenges in coordinating coverage for regional center clients. Individuals with developmental disabilities are eligible for a range of services from California’s regional centers including assessments, eligibility determinations, case management and coordination, counseling, family support, genetic counseling, early intervention services, and purchase of necessary services that are included in their individual program plan. Because regional centers are a payer of last resort, they must enroll eligible individuals in Medi-Cal, even if that individual has another form of health coverage. However, as many regional center clients have significant health needs that go beyond the coverage of traditional commercial plans, enrollment in Medi-Cal helps the individual and family obtain additional services. In particular, Medi-Cal has special programs administered by the Department of Developmental Services, the Home and Community Based Services Waiver for Californians with Developmental Disabilities and the Self-Determination Program Waiver for Individuals with Developmental Disabilities. These programs allow eligible individuals to get all of the Medi-Cal covered services as well as additional care to allow individuals who would otherwise be institutionalized, to stay in the community or allow individuals with developmental disabilities to live with as much independence as possible. These waiver programs are available to individuals in higher income families because the waiver programs have a rule, known as “institutional deeming,” that allows an individual to be determined eligible based on solely their own income without taking into account the income of their parents.

Recently, as part of the CalAIM initiative, DHCS moved many populations into mandatory managed care who were previously receiving services through the Medi-Cal fee-for-service delivery system, including individuals receiving regional center services. This move has created difficulties for many families in trying to preserve relationships with providers that may not be a part of the individual’s new Medi-Cal plan. Individuals who have been mandatorily moved into Medi-Cal plans can use continuity-of-care protections to continue seeing an existing provider who is not part of the Medi-Cal plan for up to 12 months to manage serious acute or chronic conditions. Additionally, in some cases, if an individual is not medically stable, they may seek a temporary exemption from enrollment in a Medi-Cal plan until their condition stabilizes. As mentioned above, Medi-Cal is also a payer of last resort, thus the providers for individuals with another primary form of health coverage must coordinate with both the other form of health coverage and the Medi-Cal plan. If the provider is in-network in both plans, this coordination is far easier, but not all providers are in both networks. Given the higher income limits of the Medi-Cal waiver programs that many regional center clients enroll in, many of these individuals have another form of health coverage through a parent’s commercial coverage.

1. Prior legislation. AB 1608 (Joe Patterson of 2023) would have exempted Medi-Cal recipients from Medi-Cal managed care who received services from a regional center and have another primary form of health coverage. AB 1608 was not heard in the Assembly Health Committee.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) establishes, among other things, authority for DHCS to standardize enrollment of most populations in managed care, with limited exceptions.

1. Support. The California Academy of Family Physicians writes that this bill aims to fix a systemic glitch for patients that rely on Medi-Cal as a secondary source of health care coverage. For children and adults with disabilities that access their primary clinicians through private insurance but are eligible for supplemental services through Medi-Cal, this administrative hurdle causes undue confusion and barriers to access their care. It is important to address these issues to prevent such disruptions that can cause delays in treatment and add unnecessary administrative burdens on clinicians taking crucial time away from patient care.
2. Policy comment. Recent amendments to this bill limit the protections for Medi-Cal recipients with other health coverage to just those receiving regional center services. The amendments also exempt recipients receiving regional center services from mandatory Medi-Cal plan enrollment in specified circumstances or extend continuity of care protections indefinitely in specified circumstances. The removal of exemption from mandatory enrollment in a Medi-Cal plan was done by the Assembly Health committee, and adding it back is contrary to the goals of the CalAIM initiative, which aims to standardize the delivery of Medi-Cal services across population and require Medi-Cal plans to offer more services and care coordination. The indefinite extension of the Medi-Cal plan’s continuity of care requirement will add to the program’s complexity and cost.

While the care coordination needs of those receiving regional center services are real, particularly in light of the recent move to mandatory Medi-Cal plan enrollment for these individuals, this committee recommends preserving the additional attempts to streamline coordination of other health coverage with Medi-Cal plan coverage for all individuals in this circumstance, particularly those with commercial coverage. Limiting these provisions to just regional center clients adds additional program complexity to an already over-complex Medi-Cal program. Nonetheless, requiring DHCS to focus more on the needs of this population by soliciting stakeholder input through the existing Medi-Cal managed care advisory committee and taking any necessary steps through additional plan or provider guidance, enforcement, or consumer outreach and education where necessary to address the issues raised would be warranted.

SUPPORT AND OPPOSITION:

Support: California Academy of Family Physicians
California Association of Alcohol and Drug Program Executives

Oppose: None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 3156

Author:(Joe Patterson and Stephanie Nguyen)

As Amended Ver:April 25, 2024

Majority vote

SUMMARY

Implements several changes to help beneficiaries who use Medi-Cal as a secondary form of health coverage to maintain their providers when they transition from fee-for-service (FFS) Medi-Cal to Medi-Cal managed care, including limiting administrative and contracting requirements for providers when billing Medi-Cal managed care plans as secondary payers and requiring Medi-Cal managed care plans to provide assistance with maintaining providers, upon request. Requires the Department of Health Care Services (DHCS) to report on the bill's implementation.

Major Provisions

COMMENTS

This bill was prompted by complaints from individuals who have private insurance, but rely on Medi-Cal as a secondary payer to cover significant costs associated with care for individuals with severe disabilities. These individuals indicated they were losing access to providers contracted with their private coverage (referred to other health coverage, or OHC) because of the transition of their Medi-Cal from FFS to managed care, which has been pursued as part of a larger statewide initiative.

1. Medi-Cal is the Payer of Last Resort. Federal law requires state Medicaid programs to take reasonable measures to ascertain the legal liability of third parties, including other health plans and insurers, to pay for services covered under Medicaid. A beneficiary is required to use their private coverage, prior to their Medi-Cal benefits, when the same service or benefit is available under their private health coverage. When this occurs, Medi-Cal will be secondary to the other health coverage, covering allowable costs not paid by the primary insurance (for instance, copayments) up to the Medi-Cal rate.
2. Mandatory Transition to Managed Care. Over the last several years, most of the Medi-Cal population has transitioned into Medi-Cal managed care. DHCS introduced mandatory enrollment in managed care to guarantee a similar beneficiary experience across counties, and to streamline Medi-Cal program administration.

Beneficiaries with OHC who do not have Medicare transitioned on January 1, 2022, while beneficiaries who are dually eligible for Medi-Cal and Medicare transitioned effective January 1, 2023.

State law provides additional, temporary exceptions whereby individuals who transition to a managed care plan can retain relationships with their providers who are not contracted providers with the plan; however, these are restricted and time-limited.

1. How Medi-Cal Managed Care Interacts with OHC. Most private plans have cost-sharing like copayments or coinsurance, which Medi-Cal will pay on behalf of the Medi-Cal enrollee when an individual has OHC. Medi-Cal prohibits billing patients for cost-sharing. Providers must bill Medi-Cal to recover the cost-sharing amount owed by the Medi-Cal enrollee.

Prior to the transition to managed care, a provider would bill Medi-Cal FFS directly for services not covered by their patient's OHC, or to request reimbursement for cost-sharing required by the patient's OHC.

However, once an individual is enrolled in Medi-Cal managed care, an individual's provider must bill the individual's Medi-Cal managed plan for copayments or other costs not covered by the OHC, instead of billing DHCS. These providers must interact with Medi-Cal managed care plans, even if the provider is not in the network of a Medi-Cal managed care plan and the service is primarily being billed to the private plan. Billing multiple plans may be more complicated for the provider, who must validate and bill the appropriate plan instead of simply billing DHCS for all Medi-Cal claims. Furthermore, DHCS's managed care plan contracts prohibit managed care plans from paying claims for services provided to a member with OHC, without proof that the provider has first exhausted all sources of other payment. Administrative processes and documentation requirements are not standardized across plans, meaning plans may require slightly different forms of proof or have different portals or means to accept this information.

Anecdotally, according to the bill's author and affected constituents, these billing requirements have posed an area of friction between certain patients, providers, and managed care plans with the recent expansion of mandatory enrollment into Medi-Cal managed care.

1. Can Individuals With OHC Keep Their Providers when Their Medi-Cal Services Transition to Managed Care? Individuals who rely on OHC as a primary payer for their health care should theoretically should be able to maintain their providers who are paid primarily by the OHC. The providers should be able to simply bill the Medi-Cal managed care plan instead of FFS Medi-Cal for any allowable costs not covered by the OHC.

According to DHCS, if an individual is seeing providers contracted with their OHC who are billing the OHC for services, and Medi-Cal is only paying for other allowable costs such as the patient copayment, the provider is able to bill the Medi-Cal managed care plan for the copayment even if the provider is not contracted with that plan. This guidance is reflected in a fact sheet published by DHCS, titled "Overview of Mandatory Managed Care Enrollment." The fact sheet also reiterates an individual can keep their OHC when they become mandatorily enrolled into managed care.

However, anecdotally, the fact sheet has not resolved issues for individuals seeking to maintain their network of providers. Some providers may refuse to render services to individuals enrolled in Medi-Cal managed care for a variety of reasons, including the providers' choice to adopt a policy of not engaging with Medi-Cal managed care whatsoever, or a lack of understanding that they are allowed to bill the Medi-Cal managed care plan for allowable costs even if they are not contracted with the plan.

According to the Author

Children and adults with developmental disabilities who have private health coverage have been faced with a dilemma whereby accepting enrollment in Medi-Cal managed care to access supplemental services has jeopardized their ability to maintain their existing providers that are part of their private health coverage network.

As DHCS moved these individuals into Medi-Cal managed care plans, the author asserts, it has caused inexplicable confusion with the delivery of their health care, requiring families to request exemptions from DHCS to keep their existing medical teams. The author indicates his office has been working closely with DHCS and that, although DHCS acknowledges that these issues should not be occurring, the problems persist. The author indicates the administrative work families have had to do to retain their trusted providers has caused anxiety and uncertainty for a particularly vulnerable population. The author indicates if the issues were to be addressed administratively, the bill would not be necessary.

Arguments in Support

There is no known support.

Arguments in Opposition

There is no known opposition.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

Costs to DHCS of an unknown amount, but likely in the hundreds of thousands of dollars to prepare the report and to communicate the provisions of this bill with plans and providers (General Fund, federal funds).

According to the Legislative Analyst's Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years. 

VOTES

ASM HEALTH: 16-0-0

YES: Bonta, Waldron, Aguiar-Curry, Arambula, Wendy Carrillo, Flora, Haney, Jones-Sawyer, Maienschein, McCarty, Joe Patterson, Rodriguez, Sanchez, Santiago, Schiavo, Weber

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: April 25, 2024

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0003265

Date of Hearing: May 15, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 3156

Author:(Joe Patterson) – As Amended Ver:April 25, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Department of Health Care Services (DHCS) to ensure a provider billing a Medi-Cal managed care plan (MCP) does not face excessive administrative requirements, including being required to contract with the MCP, when billing for allowable services provided to a Medi-Cal enrollee who has other health coverage (OHC) and for whom Medi-Cal is a secondary payer.

Specifically, this bill:

1. In the case of a Medi-Cal MCP enrollee who has OHC and for whom Medi-Cal is a secondary payer, requires DHCS to ensure that a provider billing the Medi-Cal managed care plan for allowable costs not paid by the OHC does not face administrative requirements significantly in excess of the administrative requirements for billing those same costs to the Medi-Cal fee-for-service (FFS) delivery system.
   
2. In the case of a Medi-Cal MCP enrollee who has OHC and for whom Medi-Cal is a secondary payer, prohibits a provider participating in the Medi-Cal FFS delivery system from being required to contract with the Medi-Cal managed care plan to provide services to that Medi-Cal enrollee and bill the Medi-Cal MCP.
   
3. Requires a Medi-Cal MCP to provide assistance to Medi-Cal providers and beneficiaries, upon request, on options for maintaining health care relationships between beneficiaries and providers that contract with, or have agreements with, a beneficiary’s primary health care coverage, if the beneficiary transitions from receiving services under the Medi-Cal FFS delivery system to being an enrollee of a Medi-Cal MCP.
   
4. Requires DHCS to report, at least annually, from 2025 through 2028, to the Assembly and Senate committees on health, on the effectiveness of implementing this section.
   
5. Authorizes DHCS to implement, interpret, or make specific this section by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions.
   
6. Provides that this bill is to be implemented only to the extent that necessary federal approvals are obtained and federal financial participation is available and is not jeopardized.

FISCAL EFFECT:

Costs to DHCS of an unknown amount, but likely in the hundreds of thousands of dollars to prepare the report and to communicate the provisions of this bill with plans and providers (General Fund, federal funds).

According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years. 

COMMENTS:

1. Purpose. According to the author, children and adults with developmental disabilities who have private health coverage have been faced with a dilemma whereby accepting enrollment in Medi-Cal managed care to access supplemental services has jeopardized their ability to maintain their existing providers that are part of their private health coverage network.
   
   As DHCS moved these individuals into Medi-Cal MCPs, the author asserts, there has been confusion with the delivery of their health care, requiring families to request exemptions from DHCS to keep their existing medical teams. The author indicates his office has been working closely with DHCS and that, although DHCS acknowledges that these issues should not be occurring, the problems persist. The author indicates the administrative work families have had to do to retain their trusted providers has caused anxiety and uncertainty for a particularly vulnerable population.

This bill as introduced would have exempted individuals with OHC who also receive services though a regional center from mandatory enrollment in the Medi-Cal managed care delivery system. As amended, the bill instead requires DHCS to ease administrative burdens for these dually covered individuals.

1. Background. Pursuant to the Lanterman Act, some individuals with developmental disabilities or related risk factors qualify for services offered through 21 regional centers contracted with the state. Regional centers provide each consumer with a service coordinator, who coordinates the activities necessary to develop and implement the consumer's Individual Program Plan (IPP). Regional centers serve as fixed points of contact in the community for consumers and their families to access services and supports. Regional center staff participate in the individual program planning process, assist consumers to obtain necessary services and supports from agencies that offer benefits, and purchase other services as necessary. Regional center staff provide outreach; intake, assessment, evaluation and diagnostic services; and case management/service coordination for persons with developmental disabilities and persons who are at risk of becoming developmentally disabled. Regional center staff conduct a variety of activities to achieve the stated objectives of a consumer's IPP.

Individuals with developmental disabilities who receive services from a regional center and need a higher level of care, such as home and community-based services, are generally required to enroll in Medi-Cal if they are eligible, even if they have OHC, because the regional center is a “payer of last resort.” This means the regional center must ensure Medi-Cal or other entities pays for services to which an individual may be entitled, prior to funding those services from the regional center budget. Thus, individuals who are the subject of this bill rely on regional center services and, as a condition of accepting regional center services, must enroll in Medi-Cal so they can access Medi-Cal covered services that are not available under their private health plans, such as In-Home Supportive Services.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 23, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 3156

Author:(Joe Patterson) – As Amended Ver:March 21, 2024

SUBJECT: Medi-Cal managed care plans: exemption from mandatory enrollment.

SUMMARY: This bill exempts Medi-Cal eligible individuals who receive services from a regional center and use a Medi-Cal fee-for-service (FFS) delivery system as a secondary form of health coverage from mandatory enrollment in Medi-Cal managed care, and requires a Medi-Cal beneficiary seeking an exemption from enrollment in managed care on this basis to complete and submit an exemption form every five years.

EXISTING LAW:

1. Establishes an entitlement to services for individuals with developmental disabilities under the Lanterman Developmental Disabilities Services Act (Lanterman Act). [Welfare and Institutions Code Section (WIC) § 4500, et seq.]
2. Establishes a system of nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires the Department of Developmental Services (DDS) to contract with regional centers to provide case management services and arrange for or purchase services that meet the needs of individuals with developmental disabilities, as defined. [WIC § 4620 et seq.]
3. Requires the development of an Individual Program Plan (IPP) for each regional center consumer, which specifies services to be provided to the consumer, based on his or her individualized needs determination and preferences, and defines that planning process as the vehicle to ensure that services and supports are customized to meet the needs of consumers who are served by regional centers. [WIC § 4646]
4. Requires a regional center to identify and pursue all possible sources of funding for consumers receiving regional center services, including Medi-Cal and private entities, to the maximum extent they are liable for the cost of services, aid, insurance, or medical assistance to the consumer. [WIC § 4646]
   
5. Establishes the Medi-Cal Program, administered by the Department of Health Care Services (DHCS), to provide comprehensive health benefits to low-income individuals who meet specified eligibility criteria. [WIC § 14000, et seq.]
6. Establishes the California Advancing and Innovating Medi-Cal (CalAIM) Act as a set of Medi-Cal transformation initiatives, and requires the implementation of the time-limited CalAIM initiative to support a number of goals, including transitioning and transforming the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. [WIC §14184.100]
7. Authorizes DHCS to standardize those populations that are subject to mandatory enrollment in a Medi-Cal managed care plan across all aid code groups and Medi-Cal managed care models statewide, with certain exceptions. [WIC § 14184.200]
8. Prohibits a person having private health care coverage to receive the same health care items or services furnished or paid for by a publicly funded health care program. [WIC § 10020 (a)]
9. Requires a carrier of private health care coverage to reimburse a publicly funded health care program for the cost incurred in rendering health care paid for by the public program, to the extent of the benefits provided under the terms of the policy for the items provided or the services rendered. [(WIC) § 10020 (c)]
10. Requires health plans and other entities to provide to DHCS beneficiary information and access to real-time, electronic eligibility verification, in a format provided by the department, for purposes of cost avoidance. [WIC § 14124.90]

FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, children and adults with developmental disabilities who have private health coverage have been faced with a dilemma whereby accepting enrollment in Medi-Cal managed care to access supplemental services has jeopardized their ability to maintain their existing providers that are part of their private health coverage network.
   
   As DHCS moved these individuals into Medi-Cal managed care plans, the author asserts, it has caused inexplicable confusion with the delivery of their health care, requiring families to request exemptions from DHCS to keep their existing medical teams. The author indicates his office has been working closely with DHCS and that, although DHCS acknowledges that these issues should not be occurring, the problems persist. The author indicates the administrative work families have had to do to retain their trusted providers has caused anxiety and uncertainty for a particularly vulnerable population.

This bill would exempt individuals with other health coverage who also receive services though a regional center from mandatory enrollment in the Medi-Cal managed care delivery system. Essentially, this would allow these individuals to choose to be enrolled in Medi-Cal FFS instead of in a managed care plan. The author indicates if the issues were to be addressed administratively, the bill would not be necessary.

1. BACKGROUND. Individuals with developmental disabilities who receive services from a regional center, and need a higher level of care, such as home and community-based services, are generally required to enroll in Medi-Cal as a “generic resource” if they are eligible. This is true even if they have other health coverage, because the regional center is a “payer of last resort.” This means the regional center must ensure Medi-Cal or other entities pays for services to which an individual may be entitled, prior to funding those services from the regional center budget. Thus, individuals who are the subject of this bill rely on regional center services and, as a condition of accepting regional center services, must enroll in Medi-Cal so they can access Medi-Cal covered services that are not available under their private health plans, such as In-Home Supportive Services.
   
   Medi-Cal provides benefits through both a FFS and managed care delivery system. Medi-Cal is also the payer of last resort if services can be covered by another payer, such as an individual’s other health coverage (OHC), which may be through a private commercial health plan. If an individual has OHC, DHCS must ensure the OHC pays for any services covered by that health plan or insurer prior to Medi-Cal paying for services, and seek to recover costs from third parties like OHC that may be liable for payment of such costs.
   
   This bill was prompted by complaints from individuals who indicated they were losing access to providers contracted with their private OHC, because of the transition of their Medi-Cal from FFS to managed care, which has been pursued as part of a larger statewide initiative under CalAIM. More detailed background on several of these components is provided below.
   1. Medi-Cal is the Payer of Last Resort. Federal law requires state Medicaid programs to take reasonable measures to ascertain the legal liability of third parties, including other health plans and insurers, to pay for services covered under Medicaid. A beneficiary is required to utilize their private coverage prior to their Medi-Cal benefits when the same service or benefit is available under the beneficiary’s private health coverage. When this occurs, Medi-Cal will be secondary to the other health coverage, covering allowable costs not paid by the primary insurance (for instance, copayments) up to the Medi-Cal rate.
   2. Mandatory Transition to Managed Care. Over the last several years, most of the Medi-Cal population has transitioned into Medi-Cal managed care. Under CalAIM initiative, several additional eligibility groups have been transitioned into managed care in 2022 and 2023 on a mandatory basis. Prior to CalAIM, enrollment into the FFS delivery system or the managed care delivery system was based upon specific geographic areas, the health plan model, and/or the aid code that a beneficiary is determined to qualify for. DHCS introduced mandatory enrollment in managed care as part of CalAIM to guarantee a similar beneficiary experience across counties, and to simplify, standardize, and streamline Medi-Cal program administration.
      
      Mandatory managed care enrollment means that Medi-Cal beneficiaries who were enrolled in FFS, and were either excluded from managed care or able to choose managed care on a voluntary basis, are now required to enroll in a managed care plan. Beneficiaries with OHC who do not have Medicare transitioned on January 1, 2022, while beneficiaries who are dually eligible for Medi-Cal and Medicare transitioned effective January 1, 2023.
      
      Certain exceptions remain in statute. These include, for instance, individuals eligible for only restricted-scope Medi-Cal benefits, those made eligible on the basis of a “share of cost,” meaning they their income is not low enough to qualify for full-scope Medi-Cal without a share of cost, and those made eligible on the basis of a federally approved Medi-Cal Presumptive Eligibility program, during the relevant period of presumptive eligibility. Individuals who are Native American and youth in the foster system are also exempt from managed care enrollment.
   3. Maintaining Providers During an Individual’s Transition to Managed Care. State law provides additional, temporary exceptions whereby individuals who transition to a managed care plan can retain relationships with their providers who are not contracted providers with the plan.
      
      1. Medical Exemption Request (MER). Beneficiaries can file a MER to request a temporary exemption from enrollment into a managed care plan only until the member’s medical condition has stabilized to a level that would enable the member to transfer to a network provider of the same specialty without deleterious medical effects. Members may get a medical exemption if a member has a complex medical condition, as defined in regulation.
      2. Continuity of Care. Members transitioning from Medi-Cal FFS to a Medi-Cal managed care plan may request continuity of care from their plan to remain with their current FFS provider for up to 12 months after the enrollment date with the managed care plan. The plan must honor the continuity of care request if the following conditions are met: the individual can establish a pre-existing relationship exists with that provider; the plan has no quality concerns with the provider; and the plan and provider can agree to a rate.

Anecdotally, some of the individuals whose experience has prompted this bill have applied for and been deemed eligible for MERs, but it a MER is a temporary, not permanent, exemption from managed care enrollment.

Once an individual is stabilized and/or continuity of care has run its course, for individuals without OHC who rely on Medi-Cal to pay their health care costs, an individual may be required to change providers to a provider in the Medi-Cal managed care plan’s network. The situation for an individual with OHC is further described below.

• 1. How Medi-Cal Managed Care Interacts with OHC. Most private plans have cost-sharing like copayments or coinsurance, which Medi-Cal will pay on behalf of the Medi-Cal enrollee when an individual has OHC. Medi-Cal prohibits billing patients for cost-sharing. Providers must bill Medi-Cal to recover the cost-sharing amount owed by the Medi-Cal enrollee.
     
     Prior to the transition to managed care, a provider would bill Medi-Cal FFS directly for services not covered by their patient’s OHC, or to request reimbursement for cost-sharing required by the patient’s OHC.
     
     However, once an individual is enrolled in Medi-Cal managed care, an individual’s provider must bill the individual’s Medi-Cal managed plan for copayments or other costs not covered by the OHC, instead of billing DHCS. These providers must interact with Medi-Cal managed care plans, even if the provider is not in the network of a Medi-Cal managed care plan and the service is primarily being billed to the private plan. Billing multiple plans may be more complicated for the provider, who must validate and bill the appropriate plan instead of simply billing DHCS for all Medi-Cal claims. Furthermore, DHCS’s managed care plan contracts prohibit managed care plans from paying claims for services provided to a member with OHC, without proof that the provider has first exhausted all sources of other payment. Administrative processes and documentation requirements are not standardized across plans, meaning plans may require slightly different forms of proof or have different portals or means to accept this information.
     
     Anecdotally, according to the bill’s author and affected constituents, these billing requirements have posed an area of friction between certain patients, providers, and managed care plans with the recent expansion of mandatory enrollment into Medi-Cal managed care.
  2. Can Individuals With OHC Keep Their Providers when Their Medi-Cal Services Transition to Managed Care? Individuals who rely on OHC as a primary payer for their health care should theoretically should be able to maintain their providers who are paid primarily by the OHC. The providers should be able to simply bill the Medi-Cal managed care plan instead of FFS Medi-Cal for any allowable costs not covered by the OHC.
     
     According to DHCS, if an individual is seeing providers contracted with their OHC who are billing the OHC for services, and Medi-Cal is only paying for other allowable costs such as the patient copayment, the provider is able to bill the Medi-Cal managed care plan for the copayment even if the provider is not contracted with that plan. This guidance is reflected in a fact sheet published by DHCS, titled “Overview of Mandatory Managed Care Enrollment.” The fact sheet also reiterates an individual can keep their OHC when they become mandatorily enrolled into managed care.

However, anecdotally, the fact sheet has not resolved issues for individuals seeking to maintain their network of providers. Some providers may refuse to render services to individuals enrolled in Medi-Cal managed care for a variety of reasons, including the providers’ choice to adopt a policy of not engaging with Medi-Cal managed care whatsoever, or a lack of understanding that they are allowed to bill the Medi-Cal managed care plan for allowable costs if they are not contracted with the plan.

• 1. Regional Centers. Pursuant to the Lanterman Act, some individuals with developmental disabilities or related risk factors qualify for services offered through 21 regional centers contracted with the state DDS. Regional centers provide each consumer with a service coordinator, who coordinates the activities necessary to develop and implement the consumer's IPP. Regional centers serve as fixed points of contact in the community for consumers and their families to access services and supports. Regional center staff participate in the individual program planning process, assist consumers to obtain necessary services and supports from “generic agencies,” like state agencies that offer health benefits, and purchase other services as necessary. They are responsible for the provision of outreach; intake, assessment, evaluation and diagnostic services; and case management/service coordination for persons with developmental disabilities and persons who are at risk of becoming developmentally disabled. Regional center staff conducts a variety of activities to achieve the stated objectives of a consumer's IPP.
  2. Value of Managed Care May Be More Limited for the Specific Population Addressed by This Bill. Although the transition of certain populations into managed care has not been without challenge and controversy, the state has in recent years moved towards mandatory enrollment of most of the Medi-Cal population into managed care. Policymakers have generally recognized and accepted that enrollment in managed care comes with tradeoffs in access, complexity and administrative burden for the state, beneficiaries, plans and providers. The state has embraced Medi-Cal managed care plans as a single point of accountability for delivery of a number of services and as a vehicle for improving care coordination, improving quality and streamlining program administration. As it applies to this population, however, a number of important functions of a Medi-Cal managed care plan— including providing person-centered coordination of care and services; ensuring access to primary and specialty care; and managing provider networks from a cost, access, and quality perspective— appear to be of limited value. This population is able to access these those from their OHC or from the regional center. However, it should also be noted that plans may provide more accountability for ensuring access to services covered by Medi-Cal, and that provider availability and participation in FFS Medi-Cal— and the commensurate perceived benefit or desirability of staying in FFS Medi-Cal— varies across the state.

1. PREVIOUS LEGISLATION.
   1. AB 1608 (Joe Patterson) of 2023 was similar to this bill. AB 1608 was not heard in the Assembly Health Committee.
   2. AB 133 (Committee on Budget), Chapter 143, Statutes of 2021, establishes statutory authority for various aspects of the CalAIM initiative, including authority to standardize enrollment of most populations in managed care.
   3. AB 203 (Committee on Budget), Chapter 188, Statutes of 2007, establishes in state law a set of federal requirements regarding recovery of costs incurred by Medi-Cal for health care services covered by third-party payers.
2. AMENDMENTS. The overall value of managed care may be limited for the specific population impacted by this bill. This limited value is exacerbated by administrative difficulties faced by individuals trying to maintain longstanding and critical provider arrangements for severely developmentally disabled children. These administrative difficulties appear to go beyond general managed care transition issues in that they appear to be inexplicably impacting the families’ ability to utilize their other health coverage. There are likely many possible ways to address the difficulties individuals are having; this bill proposes one solution.
   
   However, the approach also raises significant equity issues by carving out and allowing additional choices to one narrow population group, while requiring the vast majority of others to enroll in managed care. This type of one-off exemption is difficult to justify in a broader context, and strays from the principle of equitable treatment of all Medi-Cal eligible populations. For instance, it is possible the administrative disruptions faced by the small population who inspired this bill may be indicative of challenges faced by more individuals in their transition to managed care, and this narrow exemption would not address any broader concern. It also would take the state back towards maintaining the type of population-based, heterogeneous exemption from managed care enrollment the state has consistently sought to eliminate in recent years, in favor of the CalAIM framework of a more standardized, simplified, and streamlined Medi-Cal program.
   
   To address these concerns, the author and Committee have agreed to amend this bill to approach the issue differently. The new approach works from the premise of making mandatory managed care enrollment work better for individuals with OHC. Accordingly, the author and Committee have agreed to amend the bill as follows:
   1. Require DHCS to ensure that a provider billing the Medi-Cal managed care plan as a secondary payer does not face administrative requirements significantly in excess of requirements for billing those same costs to the Medi-Cal FFS delivery system.
      
   2. Specify, consistent with DHCS guidance, a provider participating in the Medi-Cal FFS delivery system or in the federal Medicare Program is not required to contract with the Medi-Cal managed care plan, in order to bill the plan as a secondary payer.
      
   3. Require, upon request, a Medi-Cal managed care plan to provide assistance to Medi-Cal beneficiaries and their existing OHC providers, on options for maintaining health care relationships between beneficiaries and their providers, if a beneficiary transitions to Medi-Cal managed care.
   4. At least annually, from 2025 through 2028, require DHCS to report to the Assembly Committee on Health and the Senate Committee on Health on the effectiveness of implementing this bill.
      
   5. Include other language standard for Medi-Cal changes, including the ability to implement the bill through non-regulatory guidance and conditioning implementation on the receipt of any necessary federal approvals and the availability of federal financial participation.
      

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Lisa Murawski / HEALTH / (916) 319-2097