BILL NUMBER: SB 83 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 20, 2007
AMENDED IN ASSEMBLY JULY 16, 2007
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 17, 2007
An act relating to the Budget Act of 2007.
An act to add Section 13343 to the G overnment Code, to
amend Sections 1250.8, 1266, 1279, 1280.1, 1280.3, 1324.21, 1324.23,
1324.28, 1324.29, 1324.30, 1422, 101317, 101320, 120955, 124910,
124977, and 130542 of, and to add Section 1204.5 to, the Health and
Safety Code, to amend and repeal Section 12693.981 of the Insurance
Code, to amend Sections 4640.6, 4643, 4648.4, 4681.5, 4691.6, 4781.5,
10020, 10022, 10024, 14011.6, 14043.1, 14043.15, 14043.2, 14043.26,
14043.27, 14043.28, 14043.36, 14043.46, 14043.47, 14043.61, 14043.62,
14043.65, 14043.7, 14087.305, 14087.5, 14088, 14088.14, 14088.25,
14089, 14091.21, 14100.95, 14105.2, 14105.3, 14105.45, 14105.47,
14105.8, 14105.85, 14110, 14124.70, 14124.76, 14124.78, 14124.89,
14124.90, 14124.94, 14125, 14125.2, 14125.8, 14126.027,
14126.033, 14132.100, 14134.5, 14165.4, 14166.4, 14199.2, 14199.3,
14464.5, 14495.10, 14499.5, 16809, and 24005 of, to add Sections
4474.4, 4474.5, 4474.8, 4781.6, 14011.65b, 14105.475, 14124.785,
14124.792, and 14301.1 to, to amend and repeal Section 14262 of, and
to repeal and add Section 14043.45 of, the Welfare and Institutions
Code, relating to health, making an appropriation therefor, and
declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 83, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2007. Health.
Existing law prescribes various duties and responsibilities of the
Department of Finance with respect to the preparation of the annual
state budget.
This bill would require the department and the State Department of
Public Health to provide specified budget information concerning
designated programs administered by the State Department of Public
Health.
Existing law prescribes the procedures for the licensure and
regulation of clinics, including primary care clinics, by the State
Department of Public Health.
This bill would authorize pimary care clinics to submit
verification of certification to the Licensing and Certification
Division of the State Department of Public Health for specified
purposes.
Existing law provides for the licensure and regulation of health
facilities by the State Department of Public Health.
Existing law contains ratesetting provisions governing fees for
the licensure of health facilities by the State Department of Public
Health. Existing law requires that the Licensing and Certification
Division of the department be supported entirely by federal funds and
special funds no later than the beginning of the 2009-10 fiscal
year, unless specified by law or unless funds are appropriated from
the General Fund for that purpose.
This bill would specify that for the 2007-08 fiscal year General
Fund support shall be provided in an amount of not less than
$2,782,000, and would prescribe additional requirements to be used in
calculating licensure fees.
Existing law requires periodic inspection of health facilities by
the department as part of licensing and certification of those
facilities. Existing law specifies that the department shall inspect
for compliance with state law and regulations during a state or
federal periodic inspection.
This bill would, instead, require inspections for compliance with
state law and regulations to occur during a state periodic inspection
or at the same time as a federal periodic inspection.
Existing law authorizes the department to assess a licensee of a
general acute care hospital, an acute psychiatric hospital, or a
special hospital an administrative penalty not to exceed $25,000 if
the licensee receives a notice of deficiency constituting an
immediate jeopardy to the health or safety of a patient and is
required to submit a plan of correction.
Existing law provides, however, that, upon the adoption of
specified regulations, the administrative penalty for such a
violation shall be up to $50,000, and that, if the violation does not
constitute such an immediate jeopardy violation the penalty may be
up to $17,500, except that no penalty shall be assessed for a minor
violation.
Existing law, as a condition of licensure, requires every hospital
to maintain written policies about discount payment and charity care
for qualified patients.
This bill would, upon the effective date of the regulations
referred to above, expressly provide that the penalties for a
violation that is not an immediate jeopardy violation, apply to the
provisions relating to discount payment and charity care policies.
Existing law provides that inspections and investigations of
long-term health care facilities that are certified by the Medicare
Program or the Medicaid Program shall determine compliance with state
law and federal standards.
This bill would provide that those inspections and investigations
shall determine compliance to the extent that California law provides
greater protection to residents or is more precise than federal
standards.
Existing law requires the department to impose a uniform quality
assurance fee on each skilled nursing facility, with certain
exceptions, in accordance with a prescribed formula. The formula is
based on the determination of the projected net revenues of skilled
nursing facilities. The fee will cease to be assessed and collected
on and after July 31, 2008.
This bill would extend the assessment and collection of the
uniform quality assurance fee until July 31, 2009, and change the
percentage to 5.5% effective January 1, 2008. The bill would make
other conforming changes. It would also modify the manner in which
the maximum aggregate amount of the fee is determined.
Existing law establishes procedures and requirements to govern the
allocation to, and expenditure by, local health jurisdictions and
treatment facilities, designated pursuant to a federally approved
plan, of federal funding received for the prevention of, and response
to, bioterrorist attacks and other public health emergencies.
Existing law requires a local health jurisdiction receiving funds
under these provisions to deposit the money in a special Local Public
Health Preparedness Trust Fund. These provisions provide that
federal funding received by the State Department of Public Health for
bioterrorism preparedness and emergency response is subject to
appropriation in the annual Budget Act. These provisions become
inoperative on September 1, 2007, and are repealed as of January 1,
2008.
This bill would extend the inoperative and repeal dates to
September 1, 2010, and January 1, 2011, respectively. It would also
modify reporting provisions with which local public health districts
must comply.
Existing law requires the development of a list of drugs to be
provided under the AIDS Drug Assistance Program, which is
administered by the State Department of Public Health.
This bill would require the list to be developed in consultation
with the AIDS Drug Assistance Program Medical Advisory Committee,
would exempt changes to the list from the Administrative Procedure
Act, and would require the department to make a prescribed
notification concerning these changes to the fiscal and policy
committees of the Legislature.
Existing law requires each licensed primary care clinic that
applies to the department for funds for the delivery of medical
services to demonstrate that it is an active Medi-Cal provider by
having a Medi-Cal provider number.
This bill would, instead, require the applicant to demonstrate
that it is an active Medi-Cal provider by being enrolled in Medi-Cal
for a period of 3 months.
Existing law, the Birth Defects Monitoring Program, requires the
Director of Health Services to maintain a system for the collection
of prescribed information on birth defects and other activities. The
program is funded by prenatal screening fees which are deposited in
the continuously appropriated Genetic Disease Testing Fund.
This bill would, instead, require that those fees be deposited in
the Genetic Disease Testing Fund, except for moneys to fund
activities related to the Birth Defect Monitoring Program, which
would be deposited in the Birth Defects Monitoring Fund, to be
created by the bill, and that would be available for expenditure upon
appropriation by the Legislature.
Existing law establishes the California Discount Prescription Drug
Program Fund for the deposit of all payments under that program and
makes money available to the department when appropriated by the
Legislature for the purposes of the program.
This bill would provide that the fund is continuously appropriated
to the department without regard to fiscal year for the purpose of
providing payment to participating pharmacies and administrative
costs of the program, thereby making an appropriation.
Existing law establishes the Healthy Families-to-Medi-Cal Bridge
Benefits Program to provide any person enrolled for coverage under
the Healthy Families Program who meets certain criteria with a two
calendar-month period of health care benefits to provide the person
with an opportunity to apply for Medi-Cal. The program is
administered by the Managed Risk Medical Insurance Board.
This bill would provide for the repeal of this program on the date
that the Director of Health Care Services executes a declaration
stating that implementation of the presumptive Medi-Cal eligibility
program, which the bill would create, has commenced. It would provide
that this presumptive eligibility program would apply to children
meeting specified criteria, with the program to be implemented to the
extent that federal financial participation is available. Because
each county is required to administer the eligibility process, and
the bill would require additional duties to be performed in this
regard, it would create a state-mandated local program.
Existing law requires the board, if a federal waver is obtained,
to expand eligibility under the Healthy Families Program, to include
uninsured parents of children enrolled in the Healthy Families
Program or, under certain circumstances, the Medi-Cal program.
Existing law requires, to the extent that federal financial
participation is available, that the department implement an option
provided for under the federal Social Security Act for a program for
accelerated enrollment of children into the Medi-Cal program. The
department is, however, prohibited from implementing this option
unless the federal waiver for expansion of Healthy Families Program
benefits to uninsured parents, as described above, is obtained.
This bill would repeal the requirement that the accelerated
enrollment program be implemented only if the Healthy Families
Program waiver for the inclusion of uninsured parents is obtained.
Existing law establishes various state developmental centers,
including Agnews Developmental Center, for the care of
developmentally disabled persons.
This bill would require the Secretary of California Health and
Human Services to verify that the State Department of Developmental
Services and the State Department of Health Care Services have
established protocols for the provision of services to people with
developmental disabilities transitioning from the Agnews
Developmental Center. The bill would provide that, subject to the
receipt of federal financial participation, services rendered to
Medi-Cal beneficiaries transitioning from Agnews Developmental Center
to the community shall be provided by Medi-Cal managed care plan.
The bill would also require the State Department of Developmental
Services to continue the operation of the Agnews Outpatient Clinic
until the department is no longer responsible for the property.
Existing law, the Lanterman Developmental Disabilities Services
Act, requires the State Department of Developmental Services to
allocate funds to private nonprofit regional centers for the
provision of community services and support for persons with
developmental disabilities and their families and sets forth the
duties of regional centers in that regard. Existing law requires the
department to develop a plan for the proposed closure of any
developmental center. Existing law also authorizes the department to
engage in activities that will meet the goal of an orderly closure of
Agnews Developmental Center.
Existing law requires through June 30, 2007, that contracts
between the department and regional centers for persons with
developmental disabilities specify certain coordinator-to-consumer
ratios.
This bill would extend that requirement to June 30, 2008.
Existing law provides for the assessment of certain individuals
for whom benefits are provided by regional centers. Existing law
provides that if assessment is needed, prior to July 1, 2007, the
assessment shall be performed within 120 days following initial
intake, and requires that assessments after that date shall be
performed within 60 days following intake.
This bill would extend the 120-day assessment requirement until
July 1, 2008.
Existing law limits the rate of payment a regional center may pay
a provider for specified services to a rate that is in effect on or
after July 1, 2006, except as provided.
This bill would, instead, apply that limit to the 2007-08 fiscal
year, and would limit the rate to that in effect on or after July 1,
2007, subject to the specified exception.
Existing law provides that, during the 2006-07 fiscal year, no
regional center may approve any service level for a residential
service provider if the approval would result in an increase to be
paid to the provider that is greater than the rate in effect on July
1, 2006.
This bill would make that limitation applicable during the 2007-08
fiscal year, and would base the limitation on the rate in effect on
June 30, 2007.
Existing law prohibits, during the 2006-07 fiscal year, the State
Department of Developmental Services from establishing any permanent
payment rate for a community-based day program or in-home respite
care agency that has a temporary payment rate in effect on July 1,
2006, or making other specified changes or adjustments that would
result in a rate increase.
This bill would base that prohibition for the 2007-08 fiscal year
on the rate in effect on or after July 1, 2007.
Existing law provides that, for the 2006-07 fiscal year, a
regional center may not expend any purchase of service funds for the
startup of any new program unless certain criteria are met, except as
specified.
This bill would provide that, for the 2007-08 fiscal year only, a
regional center shall not expend any purchase of service funds for
the startup of any new program unless the expenditure is necessary to
protect the consumer's health or safety or because of other
extraordinary circumstances and the department has granted prior
written authorization.
The bill would also require the State Department of Developmental
Services to develop a plan of options to better control regional
center costs of operating and providing state-supported services. The
bill would require the department to submit the plan to the Joint
Legislative Budget Committee and the fiscal and policy committees of
the Legislature no later than October 1, 2007.
Existing law provides that no person having private health care
coverage, as defined, is entitled to receive the same health care
furnished or paid for by a publicly funded health care program.
This bill would redefine private health care coverage for purposes
of these provisions.
Existing law entitles publicly funded health care programs that
furnish or pay for health care for a person having private health
care coverage to be subrogated to the rights the person has against
the carrier of that private health care coverage within 3 years of
rendering the service.
This bill would require that an entity providing private health
care coverage, as a condition of doing business in the state, accept
the state's right of recovery, as specified.
Existing law provides for the Medi-Cal program, administered by
the State Department of Health Care Services, under which basic
health care services are provided to qualified low-income persons.
Under existing Medi-Cal provisions "business address" is defined
as the location where an applicant or provider provides services,
goods, supplies, or merchandise to a Medi-Cal beneficiary. The
business address of a vehicle or vessel owned, operated, and used to
provide Medi-Cal services and other items is either the applicant or
provider's pay-to-address or the business address location for which
a separate provider number is issued.
This bill would delete the business address location for which
there is a separate provider number and, instead, use the business
address location listed on the provider's application as the location
where similar services and items would be provided.
Existing law requires information about Medi-Cal providers, or
applicants to be providers, for enrollment purposes, submission of
claims, and similar purposes to include the provider's number.
This bill would, except as provided, eliminate the requirement for
separate provider numbers for each business address of the provider
and would make conforming changes.
This bill would also eliminate various references to the need for
a provider number in order to obtain Medi-Cal reimbursement, and
instead, refer in this regard to enrollment in the Medi-Cal program.
Existing law permits the Director of Health Services to issue a
Medi-Cal provider a unique identification number or numbers
notwithstanding the National Provider Identifier (NPI) issued by the
federal government.
This bill would, instead, authorize the department to require a
Medi-Cal applicant or provider to submit an NPI number, or to issue a
unique identification number or numbers for transactions not
identified as covered transactions under the rules of the Health
Insurance Portability and Accountability Act of 1996.
Under existing law, the department is authorized to contract for
the provision of Medi-Cal services through certain managed health
care options.
Under existing law, each Medi-Cal beneficiary or eligible
applicant is required to be provided with information as to these
health care options in receiving Medi-Cal benefits, including certain
provider information.
This bill would revise the provider information to be provided,
including specifying that it be for the geographic area in which the
beneficiary or applicant resides through a specialized provider
directory for the beneficiary or applicant to be implemented as a
pilot project in 2 counties, as specified.
Existing law provides the California Medical Assistance Commission
with the authority to negotiate exclusive contracts with county
organized health systems to provide health care services under the
Medi-Cal program.
This bill would provide, on and after the effective date of this
bill, that the State Department of Health Care Services rather than
the commission has exclusive authority to negotiate those contracts.
The bill would require the department to disclose those contracts
upon request as public records.
Existing law requires the department to enter into demonstration
contracts with manufacturers of medical supplies for 4 items of its
own selection of medical supplies existing on the pharmacy claims
processing system to establish rebates or other cost-saving
mechanisms and to report to the Legislature on the outcomes of the
contracts no later than January 1, 2007.
This bill would require the department to evaluate the products
and execute the contracts pursuant to specified criteria and would
require the report to be made no later than January 1, 2009.
Existing law authorizes the department to enter into exclusive or
nonexclusive contracts on a bid or negotiated basis with
manufacturers, distributors, dispensers, or suppliers of appliances,
durable medical equipment, medical supplies, and other product-type
health care services and with laboratories for clinical laboratory
services, as specified.
Existing law contains provisions governing the reimbursement of
hearing aids under the Medi-Cal program.
This bill would require the department, on or before June 30,
2008, to enter into exclusive or nonexclusive contracts, on a bid or
negotiated basis, for purchasing hearing aid appliances.
Existing law requires the department to reimburse Medi-Cal
pharmacy providers for legend and nonlegend drugs pursuant to
specified criteria including the average sales price of a drug
calculated by certain factors.
This bill would delete the term "average sales price" and
substitute the term "average manufacturer's price," as defined and
make related changes.
Existing law permits the department to enter into contracts with
manufacturers of enteral formulae for Medi-Cal patients whose
condition precludes the full use of regular food.
This bill would, instead, permit contracts with the manufacturers
of enteral nutrition products and specify the criteria those products
shall meet.
The bill would also modify various procedures, including
ratesetting provision, governing the provision of medical supplies
under the Medi-Cal program.
Existing law authorizes the director, as well as the Attorney
General, and other specified officials, to bring an action to recover
the reasonable value of benefits provided or that will be provided
to a Medi-Cal recipient against a 3rd party, including an insurance
carrier, because of any injury for which the 3rd party is liable.
Existing law contains procedures governing these actions, as well
as provisions pertaining to the director's right to claim
reimbursement when the claim against a 3rd party is brought by
another person, including the recipient. Existing law prohibits the
director's claim for exceeding one-half of the beneficiary's recovery
after deducting fees and costs.
This bill would define the term "lien" as the director's claim for
recovery, from a beneficiary's tort action or claim, of the
reasonable value of benefits provided on behalf of the beneficiary.
This bill would limit recovery of the director's lien from an injured
beneficiary's action or claim to what the beneficiary receives after
deducting attorney's fees and litigation costs of a settlement,
judgment, or award.
Under existing law, when benefits are provided or will be provided
to a Medi-Cal beneficiary because of an injury for which another
person or carrier is liable, the director may recover from that
person or carrier the reasonable value of benefits so provided. In
connection with that recovery, existing law requires insurers to
provide specified information upon request of the department.
This bill would redefine "insurer" for these purposes.
Existing law establishes a formula for provider reimbursement
rates for incontinence medical supplies covered by the Medi-Cal
program.
This bill would revise that formula and would specify the criteria
for evaluating products for the department's list of incontinence
medical supplies. It would also permit the department to enter into
contracts, as specified, for the purchase of these supplies.
Under existing law, in order to qualify for Medi-Cal coverage an
incontinence medical supply product shall be in general retail
distribution. General retail distribution includes when the product
is on display and available for purchase at retail outlets.
This bill would, instead, specify that the product is on display
and available for purchase at licensed pharmacies or licensed medical
supply dealers within California.
Existing law, the Medi-Cal Long-Term Care Reimbursement Act,
requires the department to implement a facility specific ratesetting
system for facilities providing long-term care services. The director
may implement the act by provider bulletins until July 31, 2007, by
which time the director shall have adopted regulations.
This bill would change that date to July 31, 2008.
Existing law provides that, beginning with the 2007-08 rate year,
the maximum increase in the weighted average Medi-Cal reimbursement
rate required for purposes of these provisions shall not exceed 5.5%
of the weighted average Medi-Cal reimbursement rate for the
proceeding fiscal year, adjusted as prescribed.
This bill would extend that rate through the 2008-09 rate year.
Existing law, administered by the department, provides for the
HIV/AIDS Pharmacy Pilot Program, as described, to
evaluate the provision of medication therapy
management services, as defined, for people with HIV/AIDS. Existing
law provides for the repeal of these provisions on January 1, 2008.
This bill would authorize the department to seek federal financial
participation under specified conditions and would extend the repeal
date of the HIV/AIDS Pharmacy Pilot Program to June 30, 2008.
Existing law specifies the procedures by which the department
determines prospective per capita rates of payment of services for
Medi-Cal beneficiaries enrolled in a prepaid health plan.
This bill would require that, for rates established on or after
August 1, 2007, the department shall pay capitation rates to health
plans participating in the Medi-Cal managed care program, and permit
the department to utilize a county and health plan specific rate
methodology to develop Medi-Cal managed care capitation rates for
contracts between the department and case management plans, county
health systems, and a geographic managed care pilot project. It would
require the department and the commission to report to the
Legislature, through budget subcommittee hearings to be convened in
2008, regarding changes implemented in the 2007-08 fiscal year
regarding Medi-Cal Managed Care reimbursement rates negotiated under
the Geographic Managed Care model concerning the use of health plan
specific encounter and claims data, and the application of actuarial
methods.
Existing law defines actuarial methods and related terms for
purposes of these Medi-Cal prepaid health plan provisions.
This bill would make these provisions inoperative on August 1,
2007, and repeal them on January 1, 2008.
Existing law requires the department to impose annually, until
January 1, 2009, a quality improvement fee on each Medi-Cal managed
care plan in the amount of 6% of the plan's total operating revenues,
as defined, to be deposited in the General Fund, with the revenue
derived from this fee to be used to increase Medi-Cal managed care
plan capitation rates.
This bill would extend the provisions pertaining to the fee until
October 1, 2009, and would provide that the amount of the fee shall
be up to 6% of the plans total operating revenue.
Existing law requires the department to establish a pilot program
to provide continuous skilled nursing care as a benefit under the
Medi-Cal program when those services are provided pursuant to a
federal waiver. This provision is repealed as of January 1, 2008.
This bill would extend the repeal date to January 1, 2010.
Existing law, relating to the operation of a pilot program in
Santa Barbara County for the delivery of Medi-Cal services, among
other things, authorizes the California Medical Assistance Commission
to negotiate exclusive contracts and rates with the Santa Barbara
Regional Health Authority and requires the contracts to be approved
by the Department of Finance.
This bill would instead authorize the State Department of Health
Care Services to negotiate those contracts and would delete the
requirement of approval by the Department of Finance.
Existing law provides that the board of supervisors of a county
that contracted with the department pursuant to a specified provision
of law during the 1990-91 fiscal year and any county with a
population under 300,000, as determined in accordance with the 1990
decennial census, may, by adopting a resolution to the effect, elect
to participate in the County Medical Services Program for state
administration of health care services to eligible persons in the
county. Existing law revises, for the 2006-07 fiscal year, state and
county financial responsibilities for certain increases in the County
Medical Services Program.
This bill would further extend that provision to include the
2007-08 fiscal year.
This bill would reallocate certain amounts appropriated in the
Budget Act of 2007 from the Cigarette and Tobacco Products Surtax
Fund, with these revenues to be allocated to certain county health
services programs.
This bill would require the State Department of Mental Health, in
collaboration with the State Department of Health Care Services to
provide specified material to the fiscal and policy committees of the
Legislature regarding a prescribed State Department of Mental Health
workplan and materials concerning certain mental health programs in
San Mateo County.
This bill would require the State Department of Health Care
Services to issue an All County Welfare Directors Letter and a
Medi-Cal Provider Bulletin regarding the Conlan v. Shewry Beneficiary
Reimbursement process, as specified.
This bill would authorize the Managed Risk Medical Insurance Board
and the State Department of Health Care Services to adopt emergency
regulations to implement applicable provisions of the bill.
Existing law provides for the Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) Program, which provides certain
mental health and other medical services to Medi-Cal beneficiaries
and other qualified persons.
This bill would require the State Department of Mental Health to
develop a plan for the EPSDT Program, as provided, and would require
the department to, in developing the plan, provide program
efficiencies while protecting clients, to consult with counties, and
to consider the role of counties in providing services under the
program. The bill would require the department to submit the plan to
the Joint Legislative Budget Committee and the fiscal and policy
committees of the Legislature no later than March 1, 2008.
The bill would also require the department to work with the
Legislature to develop an appropriate administrative structure for
the EPSDT Program for implementation in the 2008-09 fiscal year.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
This bill would declare that it is to take effect immediately as
an urgency statute.
This bill would express the intent of the Legislature to make
statutory changes relating to the Budget Act of 2007.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 13343 is added to the
Government Code , to read:
13343. (a) The Department of Finance shall revise the Governor's
Budget documents display for the State Department of Public Health to
include a display of the supplemental local assistance appropriation
summary, including actual past year, estimated current year, and
proposed budget year expenditures for each branch in the department.
(b) No later than January 20 of each year, the State Department of
Public Health shall annually provide expenditure information for
actual past year, estimated current year, and proposed budget year
for the following:
(1) The Cigarette and Tobacco Products Surtax Fund and the
accounts contained therein as established by Proposition 99 as
approved by the voters at the November 8, 1988, statewide general
election.
(2) Statewide AIDS/HIV programs.
(3) AIDS Drug Assistance Program.
(4) Title V Maternal, Child, and Adolescent Health Grant funds.
(5) Women, Infants, and Children Supplemental Nutrition Program.
(6) Federal Health and Human Services Hospital Preparedness
Program funds.
(7) Centers for Disease Control and Prevention Public Health
Emergency Preparedness Grant funds.
SEC. 2. Section 1204.5 is added to the
Health and Safety Code , to read:
1204.5. Primary care clinics may submit verification of Joint
Commission on Accreditation of Healthcare Organization (JCAHO)
certification to the Licensing and Certification Division within the
State Department of Public Health for entry into the electronic
Licensing Management System for purposes of data collection and
extraction for licensing and certification fee calculations.
SEC. 3. Section 1250.8 of the Health
and Safety Code is amended to read:
1250.8. (a) Notwithstanding subdivision (a) of Section 437.10,
the state department, upon application of a
general acute care hospital which meets all the criteria of
subdivision (b), and other applicable requirements of licensure,
shall issue a single consolidated license to a general acute care
hospital which includes more than one physical plant maintained and
operated on separate premises or which has multiple licenses for a
single health facility on the same premises. A single consolidated
license shall not be issued where the separate freestanding physical
plant is a skilled nursing facility or an intermediate care facility,
whether or not the location of the skilled nursing facility or
intermediate care facility is contiguous to the general acute care
hospital unless the hospital is exempt from the requirements of
subdivision (b) of Section 1254, or the facility is part of the
physical structure licensed to provide acute care.
(b) The issuance of a single consolidated license shall be based
on the following criteria:
(1) There is a single governing body for all of the facilities
maintained and operated by the licensee.
(2) There is a single administration for all of the facilities
maintained and operated by the licensee.
(3) There is a single medical staff for all of the facilities
maintained and operated by the licensee, with a single set of bylaws,
rules, and regulations, which prescribe a single committee
structure.
(4) Except as provided otherwise in this paragraph, the physical
plants maintained and operated by the licensee which are to be
covered by the single consolidated license are located not more than
15 miles apart. If an applicant provides evidence satisfactory to the
department that it can comply with all requirements of licensure and
provide quality care and adequate administrative and professional
supervision, the director may issue a single consolidated license to
a general acute care hospital that operates two or more physical
plants located more than 15 miles apart under any of the following
circumstances:
(A) One or more of the physical plants is located in a rural area,
as defined by regulations of the director.
(B) One or more of the physical plants provides only outpatient
services, as defined by the department.
(C) If Section 14105.986 of the Welfare and Institutions Code is
implemented and the applicant meets all of the following criteria:
(i) The applicant is a nonprofit corporation.
(ii) The applicant is a children's hospital listed in Section
10727 of the Welfare and Institutions Code.
(iii) The applicant is affiliated with a major university medical
school, and located adjacent thereto.
(iv) The applicant operates a regional tertiary care facility.
(v) One of the physical plants is located in a county that has a
consolidated and county government structure.
(vi) One of the physical plants is located in a county having a
population between 1 million and 2 million.
(vii) The applicant is located in a city with a population between
50,000 and 100,000.
(c) In issuing the single consolidated license, the state
department shall specify the location of each supplemental service
and the location of the number and category of beds provided by the
licensee. The single consolidated license shall be renewed annually.
(d) To the extent required by Part 1.5 (commencing with Section
437) of Division 1, a general acute care hospital which has been
issued a single consolidated license:
(1) Shall not transfer from one facility to another a special
service described in Section 1255 without first obtaining a
certificate of need.
(2) Shall not transfer, in whole or in part, from one facility to
another, a supplemental service, as defined in regulations of the
director pursuant to this chapter, without first obtaining a
certificate of need, unless the licensee, 30 days prior to the
relocation, notifies the Office of Statewide Health Planning and
Development, the applicable health systems agency, and the state
department of the licensee's intent to relocate the supplemental
service, and includes with this notice a cost estimate, certified by
a person qualified by experience or training to render the estimates,
which estimates that the cost of the transfer will not exceed the
capital expenditure threshold established by the Office of Statewide
Health Planning and Development pursuant to Section 437.10.
(3) Shall not transfer beds from one facility to another facility,
without first obtaining a certificate of need unless, 30 days prior
to the relocation, the licensee notifies the Office of Statewide
Health Planning and Development, the applicable health systems
agency, and the state department of the licensee's intent to relocate
health facility beds, and includes with this notice both of the
following:
(A) A cost estimate, certified by a person qualified by experience
or training to render the estimates, which estimates that the cost
of the relocation will not exceed the capital expenditure threshold
established by the Office of Statewide Health Planning and
Development pursuant to Section 437.10.
(B) The identification of the number, classification, and location
of the health facility beds in the transferor facility and the
proposed number, classification, and location of the health facility
beds in the transferee facility.
Except as otherwise permitted in Part 1.5 (commencing with Section
437) of Division 1, or as authorized in an approved certificate of
need pursuant to that part, health facility beds transferred pursuant
to this section shall be used in the transferee facility in the same
bed classification as defined in Section 1250.1, as the beds were
classified in the transferor facility.
Health facility beds transferred pursuant to this section shall
not be transferred back to the transferor facility for two years from
the date of the transfer, regardless of cost, without first
obtaining a certificate of need pursuant to Part 1.5 (commencing with
Section 437) of Division 1.
(e) All transfers pursuant to subdivision (d) shall satisfy all
applicable requirements of licensure and shall be subject to the
written approval, if required, of the state department. The state
department may adopt regulations which are necessary to implement the
provisions of this section. These regulations may include a
requirement that each facility of a health facility subject to a
single consolidated license have an onsite full-time or part-time
administrator.
(f) As used in this section, "facility" means any physical plant
operated or maintained by a health facility subject to a single,
consolidated license issued pursuant to this section.
(g) For purposes of selective provider contracts negotiated under
the Medi-Cal program, the treatment of a health facility with a
single consolidated license issued pursuant to this section shall be
subject to negotiation between the health facility and the California
Medical Assistance Commission. A general acute care hospital which
is issued a single consolidated license pursuant to this section may,
at its option, receive from the state department a single
Medi-Cal program provider number or separate Medi-Cal program
provider numbers be enrolled in the Medi-Cal program
as a single business address or as separate business addresses
for one or more of the facilities subject to the single consolidated
license. Irrespective of whether the general acute care hospital is
issued one or more Medi-Cal provider numbers
enrolled at one or more business addresses , the state
department may require the hospital to file separate cost
reports for each facility pursuant to Section 14170 of the Welfare
and Institutions Code.
(h) For purposes of the Annual Report of Hospitals required by
regulations adopted by the state department pursuant to this part,
the state department and the Office of Statewide Health Planning and
Development may require reporting of bed and service utilization data
separately by each facility of a general acute care hospital issued
a single consolidated license pursuant to this section.
(i) The amendments made to this section during the 1985-86 Regular
Session of the Legislature pertaining to the issuance of a single
consolidated license to a general acute care hospital in the case
where the separate physical plant is a skilled nursing facility or
intermediate care facility shall not apply to the following
facilities:
(1) Any facility which obtained a certificate of need after August
1, 1984, and prior to February 14, 1985, as described in this
subdivision. The certificate of need shall be for the construction of
a skilled nursing facility or intermediate care facility which is
the same facility for which the hospital applies for a single
consolidated license, pursuant to subdivision (a).
(2) Any facility for which a single consolidated license has been
issued pursuant to subdivision (a), as described in this subdivision,
prior to the effective date of the amendments made to this section
during the 1985-86 Regular Session of the Legislature.
Any facility which has been issued a single consolidated license
pursuant to subdivision (a), as described in this subdivision, shall
be granted renewal licenses based upon the same criteria used for the
initial consolidated license.
(j) If the state department issues a single consolidated license
pursuant to this section, the state department may take any action
authorized by this chapter, including, but not limited to, any action
specified in Article 5 (commencing with Section 1294), with respect
to any facility, or any service provided in any facility, which is
included in the consolidated license.
(k) The eligibility for participation in the Medi-Cal program
(Chapter 7 (commencing with Section 14000), Part 3, Division 9,
Welfare and Institutions Code) of any facility that is included in a
consolidated license issued pursuant to this section, provides
outpatient services, and is located more than 15 miles from the
health facility issued the consolidated license shall be subject to a
determination of eligibility by the state department. This
subdivision shall not apply to any facility that is located in a
rural area and is included in a consolidated license issued pursuant
to subparagraphs (A), (B), and (C) of paragraph (4) of subdivision
(b). Regardless of whether a facility has received or not received a
determination of eligibility pursuant to this subdivision, this
subdivision shall not affect the ability of a licensed professional,
providing services covered by the Medi-Cal program to a person
eligible for Medi-Cal in a facility subject to a determination of
eligibility pursuant to this subdivision, to bill the Medi-Cal
program for those services provided in accordance with applicable
regulations.
(l) Notwithstanding any other provision of law, the director may
issue a single consolidated license for a general acute care hospital
to Children's Hospital Oakland and San Ramon Regional Medical
Center.
(m) Notwithstanding any other provision of law, the director may
issue a single consolidated license for a general acute care hospital
to Children's Hospital Oakland and the John Muir Medical Center,
Concord campus.
(n) (1) To the extent permitted by federal law, payments made to
Children's Hospital Oakland pursuant to Section 14166.11 of the
Welfare and Institutions Code shall be adjusted as follows:
(A) The number of Medi-Cal payment days and net revenues
calculated for the John Muir Medical Center Concord campus under the
consolidated license shall not be used for eligibility purposes for
the private hospital disproportionate share hospital replacement
funds for Children's Hospital Oakland.
(B) The number of Medi-Cal payment days calculated for hospital
beds located at John Muir Medical Center Concord campus that are
included in the consolidated license beginning in the 2007-08 fiscal
year shall only be used for purposes of calculating disproportionate
share hospital payments authorized under Section 14166.11 of the
Welfare and Institutions Code at Children's Hospital Oakland to the
extent that the inclusion of those days does not exceed the total
Medi-Cal payment days used to calculate Children's Hospital Oakland
payments for the 2006-07 fiscal year disproportionate share
replacement.
(2) This subdivision shall become inoperative in the event that
the two facilities covered under the consolidated license described
in subdivision (a) are located within a 15-mile radius of each other.
SEC. 4. Section 1266 of the Health and
Safety Code is amended to read:
1266. (a) Unless otherwise specified in statute, or
unless funds are specifically appropriated from the General Fund in
the annual Budget Act or other enacted legislation, the Licensing and
Certification Division shall, no later than the beginning of the
2009-10 fiscal year, be supported entirely by federal funds and
special funds. The Licensing and Certification
Division shall be supported entirely by federal funds and special
funds by no earlier than the beginning of the 2009-10 fiscal year
unless otherwise specified in statute, or unless funds are
specifically appropriated from the General Fund in the annual Budget
Act or other enacted legislation. For the 2007-08 fiscal
year, General Fund support shall be provided to offset licensing and
certification fees in an amount of not less than two million
seven hundred eighty-two
thousand dollars ($2, 782,000 ).
(b) The Licensing and Certification Program fees for the 2006-07
fiscal year shall be as follows:
Type of Facility Fee
General Acute Care Hospitals $ 134.10 per bed
Acute Psychiatric Hospitals $ 134.10 per bed
Special Hospitals $ 134.10 per bed
Chemical Dependency Recovery
Hospitals $ 123.52 per bed
Skilled Nursing Facilities $ 202.96 per bed
Intermediate Care Facilities $ 202.96 per bed
Intermediate Care Facilities
- Developmentally Disabled $ 592.29 per bed
Intermediate Care Facilities
- Developmentally Disabled - per
Habilitative $1,000.00 facility
Intermediate Care Facilities
- Developmentally Disabled - per
Nursing $1,000.00 facility
Home Health Agencies per
$2,700.00 facility
Referral Agencies per
$5,537.71 facility
Adult Day Health Centers per
$4,650.02 facility
Congregate Living Health
Facilities $ 202.96 per bed
Psychology Clinics per
$ 600.00 facility
Primary Clinics - per
Community and Free $ 600.00 facility
Specialty Clinics - Rehab
Clinics per
(For profit) $2,974.43 facility
(Nonprofit) per
$ 500.00 facility
Specialty Clinics - Surgical per
and Chronic $1,500.00 facility
Dialysis Clinics per
$1,500.00 facility
Pediatric Day Health/Respite
Care $ 142.43 per bed
Alternative Birthing Centers per
$2,437.86 facility
Hospice per
$1,000.00 facility
Correctional Treatment Centers $ 590.39 per bed
(c) Commencing February 1, 2007, and every February 1 thereafter,
the department shall publish a list of estimated fees pursuant to
this section. The calculation of estimated fees and the publication
of the report and list of estimated fees shall not be subject to the
rulemaking requirements of Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) By February 1 of each year, the department shall prepare the
following reports and shall make those reports, and the list of
estimated fees required to be published pursuant to subdivision (c),
available to the public by submitting them to the Legislature and
posting them on the department's Internet Web
site:
(1) The department shall prepare a report of all costs for
activities of the Licensing and Certification Program. As part of
this report, the department shall recommend Licensing and
Certification Program fees in accordance with the following:
(A) Projected workload and costs shall be grouped for each fee
category.
(B) Cost estimates, and the estimated fees, shall be based on the
appropriation amounts in the Governor's proposed budget for the next
fiscal year, with and without policy adjustments to the fee
methodology.
(C) The allocation of program, operational, and administrative
overhead, and indirect costs to fee categories shall be based on
generally accepted cost allocation methods. Significant items of
costs shall be directly charged to fee categories if the expenses can
be reasonably identified to the fee category that caused them.
Indirect and overhead costs shall be allocated to all fee categories
using a generally accepted cost allocation method.
(D) The amount of federal funds and General Fund moneys to be
received in the budget year shall be estimated and allocated to each
fee category based upon an appropriate metric.
(E) The fee for each category will shall
be determined by dividing the aggregate state share of all
costs for the Licensing and Certification Program by the appropriate
metric for the category of licensure. Amounts actually received
for new licensure applications, including change of ownership
applications, and late payment penalties, pursuant to Section 1266.5,
during each fiscal year shall be calculated and 95 percent shall be
applied to the appropriate fee categories in determining Licensing
and Certification Program fees for the second fiscal year following
receipt of those funds. The remaining 5 percent shall be retained in
the fund as a reserve until appropriated.
(2) (A) The department shall prepare a staffing and systems
analysis to ensure efficient and effective utilization of fees
collected, proper allocation of departmental resources to licensing
and certification activities, survey schedules, complaint
investigations, enforcement and appeal activities, data collection
and dissemination, surveyor training, and policy development.
(B) The analysis under this paragraph shall be made available to
interested persons and shall include all of the following:
(i) The number of surveyors and administrative support personnel
devoted to the licensing and certification of health care facilities.
(ii) The percentage of time devoted to licensing and certification
activities for the various types of health facilities.
(iii) The number of facilities receiving full surveys and the
frequency and number of follow up visits.
(iv) The number and timeliness of complaint investigations.
(v) Data on deficiencies and citations issued, and numbers of
citation review conferences and arbitration hearings.
(vi) Other applicable activities of the licensing and
certification division.
(e) (1) The department shall adjust the list of estimated fees
published pursuant to subdivision (c) if the annual Budget Act or
other enacted legislation includes an appropriation that differs from
those proposed in the Governor's proposed budget for that fiscal
year.
(2) The department shall publish a final fee list, with an
explanation of any adjustment, by the issuance of an all facilities
letter, by posting the list on the department's Internet Web site,
and by including the final fee list as part of the licensing
application package, within 14 days of the enactment of the annual
Budget Act. The adjustment of fees and the publication of the final
fee list shall not be subject to the rulemaking requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.
(f) (1) No fees shall be assessed or collected pursuant to this
section from any state department, authority, bureau, commission, or
officer, unless federal financial participation would become
available by doing so and an appropriation is included in the annual
Budget Act for that state department, authority, bureau, commission,
or officer for this purpose. No fees shall be assessed or collected
pursuant to this section from any clinic that is certified only by
the federal government and is exempt from licensure under Section
1206, unless federal financial participation would become available
by doing so.
(2) For the 2006-07 state fiscal year, no fee shall be assessed or
collected pursuant to this section from any general acute care
hospital owned by a health care district with 100 beds or less.
(g) The Licensing and Certification Program may change annual
license expiration renewal dates to provide for efficiencies in
operational processes or to provide for sufficient cash flow to pay
for expenditures. If an annual license expiration date is changed,
the renewal fee shall be prorated accordingly. Facilities shall be
provided with a 60-day notice of any change in their annual license
renewal date.
SEC. 5. Section 1279 of the Health and
Safety Code is amended to read:
1279. (a) Every health facility for which a license or special
permit has been issued shall be periodically inspected by the
department, or by another governmental entity under contract with the
department. The frequency of inspections shall vary, depending upon
the type and complexity of the health facility or special service to
be inspected, unless otherwise specified by state or federal law or
regulation. The inspection shall include participation by the
California Medical Association consistent with the manner in which it
participated in inspections, as provided in Section 1282 prior to
September 15, 1992.
(b) Except as provided in subdivision (c), inspections shall be
conducted no less than once every two years and as often as necessary
to ensure the quality of care being provided.
(c) For a health facility specified in subdivision (a), (b), or
(f) of Section 1250, inspections shall be conducted no less than once
every three years, and as often as necessary to ensure the quality
of care being provided.
(d) During the inspection, the representative or representatives
shall offer such advice and assistance to the health facility as they
deem appropriate.
(e) For acute care hospitals of 100 beds or more, the inspection
team shall include at least a physician, registered nurse, and
persons experienced in hospital administration and sanitary
inspections. During the inspection, the team shall offer advice and
assistance to the hospital as it deems appropriate.
(f) The department shall ensure that a periodic inspection
conducted pursuant to this section is not announced in advance of the
date of inspection. An inspection may be conducted jointly with
inspections by entities specified in Section 1282. However, if the
department conducts an inspection jointly with an entity specified in
Section 1282 that provides notice in advance of the periodic
inspection, the department shall conduct an additional periodic
inspection that is not announced or noticed to the health facility.
(g) Notwithstanding any other provision of law, the department
shall inspect for compliance with provisions of state law and
regulations during a state periodic inspection or at
the same time as a federal periodic inspection, including, but
not limited to, an inspection required under this section. If
the department inspects for compliance with state law and regulations
at the same time as a federal periodic inspection, the inspection
shall be done consistent with the guidance of the federal Centers for
Medicare and Medicaid Services for the federal portion of the
inspection.
SEC. 6. Section 1280.1 of the Health
and Safety Code is amended to read:
1280.1. (a) If Prior to the effective
date of regulations adopted to implement Section 1280.3, if a
licensee of a health facility licensed under subdivision (a), (b), or
(f) of Section 1250 receives a notice of deficiency
constituting an immediate jeopardy to
the health or safety of a patient and is required to submit a plan
of correction, the department may assess the licensee an
administrative penalty in an amount not to exceed twenty-five
thousand dollars ($25,000) per violation.
(b) If the licensee disputes a determination by the department
regarding the alleged deficiency or the alleged failure to correct a
deficiency, or regarding the reasonableness of the proposed deadline
for correction or the amount of the penalty, the licensee may, within
10 days, request a hearing pursuant to Section 100171. Penalties
shall be paid when appeals have been exhausted and the department's
position has been upheld.
(c) For purposes of this section "immediate jeopardy" means a
situation in which the licensee's noncompliance with one or more
requirements of licensure has caused, or is likely to cause, serious
injury or death to the patient.
(d) This section shall apply only to incidents occurring on or
after January 1, 2007.
(e) No new regulations are required or authorized for
implementation of this section.
(f) This section shall become inoperative on the effective date of
regulations promulgated by the department pursuant to Section
1280.3.
SEC. 7. Section 1280.3 of the Health
and Safety Code is amended to read:
1280.3. (a) Commencing on the effective date of the regulations
adopted pursuant to this section, the director may assess an
administrative penalty in an amount of up to fifty thousand dollars
($50,000) per immediate jeopardy violation , as defined in
Section 1280.1, against a licensee of a health facility
licensed under subdivision (a), (b), or (f) of Section 1250.
(b) Except as provided in subdivision (c), for a violation of this
chapter or the rules and regulations promulgated thereunder that
does not constitute a violation of subdivision (a), the department
may assess an administrative penalty in an amount of up to seventeen
thousand five hundred dollars ($17,500) per violation. This
subdivision shall also apply to violation of regulations set forth in
Article 3 (commencing with Section 127400) of Chapter 2 of Part 2 of
Division 107 or the rules and regulations promulgated thereunder.
The department shall promulgate regulations establishing the
criteria to assess an administrative penalty against a health
facility licensed pursuant to subdivisions (a), (b), or (f) of
Section 1250. The criteria shall include, but need not be limited to,
the following:
(1) The patient's physical and mental condition.
(2) The probability and severity of the risk that the violation
presents to the patient.
(3) The actual financial harm to patients, if any.
(4) The nature, scope, and severity of the violation.
(5) The facility's history of compliance with related state and
federal statutes and regulations.
(6) Factors beyond the facility's control that restrict the
facility's ability to comply with this chapter or the rules and
regulations promulgated thereunder.
(7) The demonstrated willfulness of the violation.
(8) The extent to which the facility detected the violation and
took steps to immediately correct the violation and prevent the
violation from recurring.
(c) The department shall not assess an administrative penalty for
minor violations.
(d) The regulations shall not change the definition of immediate
jeopardy as established in Section 1280.1
this section .
(e) The regulations shall apply only to incidents occurring on or
after the effective date of the regulations.
(f) If the licensee disputes a determination by the department
regarding the alleged deficiency or alleged failure to correct a
deficiency, or regarding the reasonableness of the proposed deadline
for correction or the amount of the penalty, the licensee may, within
10 working days, request a hearing pursuant to Section 100171.
Penalties shall be paid when all appeals have been exhausted and the
department's position has been upheld.
(g) Moneys collected by the department as a result of
administrative penalties imposed under this section and Section
1280.1 shall be deposited into the Licensing and Certification
Program Fund established pursuant to Section 1266.9. These moneys
shall be tracked and available for expenditure, upon appropriation by
the Legislature, to support internal departmental quality
improvement activities.
(h) For purposes of this section, "immediate jeopardy" means a
situation in which the licensee's noncompliance with one or more
requirements of licensure has caused, or is likely to cause, serious
injury or death to the patient.
SEC. 8. Section 1324.21 of the Health
and Safety Code is amended to read:
1324.21. (a) For facilities licensed under subdivision (c) of
Section 1250, there shall be imposed each state fiscal year a uniform
quality assurance fee per resident day. The uniform quality
assurance fee shall be based upon the entire net revenue of all
skilled nursing facilities subject to the fee, except an exempt
facility, as defined in Section 1324.20, calculated in accordance
with subdivision (b).
(b) The amount of the uniform quality assurance fee to be assessed
per resident day shall be determined based on the aggregate net
revenue of skilled nursing facilities subject to the fee, in
accordance with the methodology outlined in the request for federal
approval required by Section 1324.27 and in regulations, provider
bulletins, or other similar instructions. The uniform quality
assurance fee shall be calculated as follows:
(1) (A) For the rate year 2004-05, the net revenue shall be
projected for all skilled nursing facilities subject to the fee. The
projection of net revenue shall be based on prior rate year data.
Once determined, the aggregate projected net revenue for all
facilities shall be multiplied by 2.7 percent, as determined under
the approved methodology, and then divided by the projected total
resident days of all providers subject to the fee.
(B) Notwithstanding subparagraph (A), the Director of Health
Services may increase the amount of the fee up to 3 percent of the
aggregate projected net revenue if necessary for the implementation
of Article 3.8 (commencing with Section 14126) of Chapter 7 of Part 3
of Division 9 of the Welfare and Institutions Code.
(2) For the rate year 2005-06 and subsequent rate years through
and including the 2007-08 2008-09 rate
year, the net revenue shall be projected for all skilled nursing
facilities subject to the uniform quality assurance fee. The
projection of net revenue shall be based on the prior rate year's
data. Once determined, the aggregate projected net revenue for all
facilities shall be multiplied by 6 percent, as determined under the
approved methodology, and then divided by the projected total
resident days of all providers subject to the fee. The amounts
so determined shall be subject to the provisions of subdivision (d).
(c) The director may assess and collect a nonuniform fee
consistent with the methodology approved pursuant to Section 1324.27.
(d) In no case shall the aggregate fees
collected annually pursuant to this article exceed 6 percent
of the annual aggregate net revenue for licensed skilled nursing
facilities subject to the fee , taken together with
applicable licensing fees, exceed the amounts allowable under federal
law .
(e) If there is a delay in the implementation of this article for
any reason, including a delay in the approval of the quality
assurance fee and methodology by the federal Centers for Medicare and
Medicaid Services, in the 2004-05 rate year or in any other rate
year, all of the following shall apply:
(1) Any facility subject to the fee may be assessed the amount the
facility will be required to pay to the department, but shall not be
required to pay the fee until the methodology is approved and
Medi-Cal rates are increased in accordance with paragraph (2) of
subdivision (a) of Section 1324.28 and the increased rates are paid
to facilities.
(2) The department may retroactively increase and make payment of
rates to facilities.
(3) Facilities that have been assessed a fee by the department
shall pay the fee assessed within 60 days of the date rates are
increased in accordance with paragraph (2) of subdivision (a) of
Section 1324.28 and paid to facilities.
(4) The department shall accept a facility's payment
notwithstanding that the payment is submitted in a subsequent fiscal
year than the fiscal year in which the fee is assessed.
SEC. 9. Section 1324.23 of the Health
and Safety Code is amended to read:
1324.23. (a) The Director of Health Services, or his or her
designee, shall administer this article.
(b) The director may adopt regulations as are necessary to
implement this article. These regulations may be adopted as emergency
regulations in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
For purposes of this article, the adoption of regulations shall be
deemed an emergency and necessary for the immediate preservation of
the public peace, health and safety, or general welfare. The
regulations shall include, but need not be limited to, any
regulations necessary for any of the following purposes:
(1) The administration of this article, including the proper
imposition and collection of the quality assurance fee not to exceed
amounts reasonably necessary for purposes of this article.
(2) The development of any forms necessary to obtain required
information from facilities subject to the quality assurance fee.
(3) To provide details, definitions, formulas, and other
requirements.
(c) As an alternative to subdivision (b), and notwithstanding the
rulemaking provisions of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code, the
director may implement this article, in whole or in part, by means of
a provider bulletin, or other similar instructions, without taking
regulatory action, provided that no such bulletin or other similar
instructions shall remain in effect after July 31, 2007
2008 . It is the intent of the Legislature that
the regulations adopted pursuant to subdivision (b) shall be adopted
on or before July 31, 2007 2008 .
SEC. 10. Section 1324.28 of the Health
and Safety Code is amended to read:
1324.28. (a) This article shall be implemented as long as both of
the following conditions are met:
(1) The state receives federal approval of the quality assurance
fee from the federal Centers for Medicare and Medicaid Services.
(2) Legislation is enacted in the 2004 legislative session making
an appropriation from the General Fund and from the Federal Trust
Fund to fund a rate increase for skilled nursing facilities, as
defined under subdivision (c) of Section 1250, for the 2004-05 rate
year in an amount consistent with the Medi-Cal rates that specific
facilities would have received under the rate methodology in effect
as of July 31, 2004, plus the proportional costs as projected by
Medi-Cal for new state or federal mandates.
(b) This article shall remain operative only as long as all of the
following conditions are met:
(1) The federal Centers for Medicare and Medicaid Services
continues to allow the use of the provider assessment provided in
this article.
(2) The Medi-Cal Long Term Care Reimbursement Act, Article 3.8
(commencing with Section 14126) of Chapter 7 of Part 3 of Division 9
of the Welfare and Institutions Code, as added during the 2003-04
Regular Session by the act adding this section, is enacted and
implemented on or before July 31, 2005, or as extended as provided in
that article, and remains in effect thereafter.
(3) The state has continued its maintenance of effort for the
level of state funding of nursing facility reimbursement for rate
year 2005-06, and for every subsequent rate year continuing through
the 2007-08 2008-09 rate year, in an
amount not less than the amount that specific facilities would have
received under the rate methodology in effect on July 31, 2004, plus
Medi-Cal's projected proportional costs for new state or federal
mandates, not including the quality assurance fee.
(4) The full amount of the quality assurance fee assessed and
collected pursuant to this article remains available for the purposes
specified in Section 1324.25 and for related purposes.
(c) If all of the conditions in subdivision (a) are met, this
article is implemented, and subsequently, any one of the conditions
in subdivision (b) is not met, on and after the date that the
department makes that determination, this article shall not be
implemented, notwithstanding that the condition or conditions
subsequently may be met.
(d) Notwithstanding subdivisions (a), (b), and (c), in the event
of a final judicial determination made by any state or federal court
that is not appealed, or by a court of appellate jurisdiction that is
not further appealed, in any action by any party, or a final
determination by the administrator of the federal Centers for
Medicare and Medicaid Services, that federal financial participation
is not available with respect to any payment made under the
methodology implemented pursuant to this article because the
methodology is invalid, unlawful, or contrary to any provision of
federal law or regulations, or of state law, this section shall
become inoperative.
SEC. 11. Section 1324.29 of the Health
and Safety Code is amended to read:
1324.29. The quality assurance fee shall cease to be assessed and
collected on or after July 31, 2008 2009
.
SEC. 12. Section 1324.30 of the Health
and Safety Code is amended to read:
1324.30. This article shall become inoperative on July
1, 2008 31, 2009 , and, as of January 1,
2009 2010 , is repealed, unless a later enacted
statute, that becomes operative on or before January 1,
2009 2010 , deletes or extends the dates on
which it becomes inoperative and is repealed.
SEC. 13. Section 1422 of the Health and
Safety Code , as amended by Section 6 of Chapter 895 of
the Statutes of 2006, is amended to read:
1422. (a) The Legislature finds and declares that it is the
public policy of this state to ensure that long-term health care
facilities provide the highest level of care possible. The
Legislature further finds that inspections are the most effective
means of furthering this policy. It is not the intent of the
Legislature by the amendment of subdivision (b) enacted by Chapter
1595 of the Statutes of 1982 to reduce in any way the resources
available to the state department for inspections, but rather to
provide the state department with the greatest flexibility to
concentrate its resources where they can be most effective. It is the
intent of the Legislature to create a survey process that includes
state-based survey components and that determines compliance with
federal and California requirements for certified long-term health
care facilities. It is the further intent of the Legislature to
execute this inspection in the form of a single survey process, to
the extent that this is possible and permitted under federal law. The
inability of the state to conduct a single survey in no way exempts
the state from the requirement under this section that state-based
components be inspected in long-term health care facilities as
required by law.
(b) (1) (A) Notwithstanding Section 1279 or any other provision of
law, without providing notice of these inspections, the
state department, in addition to any inspections conducted
pursuant to complaints filed pursuant to Section 1419, shall conduct
inspections annually, except with regard to those facilities which
have no class "AA," class "A," or class "B" violations in the past 12
months. The state department shall also conduct inspections as may
be necessary to ensure the health, safety, and security of patients
in long-term health care facilities. Every facility shall be
inspected at least once every two years. The department shall vary
the cycle in which inspections of long-term health care facilities
are conducted to reduce the predictability of the inspections.
(B) Inspections and investigations of long-term health care
facilities that are certified by the Medicare Program or the Medicaid
Program shall determine compliance with federal standards and
California statutes and regulations to the extent that
California statutes and regulations provide greater protection to
residents, or are more precise than federal standards, as determined
by the department. Notwithstanding any other provision of law, the
department may, without taking regulatory action pursuant
to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code, implement, interpret, or make
specific this paragraph by means of an All Facilities Letter (AFL) or
similar instruction. Prior to issuing an AFL or similar instruction,
the department shall consult with interested parties and shall
inform the appropriate committees of the Legislature. The department
shall also post the AFL or similar instruction on its Web site so
that any person may observe which California laws and regulations
provide greater protection to its residents or ar e more
precise than federal standards. Nothing in this subdivision is
intended to change existing statutory or regulatory requirements
governing the care provided to long-term health care facility
residents .
(C) In order to ensure maximum effectiveness of inspections
conducted pursuant to this article, the department shall identify all
state law standards for the staffing and operation of long-term
health care facilities. Initial license and renewal fees for
long-term health care facilities may be increased pursuant to
Section 1266 in order to recover any additional costs incurred by the
department as a result of this subparagraph. Costs of
the additional survey and inspection activities required by Chapter
895 of the Statutes of 2006 shall be included as Licensing and
Certification Program activities for the purposes of calculating fees
in accordance with Section 1266.
(2) The state department shall submit to the federal Department of
Health and Human Services on or before July 1, 1985, for review and
approval, a request to implement a three-year pilot program designed
to lessen the predictability of the long-term health care facility
inspection process. Two components of the pilot program shall be (A)
the elimination of the present practice of entering into a one-year
certification agreement, and (B) the conduct of segmented inspections
of a sample of facilities with poor inspection records, as defined
by the state department. At the conclusion of the pilot project, an
analysis of both components shall be conducted by the state
department to determine effectiveness in reducing inspection
predictability and the respective cost benefits. Implementation of
this pilot project is contingent upon federal approval.
(c) Except as otherwise provided in subdivision (b), the state
department shall conduct unannounced direct patient care inspections
at least annually to inspect physician and surgeon services, nursing
services, pharmacy services, dietary services, and activity programs
of all the long-term health care facilities. Facilities evidencing
repeated serious problems in complying with this chapter or a history
of poor performance, or both, shall be subject to periodic
unannounced direct patient care inspections during the inspection
year. The direct patient care inspections shall assist the state
department in the prioritization of its efforts to correct facility
deficiencies.
(d) All long-term health care facilities shall report to the state
department any changes in the nursing home administrator or the
director of nursing services within 10 calendar days of the changes.
(e) Within 90 days after the receipt of notice of a change in the
nursing home administrator or the director of nursing services, the
state department may conduct an abbreviated inspection of the
long-term health care facilities.
(f) If a change in a nursing home administrator occurs and the
Board of Nursing Home Administrators notifies the state department
that the new administrator is on probation or has had his or her
license suspended within the previous three years, the state
department shall conduct an abbreviated survey of the long-term
health care facility employing that administrator within 90 days of
notification.
SEC. 14. Section 101317 of the Health
and Safety Code is amended to read:
101317. (a) For purposes of this article, allocations shall be
made to the administrative bodies of qualifying local health
jurisdictions described as public health administrative organizations
in Section 101185, and pursuant to Section 101315, in the following
manner:
(1) (A) For the 2003-04 fiscal year and subsequent fiscal years,
to the administrative bodies of each local health jurisdiction, a
basic allotment of one hundred thousand dollars ($100,000), subject
to the availability of funds appropriated in the annual Budget Act or
some other act.
(B) For the 2002-03 fiscal year, the basic allotment of one
hundred thousand dollars ($100,000) shall be reduced by the amount of
federal funding allocated as part of a basic allotment for the
purposes of this article to local health jurisdictions in the 2001-02
fiscal year.
(2) (A) Except as provided in subdivision (c), after determining
the amount allowed for the basic allotment as provided in paragraph
(1), the balance of the annual appropriation for purposes of this
article, if any, shall be allotted on a per capita basis to the
administrative bodies of each local health jurisdiction in the
proportion that the population of that local health jurisdiction
bears to the population of all eligible local health jurisdictions of
the state.
(B) The population estimates used for the calculation of the per
capita allotment pursuant to subparagraph (A) shall be based on the
Department of Finance's E-1 Report, "City/County Populations
Estimates with Annual Percentage Changes" as of January 1 of the
previous year. However, if within a local health jurisdiction there
are one or more city health jurisdictions, the local health
jurisdiction shall subtract the population of the city or cities from
the local health jurisdiction total population for purposes of
calculating the per capita total.
(b) If the amounts appropriated are insufficient to fully fund the
allocations specified in subdivision (a), the department shall
prorate and adjust each local health jurisdiction's allocation so
that the total amount allocated equals the amount appropriated.
(c) For the 2002-03 fiscal year and subsequent fiscal years, where
the federally approved collaborative state-local plan identifies an
allocation method, other than the basic allotment and per capita
method described in subdivision (a), for specific funding to a local
public health jurisdiction, including, but not limited to, funding
laboratory training, chemical and nuclear terrorism preparedness,
smallpox preparedness, and information technology approaches, that
funding shall be paid to the administrative bodies of those local
health jurisdictions in accordance with the federally approved
collaborative state-local plan for bioterrorism preparedness and
other public health threats in the state.
(d) Funds appropriated pursuant to the annual Budget Act or some
other act for allocation to local health jurisdictions pursuant to
this article shall be disbursed quarterly to local health
jurisdictions beginning July 1, 2002, using the following process:
(1) Each fiscal year, upon the submission of an application for
funding by the administrative body of a local health jurisdiction,
the department shall make the first quarterly payment to each
eligible local health jurisdiction. Initially, that application shall
include a plan and budget for the local program that is in
accordance with the department's plans and priorities for
bioterrorism preparedness and response, and other public health
threats and emergencies, and a certification by the chairperson of
the board of supervisors or the mayor of a city with a local health
department that the funds received pursuant to this article will not
be used to supplant other funding sources in violation of subdivision
(d) of Section 101315. In subsequent years, the department shall
develop a streamlined process for continuation of funding that will
address new federal requirements and will assure the continuity of
local plan activities.
(2) The department shall establish procedures and a format for the
submission of the local health jurisdiction's plan and budget. The
local health jurisdiction's plan shall be consistent with the
department's plans and priorities for bioterrorism preparedness and
response and other public health threats and emergencies in
accordance with requirements specified in the department's federal
grant award. Payments to local health jurisdictions beyond the first
quarter shall be contingent upon the approval of the department of
the local health jurisdiction's plan and the local health
jurisdiction's progress in implementing the provisions of the local
health jurisdiction's plan, as determined by the department.
(3) If a local health jurisdiction does not apply or submits a
noncompliant application for its allocation, those funds provided
under this article may be redistributed according to subdivision (a)
to the remaining local health jurisdictions.
(e) Funds shall be used for activities to improve and enhance
local health jurisdictions' preparedness for and response to
bioterrorism and other public health threats and emergencies, and for
any other purposes, as determined by the department, that are
consistent with the purposes for which the funds were appropriated.
(f) Any local health jurisdiction that receives funds pursuant to
this article shall deposit them in a special local public health
preparedness trust fund established solely for this purpose before
transferring or expending the funds for any
of the uses allowed pursuant to this article. The
interest earned on moneys in the fund shall accrue to the benefit of
the fund and shall be expended for the same purposes as other moneys
in the fund.
(g) (1) A local health jurisdiction that receives funding pursuant
to this article shall submit reports that display cost data and the
activities funded by moneys deposited in its local public health
preparedness trust fund to the department on a regular basis in a
form and according to procedures prescribed by the department.
(2) The department, in consultation with local health
jurisdictions, shall develop required content for the reports
required under paragraph (1), which shall include, but shall not be
limited to, data and information needed to implement this article and
to satisfy federal reporting requirements. The chairperson of the
board of supervisors or the mayor of a city with a local health
department shall certify the accuracy of the reports and that the
moneys appropriated for the purposes of this article have not been
used to supplant other funding sources.
(3) It is the intent of the Legislature that the department shall
audit the cost reports every three years, commencing in January 2007,
to determine compliance with federal requirements and consistency
with local health jurisdiction budgets, contingent upon the
availability of federal funds for this activity, and contingent upon
the continuation of federal funding for emergency preparedness
and bioterrorism preparedness. All cost-compliance reports
and audit exceptions or related analyses or reports issued by the
State Department of Public Health regarding the expenditure of
funding for emergency and bioterrorism preparedness by local health
jurisdictions shall be made available to the Legislature upon
request.
(h) The administrative body of a local health jurisdiction may
enter into a contract with the department and the department may
enter into a contract with that local health jurisdiction for the
department to administer all or a portion of the moneys allocated to
the local health jurisdiction pursuant to this article. The
department may use funds retained on behalf of a local jurisdiction
pursuant to this subdivision solely for the purposes of administering
the jurisdiction's bioterrorism preparedness activities. The funds
appropriated pursuant to this article and retained by the department
pursuant to this subdivision are available for expenditure and
encumbrance for the purposes of support or local assistance.
(i) The department may recoup from a local health jurisdiction any
moneys allocated pursuant to this article that are unspent or that
are not expended for purposes specified in subdivision (d). The
department may also recoup funds expended by a local health
jurisdiction in violation of subdivision (d) of Section 101315. The
department may withhold quarterly payments of moneys to a local
health jurisdiction if the local health jurisdiction is not in
compliance with this article or the terms of that local health
jurisdiction's plan as approved by the department. Before any funds
are recouped or withheld from a local health jurisdiction, the
department shall meet with local health officials to discuss the
status of the unspent moneys or the disputed use of the funds, or
both.
(j) Notwithstanding any other provision of law, moneys made
available for bioterrorism preparedness pursuant to this article in
the 2001-02 fiscal year shall be available for expenditure and
encumbrance until June 30, 2003. Moneys made available for
bioterrorism preparedness pursuant to this article from July 1, 2002,
to August 30, 2003, inclusive, shall be available for expenditure
and encumbrance until August 30, 2004. Moneys made available in the
2003-04 Budget Act for bioterrorism preparedness shall be available
for expenditure and encumbrance until August 30, 2005.
SEC. 15. Section 101320 of the Health
and Safety Code is amended to read:
101320. This article shall become inoperative on September 1,
2007 2010 , and, as of January 1,
2008 2011 , is repealed, unless a later
enacted statute that is enacted before January 1, 2008
2011 , deletes or extends the dates on which it
becomes inoperative and is repealed.
SEC. 16. Section 120955 of the Health
and Safety Code is amended to read:
120955. (a) (1) To the extent that state and federal funds are
appropriated in the annual Budget Act for these purposes, the
director shall establish and may administer a program to provide drug
treatments to persons infected with human immunodeficiency virus
(HIV), the etiologic agent of acquired immune deficiency
immunodeficiency syndrome (AIDS). If the
director makes a formal determination that, in any fiscal year, funds
appropriated for the program will be insufficient to provide all of
those drug treatments to existing eligible persons for the fiscal
year and that a suspension of the implementation of the program is
necessary, the director may suspend eligibility determinations and
enrollment in the program for the period of time necessary to meet
the needs of existing eligible persons in the program.
(2) The director , in consultation with the AIDS Drug
Assistance Program Medical Advisory Committee, shall develop,
maintain, and update as necessary a list of drugs to be provided
under this program. The list shall be exempt from the
requirements of the Administrative Procedures Act (Chapter 3.5
(commencing with Section 11340), Chapter 4 (commencing with Section
11370), and Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code), and shall not be
subject to the review and approval of the Office of
Administrative Law. In addition, the director shall notify the fiscal
and policy committees of the Legislature of any additions,
deletions, or restrictions to the list within 15 business days of the
action. At a minimum, this notification shall describe the specific
change to the formulary, the reason for the action taken, the
estimated number of people it may affect, and any estimate of costs
or savings where applicable.
(b) The director may grant funds to a county public health
department through standard agreements to administer this program in
that county. To maximize the recipients' access to drugs covered by
this program, the director shall urge the county health department in
counties granted these funds to decentralize distribution of the
drugs to the recipients.
(c) The director shall establish a rate structure for
reimbursement for the cost of each drug included in the program.
Rates shall not be less than the actual cost of the drug. However,
the director may purchase a listed drug directly from the
manufacturer and negotiate the most favorable bulk price for that
drug.
(d) Manufacturers of the drugs on the list shall pay the
department a rebate equal to the rebate that would be applicable to
the drug under Section 1927(c) of the federal Social Security Act (42
U.S.C. Sec. 1396r-8(c)) plus an additional rebate to be negotiated
by each manufacturer with the department, except that no rebates
shall be paid to the department under this section on drugs for which
the department has received a rebate under Section 1927(c) of the
federal Social Security Act (42 U.S.C. Sec. 1396r-8(c)) or that have
been purchased on behalf of county health departments or other
eligible entities at discount prices made available under Section
256b of Title 42 of the United States Code.
(e) The department shall submit an invoice, not less than two
times per year, to each manufacturer for the amount of the rebate
required by subdivision (d).
(f) Drugs may be removed from the list for failure to pay the
rebate required by subdivision (d), unless the department determines
that removal of the drug from the list would cause substantial
medical hardship to beneficiaries.
(g) The department may adopt emergency regulations to implement
amendments to this chapter made during the 1997-98 Regular Session,
in accordance with the Administrative Procedure Act, Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The initial adoption of emergency regulations
shall be deemed to be an emergency and considered by the Office of
Administrative Law as necessary for the immediate preservation of the
public peace, health and safety, or general welfare. Emergency
regulations adopted pursuant to this section shall remain in effect
for no more than 180 days.
(h) Reimbursement under this chapter shall not be made for any
drugs that are available to the recipient under any other private,
state, or federal programs, or under any other contractual or legal
entitlements, except that the director may authorize an exemption
from this subdivision where exemption would represent a cost savings
to the state.
(i) The department may also subsidize certain cost-sharing
requirements for persons otherwise eligible for the AIDS Drug
Assistance Program (ADAP) with existing non-ADAP drug coverage by
paying for prescription drugs included on the ADAP formulary within
the existing ADAP operational structure up to, but not exceeding, the
amount of that cost-sharing obligation. This cost sharing may only
be applied in circumstances in which the other payer recognizes the
ADAP payment as counting toward the individual's cost-sharing
obligation.
SEC. 17. Section 124910 of the Health
and Safety Code is amended to read:
124910. (a) (1) Each licensed primary care clinic, as specified
in subdivision (a) of Section 124900, applying for funds under this
article, shall demonstrate in its application that it meets all of
the following conditions, at a minimum:
(A) Provides medical diagnosis and treatment.
(B) Provides medical support services of patients in all stages of
illness.
(C) Provides communication of information about diagnosis,
treatment, prevention, and prognosis.
(D) Provides maintenance of patients with chronic illness.
(E) Provides prevention of disability and disease through
detection, education, persuasion, and preventive treatment.
(F) Meets one or both of the following conditions:
(i) Is located in an area or a facility federally designated as a
health professional shortage area, medically underserved area, or
medically underserved population.
(ii) Is a clinic in which at least 50 percent of the patients
served are persons with incomes at or below 200 percent of the
federal poverty level.
(2) Any applicant who has applied for and received a federal or
state designation for serving a health professional shortage area,
medically underserved area, or population shall be deemed to meet the
requirements of subdivision (a) of Section 124900.
(b) Each applicant shall also demonstrate to the satisfaction of
the department that the proposed services supplement, and do not
supplant, those primary care services to program beneficiaries that
are funded by any county, state, or federal program.
(c) Each applicant shall demonstrate that it is an active Medi-Cal
provider by having a Medi-Cal provider number
being enrolled in Medi-Cal and diligently billing the
Medi-Cal program for services rendered to Medi-Cal eligible patients
during the past three months prior to the application due date. This
subdivision shall not apply to clinics that are not currently
Medi-Cal providers, and were funded participants pursuant to this
article during the 1993-94 fiscal year.
(d) Each application shall be evaluated by the state department
prior to funding to determine all of the following:
(1) The applicant shall provide its most recently audited
financial statement to verify budget information.
(2) The applicant's ability to deliver basic primary care to
program beneficiaries.
(3) A description of the applicant's operational quality assurance
program.
(4) The applicant's use of protocols for the most common diseases
in the population served under this article.
SEC. 18. Section 124977 of the Health
and Safety Code is amended to read:
124977. (a) It is the intent of the Legislature that, unless
otherwise specified, the genetic disease testing program
carried out pursuant to this chapter be fully supported from fees
collected for services provided by the program.
(b) (1) The department shall charge a fee to all payers for any
tests or activities performed pursuant to this chapter. The amount of
the fee shall be established by regulation and periodically adjusted
by the director in order to meet the costs of this chapter.
Notwithstanding any other provision of law, any fees charged for
prenatal screening and followup services provided to persons enrolled
in the Medi-Cal program, health care service plan enrollees, or
persons covered by health insurance policies, shall be paid in full
directly to and deposited in the
Genetic Disease Testing Fund or the Birth Defects Monitoring
Fund consistent with this section , subject to all terms and
conditions of each enrollee's or insured's health care service plan
or insurance coverage, whichever is applicable, including, but not
limited to, copayments and deductibles applicable to these services,
and only if these copayments, deductibles, or limitations are
disclosed to the subscriber or enrollee pursuant to the disclosure
provisions of Section 1363.
(2) The department shall expeditiously undertake all steps
necessary to implement the fee collection process, including
personnel, contracts, and data processing, so as to initiate the fee
collection process at the earliest opportunity.
(3) The director shall convene, in the most cost-efficient manner
and using existing resources, a working group comprised of health
insurance, health care service plan, hospital, consumer, and
department representatives to evaluate newborn and prenatal screening
fee billing procedures, and recommend to the department ways to
improve these procedures in order to improve efficiencies and enhance
revenue collections for the department and hospitals. In performing
its duties, the working group may consider models in other states.
The working group shall make its recommendations by March 1, 2005.
(4)
(3) Effective for services provided on and after July
1, 2002, the department shall charge a fee to the hospital of birth,
or, for births not occurring in a hospital, to families of the
newborn, for newborn screening and followup services. The hospital of
birth and families of newborns born outside the hospital shall make
payment in full to the Genetic Disease Testing Fund. The department
shall not charge or bill Medi-Cal beneficiaries for services provided
under this chapter.
(5)
(4) The department shall charge a fee for prenatal
screening to support the pregnancy blood sample storage, testing, and
research activities of the Birth Defects Monitoring Program.
(6)
(5) The initial prenatal screening fee increase for
activities of the Birth Defects Monitoring Program shall be ten
dollars ($10).
(7)
(6) The only funds from the Genetic Disease Testing
Fund that may be used for the purpose of supporting the pregnancy
blood sample storage, testing, and research activities of the Birth
Defects Monitoring Program are those prenatal screening fees assessed
and collected prior to the creation of the Birth Defects
Monitoring Program Fund specifically to support those Birth
Defects Monitoring Program activities.
(7) The Birth Defects Monitoring Program Fund is hereby created as
a special fund in the State Treasury. Fee revenues collected
pursuant to paragraph (4) shall be deposited into the fund and shall
be available upon appropriation by the Legislature to support the
pregnancy blood sample storage, testing, and research activities of
the Birth Defects Monitoring Program. Notwithstanding Section 16305.7
of the Government Code, interest earned on funds in the Birth
Defects Monitoring Program Fund shall be deposited as revenue into
the fund to support the Birth Defects Monitoring Program.
(c) (1) The Legislature finds that timely implementation of
changes in genetic screening programs and continuous maintenance of
quality statewide services requires expeditious regulatory and
administrative procedures to obtain the most cost-effective
electronic data processing, hardware, software services, testing
equipment, and testing and followup services.
(2) The expenditure of funds from the Genetic Disease Testing Fund
for these purposes shall not be subject to Section 12102 of, and
Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of,
the Public Contract Code, or to Division 25.2 (commencing with
Section 38070). The department shall provide the Department of
Finance with documentation that equipment and services have been
obtained at the lowest cost consistent with technical requirements
for a comprehensive high-quality program.
(3) The expenditure of funds from the Genetic Disease Testing Fund
for implementation of the Tandem Mass Spectrometry screening for
fatty acid oxidation, amino acid, and organic acid disorders, and
screening for congenital adrenal hyperplasia may be implemented
through the amendment of the Genetic Disease Branch Screening
Information System contracts and shall not be subject to Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the Public
Contract Code, Article 4 (commencing with Section 19130) of Chapter
5 of Part 2 of Division 5 of Title 2 of the Government Code, and any
policies, procedures, regulations or manuals authorized by those
laws.
(4) The expenditure of funds from the Genetic Disease Testing Fund
for the expansion of the Genetic Disease Branch Screening
Information System to include cystic fibrosis and biotinidase may be
implemented through the amendment of the Genetic Disease Branch
Screening Information System contracts, and shall not be subject to
Chapter 2 (commencing with Section 10290) or Chapter 3 (commencing
with Section 12100) of Part 2 of Division 2 of the Public Contract
Code, Article 4 (commencing with Section 19130) of Chapter 5 of Part
2 of Division 5 of Title 2 of the Government Code, or Sections 4800
to 5180, inclusive, of the State Administrative Manual as they relate
to approval of information technology projects or approval of
increases in the duration or costs of information technology
projects. This paragraph shall apply to the design, development, and
implementation of the expansion, and to the maintenance and operation
of the Genetic Disease Branch Screening Information System,
including change requests, once the expansion is implemented.
(d) (1) The department may adopt emergency regulations to
implement and make specific this chapter in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. For the purposes of the Administrative
Procedure Act, the adoption of regulations shall be deemed an
emergency and necessary for the immediate preservation of the public
peace, health and safety, or general welfare. Notwithstanding Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code, these emergency regulations shall not be
subject to the review and approval of the Office of Administrative
Law. Notwithstanding Section 11346.1 and Section 11349.6 of the
Government Code, the department shall submit these regulations
directly to the Secretary of State for filing. The regulations shall
become effective immediately upon filing by the Secretary of State.
Regulations shall be subject to public hearing within 120 days of
filing with the Secretary of State and shall comply with Sections
11346.8 and 11346.9 of the Government Code or shall be repealed.
(2) The Office of Administrative Law shall provide for the
printing and publication of these regulations in the California Code
of Regulations. Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, the
regulations adopted pursuant to this chapter shall not be repealed
by the Office of Administrative Law and shall remain in effect until
revised or repealed by the department.
(3) The Legislature finds and declares that the health and safety
of California newborns is in part dependent on an effective and
adequately staffed genetic disease program, the cost of which shall
be supported by the fees generated by the program.
SEC. 19. Section 130542 of the Health
and Safety Code is amended to read:
130542. (a) The department shall deposit all payments the
department receives pursuant to this division into the California
Discount Prescription Drug Program Fund, which is hereby established
in the State Treasury.
(b) Moneys in the fund shall be made available to the
department, upon appropriation by the Legislature, for purposes of
the program. Notwithstanding Section 13340 of the
Government Code, the fund is hereby continuously appropriated to the
department without regard to fiscal year for the purpose of providing
payment to participating pharmacies pursuant to this
division and for def raying the costs of administering
this division.
(c) Notwithstanding any other
provision of law, no money in the fund is available for expenditure
for any other purpose or for loaning or transferring to any other
fund, including the General Fund. The fund shall also contain any
interest accrued on moneys in the fund.
SEC. 20. Section 12693.981 of the
Insurance Code is amended to read:
12693.981. (a) (1) The Healthy Families-to-Medi-Cal Bridge
Benefits Program is hereby established to provide any person enrolled
for coverage under this part who meets the criteria set forth in
subdivision (b) with a two calendar-month period of health care
benefits in order to provide the person with an opportunity to apply
for Medi-Cal.
(2) The Healthy Families-to-Medi-Cal Bridge Benefits Program shall
be administered by the board.
(b) (1) Any person who meets all of the following requirements
shall be eligible for two additional calendar months of Healthy
Families benefits:
(A) He or she has been receiving, but is no longer eligible for,
benefits under the program.
(B) He or she appears to be income eligible for full-scope
Medi-Cal benefits without a share of cost.
(2) The two additional calendar months of benefits under this
chapter shall begin on the first day of the month following the last
day of the person's eligibility for benefits under the program.
(c) The two-calendar-month period of Healthy Families benefits
provided under this chapter shall be identical to the scope of
benefits that the person was receiving under the program.
(d) Nothing in this section shall be construed to provide Healthy
Families benefits for more than a two calendar-month period under any
circumstances, including the failure to apply for benefits under the
Medi-Cal program or the failure to be made aware of the availability
of the Medi-Cal program unless the circumstances described in
subdivision (b) reoccur.
(e) This section shall become inoperative if an unappealable court
decision or judgment determines that any of the following apply:
(1) The provisions of this section are unconstitutional under the
United States Constitution or the California Constitution.
(2) The provisions of this section do not comply with the State
Children's Health Insurance Program, as set forth in Title XXI of the
federal Social Security Act.
(3) The provisions of this section require that the health care
benefits provided pursuant to this section are required to be
furnished for more than two calendar months.
(f) The board shall cease to provide the benefits described in
this section to any additional individuals on the date that the State
Department of Health Care Services implements the presumptive
eligibility program established pursuant to Section 14011.65b of the
Welfare and Institutions Code and the Director of Health Care
Services executes a declaration pursuant to subdivision (d) of that
section stating that the program of presumptive eligibility has
commenced. The board shall consult and coordinate with the State
Department of Health Care Services in implementing presumptive
eligibility under Section 14011.65b of the Welfare and Institutions
Code for these individuals.
(g) This section shall be repealed six months after the board
ceases to provide benefits to additional individuals pursuant to this
section.
SEC. 21. Section 4474.4 is added to the
Welfare and Institutions Code , to read:
4474.4. Notwithstanding any other provision of law to the
contrary, the Secretary of California Health and Human Services shall
verify that the State Department of Developmental Services and the
State Department of Health Care Services have established protocols
in place between the departments, as well as with the regional
centers and health care plans participating in the Medi-Cal Program
who will be providing services, including health, dental, and vision
care, to people with developmental disabilities transitioning from
Agnews Developmental Center.
The Secretary of California Health and Human Services shall
provide written verification of the establishment of these protocols
to the Joint Legislative Budget Committee, as well as to the fiscal
and policy committees of the Legislature that oversee health and
human services programs.
The purpose of the protocols is to ensure that a mutual goal of
providing appropriate, high-quality care and services to children and
adults who have developmental disabilities in order to optimize the
health and welfare of each individual. Further, the purpose of the
protocols is to ensure that all involved parties, including consumers
and families, the state, regional centers, and providers, are clear
as to their roles and
responsibilities, and are appropriately accountable for optimizing
the health and welfare of each individual.
The protocols, at a minimum, shall address enrollment for
services, all referral practices, including those to specialty care,
authorization practices for services of all involved parties,
coordination of case management services, education and training
services to be provided, the management of medical records, and
provider reimbursement methods. These protocols shall be provided to
the consumers and their families, and be made available to the public
upon request.
SEC. 22. Section 4474.5 is added to the
Welfare and Institutions Code , to read:
4474.5. (a) In order to meet the unique medical health needs of
consumers transitioning from Agnews Developmental Center into
Alameda, San Mateo, and Santa Clara Counties pursuant to the Plan for
the Closure of Agnews Developmental Center, whose individual program
plans document the need for coordinated medical and specialty care
that cannot be met using the traditional Medi-Cal Fee-For-Service
system, services provided under the contract shall be provided by
Medi-Cal managed care health plans that are currently operational in
these counties as a county organized health system or a local
initiative if consumers, where applicable, choose to enroll.
Reimbursement shall be by the State Department of Health Care
Services for all Medi-Cal services provided under the contract that
are not reimbursed by the Medicare program.
(b) Medi-Cal managed care health plans enrolling members referred
to in subdivision (a) shall be further reimbursed for the reasonable
cost of administrative services. Administrative services pursuant to
this subdivision include, but are not limited to, coordination of
care and case management not provided by a regional center, provider
credentialing and contracting, quality oversight, assuring member
access to covered services, consultation with Agnews Developmental
Center staff, regional center staff, Department of Developmental
Services staff, contractors, and family members, and financial
management of the program, including claims processing. Reasonable
cost is defined as the actual cost incurred by the Medi-Cal managed
care health plan, including both direct and indirect costs incurred
by the Medi-Cal managed care health plan, in the performance of
administrative services, but shall not include any incurred costs
found by the State Department of Health Care Services to be
unnecessary for the efficient delivery of necessary health services.
Payment for administrative services shall continue on a reasonable
cost basis until sufficient cost experience exists to allow these
costs to be part of an all-inclusive capitation rate covering both
administrative services and direct patient care services.
(c) Until the State Department of Health Care Services is able to
determine by actuarial methods, prospective per capita rates of
payment for services for those members who enroll in the Medi-Cal
managed care health plans specified in subdivision (a), the State
Department of Health Care Services shall reimburse the Medi-Cal
managed care health plans for the net reasonable cost of direct
patient care services and supplies set forth in the scope of services
in the contract between the Medi-Cal managed care health plans and
the State Department of Health Care Services and that are not
reimbursed by the Medicare Program. Net reasonable cost is defined as
the actual cost incurred by the Medi-Cal managed care health plans,
as measured by the Medi-Cal managed care health plan's payments to
providers of services and supplies, less payments made to the plans
by third parties other than Medicare, and shall not include any
incurred cost found to be unnecessary by the State Department of
Health Care Services in the efficient delivery of necessary health
services. Reimbursement shall be accomplished by the State Department
of Health Care Services making estimated payments at reasonable
intervals, with these estimates being reconciled to actual net
reasonable cost at least semiannually.
(d) The State Department of Health Care Services shall seek any
approval necessary for implementation of this section from the
federal government, for purposes of federal financial participation
under Title XIX of the Social Security Act (42 U.S.C. Sec. 1396 et
seq.). Notwithstanding any other provision of law, this section shall
be implemented only to the extent that federal financial
participation is available pursuant to necessary federal approvals.
SEC. 23. Section 4474.8 is added to the
Welfare and Institutions Code , to read:
4474.8. Notwithstanding any other provision of law to the
contrary, the State Department of Developmental Services shall
continue the operation of the Agnews Outpatient Clinic until such
time as the State Department of Developmental Services is no longer
responsible for the property.
SEC. 24. Section 4640.6 of the Welfare
and Institutions Code is amended to read:
4640.6. (a) In approving regional center contracts, the
department shall ensure that regional center staffing patterns
demonstrate that direct service coordination are the highest
priority.
(b) Contracts between the department and regional centers shall
require that regional centers implement an emergency response system
that ensures that a regional center staff person will respond to a
consumer, or individual acting on behalf of a consumer, within two
hours of the time an emergency call is placed. This emergency
response system shall be operational 24 hours per day, 365 days per
year.
(c) Contracts between the department and regional centers shall
require regional centers to have service coordinator-to-consumer
ratios, as follows:
(1) An average service coordinator-to-consumer ratio of 1 to 62
for all consumers who have not moved from the developmental centers
to the community since April 14, 1993. In no case shall a service
coordinator for these consumers have an assigned caseload in excess
of 79 consumers for more than 60 days.
(2) An average service coordinator-to-consumer ratio of 1 to 45
for all consumers who have moved from a developmental center to the
community since April 14, 1993. In no case shall a service
coordinator for these consumers have an assigned caseload in excess
of 59 consumers for more than 60 days.
(3) Commencing January 1, 2004, to June 30, 2007
2008 , inclusive, the following
coordinator-to-consumer ratios shall apply:
(A) All consumers three years of age and younger and for consumers
enrolled on the Home and Community-based Services Waiver for persons
with developmental disabilities, an average service
coordinator-to-consumer ratio of 1 to 62.
(B) All consumers who have moved from a developmental center to
the community since April 14, 1993, and have lived continuously in
the community for at least 12 months, an average service
coordinator-to-consumer ratio of 1 to 62.
(C) All consumers who have not moved from the developmental
centers to the community since April 14, 1993, and who are not
described in subparagraph (A), an average service
coordinator-to-consumer ratio of 1 to 66.
(4) For purposes of paragraph (3), service coordinators may have a
mixed caseload of consumers three years of age and younger,
consumers enrolled on the Home and Community-based Services Waiver
program for persons with developmental disabilities, and other
consumers if the overall average caseload is weighted proportionately
to ensure that overall regional center average service
coordinator-to-consumer ratios as specified in paragraph (3) are met.
For purposes of paragraph (3), in no case shall a service
coordinator have an assigned caseload in excess of 84 for more than
60 days.
(d) For purposes of this section, "service coordinator" means a
regional center employee whose primary responsibility includes
preparing, implementing, and monitoring consumers' individual program
plans, securing and coordinating consumer services and supports, and
providing placement and monitoring activities.
(e) In order to ensure that caseload ratios are maintained
pursuant to this section, each regional center shall provide service
coordinator caseload data to the department, annually for each fiscal
year. The data shall be submitted in the format, including the
content, prescribed by the department. Within 30 days of receipt of
data submitted pursuant to this subdivision, the department shall
make a summary of the data available to the public upon request. The
department shall verify the accuracy of the data when conducting
regional center fiscal audits. Data submitted by regional centers
pursuant to this subdivision shall:
(1) Only include data on service coordinator positions as defined
in subdivision (d). Regional centers shall identify the number of
positions that perform service coordinator duties on less than a
full-time basis. Staffing ratios reported pursuant to this
subdivision shall reflect the appropriate proportionality of these
staff to consumers served.
(2) Be reported separately for service coordinators whose caseload
includes any of the following:
(A) Consumers who are three years of age and older and who have
not moved from the developmental center to the community since April
14, 1993.
(B) Consumers who have moved from a developmental center to the
community since April 14, 1993.
(C) Consumers who are younger than three years of age.
(D) Consumers enrolled in the Home and Community-based Services
Waiver program.
(3) Not include positions that are vacant for more than 60 days or
new positions established within 60 days of the reporting month that
are still vacant.
(4) For purposes of calculating caseload ratios for consumers
enrolled in the Home- and Community-based Services Waiver program,
vacancies shall not be included in the calculations.
(f) The department shall provide technical assistance and require
a plan of correction for any regional center that, for two
consecutive reporting periods, fails to maintain service coordinator
caseload ratios required by this section or otherwise demonstrates an
inability to maintain appropriate staffing patterns pursuant to this
section. Plans of correction shall be developed following input from
the local area board, local organizations representing consumers,
family members, regional center employees, including recognized labor
organizations, and service providers, and other interested parties.
(g) Contracts between the department and regional center shall
require the regional center to have, or contract for, all of the
following areas:
(1) Criminal justice expertise to assist the regional center in
providing services and support to consumers involved in the criminal
justice system as a victim, defendant, inmate, or parolee.
(2) Special education expertise to assist the regional center in
providing advocacy and support to families seeking appropriate
educational services from a school district.
(3) Family support expertise to assist the regional center in
maximizing the effectiveness of support and services provided to
families.
(4) Housing expertise to assist the regional center in accessing
affordable housing for consumers in independent or supportive living
arrangements.
(5) Community integration expertise to assist consumers and
families in accessing integrated services and supports and improved
opportunities to participate in community life.
(6) Quality assurance expertise, to assist the regional center to
provide the necessary coordination and cooperation with the area
board in conducting quality-of-life assessments and coordinating the
regional center quality assurance efforts.
(7) Each regional center shall employ at least one consumer
advocate who is a person with developmental disabilities.
(8) Other staffing arrangements related to the delivery of
services that the department determines are necessary to ensure
maximum cost-effectiveness and to ensure that the service needs of
consumers and families are met.
(h) Any regional center proposing a staffing arrangement that
substantially deviates from the requirements of this section shall
request a waiver from the department. Prior to granting a waiver, the
department shall require a detailed staffing proposal, including,
but not limited to, how the proposed staffing arrangement will
benefit consumers and families served, and shall demonstrate clear
and convincing support for the proposed staffing arrangement from
constituencies served and impacted, that include, but are not limited
to, consumers, families, providers, advocates, and recognized labor
organizations. In addition, the regional center shall submit to the
department any written opposition to the proposal from organizations
or individuals, including, but not limited to, consumers, families,
providers, and advocates, including recognized labor organizations.
The department may grant waivers to regional centers that
sufficiently demonstrate that the proposed staffing arrangement is in
the best interest of consumers and families served, complies with
the requirements of this chapter, and does not violate any
contractual requirements. A waiver shall be approved by the
department for up to 12 months, at which time a regional center may
submit a new request pursuant to this subdivision.
(i) The requirements of subdivisions (c), (f), and (h) shall not
apply when a regional center is required to develop an expenditure
plan pursuant to Section 4791, and when the expenditure plan
addresses the specific impact of the budget reduction on staffing
requirements and the expenditure plan is approved by the department.
(j) (1) Any contract between the department and a regional center
entered into on and after January 1, 2003, shall require that all
employment contracts entered into with regional center staff or
contractors be available to the public for review, upon request. For
purposes of this subdivision, an employment contract or portion
thereof may not be deemed confidential nor unavailable for public
review.
(2) Notwithstanding paragraph (1), the social security number of
the contracting party may not be disclosed.
(3) The term of the employment contract between the regional
center and an employee or contractor shall not exceed the term of the
state's contract with the regional center.
SEC. 25. Section 4643 of the Welfare
and Institutions Code is amended to read:
4643. (a) If assessment is needed, prior to July 1, 2007
2008 , the assessment shall be performed within
120 days following initial intake. Assessment shall be performed as
soon as possible and in no event more than 60 days following initial
intake where any delay would expose the client to unnecessary risk to
his or her health and safety or to significant further delay in
mental or physical development, or the client would be at imminent
risk of placement in a more restrictive environment. Assessment may
include collection and review of available historical diagnostic
data, provision or procurement of necessary tests and evaluations,
and summarization of developmental levels and service needs and is
conditional upon receipt of the release of information specified in
subdivision (b). On and after July 1, 2007
2008 , the assessment shall be performed within 60 days
following intake and if unusual circumstances prevent the completion
of assessment within 60 days following intake, this assessment period
may be extended by one 30-day period with the advance written
approval of the department.
(b) In determining if an individual meets the definition of
developmental disability contained in subdivision (a) of Section
4512, the regional center may consider evaluations and tests,
including, but not limited to, intelligence tests, adaptive
functioning tests, neurological and neuropsychological tests,
diagnostic tests performed by a physician, psychiatric tests, and
other tests or evaluations that have been performed by, and are
available from, other sources.
SEC. 26. Section 4648.4 of the Welfare
and Institutions Code is amended to read:
4648.4. (a) Notwithstanding any other provision of law or
regulation, commencing July 1, 2006, rates for services listed in
paragraphs (1), (2), with the exception of travel reimbursement, (3)
to (8), inclusive, (10), and (11) of subdivision (b), shall be
increased by 3 percent, subject to funds specifically appropriated
for this increase in the Budget Act of 2006. The increase shall be
applied as a percentage, and the percentage shall be the same for all
providers. Any subsequent change shall be governed by subdivision
(b).
(b) Notwithstanding any other provision of law or regulation,
except for subdivision (a), during the 2006-07
2007-08 fiscal year, no regional center may pay any
provider of the following services or supports a rate that is greater
than the rate that is in effect on or after July 1, 2006
2007 , unless the increase is required by a
contract between the regional center and the vendor that is in effect
on June 30, 2006 2007 , or the
regional center demonstrates that the approval is necessary to
protect the consumer's health or safety and the department has
granted prior written authorization:
(1) Supported living services.
(2) Transportation, including travel reimbursement.
(3) Socialization training programs.
(4) Behavior intervention training.
(5) Community integration training programs.
(6) Community activities support services.
(7) Mobile day programs.
(8) Creative art programs.
(9) Supplemental day services program supports.
(10) Adaptive skills trainers.
(11) Independent living specialists.
SEC. 27. Section 4681.5 of the Welfare
and Institutions Code is amended to read:
4681.5. Notwithstanding any other provision of law or regulation,
during the 2006-07 2007-08 fiscal
year, no regional center may approve any service level for a
residential service provider, as defined in Section 56005 of Title 17
of the California Code of Regulations, if the approval would result
in an increase in the rate to be paid to the provider that is greater
than the rate that is in effect on July 1, 2006
2007 , unless the regional center demonstrates to the
department that the approval is necessary to protect the consumer's
health or safety and the department has granted prior written
authorization.
SEC. 28. Section 4691.6 of the Welfare
and Institutions Code is amended to read:
4691.6. (a) Notwithstanding any other provision of law or
regulation, commencing July 1, 2006, the community-based day program,
work activity program, and in-home respite service agency rate
schedules authorized by the department and in operation June 30,
2006, shall be increased by 3 percent, subject to funds specifically
appropriated for this increase in the Budget Act of 2006. The
increase shall be applied as a percentage, and the percentage shall
be the same for all providers. Any subsequent increase shall be
governed by subdivisions (b), (c), (d), and (e).
(b) Notwithstanding any other provision of law or regulation,
during the 2006-07 2007-08 fiscal year,
the department may not establish any permanent payment rate for a
community-based day program or in-home respite service agency
provider that has a temporary payment rate in effect on July 1,
2006 2007 , if the permanent payment
rate would be greater than the temporary payment rate in effect on or
after July 1, 2006 2007 , unless the
regional center demonstrates to the department that the permanent
payment rate is necessary to protect the consumers' health or safety.
(c) Notwithstanding any other provision of law or regulation,
during the 2006-07 2007-08 fiscal year,
neither the department nor any regional center may approve any
program design modification or revendorization for a community-based
day program or in-home respite service agency provider that would
result in an increase in the rate to be paid to the vendor from the
rate that is in effect on or after July 1, 2006
2007 , unless the regional center demonstrates that the
program design modification or revendorization is necessary to
protect the consumers' health or safety and the department has
granted prior written authorization.
(d) Notwithstanding any other provision of law or regulation,
during the 2006-07 2007-08 fiscal year,
the department may not approve an anticipated rate adjustment for a
community-based day program or in-home respite service agency
provider that would result in an increase in the rate to be paid to
the vendor from the rate that is in effect on or after July 1,
2006 2007 , unless the regional center
demonstrates that the anticipated rate adjustment is necessary to
protect the consumers' health or safety.
(e) Notwithstanding any other provision of law or regulation,
during the 2006-07 2007-08 fiscal year,
the department may not approve any rate adjustment for a work
activity program that would result in an increase in the rate to be
paid to the vendor from the rate that is in effect on or after July
1, 2006 2007 , unless the regional
center demonstrates that the rate adjustment is necessary to protect
the consumers' health and safety and the department has granted prior
written authorization.
SEC. 29. Section 4781.5 of the Welfare
and Institutions Code is amended to read:
4781.5. (a) For the 2006-07 fiscal year only, a regional center
may not expend any purchase of service funds for the startup of any
new program unless one of the following criteria is met:
(1) The expenditure is necessary to protect the consumer's health
or safety or because of other extraordinary circumstances.
(2) The program to be developed promotes and provides integrated
supported work options for individuals or groups of no more than
three consumers.
(3) The program to be developed promotes and provides integrated
social, civic, volunteer, or recreational activities.
(b) Notwithstanding subdivision (a), a regional center may approve
grants for the 2006-07 fiscal year only to current
providers to engage in new or expanded employment activities that
result in greater integration, conversion from sheltered to supported
work environments, self-employment, and increased consumer
participation in the federal Ticket to Work program.
(c) Startup contracts for programs funded under this section shall
be outcome-based.
(d) The department shall develop criteria by which regional
centers shall approve grants, and shall provide prior written
authorization for the expenditures under this section.
(e) This section shall not apply to any of the following:
(1) The purchase of services funds allocated as part of the
department's community placement plan process.
(2) Expenditures for the startup of new programs made pursuant to
a contract entered into before July 1, 2002.
SEC. 30. Section 4781.6 is added to the
Welfare and Institutions Code , to read:
4781.6. (a) For the 2007-08 fiscal year only, a regional center
shall not expend any purchase of service funds for the startup of any
new program unless the expenditure is necessary to protect the
consumer's health or safety or because of extraordinary
circumstances, and the department has granted prior written
authorization for the expenditures.
(b) This section does not apply to the purchase of services funds
allocated as part of the department's community placement plan
process.
SEC. 32. Section 10020 of the Welfare
and Institutions Code is amended to read:
10020. (a) No person having private health
care coverage shall be entitled to receive the same health care
items or services furnished or paid for by a publicly funded
health care program.
As
(b) As used in this
chapter, "publicly chapter:
(1) " Publicly funded
health care program" shall mean care or services rendered by a local
government or any facility thereof, or health care services for which
payment is made under the California Medical Assistance Program
established by Chapter 7 (commencing with Section 14000) of Part 3 of
this division by the State Department of Health Services or by its
fiscal intermediary, or by a carrier or other organization with which
the State Department of Health Services has contracted to furnish
such those services or to pay providers
who furnish such those services.
As used in this chapter, "private health care coverage" means any
of the following:
(a) Service benefit plans under which payment is made by a carrier
under contracts with physicians, hospitals, or other providers of
health services rendered to employees or annuitants or family
members, or under which, under certain conditions, payment is made by
a carrier to the employee or annuitant or family member.
(b) Indemnity benefit plans under which a carrier agrees to pay
certain sums of money, not in excess of actual expenses incurred, for
health services to or on behalf of a person who is a plan member or
a third party beneficiary under the plan.
(c) Individual practice prepayment plans which offer health
services in whole or in part on a prepaid basis, with professional
services thereunder provided by individual physicians who agree,
under such conditions as may be prescribed by the board, to accept
the payments provided by the plans as full payment for covered
services rendered by them.
(d) Service benefit, indemnity benefit, and individual practice
prepayment plans as defined in subdivisions (a), (b), and (c) which
are offered by trust funds regulated by the United States Department
of Labor.
(2) As used in this chapter, "private health care coverage" means
any health insurer, self-insured plan, group health plan, as defined
in Section 607(1) of the Employee Retirement Income Security Act of
1974, service benefit plan, managed care organization, including
health care service plans as defined in subdivision (f) of Section
1345 of the Health and Safety Code, licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code, pharmacy benefit manager, or other party that is, by statute,
contract, or agreement, legally responsible for payment of a claim
for a health care item or service.
If such
(c) If a person receives health
care furnished or paid for by a publicly funded health care program,
the carrier of his the person's private
health care coverage shall reimburse the publicly funded health care
program the cost incurred in rendering such
that care to the extent of the benefits provided under the
terms of the policy for the items provided or the services
rendered.
SEC. 33. Section 10022 of the Welfare
and Institutions Code is amended to read:
10022. (a) Each publicly funded health care
program that furnishes or pays for health care items or
services under this division to a person having private health care
coverage shall be entitled to be subrogated to the rights that
such person has against the carrier of
such the coverage to the extent of the health
care items provided or services rendered. Such
action may be brought within three years from the date that service
was rendered such person.
(b) An entity providing private health care coverage, as defined
in paragraph (2) of subdivision (b) of Section 10020, shall do all of
the following:
(1) Accept the state's right of recovery and the assignment to the
state of any right of an individual or other entity to payment from
the party for an item or service for which payment has been made
under the state plan.
(2) Respond to any inquiry by the state regarding a claim for
payment for any health care item or service that is submitted not
later than three years after the date of the provision of that health
care item or service.
(3) Agree not to deny a claim submitted by the state solely on the
basis of the date of submission of the claim, the type or format of
the claim form, or a failure to present proper documentation at the
point-of-sale that is the basis of the claim if both of the following
occur:
(A) The claim is submitted by the state within the three-year
period beginning on the date on which the item or service was
furnished.
(B) Any action by the state to enforce its rights with respect to
that claim is commenced within six years of the state's submission of
the claim.
SEC. 34. Section 10024 of the Welfare
and Institutions Code is amended to read:
10024. Every contract or agreement for private health care
coverage entered into or renewed after January 1, 1972, is deemed to
provide for payment to a publicly funded health care program for the
actual cost that such the program
incurs in providing health care items or rendering health
care services to any party or beneficiary of such
that contract or agreement to the extent of the benefits
provided under the terms of the policy for the items provided or
services rendered.
SEC. 35. Section 14011.6 of the Welfare
and Institutions Code is amended to read:
14011.6. (a) To the extent federal financial participation is
available, the department shall exercise the option provided in
Section 1920a of the federal Social Security Act (42 U.S.C. Sec.
1396r-1a) to implement a program for accelerated enrollment of
children.
(b) The department shall designate the single point of entry, as
defined in subdivision (c), as the qualified entity for determining
eligibility under this section.
(c) For purposes of this section, "single point of entry" means
the centralized processing entity that accepts and screens
applications for benefits under the Medi-Cal Program for the purpose
of forwarding them to the appropriate counties.
(d) The department shall implement this section only if, and to
the extent that, federal financial participation is available.
(e) The department shall seek federal approval of any state plan
amendments necessary to implement this section. When federal approval
of the state plan amendment or amendments is received, the
department shall commence implementation of this section on the first
day of the second month following the month in which federal
approval of the state plan amendment or amendments is received, or on
July 1, 2002, whichever is later.
(f) Notwithstanding any other provision of law, the department
shall implement this section only if, and to the extent that, the
federal State Children's Health Insurance Program waiver described in
Section 12693.755 of the Insurance Code is approved by the federal
government.
(g)
(f) Notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the department shall, without taking any regulatory action,
implement this section by means of all-county letters. Thereafter,
the department shall adopt regulations in accordance with the
requirements of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.
(h)
(g) Upon the receipt of an application for a child who
has coverage pursuant to the accelerated enrollment program, a county
shall determine whether the child is eligible for Medi-Cal benefits.
If the county determines that the child does not meet the
eligibility requirements for participation in the Medi-Cal program,
the county shall report this finding to the Medical Eligibility Data
System so that accelerated enrollment coverage benefits are
discontinued. The information to be reported shall consist of the
minimum data elements necessary to discontinue that coverage for the
child. This subdivision shall become operative on July 1, 2002, or
the date that the program for accelerated enrollment coverage for
children takes effect, whichever is later.
SEC. 36. Section 14011.65b is added to the
Welfare and Institutions Code , to read:
14011.65b. (a) To the extent federal financial participation is
available, the department shall exercise the option provided in
Section 1920a of the federal Social Security Act (42 U.S.C. Sec.
1396r-1a) to implement a program of presumptive eligibility for any
child who meets both of the following criteria:
(1) He or she has been receiving, but is no longer eligible for,
benefits under the Healthy Families Program.
(2) He or she appears to be income-eligible for full-scope
Medi-Cal without a share of cost.
(b) The department shall designate the Managed Risk Medical
Insurance Board or any agent designated by the Managed Risk Medical
Insurance Board, including, but not limited to, the single point of
entry defined in subdivision (c) of Section 14011.6, as the qualified
entity for determining eligibility under this section.
(c) The presumptive eligibility benefits provided under this
section shall be identical to the benefits provided to children who
receive full-scope Medi-Cal benefits without a share of cost, and
shall only be made available through a Medi-Cal provider.
(d) The department shall commence implementation of this section
on July 1, 2007, or after all necessary federal approvals are
obtained, whichever date is later. Upon implementation of the
presumptive eligibility program described in this section, the
Director of Health Care Services shall executive a declaration, which
shall be retained by the director, stating that implementation of
the program has commenced.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall, without taking any regulatory action, initially
implement this section by means of all-county letters. Thereafter,
the department shall adopt any necessary regulations in accordance
with the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code.
(f) Upon the receipt of a timely and complete Medi-Cal application
for a child who has coverage pursuant to the presumptive eligibility
program authorized under this section, a county shall determine
whether the child is eligible for Medi-Cal benefits. If the county
determines that the child does not meet the eligibility requirements
for participation in the Medi-Cal program, the county shall timely
report this finding to the Medical Eligibility Data System so that
presumptive eligibility benefits are discontinued.
SEC. 37. Section 14043.1 of the Welfare
and Institutions Code is amended to read:
14043.1. As used in this article:
(a) "Abuse" means either of the following:
(1) Practices that are inconsistent with sound fiscal or business
practices and result in unnecessary cost to the federal medicaid and
Medicare programs, the Medi-Cal program, another state's medicaid
program, or other health care programs operated, or financed in whole
or in part, by the federal government or any state or local agency
in this state or any other state.
(2) Practices that are inconsistent with sound medical practices
and result in reimbursement by the federal medicaid and Medicare
programs, the Medi-Cal program or other health care programs
operated, or financed in whole or in part, by the federal government
or any state or local agency in this state or any other state, for
services that are unnecessary or for substandard items or services
that fail to meet professionally recognized standards for health
care.
(b) "Applicant" means any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents thereof, that
applies to the department for enrollment as a provider in the
Medi-Cal program.
(c) "Application or application package" means a completed and
signed application form, signed under penalty of perjury or notarized
pursuant to Section 14043.25, a disclosure statement, a provider
agreement, and all attachments or changes in the form, statement, or
agreement.
(d) "Appropriate volume of business" means a volume that is
consistent with the information provided in the application and any
supplemental information provided by the applicant or provider, and
is of a quality and type that would reasonably be expected based upon
the size and type of business operated by the applicant or provider.
(e) "Business address" means the location where an applicant or
provider provides services, goods, supplies, or merchandise, directly
or indirectly, to a Medi-Cal beneficiary. A post office box or
commercial box is not a business address. The business address for
the location of a vehicle or vessel owned and operated by an
applicant or provider enrolled in the Medi-Cal program and used to
provide services, goods, supplies, or merchandise, directly or
indirectly, to a Medi-Cal beneficiary shall either be the business
address location for which a separate provider number is
issued to the applicant or provider for the provision of similar
services listed on the provider's application as the
location where similar services, goods, supplies, or merchandise
would be provided or, the applicant
applicant's or provider's pay-to-address.
(f) "Convicted" means any of the following:
(1) A judgment of conviction has been entered against an
individual or entity by a federal, state, or local court, regardless
of whether there is a posttrial motion or an appeal pending or the
judgment of conviction or other record relating to the criminal
conduct has been expunged or otherwise removed.
(2) A federal, state, or local court has made a finding of guilt
against an individual or entity.
(3) A federal, state, or local court has accepted a plea of guilty
or nolo contendere by an individual or entity.
(4) An individual or entity has entered into participation in a
first offender, deferred adjudication, or other program or
arrangement where judgment of conviction has been withheld.
(g) "Debt due and owing" means 60 days have passed since a notice
or demand for repayment of an overpayment or other amount resulting
from an audit or examination, for a penalty assessment, or for any
other amount due the department was sent to the provider, regardless
of whether the provider is an institutional provider or a
noninstitutional provider and regardless of whether an appeal is
pending.
(h) "Enrolled or enrollment in the Medi-Cal program" means
authorized under any processes by the department or its agents or
contractors to receive, directly or indirectly, reimbursement for the
provision of services, goods, supplies, or merchandise to a Medi-Cal
beneficiary.
(i) "Fraud" means an intentional deception or misrepresentation
made by a person with the knowledge that the deception could result
in some unauthorized benefit to himself or herself or some other
person. It includes any act that constitutes fraud under applicable
federal or state law.
(j) "Location" means a street, city, or rural route address or a
site or place within a street, city, or rural route address, and the
city, county, state, and nine digit ZIP Code.
(k) "Not currently enrolled at the location for which the
application is submitted" means either of the following:
(1) The provider is changing location and moving to a different
location than that for which the provider was issued a provider
number.
(2) The provider is adding an additional location to that
currently used to provide services, goods, supplies, or merchandise
to Medi-Cal beneficiaries, and for which the provider was issued a
provider number a business address .
(l) "Preenrollment period" or "preenrollment" includes the period
of time during which an application package for enrollment, continued
enrollment, or for the addition of or change in a location is
pending.
(m) "Professionally recognized standards of health care" means
statewide or national standards of care, whether in writing or not,
that professional peers of the individual or entity whose provision
of care is an issue recognize as applying to those peers practicing
or providing care within a state. When the United States Department
of Health and Human Services has declared a treatment modality not to
be safe and effective, practitioners that employ that treatment
modality shall be deemed not to meet professionally recognized
standards of health care. This subdivision shall not be construed to
mean that all other treatments meet professionally recognized
standards of care.
(n) "Provider" means any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents of any partnership,
group association, corporation, institution, or entity, that provides
services, goods, supplies, or merchandise, directly or indirectly,
to a Medi-Cal beneficiary and that has been enrolled in the Medi-Cal
program.
(o) "Unnecessary or substandard items or services" means those
that are either of the following:
(1) Substantially in excess of the provider's usual charges or
costs for the items or services.
(2) Furnished, or caused to be furnished, to patients, whether or
not covered by Medicare, medicaid, or any of the state health care
programs to which the definitions of applicant and provider apply,
and which are substantially in excess of the patient's needs, or of a
quality that fails to meet professionally recognized standards of
health care. The department's determination that the items or
services furnished were excessive or of unacceptable quality shall be
made on the basis of information, including sanction reports, from
the following sources:
(A) The professional review organization for the area served by
the individual or entity.
(B) State or local licensing or certification authorities.
(C) Fiscal agents or contractors, or private insurance companies.
(D) State or local professional societies.
(E) Any other sources deemed appropriate by the department.
SEC. 38. Section 14043.15 of the
Welfare and Institutions Code is amended to read:
14043.15. (a) The department may adopt regulations for
certification of each applicant and each provider in the Medi-Cal
program. No certification shall be required for natural persons
licensed or certificated under Division 2 (commencing with Section
500) of the Business and Professions Code, the Osteopathic Initiative
Act or the Chiropractic Initiative Act.
(b) (1) An applicant or provider who is a natural person, and is
licensed or certificated pursuant to Division 2 (commencing with
Section 500) of the Business and Professions Code, the Osteopathic
Initiative Act, or the Chiropractic Initiative Act, or is a
professional corporation, as defined in subdivision (b) of Section
13401 of the Corporations Code, shall comply with Section 14043.26
and shall be enrolled in the Medi-Cal program as either an individual
provider or as a rendering provider in a provider group for each
application package submitted and approved pursuant to Section
14043.26, notwithstanding that the applicant or provider meets the
requirements to qualify as exempt from clinic licensure under
subdivision (a) or (m) of Section 1206 of the Health and Safety Code.
(2) A provider enrolled in the Medi-Cal program pursuant to
paragraph (1), who has disclosed in the application package for
enrollment that the provider's practice includes the rendering of
services, goods, supplies, or merchandise solely at one, or at more
than one, health facility, as defined in Section 1250 of the Health
and Safety Code, or clinic, as defined in Section 1204 of the Health
and Safety Code, or medical therapy unit, for purposes of Section
123950 of the Health and Safety Code, or residence of the provider's
patient, or office of a physician and surgeon involved in the care
and treatment of the provider's patients, shall not be required to
enroll at each such health facility, clinic, medical therapy unit,
patient's residence or physician and surgeon's office location and
may utilize the provider number granted upon
business addresses listed on the application for enrollment
pursuant to paragraph (1) to claim reimbursement from the Medi-Cal
program for services rendered by the provider to Medi-Cal
beneficiaries at all of those health facilities, clinics, medical
therapy units, residences, or physician offices.
(3) This subdivision shall not be interpreted to allow the
violation of any state or federal law governing fiscal intermediaries
or Division 2 (commencing with Section 500) of the Business and
Professions Code, the Osteopathic Initiative Act, or the Chiropractic
Initiative Act. This subdivision does not remove the requirement
that each claim for reimbursement from the Medi-Cal program identify
the place of service and the rendering provider.
(c) An applicant or provider licensed as a clinic pursuant to
Chapter 1 (commencing with Section 1200) of, or a health facility
licensed pursuant to Chapter 2 (commencing with Section 1250) of,
Division 2 of the Health and Safety Code may be enrolled in the
Medi-Cal program as a clinic or a health facility and need not comply
with Section 14043.26 if the clinic or health facility is certified
by the department to participate in the Medi-Cal program.
(d) An applicant or provider that meets the requirements to
qualify as exempt from clinic licensure under subdivisions (b) to
(l), inclusive, or subdivisions (n) to (p), inclusive, of Section
1206 of the Health and Safety Code shall comply with Section 14043.26
and may be enrolled in the Medi-Cal program as either a clinic or
within any other provider category for which the applicant or
provider qualifies. An applicant or provider to which any of the
clinic licensure exemptions specified in this subdivision apply shall
identify the licensure exemption category and document in its
application package the legal and factual basis for the clinic
license exemption claimed.
(e) Notwithstanding subdivisions (a), (b), (c), and (d), an
applicant or provider that meets the requirements to qualify as
exempt from clinic licensure pursuant to subdivision (h) of Section
1206 of the Health and Safety Code, including an intermittent site
that is operated by a licensed primary care clinic or an affiliated
mobile health care unit licensed or approved under Chapter 9
(commencing with Section 1765.101) of Division 2 of the Health and
Safety Code, and that is operated by a licensed primary care clinic,
and for which intermittent site or mobile health unit the licensed
primary care clinic directly or indirectly provides all staffing,
protocols, equipment, supplies, and billing services, need not enroll
in the Medi-Cal program as a separate provider and need not comply
with Section 14043.26 if the licensed primary care clinic operating
the applicant, provider clinic, or mobile health care unit has
notified the department of its separate locations, premises,
intermittent sites, or mobile health care units.
SEC. 39. Section 14043.2 of the Welfare
and Institutions Code is amended to read:
14043.2. (a) Whether or not regulations for certification are
adopted under Section 14043.15, in order to be enrolled as a
provider, or for enrollment as a provider to continue, an applicant
or provider may be required to sign a provider agreement and shall
disclose all information as required in federal medicaid regulations
and any other information required by the department. Applicants,
providers, and persons with an ownership or control interest, as
defined in federal medicaid regulations, shall submit their social
security number or numbers to the department, to the full extent
allowed under federal law. The director may designate the form of a
provider agreement by provider type. Failure to disclose the required
information, or the disclosure of false information, shall result in
denial of the application for enrollment or shall make the provider
subject to temporary suspension from the Medi-Cal program, which
shall include temporary deactivation of all provider numbers
the provider's number or numbers, including all
business addresses used by the provider to obtain reimbursement
from the Medi-Cal program.
(b) The director shall notify the provider of the temporary
suspension and deactivation of the provider's Medi-Cal
provider number or numbers , including all business
addresses used by the provider, and the effective date thereof.
Notwithstanding Section 100171 of the Health and Safety Code and
Section 14123, proceedings after the imposition of sanctions provided
for in subdivision (a) shall be in accordance with Section 14043.65.
SEC. 40. Section 14043.26 of the Welfare
and Institutions Code is amended to read:
14043.26. (a) (1) On and after January 1, 2004, an applicant that
is not currently enrolled in the Medi-Cal program, or a provider
applying for continued enrollment, upon written notification from the
department that enrollment for continued participation of all
providers in a specific provider of service category or subgroup of
that category to which the provider belongs will occur, or a provider
not currently enrolled at a location where the provider intends to
provide services, goods, supplies, or merchandise to a Medi-Cal
beneficiary, shall submit a complete application package for
enrollment, continuing enrollment, or enrollment at a new location or
a change in location.
(2) Clinics licensed by the department pursuant to Chapter 1
(commencing with Section 1200) of Division 2 of the Health and Safety
Code and certified by the department to participate in the Medi-Cal
program shall not be subject to this section.
(3) Health facilities licensed by the department pursuant to
Chapter 2 (commencing with Section 1250) of Division 2 of the Health
and Safety Code and certified by the department to participate in the
Medi-Cal program shall not be subject to this section.
(4) Adult day health care providers licensed pursuant to Chapter
3.3 (commencing with Section 1570) of Division 2 of the Health and
Safety Code and certified by the department to participate in the
Medi-Cal program shall not be subject to this section.
(5) Home health agencies licensed pursuant to Chapter 8
(commencing with Section 1725) of Division 2 of the Health and Safety
Code and certified by the department to participate in the Medi-Cal
program shall not be subject to this section.
(6) Hospices licensed pursuant to Chapter 8.5 (commencing with
Section 1745) of Division 2 of the Health and Safety Code and
certified by the department to participate in the Medi-Cal program
shall not be subject to this section.
(b) Within 30 days after receiving an application package
submitted pursuant to subdivision (a), the department shall provide
written notice that the application package has been received and, if
applicable, that there is a moratorium on the enrollment of
providers in the specific provider of service category or subgroup of
the category to which the applicant or provider belongs. This
moratorium shall bar further processing of the application package.
(c) (1) If the applicant package submitted pursuant to subdivision
(a) is from an applicant or provider who meets the criteria listed in
paragraph (2), the applicant or provider shall be considered a
preferred provider and shall be granted preferred provisional
provider status pursuant to this section and for a period of no
longer than 18 months, effective from the date on the notice from the
department. The ability to request consideration as a preferred
provider and the criteria necessary for the consideration shall be
publicized to all applicants and providers. An applicant or provider
who desires consideration as a preferred provider pursuant to this
subdivision shall request consideration from the department by making
a notation to that effect on the application package, by cover
letter, or by other means identified by the department in a provider
bulletin. Request for consideration as a preferred provider shall be
made with each application package submitted in order for the
department to grant the consideration. An applicant or provider who
requests consideration as a preferred provider shall be notified
within 90 days whether the applicant or provider meets or does not
meet the criteria listed in paragraph (2). If an applicant or
provider is notified that the applicant or provider does not meet the
criteria for a preferred provider, the application package submitted
shall be processed in accordance with the remainder of this section.
(2) To be considered a preferred provider, the applicant or
provider shall meet all of the following criteria:
(A) Hold a current license as a physician and surgeon issued by
the Medical Board of California or the Osteopathic Medical Board of
California, which license shall not have been revoked, whether stayed
or not, suspended, placed on probation, or subject to other
limitation.
(B) Be a current faculty member of a teaching hospital or a
children's hospital, as defined in Section 10727, accredited by the
Joint Commission for Accreditation of Healthcare Organizations or the
American Osteopathic Association, or be credentialed by a health
care service plan that is licensed under the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code; the Knox-Keene Act) or
county organized health system, or be a current member in good
standing of a group that is credentialed by a health care service
plan that is licensed under the Knox-Keene Act.
(C) Have full, current, unrevoked, and unsuspended privileges at a
Joint Commission for Accreditation of Healthcare Organizations or
American Osteopathic Association accredited general acute care
hospital.
(D) Not have any adverse entries in the Healthcare Integrity and
Protection Databank.
(3) The department may recognize other providers as qualifying as
preferred providers if criteria similar to those set forth in
paragraph (2) are identified for the other providers. The department
shall consult with interested parties and appropriate stakeholders to
identify similar criteria for other providers so that they may be
considered as preferred providers.
(d) Within 180 days after receiving an application package
submitted pursuant to subdivision (a), or from the date of the notice
to an applicant or provider that the applicant or provider does not
qualify as a preferred provider under subdivision (c), the department
shall give written notice to the applicant or provider that any of
the following applies, or shall on the 181st day grant the applicant
or provider provisional provider status pursuant to this section for
a period no longer than 12 months, effective from the 181st day:
(1) The applicant or provider is being granted provisional
provider status for a period of 12 months, effective from the date on
the notice.
(2) The application package is incomplete. The notice shall
identify any additional information or documentation that is needed
to complete the application package.
(3) The department is exercising its authority under Section
14043.37, 14043.4, or 14043.7, and is conducting background checks,
preenrollment inspections, or unannounced visits.
(4) The application package is denied for any of the following
reasons:
(A) Pursuant to Section 14043.2 or 14043.36.
(B) For lack of a license necessary to perform the health care
services or to provide the goods, supplies, or merchandise directly
or indirectly to a Medi-Cal beneficiary, within the applicable
provider of service category or subgroup of that category.
(C) The period of time during which an applicant or provider has
been barred from reapplying has not passed.
(D) For other stated reasons authorized by law.
(e) (1) If the application package that was noticed as incomplete
under subdivision (d) is resubmitted with all requested information
and documentation, and received by the department within 35 days of
the date on the notice, the department shall, within 60 days of the
resubmission, send a notice that any of the following applies:
(A) The applicant or provider is being granted provisional
provider status for a period of 12 months, effective from the date on
the notice.
(B) The application package is denied for any other reasons
provided for in paragraph (4) of subdivision (d).
(C) The department is exercising its authority under Section
14043.37, 14043.4, or 14043.7 to conduct background checks,
preenrollment inspections, or unannounced visits.
(2) (A) If the application package that was noticed as incomplete
under paragraph (2) of subdivision (d) is not resubmitted with all
requested information and documentation and received by the
department within 35 days of the date on the notice, the application
package shall be denied by operation of law. The applicant or
provider may reapply by submitting a new application package that
shall be reviewed de novo.
(B) If the failure to resubmit is by a provider applying for
continued enrollment, the failure shall make the provider also
subject to deactivation of all provider numbers
the provider's number and all of the business addresses
used by the provider to obtain reimbursement from the
Medi-Cal program provide services, goods, supplies, or
merchandise to Medi-Cal beneficiaries .
(C) Notwithstanding subparagraph (A), if the notice of an
incomplete application package included a request for information or
documentation related to grounds for denial under Section 14043.2 or
14043.36, the applicant or provider may not reapply for enrollment or
continued enrollment in the Medi-Cal program or for participation in
any health care program administered by the department or its agents
or contractors for a period of three years.
(f) (1) If the department exercises its authority under Section
14043.37, 14043.4, or 14043.7 to conduct background checks,
preenrollment inspections, or unannounced visits, the applicant or
provider shall receive notice, from the department, after the
conclusion of the background check, preenrollment inspections, or
unannounced visit of either of the following:
(A) The applicant or provider is granted provisional provider
status for a period of 12 months, effective from the date on the
notice.
(B) Discrepancies or failure to meet program requirements, as
prescribed by the department, have been found to exist during the
preenrollment period.
(2) (A) The notice shall identify the discrepancies or failures,
and whether remediation can be made or not, and if so, the time
period within which remediation must be accomplished. Failure to
remediate discrepancies and failures as prescribed by the department,
or notification that remediation is not available, shall result in
denial of the application by operation of law. The applicant or
provider may reapply by submitting a new application package that
shall be reviewed de novo.
(B) If the failure to remediate is by a provider applying for
continued enrollment, the failure shall make the provider also
subject to deactivation of all provider numbers
the provider's number and all of the business addresses
used by the provider to obtain reimbursement from the
Medi-Cal program provide services, goods, supplies, or
merchandise to Medi-Cal beneficiaries .
(C) Notwithstanding subparagraph (A), if the discrepancies or
failure to meet program requirements, as prescribed by the director,
included in the notice were related to grounds for denial under
Section 14043.2 or 14043.36, the applicant or provider may not
reapply for three years.
(g) If provisional provider status or preferred provisional
provider status is granted pursuant to this section, a
separate provider number shall be issued for each
location used by the provider for each business
address for which an application package has been approved.
This separate provider number shall be used
exclusively for the location locations
for which it is issued, unless the practice of the provider's
profession or delivery of services, goods, supplies, or merchandise
is such that services, goods, supplies, or merchandise are rendered
or delivered at locations other than the provider's business address
and this practice or delivery of services, goods, supplies, or
merchandise has been disclosed in the application package approved by
the department when the provisional provider status or preferred
provisional provider status was granted.
(h) Except for providers subject to subdivision (c) of Section
14043.47, a provider currently enrolled in the Medi-Cal program at
one or more locations who has submitted an application package for
enrollment at a new location or a change in location pursuant to
subdivision (a) may continue to submit claims
under an existing provider number for services
for services, goods, supplies, or merchandise rendered at
the new location until the application package is approved or denied
under this section, and shall not be subject, during that period, to
deactivation of the provider's provider number ,
or be subject to any delay or nonpayment of claims as a result of
the use of the existing provider number
billing for services rendered at the new location as herein
authorized. However, the provider shall be considered during that
period to have been granted provisional provider status or preferred
provisional provider status and be subject to termination of that
status pursuant to Section 14043.27. A provider that is subject to
subdivision (c) of Section 14043.47 may come within the scope of this
subdivision upon submitting documentation in the application package
that identifies the physician providing supervision for every three
locations . If a provider submits claims for services rendered
at a new location before the application for that location is
received by the department, the department may deny the claim .
(i) An applicant or a provider whose application for enrollment,
continued enrollment, or a new location or change in location has
been denied pursuant to this section, may appeal the denial in
accordance with Section 14043.65.
(j) (1) Upon receipt of a complete and accurate claim for an
individual nurse provider, the department shall adjudicate the claim
within an average of 30 days.
(2) During the budget proceedings of the 2006-07
2006-07 fiscal year, and each fiscal year thereafter, the
department shall provide data to the Legislature specifying the
timeframe under which it has processed and approved the provider
applications submitted by individual nurse providers.
(3) For purposes of this subdivision, "individual nurse providers"
are providers authorized under certain home- and community-based
waivers and under the state plan to provide nursing services to
Medi-Cal recipients in the recipients' own homes rather than in
institutional settings.
SEC. 41. Section 14043.27 of the
Welfare and Institutions Code is amended to read:
14043.27. (a) If an applicant or provider is granted provisional
provider status or preferred provisional provider status pursuant to
Section 14043.26 and, if at any time during the provisional provider
status period or preferred provisional provider status period, the
department conducts any announced or unannounced visits or any
additional inspections or reviews pursuant to this chapter or Chapter
8 (commencing with Section 14200), or the regulations adopted
thereunder, or pursuant to Section 100185.5 of the Health and Safety
Code, and discovers or otherwise determines the existence of any
ground to deactivate the provider provider's
number and business addresses or suspend the
provider from the Medi-Cal program pursuant to this chapter or
Chapter 8 (commencing with Section 14200), or the regulations adopted
thereunder, or pursuant to Section 100185.5 of the Health and Safety
Code, or if any of the circumstances listed in subdivision (c)
occur, the department shall terminate the provisional provider status
or preferred provisional provider status of the provider, regardless
of whether the period of time for which the provisional provider
status or preferred provisional provider status was granted under
Section 14043.26 has elapsed.
(b) Termination of provisional provider status or preferred
provisional provider status shall include deactivation of
all provider numbers the provider's number, including
all business addresses used by the provider at any
location to obtain reimbursement from the Medi-Cal program
and removal of the provider from enrollment in the Medi-Cal program,
except where the termination is based upon a ground related solely to
a specific location for which provisional provider status was
granted. Termination of provisional provider status based upon
grounds related solely to a specific location may include failure to
have an established place of business, failure to possess the
business or zoning permits or other approvals necessary to operate a
business, or failure to possess the appropriate licenses, permits, or
certificates necessary for the provider of service category or
subcategory identified by the provider in its application package.
Where the grounds relate solely to a specific location, the
termination of provisional provider status shall include only
deactivation of the provider numbers issued for
the specific locations that the grounds apply to and shall include
removal of the provider from enrollment in the Medi-Cal program only
if, after deactivation of the provider numbers
specific locations , the provider does not
possess any valid provider numbers have any business
address that is not deactivated .
(c) The following circumstances are grounds for termination of
provisional provider status or preferred provisional provider status:
(1) The provider, persons with an ownership or control interest in
the provider, or persons who are directors, officers, or managing
employees of the provider have been convicted of any felony, or
convicted of any misdemeanor involving fraud or abuse in any
government program, related to neglect or abuse of a patient in
connection with the delivery of a health care item or service, or in
connection with the interference with, or obstruction of, any
investigation into health care related fraud or abuse, or have been
found liable for fraud or abuse in any civil proceeding, or have
entered into a settlement in lieu of conviction for fraud or abuse in
any government program within 10 years of the date of the
application package.
(2) There is a material discrepancy in the information provided to
the department, or with the requirements to be enrolled, that is
discovered after provisional provider status or preferred provisional
provider status has been granted and that cannot be corrected
because the discrepancy occurred in the past.
(3) The provider has provided material information that was false
or misleading at the time it was provided.
(4) The provider failed to have an established place of business
at the business address for which the application package was
submitted at the time of any onsite inspection, announced or
unannounced visit, or any additional inspection or review conducted
pursuant to this article or a statute or regulation governing the
Medi-Cal program, unless the practice of the provider's profession or
delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the business address and this practice or
delivery of services, goods, supplies, or merchandise has been
disclosed in the application package approved by the department when
the provisional provider status or preferred provisional provider
status was granted.
(5) The provider meets the definition of a clinic under Section
1200 of the Health and Safety Code, but is not licensed as a clinic
pursuant to Chapter 1 (commencing with Section 1200) of Division 2 of
the Health and Safety Code and fails to meet the requirements to
qualify for at least one exemption pursuant to Section 1206 or 1206.1
of the Health and Safety Code.
(6) The provider performs clinical laboratory tests or
examinations, but it or its personnel do not meet CLIA, and the
regulations adopted thereunder, and the state clinical laboratory
law, do not possess valid CLIA certificates and clinical laboratory
registrations or licenses pursuant to Chapter 3 (commencing with
Section 1200) of Division 2 of the Business and Professions Code, or
are not exempt from licensure as a clinical laboratory under Section
1241 of the Business and Professions Code.
(7) The provider fails to possess either of the following:
(A) The appropriate licenses, permits, certificates, or other
approvals needed to practice the profession or occupation, or provide
the services, goods, supplies, or merchandise the provider
identified in the application package approved by the department when
the provisional provider status or preferred provisional provider
status was granted and for the location for which the application was
submitted.
(B) The business or zoning permits or other approvals necessary to
operate a business at the location identified in its application
package approved by the department when the provisional provider
status or preferred provisional provider status was granted.
(8) The provider, or if the provider is a clinic, group,
partnership, corporation, or other association, any officer,
director, or shareholder with a 10 percent or greater interest in
that organization, commits two or more violations of the federal or
state statutes or regulations governing the Medi-Cal program, and the
violations demonstrate a pattern or practice of fraud, abuse, or
provision of unnecessary or substandard medical services.
(9) The provider commits any violation of a federal or state
statute or regulation governing the Medi-Cal program or of a statute
or regulation governing the provider's profession or occupation and
the violation represents a threat of immediate jeopardy or
significant harm to any Medi-Cal beneficiary or to the public
welfare.
(10) The provider submits claims for payment that subject a
provider to suspension under Section 14043.61.
(11) The provider submits claims for payment for services, goods,
supplies, or merchandise rendered at a location other than the
location for which the provider number was issued
business address or addresses listed on the application for
enrollment , unless the practice of the provider's profession
or delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the business address and this practice or
delivery of services, goods, supplies, or merchandise has been
disclosed in the application package approved by the department when
the provisional provider status was granted.
(12) The provider has not paid its fine, or has a debt due and
owing, including overpayments and penalty assessments, to any
federal, state, or local government entity that relates to Medicare,
medicaid, Medi-Cal, or any other federal or state health care
program, and has not made satisfactory arrangements to fulfill the
obligation or otherwise been excused by legal process from fulfilling
the obligation.
(d) If, during a provisional provider status period or a preferred
provisional provider status period, the department conducts any
announced or unannounced visits or any additional inspections or
reviews pursuant to this chapter or Chapter 8 (commencing with
Section 14200), or the regulations adopted thereunder, and commences
an investigation for fraud or abuse, or discovers or otherwise
determines that the provider is under investigation for fraud or
abuse by any other state, local, or federal government law
enforcement agency, the provider shall be subject to termination of
provisional provider status or preferred provisional provider status,
regardless of whether the period of time for which the provisional
provider status or preferred provisional provider status was granted
under Section 14043.26 has elapsed.
(e) A provider whose provisional provider status or preferred
provisional provider status has been terminated pursuant to this
section may appeal the termination in accordance with Section
14043.65.
(f) Any department-recovered fine or debt due and owing, including
overpayments, that are subsequently determined to have been
erroneously collected shall be promptly refunded to the provider,
together with interest paid in accordance with subdivision (e) of
Section 14171 and Section 14172.5.
SEC. 42. Section 14043.28 of the
Welfare and Institutions Code is amended to read:
14043.28. (a) (1) If an application package is denied under
Section 14043.26 or provisional provider status or preferred
provisional provider status is terminated under Section 14043.27, the
applicant or provider may not reapply for enrollment or continued
enrollment in the Medi-Cal program or for participation in any health
care program administered by the department or its agents or
contractors for a period of three years from the date the application
package is denied or the provisional provider status is terminated,
or from the date of the final decision following an appeal from that
denial or termination, except as provided otherwise in paragraph (2)
of subdivision (e), or paragraph (2) of subdivision (f), of Section
14043.26 and as set forth in this section.
(2) If the application is denied under paragraph (2) of
subdivision (e) of Section 14043.26 because the applicant failed to
resubmit an incomplete application package or is denied under
paragraph (2) of subdivision (f) of Section 14043.26 because the
applicant failed to remediate discrepancies, the applicant may
resubmit an application in accordance with paragraph (2) of
subdivision (d) or paragraph (2) of subdivision (f), respectively.
(3) If the denial of the application package is based upon a
conviction for any offense or for any act included in Section
14043.36 or termination of the provisional provider status or
preferred provisional provider status is based upon a conviction for
any offense or for any act included in paragraph (1) of subdivision
(c) of Section 14043.27, the applicant or provider may not reapply
for enrollment or continued enrollment in the Medi-Cal program or for
participation in any health care program administered by the
department or its agents or contractors for a period of 10 years from
the date the application package is denied or the provisional
provider status or preferred provisional provider status is
terminated or from the date of the final decision following an appeal
from that denial or termination.
(4) If the denial of the application package is based upon two or
more convictions for any offense or for any two or more acts included
in Section 14043.36 or termination of the provisional provider
status or preferred provisional provider status is based upon two or
more convictions for any offense or for any two acts included in
paragraph (1) of subdivision (c) of Section 14043.27, the applicant
or provider shall be permanently barred from enrollment or continued
enrollment in the Medi-Cal program or for participation in any health
care program administered by the department or its agents or
contractors.
(5) The prohibition in paragraph (1) against reapplying for three
years shall not apply if the denial of the application or termination
of provisional provider status or preferred provisional provider
status is based upon any of the following:
(A) The grounds provided for in paragraph (4), or subparagraph (B)
of paragraph (7), of subdivision (c) of Section 14043.27.
(B) The grounds provided for in subdivision (d) of Section
14043.27, if the investigation is closed without any adverse action
being taken.
(C) The grounds provided for in paragraph (6) of subdivision (c)
of Section 14043.27. However, the department may deny reimbursement
for claims submitted while the provider was noncompliant with CLIA.
(b) (1) If an application package is denied under subparagraph
(A), (B), or (D) of paragraph (4) of subdivision (d) of Section
14043.26, or with respect to a provider described in subparagraph (B)
of paragraph (2) of subdivision (e), or subparagraph (B) of
paragraph (2) of subdivision (f), of Section 14043.26, or provisional
provider status or preferred provisional provider status is
terminated based upon any of the grounds stated in subparagraph (A)
of paragraph (7), or paragraphs (1), (2), (3), (5), and (8) to (12),
inclusive, of subdivision (c) of Section 14043.27, all
existing provider numbers assigned to business
addresses of the applicant or provider shall be deactivated and
the applicant or provider shall be removed from enrollment in the
Medi-Cal program by operation of law.
(2) If the termination of provisional provider status is based
upon the grounds stated in subdivision (d) of Section 14043.27 and
the investigation is closed without any adverse action being taken,
or is based upon the grounds in subparagraph (B) of paragraph (7) of
subdivision (c) of Section 14043.27 and the applicant or provider
obtains the appropriate license, permits, or approvals covering the
period of provisional provider status, the termination taken pursuant
to subdivision (c) of Section 14043.27 shall be rescinded, the
previously deactivated provider numbers shall be reactivated, and the
provider shall be reenrolled in the Medi-Cal program, unless there
are other grounds for
taking these actions.
(c) Claims that are submitted or caused to be submitted by an
applicant or provider who has been suspended from the Medi-Cal
program for any reason or who has had its provisional provider status
terminated or had its application package for enrollment or
continued enrollment denied and all provider numbers
business addresses deactivated may not be paid
for services, goods, merchandise, or supplies rendered to Medi-Cal
beneficiaries during the period of suspension or termination or after
the date all provider numbers business
addresses are deactivated.
SEC. 43. Section 14043.36 of the
Welfare and Institutions Code is amended to read:
14043.36. (a) The department shall not enroll any applicant that
has been convicted of any felony or misdemeanor involving fraud or
abuse in any government program, or related to neglect or abuse of a
patient in connection with the delivery of a health care item or
service, or in connection with the interference with or obstruction
of any investigation into health care related fraud or abuse or that
has been found liable for fraud or abuse in any civil proceeding, or
that has entered into a settlement in lieu of conviction for fraud or
abuse in any government program, within the previous 10 years. In
addition, the department may deny enrollment to any applicant that,
at the time of application, is under investigation by the department
or any state, local, or federal government law enforcement agency for
fraud or abuse pursuant to Subpart A (commencing with Section
455.12) of Part 455 of Title 42 of the Code of Federal Regulations.
The department shall not deny enrollment to an otherwise qualified
applicant whose felony or misdemeanor charges did not result in a
conviction solely on the basis of the prior charges. If it is
discovered that a provider is under investigation by the department
or any state, local, or federal government law enforcement agency for
fraud or abuse, that provider shall be subject to temporary
suspension from the Medi-Cal program, which shall include temporary
deactivation of all provider numbers the
provider's number, including all business addresses used by the
provider to obtain reimbursement from the Medi-Cal program.
(b) The director shall notify in writing the provider of the
temporary suspension and deactivation of the provider's
Medi-Cal provider number or numbers ,
which shall take effect 15 days from the date of the notification.
Notwithstanding Section 100171 of the Health and Safety Code,
proceedings after the imposition of sanctions provided for in
subdivision (a) shall be in accordance with Section 14043.65.
SEC. 44. Section 14043.45 of the
Welfare and Institutions Code is repealed.
14043.45. Notwithstanding the adoption of the Standardized
National Application form and the National Provider Identifier by the
federal government, a provider may be issued a unique identification
number or numbers, as prescribed by the director.
SEC. 45. Section 14043.45 is added to the
Welfare and Institutions Code , to read:
14043.45. (a) Notwithstanding whether a National Provider
Identification (NPI) number is required by the rules issued by the
Centers for Medicare and Medicaid Services implementing the Health
Insurance Portability and Accountability Act of 1996 (HIPAA), the
department may require that an applicant or provider submit an NPI
number.
(b) For transactions not specifically identified as covered
transactions under the HIPAA NPI rules, the department may require
that a provider use a National Provider Identification number on
those transactions, or the department may issue the provider a unique
identification number or numbers that shall be used on all
transactions.
(c) Notwithstanding any other provisions of law, the department
may, without taking regulatory action pursuant to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, implement, interpret, or make specific this
section by means of a provider bulletin or similar instruction. The
department shall notify and consult with interested parties and
appropriate stakeholders in implementing, interpreting, or making
specific this statute, including taking all of the following actions:
(1) Notifying provider representatives of the proposed action or
change. The notice shall occur at least 10 business days prior to the
meeting provided for in paragraph (2).
(2) Scheduling at least one meeting with interested parties and
appropriate stakeholders to discuss the action or change.
(3) Allowing for written input regarding the action or change.
(4) Providing at least 30 days' advance notice of the effective
date of the action or change.
(d) This section shall apply to any health care program
administered by the department or its agents or contractors.
SEC. 46. Section 14043.46 of the
Welfare and Institutions Code is amended to read:
14043.46. (a) Notwithstanding any other provision of law, on the
effective date of the act adding this section, the department may
implement a one-year moratorium on the certification and enrollment
into the Medi-Cal program of new adult day health care centers on a
statewide basis or within a geographic area.
(b) The moratorium shall not apply to the following:
(1) Programs of All-Inclusive Care for the Elderly (PACE)
established pursuant to Chapter 8.75 (commencing with Section 14590).
(2) An organization that currently holds a designation as a
federally qualified health center as defined in Section 1396d(l)(2)
of Title 42 of the United States Code.
(3) An organization that currently holds a designation as a
federally qualified rural health clinic as defined in Section 1396d
(l)(1) of Title 42 of the United States Code.
(4) An applicant with the physical location of the center in an
unserved area, which is defined as a county having no licensed and
certified adult day health care center within its geographic
boundary.
(5) Commencing May 1, 2006, an applicant for certification that
meets all of the following:
(A) Is serving persons discharged into community housing from a
nursing facility operated by the City and County of San Francisco.
(B) Has submitted, after December 31, 2005, but prior to February
1, 2006, an application for certification that has not been denied.
(C) Meets all criteria for certification imposed under this
article and is licensed as an adult day health care center pursuant
to Chapter 3.3 (commencing with Section 1570) of Division 2 of the
Health and Safety Code.
(6) An applicant that is requesting expansion or relocation, or
both, that has been Medi-Cal certified as an adult day health care
center for at least four years, is expanding or relocating within the
same county, and that meets one of the following population-based
criteria as reported in the California Long Term Care County
Data Book, 2002 :
(A) The county is ranked number one or two for having the highest
ratio of persons over 65 years of age receiving Medi-Cal benefits.
(B) The county is ranked number one or two for having the highest
ratio of persons over 85 years of age residing in the county.
(C) The county is ranked number one or two for having the greatest
ratio of persons over 65 years of age living in poverty.
(7) An applicant for certification that is currently licensed and
located in a county with a population that exceeds 9,000,000 and
meets the following criteria:
(A) The applicant has identified a special population of regional
center consumers whose individual program plan calls for the
specialized health and social services that are uniquely provided
within the adult day health care center, in order to prevent
deterioration of the special population's health status.
(B) The referring regional center submits a letter to the Director
of Health Services supporting the applicant for certification as an
adult day health care provider for this special population.
(C) The applicant is currently providing services to the special
population as a vendor of the referring regional center.
(D) The participants in the center are clients of the referring
regional center and are not residing in a health facility licensed
pursuant to subdivision (c), (d), (g), (h), or (k) of Section 1250 of
the Health and Safety Code.
(c) The moratorium shall not prohibit the department from
approving a change of ownership, relocation, or increase in capacity
for an adult day health care center if the following conditions are
met:
(1) For an application to change ownership, the adult day health
care center meets all of the following conditions:
(A) Has been licensed and certified prior to the effective date of
this section.
(B) Has a license in good standing.
(C) Has a record of substantial compliance with certification laws
and regulations.
(D) Has met all requirements for the change application.
(2) For an application to relocate an existing facility, the
relocation center must meet all of the conditions of paragraph (1)
and both of the following conditions:
(A) Must be located in the same county as the existing licensed
center.
(B) Must be licensed for the same capacity as the existing
licensed center, unless the relocation center is located in an
underserved area, which is defined as a county having 2 percent or
fewer Medi-Cal beneficiaries over the age of 65 years using adult day
health care services, based on 2002 calendar year Medi-Cal
utilization data.
(3) For an application to increase the capacity of an existing
facility, the center must meet all of the conditions of paragraph (1)
and must be located in an underserved area, which is defined as a
county having 2 percent or fewer Medi-Cal beneficiaries over the age
of 65 years using adult day health care services, based on 2002
calendar year Medi-Cal utilization data.
(d) Following the first 180 days of the moratorium period, the
department may make exceptions to the moratorium for new adult day
health care centers that are located in underserved areas if the
center's application was on file with the department on or before the
effective date of the act adding this section. In order to apply for
this exemption, an applicant or licensee must meet all of the
following criteria:
(1) The applicant has control of a facility, either by ownership
or lease agreement, that will house the adult day health care center,
has provided to the department all necessary documents and fees, and
has completed and submitted all required fingerprinting forms to the
department.
(2) The physical location of the applicant's or licensee's adult
day health care center is in an underserved area, which is defined as
a county having 2 percent or fewer Medi-Cal beneficiaries over the
age of 65 years using adult day health care services, based on 2002
calendar year Medi-Cal utilization data.
(e) During the period of the moratorium, a licensee or applicant
that meets the criteria for an exemption as defined in subdivision
(d) may submit a written request for an exemption to the director.
(f) If the director determines that a new adult day health care
licensee or applicant meets the exemption criteria, the director may
certify the licensee or applicant, once licensed, for participation
in the Medi-Cal program.
(g) The director may extend this moratorium, if necessary, to
coincide with the implementation date of the adult day health care
waiver.
(h) The authority granted in this section shall not be interpreted
as a limitation on the authority granted to the department in any
other section.
SEC. 47. Section 14043.47 of the
Welfare and Institutions Code is amended to read:
14043.47. (a) A provider doing business as a sole proprietorship,
partnership, or professional corporation under Part 4 (commencing
with Section 13400) of Division 3 of the Corporations Code or a
rendering physician provider in a group who utilizes nonphysician
medical practitioners to provide services, goods, supplies, or
merchandise to Medi-Cal beneficiaries shall meet the specific
supervisory requirements applicable to such providers, pursuant to
the Business and Professions Code or other state or federal law.
(b) A provider doing business as a sole proprietorship,
partnership, or professional corporation under Part 4 (commencing
with Section 13400) of Division 3 of the Corporations Code or a
rendering physician provider in a group who fails to comply with the
requirements of this section is subject to temporary suspension from
the Medi-Cal program and deactivation of all provider
numbers the provider's number, including all business
addresses .
(c) A physician doing business as a sole proprietorship,
partnership, or professional corporation under Part 4 (commencing
with Section 13400) of Division 3 of the Corporations Code or a
rendering physician provider in a group may not be enrolled at more
than three business addresses unless there is a ratio of at least one
physician providing supervision for every three locations.
(d) A physician doing business as a sole proprietorship,
partnership, or professional medical corporation under Part 4
(commencing with Section 13400) of Division 3 of the Corporations
Code or a rendering physician provider in a group who fails to comply
with the requirements of this section is subject to temporary
suspension from the Medi-Cal program and deactivation of all of his
or her provider numbers number, including all
business addresses .
SEC. 48. Section 14043.61 of the
Welfare and Institutions Code is amended to read:
14043.61. (a) A provider shall be subject to suspension if claims
for payment are submitted under any provider number used by
the provider to obtain reimbursement from the Medi-Cal program
for the services, goods, supplies, or merchandise provided,
directly or indirectly, to a Medi-Cal beneficiary, by an individual
or entity that is suspended, excluded, or otherwise ineligible
because of a sanction to receive, directly or indirectly,
reimbursement from the Medi-Cal program and the individual or entity
is listed on either the Suspended and Ineligible Provider List,
published by the department, to identify suspended and otherwise
ineligible providers, or any list published by the federal Office of
Inspector General regarding the suspension or exclusion of
individuals or entities from the federal Medicare and medicaid
programs, to identify suspended, excluded, or otherwise ineligible
providers.
(b) Notwithstanding Section 100171 of the Health and Safety Code,
the imposition of the sanction provided for in subdivision (a) shall
be appealable in accordance with Section 14043.65.
SEC. 49. Section 14043.62 of the
Welfare and Institutions Code is amended to read:
14043.62. (a) The department shall deactivate, immediately and
without prior notice, the provider numbers
provider's number, including all business addresses used by a
provider to obtain reimbursement from the Medi-Cal program when
warrants or documents mailed to a provider's mailing address or its
pay to address, if any, or its service or business address, are
returned by the United States Postal Service as not deliverable or
when a provider has not submitted a claim for reimbursement from the
Medi-Cal program for one year. Prior to taking this action the
department shall use due diligence in attempting to contact the
provider at its last known telephone number and ascertain if the
return by the United States Postal Service is by mistake or shall use
due diligence in attempting to contact the provider by telephone or
in writing to ascertain whether the provider wishes to continue to
participate in the Medi-Cal program. If deactivation pursuant to this
section occurs, the provider shall meet the requirements for
reapplication as specified in this article or the regulations adopted
thereunder.
(b) For purposes of this section:
(1) "Mailing address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive general program
correspondence.
(2) "Pay to address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive warrants.
(3) "Service or business address" means the address that the
provider has identified to the department in its application for
enrollment as the address at which the provider will provide services
to program beneficiaries.
SEC. 50. Section 14043.65 of the
Welfare and Institutions Code is amended to read:
14043.65. (a) Notwithstanding any other provision of law, any
applicant whose application for enrollment as a provider or whose
certification is denied; or any provider who is denied continued
enrollment or certification, or denied enrollment for a new location,
who has been temporarily suspended, who has had payments withheld,
who has had one or more provider numbers
business addresses used to obtain reimbursement from the
Medi-Cal program deactivated, or whose provisional provider status or
preferred provisional provider status has been terminated pursuant
to this article or Section 14107.11, or Section 100185.5 of the
Health and Safety Code, or who has had a civil penalty imposed
pursuant to subdivision (a) of Section 14123.25; or any billing
agent, as defined in Section 14040, when the billing agent's
registration has been denied pursuant to subdivision (e) of Section
14040.5, may appeal this action by submitting a written appeal,
including any supporting evidence, to the director or the director's
designee. Where the appeal is of a withholding of payment pursuant to
Section 14107.11, the appeal to the director or the director's
designee shall be limited to the issue of the reliability of the
evidence supporting the withhold and shall not encompass fraud or
abuse. The appeal procedure shall not include a formal administrative
hearing under the Administrative Procedure Act and shall not result
in reactivation of any deactivated provider numbers during appeal. An
applicant, provider, or billing agent that files an appeal pursuant
to this section shall submit the written appeal along with all
pertinent documents and all other relevant evidence to the director
or to the director's designee within 60 days of the date of
notification of the department's action. The director or the director'
s designee shall review all of the relevant materials submitted and
shall issue a decision within 90 days of the receipt of the appeal.
The decision may provide that the action taken should be upheld,
continued, or reversed, in whole or in part. The decision of the
director or the director's designee shall be final. Any further
appeal shall be required to be filed in accordance with Section 1085
of the Code of Civil Procedure.
(b) No applicant whose application for enrollment as a provider
has been denied pursuant to Section 14043.2, 14043.36, or 14043.4 may
reapply for a period of three years from the date the application is
denied. If the provider has appealed the denial, the three-year
period shall commence upon the date of final action by the director
or the director's designee.
SEC. 51. Section 14043.7 of the Welfare
and Institutions Code is amended to read:
14043.7. (a) The department may make unannounced visits to any
applicant or to any provider for the purpose of determining whether
enrollment, continued enrollment, or certification is warranted, or
as necessary for the administration of the Medi-Cal program. At the
time of the visit, the applicant or provider shall be required to
demonstrate an established place of business appropriate and adequate
for the services billed or claimed to the Medi-Cal program, as
relevant to his or her scope of practice, as indicated by, but not
limited to, the following:
(1) Being open and available to the general public.
(2) Having regularly established and posted business hours.
(3) Having adequate supplies in stock on the premises.
(4) Meeting all local laws and ordinances regarding business
licensing and operations.
(5) Having the necessary equipment and facilities to carry out
day-to-day business for his or her practice.
(b) An unannounced visit pursuant to subdivision (a) shall be
prohibited with respect to clinics licensed under Section 1204 of the
Health and Safety Code, clinics exempt from licensure under Section
1206 of the Health and Safety Code, health facilities licensed under
Chapter 2 (commencing with Section 1250) of Division 2 of the Health
and Safety Code, and natural persons licensed or certified under
Division 2 (commencing with Section 500) of the Business and
Professions Code, the Osteopathic Initiative Act, or the Chiropractic
Initiative Act, unless the department has reason to believe that the
provider will defraud or abuse the Medi-Cal program or lacks the
organizational or administrative capacity to provide services under
the program.
(c) Failure to remediate significant discrepancies in information
provided to the department by the provider or significant
discrepancies that are discovered as a result of an announced or
unannounced visit to a provider, for purposes of enrollment,
continued enrollment, or certification pursuant to subdivision (a)
shall make the provider subject to temporary suspension from the
Medi-Cal program, which shall include temporary deactivation of
all provider numbers the provider's number,
including all business addresses used by the provider to obtain
reimbursement from the Medi-Cal program. The director shall notify
in writing the provider of the temporary suspension and deactivation
of provider numbers, which shall take effect 15 days from the date of
the notification. Notwithstanding Section 100171 of the Health and
Safety Code, proceedings after the imposition of sanctions in this
paragraph shall be in accordance with Section 14043.65.
SEC. 52. Section 14087.305 of the
Welfare and Institutions Code is amended to read:
14087.305. (a) In areas specified by the director for expansion
of the Medi-Cal managed care program under Section 14087.3 and where
the department is contracting with a prepaid health plan that is
contracting with, governed, owned or operated by a county board of
supervisors, a county special commission or county health authority
authorized by Sections 14018.7, 14087.31, 14087.35, 14087.36,
14087.38, and 14087.96, a Medi-Cal or Aid to Families with
Dependent Children (AFDC) California Work Opportunity
and Responsibility for Kids (CalWORKs) applicant or beneficiary
shall be informed of the managed health
care options available regarding methods of receiving Medi-Cal
benefits. The county shall ensure that each beneficiary is informed
of these options and informed that a health care options presentation
is available.
(b) The managed care options information described in subdivision
(a) shall include the following elements:
(1) Each beneficiary or eligible applicant shall be provided
, at a minimum, with the name, address, telephone number, and
specialty, if any, of each primary care provider, by specialty, or
clinic, participating in each prepaid managed
care health plan option through a personalized provider
directory for that beneficiary or applicant . This information
shall be presented under the geographic area designations,
in alphabetical order by the name of the primary
care provider and clinic . The name, address, and telephone
number of each specialist participating in each prepaid health plan
shall be made available by contacting the health care options
contractor or the prepaid health plan and shall be
updated based on information electronically provided monthly by the
health care plans to the department, setting forth any changes in the
health care plan's provider network. The geographic areas shall be
based on the applicant's residence address, the minor applicant's
school address, the applicant's work address, or any other factor
deemed appropriate by the department, in consultation with health
plan representatives , legislative staff, and
consumer stakeholders. In addition, directories of the entire service
area of the local initiative and commercial plan provider networks,
including, but not limited to, the name, address, and telephone
number of each primary care provider and hospital, shall be made
available to beneficiaries or applicants who request them from
the health care options contractor. Each personalized p
rovider directory shall include information regarding the
availability of a directory of the entire service area, provide
tele phone numbers for the beneficiary to request a
directory of the entire service area, and include a postage-paid mail
card to send for a directory of the entire service area. The
personalized provider directory shall be implemented as a pilot
project in Los Angeles County pursuant to this article, and in
Sacramento County (Geographic Managed Care Model) pursuant to Article
2.91 (commencing with Section 14089
) . The content, form, and the geographic
areas used in the personalized provider directories shall be
determined by the department , in consultation
with a workgroup to include health plan representatives, legislative
staff, and consumer stakeholders, with an emphasis on the inclusion
of stakeholders from Los Angeles and Sacramento Counties. The
personalized provider directories may include a section for each
health plan. Prior to implementation of the pilot project, the
department , in consultation with consumer
stakeholders, legislative staff, and health plans, shall determine
the parameters, methodology, and evaluation process of the pilot
project. The pilot project shall thereafter be in effect for a
minimum of two years. Three
months prior to the end of the first two years of the pilot project,
the department shall promptly provide the fiscal and policy
committees of the Legislature with an evaluation of the personalized
provider directory pilot project and its impact on the Medi-Cal
managed care program, including whether the pilot project resulted in
a reduction of default assignments and a more informed choice
process for beneficiaries, and its overall cost-benefit to the state.
Following two years of operation as a pilot project in two counties
and submission of the evaluation to the Legislature, the department,
in consultation with consumer stakeholders, legislative staff, and
health plans, shall determine whether to implement personalized
provider directories as a permanent program statewide.
This determination shall be based on the outcomes set forth in the
evaluation provided to the Legislature. If necessary, the pilot
project shall continue beyond the initial two -
year period until this determination is made. This pilot project
shall only be implemented to the extent that it is budget neutral to
the department .
(2) Each beneficiary or eligible applicant shall be informed that
he or she may choose to continue an established patient-provider
relationship in a managed care option, if his or her treating
provider is a primary care provider or clinic contracting with any of
the prepaid health plan options available and has available capacity
and agrees to continue to treat that beneficiary or applicant.
(3) Each beneficiary or eligible applicant shall be informed that
if he or she fails to make a choice, he or she shall be assigned to,
and enrolled in, a prepaid health plan.
(c) No later than 30 days following the date a Medi-Cal or
AFDC CalWORKs beneficiary or applicant
is determined eligible for Medi-Cal, the beneficiary shall indicate
his or her choice, in writing, from among the available prepaid
health plans in the region and his or her choice of primary care
provider or clinic contracting with the selected prepaid health plan.
Notwithstanding the 30 - day deadline set
forth in this subdivision, if a beneficiary requests a directory for
the entire service area within 30 days of
receiving an enrollment form, the deadline for choosing a
plan shall be extended an additional 30 days
from the date of the request.
(d) At the time the beneficiary or eligible applicant selects a
prepaid health plan, the department shall, when applicable, encourage
the beneficiary or eligible applicant to also indicate, in writing,
his or her choice of primary care provider or clinic contracting with
the selected prepaid health plan.
(e) In areas specified by the director for expansion of the
Medi-Cal managed care program under Section 14087.3, and where the
department is contracting with a prepaid health plan that is
contracting with, governed, owned or operated by a county board of
supervisors, a county special commission or county health authority
authorized by Sections 14018.7, 14087.31, 14087.35, 14087.36,
14087.38, and 14087.96, a Medi-Cal or AFDC
CalWORKs beneficiary who does not make a choice of managed care
plans, shall be assigned to and enrolled in an appropriate Medi-Cal
prepaid health plan providing service within the area in which the
beneficiary resides.
(f) If a beneficiary or eligible applicant does not choose a
primary care provider or clinic, or does not select any primary care
provider who is available, the prepaid health plan that was selected
by or assigned to the beneficiary shall ensure that the beneficiary
selects a primary care provider or clinic within 30 days after
enrollment or is assigned to a primary care provider within 40 days
after enrollment.
(g) Any Medi-Cal or AFDC CalWORKs
beneficiary dissatisfied with the primary care provider or prepaid
health plan shall be allowed to select or be assigned to another
primary care provider within the same prepaid health plan. In
addition, the beneficiary shall be allowed to select or be assigned
to another prepaid health plan contracted for pursuant to this
article that is in effect for the geographic area in which he or she
resides, in accordance with Section 1903 (m) (2) (F) (ii)
1903(m)(2)(F)(ii) of the Social Security Act.
(h) The department or its contractor shall notify a prepaid health
plan when it has been selected by or assigned to a beneficiary. The
prepaid health plan that has been selected by or assigned to a
beneficiary shall notify the primary care provider that has been
selected or assigned. The prepaid health plan shall also notify the
beneficiary of the prepaid health plan and primary care provider or
clinic selected or assigned.
(i) (1) The managed health care plan shall have a valid Medi-Cal
contract, adequate capacity, and appropriate staffing to provide
health care services to the beneficiary.
(2) The department shall establish standards for all of the
following:
(A) The maximum distances a beneficiary is required to travel to
obtain primary care services from the managed care plan, in which the
beneficiary is enrolled.
(B) The conditions under which a primary care service site shall
be accessible by public transportation.
(C) The conditions under which a managed care plan shall provide
nonmedical transportation to a primary care service site.
(3) In developing the standards required by paragraph (2) the
department shall take into account, on a geographic basis, the means
of transportation used and distances typically traveled by Medi-Cal
beneficiaries to obtain fee-for-service primary care services and the
experience of managed care plans in delivering services to Medi-Cal
enrollees. The department shall also consider the provider's ability
to render culturally and linguistically appropriate services.
(j) To the extent possible, the arrangements for carrying out
subdivision (e) shall provide for the equitable distribution of
Medi-Cal beneficiaries among participating prepaid health plans, or
managed care plans.
(k) This section shall be implemented in a manner consistent with
any federal waiver required to be obtained by the department in order
to implement this section.
SEC. 53. Section 14087.5 of the Welfare
and Institutions Code is amended to read:
14087.5. (a) The California Medical Assistance Commission may
negotiate exclusive contracts with any county which seeks to provide,
or arrange for the provision of the health care services provided
under this chapter. The California Medical Assistance Commission
shall establish regulations concerning the time for submittal of
proposed plans for a contract by a county, and for the time by which
the California Medical Assistance Commission shall decide whether or
not to accept the county's proposal.
(b) The department shall seek all federal waivers necessary to
allow for federal financial participation in expenditures under this
article. This article shall not be implemented until all necessary
waivers have been approved by the federal government.
(c) (1) Notwithstanding subdivision (a) or any other provision of
law, on and after the effective date of the act adding this
subdivision, the department shall have exclusive authority to
negotiate the rates, terms, and conditions of county organized health
systems contracts and contract amendments under this article or
under Article 7 (commencing with Section 14490) of Chapter 8. As of
that date, all references in this article to the negotiator or the
California Medical Assistance Commission shall mean the department.
(2) For contracts executed pursuant to this article, the
department shall disclose, upon request, each negotiated contract or
contract amendment executed by both parties after July 1, 2007, which
shall be considered public records for the purposes of the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code), including
contracts that reveal the department's rates of payment for health
care services, the rates themselves, and rate manuals.
SEC. 54. Section 14088 of the Welfare
and Institutions Code is amended to read:
14088. (a) It is the purpose of this article to ensure that the
Medi-Cal program shall be operated in the most cost-effective and
efficient manner possible with the optimum number of Medi-Cal
providers and shall assure quality of care and known access to
services.
(b) For the purposes of this article, the following definitions
shall apply:
(1) "Primary care provider" means either of the following:
(A) Any internist, general practitioner,
obstetrician/gynecologist, pediatrician or family practice physician
or any primary care clinic, rural health clinic, community clinic or
hospital outpatient clinic holding a valid and current
Medi-Cal provider number currently enrolled in the
Medi-Cal program , which agrees to provide case management to
Medi-Cal beneficiaries.
(B) A county or other political subdivision that employs,
operates, or contracts with, any of the primary care providers listed
in subparagraph (A), and that agrees to use that primary care
provider for the purposes of contracting under this article.
(2) "Primary care case management" means responsibility for the
provision of referral, consultation, ordering of therapy, admission
to hospitals, follow up care, and prepayment approval of referred
services.
(3) "Designation form" or "form" means a form supplied by the
department to be executed by a Medi-Cal beneficiary and a primary
care provider or other entity eligible pursuant to this article who
has entered into a contract with the department pursuant to this
article, setting forth the beneficiary's choice of contractor and an
agreement to be limited by the case management decisions of that
contractor and the contractor's agreement to be responsible for that
beneficiary's case management and medical care, as specified in this
article.
(4) "Emergency services" means health care services rendered by an
eligible Medi-Cal provider to a Medi-Cal beneficiary for those
health services required for alleviation of severe pain or immediate
diagnosis and treatment of unforeseen medical conditions which if not
immediately diagnosed and treated could lead to disability or death.
(5) "Modified primary care case management" means primary care
case management wherein capitated services are limited to primary
care physician office visits only.
(6) "Service area" means an area designated by either a single
federal Postal ZIP Code or by two or more Postal ZIP Codes that are
contiguous.
SEC. 55. Section 14088.14 of the
Welfare and Institutions Code is amended to read:
14088.14. The department may enter into contracts pursuant to
this article with nurse practitioners, acting within the scope of
practice of a nurse practitioner, certified nurse midwives, acting
within the scope of practice of a certified nurse midwife, and, for
the purpose of providing services to populations with special medical
problems, with any physician who has specialized in an area of
medicine relevant to the special population to be served and who
holds a valid and current Medi-Cal provider number
is currently enrolled in the Medi-Cal program .
SEC. 56. Section 14088.25 of the
Welfare and Institutions Code is amended to read:
14088.25. (a) The department may conduct onsite reviews of a
provider or facility that has agreed with the primary care case
management contractor or a potential contractor to provide services
to beneficiaries enrolled with the contractor. These reviews may be
for purposes such as evaluating the capabilities of potential
contractors, monitoring quality of care, investigating complaints,
and ensuring contractor compliance with the terms of the contract
entered into pursuant to this article.
(b) Prior to adding a provider or facility to an existing network
of providers and facilities, the primary care case management
contractor shall submit a complete prequalification package to the
department. The department shall provide to the contractor written
acknowledgment that the package is complete within 10 working days.
(c) (1) If the provider or facility proposed for addition to the
contractor's existing network holds a valid and current
Medi-Cal provider number is currently enrolled in the
Medi-Cal program , the provider or facility may begin treating
beneficiaries enrolled with the contractor immediately upon the
contractor's receipt of the acknowledgment required by subdivision
(b), subject to paragraph (2) and subdivision (d).
(2) Whenever warranted, the department may rescind the privilege
provided for in paragraph (1) by advance notification to the
contractor, pending the onsite review required by subdivision (d).
Notification shall be in writing and describe the conditions that
support the rescission of the privilege.
(d) (1) The department shall conduct an onsite review of the
provider or facility within a reasonable period of time after receipt
of the package, which shall be not more than 60 days after receipt
of the package, unless there are extenuating circumstances.
(2) The department shall notify the contractor in writing of the
department's final decision on the request to add the provider or
facility to the contractor's existing network within 10 working days
of the date of the review.
(e) In the conduct of the onsite review of the provider or
facility, the department shall not condition approval of the site on
adherence by the provider or facility to requirements that are not
contained in any statute, regulation, or commonly accepted community
standard of medical practice that directly applies to the category of
provider or facility being inspected. This subdivision does not,
however, relieve the contractor of any obligations under the contract
entered into pursuant to this article.
SEC. 57. Section 14089 of the Welfare
and Institutions Code is amended to read:
14089. (a) The purpose of this article is to provide a
comprehensive program of managed health care plan services to
Medi-Cal recipients residing in clearly defined geographical areas.
It is, further, the purpose of this article to create maximum
accessibility to health care services by permitting Medi-Cal
recipients the option of choosing from among two or more managed
health care plans or fee-for-service managed case arrangements,
including, but not limited to, health maintenance organizations,
prepaid health plans, primary care case management plans. Independent
practice associations, health insurance carriers, private
foundations, and university medical centers systems, not-for-profit
clinics, and other primary care providers, may be offered as choices
to Medi-Cal recipients under this article if they are organized and
operated as managed care plans, for the provision of preventive
managed health care plan services.
(b) The negotiator may seek proposals and then shall contract
based on relative costs, extent of coverage offered, quality of
health services to be provided, financial stability of the health
care plan or carrier, recipient access to services, cost-containment
strategies, peer and community participation in quality control,
emphasis on preventive and managed health care services and the
ability of the health plan to meet all requirements for both of the
following:
(1) Certification, where legally required, by the Director of the
Department of Managed Health Care and the Insurance Commissioner.
(2) Compliance with all of the following:
(A) The health plan shall satisfy all applicable state and federal
legal requirements for participation as a Medi-Cal managed care
contractor.
(B) The health plan shall meet any standards established by the
department for the implementation of this article.
(C) The health plan receives the approval of the department to
participate in the pilot project under this article.
(c) (1) (A) The proposals shall be for the provision of preventive
and managed health care services to specified eligible populations
on a capitated, prepaid or postpayment basis.
(B) Enrollment in a Medi-Cal managed health care plan under this
article shall be voluntary for beneficiaries eligible for the federal
Supplemental Security Income for the Aged, Blind, and Disabled
Program (Subchapter 16 (commencing with Section 1381) of Chapter 7 of
Title 42 of the United States Code).
(2) The cost of each program established under this section shall
not exceed the total amount which the department estimates it would
pay for all services and requirements within the same geographic area
under the fee-for-service Medi-Cal program.
(d) The department shall enter into contracts pursuant to this
article, and shall be bound by the rates, terms, and conditions
negotiated by the negotiator.
(e) (1) An eligible beneficiary shall be entitled to enroll in any
health care plan contracted for pursuant to this article that is in
effect for the geographic area in which he or she resides.
Enrollment shall be for a minimum of six months. Contracts entered
into pursuant to this article shall be for at least one but no more
than three years. The director
department shall make available to recipients information
summarizing the benefits and limitations of each health care plan
available pursuant to this section in the geographic area in which
the recipient resides. A Medi-Cal or CalWORK s
applicant or beneficiary shall be informed of the health care
options available regarding methods of receiving Medi-Cal benefits.
The c ounty shall ensure that each beneficiary
is informed of these options and informed that a health care options
presentation is available.
(2) No later than 30 days following the date a Medi-Cal or
AFDC CalWORKs recipient is informed of
the health care options described in paragraph (1) of
subdivision (e) , the recipient shall indicate his or her
choice in writing of one of the available health care plans and his
or her choice of primary care provider or clinic contracting with the
selected health care plan. Notwithstanding the 30-day deadline
set forth in this paragraph, if a beneficiary requests a directory
for the entire service area within 30 days of the date of receiving
an enrollment form, the deadline for choosing a plan shall be
extended an additional 30 days from the date of that request.
(3) The health care options information described in
paragraph (1) of subdivision (e) this subdivision
shall include the following elements:
(A) Each beneficiary or eligible applicant shall be provided ,
at a minimum, with the name, address, telephone number, and
specialty, if any, of each primary care provider, and each
by specialty or clinic participating in each
managed health care plan option through a
personalized provider directory for that beneficiary or applicant
. This information shall be presented under the
geographic area designations in alphabetical order
by the name of the primary care provider and clinic . The
name, address, and telephone number of each specialist participating
in each health care plan shall be made available by contacting the
health care options contractor or the health care plan
, and shall be updated based on information electronically provided
monthly by the health care plans to the department
, setting forth any changes in the health care plan
provider network. The geographic areas shall be based on the
applicant's residence address, the minor applicant's school address,
the applicant's work address, or any other factor deemed appropriate
by the department, in consultation with health plan representatives,
legislative staff, and consumer stakeholders. In addition,
directories of the entire service area, including, but not limited
to, the name, address, and telephone number of each primary care
provider and hospital, of all Geographic Managed Care health plan
provider networks shall be made available to beneficiaries or
applicants who request them from the health care options contractor.
Each personalized provider directory shall include
information regarding the availability of a directory of the entire
service area, provide telephone numbers for the beneficiary to
request a directory of the entire service area, and include a
postage-paid mail card to send for a directory of the entire service
area. The personalized provider directory shall be implemented as a
pilot project in Sacramento County pursuant to this article, and in
Los Angeles Coun ty (Two-Plan Model) pursuant to Article
2.7 (commencing with Section 14087.305). The content, form, and
geographic areas used shall be determined by the department in
consultation with a workgroup to include health plan representatives,
legislative staff, and consumer stakeholders, with an emphasis on
the inclusion of stakeholders from Los Angeles and Sacramento
Counties. The personalized provider directories may include a section
for each health plan. Prior to implementation of the pilot project,
the department, in consultation with consumer stakeholders,
legislative staff, and health plans, shall determine the
parameters, methodology, and evaluation process of the pilot project.
The pilot project shall thereafter be in effect for a minimum of two
years. Three months prior to the end of the first two years of the
pilot project, the department shall promptly provide the fiscal and
policy committees of the Legislature with an evaluation of the
personalized provider directory pilot project and its impact on the
Medi-Cal managed care program, including whether the pilot project
resulted in a reduction of default assignments and a more informed
choice process for beneficiaries, and its overall cost-benefit to the
state. Following two years of operation as a pilot project in two
counties and submission of the evaluation to the Legislature, the
department, in consultation with consumer stakeholders, legislative
staff, and health plans, shall determine whether to implement
personalized provider directories as a permanent program statewide.
This determination shall be based on the outcomes set forth in the
evaluation provided to the Legislature. If necessary, the
pilot project shall continue beyond the initial two-year period until
this determination is made. This pilot project shall only be
implemented to the extent that it is budget neutral to the department
.
(B) Each beneficiary or eligible applicant shall be informed that
he or she may choose to continue an established patient-provider
relationship in a managed care option, if his or her treating
provider is a primary care provider or clinic contracting with any of
the health plans available and has the available capacity and agrees
to continue to treat that beneficiary or eligible applicant.
(C) Each beneficiary or eligible applicant shall be informed that
if he or she fails to make a choice, he or she shall be assigned to,
and enrolled in, a health care plan.
(4) At the time the beneficiary or eligible applicant selects a
health care plan, the department shall, when applicable, encourage
the beneficiary or eligible applicant to also indicate, in writing,
his or her choice of primary care provider or clinic contracting with
the selected health care plan.
(5) Commencing with the implementation of a geographic managed
care project in a designated county, a Medi-Cal or AFDC
CalWORKs beneficiary who does not make a choice
of health care plans in accordance with paragraph (2), shall be
assigned to and enrolled in an appropriate health care plan providing
service within the area in which the beneficiary resides.
(6) If a beneficiary or eligible applicant does not choose a
primary care provider or clinic, or does not select any primary care
provider who is available, the health care plan selected by or
assigned to the beneficiary shall ensure that the beneficiary selects
a primary care provider or clinic within 30 days after enrollment or
is assigned to a primary care provider within 40 days after
enrollment.
(7) Any Medi-Cal or AFDC CalWORKs
beneficiary dissatisfied with the primary care provider or health
care plan shall be allowed to select or be assigned to another
primary care provider within the same health care plan. In addition,
the beneficiary shall be allowed to select or be assigned to another
health care plan contracted for pursuant to this article that is in
effect for the geographic area in which he or she resides in
accordance with Section 1903(m)(2)(F)(ii) of the Social Security Act.
(8) The department or its contractor shall notify a health care
plan when it has been selected by or assigned to a beneficiary. The
health care plan that has been selected or assigned by a beneficiary
shall notify the primary care provider that has been selected or
assigned. The health care plan shall also notify the beneficiary of
the health care plan and primary care provider selected or assigned.
(9) This section shall be implemented in a manner consistent with
any federal waiver that is required to be obtained by the department
to implement this section.
(f) A participating county may include within the plan or plans
providing coverage pursuant to this section, employees of county
government, and others who reside in the geographic area and who
depend upon county funds for all or part of their health care costs.
(g) The negotiator and the department shall establish pilot
projects to test the cost-effectiveness of delivering benefits as
defined in subdivisions (a) to (f), inclusive.
(h) The
California Medical Assistance Commission shall evaluate the
cost-effectiveness of these pilot projects after one year of
implementation. Pursuant to this evaluation the commission may either
terminate or retain the existing pilot projects.
(i) Funds may be provided to prospective contractors to assist in
the design, development, and installation of appropriate programs.
The award of these funds shall be based on criteria established by
the department.
(j) In implementing this article, the department may enter into
contracts for the provision of essential administrative and other
services. Contracts entered into under this subdivision may be on a
noncompetitive bid basis and shall be exempt from Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the Public
Contract Code.
SEC. 60. Section 14091.21 of the
Welfare and Institutions Code is amended to read:
14091.21. (a) Nursing facility services necessary for the
treatment of illness or injury are covered subject to the provisions
of this section:
(b) Nursing facility services are covered only after prior
authorization has been obtained from the designated Medi-Cal
consultant for the field office area in which the nursing facility is
located. The authorization request shall be initiated by the
facility and shall be signed by the attending physician. Nursing
facility services may be authorized either for a distinct-part
nursing facility (a facility that is a distinct part of an acute care
hospital), or for a freestanding nursing facility (a facility that
is not part of an acute care hospital).
(1) Distinct-part nursing facility care at the distinct-part
nursing facility reimbursement rate for any Medi-Cal patient
determined to need long-term nursing care shall be authorized when
any one of the following conditions is met:
(A) There is no freestanding nursing facility within 15 miles,
which shall be defined as 30 minutes at 30 miles per hour, from the
established residential address of that patient prior to admission to
nursing care and the distinct-part nursing facility is within a
shorter actual travel time than the closest freestanding nursing
facility able and willing to admit the patient.
(B) There is a freestanding nursing facility within 15 miles, as
defined in subparagraph (A) from the established residential address
of the patient before admission to nursing care, but after reasonable
placement efforts, no such facility is able and willing to accept
the patient, and the distinct-part nursing facility is within a
shorter travel time than the closest freestanding nursing facility
able and willing to admit the patient, within the 25-day placement
period.
(C) There is no freestanding nursing facility within 30 minutes
actual travel time from the established residential address of the
immediate family member, such as the spouse, parent, child, or
sibling of the patient, who certifies that he or she is the family
member who will be most frequently visiting and helping with the
personal needs of the patient, or if there is such a freestanding
nursing facility, there is none able and willing, after reasonable
placement efforts, to accept the patient, and the distinct-part
nursing facility is within a shorter travel time than the closest
freestanding nursing facility. In this case, the distinct-part
nursing facility shall submit with the treatment authorization
request a signed statement from the immediate family member
certifying that he or she is the person who will be most frequently
visiting and seeing to the personal needs of the patient. The signed
statement of the family member shall contain an explanation of the
relationship to the patient, the residential address used in
calculating the distance to the distinct-part nursing facility, and
the mode of transportation to be used. A copy of this certification
shall be kept in the patient's file at the distinct-part nursing
facility.
(D) The immediate family member who will be most frequently
visiting and seeing to the personal needs of the patient cannot,
because of established health reasons, travel to a freestanding
nursing facility that is able and willing to admit the patient and
that is within 30 minutes actual travel time, but he or she is able
to travel to the distinct-part nursing facility. The certification so
stating, and signed by that family member, shall be submitted with
the treatment authorization request. A copy of this certification
shall be kept in the patient's file at the distinct-part nursing
facility.
(E) The patient has a spouse residing in the same distinct-part
nursing facility.
(F) The patient is currently, as of the time approval is sought,
residing in the distinct-part nursing facility and has been
continuously residing in that facility for at least 120 consecutive
days, and payment has been made or approved during the 120
consecutive days by Medicare, other health insurance, or by Medi-Cal
at a distinct-part nursing facility rate. For patients who have met
this requirement and are later hospitalized, a treatment
authorization request at the distinct-part nursing facility rate
shall be reinstated if the patient returns to the same distinct-part
nursing facility during the seven-day bed-hold period specified in
Section 1599.79 of the Health and Safety Code. Otherwise, to reside
in a distinct-part nursing facility, the patient shall meet one of
the conditions set forth unless the patient's attending physician
documents in the medical record that discharge to a freestanding
nursing facility would cause physical or psychological harm to the
patient.
(2) "Actual travel time" means the amount of time it would usually
take the immediate family member to travel between two specific
points by means of whatever transport would be available to him or
her, taking into account actual road and weather conditions.
(3) "Reasonable placement efforts" means that during the 25-day
time period beginning with the date that approval for the Medi-Cal
distinct-part nursing facility rate is first sought, the facility
shall do all of the following:
(A) Contact on a daily basis, not including Saturdays, Sundays, or
holidays, Medi-Cal-certified freestanding nursing facilities within
the applicable mileage or travel time, to determine whether each such
freestanding nursing facility is able and willing to admit the
patient. In meeting this requirement, facilities shall contact only
those freestanding nursing facilities that they, in good faith,
believe may be able and willing to admit this patient, taking into
account previous contacts. Further attempts at placement calls will
be waived by the department. Freestanding nursing facilities within
the applicable mileage or travel time are those within the
appropriate travel time plus any freestanding nursing facility within
a shorter actual travel time than the distinct-part nursing facility
from the appropriate residential address such as the patient's or
the immediate family member's.
(B) Document that the facility contacted a person responsible for
admission decisions during each required contact, the date and time
of each contact with a freestanding nursing facility, the name and
title of each person contacted, the reason given for the freestanding
nursing facility not being able or willing to admit the patient on
the day contacted, and the date, if any, when the freestanding
nursing facility would be able and willing to accept the patient.
Contacts may be made by telephone or facsimile transmission.
(C) Submit the documentation specified in subparagraph (B) to the
Medi-Cal field office at the conclusion of the 25-day placement
effort period.
(4) Upon submission of documentation that reasonable placement
efforts requirement were met, the distinct-part nursing facility rate
or acute administrative days shall be approved as follows:
(A) Hospitals seeking to place a patient into their own
distinct-part nursing facilities shall be approved for acute
administrative days for a patient determined to need long-term
nursing facility care, who remains in an acute care bed during the
placement period. If a contacted freestanding nursing facility was
able and willing to admit the patient during the 25-day period, the
hospital's treatment authorization request shall be subsequently
authorized for approval of acute administrative days until the date
that the freestanding nursing facility is able to accept the patient.
At the completion of the reasonable placement effort period, if no
freestanding nursing facility is able and willing to take the
patient, the hospital's treatment authorization request shall be
authorized for approval for acute administrative days for days of
care during the reasonable placement period. The hospital, in order
to comply with this subparagraph, shall complete the 25-day placement
period if there is a freestanding nursing facility within the
applicable mileage or travel time willing to take the patient, but
due to occupancy, is unable to accept transfer on the days it was
contacted. If, however, there is a freestanding nursing facility
within the applicable mileage or travel time, but the freestanding
nursing facility is not able or willing to admit the patient at the
time of the placement effort or in the future, the length of
placement time required shall vary and may be shorter than 25 days.
If documentation establishes that no freestanding nursing facility
within the applicable mileage or travel time, is, or will ever be,
able or willing to admit the patient, further placement efforts shall
not be required. The distinct-part nursing facility rate of
reimbursement shall be approved upon the patient's admission to the
distinct-part nursing facility if reasonable placement efforts
requirement has been met and no freestanding nursing facility within
the applicable mileage or travel time standard was able and willing
to accept the patient.
(B) When a patient is either admitted to a distinct-part nursing
facility from an acute hospital, nonacute facility, or community
setting, or was a distinct-part nursing facility resident whose care
has been, but is no longer being, paid by another payment source, a
treatment authorization request shall be approved at the
distinct-part nursing facility rate for a patient who has been
admitted and determined to need long-term nursing facility placement
when the reasonable placement efforts requirement has been met. If a
contacted freestanding nursing facility is able and willing to admit
the patient during the 25-day period, the distinct-part nursing
facility treatment authorization request shall be subsequently
authorized for approval at the distinct-part nursing facility rate
until the date that the freestanding nursing facility is able to
accept the patient. If the basis on which the final distinct-part
nursing facility approval is sought is the lack of any freestanding
nursing facility able and willing to take the patient after
reasonable placement efforts, this approval shall not be given until
after the completion of the reasonable placement period, but may be
given for days of care during that period. The criteria for
shortening the reasonable placement period to less than 25 days shall
apply. Notwithstanding the general requirement that skilled nursing
care must receive prior authorization, when a distinct-part nursing
facility admits a patient during the time it is making reasonable
placement efforts, authorization of the distinct-part nursing
facility rate may be given postadmission.
However, no days of care shall be authorized for any period prior
to the receipt of the treatment authorization request from the
facility, unless retroactive authorization may be given.
(C) When a patient spends some of the placement period in the
hospital and some of that time in a distinct-part nursing facility,
acute administrative days shall be authorized for the hospital days
and the distinct-part nursing facility rate for the distinct-part
nursing facility days, subject to the provisions of this paragraph.
(5) Reasonable placement efforts, as defined in paragraph (3),
shall be conducted for all patients in need of long-term nursing care
who are seeking admission to a distinct-part nursing facility
pursuant to paragraph (1) of subdivision (a) of Section 51335 of
Title 22 of the California Code of Regulations. Patients requiring
nursing care for postsurgical rehabilitative or therapy services
shall not be subject to the reasonable placement efforts required for
admission to a distinct-part nursing facility but they shall be
subject to all other Medi-Cal criteria for these admissions. A
patient, who is a resident of a distinct-part nursing facility and
who has been hospitalized for more than the seven-day bed-hold
period, may be readmitted to the distinct-part nursing facility
without meeting the reasonable placement efforts requirement for
admission, if the attending physician documents that discharge to a
freestanding nursing facility will result in physical or
psychological harm.
(6) If a distinct-part nursing facility desires of its own
volition to admit a patient needing nursing care at the freestanding
nursing facility rate, the department shall approve a treatment
authorization request submitted for approval at that rate.
Distinct-part nursing facilities shall obtain
be enrolled in the Medi-Cal program as a freestanding nursing
facility provider number for that purpose, in
addition to their regular provider number
being otherwise enrolled in the Medi-Cal program . A
distinct-part nursing facility objecting to the freestanding nursing
facility rate in any other circumstance, such as when it has not
accepted the rate of its own volition, shall not be deemed to have
waived its rights to administrative appeal and further review.
(7) With respect to acute care hospitals that are licensed for
distinct-part nursing beds, and determined by the State Department of
Health Services to provide special services to a unique population,
the department shall enact and enforce no regulation, field office
instruction, or preadmission screening criteria that restricts a
Medi-Cal beneficiary's freedom to seek admission to a nursing
facility or unit that is a distinct part of an acute care hospital on
terms or conditions different from those governing admission to a
long-term care facility.
(c) The department may waive the requirements of this section if
it can be demonstrated that both of the following apply:
(1) Access to care is compromised for a specific patient
population.
(2) The facility can demonstrate an increase in acute
administrative days that are attributable to unsuccessful placement
efforts.
SEC. 61. Section 14100.95 of the
Welfare and Institutions Code is amended to read:
14100.95. (a) The department shall enter into demonstration
contracts with manufacturers of medical supplies for four items of
its own selection of medical supplies existing on the pharmacy claims
processing system, for the purpose of establishing rebates or other
cost-saving mechanisms and demonstrating cost savings in the purchase
of these medical supplies. The department shall maintain a list of
the supplies for which contracts have been executed.
(b) Nothing in this section shall prevent a small retail business
from continuing to supply medical supplies for use by Medi-Cal
beneficiaries.
(c) In establishing these demonstration contracts, the department
shall preserve reasonable access to these supplies by beneficiaries
. To ensure that the health needs of Medi-Cal beneficiaries are
met, the department shall evaluate products and execute contracts
pursuant to subdivision (c) of Section 14105.47 .
(d) The department shall report the outcomes of these
demonstration contracts to the Legislature no later than January 1,
2007 2009 .
SEC. 62. Section 14105.2 of the Welfare
and Institutions Code is amended to read:
14105.2. (a) The allowable markup payable for the dispensing of
medical supplies by assistive device and sickroom supply dealers and
pharmacies shall not exceed 23 percent of the estimated
acquisition cost of the item dispensed, as defined by the
department.
(b) Payment for diabetic testing supplies shall not exceed the
estimated acquisition cost of the item dispensed, as
defined by the department, plus a fee equal to the maximum
professional fee component used in the payment for legend generic
drug types.
(c) In determining the estimated acquisition costs of products
pursuant to this section, the department shall consider provider
related costs of the product that include, but are not limited to,
shipping, handling, storage, and delivery.
SEC. 63. Section 14105.3 of the Welfare
and Institutions Code is amended to read:
14105.3. (a) The department is considered to be the purchaser,
but not the dispenser or distributor, of prescribed drugs under the
Medi-Cal program for the purpose of enabling the department to obtain
from manufacturers of prescribed drugs the most favorable price for
those drugs furnished by one or more manufacturers, based upon the
large quantity of the drugs purchased under the Medi-Cal program, and
to enable the department, notwithstanding any other provision of
state law, to obtain from the manufacturers discounts, rebates, or
refunds based on the quantities purchased under the program, insofar
as may be permissible under federal law. Nothing in this section
shall interfere with usual and customary distribution practices in
the drug industry.
(b) The department may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis with manufacturers,
distributors, dispensers, or suppliers of appliances, durable medical
equipment, medical supplies, and other product-type health care
services and with laboratories for clinical laboratory services for
the purpose of obtaining the most favorable prices to the state and
to assure adequate quality of the product or service. This
subdivision shall not apply to pharmacies licensed pursuant to
Section 4080 of the Business and Professions Code.
(c) Notwithstanding subdivision (b), the department may not enter
into a contract with a clinical laboratory unless the clinical
laboratory operates in conformity with Chapter 3 (commencing with
Section 1200) of Division 2 of the Business and Professions Code and
the regulations adopted thereunder, and Section 263a of Title 42 of
the United States Code and the regulations adopted thereunder.
(d) The department shall contract with manufacturers of
single-source drugs on a negotiated basis, and with manufacturers of
multisource drugs on a bid or negotiated basis.
(e) In order to ensure and improve access by Medi-Cal
beneficiaries to both hearing aid appliances and provider services,
and to ensure that the state obtains the most favorable prices, the
department, by June 30, 2008, shall enter into exclusive or
nonexclusive contracts, on a bid or negotiated basis, for purchasing
hearing aid appliances.
(e)
(f) In carrying out contracting activity for this or
any section associated with the Medi-Cal list of contract drugs,
notwithstanding Section 19130 of the Government Code, the department
may contract, either directly or through the fiscal intermediary, for
pharmacy consultant staff necessary to accomplish the contracting
process or treatment authorization request reviews. The fiscal
intermediary contract, including any contract amendment, system
change pursuant to a change order, and project or systems development
notice shall be exempt from Part 2 (commencing with Section 10100)
of Division 2 of the Public Contract Code, Chapter 7 (commencing with
Section 11700) of Part 1 of Division 3 of Title 2 of the Government
Code, and any policies, procedures, or regulations authorized by
these provisions.
(f)
(g) In order to achieve maximum cost savings the
Legislature hereby determines that an expedited contract process for
contracts under this section is necessary. Therefore contracts under
this section shall be exempt from Chapter 2 (commencing with Section
10290) of Part 2 of Division 2 of the Public Contract Code.
(g)
(h) For purposes of implementing the contracting
provisions specified in this section, the department shall do all of
the following:
(1) Ensure adequate access for Medi-Cal patients to quality
laboratory testing services in the geographic regions of the state
where contracting occurs.
(2) Consult with the statewide association of clinical
laboratories and other appropriate stakeholders on the implementation
of the contracting provisions specified in this section to ensure
maximum access for Medi-Cal patients consistent with the savings
targets projected by the 2002-03 Budget Conference Committee for
clinical laboratory services provided under the Medi-Cal program.
(3) Consider which types of laboratories are appropriate for
implementing the contracting provisions specified in this section,
including independent laboratories, outreach laboratory programs of
hospital based laboratories, clinic laboratories, physician office
laboratories, and group practice laboratories.
SEC. 64. Section 14105.45 of the
Welfare and Institutions Code is amended to read:
14105.45. (a) For purposes of this section, the following
definitions shall apply:
(1) "Average sales manufacturers
price" means , of a drug or biological, the sales price for
a National Drug Code for a calendar quarter for a
manufacturer for a unit, calculated as follows: the
price reported to the department by the Centers for
Medicare and Medicaid Services pursuant to Section 1927 of the Social
Security Act (42 U.S.C. Sec. 1396r-8). In the event an average
manufacturer' s price is not available, the department
shall use the direct price as the average manufacturer' s
price.
(A) The manufacturer's sales to all purchasers, excluding sales
exempt under subparagraph (B), of a drug or biological in the United
States in the calendar quarter, divided by the total number of the
units of that drug or biological sold by the manufacturer in that
calendar quarter.
(B) In calculating the manufacturer's average sales price, the
following sales shall be excluded:
(i) Sales exempt from inclusion in the determination of "best
price" under Section 1927(c)(1)(C)(i) of the Social Security Act (42
U.S.C. Sec. 1396r-8(c)(1)(C)(i)).
(ii) Any other sales as the Secretary of the United States
Department of Health and Human Services identifies as sales to an
entity that are merely nominal in amount, as applied for purposes of
Section 1927(c)(1)(C)(ii)(III) of the Social Security Act (42 U.S.C.
Sec. 1396r-8(c)(1)(C)(ii)(III)), except as the secretary may
otherwise provide.
(C) In calculating the manufacturer's average sales price, the
price shall include volume discounts, prompt pay discounts, cash
discounts, free goods that are contingent on any purchase
requirement, chargebacks, and rebates, other than rebates under
Section 1927 of the Social Security Act (42 U.S.C. Sec. 1396r-8).
After 2004, the secretary may include in the manufacturer's average
sales price other price concessions, which may be based on
recommendations of the Inspector General of the United States
Department of Health and Human Services, that would result in a
reduction of the cost to the purchaser.
(D) In the case of a drug or biological during an initial period,
not to exceed a full calendar quarter, in which data on the prices
for sales for the drug or biological are not sufficiently available
from the manufacturer to compute an average sales price for the drug
or biological, the department may determine the amount payable under
this section for the drug or biological based on the wholesale
selling price.
(2) "Average wholesale price" means the price for a drug product
listed in the department's primary price reference source.
(3) "Direct price" means the price for a drug product purchased by
a pharmacy directly from a drug manufacturer listed in the
department's primary reference source.
(4) "Estimated acquisition cost" means the department's best
estimate of the price generally and currently paid by providers for a
drug product sold by a particular manufacturer or principal labeler
in a standard package.
(5) "Federal upper limit" means the maximum per unit reimbursement
when established by the Centers for Medicare and Medicaid Services
and published by the department in Medi-Cal pharmacy provider
bulletins and manuals.
(6) "Generically equivalent drugs" means drug products with the
same active chemical ingredients of the same strength, quantity, and
dosage form, and of the same generic drug name, as determined by the
United States Adopted Names (USAN) and accepted by the federal Food
and Drug Administration (FDA), as those drug products having the same
chemical ingredients.
(7) "Legend drug" means any drug whose labeling states "Caution:
Federal law prohibits dispensing without prescription," "Rx only," or
words of similar import.
(8) "Maximum allowable ingredient cost" (MAIC) means the maximum
amount the department will reimburse Medi-Cal pharmacy providers for
generically equivalent drugs.
(9) "Innovator multiple source drug," "noninnovator multiple
source drug," and "single source drug" have the same meaning as those
terms are defined in Section 1396r-8(k)(7) of Title 42 of the United
States Code.
(10) "Nonlegend drug" means any drug whose labeling does not
contain the statement referenced in paragraph (7).
(11) "Wholesale selling price" means the weighted (by unit volume)
mean price, including discounts and rebates, paid by a pharmacy to a
wholesale drug distributor.
(12)
(11) "Selling price" means the price used in the
establishment of the estimated acquisition cost. The department shall
base the selling price on the average sales price reported
by manufacturers pursuant to subdivision (c)
manufacturer's price plus a percent ma rkup determined by
the department to be necessary for the selling price to
represent the a verage purchase
price paid by retail pharmacies in
California . The selling price shall not be considered
confidential and shall be subject to disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(b) (1) Reimbursement to Medi-Cal pharmacy providers for legend
and nonlegend drugs shall consist of the estimated acquisition cost
of the drug plus a professional fee for dispensing. The professional
fee shall be seven dollars and twenty-five cents ($7.25) per
dispensed prescription. The professional fee for legend drugs
dispensed to a beneficiary residing in a skilled nursing facility or
intermediate care facility shall be eight dollars ($8) per dispensed
prescription. For purposes of this paragraph "skilled nursing
facility" and "intermediate care facility" shall have the same
meaning as defined in Division 5 (commencing with Section 70001) of
Title 22 of the California Code of Regulations.
(2) The department shall establish the estimated acquisition cost
of legend and nonlegend drugs as follows:
(A) For single source and innovator multiple source drugs, the
estimated acquisition cost shall be equal to the lowest of the
average wholesale price minus 17 percent, the selling price, the
federal upper limit, or the MAIC.
(B) For noninnovator multiple source drugs, the estimated
acquisition cost shall be equal to the lowest of the average
wholesale price minus 17 percent, the selling price, the federal
upper limit, or the MAIC.
(C) The department shall not use the direct price paid by
pharmacies to drug manufacturers to establish estimated acquisition
cost.
(3) For purposes of paragraph (2), the department shall establish
a list of MAICs for generically equivalent drugs, which shall be
published in pharmacy provider bulletins and manuals. The department
shall update the list of MAICs and establish additional MAICs in
accordance with all of the following:
(A) The department shall base the MAIC on the mean of the
wholesale selling prices average manufacturer'
s price of drugs generically equivalent to the particular
innovator drug that are available in California from
wholesale drug distributors selected by the department
plus a percent markup determined by the department to be necessary
for the MAIC to represent the average purchase price paid by retail
pharmacies in California .
(B) The department shall notify each selected wholesale drug
distributor, in writing, that the wholesale drug distributor has been
identified as a source of wholesale selling price information.
(C) Wholesale drug distributors notified pursuant to subparagraph
(B) shall, no later than 30 days after the end of each month, and in
a format determined by the department, provide to the department the
wholesale selling price of all legend and nonlegend drugs sold to
pharmacies.
(D)
(B) The department shall update MAICs at least every
three months and notify Medi-Cal providers at least 30 days prior to
the effective date of a MAIC.
(E) The failure of a wholesaler to report wholesale selling prices
pursuant to subparagraph (C) of paragraph (3) of subdivision (b)
shall result in the director denying payment for all drugs supplied
by that wholesaler to Medi-Cal program beneficiaries. The denial of
payment shall be effective no sooner than 30 days after notifying
pharmacy providers of the change through a provider bulletin.
(F) All pricing information reported by a wholesale distributor to
the department pursuant to this section shall be considered
confidential and corporate proprietary information and shall not be
subject to disclosure under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code).
(c) (1) Manufacturers and principal labelers of legend and
nonlegend drugs shall, no later than 30 days after the end of each
calendar quarter, and in a format determined by the department,
provide to the department the average sales price of each of the
manufacturer's legend and nonlegend drugs.
(2)
(c) The department shall update the Medi-Cal claims
processing system to reflect the selling price of drugs not later
than 62 calendar days after the end of each calendar quarter
30 days after receiving the average manufacturer'
s price .
(3) For manufacturers that fail to provide average selling price
information pursuant to this section, the department may subject
their drugs' availability to prior authorization. The provisions of
this subdivision shall be included in contracts or contract
amendments entered into by the department pursuant to Section
14105.3, 14105.33, 14105.37, or 14105.39, and manufacturers shall
continue rebate payments according to the rebate provisions in the
contracts. Nothing in this paragraph shall affect a Medi-Cal
beneficiary's ability to receive continuity of care for 60 days as
contained in subdivision (i) of Section 14105.33.
(4) All pricing information reported by manufacturers and
principal labelers of legend and nonlegend drugs to the department
pursuant to this section shall be considered confidential and
corporate proprietary information and shall not be subject to
disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code.
(d) In order to maintain beneficiary access to prescription drug
services, no later than 30 days after the department initially
implements selling price as a component of estimated acquisition
cost, pursuant to paragraph (2) of subdivision (b), the department
shall make a one-time adjustment to the dispensing fees paid to
pharmacy providers in accordance with paragraph (1) of subdivision
(b). This change shall only be made if selling price results in a
lower aggregate drug reimbursement. Any increase in dispensing fee
made pursuant to this subdivision shall not exceed the aggregate
savings associated with the implementation of selling price. At least
30-days prior to implementing the dispensing fee increase, the
department shall issue a copy of the department's request for federal
approval pursuant to subdivision (e), to the chairperson in each
house that considers appropriations and the Chairperson of the Joint
Legislative Budget Committee, or whatever lesser time the Chairperson
of the Joint Legislative Budget Committee or his or her designee may
determine.
(e) The director shall implement this section in a manner that is
consistent with federal Medicaid law and regulations. The director
shall seek any necessary federal approvals for the implementation of
this section. This section shall be implemented only to the extent
that federal approval is obtained.
(d)
(f) Notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the department may take the actions specified in this section
by means of a provider bulletin or notice, policy letter, or other
similar instructions, without taking regulatory action.
(g) The department shall issue a Medi-Cal pharmacy reimbursement
fact sheet to the chairperson of the committee in each house of the
Legislature that considers appropriations no later than March 1,
2008. The reimbursement fact sheet shall contain, but not be limited
to, available data and information regarding the change in
reimbursement due to the federal Deficit Reduction Act of 2005
implementation of average manufacturer's price based federal upper
limits, the implementation of selling price, change in the average
wholesale price reported to the department by the primary price
reference source, change in pharmacy dispensing fees, prescription
drug volume trends, and the number of active Medi-Cal pharmacy
providers. The fact sheet shall also contain general information and
definitions regarding drug pricing terminology and a description of
pharmacy claims processing in Medi-Cal.
SEC. 65. Section 14105.47 of the
Welfare and Institutions Code is amended to read:
14105.47. (a) (1) The department shall establish a list of
medical supplies. The list shall specify utilization controls to be
applied to each medical supply product.
(2) The utilization controls specified shall include, but not be
limited to, those provided by regulation of the department.
The department shall repeal Section 59998 of Title 22 of the
California Code of Regulations, which establishes requirements for
medical supplies.
(3) The department shall notify providers at least 30 days prior
to the effective date of a change in utilization controls.
(b) (1) The department shall establish a list of maximum allowable
product costs (MAPCS) for medical supplies, which shall be published
in provider bulletins.
(2) The department shall repeal the provisions of Section 51520.1
of Title 22 of the California Code of Regulations.
(3)
(2) The department shall update existing MAPCS and
establish additional MAPCS in accordance with all of the following:
(A) In establishing the MAPCS, the director shall assure that
eligible persons shall receive medical supply products that are
available to the public generally, without discrimination or
segregation based purely on economic disability.
(B) All related medical supply products within each particular
medical supply type available for retail distribution shall be
reviewed by the department in consultation with representatives from
the California Association of Medical Product Suppliers and the
California Pharmacists Association.
(C) The department shall base MAPCS on the mean of the wholesale
selling price of related medical supply products that are available
in California. For purposes of this section, "wholesale selling price"
means the price, including discounts and rebates, paid by a provider
to a wholesaler, distributor, or manufacturer for a medical supply
product.
(D) In establishing the MAPCS, the department shall consider the
provider related costs of the product that include, but are not
limited to, shipping, handling, storage, and delivery.
(D)
(E) The department shall notify Medi-Cal
providers at least 30 days prior to the effective date of MAPCS.
(c) (1) In establishing the list of medical supplies, the
department may enter into exclusive or nonexclusive contracts on a
bid or negotiated basis with manufacturers, distributors, dispensers,
or suppliers of medical supplies pursuant to Sections 14100.95 and
14105.3.
(2) To ensure that the health needs of Medi-Cal beneficiaries are
met, the department shall, when evaluating a decision to execute a
contract, and when evaluating medical supplies for retention on,
addition to, or deletion from, the list of medical supplies, consider
all of the following criteria:
(A) The safety of the product.
(B) The effectiveness of the product.
(C) The essential need for the product.
(D) The potential for misuse of the product.
(E) The immediate or long-term cost effectiveness of the product.
(3) The deficiency of a product when measured by one of the
criteria specified in paragraph (2) may be sufficient to support a
decision that the product should be deleted from, should not be added
to, or should not be retained on, the list of medical supplies.
However, the superiority of a product under one criterion may be
sufficient to warrant the addition or retention of the product,
notwithstanding a deficiency in another criterion.
(4) In the evaluation of the effectiveness of a product, the
department may require the manufacturer, distributor, dispenser, or
supplier to submit its products to testing by an independent
laboratory. For the purposes of this section, "independent laboratory"
means an analytical laboratory that is not a subsidiary of,
affiliated with, or on retainer for, the manufacturer, distributor,
dispenser, or supplier. The department shall only utilize this
paragraph involving products where there is a demonstrated experience
of a significant variation in performance among the products subject
to this particular contracting process.
(c)
(d) Notwithstanding the provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of the
Government Code, actions under this section shall not be subject to
the Administrative Procedure Act or to the review and approval of the
Office of Administrative Law.
SEC. 66. Section 14105.475 is added to the
Welfare and Institutions Code , to read:
14105.475. (a) In maintaining the lists of medical supplies,
incontinence medical supplies, and enteral nutrition products, the
department may perform a review of, and contract for, various
products in a specific product category.
(b) The department shall notify each manufacturer of products in
the categories selected pursuant to Sections 14100.95, 14105.47,
14105.8, and Sections 14125 to 14125.9, inclusive.
(c) If, within 30 days of notification, a manufacturer does not
enter into negotiations for a contract pursuant to those sections,
the department may delete the products from their respective lists,
or refuse to consider for addition, products of that manufacturer in
the selected product categories.
(d) If, after 270 days from the initial notification, a contract
is not executed for a product currently on the list of medical
supplies, incontinence medical supplies, or enteral nutrition
products, the department may delete the product from its respective
list.
(e) If, within 270 days from the initial notification, a contract
is executed for a product currently on the list of medical supplies,
incontinence medical supplies, or enteral nutrition products, the
department shall retain the product on its respective list.
(f) If, within 270 days from the date of the initial notification,
a contract is executed for a product not currently on the list of
medical supplies, incontinence medical supplies, or enteral nutrition
products, the department shall add the product to its respective
list.
(g) The department shall terminate all negotiations 270 days after
the initial notification.
(h) The department may delete any product from its respective list
at the expiration of the contract term or when the contract between
the department and the manufacturer of that product is terminated.
(i) In the absence of a contract, the department may deem any
product on the list of medical supplies, incontinence medical
supplies, or enteral nutrition products, a nonbenefit of the program
and delete that product from its respective list.
(j) Deletions made to the lists of medical supplies, incontinence
supplies, and enteral nutrition products, shall become effective no
sooner than 30 days after publication of the changes in provider
bulletins.
(k) (1) A manufacturer of a medical supply, incontinence supply,
or enteral nutrition product denied a contract pursuant to this
section, or pursuant to Sections 14100.95, 14105.47, 14105.8, and
Sections 14125 to 14125.9, inclusive, may file an appeal of that
decision with the director within 30 calendar days of the department'
s written decision.
(2) The director shall issue a final decision on the appeal within
60 calendar days of the postmark date of the appeal.
(l) The department shall provide individual notice to Medi-Cal
beneficiaries at least 60 calendar days prior to the effective date
of the deletion or suspension of any product pursuant to this
subdivision. The notice shall include a description of the
beneficiary's right to a fair hearing and shall encourage the
beneficiary to consult a physician to determine if an appropriate
substitute product is available from Medi-Cal.
SEC. 67. Section 14105.8 of the Welfare
and Institutions Code is amended to read:
14105.8. (a) The department may enter into contracts with
manufacturers of enteral formulae nutrition
products that can be used as a therapeutic regimen to prevent
serious disability or death in patients with medically diagnosed
conditions that preclude the full use of regular food, on a bid or
nonbid basis. The department shall maintain a list of those products
for which contracts have been executed. Rebates created by
these contracts For those contracts that generate
rebates, those rebates shall be managed through the department'
s drug rebate accounting system.
(b) For the purpose of this benefit, enteral formulae is defined
as those products that have been classified by the Statistical
Analysis Durable Medical Equipment Regional Carrier (SADMERC) into
one of the product classifications used for reimbursement in the
Medicare program. SADMERC classified enteral formulae, Category V:
modular components do not meet the test as a replacement for regular
food pursuant to subdivision (a) and shall not be a benefit of the
Medi-Cal program, except that the Medi-Cal program may deem a SADMERC
Category V classified enteral formulae as a benefit when the
department determines that the use of the product is neither
investigational nor experimental when used as a therapeutic regimen
to prevent serious disability or death in patients with medically
diagnosed conditions. Infant formulas and enteral formulae covered by
the Woman, Infant and Children (WIC) program for individuals
enrolled in WIC shall not be a benefit of the Medi-Cal program.
(b) (1) To ensure that the health needs of Medi-Cal beneficiaries
are met, the department shall, when evaluating a decision to execute
a contract, and when evaluating enteral nutrition products for
retention on, addition to, or deletion from, the list of enteral
nutrition products, consider all of the following criteria:
(A) The safety of the product.
(B) The effectiveness of the product.
(C) The essential need for the product.
(D) The potential for misuse of the product.
(E) The immediate or long-term cost effectiveness of the product.
(2) The deficiency of a product when measured by one of the
criteria specified in paragraph (1) may be sufficient to support a
decision that the product should be deleted from, should not be added
to, or should not be retained on, the list of medical supplies.
However, the superiority of a product under one criterion may be
sufficient to warrant the addition or retention of the product,
notwithstanding a deficiency in another criterion.
(c) In order that Medi-Cal beneficiaries may have access to a
comprehensive range of enteral formulae
nutrition products pursuant to subdivision (a), the department
shall ensure that there is representation on the list of both general
use and specialized use enteral formulae
nutrition products . The Medi-Cal program may deem an
enteral formulae not classified by SADMERC as a benefit if it meets
the medical need of patients with medically diagnosed conditions that
preclude the full use of regular food. The department
deems all products designed to meet the normal needs of infants, and
all products that are an incomplete source of nutrition, including
modular products, and all products intended for use in weight loss,
are not benefits of the Medi-Cal program. The department
may deem an incomplete product a benefit for patients with diagnoses,
including, but not limited to, malabsorption and inborn errors of
metabolism, when the product either appropriately lacks only an
offending nutrient, or has been shown to not be investigational nor
experimental when used as part of a therapeutic regimen to prevent
serious disability or death, or when both conditions apply.
(d) In order to achieve maximum cost savings, the Legislature
declares that an expedited process for contracts under this section
is necessary. Therefore, contracts entered into on a nonbid basis
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(e) (1) A manufacturer of an enteral formulae denied a contract
pursuant to this section may file an appeal of that decision with the
director within 30 calendar days of the department's written
decision.
(2) The director shall issue a final decision on the appeal within
60 calendar days of the postmark date of the appeal.
(f)
(e) Deletions made to the list of enteral
formulae nutrition products shall become
effective no sooner than 30 days after publication of the changes in
provider bulletins.
(g)
(f) Changes made to the list of enteral
formulae nutrition products under this or any
other section are exempt from the requirements of the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4
(commencing with Section 11370), and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code), and shall not be subject to the review and approval of the
Office of Administrative Law.
(h) In no event shall a beneficiary be denied continued use of an
enteral formulae, pursuant to subdivisions (b) and (j), that has been
deleted from the list of enteral formulae.
(g) The department may provide
beneficiaries continuing care for products deleted from the list of
enteral nutrition products. The department shall assess the need for
continuing care based on the criteria in subdivision (b) and the
potential impact on beneficiary access to appropriate therapy.
To be eligible for continuing care status under this subdivision, a
beneficiary must be taking the enteral formulae
nutrition product when the product is deleted.
Additionally, the department shall have received a claim for the
enteral formulae nutrition product with
a date of service that is within 100 days prior to the date the
product was deleted. A beneficiary shall remain eligible for
continuing care status provided that a claim is submitted for the
enteral formulae nutrition product in
question at least every 100 days and the date of service of the claim
is within 100 days of the date of service of the last claim
submitted for the same enteral formulae
nutrition product.
(i)
(h) The department shall provide individual notice to
Medi-Cal beneficiaries at least 60 calendar days prior to the
effective date of the deletion of any enteral formulae
nutrition product from the list of enteral
formulae nutrition products . The
notice shall include a description of the beneficiary's right to a
fair hearing and shall encourage the beneficiary to consult a
physician to determine if an appropriate substitute enteral
formulae nutrition product is available from
Medi-Cal.
(j)
(i) Enteral formulae nutrition
products authorized pursuant to subdivision (a) shall be
available only through prior authorization. The department may
designate those enteral formulae nutrition
products that are without a contract as not being a benefit of
the Medi-Cal program, except in the case of continuing care as
described in subdivision (h) of this section.
(k)
(j) Contracts executed pursuant to this section shall
be confidential and shall be exempt from disclosure under the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).
(l)
(k) (1) Manufacturers shall calculate and pay interest
on late or unpaid rebates.
(2) Interest pursuant to paragraph (1) shall begin accruing 38
calendar days from the date of mailing of the quarterly invoice,
including supporting utilization data sent to the manufacturer.
Interest shall continue to accrue until the date of mailing of the
manufacturer's payment.
(3) Interest rates and calculations pursuant to paragraph (1)
shall be identical and shall be equal to the drug rebate interest
rates as determined by the federal Centers for Medicare and Medicaid
Services' Medicaid Drug Rebate Program Releases or regulations.
(4) If the date of mailing of a state rebate payment is 69 days of
more from the date of mailing of the invoice, including supporting
utilization data sent to the manufacturer, the interest rate shall be
as specified in paragraph (3), however the interest rate shall be
increased by 10 percentage points.
(m)
(l) The department may adopt emergency regulations to
implement this section in accordance with the rulemaking provisions
of the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code).
SEC. 68. Section 14105.85 of the
Welfare and Institutions Code is amended to read:
14105.85. (a) Effective July 1, 2002,
payment for enteral formulae nutrition
products dispensed by a pharmacy provider shall be based on the
estimated acquisition cost for that product plus a percentage markup
to be determined by the department in consultation with provider
representatives from the California Association of Medical Product
Suppliers and the California Pharmacists Association. The
percentage markup shall consider the costs of handling, storage,
delivery, and billing for those products. Any changes to
the percentage markup may be implemented with 30-day notice to the
provider community via a provider bulletin or other specific
notification to providers.
(b) In determining the estimated acquisition cost of products
pursuant to this section, the department shall consider provider
related costs of the products that include, but are not limited to,
shipping, handling, storage, and delivery.
SEC. 69. Section 14110 of the Welfare
and Institutions Code is amended to read:
14110. No payment for care or services shall be made under
Medi-Cal to a medical or health care facility unless it has been
certified by the department for participation, and it meets one of
the following:
(a) It is licensed by the department.
(b) It is licensed by a comparable agency in another state.
(c) It is exempt from licensure.
(d) It is operated by the Regents of the University of California.
(e) It meets the utilization review plan criteria for
certification or is certified as an institutional provider of
services under Title XVIII of the Federal Social Security Act and
regulations issued thereunder.
Nothing in this section shall preclude payments for care for aged
patients in medical facilities or institutions operated or licensed
by the department, or the State Department of Mental Health, State
Department of Developmental Services, State Department of Social
Services, or Department of Rehabilitation.
The department shall certify facilities licensed pursuant to
subdivision (e) of Section 1250 of the Health and Safety Code for
participation in the program within 30 calendar days of receipt of a
complete application or date of licensure, whichever is greater, if
the facility meets all the requirements for certification. The
department for claims purposes only, shall issue a provider
number to enroll facilities which meet all
certification requirements within 30 calendar days of the date of
certification or 60 calendar days of licensure, whichever is greater.
SEC. 70. Section 14124.70 of the
Welfare and Institutions Code is amended to read:
14124.70. As used in this article:
(a) "Carrier" includes any insurer as defined in Section 23 of the
Insurance Code, including any private company, corporation, mutual
association, trust fund, reciprocal or interinsurance exchange
authorized under the laws of this state to insure persons against
liability or injuries caused to another, and also any insurer
providing benefits under a policy of bodily injury liability
insurance covering liability arising out of the ownership,
maintenance or use of a motor vehicle which provides uninsured
motorist endorsement or coverage, pursuant to Section 11580.2 of the
Insurance Code.
(b) "Beneficiary" means any person who has received benefits or
will be provided benefits under this chapter because of an injury for
which another person or party may be liable. It includes such
beneficiary's guardian, conservator or other personal representative,
his estate or survivors.
(c) "Reasonable value of benefits" means both of the following:
(1) Except in a case in which services were provided to a
beneficiary under a managed care arrangement or contract, "reasonable
value of benefits" means the Medi-Cal rate of payment, for the type
of services rendered, under the schedule of maximum allowances
authorized by Section 14106 or, the Medi-Cal rate of payment, for the
type of services rendered, under regulations adopted pursuant to
this chapter, including but not limited, to Section 14105.
(2) If services were provided to a beneficiary under a managed
care arrangement or contract, "reasonable value of benefits" means
the rate of payment to the provider by the plan for the services
rendered to the beneficiary, except in cases where the plan pays the
provider on a capitated or risk sharing basis, in which case it means
the value of the services rendered to the beneficiary calculated by
the plan as the usual customary and reasonable charge made to the
general public by the provider for similar services.
(d) "Lien" means the director's claim for recovery, from a
beneficiary's tort action or claim, of the reasonable value of
benefits provided on behalf of the beneficiary. The amount paid by
Medi-Cal shall not be considered as evidence of past medical damages
or for the purpose of reducing the third party's liability to the
beneficiary in any third-party action.
SEC. 71. Section 14124.76 of the
Welfare and Institutions Code is amended to read:
14124.76. (a) No settlement,
judgment, or award , or settlement in
any action or claim by a beneficiary to recover damages for injuries,
where the director has an interest, shall be deemed final or
satisfied without first giving the director notice and a
reasonable opportunity to perfect and to satisfy
his the director's lien. Recovery of the
director's lien from an injured beneficiary's action or claim is
limited to that portion of a settlement, judgment, or award that
represents payment for medical expenses, or medical care, provid
ed on behalf of the beneficiary. All reasonable efforts
shall be made to obtain the director's advance agreement to a
determination as to what portion of a settlement, judgment, or award
that represents payment for medical expenses, or medical care,
provided of behalf on the beneficiary. Absent
the director's advance agreement as to what portion of a settlement,
judgment, or award represents payment for medical expenses, or
medical care, provided on behalf of the beneficiary, the matter shall
be submitted to a court for decision. Either the director or the
beneficiary may seek resolution of the dispute by filing a motion,
which shall be subject to regular law and motion procedures. In
determining what portion of a settlement, judgment, or award
represents payment for medical expenses, or medical care, provided on
behalf of the beneficiary and as to what the appropriate
reimbursement amount to the director should be, the court shall be
guided by the United States Supreme Court decision in Arkansas
Department of Health and Human Services
v. Ahlborn (2006) 547 U.S. 268 and other
relevant statutory and case law.
(b) If the beneficiary has filed a third-party action or claim,
the court where the action or claim was filed shall have jurisdiction
over a dispute between the director and the beneficiary regarding
the amount of a lien asserted pursuant to this section that is based
upon an allocation of damages contained in a settlement or compromise
of the third-party action or claim. If no third-party action or
claim has been filed, any superior court in California where venue
would have been proper had a claim or action been filed shall have
jurisdiction over the motion. The motion may be filed as a special
motion and treated as an ordinary law and motion proceeding and
subject to regular motion fees. The reimbursement determination
motion shall be treated as a special proceeding of a civil nature
pursuant to Part 3 (commencing with Section 1063) of the Code of
Civil Procedure. When no action is pending, the person making the
motion shall be required to pay a first appearance fee. When an
action is pending, the person making the motion shall pay a regular
law and motion fee. Notwithstanding Section 1064 of the Code of Civil
Procedure, either the beneficiary or the director may appeal the
final findings, decision, or order.
(c) The court shall issue its findings, decision, or order, which
shall be considered the final determination of the parties' rights
and obligations with respect to the director's lien, unless the
settlement is contingent on an acceptable allocation of the
settlement proceeds, in which case, the court's findings, decision,
or order shall be considered a tentative determination. If the
beneficiary does not serve notice of a rejection of the tentative
determination, which shall be based solely upon a rejection of the
contingent settlement, within 30 days of the notice of entry of the
court's tentative determination, subject to further consideration by
the court pursuant to subdivision (d), the tentative determination
shall become final. Notwithstanding Section 1064 of the Code of Civil
Procedure, either the beneficiary or the director may appeal the
final findings, decision, or order.
(d) If the beneficiary does not accept the tentative
determination, which shall be based solely upon a rejection of the
contingent settlement, any party may subsequently seek further
consideration of the court's findings upon application to modify the
prior findings, decision, or order based on new or different facts or
circumstances. The application shall include an affidavit showing
what application was made before, when, and to what judge, what order
or decision was made, and what new or different facts or
circumstances, including a different settlement, are claimed to
exist. Upon further consideration, the court may modify the
allocation in the interest of fairness and for good cause.
SEC. 72. Section 14124.78 of the
Welfare and Institutions Code is amended to read:
14124.78. Except as otherwise provided in this article,
notwithstanding Notwithstanding any other
provision of law, the entire amount of any settlement of the
injured beneficiary's action or claim, with or without suit, is
subject to the director's claim for reimbursement of the reasonable
value of benefits provided and any lien filed pursuant thereto, but
in no event shall the director's claim exceed
one-half of the beneficiary's recovery director rec
over more than the beneficiary rec
overs after deducting for , f
rom the settlement judgment, or award, attorney'
s fees , and litigation costs
, and medical expenses relating to the injury paid for by
the beneficiary. If the director's recovery is determined under
this section, the reduction s in subdivision
(d) of Section 14124.72 shall not apply .
SEC. 73. Section 14124.785 is added to the
Welfare and Institutions Code , to read:
14124.785. The director's recovery is limited to the amount
derived from applying Section 14124.72, 14124.76, or 14124.78,
whichever is less.
SEC. 74. Section 14124.792 is added to the
Welfare and Institutions Code , to read:
14124.792. If any provision of this article, or the application
of any provision of this article to any person, firm, corporation, or
other entity or to any circumstance or situation, shall be held
invalid, the remaining provisions of this article shall not be
affected thereby, and shall be given effect.
SEC. 75. Section 14124.89 of the
Welfare and Institutions Code is amended to read:
14124.89. (a) Every health care service plan,
self-insured employee welfare benefit plan, disability insurer, and
nonprofit hospital service plan health insurer,
self-insured plan, group health plan, as defined in Section 607(1) of
the Employee Retirement Income Security Act of 1974, service benefit
plan, managed care organization, including health care service plans
as defined in subdivision (f) of Section 1345 of the Health and
Safety Code, licensed pursuant to the Knox-Keene Health Care Service
Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of
Division 2 of the Health and Safety Code), pharmacy
benefit manager, or other party that is, by statute,
contract, or agreement, legally responsible for payment of a claim
for a health care item or service shall, upon request of the
department for any records, or any information contained in records
pertaining to an individual or group health insurance policy or plan
issued by such insurer or plan against, or pertaining to the medical
or dental benefits paid by or claims made against such insurer or
plans under a policy or plan, make the requested records or
information available upon a certification by the department that the
individual is an applicant for or recipient of services under this
chapter or is a person who is legally responsible for such an
applicant or recipient.
(b) The department shall enter into a cooperative agreement
setting forth mutually agreeable procedures for requesting and
furnishing appropriate information, not inconsistent with any law
pertaining to the confidentiality and privacy of medical records,
which procedure shall include such financial arrangements as may be
necessary to reimburse insurers or plans for necessary costs incurred
in furnishing requested information, and the time and manner such
procedures are to become effective. Reimbursement to insurers or
plans complying with the provisions of this section shall be at the
same rate of reimbursement used to reimburse the Department of Motor
Vehicles for providing information to insurance carriers.
(c) The information required to be made available pursuant to this
section shall be limited to information necessary to determine
whether health benefits have been or should have been claimed and
paid pursuant to a health insurance policy or plan with respect to
items of medical care and services received by a particular
individual for which Medi-Cal coverage would otherwise be available.
(d) Not later than the date upon which the procedures agreed to
pursuant to subdivision (b) become effective, the director shall
establish guidelines to assure that information relating to an
individual certified to be an applicant for or recipient of medical
assistance, furnished to any insurer or plan pursuant to this
section, is used only for the purpose of identifying the records or
information requested in such manner so as not to violate the
confidentiality of an applicant or recipient.
(e) The department shall implement the provisions of this section
by January 1, 1983.
SEC. 76. Section 14124.90 of the
Welfare and Institutions Code is amended to read:
14124.90. It is the intent of the Legislature to comply with
federal law requiring that when a beneficiary has third-party health
coverage or insurance, the State Department of Health Services shall
be the payer of last resort. In order to assess overlapping or
duplicate health coverage, every health care service plan,
self-insured employee welfare benefit plan, including those regulated
pursuant to the Employee Retirement Income Security Act of 1974
(Public Law 93-406), self-funded employer plan, disability insurer,
nonprofit hospital service plan, labor union trust fund, employer,
and any other similar plan, insurer, or entity health
insurer, self-insured plan, group health plan, as defined in Section
607(1) of the Employee Retirement Income Security Act of 1974,
service benefit plan, managed care organization, including health
care service plans as defined in subdivision (f) of Section 1345 of
the Health and Safety Code, licensed pursuant to the Knox-Keene
Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with
Section 1340) of Division 2 of the Health and Safety Code), pharmacy
benefit manager, or other party that is, by statute, contract, or
agreement, legally responsible for payment of a claim for a health
care item or service shall maintain a centralized file of the
subscribers', policyholders', or enrollees' names, mailing addresses,
and social security numbers or date of birth, and where available,
for all other covered persons, the names and social security numbers
or date of birth. This information shall be made available to the
State Department of Health Services upon reasonable request.
Notwithstanding Section 20134 of the Government Code, the Board of
Administration of the California Public Employees' Retirement System
and affiliated systems or contract agencies shall permit data matches
with the state department to identify Medi-Cal beneficiaries with
third-party health coverage or insurance. A recipient's Medi-Cal
identification card shall, where information is available, contain
information advising providers of health care services of any
third-party health coverage for the recipient. Providers shall seek
reimbursement from available third-party health coverage before
billing the Medi-Cal program.
SEC. 77. Section 14124.94 of the
Welfare and Institutions Code is amended to read:
14124.94. (a) When the rights of a Medi-Cal beneficiary to health
care benefits from an insurer have been assigned to the department,
an insurer shall not impose any requirement on the department that is
different from any requirement applicable to an agent or any
assignee of the covered beneficiary.
(b) The department, in the administration of the Medi-Cal program,
may garnish the wages, salary, or other employment income of, and
withhold amounts from state tax refunds from, any person to whom both
of the following apply:
(1) The person is required by a court or administrative order to
provide coverage of the costs of health services to a child who is
eligible for medical assistance under the Medi-Cal program.
(2) The person has received payment from a third party for the
costs of the health services for the child, but he or she has not
used the payments to reimburse, as appropriate, either the other
parent or the person having custody of the child, or the provider of
the health services, to the extent necessary to reimburse the
department for expenditures for those costs under the Medi-Cal
program. All claims for current or past due child support shall take
priority over claims made by the department for the costs of Medi-Cal
services.
(c) For purposes of this section, "insurer" includes every
health care service plan, self-insured welfare benefit plan,
including those regulated pursuant to the Employee Retirement Income
Security Act of 1974 (29 U.S.C. Sec. 1001, et. seq.), self-funded
employer plan, disability insurer, nonprofit hospital service plan,
labor union trust fund, employer, and any other similar plan,
insurer, or entity offering a health coverage plan
health insurer, self-insured plan, group health plan, as defined in
Section 607(1) of the Employee Retirement Income Security
Act of 1974, service benefit plan, managed care organization,
including health care service plans as defined in subdivision (f) of
Section 1345 of the Health and Safety Code, licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code), pharmacy benefit manager, or other party that is, by statute,
contract, or agreement, legally responsible for payment of a claim
for a health care item or service .
SEC. 78. Section 14125 of the Welfare
and Institutions Code is amended to read:
14125. (a) The purpose of this article is
to establish provider reimbursement rates for incontinence medical
supplies covered by the Medi-Cal program. Reimbursement for
incontinence medical supplies shall consist of the weighted
average of the negotiated contract prices within each
product category, plus a markup fee equal to 38 percent of the
resulting adjusted contract price.
(b) (1) In establishing the list of incontinence medical supplies,
the department may enter into exclusive or nonexclusive contracts on
a bid or negotiated basis with manufacturers, distributors,
dispensers, or suppliers of incontinence medical supplies.
(2) To ensure that the health needs of Medi-Cal beneficiaries are
met, the department shall, when evaluating a decision to execute a
contract, and when evaluating incontinence medical supplies for
retention on, addition to, or deletion from, the list of incontinence
medical supplies, consider all of the following criteria:
(A) The safety of the product.
(B) The effectiveness of the product.
(C) The essential need for the product.
(D) The potential for misuse of the product.
(E) The immediate or long-term cost-effectiveness of the product.
(3) The deficiency of a product when measured by one of the
criteria specified in paragraph (2) may be sufficient to support a
decision that the product should be deleted from, should not be added
to, or should not be retained on, the list of medical supplies.
However, the superiority of a product under one criterion may be
sufficient to warrant the addition or retention of the product,
notwithstanding a deficiency in another criterion.
(4) In the evaluation of the effectiveness of a product, the
department may require the manufacturer, distributor, dispenser, or
supplier to submit their products to testing by an independent
laboratory. For the purposes of this section, "independent laboratory"
means an analytical laboratory that is not a subsidiary of,
affiliated with, or on retainer for, the manufacturer, distributor,
dispenser, or supplier.
(c) The department may use Healthcare Common Procedure Code System
codes or Universal Product Number codes for the processing and
payment of incontinence medical supplies.
SEC. 79. Section 14125.2 of the Welfare
and Institutions Code is amended to read:
14125.2. (a) (1) To qualify for Medi-Cal coverage a product shall
be in general retail distribution, sold to the general public, and
comply with any standards for products established by law or
regulation. No product that is manufactured, distributed, or
otherwise promoted for the exclusive use of beneficiaries of the
Medi-Cal program shall be a Medi-Cal benefit.
(2) For purposes of this section, "product" means any product
which is in general retail distribution.
(3) For purposes of this subdivision, "general retail distribution"
means either of the following:
(A) The product is included in a listing of approved products for
purchase either by the federal or state government.
(B) The product is on display and available for purchase by
customers for private payment at retail outlets
licensed pharmacies or licensed medical supply dealers within
California which are physical locations open to the
general public.
(b) In order to qualify as a Medi-Cal provider of incontinence
medical supplies, a dealer shall have an established place of
business that is readily identifiable as a medical supply business,
be open to the general public at regularly established business
hours, have incontinence supplies in stock on the premises or in a
warehouse under the provider's direct control, and meet all local
laws and ordinances regarding business licensing and operations. The
department shall establish additional rules and regulations for
participation in the Medi-Cal program as it deems necessary to ensure
adequate safeguards to the integrity of the Medi-Cal program.
SEC. 80. Section 14125.8 of the Welfare
and Institutions Code is amended to read:
14125.8. (a) In order to more fully identify the owner or owners
of companies or corporations that apply to be or currently are
providers of incontinence medical supplies, within 30 days of the
receipt of a request from the department, or a request to the
department from the Department of Justice, the applicant or provider
shall provide, as part of the application process or as a condition
of continued participation in the Medi-Cal program, the following:
(1) The name of the corporation, the official titles of the
applicants, and a list of all the corporate officers.
(2) The California driver's license or California identification
card number of the applicants, coowners, corporate officers, and
financially interested parties.
(3) The applicant's business permit control number, issued by the
State Board of Equalization, for the business location where services
are rendered to the public.
(4) A statement of all current sources of capital, identity of all
investors, disclosure of all manufacturers, suppliers, and providers
currently doing business with the applicant, and disclosure of all
entities to whom the applicant has extended a line of credit.
(5) A statement certifying that all information supplied pursuant
to this section is accurate.
(b) A Medi-Cal provider of incontinence supplies shall not submit
a claim for goods or services to the department prior to the date the
goods or services are delivered to the Medi-Cal beneficiary. The
date of delivery to a beneficiary shall be the earlier of the date
the beneficiary actually received the goods or services, or the date
the goods were posted or
otherwise dispatched from the provider's premises and control. A
claim submitted to the department prior to the date of delivery shall
not be paid. Violation of this subdivision shall be grounds for
expulsion from the Medi-Cal program.
(c) The department may implement a 180-day moratorium on the
issuance of new provider numbers enrollment
of new providers or new business addresses for incontinence
medical supply dealers when the department determines this action is
necessary to safeguard public funds or to maintain the fiscal
integrity of the program.
SEC. 81. Section 14126.027 of the
Welfare and Institutions Code is amended to read:
14126.027. (a) (1) The Director of Health Services, or his or her
designee, shall administer this article.
(2) The regulations and other similar instructions adopted
pursuant to this article shall be developed in consultation with
representatives of the long-term care industry, organized labor,
seniors, and consumers.
(b) (1) The director may adopt regulations as are necessary to
implement this article. The adoption, amendment, repeal, or
readoption of a regulation authorized by this section is deemed to be
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, for purposes of Sections 11346.1 and
11349.6 of the Government Code, and the department is hereby
exempted from the requirement that it describe specific facts showing
the need for immediate action.
(2) The regulations adopted pursuant to this section may include,
but need not be limited to, any regulations necessary for any of the
following purposes:
(A) The administration of this article, including the specific
analytical process for the proper determination of long-term care
rates.
(B) The development of any forms necessary to obtain required cost
data and other information from facilities subject to the
ratesetting methodology.
(C) To provide details, definitions, formulas, and other
requirements.
(c) As an alternative to the adoption of regulations pursuant to
subdivision (b), and notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the director may implement this article, in whole or in part,
by means of a provider bulletin or other similar instructions,
without taking regulatory action, provided that no such bulletin or
other similar instructions shall remain in effect after July 31,
2007 2008 . It is the intent that
regulations adopted pursuant to subdivision (b) shall be in place on
or before July 31, 2007 2008 .
SEC. 82. Section 14126.033 of the
Welfare and Institutions Code is amended to read:
14126.033. (a) This article, including Section 14126.031, shall
be funded as follows:
(1) General Fund moneys appropriated for purposes of this article
pursuant to Section 6 of the act adding this section shall be used
for increasing rates, except as provided in Section 14126.031, for
freestanding skilled nursing facilities, and shall be consistent with
the approved methodology required to be submitted to the Centers for
Medicare and Medicaid Services pursuant to Article 7.6 (commencing
with Section 1324.20) of Chapter 2 of Division 2 of the Health and
Safety Code.
(2) (A) Notwithstanding Section 14126.023, for the 2005-06 rate
year, the maximum annual increase in the weighted average Medi-Cal
rate required for purposes of this article shall not exceed 8 percent
of the weighted average Medi-Cal reimbursement rate for the 2004-05
rate year as adjusted for the change in the cost to the facility to
comply with the nursing facility quality assurance fee for the
2005-06 rate year, as required under subdivision (b) of Section
1324.21 of the Health and Safety Code, plus the total projected
Medi-Cal cost to the facility of complying with new state or federal
mandates.
(B) Beginning with the 2006-07 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate required
for purposes of this article shall not exceed 5 percent of the
weighted average Medi-Cal reimbursement rate for the prior fiscal
year, as adjusted for the projected cost of complying with new state
or federal mandates.
(C) Beginning with the 2007-08 rate year and continuing
through the 2008-09 rate year , the maximum annual increase in
the weighted average Medi-Cal reimbursement rate required for
purposes of this article shall not exceed 5.5 percent of the weighted
average Medi-Cal reimbursement rate for the prior fiscal year, as
adjusted for the projected cost of complying with new state or
federal mandates.
(D) To the extent that new rates are projected to exceed the
adjusted limits calculated pursuant to subparagraph (A) or (B), the
department shall adjust the increase to each skilled nursing facility'
s projected rate for the applicable rate year by an equal percentage.
(b) The rate methodology shall cease to be implemented on and
after July 31, 2008 2009 .
(c) (1) It is the intent of the Legislature that the
implementation of this article result in individual access to
appropriate long-term care services, quality resident care, decent
wages and benefits for nursing home workers, a stable workforce,
provider compliance with all applicable state and federal
requirements, and administrative efficiency.
(2) Not later than December 1, 2006, the Bureau of State Audits
shall conduct an accountability evaluation of the department's
progress toward implementing a facility-specific reimbursement
system, including a review of data to ensure that the new system is
appropriately reimbursing facilities within specified cost categories
and a review of the fiscal impact of the new system on the General
Fund.
(3) Not later than January 1, 2007, to the extent information is
available for the three years immediately preceding the
implementation of this article, the department shall provide baseline
information in a report to the Legislature on all of the following:
(A) The number and percent of freestanding skilled nursing
facilities that complied with minimum staffing requirements.
(B) The staffing levels prior to the implementation of this
article.
(C) The staffing retention rates prior to the implementation of
this article.
(D) The numbers and percentage of freestanding skilled nursing
facilities with findings of immediate jeopardy, substandard quality
of care, or actual harm, as determined by the certification survey of
each freestanding skilled nursing facility conducted prior to the
implementation of this article.
(E) The number of freestanding skilled nursing facilities that
received state citations and the number and class of citations issued
during calendar year 2004.
(F) The average wage and benefits for employees prior to the
implementation of this article.
(4) Not later than January 1, 2008 2009
, the department shall provide a report to the Legislature that
does both of the following:
(A) Compares the information required in paragraph (2) to that
same information two years after the implementation of this article.
(B) Reports on the extent to which residents who had expressed a
preference to return to the community, as provided in Section 1418.81
of the Health and Safety Code, were able to return to the community.
(5) The department may contract for the reports required under
this subdivision.
(d) This section shall become inoperative on July 31,
2008 2009 , and as of January 1, 2009
2010 , is repealed, unless a later enacted
statute, that is enacted before January 1, 2009
2010 , deletes or extends the dates on which it becomes
inoperative and is repealed.
SEC. 83. Section 14132.100 of the
Welfare and Institutions Code is amended to read:
14132.100. (a) The federally qualified health center services
described in Section 1396d(a)(2)(C) of Title 42 of the United States
Code are covered benefits.
(b) The rural health clinic services described in Section 1396d
(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c) Federally qualified health center services and rural health
clinic services shall be reimbursed on a per-visit basis in accord
with the definition of "visit" set forth in subdivision (g).
(d) Effective October 1, 2004, and on each October 1, thereafter,
until no longer required by federal law, federally qualified health
center (FQHC) and rural health clinic (RHC) per-visit rates shall be
increased by the Medicare Economic Index applicable to primary care
services in the manner provided for in Section 1396a(bb)(3)(A) of
Title 42 of the United States Code. Prior to January 1, 2004, FQHC
and RHC per-visit rates shall be adjusted by the Medicare Economic
Index in accord with the methodology set forth in the state plan in
effect on October 1, 2001.
(e) (1) An FQHC or RHC may apply for an adjustment to its
per-visit rate based on a change in the scope of services provided by
the FQHC or RHC. Rate changes based on a change in the scope of
services provided by an FQHC or RHC shall be evaluated in accordance
with Medicare reasonable cost principles, as set forth in Part 413
(commencing with Section 413.1) of Title 42 of the Code of Federal
Regulations, or its successor.
(2) Subject to the conditions set forth in subparagraphs (A) to
(D), inclusive, of paragraph (3), a change in scope of service means
any of the following:
(A) The addition of a new FQHC or RHC service that is not
incorporated in the baseline prospective payment system (PPS) rate,
or a deletion of an FQHC or RHC service that is incorporated in the
baseline PPS rate.
(B) A change in service due to amended regulatory requirements or
rules.
(C) A change in service resulting from relocating or remodeling an
FQHC or RHC.
(D) A change in types of services due to a change in applicable
technology and medical practice utilized by the center or clinic.
(E) An increase in service intensity attributable to changes in
the types of patients served, including, but not limited to,
populations with HIV or AIDS, or other chronic diseases, or homeless,
elderly, migrant, or other special populations.
(F) Any changes in any of the services described in subdivision
(a) or (b), or in the provider mix of an FQHC or RHC or one of its
sites.
(G) Changes in operating costs attributable to capital
expenditures associated with a modification of the scope of any of
the services described in subdivisions (a) or (b), including new or
expanded service facilities, regulatory compliance, or changes in
technology or medical practices at the center or clinic.
(H) Indirect medical education adjustments and a direct graduate
medical education payment that reflects the costs of providing
teaching services to interns and residents.
(I) Any changes in the scope of a project approved by the federal
Health Resources and Service Administration (HRSA).
(3) No change in costs shall, in and of itself, be considered a
scope-of-service change unless all of the following apply:
(A) The increase or decrease in cost is attributable to an
increase or decrease in the scope of services defined in subdivisions
(a) and (b), as applicable.
(B) The cost is allowable under Medicare reasonable cost
principles set forth in Part 413 (commencing with Section 413) of
Subchapter B of Chapter 4 of Title 42 of the Code of Federal
Regulations, or its successor.
(C) The change in the scope of services is a change in the type,
intensity, duration, or amount of services, or any combination
thereof.
(D) The net change in the FQHC's or RHC's rate equals or exceeds
1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs
that filed consolidated cost reports for multiple sites to establish
the initial prospective payment reimbursement rate, the 1.75 percent
threshold shall be applied to the average per-visit rate of all sites
for the purposes of calculating the cost associated with a
scope-of-service change. "Net change" means the per-visit rate change
attributable to the cumulative effect of all increases and decreases
for a particular fiscal year.
(4) An FQHC or RHC may submit requests for scope-of-service
changes once per fiscal year, only within 90 days following the
beginning of the FQHC's or RHC's fiscal year. Any approved increase
or decrease in the provider's rate shall be retroactive to the
beginning of the FQHC's or RHC's fiscal year in which the request is
submitted.
(5) An FQHC or RHC shall submit a scope-of-service rate change
request within 90 days of the beginning of any FQHC or RHC fiscal
year occurring after the effective date of this section, if, during
the FQHC's or RHC's prior fiscal year, the FQHC or RHC experienced a
decrease in the scope of services provided that the FQHC or RHC
either knew or should have known would have resulted in a
significantly lower per-visit rate. If an FQHC or RHC discontinues
providing onsite pharmacy or dental services, it shall submit a
scope-of-service rate change request within 90 days of the beginning
of the following fiscal year. The rate change shall be effective as
provided for in paragraph (4). As used in this paragraph,
"significantly lower" means an average per-visit rate decrease in
excess of 2.5 percent.
(6) Notwithstanding paragraph (4), if the approved
scope-of-service change or changes were initially implemented on or
after the first day of an FQHC's or RHC's fiscal year ending in
calendar year 2001, but before the adoption and issuance of written
instructions for applying for a scope-of-service change, the adjusted
reimbursement rate for that scope-of-service change shall be made
retroactive to the date the scope-of-service change was initially
implemented. Scope-of-service changes under this paragraph shall be
required to be submitted within the later of 150 days after the
adoption and issuance of the written instructions by the department,
or 150 days after the end of the FQHC's or RHC's fiscal year ending
in 2003.
(7) All references in this subdivision to "fiscal year" shall be
construed to be references to the fiscal year of the individual FQHC
or RHC, as the case may be.
(f) (1) An FQHC or RHC may request a supplemental payment if
extraordinary circumstances beyond the control of the FQHC or RHC
occur after December 31, 2001, and PPS payments are insufficient due
to these extraordinary circumstances. Supplemental payments arising
from extraordinary circumstances under this subdivision shall be
solely and exclusively within the discretion of the department and
shall not be subject to subdivision (l). These supplemental payments
shall be determined separately from the scope-of-service adjustments
described in subdivision (e). Extraordinary circumstances include,
but are not limited to, acts of nature, changes in applicable
requirements in the Health and Safety Code, changes in applicable
licensure requirements, and changes in applicable rules or
regulations. Mere inflation of costs alone, absent extraordinary
circumstances, shall not be grounds for supplemental payment. If an
FQHC's or RHC's PPS rate is sufficient to cover its overall costs,
including those associated with the extraordinary circumstances, then
a supplemental payment is not warranted.
(2) The department shall accept requests for supplemental payment
at any time throughout the prospective payment rate year.
(3) Requests for supplemental payments shall be submitted in
writing to the department and shall set forth the reasons for the
request. Each request shall be accompanied by sufficient
documentation to enable the department to act upon the request.
Documentation shall include the data necessary to demonstrate that
the circumstances for which supplemental payment is requested meet
the requirements set forth in this section. Documentation shall
include all of the following:
(A) A presentation of data to demonstrate reasons for the FQHC's
or RHC's request for a supplemental payment.
(B) Documentation showing the cost implications. The cost impact
shall be material and significant (two hundred thousand dollars
($200,000) or 1 percent of a facility's total costs, whichever is
less).
(4) A request shall be submitted for each affected year.
(5) Amounts granted for supplemental payment requests shall be
paid as lump-sum amounts for those years and not as revised PPS
rates, and shall be repaid by the FQHC or RHC to the extent that it
is not expended for the specified purposes.
(6) The department shall notify the provider of the department's
discretionary decision in writing.
(g) An FQHC or RHC "visit" means a face-to-face encounter between
an FQHC or RHC patient and a physician, physician assistant, nurse
practitioner, certified nurse midwife, clinical psychologist,
licensed clinical social worker, or a visiting nurse. For purposes of
this section, "physician" shall be interpreted in a manner
consistent with the Centers for Medicare and Medicaid Services'
Medicare Rural Health Clinic and Federally Qualified Health Center
Manual (Publication 27), or its successor, only to the extent that it
defines the professionals whose services are reimbursable on a
per-visit basis and not as to the types of services that these
professionals may render during these visits and shall include a
medical doctor, osteopath, podiatrist, dentist, optometrist, and
chiropractor. A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a comprehensive perinatal services
practitioner, as defined in Section 51179.1 of Title 22 of the
California Code of Regulations, providing comprehensive perinatal
services, a four-hour day of attendance at an adult day health care
center, and any other provider identified in the state plan's
definition of an FQHC or RHC visit.
(h) If FQHC or RHC services are partially reimbursed by a
third-party payer, such as a managed care entity (as defined in
Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the
Medicare program, or the Child Health and Disability Prevention
(CHDP) program, the department shall reimburse an FQHC or RHC for the
difference between its per-visit PPS rate and receipts from other
plans or programs on a contract-by-contract basis and not in the
aggregate, and may not include managed care financial incentive
payments that are required by federal law to be excluded from the
calculation.
(i) (1) An entity that first qualifies as an FQHC or RHC in the
year 2001 or later, a newly licensed facility at a new location added
to an existing FQHC or RHC, and any entity that is an existing FQHC
or RHC that is relocated to a new site shall each have its
reimbursement rate established in accordance with one of the
following methods, as selected by the FQHC or RHC:
(A) The rate may be calculated on a per-visit basis in an amount
that is equal to the average of the per-visit rates of three
comparable FQHCs or RHCs located in the same or adjacent area with a
similar caseload.
(B) In the absence of three comparable FQHCs or RHCs with a
similar caseload, the rate may be calculated on a per-visit basis in
an amount that is equal to the average of the per-visit rates of
three comparable FQHCs or RHCs located in the same or an adjacent
service area, or in a reasonably similar geographic area with respect
to relevant social, health care, and economic characteristics.
(C) At a new entity's one-time election, the department shall
establish a reimbursement rate, calculated on a per-visit basis, that
is equal to 100 percent of the projected allowable costs to the FQHC
or RHC of furnishing FQHC or RHC services during the first 12 months
of operation as an FQHC or RHC. After the first 12-month period, the
projected per-visit rate shall be increased by the Medicare Economic
Index then in effect. The projected allowable costs for the first 12
months shall be cost settled and the prospective payment
reimbursement rate shall be adjusted based on actual and allowable
cost per visit.
(D) The department may adopt any further and additional methods of
setting reimbursement rates for newly qualified FQHCs or RHCs as are
consistent with Section 1396a(bb)(4) of Title 42 of the United
States Code.
(2) In order for an FQHC or RHC to establish the comparability of
its caseload for purposes of subparagraph (A) or (B) of paragraph
(1), the department shall require that the FQHC or RHC submit its
most recent annual utilization report as submitted to the Office of
Statewide Health Planning and Development, unless the FQHC or RHC was
not required to file an annual utilization report. FQHCs or RHCs
that have experienced changes in their services or caseload
subsequent to the filing of the annual utilization report may submit
to the department a completed report in the format applicable to the
prior calendar year. FQHCs or RHCs that have not previously submitted
an annual utilization report shall submit to the department a
completed report in the format applicable to the prior calendar year.
The FQHC or RHC shall not be required to submit the annual
utilization report for the comparable FQHCs or RHCs to the
department, but shall be required to identify the comparable FQHCs or
RHCs.
(3) The rate for any newly qualified entity set forth under this
subdivision shall be effective retroactively to the later of the date
that the entity was first qualified by the applicable federal agency
as an FQHC or RHC, the date a new facility at a new location was
added to an existing FQHC or RHC, or the date on which an existing
FQHC or RHC was relocated to a new site. The FQHC or RHC shall be
permitted to continue billing for Medi-Cal covered benefits on a
fee-for-service basis under its existing provider number
until it is informed of its new
enrollment as an FQHC or RHC provider number
, and the department shall reconcile the difference between the
fee-for-service payments and the FQHC's or RHC's prospective payment
rate at that time.
(j) Visits occurring at an intermittent clinic site, as defined in
subdivision (h) of Section 1206 of the Health and Safety Code, of an
existing FQHC or RHC, or in a mobile unit as defined by paragraph
(2) of subdivision (b) of Section 1765.105 of the Health and Safety
Code, shall be billed by and reimbursed at the same rate as the FQHC
or RHC establishing the intermittent clinic site or the mobile unit,
subject to the right of the FQHC or RHC to request a scope-of-service
adjustment to the rate.
(k) An FQHC or RHC may elect to have pharmacy or dental services
reimbursed on a fee-for-service basis, utilizing the current fee
schedules established for those services. These costs shall be
adjusted out of the FQHC's or RHC's clinic base rate as
scope-of-service changes. An FQHC or RHC that reverses its election
under this subdivision shall revert to its prior rate, subject to an
increase to account for all MEI increases occurring during the
intervening time period, and subject to any increase or decrease
associated with applicable scope-of-services adjustments as provided
in subdivision (e).
(l) FQHCs and RHCs may appeal a grievance or complaint concerning
ratesetting, scope-of-service changes, and settlement of cost report
audits, in the manner prescribed by Section 14171. The rights and
remedies provided under this subdivision are cumulative to the rights
and remedies available under all other provisions of law of this
state.
(m) The department shall, by no later than March 30, 2004,
promptly seek all necessary federal approvals in order to implement
this section, including any amendments to the state plan. To the
extent that any element or requirement of this section is not
approved, the department shall submit a request to the federal
Centers for Medicare and Medicaid Services for any waivers that would
be necessary to implement this section.
(n) The department shall implement this section only to the extent
that federal financial participation is obtained.
SEC. 84. Section 14134.5 of the Welfare
and Institutions Code is amended to read:
14134.5. All of the following provisions apply to the provision
of services pursuant to subdivision (v) (u)
of Section 14132:
(a) "Comprehensive perinatal provider" means any general practice
physician, family practice physician, obstetrician-gynecologist,
pediatrician, certified nurse midwife, a group, any of whose members
is one of the above-named physicians, or any preferred provider
organization or clinic holding a valid and current Medi-Cal
provider number enrolled in the Medi-Cal program
and certified pursuant to the standards of this section.
(b) "Perinatal" means the period from the establishment of
pregnancy to one month following delivery.
(c) "Comprehensive perinatal services" shall include, but not be
limited to, the provision of the combination of services developed
through the Department of Health Services Obstetrical Access Pilot
Program.
(d) The comprehensive perinatal provider shall schedule visits
with appropriate providers and shall track the patient to verify
whether services have been received. As part of the reimbursement for
coordinating these services, the comprehensive perinatal provider
shall ensure the provision of the following services either through
the provider's own service or through subcontracts or referrals to
other providers:
(A)
(1) A psychosocial assessment and when appropriate
referrals to counseling.
(B)
(2) Nutrition assessments and when appropriate referral
to counseling on food supplement programs, vitamins and
breast-feeding.
(C)
(3) Health, childbirth, and parenting education.
(e) Except where existing law prohibits the employment of
physicians, a health care provider may employ or contract with all of
the following medical and other practitioners for the purpose of
providing the comprehensive services delineated in this section:
(1) Physicians, including a general practitioner, a family
practice physician, a pediatrician, or an obstetrician-gynecologist.
(2) Certified nurse midwives.
(3) Nurses.
(4) Nurse practitioners.
(5) Physician assistants.
(6) Social workers.
(7) Health and childbirth educators.
(8) Registered dietitians.
The department shall adopt regulations which define the
qualifications of any of these practitioners who are not currently
included under the regulations adopted pursuant to this chapter.
Providers shall, as feasible, utilize staffing patterns which reflect
the linguistic and cultural features of the populations they serve.
(f) The
California Medical Assistance Program and the Maternal and Child
Health Branch of the State Department of Health Services in
consultation with the California Conference of Local Health Officers
shall establish standards for health care providers and for services
rendered pursuant to this subdivision.
(g) The department shall assist local health departments to
establish a community perinatal program whose responsibilities may
include certifying and monitoring providers of comprehensive
perinatal services. The department shall provide the local health
departments with technical assistance for the purpose of implementing
the community perinatal program. The department shall, to the extent
feasible, and to the extent funding for administrative costs is
available, utilize local health departments in the administration of
the perinatal program. If these funds are not available, the
department shall use alternative means to implement the community
perinatal program.
(h) It is the intent of the Legislature that the department shall
establish a method for reimbursement of comprehensive perinatal
providers which shall include a fee for coordinating services and
which shall be sufficient to cover reasonable costs for the provision
of comprehensive perinatal services. The department may utilize fees
for service, capitated fees, or global fees to reimburse providers.
However, if capitated or global fees are established, the department
shall set minimum standards for the provision of services including,
but not limited to, the number of prenatal visits and the amount and
type of psychosocial, nutritional, and educational services patients
shall receive.
Notwithstanding the type of reimbursement system, the
comprehensive perinatal provider shall not be financially at risk for
the provision of inpatient services. The provision of inpatient
services which are not related to perinatal care shall not be subject
to the provisions of this section. Inpatient services related to
services pursuant to this subdivision shall be reimbursed, in
accordance with Section 14081, 14086, 14087, or 14087.2, whichever is
applicable.
(i) The department shall develop systems for monitoring and
oversight of the comprehensive perinatal services provided in this
section. The monitoring shall include, but shall not be limited to,
collection of information using the perinatal data form.
(j) Participation for services provided pursuant to this section
shall be voluntary. The department shall adopt patient rights
safeguards for recipients of the comprehensive perinatal services.
SEC. 85. Section 14165.4 of the Welfare
and Institutions Code is amended to read:
14165.4. It is the intent of the Legislature that beginning July
1, 1983, the functions, powers and duties contained in Article 2.6
(commencing with Section 14081) , Article 2.8 (commencing
with Section 14087.5), and Article 2.91 (commencing with Section
14089) become subject to the provisions contained herein.
Between January 1, 1983, and July 1, 1983, the commission shall
monitor and review the activities undertaken pursuant to Article 2.6
(commencing with Section 14081) , Article 2.8 (commencing
with Section 14087.5), and Article 2.91 (commencing with Section
14089) .
SEC. 86. Section 14166.4 of the Welfare
and Institutions Code is amended to read:
14166.4. (a) Notwithstanding Article 2.6 (commencing with Section
14081), and any other provision of law, fee-for-service payments to
the designated public hospitals for inpatient services to Medi-Cal
beneficiaries shall be governed by this section. Each of the
designated public hospitals shall receive as payment for inpatient
hospital services provided to Medi-Cal beneficiaries during any
project year, the hospital's allowable costs incurred in providing
those services, multiplied by the federal medical assistance
percentage. These costs shall be determined, certified, and claimed
in accordance with Sections 14166.8 and 14166.9. All Medicaid federal
financial participation received by the state for the certified
public expenditures of the hospital, or the governmental entity with
which the hospital is affiliated, for inpatient hospital services
rendered to Medi-Cal beneficiaries shall be paid to the hospital.
(b) With respect to each project year, each of the designated
public hospitals shall receive an interim payment for each day of
inpatient hospital services rendered to Medi-Cal beneficiaries based
upon claims filed by the hospital in accordance with the claiming
process set forth in Division 3 (commencing with Section 50000) of
Title 22 of the California Code of Regulations. The interim per diem
payment amount shall be based on estimated costs, which shall be
derived from statistical data from the following sources and which
shall be multiplied by the federal medical assistance percentage:
(1) For allowable costs reflected in the Medicare cost report, the
cost report most recently audited by the hospital's Medicare fiscal
intermediary adjusted by a trend factor to reflect increased costs,
as approved by the federal Centers for Medicare and Medicaid Services
for the demonstration project.
(2) For allowable costs not reflected in the Medicare cost report,
each hospital shall provide hospital-specific cost data requested by
the department. The department shall adjust the data by a trend
factor as necessary to reflect project year allowable costs.
(c) Until the department commences making payments pursuant to
subdivision (b), the department may continue to make fee-for-service,
per diem payments to the designated public hospitals, pursuant to
the selective provider contracting program in accordance with Article
2.6 (commencing with Section 14081), for services rendered on and
after July 1, 2005, for a period of 120 days following the award of
this demonstration. Per diem payments shall be adjusted retroactively
to the amounts determined under the payment methodology prescribed
in this article.
(d) No later than April 1 following the end of the project year,
the department shall undertake an interim reconciliation of payments
made pursuant to subdivisions (a) to (c), inclusive, based on
Medicare and other cost and statistical data submitted by the
hospital for the project year and shall adjust payments to the
hospital accordingly.
(e) (1) The designated public hospitals shall receive supplemental
reimbursement for the costs incurred for physician and nonphysician
practitioner services provided to Medi-Cal beneficiaries who are
patients of the hospital, to the extent that those services are not
claimed as inpatient hospital services under the hospital's
Medi-Cal provider number by the hospital and the
costs of those services are not otherwise recognized under
subdivision (a).
(2) Expenditures made by the designated public hospital, or a
governmental entity with which it is affiliated, for the services
identified in paragraph (1) shall be reduced by any payments received
pursuant to Article 7 (commencing with Section 51501) of Title 22 of
the California Code of Regulations. The remainder shall be certified
by the appropriate public official and claimed by the department in
accordance with Sections 14166.8 and 14166.9. These expenditures may
include any of the following:
(A) Compensation to physicians or nonphysician practitioners
pursuant to contracts with the designated public hospital.
(B) Salaries and related costs for employed physicians and
nonphysician practitioners.
(C) The costs of interns, residents, and related teaching
physician and supervision costs.
(D) Administrative costs associated with the services described in
subparagraphs (A) to (C), inclusive, including billing costs.
(3) Designated public hospitals shall receive federal funding
based on the expenditures identified and certified in paragraph (2).
All federal financial participation received by the department for
the certified public expenditures identified in paragraph (2) shall
be paid to the designated public hospital, or a governmental entity
with which it is affiliated.
(4) To the extent that the supplemental reimbursement received
under this subdivision relates to services provided to hospital
inpatients, the reimbursement shall be applied in determining whether
the designated public hospital has received full baseline payments
for purposes of paragraph (1) of subdivision (b) of Section 14166.21.
(5) Supplemental reimbursement under this subdivision may be
distributed as part of the interim payments under subdivision (b), on
a per-visit basis, on a per-procedure basis, or on any other
federally permissible basis.
(6) The department shall submit for federal approval, by September
30, 2005, a proposed amendment to the Medi-Cal state plan to
implement this subdivision, retroactive to July 1, 2005, to the
extent permitted by the federal Centers for Medicare and Medicaid
Services. If necessary to obtain federal approval, the department may
limit the application of this subdivision to costs determined
allowable by the federal Centers for Medicare and Medicaid Services.
If federal approval is not obtained, this subdivision shall not be
implemented.
SEC. 87. Section 14199.2 of the Welfare
and Institutions Code is amended to read:
14199.2. (a) The pilot program provided for under this article
shall provide the necessary information to assess the effectiveness
of pharmacist care in improving health outcomes for HIV/AIDS
patients. If the department determines that the pilot program
has shown that HIV/AIDS-related medication therapy management service
is effective at improving the health outcomes of HIV/AIDS patients
and is cost effective, then the department may
seek federal authorization, through a state plan amendment or
Medicaid waiver application, to receive federal financial
participation for this service.
(b) The department shall implement an HIV/AIDS-related medication
therapy management service pilot project in no more than 10
pharmacies.
(c) The selection of the pharmacy providers shall be based on all
of the following:
(1) Percentage of HIV/AIDS patients serviced by the pharmacy. More
than 90 percent of the total patients serviced by the pharmacy in
the months of May, June, and July 2004, must have been HIV/AIDS
patients.
(2) Ability of the pharmacy to immediately provide specialized
services. The provider shall be required to establish specialized
services with capability to implement all statutorily mandated
services on the implementation date of the project. The pharmacy
shall provide all the services listed in subdivision (e).
(3) All specialized services shall be rendered by a qualified
pharmacist or other health care provider operating within his or her
scope of practice. The department shall develop, in consultation with
pharmacy providers, the appropriate professional qualifications
needed by the pharmacists rendering services, including any
continuing education requirements.
(d) The department shall select the first pharmacies that apply
and meet the criteria specified in subdivision (c) for the pilot
program.
(e) Pharmacies that participate in this pilot program shall
provide the following services:
(1) Patient-specific and individualized services provided directly
by a pharmacist to the patient, or in limited circumstances, the
patient's caregiver. These services are distinct from generalized
patient education and information activities already required by law
and provided for in the professional fee for dispensing.
(2) Face-to-face interaction between the patient or caregiver and
the pharmacist during delivery of medication therapy management
services. When barriers to face-to-face communication exist, patients
shall have equitable access to appropriate alternative delivery
methods.
(3) Pharmacists and other qualified health care providers to
identify patients who should receive medication therapy management
services.
(f) The department shall consult with the pilot program pharmacies
to establish appropriate outcome measures and the required
timeframes for reporting those measures, which in no case shall be
less than annually. The department shall retain the ability to
require additional outcome measures during the course of the project.
(g) The medication therapy management services shall be based on
the individual patient's needs and may include, but are not limited
to, the following:
(1) Performing or obtaining necessary assessments of the patient's
health status.
(2) Formulating a medication treatment plan.
(3) Selecting, initiating, modifying, or administering medication
therapy.
(4) Monitoring and evaluating the patient's response to therapy,
including safety and effectiveness.
(5) Performing a comprehensive medication review to identify,
resolve, and prevent medication-related problems, including adverse
drug events.
(6) Documenting the care delivered and communicating essential
information to the patient's other primary care providers.
(7) Providing verbal education and training, beyond what is
already required by law, that is designed to enhance patient
understanding and appropriate use of the patient's medications.
(8) Providing information, support services, and resources, such
as compliance packaging, designed to enhance patient adherence to his
or her therapeutic regimens.
(9) Coordinating and integrating medication therapy management
services within the broader health care management services being
provided to the patient.
(10) Home delivery of medications.
(h) Participants in this pilot program shall be paid an additional
dispensing fee of nine dollars and fifty cents ($9.50) per
prescription for services rendered after September 1, 2004.
(i) Notwithstanding any other provision of law, the department
shall not make any payments for services listed in subdivision (g)
that were rendered during any time period in which subdivision (b) of
Section 14105.45 has been enjoined by a court order or is otherwise
not in effect.
(j) Pilot project contracts under this section may be executed on
a noncompetitive bid basis and shall be exempt from the requirements
of Chapter 2 (commencing with Section 10290) of Part 2 of Division 2
of the Public Contract Code.
(k) Pharmacies shall maintain a sufficient quantity of HIV/AIDS
medication in their inventories.
() Pharmacies shall purchase HIV medications from state licensed
wholesalers.
SEC. 88. Section 14199.3 of the Welfare
and Institutions Code is amended to read:
14199.3. This article shall remain in effect only until
January 1, June 30, 2008, and as of that date is
repealed, unless a later enacted statute that becomes effective on
or before January 1, June 30, 2008,
deletes or extends that date.
SEC. 89. Section 14262 of the Welfare
and Institutions Code is amended to read:
14262. (a) "Actuarial methods" mean any reasonable and adequate
method of computing or determining prospective per capita rates of
payment which is based upon various assumptions, including
"experience data," to determine the expected cost and expected
frequency of utilization (by aid category, age and sex) for each
component or grouping of services and other requirements for which
the rate or rates will serve as compensation or reimbursement.
Initially, expected cost and utilization information shall be
developed from recent experience data and then projected over the
period for which the per capita rates are to be effective. Such a
projection shall be adjusted to take into consideration various
actuarial factors, including inflation and requirements, if any,
which exceed the program or basis from which the experience data is
derived.
(b) "Experience data" mean cost and utilization data from the
Medi-Cal fee-for-service or prepaid health plan programs. Such data
shall be sufficient in quantity and extent to provide credibility.
(c) "Actuarial equivalence" means the actual per capita costs for
Medi-Cal beneficiaries adjusted by age, sex, aid category, and other
appropriate factors so as to be comparable with the costs of prepaid
health plan enrollees.
(d) "Actuary" or "consulting actuary" means a person who has
engaged in the practice of actuarial science and has demonstrated, by
training and experience, actuarial competence to the director.
(e) This section shall become inoperative on August 1, 2007, and
as of January 1, 2008, is repealed.
SEC. 90. Section 14301.1 is added to the
Welfare and Institutions Code , to read:
14301.1. (a) For rates established on or after August 1, 2007,
the department shall pay capitation rates to health plans
participating in the Medi-Cal managed care program using actuarial
methods and may establish health plan and county specific rates. The
department shall utilize a county and model specific rate methodology
to develop Medi-Cal managed care capitation rates for contracts
entered into between the department and any entity pursuant to
Article 2.7 (commencing with Section 14087.3), Article 2.8
(commencing with Section 14087.5), and Article 2.91 (commencing with
Section 14089) of Chapter 7 that includes, but is not limited to, all
of the following:
(1) Health plan specific encounter and claims data.
(2) Supplemental utilization and cost data submitted by the health
plans.
(3) Fee-for-service data for the underlying county of operation or
other appropriate counties as deemed necessary by the department.
(4) Department of Managed Health Care financial statement data
specific to Medi-Cal operations.
(5) Other demographic factors, such as age, gender, or
diagnostic-based risk adjustments, as the department deems
appropriate.
(b) To the extent that the department is unable to obtain
sufficient actual plan data, it may substitute plan model, similar
plan, or county specific fee-for-service data.
(c) The department shall develop rates that include administrative
costs, and may apply different administrative costs with respect to
separate aid code groups.
(d) The department shall develop rates that shall include, but are
not limited to, assumptions for underwriting, return on investment,
risk, contingencies, changes in policy, and a detailed review of
health plan financial statements to validate and reconcile costs for
use in developing rates.
(e) The department may develop rates that pay plans based on
performance incentives, including quality indicators, access to care,
and data submission.
(f) The department may develop and adopt condition-specific
payment rates for health conditions, including, but not limited to,
childbirth delivery.
(g) Prior to finalizing Medi-Cal managed care capitation rates,
the department shall provide health plans with information on how the
rates were developed, including rate sheets for that specific health
plan, and provide the plans with the opportunity to provide
additional supplemental information.
(h) For the purposes of developing capitation rates through
implementation of this ratesetting methodology, Medi-Cal managed care
health plans shall provide the department with financial and
utilization data in a form and substance as deemed necessary by the
department to establish rates. This data shall be considered
proprietary and shall be exempt from disclosure as official
information pursuant to subdivision (k) of Section 6254 of the
Government Code as contained in the California Public Records Act.
(i) The department shall report, upon request, to the fiscal and
policy committees of the respective houses of the Legislature
regarding implementation of this section.
SEC. 91. Section 14464.5 of the Welfare
and Institutions Code is amended to read:
14464.5. (a) For purposes of this article, the following
definitions apply:
(1) "Capitation payment" means the monthly amount paid by the
state to a designated Medi-Cal managed care plan in exchange for
contracted health care services procured by means of the Medi-Cal
managed care contracts described in paragraph (3).
(2) "Capitation rate" means the per member per month rate used to
calculate the capitation payments.
(3) "Medi-Cal managed care plan" means any Medi-Cal managed care
plan contracting with the department to provide services to enrolled
Medi-Cal beneficiaries pursuant to Article 2.7 (commencing with
Section 14087.3), Article 2.9 (commencing with Section 14088),
Article 2.91 (commencing with Section 14089), and Section 14087.51 of
Chapter 7, or pursuant to this chapter, and that is also an
organization that meets the criteria in Section 1396b(w)(7)(A)(viii)
of Title 42 of the United States Code.
(4) "Total operating revenue" means non-Medicare amounts received
by a managed care plan for the coverage or providing of all health
care services, including amounts received in exchange for health care
procured by means of a Medi-Cal managed care contract as described
in paragraph (3). Total operating revenue does not include amounts
received by a managed care plan pursuant to a subcontract with a
Medi-Cal managed care plan to provide health care services to
Medi-Cal beneficiaries.
(b) The department shall impose, on an annual basis, a quality
improvement fee no earlier than January 1, 2005. The quality
improvement fee shall be paid to the state monthly and shall be
up to 6 percent of each Medi-Cal managed care plan's total
operating revenue. The quality improvement fee shall be subject to
all of the following provisions:
(1) The quality improvement fee shall be paid monthly to the state
and is due within 15 calendar days following the close of each month
and shall be calculated on the prior month's total operating revenue
as defined in paragraph (4) of subdivision (a).
(2) The quality improvement fee shall be deposited in the General
Fund.
(3) If the Medi-Cal managed care plan does not timely pay the
quality improvement fee, or any part thereof, the department may
offset the amount of the fee that is unpaid against any amounts due
from the state to the Medi-Cal managed care plan. Notwithstanding any
such offset, the methodology for determining the fee as set forth in
this subdivision shall be followed.
(4) The department shall make retrospective adjustments as
necessary to the amounts calculated pursuant to this subdivision in
order to assure that the Medi-Cal managed care plan's aggregate
quality improvement fee for any particular state fiscal year does not
exceed 6 percent of the total operating revenue for the Medi-Cal
managed care plan for that year.
(5) If, on account of delay in the adoption of the annual Budget
Act, or for any other reason, a Medi-Cal managed care plan is not
paid by the department for a period in excess of 30 days, the payment
date for the fee specified in paragraph (1) shall be extended until
45 days following the date that regular payments are resumed to the
plans.
(6) On or before August 31 of each year, each Medi-Cal managed
care plan subject to the quality improvement fee shall report to the
department, in a prescribed form, the plan's total operating revenue
as defined in paragraph (4) of subdivision (a) for the preceding
state fiscal year.
(7) Any fee imposed pursuant to this section shall not be
considered to be an administrative cost for purposes of Section 1378
of the Health and Safety Code, Section 14087.101, 14087.103, or
14087.105, or any regulation adopted pursuant to those sections.
(c) (1) The department shall implement this section in a manner
that complies with federal requirements. If the department is unable
to comply with the federal requirements for federal matching funds
under this section, the quality improvement fee shall not be assessed
or collected.
(2) The director may alter the methodology specified in this
section for calculating the quality improvement fee to the extent
necessary to meet the requirement of federal law or regulations.
(3) If, after implementation of this section, federal disapproval
of the quality improvement fee program as described in this section
occurs, any fees paid by the plans to the department in any period
for which such disapproval is effective shall be refunded to the
plans.
(d) In addition to the Medi-Cal capitation rates that a Medi-Cal
managed care plan would otherwise receive for providing services to
Medi-cal beneficiaries, the capitation rates shall be increased in an
amount determined by the department, subject to the following
requirements:
(1) The additional Medi-Cal reimbursement provided by this section
shall be distributed under a capitation payment methodology or on
any other federally permissible basis.
(2) The additional Medi-Cal reimbursement provided by this section
shall not supplant the payments otherwise due to any Medi-Cal
managed care plan in the absence of such an additional reimbursement.
(3) Additional reimbursement provided by this section to any
particular Medi-Cal managed care plan shall not cause the total
reimbursement paid to that plan to exceed any applicable limit on
payments as established pursuant to federal law and regulations.
(e) The director, or his or her designee, shall administer this
section.
(f) The director may adopt regulations as are necessary to
implement this section. These regulations shall be adopted as
emergency regulations in accordance with the rulemaking provisions of
the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code). For purposes of this section, the adoption of regulations
shall be deemed an emergency and necessary for the immediate
preservation of the public peace, health, and safety or general
welfare. The regulations shall include, but not be limited to, any
regulations necessary for either of the following purposes:
(1) The administration of this section, including the proper
imposition and collection of the quality improvement fees.
(2) The development of any forms necessary to calculate,
notify, collect, and distribute the quality improvement fees.
(g) As an alternative to subdivision (f), and notwithstanding
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code, the director may implement this
section by means of a provider bulletin, contract amendment, policy
letter, or other similar instructions, without taking regulatory
action.
(h) To the extent permitted by federal law, any limitation on
rates to the Medi-Cal managed care plan based on Medi-Cal
fee-for-service costs shall be increased to include any capitation
rate increase related to the quality improvement fee in subdivision
(b).
(i) This section shall become inoperative on January
remain in effect only until October 1, 2009,
and, as of July 1, 2009, and as of that date
is repealed, unless a later enacted statute, that becomes
effective on or before July October 1,
2009, deletes or extends the dates on which it becomes
inoperative and is repealed that date .
SEC. 92. Section 14495.10 of the
Welfare and Institutions Code is amended to read:
14495.10. (a) The department shall establish a pilot program to
provide continuous skilled nursing care as a benefit of the Medi-Cal
program, when those services are provided in accordance with an
approved federal waiver meeting the requirements of subdivision (b).
"Continuous skilled nursing care" means medically necessary care
provided by, or under the supervision of, a registered nurse within
his or her scope of practice, seven days a week, 24 hours per day, in
a health facility participating in the pilot program. This care
shall include a minimum of eight hours per day provided by or under
the direct supervision of a registered nurse. Each health facility
providing continuous skilled nursing care in the pilot program shall
have a minimum of one registered nurse or one licensed vocational
nurse awake and in the facility at all times.
(b) The department shall submit to the federal Centers for
Medicare and Medicaid Services, no later than April 1, 2000, a
federal waiver request developed in consultation with the State
Department of Developmental Services and the Association of Regional
Center Agencies, pursuant to Section 1915(b) of the federal Social
Security Act to provide continuous skilled nursing care services
under the pilot program.
(c) (1) The pilot program shall be conducted to explore more
flexible models of health facility licensure to provide continuous
skilled nursing care to developmentally disabled individuals in the
least restrictive health facility setting, and to evaluate the effect
of the pilot program on the health, safety, and quality of life of
individuals, and the cost-effectiveness of this care. The evaluation
shall include a review of the pilot program by an independent agency.
(2) Participation in the pilot program shall include 10 health
facilities provided that the facilities meet all eligibility
requirements. The facilities shall be approved by the department, in
consultation with the State Department of Developmental Services and
the appropriate regional center agencies, and shall meet the
requirements of subdivision (e). Priority shall be given to
facilities with four to six beds, to the extent those facilities meet
all other eligibility requirements.
(d) Under the pilot program established in this section, a
developmentally disabled individual is eligible to receive continuous
skilled nursing care if all of the following conditions are met:
(1) The developmentally disabled individual meets the criteria as
specified in the federal waiver.
(2) The developmentally disabled individual resides in a health
facility that meets the provider participation criteria as specified
in the federal waiver.
(3) The continuous skilled nursing care services are provided in
accordance with the federal waiver.
(4) The continuous skilled nursing care services provided to the
developmentally disabled individual do not result in costs that
exceed the fiscal limit established in the federal waiver.
(e) A health facility seeking to participate in the pilot program
shall provide care for developmentally disabled individuals who
require the availability of continuous skilled nursing care, in
accordance with the terms of the pilot program. During participation
in the pilot program, the health facility shall comply with all the
terms and conditions of the federal waiver described in subdivision
(b), and shall not be subject to licensure or inspection under
Chapter 2 (commencing with Section 1250) of Division 2 of the Health
and Safety Code. Upon termination of the pilot program and
verification of compliance with Section 1265 of the Health and Safety
Code, the department shall immediately reinstate the participating
health facility's previous license for the balance of time remaining
on the license when the health facility began participation in the
pilot program.
(f) The department shall implement this pilot program only to the
extent it can demonstrate fiscal neutrality, as required under the
terms of the federal waiver, and only if the department has obtained
the necessary approvals to implement the pilot program and receives
federal financial participation from the federal Centers for Medicare
and Medicaid Services.
(g) In implementing this article, the department may enter into
contracts for the provision of essential administration and other
services. Contracts entered into under this section may be on a
noncompetitive bid basis and shall be exempt from the requirements of
Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of
the Public Contract Code.
(h) This section shall remain in effect only until January 1,
2008 2010 , and as of that date is
repealed, unless a later enacted statute that becomes effective on or
before January 1, 2008 2010 , deletes
or extends that date.
SEC. 93. Section 14499.5 of the Welfare
and Institutions Code is amended to read:
14499.5. (a) (1) In carrying out the intent of this article, the
director shall contract for the operation of one local pilot program.
Special consideration shall be given to approving a program
contracted through county government in Santa Barbara County.
(2) Notwithstanding the limitations contained in Section 14490,
the director may enter into, or extend, contracts with the local
pilot program in Santa Barbara County pursuant to paragraph (1) for
periods that do not exceed three years.
(b) The establishment of a pilot program pursuant to this section
shall be contingent upon the availability of state and federal
funding. The program shall include the following components:
(1) Local authority for administration, fiscal management, and
delivery of services, but not including eligibility determination.
(2) Physician case management.
(3) Cost containment through provider incentives and other means.
(c) The program for the pilot project shall include a plan and
budget for delivery of services, administration, and evaluation.
During the first year of the pilot program, the amount of the state
contract shall equal 95 percent of total projected Medi-Cal
expenditures for delivery of services and for administration based on
fee-for-service conditions in the program county. During the
remaining years of the pilot project Medi-Cal expenditures in the
program county shall be no more than 100 percent of total projected
expenditures for delivery of services and for administration based on
any combination of the following paragraphs:
(1) Relevant prior fee-for-service Medi-Cal experience in the
program county.
(2) The fee-for-service Medi-Cal experience in comparable counties
or groups of counties.
(3) Medi-Cal experience of the pilot project in the program county
if, as determined by the department, the scope, level, and duration
of, and expenditures for, any services used in setting the rates
under this paragraph would be comparable to fee-for-service
conditions were they to exist in the program county and would be more
actuarially reliable for use in ratesetting than data available for
use in applying paragraph (1) or (2).
The projected total expenditure shall be determined annually
according to an acceptable actuarial process. The data elements used
by the department shall be shared with the proposed contractor.
(d) The director shall accept or reject the proposal within 30
days after the date of receipt. If a decision is made to reject the
proposal, the director shall set forth the reasons for this decision
in writing. Upon approval of the proposal, a contract shall be
written within 60 days. After signature by the local contractor, the
State Department of Health Care Services and the
Department of General Services shall execute the contract within 60
days.
(e) The director shall seek the necessary state and federal
waivers to enable operation of the program. If the federal waivers
for delivery of services under this plan are not granted, the
department is under no obligation to contract for implementation of
the program.
(f) For purposes of Section 1343 of the Health and Safety Code,
the Santa Barbara Regional Health Authority shall be considered to be
a county-operated pilot program contracting with the State
Department of Health Care Services pursuant to this
article, and notwithstanding any other provision of law, during the
period that this contract is in effect, the contractor shall be
exempt from the provisions of the Knox-Keene Health Care Service Plan
Act of 1975, Chapter 2.2 (commencing with Section 1340) of Division
2 of the Health and Safety Code, relative to the services provided to
Medi-Cal beneficiaries under the terms and provisions of the pilot
program.
(g) Dental services may be included within the services provided
in this pilot program.
(h) Any federal demonstration funding for this pilot program shall
be made available to the county within 60 days upon notification of
the award without the state retaining any portion not previously
specified in the grant application as submitted.
(i) (1) (A) The California Medical Assistance Commission
department may negotiate exclusive contracts and
rates on behalf of the department with the Santa
Barbara Regional Health Authority in the implementation of this
section.
(B) Contracts entered into under this article may be on a
noncompetitive bid basis and shall be exempt from Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the Public
Contract Code. These contracts shall have no force or
effect unless approved by the Department of Finance.
(C) The department shall enter into contracts pursuant to this
article, and shall be bound by the terms and conditions related to
the rates negotiated by the negotiator.
(2) The department shall implement this subdivision to the extent
that the following apply:
(A) Its implementation does not revise the status of the pilot
program as a federal demonstration project.
(B) Existing federal waivers apply to the pilot program as revised
by this subdivision, or the federal government extends the
applicability of the existing federal waivers or authorizes
additional federal waivers for the implementation of the program.
(3) The implementation of this subdivision shall not affect the
pilot program's having met any of the requirements of Part 3.5
(commencing with Section 1175) of Division 1 of the Health and Safety
Code and this division applicable to the pilot program with respect
to the negotiations of contracts and rates by the department.
SEC. 94. Section 16809 of the
Welfare and Institutions Code is amended to read:
16809. (a) (1) The board of supervisors of a county that
contracted with the department pursuant to Section 16709 during the
1990-91 fiscal year and any county with a population under 300,000,
as determined in accordance with the 1990 decennial census, by
adopting a resolution to that effect, may elect to participate in the
County Medical Services Program. The governing board shall have
responsibilities for specified health services to county residents
certified eligible for those services by the county.
(2) The board of supervisors of a county that has contracted with
the governing board pursuant to paragraph (1) may also contract with
the governing board for the delivery of health care and
health-related services to county residents other than under the
County Medical Services Program by adopting a resolution to that
effect. The governing board shall have responsibilities for the
delivery of specified health services to county residents as agreed
upon by the governing board and the county. Participation by a county
pursuant to this paragraph shall be voluntary, and funds shall be
provided solely by the county.
(b) The governing board may contract with the department or any
other person or entity to administer the County Medical Services
Program.
(1) If the governing board contracts with the department to
administer the County Medical Services Program, that contract shall
include, but need not be limited to, all of the following:
(A) Provisions for the payment to participating counties for
making eligibility determinations as determined by the governing
board.
(B) Provisions for payment of expenses of the governing board.
(C) Provisions relating to the flow of funds from counties'
vehicle license fees, sales taxes, and participation fees and the
procedures to be followed if a county does not pay those funds to the
program.
(D) Those provisions, as applicable, contained in the 1993-94
fiscal year contract with counties under the County Medical Services
Program.
(E) Provisions for the department to administer the County Medical
Services Program pursuant to regulations adopted by the governing
board or as otherwise determined by the governing board.
(F) Provisions requiring that the governing board reimburse the
state costs of providing administrative support to the County Medical
Services Program in accordance with amounts determined between the
governing board and the department.
(2) If the governing board does not contract with the department
for administration of the County Medical Services Program, the
governing board may contract with the department for specified
services to assist in the administration of that program. Any
contract with the department under this paragraph shall require that
the governing board reimburse the state costs of providing
administrative support.
(3) The department shall not be liable for any costs related to
decisions of the governing board that are in excess of those set
forth in the contract between the department and the governing board.
(c) Each county intending to participate in the County Medical
Services Program pursuant to this section shall submit to the
governing board a notice of intent to contract adopted by the board
of supervisors no later than April 1 of the fiscal year preceding the
fiscal year in which the county will participate in the County
Medical Services Program.
(d) A county participating in the County Medical Services Program
pursuant to this section, or a county contracting with the governing
board pursuant to paragraph (2) or (3) of subdivision (a), or
participating in a pilot project or contracting with the governing
board for an alternative product pursuant to Section 16809.4, shall
not be relieved of its indigent health care obligation under Section
17000.
(e) (1) The County Medical Services Program Account is established
in the County Health Services Fund. The County Medical Services
Program Account is continuously appropriated, notwithstanding Section
13340 of the Government Code, without regard to fiscal years. The
following amounts may be deposited in the account:
(A) Any interest earned upon money deposited in the account.
(B) Moneys provided by participating counties or appropriated by
the Legislature to the account.
(C) Moneys loaned pursuant to subdivision (n).
(2) The methods and procedures used to deposit funds into the
account shall be consistent with the methods used by the program
during the 1993-94 fiscal year, unless otherwise determined by the
governing board.
(f) Moneys in the program account shall be used by the governing
board, or by the department if the department contracts with the
governing board for this purpose, to pay for health care services
provided to the persons meeting the eligibility criteria established
pursuant to subdivision (j) and to pay the governing board expenses
and program administrative costs. In addition, moneys in this account
may be used to reimburse the department for state costs pursuant to
subparagraph (F) of paragraph (1) of subdivision (b).
(g) (1) Moneys in this account shall be administered on an accrual
basis and notwithstanding any other provision of law, except as
provided in this section, shall not be transferred to any other fund
or account in the State Treasury except for purposes of investment as
provided in Article 4 (commencing with Section 16470) of Chapter 3
of Part 2 of Division 4 of Title 2 of the Government Code.
(2) (A) All interest or other increment resulting from the
investment shall be deposited in the program account, notwithstanding
Section 16305.7 of the Government Code.
(B) All interest deposited pursuant to subparagraph (A) shall be
available to reimburse program-covered services, governing board
expenses, and program administrative costs.
(h) The governing board shall establish a reserve account for the
purpose of depositing funds for the payment of claims and unexpected
contingencies. Funds in the reserve account in excess of the amounts
the governing board determines necessary for these purposes shall be
available for expenditures in years when program expenditures exceed
program funds, and to augment the rates, benefits, or eligibility
criteria under the program.
(i) (1) Counties shall pay participation fees as established by
the governing board and their jurisdictional risk amount in a method
that is consistent with that established in the 1993-94 fiscal year.
(2) A county may request, due to financial hardship, the payments
under paragraph (1) be delayed. The request shall be subject to
approval by the governing board.
(3) Payments made pursuant to this subdivision shall be deposited
in the program account, unless otherwise directed by the governing
board.
(4) Payments may be made as part of the deposits authorized by the
county pursuant to Sections 17603.05 and 17604.05.
(j) (1) (A) Beginning in the 1992-93 fiscal year and for each
fiscal year thereafter, counties and the state shall share the risk
for cost increases of the County Medical Services Program not funded
through other sources. The state shall be at risk for any cost that
exceeds the cumulative annual growth in dedicated sales tax and
vehicle license fee revenue, up to the amount of twenty million two
hundred thirty-seven thousand four hundred sixty dollars
($20,237,460) per fiscal year, except for the 1999-2000, 2000-01,
2001-02, 2002-03, 2003-04, 2004-05, 2005-06, and
2006-07 , and 2007-08 fiscal years. Counties shall be at
risk up to the cumulative annual growth in the Local Revenue Fund
created by Section 17600, according to the table specified in
paragraph (2), to the County Medical Services Program, plus the
additional cost increases in excess of twenty million two hundred
thirty-seven thousand four hundred sixty dollars ($20,237,460) per
fiscal year, except for the 1999-2000, 2000-01, 2001-02, 2002-03,
2003-04, 2004-05, 2005-06, and 2006-07 , and
2007-08 fiscal years.
(B) For the 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04,
2004-05, 2005-06, and 2006-07 , and 2007-08
fiscal years, the state shall not be at risk for any cost that
exceeds the cumulative annual growth in dedicated sales tax and
vehicle license fee revenue. Counties shall be at risk up to the
cumulative annual growth in the Local Revenue Fund created by Section
17600, according to the table specified in paragraph (2), to the
County Medical Services Program, plus any additional cost increases
for the 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04, 2004-05,
2005-06, and 2006-07 , and 2007-08
fiscal years.
(C) (i) The governing board shall establish uniform eligibility
criteria and benefits among all counties participating in the County
Medical Services Program listed in paragraph (2). For counties that
are not listed in paragraph (2) and that elect to participate
pursuant to paragraph (1) of subdivision (a), the eligibility
criteria and benefit structure may vary from those of counties
participating pursuant to paragraph (2) of subdivision (a).
(ii) Notwithstanding clause (i), the governing board may establish
and maintain pilot projects to identify or test alternative
approaches for determining eligibility or for providing or paying for
benefits under the County Medical Services Program, and may develop
and implement alternative products with varying levels of eligibility
criteria and benefits outside of the County Medical Services
Program.
(2) For the 1991-92 fiscal year, and each year thereafter,
jurisdictional risk limitations shall be as follows:
Jurisdiction Amount
Alpine.......................... $ 13,150
Amador.......................... 620,264
Butte........................... 5,950,593
Calaveras....................... 913,959
Colusa.......................... 799,988
Del Norte....................... 781,358
El Dorado....................... 3,535,288
Glenn........................... 787,933
Humboldt........................ 6,883,182
Imperial........................ 6,394,422
Inyo............................ 1,100,257
Kings........................... 2,832,833
Lake............................ 1,022,963
Lassen.......................... 687,113
Madera.......................... 2,882,147
Marin........................... 7,725,909
Mariposa........................ 435,062
Mendocino....................... 1,654,999
Modoc........................... 469,034
Mono............................ 369,309
Napa............................ 3,062,967
Nevada.......................... 1,860,793
Plumas.......................... 905,192
San Benito...................... 1,086,011
Shasta.......................... 5,361,013
Sierra.......................... 135,888
Siskiyou........................ 1,372,034
Solano.......................... 6,871,127
Sonoma.......................... 13,183,359
Sutter.......................... 2,996,118
Tehama.......................... 1,912,299
Trinity......................... 611,497
Tuolumne........................ 1,455,320
Yuba............................ 2,395,580
(3) Beginning in the 1991-92 fiscal year and in subsequent fiscal
years, the jurisdictional risk limitation for the counties that did
not contract with the department pursuant to Section 16709 during the
1990-91 fiscal year shall be the amount specified in subparagraph
(A) plus the amount determined pursuant to subparagraph (B), minus
the amount specified by the governing board as participation fees.
(A)
Jurisdiction Amount
Merced........................... 2,033,729
Placer........................... 1,338,330
San Luis Obispo.................. 2,000,491
Santa Cruz....................... 3,037,783
Yolo............................. 1,475,620
(B) The amount of funds necessary to fully fund the anticipated
costs for the county shall be determined by the governing board
before a county is permitted to participate in the County Medical
Services Program.
(4) The specific amounts and method of apportioning risk to each
participating county may be adjusted by the governing board.
(k) The Legislature hereby determines that an expedited contract
process for contracts under this section is necessary. Contracts
under this section shall be exempt from Part 2 (commencing with
Section 10100) of Division 2 of the Public Contract Code. Contracts
of the department pursuant to this section shall have no force or
effect unless they are approved by the Department of Finance.
(l) The state shall not incur any liability except as specified in
this section.
(m) Third-party recoveries for services provided under this
section may be pursued.
(n) The Department of Finance may authorize a loan of up to thirty
million dollars ($30,000,000) for deposit into the program account
to ensure that there are sufficient funds available to reimburse
providers and counties pursuant to this section.
(o) Moneys appropriated from the General Fund to meet the state
risk, as set forth in subparagraph (A) of paragraph (1) of
subdivision (j), shall not be available for those counties electing
to disenroll from the County Medical Services Program.
SEC. 95. Section 24005 of the Welfare
and Institutions Code is amended to read:
24005. (a) This section shall apply to the Family Planning Access
Care and Treatment Waiver program identified in subdivision (aa) of
Section 14132 and this program.
(b) Only licensed medical personnel with family planning skills,
knowledge, and competency may provide the full range of family
planning medical services covered in this program.
(c) Medi-Cal enrolled providers, as determined by the department,
shall be eligible to provide family planning services under the
program when these services are within their scope of practice and
licensure. Those clinical providers electing to participate in the
program and approved by the department shall provide the full scope
of family planning education, counseling, and medical services
specified for the program, either directly or by referral, consistent
with standards of care issued by the department.
(d) The department shall require providers to enter into clinical
agreements with the department to ensure compliance with standards
and requirements to maintain the fiscal integrity of the program.
Provider applicants, providers, and persons with an ownership or
control interest, as defined in federal medicaid regulations, shall
be required to submit to the department their social security numbers
to the full extent allowed under federal law. All state and federal
statutes and
regulations pertaining to the audit or examination of Medi-Cal
providers shall apply to this program.
(e) Clinical provider agreements shall be signed by the provider
under penalty of perjury. The department may screen applicants at the
initial application and at any reapplication pursuant to
requirements developed by the department to determine provider
suitability for the program.
(f) The department may complete a background check on clinical
provider applicants for the purpose of verifying the accuracy of
information provided to the department for purposes of enrolling in
the program and in order to prevent fraud and abuse. The background
check may include, but not be limited to, unannounced onsite
inspection prior to enrollment, review of business records, and data
searches. If discrepancies are found to exist during the
preenrollment period, the department may conduct additional
inspections prior to enrollment. Failure to remediate significant
discrepancies as prescribed by the director may result in denial of
the application for enrollment. Providers that do not provide
services consistent with the standards of care or that do not comply
with the department's rules related to the fiscal integrity of the
program may be disenrolled as a provider from the program at the sole
discretion of the department.
(g) The department shall not enroll any applicant who, within the
previous 10 years:
(1) Has been convicted of any felony or misdemeanor that involves
fraud or abuse in any government program, that relates to neglect or
abuse of a patient in connection with the delivery of a health care
item or service, or that is in connection with the interference with,
or obstruction of, any investigation into health care related fraud
or abuse.
(2) Has been found liable for fraud or abuse in any civil
proceeding, or that has entered into a settlement in lieu of
conviction for fraud or abuse in any government program.
(h) In addition, the department may deny enrollment to any
applicant that, at the time of application, is under investigation by
the department or any local, state, or federal government law
enforcement agency for fraud or abuse. The department shall not deny
enrollment to an otherwise qualified applicant whose felony or
misdemeanor charges did not result in a conviction solely on the
basis of the prior charges. If it is discovered that a provider is
under investigation by the department or any local, state, or federal
government law enforcement agency for fraud or abuse, that provider
shall be subject to immediate disenrollment from the program.
(i) (1) The program shall disenroll as a program provider any
individual who, or any entity that, has a license, certificate, or
other approval to provide health care, which is revoked or suspended
by a federal, California, or other state's licensing, certification,
or other approval authority, has otherwise lost that license,
certificate, or approval, or has surrendered that license,
certificate, or approval while a disciplinary hearing on the license,
certificate, or approval was pending. The disenrollment shall be
effective on the date the license, certificate, or approval is
revoked, lost, or surrendered.
(2) A provider shall be subject to disenrollment if the
provider submits claims for payment are submitted
under any provider number used by the provider to obtain
reimbursement from the program for the services, goods,
supplies, or merchandise provided, directly or indirectly, to a
program beneficiary, by an individual or entity that has been
previously suspended, excluded, or otherwise made ineligible to
receive, directly or indirectly, reimbursement from the program or
from the Medi-Cal program and the individual has previously been
listed on either the Suspended and Ineligible Provider List, which is
published by the department, to identify suspended and otherwise
ineligible providers or any list published by the federal Office of
the Inspector General regarding the suspension or exclusion of
individuals or entities from the federal Medicare and medicaid
programs, to identify suspended, excluded, or otherwise ineligible
providers.
(3) The department shall deactivate, immediately and without prior
notice, the provider numbers used by a provider to obtain
reimbursement from the program when warrants or documents mailed to a
provider's mailing address, its pay to address, or its service
address, if any, are returned by the United States Postal Service as
not deliverable or when a provider has not submitted a claim for
reimbursement from the program for one year. Prior to taking this
action, the department shall use due diligence in attempting to
contact the provider at its last known telephone number and to
ascertain if the return by the United States Postal Service is by
mistake and shall use due diligence in attempting to contact the
provider by telephone or in writing to ascertain whether the provider
wishes to continue to participate in the Medi-Cal program. If
deactivation pursuant to this section occurs, the provider shall meet
the requirements for reapplication as specified in regulation.
(4) For purposes of this subdivision:
(A) "Mailing address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive general program
correspondence.
(B) "Pay to address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive warrants.
(C) "Service address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which the provider will provide services to program
beneficiaries.
(j) Subject to Article 4 (commencing with Section 19130) of
Chapter 5 of Division 5 of Title 2 of the Government Code, the
department may enter into contracts to secure consultant services or
information technology including, but not limited to, software, data,
or analytical techniques or methodologies for the purpose of fraud
or abuse detection and prevention. Contracts under this section shall
be exempt from the Public Contract Code.
(k) Enrolled providers shall attend specific orientation approved
by the department in comprehensive family planning services. Enrolled
providers who insert IUDs or contraceptive implants shall have
received prior clinical training specific to these procedures.
(l) Upon receipt of reliable evidence that would be admissible
under the administrative adjudication provisions of Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code, of fraud or willful misrepresentation by a
provider under the program or commencement of a suspension under
Section 14123, the department may do any of the following:
(1) Collect any State-Only Family Planning program or Family
Planning Access Care and Treatment Waiver program overpayment
identified through an audit or examination, or any portion thereof
from any provider. Notwithstanding Section 100171 of the Health and
Safety Code, a provider may appeal the collection of overpayments
under this section pursuant to procedures established in Article 5.3
(commencing with Section 14170) of Part 3 of Division 9. Overpayments
collected under this section shall not be returned to the provider
during the pendency of any appeal and may be offset to satisfy audit
or appeal findings, if the findings are against the provider.
Overpayments shall be returned to a provider with interest if
findings are in favor of the provider.
(2) Withhold payment for any goods or services, or any portion
thereof, from any State-Only Family Planning program or Family
Planning Access Care and Treatment Waiver program provider. The
department shall notify the provider within five days of any
withholding of payment under this section. The notice shall do all of
the following:
(A) State that payments are being withheld in accordance with this
paragraph and that the withholding is for a temporary period and
will not continue after it is determined that the evidence of fraud
or willful misrepresentation is insufficient or when legal
proceedings relating to the alleged fraud or willful
misrepresentation are completed.
(B) Cite the circumstances under which the withholding of the
payments will be terminated.
(C) Specify, when appropriate, the type or types of claimed
payments being withheld.
(D) Inform the provider of the right to submit written evidence
that is evidence that would be admissible under the administrative
adjudication provisions of Chapter 5 (commencing with Section 11500)
of Part 1 of Division 3 of Title 2 of the Government Code, for
consideration by the department.
(3) Notwithstanding Section 100171 of the Health and Safety Code,
a provider may appeal a withholding of payment under this section
pursuant to Section 14043.65. Payments withheld under this section
shall not be returned to the provider during the pendency of any
appeal and may be offset to satisfy audit or appeal findings.
(m) As used in this section:
(1) "Abuse" means either of the following:
(A) Practices that are inconsistent with sound fiscal or business
practices and result in unnecessary cost to the medicaid program, the
Medicare program, the Medi-Cal program, including the Family
Planning Access Care and Treatment Waiver program, identified in
subdivision (aa) of Section 14132, another state's medicaid program,
or the State-Only Family Planning program, or other health care
programs operated, or financed in whole or in part, by the federal
government or any state or local agency in this state or any other
state.
(B) Practices that are inconsistent with sound medical practices
and result in reimbursement, by any of the programs referred to in
subparagraph (A) or other health care programs operated, or financed
in whole or in part, by the federal government or any state or local
agency in this state or any other state, for services that are
unnecessary or for substandard items or services that fail to meet
professionally recognized standards for health care.
(2) "Fraud" means an intentional deception or misrepresentation
made by a person with the knowledge that the deception could result
in some unauthorized benefit to himself or herself or some other
person. It includes any act that constitutes fraud under applicable
federal or state law.
(3) "Provider" means any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents of any partnership,
group, association, corporation, institution, or entity, that
provides services, goods, supplies, or merchandise, directly or
indirectly, to a beneficiary and that has been enrolled in the
program.
(4) "Convicted" means any of the following:
(A) A judgment of conviction has been entered against an
individual or entity by a federal, state, or local court, regardless
of whether there is a post-trial motion or an appeal pending or the
judgment of conviction or other record relating to the criminal
conduct has been expunged or otherwise removed.
(B) A federal, state, or local court has made a finding of guilt
against an individual or entity.
(C) A federal, state, or local court has accepted a plea of guilty
or nolo contendere by an individual or entity.
(D) An individual or entity has entered into participation in a
first offender, deferred adjudication, or other program or
arrangement where judgment of conviction has been withheld.
(5) "Professionally recognized standards of health care" means
statewide or national standards of care, whether in writing or not,
that professional peers of the individual or entity whose provision
of care is an issue, recognize as applying to those peers practicing
or providing care within a state. When the United States Department
of Health and Human Services has declared a treatment modality not to
be safe and effective, practitioners that employ that treatment
modality shall be deemed not to meet professionally recognized
standards of health care. This definition shall not be construed to
mean that all other treatments meet professionally recognized
standards of care.
(6) "Unnecessary or substandard items or services" means those
that are either of the following:
(A) Substantially in excess of the provider's usual charges or
costs for the items or services.
(B) Furnished, or caused to be furnished, to patients, whether or
not covered by Medicare, medicaid, or any of the state health care
programs to which the definitions of applicant and provider apply,
and which are substantially in excess of the patient's needs, or of a
quality that fails to meet professionally recognized standards of
health care. The department's determination that the items or
services furnished were excessive or of unacceptable quality shall be
made on the basis of information, including sanction reports, from
the following sources:
(i) The professional review organization for the area served by
the individual or entity.
(ii) State or local licensing or certification authorities.
(iii) Fiscal agents or contractors, or private insurance
companies.
(iv) State or local professional societies.
(v) Any other sources deemed appropriate by the department.
(7) "Enrolled or enrollment in the program" means authorized under
any and all processes by the department or its agents or contractors
to receive, directly or indirectly, reimbursement for the provision
of services, goods, supplies, or merchandise to a program
beneficiary.
(n) In lieu of, or in addition to, the imposition of any other
sanctions available, including the imposition of a civil penalty
under Sections 14123.2 or 14171.6, the program may impose on
providers any or all of the penalties pursuant to Section 14123.25,
in accordance with the provisions of that section. In addition,
program providers shall be subject to the penalties contained in
Section 14107.
(o) (1) Notwithstanding any other provision of law, every primary
supplier of pharmaceuticals, medical equipment, or supplies shall
maintain accounting records to demonstrate the manufacture, assembly,
purchase, or acquisition and subsequent sale, of any
pharmaceuticals, medical equipment, or supplies, to providers.
Accounting records shall include, but not be limited to, inventory
records, general ledgers, financial statements, purchase and sales
journals, and invoices, prescription records, bills of lading, and
delivery records.
(2) For purposes of this subdivision, the term "primary supplier"
means any manufacturer, principal labeler, assembler, wholesaler, or
retailer.
(3) Accounting records maintained pursuant to paragraph (1) shall
be subject to audit or examination by the department or its agents.
The audit or examination may include, but is not limited to,
verification of what was claimed by the provider. These accounting
records shall be maintained for three years from the date of sale or
the date of service.
(p) Each provider of health care services rendered to any program
beneficiary shall keep and maintain records of each service rendered,
the beneficiary to whom rendered, the date, and such additional
information as the department may by regulation require. Records
required to be kept and maintained pursuant to this subdivision shall
be retained by the provider for a period of three years from the
date the service was rendered.
(q) A program provider applicant or a program provider shall
furnish information or copies of records and documentation requested
by the department. Failure to comply with the department's request
shall be grounds for denial of the application or automatic
disenrollment of the provider.
(r) A program provider may assign signature authority for
transmission of claims to a billing agent subject to Sections 14040,
14040.1, and 14040.5.
(s) Moneys payable or rights existing under this division shall be
subject to any claim, lien, or offset of the State of California,
and any claim of the United States of America made pursuant to
federal statute, but shall not otherwise be subject to enforcement of
a money judgment or other legal process, and no transfer or
assignment, at law or in equity, of any right of a provider of health
care to any payment shall be enforceable against the state, a fiscal
intermediary, or carrier.
SEC. 96. (a) Of the funds appropriated in Item
4265-111-0001 of Section 2.00 of the Budget Act of 2007 from the
Cigarette and Tobacco Products Surtax Fund, twenty-four million eight
hundred three thousand dollars ($24,803,000) shall be allocated in
accordance with subdivision (b) for the 2007-08 fiscal year from the
following accounts:
(1) Twenty million two hundred twenty-seven thousand dollars
($20,227,000) from the Hospital Services Account.
(2) Four million five hundred seventy-six thousand dollars
($4,576,000) from the Physician Services Account.
(b) The funds specified in subdivision (a) shall be allocated
proportionately as follows:
(1) Twenty-two million three hundred twenty-four thousand dollars
($22,324,000) shall be administered and allocated for distribution
through the California Healthcare for Indigents Program (CHIP),
Chapter 5 (commencing with Section 16940) of Part 4.7 of Division 9
of the Welfare and Institutions Code.
(2) Two million four hundred seventy-nine thousand dollars
($2,479,000) shall be administered and allocated through the Rural
Health Services Program, Chapter 4 (commencing with Section 16930) of
Part 4.7 of Division 9 of the Welfare and Institutions Code.
(c) (1) Funds allocated pursuant to this section from the
Physician Services Account and the Hospital Services Account in the
Cigarette and Tobacco Products Surtax Fund shall be used only for the
reimbursement of physicians for losses incurred in providing
uncompensated emergency services in general acute care hospitals
providing basic, comprehensive, or standby emergency services, as
defined in Section 16953 of the Welfare and Institutions Code. Funds
shall be transferred to the Physician Services Account in the county
Emergency Medical Services Fund established pursuant to Sections
16951 and 16952 of the Welfare and Institutions Code, and shall be
paid only to physicians who directly provide emergency medical
services to patients, based on claims submitted or a subsequent
reconciliation of claims. Payments shall be made as provided in
Sections 16951 to 16959, inclusive, of the Welfare and Institutions
Code, and payments shall be made on an equitable basis, without
preference to any particular physician or group of physicians.
(2) If a county has an Emergency Medical Services Fund Advisory
Committee that includes both emergency physicians and emergency
department on-call back-up panel physicians, and if the committee
unanimously approves, the administrator of the Emergency Medical
Services Fund may create a special fee schedule and claims submission
criteria for reimbursement for services rendered to uninsured trauma
patients, provided that no more than 15 percent of the tobacco tax
revenues allocated to the county's Emergency Medical Services Fund is
distributed through this special fee schedule, that all physicians
who render trauma services are entitled to submit claims for
reimbursement under this special fee schedule, and that no physician'
s claim may be reimbursed at greater than 50 percent of losses under
the special fee schedule.
SEC. 97. The State Department of Mental Health, in
direct collaboration with the State Department of Health Care
Services as the state's lead Medicaid entity, shall provide the
fiscal and policy committees of the Legislature with specified work
products as contained in the State Department of Mental Health
workplan. The purpose of the workplan is to significantly improve the
management of fiscal systems as they pertain to the Medi-Cal
program, including the Early, Periodic Screening and Diagnosis and
Treatment Program, Mental Health Managed Care, and Short/Doyle
Medi-Cal services. The work products to be provided and their
delivery dates include, at a minimum, the following:
(a) Accounting and Administrative Control Review recommendations
(October 2007).
(b) A detailed implementation plan to implement Accounting and
Administrative Control Review recommendations (March 2008).
(c) An action plan to address reforms regarding Mental Health
Managed Care and Short/Doyle services (March 2008).
SEC. 98. The State Department of Mental Health, in
direct collaboration with the State Department of Health Care
Services as the state's lead Medicaid entity, shall provide the
fiscal and policy committees of the Legislature, by no later than
March 1, 2008, with a policy analysis of the San Mateo Pharmacy and
Laboratory Services Project. At a minimum this policy analysis shall
do the following:
(a) Articulate best practices learned from the pilot and whether
these best practices could be replicated statewide.
(b) Offer suggestions to improve the project.
(c) Clarify the project's relationship to other local and
statewide efforts related to pharmaceutical usage and purchasing,
such as those conducted through the Health Plan of San Mateo and the
CalMEND project, as well as others.
SEC. 99. The State Department of Mental Health
shall provide the fiscal and policy committees of the Legislature, by
no later than September 1, 2007, with their action plan to implement
fiscal reforms regarding the San Mateo Pharmacy and Laboratory
Services Project. This action plan shall respond to issues identified
by the Office of State Audits and Evaluations, as well as any other
applicable concerns identified by the department, stakeholders, and
control agencies.
SEC. 100. (a) The State Department of Health Care
Services shall issue an All County Welfare Directors Letter and a
Medi-Cal Provider Bulletin regarding the Conlan v. Shewry Beneficiary
Reimbursement process no later than October 1, 2007, which shall
include, at a minimum, all of the following information:
(1) Persons eligible for Medi-Cal on or after June 27, 1997, are
eligible for reimbursement of health care services paid out-of-pocket
for Medi-Cal covered services during any of the following periods of
time:
(A) The three months before an application for Medi-Cal was filed
(retroactivity period).
(B) The time between when a Medi-Cal application was filed and was
approved (evaluation period).
(C) After being approved for Medi-Cal (postapproval period).
(2) Payments made to a Medi-Cal provider are eligible for
reimbursement, including improper copayments, improper share-of-cost
amounts, or the cost of covered medical, mental health, IHSS, drug
and alcohol or dental services. Payments made to a Medi-Cal provider
are ineligible for reimbursement if the payments were for valid
copayments or share of cost.
(3) Payments made to non-Medi-Cal providers are eligible for
reimbursement if the services were received at either of the
following times:
(A) On or before February 2, 2006, and the Medi-Cal eligible
person had applied but not received a Medi-Cal card.
(B) During the 90-day retroactivity period prior to the person
filing a Medi-Cal application.
(4) Medi-Cal beneficiaries are entitled to reimbursement of the
full amount paid minus permissible cost-sharing amounts, not limited
to the Medi-Cal rate, if reimbursement is made by the provider or by
the State Department of Health Care Services when it has the ability
to initiate a recoupment action against a provider. If the Medi-Cal
provider has not made full reimbursement, the department shall
initiate recoupment from the Medi-Cal provider if appropriate.
(5) Providers who reimburse a Medi-Cal beneficiary may submit
claims for payment to the State Department of Health Care Services
for those services provided notwithstanding the billing timeliness
limitations for claims submissions, (pursuant to Title 42 Code of
Federal Regulations, Section 447.45(d)(1) and California Code of
Regulations, Title 22 of Division 3 of Sections 51000.8(a) and
51008.5) even if more than 12 months has elapsed since the service
was provided. Claims for services that were provided from June 27,
1997, through November 16, 2006, inclusive, shall be submitted to the
department by November 16, 2007, or within 90 days after issuance of
the Medi-Cal card, whichever is longer. Claims for services provided
on or after November 16, 2006, shall be received by the department
within one calendar year after the date the service was rendered or
within 90 days after issuance of the Medi-Cal card, whichever is
longer.
(6) Medi-Cal providers shall either reimburse the beneficiary who
requests payment or request a state hearing to contest the request
for payment within 30 days of receipt of the letter from the State
Department of Health Care Services. The time period for reimbursement
may be extended upon a showing of good cause to the department. The
reimbursement and recoupment process shall be stayed pending the
outcome of the state hearing.
(b) The State Department of Health Care Services shall seek input
from consumer advocates and provider representatives in developing
the All County Welfare Directors Letter and the
Provider Bulletin.
(c) The State Department of Health Care Services shall prominently
post on its Web site information on the Conlan v. Shewry
Reimbursement Process, including, at a minimum, the Conlan
Implementation Plan that was approved by the superior court.
(d) Nothing in this section shall be construed to expand the legal
duties of the State Department of Health Care Services under the
Conlan v. Shewry Revised Implementation Plan that was approved by the
San Francisco Superior Court on November 17, 2006.
SEC. 101. The adoption and readoption of
regulations by the Managed Risk Medical Insurance Board pursuant to
Section 12693.981 of the Insurance Code, shall be deemed to be an
emergency and necessary for the immediate preservation of public
peace, health, and safety, or general welfare. The board is hereby
exempted from the requirements that it describe specific facts
showing the need for immediate action and shall be exempt from review
by the Office of Administrative Law. For purposes of subdivision (e)
of Section 11346.1 of the Government Code, the 120-day period, as
applicable to the effective period of an emergency regulation and
submission of specified materials to the Office of Administrative
Law, is hereby extended to 180 days.
SEC. 102. The Division of Licensing and
Certification in the State Department of Public Health may
temporarily revise rate structures within individual types of health
facilities listed in Section 1266 of the Health and Safety Code
during the 2007-08 fiscal year, provided that any revisions are
revenue-neutral and do not shift costs between provider groups.
SEC. 102.3. The California Medical Assistance
Commission (CMAC) and the State Department of Health Care Services
shall report to the Legislature, through budget subcommittee hearings
to be convened in 2008, regarding changes implemented in the 2007-08
fiscal year regarding Medi-Cal Managed Care reimbursement rates
negotiated under the Geographic Managed Care model with respect to
changes made pursuant to Section 14301.1 of the Welfare and
Institutions Code concerning the use of health plan specific
encounter and claims data, and the application of actuarial methods.
SEC. 102.5. (a) (1) The State Department of
Developmental Services shall develop a plan of options for
consideration by the Administration and the Legislature to better
control regional center costs of operating and providing
state-supported services. The options shall provide program
efficiencies while protecting clients.
(2) The plan developed pursuant to paragraph (1) should include a
wide range of options, with an analysis of advantages and
disadvantages of each.
(b) The department shall submit the plan developed pursuant to
subdivision (a) to the Joint Legislative Budget Committee and the
fiscal and policy committees of the Legislature no later than October
1, 2007.
SEC. 102.7. (a) (1) The State Department of Mental
Health shall develop a plan for the Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) Program for consideration by the
Administration and the Legislature. The plan shall include all of the
following:
(A) Proposals for a statutory framework for the program.
(B) Options for reforms that would control program costs.
(C) Proposals to address the recommendations of the Department of
Finance, Office of State Audits and Evaluation.
(2) In developing the plan, the department shall provide program
efficiencies while protecting clients, and shall consult with the
counties and consider the role of the counties in providing services
under the program.
(3) The department shall submit the plan developed pursuant to
this subdivision to the Joint Legislative Budget Committee and the
fiscal and policy committees of the Legislature no later than March
1, 2008.
(b) The State Department of Mental Health shall work with the
Legislature to develop an appropriate administrative structure for
the EPSDT Program for implementation in the 2008-09 fiscal year,
including enacting legislation to codify the administrative structure
of the EPSDT Program.
SEC. 103. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SEC. 104. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or
safety within the meaning of Article IV of the Constitution and shall
go into immediate effect. The facts constituting the necessity are:
In order to make the necessary statutory changes to implement the
Budget Act of 2007 at the earliest possible time, it is necessary
that this act take effect immediately.
SECTION 1. It is the intent of the Legislature
to make statutory changes relating to the Budget Act of 2007.