BILL NUMBER: AB 2716 CHAPTERED 09/10/04 CHAPTER 454 FILED WITH SECRETARY OF STATE SEPTEMBER 10, 2004 APPROVED BY GOVERNOR SEPTEMBER 10, 2004 PASSED THE ASSEMBLY AUGUST 24, 2004 PASSED THE SENATE AUGUST 10, 2004 AMENDED IN SENATE AUGUST 4, 2004 AMENDED IN SENATE JUNE 9, 2004 AMENDED IN ASSEMBLY APRIL 27, 2004 AMENDED IN ASSEMBLY APRIL 13, 2004 INTRODUCED BY Assembly Member Lowenthal FEBRUARY 20, 2004 An act to amend Sections 14087.96, 14087.961, 14087.9625, 14087.966, and 14087.969 of the Welfare and Institutions Code, relating to Medi-Cal. LEGISLATIVE COUNSEL'S DIGEST AB 2716, Lowenthal. Medi-Cal. Existing law provides for the Medi-Cal program, administered by the State Department of Health Services, under which qualified low-income persons are provided with health care services. Existing law authorizes the Board of Supervisors of the County of Los Angeles to establish a commission for the provision, or arrangement for the provision, of health care services under the Medi-Cal program in all or a portion of the geographic area of the county. Under existing law, the authorization for the commission to operate a health care program is limited to the local initiative described in a strategic plan, which is defined as a specified report issued on March 31, 1993, by the department. This bill would revise the definition of the strategic plan to specifically include within the scope of that definition, the plan, as subsequently revised or amended. Under existing law, governance of the commission is vested in a governing body consisting of 13 members. Among other requirements, one member is required to be a representative of free and community clinics and one member is required to be a representative of federally qualified health centers, with both of these members to be nominated by an entity or group recognized by the board of supervisors as representing the clinics and centers, respectively. This bill, instead, would require that these members be nominated by the Community Clinics Association of Los Angeles County. Existing law requires the governing body for each geographic region served by the local initiative to establish a community advisory committee and requires that the chairpersons of the community advisory committees comprise an executive advisory committee. This bill would rename the community advisory committee the regional community advisory committee and rename the executive advisory committee the executive community advisory committee. Existing law prohibits certain public officials and employees from being financially interested in any contract made by them in their official capacity or by any body or board of which they are members, including members of the governing body of the commission. Existing law provides that a member of the governing body of the commission or any advisory panel to the governing body is deemed not interested in a contract or amendment to a contract entered into by the commission if 6 conditions are satisfied. This bill would revise these conditions. The bill also would establish conditions under which unrelated income, as defined under the bill, from a contractor under the local initiative to a member or a member's organization would not cause the member of the governing body of the commission or the advisory panel to the governing body to be deemed to be interested in the contract or amendment to the contract. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 14087.96 of the Welfare and Institutions Code is amended to read: 14087.96. The following definitions shall apply for purposes of this article: (a) "County" means the County of Los Angeles. (b) "Board of supervisors" means the Board of Supervisors of the County of Los Angeles. (c) "Commission" means the separate public agency established by the board of supervisors to operate a local initiative for health care in the county. (d) "Local initiative" means the health plan or plans and other health care programs owned or operated by the commission established under this article, and operated pursuant to the strategic plan. (e) "Medi-Cal managed care programs" means all those components of the Medi-Cal program that involve the restriction of access for Medi-Cal patients to particular providers or health plans and that involve managed care principles, including, but not limited to, programs such as those described in Article 2.7 (commencing with Section 14087.3), Article 2.8 (commencing with Section 14087.5), Chapter 8 (commencing with Section 14200), including pilot programs under Article 7 (commencing with Section 14490) thereof. (f) "Health care consumer" means a Medi-Cal beneficiary or any other person eligible to receive health care services under the local initiative, including parents, legal guardians, or conservators of Medi-Cal beneficiaries and people who will receive health care services under the local initiative. (g) "Health care consumer advocate" means an individual who, whether in a paid or unpaid capacity, represents the interests of Medi-Cal beneficiaries or people who will receive health care under the local initiative. (h) "Strategic plan" means the report issued on March 31, 1993, by the State Department of Health Services, entitled "The State Department of Health Services' Plan for Expanding Medi-Cal Managed Care: Protecting Vulnerable Populations" or the report, as subsequently revised or amended. SEC. 2. Section 14087.961 of the Welfare and Institutions Code is amended to read: 14087.961. Governance of the commission shall be vested in a governing body consisting of 13 members, each of whom shall have a fiduciary duty to act in the best interest of the commission and the local initiative, nominated by the following entities, and appointed by the board of supervisors: (a) Four members shall be nominated by the board of supervisors to represent the County of Los Angeles. No more than one member nominated by the board of supervisors shall be a member of the board of supervisors and each remaining member nominated by the board of supervisors shall possess experience as a health care administrator or as a health care provider. (b) One member shall be a representative of private hospitals that have Medi-Cal disproportionate share status, or if that status no longer exists, that serve an equivalent patient population, who shall be nominated by the Hospital Association of Southern California. (c) One member shall be a representative of private hospitals that do not have Medi-Cal disproportionate share status, who shall be nominated by the Hospital Association of Southern California. (d) One member shall be a representative of free and community clinics, who shall be nominated by the Community Clinics Association of Los Angeles County. (e) One member shall be a representative of federally qualified health centers, who shall be nominated by the Community Clinics Association of Los Angeles County, or if that status no longer exists, an equivalent group of health centers. (f) One member shall be a physician representative, who shall be nominated by the Los Angeles County Medical Association, in consultation with other physician associations within the county. (g) One member shall be a representative of Knox-Keene licensed prepaid health plans, who shall be nominated by the California Association of Health Plans. (h) One member shall represent health care consumers, and at the time of being nominated, shall be a health care consumer. The initial nominee shall be nominated by the working group on the role of the consumer for the first nominee, and thereafter, by a process determined by the community advisory committee under which only health care consumers may nominate and vote for appointees. (i) One member shall be a health care consumer advocate, who shall represent health care consumers. The initial nominee shall be nominated by the working group on the role of the consumer for the first nominee, and thereafter, by a process determined by the community advisory committee under which only health care consumers may nominate and vote for appointees. (j) One member shall be a children's health care provider representative, who shall be nominated by the Children's Planning Council as the coordinating entity for organizations and agencies providing direct services to, or advocacy for, children and families within the county. SEC. 3. Section 14087.9625 of the Welfare and Institutions Code is amended to read: 14087.9625. (a) Members of the governing body of the commission shall serve four-year terms. (b) Individuals shall be limited to serving on the governing body for two consecutive four-year terms or a maximum of 10 years. SEC. 4. Section 14087.966 of the Welfare and Institutions Code is amended to read: 14087.966. (a) The governing body for each geographic region served by the local initiative shall establish a regional community advisory committee to ensure community involvement. (b) Each regional community advisory committee shall have no more than 35 members, a majority of whom shall be consumers and consumer advocates, but may also include providers. (c) (1) The chairpersons of the regional community advisory committees shall comprise an executive community advisory committee. (2) It is the intent of the Legislature that a majority of the executive community advisory committee shall be consumers and consumer advocates, plus two at-large members. (d) The executive community advisory committee shall make recommendations, and shall report on its activities, to the governing body and shall be able to place matters of the governing body's agenda for consideration. SEC. 5. Section 14087.969 of the Welfare and Institutions Code is amended to read: 14087.969. (a) Notwithstanding any other provision of law, neither a member of the governing body of the commission nor a member of any advisory panel to the governing body shall be deemed to be interested in a contract or amendment to a contract entered into by the commission within the meaning of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code if all of the following conditions are satisfied: (1) The board of supervisors or the governing body appointed the member to represent the interests of the county, physicians, health care practitioners, hospitals, pharmacies, other health care organizations, consumers, or consumer advocates. For purposes of this section, each group whose interests are described in this paragraph shall be referred to as a stakeholder. (2) The contract or the contract as amended authorizes individuals or organizations in the same stakeholder group that the member was appointed to represent to provide services under the local initiative. (3) The contract or the contract as amended contains substantially the same terms and conditions as contracts entered into with other individuals or organizations in the same stakeholder group that the member was appointed to represent. (4) The contract or the contract as amended does not specifically authorize the member or the member's organization, as defined in paragraph (1) of subdivision (e), to provide services under the local initiative. (b) If paragraphs (1) to (3), inclusive, of subdivision (a) are satisfied but the contract or the contract as amended would specifically authorize the member or the member's organization to provide services under the local initiative, the contract approved by the governing body of the commission shall be deemed to comply with Section 1090 of the Government Code if the member abstains from voting on the contract or amendment to the contract, the member discloses the interest to the governing body or the advisory panel, whichever is applicable, the governing body or advisory panel notes the disclosure and the abstention in its official records, the member does not influence or attempt to influence the governing body, the advisory panel, or any member of the governing body or advisory panel to enter into the particular contract or the contract as amended, and the governing body or advisory panel authorizes the contract or amendment to the contract in good faith only by a vote of its membership sufficient for the purpose without counting the vote of the member. (c) Notwithstanding any other provision of law, income from a contractor under the local initiative to a member or to a member's organization, as defined in paragraph (1) of subdivision (e), which is unrelated income, as defined in paragraph (2) of subdivision (e), shall not cause the member of the governing body of the commission or the member of the advisory panel to the governing body to be deemed to be interested in the contract or amendment to the contract for purposes of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code, if the contract or the contract as amended contains substantially the same terms and conditions as contracts entered into with other contractors in the same stakeholder group that is the source of the unrelated income. (d) If the particular contract or the contract as amended does not contain substantially the same terms and conditions as contracts entered into with other contractors in the same stakeholder group that is the source of the unrelated income, the contract approved by the governing body of the commission shall be deemed to comply with Section 1090 of the Government Code if the member abstains from voting on the contract or amendment to the contract, the member discloses the interest to the governing body or the advisory panel, whichever is applicable, the governing body or advisory panel notes the disclosure and abstention in its official records, the member does not influence or attempt to influence the governing body to enter into the particular contract or the contract as amended, and the governing body or advisory panel authorizes the contract or amendment to the contract in good faith only by a vote of its membership sufficient for that purpose without counting the vote of the member. (e) For purposes of this section, the following definitions shall apply: (1) "Member's organization" means an entity for which the member serves as an employee, officer, board member, or consultant, or in which the member has any other financial interest for purposes of Article 4 (commencing with Section 1090) of Chapter 1 of Division 4 of Title 1 of the Government Code. (2) "Unrelated income" means income that is not related to, or is not for providing services under, the local initiative.