Existing law establishes, under the Medi-Cal program, certain time and distance standards for specified Medi-Cal managed care covered services, consistent with federal regulations relating to network adequacy standards, to ensure that those services, including certain specialty care, are available and accessible to enrollees of Medi-Cal managed care plans in a timely manner. Existing law sets forth other timely access requirements for health care service plans and health insurers, including with regard to referrals to a specialist.

Existing law establishes various health professions development programs, within the Department of Health Care Access and Information, for the promotion of education, training, and recruitment of health professionals to address workforce shortage and distribution needs. Existing law sets forth various provisions for the authorized use of telehealth in the delivery of health care services.

This bill would, subject to an appropriation, require the California Health and Human Services Agency, in collaboration with the Department of Health Care Access and Information and the State Department of Health Care Services, to establish a demonstration project for a grant program. Under the bill, the grant program would be aimed at facilitating a telehealth and other virtual services specialty care network that is or networks that are designed to serve patients of safety-net providers consisting of qualifying providers, defined to include, among others, rural health clinics and community health centers. The as defined.

Under the bill, the purpose of the demonstration project would be to improve access to specialty care for Medi-Cal beneficiaries through development of a financially sustainable specialty care network or networks that are focused on serving the needs of the health care safety net. The bill would authorize the focus of the project to include increasing access to behavioral and maternal health services and additional specialties prioritized by the agency. The bill would state the intent of the Legislature that implementation of the demonstration project would facilitate compliance with any applicable network adequacy standards.

Existing law establishes, under the Medi-Cal program, certain time and distance standards for specified Medi-Cal managed care covered services, consistent with federal regulations relating to network adequacy standards, to ensure that those services, including certain specialty care, are available and accessible to enrollees of Medi-Cal managed care plans in a timely manner. Existing law sets forth other timely access requirements for health care service plans and health insurers, including with regard to referrals to a specialist.

Existing law establishes various health professions development programs, within the Department of Health Care Access and Information, for the promotion of education, training, and recruitment of health professionals to address workforce shortage and distribution needs. Existing law sets forth various provisions for the authorized use of telehealth in the delivery of health care services.

This bill would, subject to an appropriation, require the California Health and Human Services Agency, in collaboration with the Department of Health Care Access and Information and the State Department of Health Care Services, to establish a demonstration project for a telehealth and other virtual services specialty care network that is designed to serve patients of safety-net providers consisting of qualifying providers, defined to include, among others, rural health clinics and community health centers. The bill would authorize the focus of the project to include increasing access to behavioral and maternal health services and additional specialties prioritized by the agency. The bill would state the intent of the Legislature that implementation of the demonstration project would facilitate compliance with any applicable network adequacy standards.

The bill would require the demonstration project to include a grant program to award funding to grantees, as defined, that meet specified conditions relating to specialist networks and health information technology. Under the bill, the purpose of the grant program would be to achieve certain objectives, including, among others, reducing structural barriers to access experienced by patients, improving cost-effectiveness, and optimizing utilization. The bill would require a grantee to evaluate its performance on the objectives and to submit a report of its findings to the agency.

Date of Hearing: April 9, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 257

Author:(Flora) – As Amended Ver:March 27, 2025

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

SUMMARY:

This bill, subject to an appropriation, requires the California Health and Human Services Agency (CalHHS) to establish a demonstration project for a grant program for facilitating a telehealth and other virtual services network to improve access to specialty care for Medi-Cal beneficiaries.

Specifically, this bill:

1. Requires CalHHS, in collaboration with the Department of Health Care Access and Information (HCAI) and the Department of Health Care Services (DHCS), to establish “Equal Access to Specialty Care Everywhere,” a demonstration project for a telehealth and other virtual services specialty care network designed to improve access to specialty care for Medi-Cal beneficiaries through development of a financially sustainable specialty care network or networks that are focused on serving the needs of the health care safety net.
   
2. Authorizes the demonstration to focus on increasing access to behavioral and maternal health services and additional specialties prioritized by CalHHS.
3. Requires CalHHS to administer a program to award grants based on an application process.
   
4. Establishes eligibility criteria for a grant applicant, including a network of at least 10 qualifying providers and a record of supporting underserved communities.
5. Establishes requirements for how an applicant may use grant funds.
6. Requires CalHHS to ensure lessons learned, recommendations, and best practices from the demonstration project are publicly disseminated.
   
7. Conditions implementation on an appropriation by the Legislature.
   

FISCAL EFFECT:

General Fund cost pressures of an unknown amount, potentially $12 million, to CalHHS. The author has requested a one-time appropriation of $12 million to fund a demonstration project as specified in this bill, for three grants of $4 million each.

COMMENTS:

1. Purpose. This bill is sponsored by OCHIN, a nonprofit provider of electronic health record (EHR) systems and health information exchange and technology support to safety net providers. OCHIN’s client network includes safety net providers such as community clinics, critical access hospitals, local public health agencies, and school-based health programs. According to the author:

[P]atients in rural and underinvested communities still wait weeks or months to see specialists, which often results in them not getting care at all...[W]e can reimagine specialty care delivery that leverages digital modalities and AI through an integrated virtual specialty care network, connecting patients who face the greatest barriers to accessing care with specialty care rapidly, no matter where they live. Enhanced interoperability and AI will power seamless data sharing, streamline provider coordination, and eliminate costly gaps in care.

1. Related Legislation.
   
   AB 688 (Mark González) requires DHCS to produce a publicly available Medi-Cal telehealth utilization report every two years. AB 688 is pending in the Assembly Committee on Health.
   
   SB 530 (Richardson) updates and removes the sunset on time and distance standards in Medi-Cal managed care, and narrows the situations in which a Medi-Cal managed care plan may meet time and distance standards using telehealth, among other provisions. SB 530 is pending in the Senate Committee on Health.
2. Prior Legislation.
   
   AB 2726 (Flora), of the 2023-24 Legislative Session, was identical to this bill, and was held in this committee.
   
   AB 1943 (Weber), of the 2023-24 Legislative Session, was similar to AB 688, above, and was held on suspense in the Senate Committee on Appropriations.
   
   AB 2239 (Aguiar-Curry), of the 2023-24 Legislative Session, would have expanded the situations in which Medi-Cal could reimburse health care providers for services rendered to new patients through asynchronous store and forward telehealth. Governor Newsom vetoed AB 2239, stating in part:

[T]here are details of a patient's medical history and personal health information that are best gathered during a synchronous appointment. For example, this bill would allow a patient to receive treatment and medications for reproductive and behavioral health services without ever seeing or talking directly to a provider. I believe that there are consumer protections provided through a live interaction between a patient and provider.

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

Date of Hearing: March 25, 2025

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 257

Author:(Flora) – As Introduced Ver:January 16, 2025

SUBJECT: Specialty care network: telehealth and other virtual services.

SUMMARY: Requires the California Health and Human Services Agency (CalHHS), in collaboration with the Department of Health Care Access and Information (HCAI) and Department of Health Care Services (DHCS), to establish a demonstration project for a telehealth and other virtual services specialty care network that is designed to serve patients of safety-net providers consisting of qualifying providers, defined as a rural health clinic (RHC), federally qualified health center (FQHC), critical access hospital (CAH), or other community health center, including, but not limited to, an Indian health clinic. Specifically, this bill:

1. Requires CalHHS to establish a demonstration project for a telehealth and other virtual services specialty care network that is designed to serve patients of safety-net providers consisting of clinics and hospitals.
2. Authorizes the demonstration to focus on increasing access to behavioral and maternal health services and additional specialties prioritized by CalHHS.
3. Requires the demonstration project to include a grant program, administered by CalHHS, to award funding to grantees based on an application process.
4. Requires an applicant for a grant to meet both of the following conditions:
   1. Establishing, through contracting, direct hire, or partnering, a network of clinical specialists; and,
   2. Providing health information technology and technical assistance to support both the specialists and any primary care provider care coordination, referral, or electronic consultations.
5. Defines a grantee as an entity that meets all of the following conditions:
   1. Consisting of, or partnering with, a network of health care providers, including at least 50 clinics or hospitals that serve individuals who are uninsured, individuals who are covered under the Medi-Cal program or other state public programs serving expansion populations, and individuals who are covered under the federal Medicare Program or other federal health care programs;
   2. Ensuring interoperable electronic health record bidirectional communication with primary care providers;
   3. Coordinating services, furnished through health information technology tools to individuals, with the primary care providers of those individuals;
   4. Offering evaluation and analysis on specialty service access among underserved communities; and,
   5. Having a demonstrated record of supporting the delivery of health care services and addressing social determinants of health in underserved communities in multiple regions throughout the state.
6. Establishes the purpose of the grant program as follows:
   1. Increasing capacity and efficiencies to address endemic and growing workforce shortages of specialists through enhanced triage capabilities and reduction in missed appointments;
   2. Reducing structural barriers to access experienced by patients, particularly those who have health-related social needs or disabilities, and those experiencing significant health disparities, including by reducing waiting times;
   3. Increasing financial sustainability of health care providers in rural and underserved areas;
   4. Strengthening public health resiliency, including surveillance capabilities and mitigation;
   5. Improving cost-effectiveness and optimizing utilization; and,
   6. Improving interoperability, inter-clinician care coordination, and enhanced care management.
7. Requires a grantee to evaluate its performance on the objectives described in 6) above, and submit a report of its findings to CalHHS.
8. States the intent of the Legislature that implementation of the demonstration project will facilitate compliance with any network adequacy standards set forth under existing law as applicable for health care service plans, health insurers, Medi-Cal managed care plans, or other entities providing health care coverage.
9. Conditions implementation on an appropriation made by the Legislature for this purpose in the annual Budget Act or another statute.

EXISTING LAW:

1. Establishes the Medi-Cal Program, administered by DHCS, to provide comprehensive health benefits to low-income individuals who meet specified eligibility criteria. [Welfare and Institutions Code (WIC) § 14000 et seq.]
2. Establishes a schedule of benefits under the Medi-Cal program, including physician, hospital or clinic outpatient, surgical center, respiratory care, optometric, chiropractic, psychology, podiatric, and therapy services, subject to utilization controls. [WIC § 14132]
3. Defines “telehealth” to:
   1. Mean the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patient’s health care; and,
   2. Include synchronous interactions and asynchronous store and forward transfers. [Business and Professions Code § 2290.5 (a)(6)]
4. Establishes Medi-Cal coverage for health care services provided through telehealth, including specifying that in-person, face-to-face contact between a health care provider and a patient is not required under the Medi-Cal program for covered health care services and provider types designated by DHCS, when those services and settings meet the applicable standard of care and meet the requirements of the service code being billed. [WIC § 14132.725 and § 14132.100]
5. Establishes time and distance standards by which Medi-Cal managed care plans must demonstrate network adequacy. Allows DHCS to authorize a Medi-Cal managed care plan to use clinically appropriate synchronous video telehealth as a means of demonstrating compliance with time or distance standards. [WIC § 14197 and 14197(e)]
6. Establishes HCAI to collect and analyze health data, administer health workforce programs, oversee hospital and health facility building programs, and administer the Office of Health Care Affordability. [Health and Safety Code § 127000]

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, everyone should have access to timely specialty care, but patients in rural communities face unique challenges. The author asserts that the state needs to build clinical capacity for specialty care, improve patient access, improve disaster preparedness and response, and curtail rising health care costs for rural communities. By allowing patients to use telehealth when finding specialty care, the author notes, rural and underserved communities can quickly access quality, low-cost health care. The author concludes that the bill is a commonsense step that will reduce costly emergency room visits by allowing patients to address the root cause of health concerns before they grow worse. This bill is sponsored by OCHIN, a nonprofit provider of electronic health records systems (EHR) and health information exchange and technology support to safety net providers. OCHIN’s client network includes FQHCs, RHCs, critical access hospitals, local public health agencies, and school-based health programs.
2. BACKGROUND.
   1. Specialty Care Access. Delays and difficulty accessing specialty care in Medicaid programs are well-documented. In a 2019 survey of community health center medical directors in nine states that expanded Medicaid pursuant to the federal Patient Protection and Affordable Care Act (including California) and Washington, D.C., nearly 60% reported difficulty obtaining new specialist visits and multiple access barriers. Although specialty care access can be difficult in rural areas regardless of coverage and can be challenging even with commercial coverage due to general provider shortages, the problem is more acute in Medicaid programs, including Medi-Cal, posing equity concerns. A 2023 study titled “State-Level Variation in Medicaid Managed Care Enrollment and Specialty Care for Publicly Insured Children,” which was published in JAMA (Journal of the American Medical Association) Network Open, had found caregivers of children insured by Medicaid were more than twice as likely as caregivers of children with private insurance to report feeling frustrated trying to find specialty medical care for their children.
   2. Managed Care Network Adequacy Requirements. Federal law requires Medicaid managed care plans to assure that they have capacity to serve expected enrollment in their service area and maintain a sufficient number, mix, and geographic distribution of providers. A Medicaid managed care plan must make covered services accessible to its enrollees to the same extent that such services are accessible to other state residents with Medicaid who are not enrolled with that plan. State law establishes specific time and distance standards by which a plan must demonstrate that their enrollees can access an adequate network of providers.

SB 184 (Committee on Budget and Fiscal Review), Chapter 47, Statutes of 2022, authorizes DHCS to allow telehealth providers to count towards compliance with time or distance standards. Previously, DHCS allowed telehealth as an alternative access standard only if a managed care plan was not able to demonstrate compliance with time or distance standards. Pursuant to All-Plan Letter 23-001, if a plan is able to cover at least 85% of the members in a ZIP code and they can show that they have additional capacity through the use of telehealth providers to serve the remaining members, the plan would be deemed compliant with time or distance standards and no alternative access standard submission is required.

DHCS allows plans to use telehealth providers for purposes of demonstrating adequacy of their networks for primary care and the following specialty provider types: cardiology/interventional cardiology, neurology, dermatology, non-specialty mental health, endocrinology, obstetrics and gynecology; ear, nose, and throat/otolaryngology; oncology; gastroenterology; ophthalmology; hematology; HIV/AIDS specialists; infectious diseases; psychiatry; nephrology; and pulmonology.

Plans must provide access to in-person services rather than telehealth if a Medi-Cal beneficiary requests it, including access to transportation and out of network services when necessary.

• 1. Need for This Bill. The sponsor of this bill, OCHIN, notes safety net providers with the most clinically and socially complex patients have the greatest need for timely specialty care services to manage patients with co-morbid chronic conditions. OCHIN notes these providers, such as FQHCs and RHCs, expend significant resources trying to identify specialty referral pathways. A recent analysis of safety net providers in the OCHIN network in California found the average wait time to see a specialist in 2024 was 63 days. OCHIN reports within their network, only about 27% of all patient specialty referrals closed between October 2022 and September 2023 because the patient was seen by a specialist.

OCHIN argues efforts to improve maternal health, mental and behavioral health, complex chronic disease management, and transitions to new value-driven payment and delivery models will be hamstrung by this endemic lack of access. OCHIN notes access to virtual modalities such as telehealth, store and forward, and eConsults (provider-to-provider transactions) should have improved access to specialists as it did for primary care during the COVID-19 public health emergency, but that it has not, and will not, without a network of specialists dedicated to serving patients in the safety net.

• 1. What This Bill Proposes. According to OCHIN, the demonstration project authorized by the bill would support the launch of a dedicated safety net virtual specialty care network through an integrated EHR platform focused on primary care providers serving rural and underserved communities. The network would provide services to patients who have coverage through federal and state programs such as Medi-Cal and Medicare as well as those who are underinsured. The demonstration would seek to improve access to specialty care by establishing and testing a virtual network to provide specialty care through a range of digital modalities, such as eConsults, telehealth, and EHR-based clinical decision support. While there is a significant evidence base to support the use of virtual modalities to improve access to care, OCHIN notes, this demonstration focuses on testing a virtual delivery model tailored to the payment and specific needs of rural and underserved communities. The demonstration would test the impact of timely specialty care access that is coordinated with primary care on access, health outcomes, and costs. OCHIN offers that a similar pilot on a smaller scale at an OCHIN member rural clinic in Oregon found that dermatology eConsults were effective in reducing follow-up time for patients by an average of 45 business days with significant savings through avoided specialty referrals.

1. SUPPORT. OCHIN supports this bill, noting the importance of access to timely specialty care, the dire state of current access, and the opportunities to improve timely access to many types of specialty care for patients of safety net providers through this demonstration. Mental Health America of California supports this bill, arguing the specialty network will be instrumental to reducing mental health disparities and ensuring access to those who need it most.
2. RELATED LEGISLATION.
   1. AB 688 (Mark González), pending in this committee, would require DHCS, commencing in 2028 and every two years thereafter, to produce a publicly available Medi-Cal telehealth utilization report, as specified.
   2. SB 508 (Valladares), pending in the Senate Business, Professions and Economic Development Committee, would allow out-of-state physicians and surgeons to provide services through telehealth to patients with cancer.
   3. SB 530 (Richardson), pending in the Senate Health Committee, would remove the sunset on, and updates, time and distance standards in Medi-Cal managed care. The bill would also narrow the situations in which a Medi-Cal managed care plan may meet time and distance standards using telehealth, clarifies requirements to provide alternatives to telehealth, and would require plans to notify enrollees of their options, including telehealth, as applicable, if a provider is located outside of designated time or distance standards.
3. PREVIOUS LEGISLATION.
   1. AB 2726 (Flora) was similar to this bill and was held on suspense in the Assembly Appropriations Committee.
   2. AB 1943 (Weber) of 2024 was similar to AB 688 above and was held on suspense in the Senate Appropriations Committee.
   3. AB 2239 (Aguiar-Curry) would have expanded the situations in which health care providers are able to be reimbursed by Medi-Cal for services rendered to new patients through asynchronous store and forward telehealth. This is potentially important for specialty care access through telehealth, as many patients would be new patients to a specialist, given it is not their regular source of care, and asynchronous store and forward is commonly used for dermatology and ophthalmology. Governor Newsom vetoed AB 2339, stating that “robust telehealth policies increase access and reduce barriers to health care, including the use of asynchronous telehealth. However, there are details of a patient's medical history and personal health information that are best gathered during a synchronous appointment. For example, this bill would allow a patient to receive treatment and medications for reproductive and behavioral health services without ever seeing or talking directly to a provider. I believe that there are consumer protections provided through a live interaction between a patient and provider.”
   4. SB 184 (Committee on Budget and Fiscal Review), Chapter 47, Statutes of 2022 authorizes DHCS to allow Medi-Cal managed care plans to count telehealth providers for purposes of establishing compliance with time or distance standards, establishes permanent telehealth policy following the COVID-19 pandemic, and also requires DHCS to develop a research and evaluation plan addressing, among other things, the relationship between telehealth and access to care.
4. AMENDMENTS. In response to a number of concerns and questions raised by the Committee, the author and Committee have agreed to amend this bill to broaden the pool of potential applicants; require that providers participating in the demonstration serve underserved populations; require an independent evaluation; require lessons learned, recommendations, and best practices from the demonstration to be publicly disseminated to inform the development of telehealth and specialty care networks to serve the safety net; and clarify a number of aspects, including the purpose of the grant, the distinction between conditions required for an applicant to apply versus the program activities funded by the grant, and that the grantee must report data and information as requested by CalHHS.

REGISTERED SUPPORT / OPPOSITION:

Support

OCHIN, Inc. (sponsor)

Mental Health America of California

Opposition

None on file.

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