BILL NUMBER: AB 342	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 23, 2010
	AMENDED IN ASSEMBLY  MAY 18, 2009
	AMENDED IN ASSEMBLY  APRIL 13, 2009

INTRODUCED BY   Assembly  Members   Bass
    and Jones   Member
  John A. Perez 
    (   Coauthor:   Assembly Member  
Monning   ) 
   (Coauthor: Senator Steinberg)

                        FEBRUARY 18, 2009

    An act to add Article 5.4 (commencing with Section 14180)
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code,   An act to amend Section 15908 of, to add
Sections 14132.275, 14183, 14183.1, 14183.5, 14184 to, and to add
Part 3.6 (commencing with Section 15909) to Division 9 of, the
Welfare and Institutions Code,  relating to Medi-Cal, and
declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 342, as amended,  Bass   John A. Perez
 . Medi-Cal: demonstration project  waiver. 
 waivers. 
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services and
under which qualified low-income persons receive health care
benefits. The Medi-Cal program is, in part, governed and funded by
federal Medicaid provisions. 
   This bill would require the department to submit an application to
the federal Centers for Medicare and Medicaid Services for a waiver
to implement a demonstration project that improves health care, as
specified. The bill would require the department to submit the waiver
application by a date that shall ensure that the waiver is approved
by the federal Centers for Medicare and Medicaid Services by
September 1, 2010. The bill would condition implementation of the
waiver upon the enactment of subsequent statutory authorization.
 
   Existing federal law provides for the federal Medicare Program,
which is a public health insurance program for persons 65 years of
age and older and specified persons with disabilities who are under
65 years of age.  
   This bill would, to the extent that federal financial
participation is available, and pursuant to a demonstration project
or waiver of federal law, require the department to establish pilot
projects in up to 4 counties, as specified, to develop effective
health care models to provide services to persons who are dually
eligible under both the Medi-Cal and Medicare programs. This bill
would require the department to, no later than January 1, 2012,
identify health care models that may be included in a pilot project
and to develop a timeline and process for selecting, financing,
monitoring, and evaluating the pilot projects. 
   Existing law requires the department to seek a demonstration
project or federal waiver of Medicaid law to implement specified
objectives, which may include better care coordination for seniors
and persons with disabilities and children with special health care
needs.  
   This bill would, in furtherance of the demonstration project and
to the extent that federal financial participation is available,
permit the department to develop a pilot project that would require
seniors and persons with disabilities to be assigned as mandatory
enrollees into new and existing managed care health plans or county
alternative models of care, as specified. This bill would provide
that enrollment of seniors and persons with disabilities shall be
accomplished using a phased-in process and shall not commence until
necessary federal approvals have been acquired, or until February 1,
2011, whichever is later. The bill would impose various requirements
upon managed care health plans and county alternative models of care
participating in the demonstration program.  
   This bill would, commencing January 1, 2011, require all Medi-Cal
managed care health plans and other managed care arrangements, as
specified, to submit data, including encounter data and financial
data, for the development of rates, monitoring performance, and
ensuring quality.  
   This bill would require the department, in conjunction with the
implementation of the pilot project, to work with counties to develop
a method to be used in determining the appropriate contribution to
cover the nonfederal share of inpatient hospital expenses for seniors
and persons with disabilities in the Medi-Cal program.  
   Existing law, the Robert W. Crown California Children's Services
Act, requires the department and each county to administer the
California Children Services (CCS) program for treatment services for
persons under 21 years of age diagnosed with severe chronic disease
or severe physical limitations, as specified.  
   This bill also would, in furtherance of the demonstration project,
require the Director of Health Care Services to establish, by
January 1, 2012, models of organized health care delivery systems, as
specified, for children eligible for services under the CCS program.
This bill would provide that, to the extent permitted by federal
law, the department may require eligible individuals to enroll in
these models. This bill would also permit the Managed Risk Medical
Insurance Board to elect, with the consent of the director, to permit
children enrolled in the Healthy Families Program who are eligible
for CCS services to enroll in these organized health care delivery
models.  
   Existing law provides for the Health Care Coverage Initiative,
which is a federal waiver demonstration project established to expand
health care coverage to low-income uninsured individuals who are not
currently eligible for the Medi-Cal program, the Healthy Families
Program, or the Access for Infants and Mothers program.  
   Existing law provides for the repeal of this authority upon the
execution of a declaration by the Director of Health Care Services
specifying that the demonstration project has been terminated. 

   This bill would, alternatively, authorize the director to execute
a declaration continuing the demonstration project to the extent
authorized by a successor federal waiver or demonstration project.
 
   This bill would, in this regard, to the extent that federal
financial participation is available, require the department to, on
or after September 1, 2010, but no later than January 1, 2011, or 180
days after federal approval is obtained, seek a successor
demonstration project or federal waiver of Medicaid law to establish
Coverage Expansion and Enrollment Demonstration (CEED) projects, as
specified, to provide scheduled health care benefits for uninsured
adults 19 to 64, inclusive, years of age with incomes up to 200% of
the federal poverty level who are not otherwise eligible for Medi-Cal
or Medicare. This bill would require CEED projects to be designed
and implemented with the systems and program elements necessary to
facilitate the transition of those eligible individuals to the
Medi-Cal program, or alternatively, to coverage through the state
health insurance exchange, by 2014, pursuant to the provisions of
federal and state law, and the terms and conditions of specified
successor federal waivers or demonstrations projects. 
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 14132.275 is added to the 
 Welfare and Institutions Code   , to read:  
   14132.275.  (a) The department shall seek federal approval to
establish pilot projects described in this section pursuant to a
Medicare or a Medicaid demonstration project or waiver, or a
combination thereof. Under a Medicare demonstration, the department
may operate the Medicare component of a pilot project as a delegated
Medicare benefit administrator, and may enter into financing
arrangements with the federal Centers for Medicare and Medicaid
Services to share in any Medicare program savings generated by the
operation of any pilot project.
   (b) After federal approval is obtained, the department shall
establish pilot projects that enable dual eligibles to receive a
continuum of services, and that maximize the coordination of benefits
between the Medi-Cal and Medicare programs and access to the
continuum of services needed. The purpose of the pilot projects is to
develop effective health care models that integrate services
authorized under the federal Medicaid Program (Title XIX of the
federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)) and the
federal Medicare Program (Title XVIII of the federal Social Security
Act (42 U.S.C. Sec. 1395 et seq.)). These pilot projects may also
include additional services as approved through a demonstration
project or waiver, or a combination thereof.
   (c) No later than January 1, 2012, the department shall identify
health care models that may be included in a pilot project, and shall
develop a timeline and process for selecting, financing, monitoring,
and evaluating these pilot projects.
   (d) Goals for the pilot projects shall include all of the
following:
   (1) Coordinating Medi-Cal and Medicare benefits across health care
settings and improving continuity of acute care, long-term care, and
home- and community-based services.
   (2) Coordinating access to acute and long-term care services for
dual eligibles.
   (3) Maximizing the ability of dual eligibles to remain in their
homes and communities with appropriate services and supports in lieu
of institutional care.
   (4) Increasing the availability of and access to home- and
community-based alternatives.
   (e) Pilot projects shall be established in up to four counties,
and shall include at least one county that provides Medi-Cal services
via a two plan model pursuant to Article 2.7 (commencing with
Section 14087.3) and one county that provides Medi-Cal services under
a county organized health system pursuant to Article 2.8 (commencing
with Section 14087.5). In determining the counties in which to
establish a pilot project, the director shall consider the following:

   (1) Local support for integrating medical care, long-term care,
and home- and community-based services networks.
   (2) A local stakeholder process that includes health plans,
providers, community programs, consumers, and other interested
stakeholders in the development, implementation, and continued
operation of the pilot project.
   (f) The director may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis and may amend existing managed
care contracts to provide or arrange for services provided under
this section. Contracts entered into or amended pursuant to this
section shall be exempt from the provisions of Chapter 2 (commencing
with Section 10290) of Part 2 of Division 2 of the Public Contract
Code and Chapter 6 (commencing with Section 14825) of Part 5.5 of
Division 3 of the Government Code.
   (g) Notwithstanding any other provision of state law, the
department may require that dual eligibles be assigned as mandatory
enrollees into managed care plans established or expanded as part of
a pilot project. To the extent that mandatory enrollment is required,
except for subdivision (f) of Section 14183, any requirement of the
department and the health plans, and any requirement of continuity of
care protections for enrollees, as specified in Section 14183, shall
be applicable to this section. Dual eligibles shall have the option
to forgo receiving Medicare benefits under a pilot project.
   (h) For purposes of this section, a "dual eligible" means an
individual who is simultaneously eligible for full scope benefits
under Medi-Cal and the federal Medicare program.
   (i) Persons meeting requirements for Program of All-Inclusive Care
for the Elderly (PACE) pursuant to Chapter 8.75 (commencing with
Section 14590), may select a PACE plan if one is available in that
county.
   (j) The department shall conduct an evaluation to assess outcomes
and the experience of dual eligibles in these pilot projects and
shall provide a report to the Legislature after the first full year
of pilot operation, and annually thereafter.
   (k) This section shall be implemented only if and to the extent
that federal financial participation or funding is available to
establish these pilot projects.
   (l) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. 
   SEC. 2.    Section 14183 is added to the  
Welfare and Institutions Code   , to read:  
   14183.  (a) In furtherance of the demonstration project developed
pursuant to Section 14180, the department may require seniors and
persons with disabilities to be assigned as mandatory enrollees into
new or existing managed care health plans, or county alternative
models of care as described in subdivision (f). To the extent that
enrollment is required by the department, an enrollee's access to
fee-for-service Medi-Cal shall not be terminated until the enrollee
has been assigned to a managed care provider or county alternative
model of care.
   (b) In exercising its authority pursuant to subdivision (a), the
department shall do all of the following:
   (1) Assess and ensure the readiness of the managed care health
plans or county alternative models of care to address the unique
needs of seniors or persons with disabilities pursuant to the
applicable readiness evaluation criteria and requirements set for in
paragraphs (1) to (8), inclusive, of subdivision (b) of Section
14087.48.
   (2) Ensure the managed care health plans or county alternative
models of care comply with applicable state and federal laws,
including, but not limited to, physical accessibility and the
provision of health plan information in alternative formats.
   (3) Develop and implement an outreach and education program for
seniors and persons with disabilities, not currently enrolled in
Medi-Cal managed care, to inform them of their enrollment options and
rights under the demonstration project. Contingent upon available
private or public dollars other than moneys from the General Fund,
the department or its designated agent for enrollment and outreach
may partner or contract with community-based, nonprofit consumer or
health insurance assistance organizations with expertise and
experience in assisting seniors and persons with disabilities in
understanding their health care coverage options. Contracts entered
into or amended pursuant to this paragraph shall be exempt from
Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of
the Public Contract Code and any implementing regulations or policy
directives.
   (4) At least three months prior to enrollment, inform
beneficiaries who are seniors or persons with disabilities, through a
notice written at no more than a sixth grade reading level, about
the forthcoming changes to their delivery of care, including, at a
minimum, how their system of care will change, when the changes will
occur, and who they can contact for assistance with choosing a
delivery system or with problems they encounter. In developing this
notice, the department shall consult with consumer representatives
and other stakeholders.
   (5) Implement an appropriate awareness and sensitivity training
program regarding serving seniors and persons with disabilities for
managed care health plans and county alternative models of care, and
plan providers and staff in the Medi-Cal Managed Care Division of the
department.
   (6) Coordinate with the managed care health plans and county
alternative models of care, in consultation with stakeholders and
consumers, to develop and implement a mechanism or algorithm to
identify, within the earliest possible timeframe, persons with the
highest risk and most complex health care needs.
   (7) Provide managed care health plans and county alternative
models of care with historical utilization data for beneficiaries
upon enrollment in a managed care health plan or county alternative
model of care so that the plans participating in the demonstration
project are better able to assist beneficiaries and prioritize
assessment and care planning.
   (8) Develop and provide managed care health plans and county
alternative models of care participating in the demonstration project
with an enhanced facility site review tool for use in assessing the
physical accessibility of providers, including specialists and
ancillary service providers, at a clinic or provider site, in order
to ensure that there are sufficient physically accessible providers.
   (9) Develop a process to enforce legal sanctions, including, but
not limited to, financial penalties, withholding of Medi-Cal
payments, enrollment termination, and contract termination, in order
to sanction any managed care health plan or county alternative models
of care in the demonstration project that consistently or repeatedly
fails to meet performance standards.
   (10) Ensure that managed care health plans and county alternative
models of care provide a mechanism for enrollees to request a
specialist or clinic as a primary care provider.
   (11) Ensure that managed care health plans and county alternative
models of care participating in the demonstration project are able to
provide communication access to seniors and persons with
disabilities in alternative formats or through other methods that
ensure communication, including assistive listening systems, sign
language interpreters, captioning, pad and pencil, plain language or
written translations and oral interpreters, including for those who
are limited English-proficient, or non-English speaking, and that all
managed care health plans and county alternative models are in
compliance with applicable cultural and linguistic requirements.
   (12) Ensure that managed care health plans and county alternative
models participating in the demonstration project provide access to
out-of-network providers for new individual members enrolled under
this section who have an ongoing relationship with a provider if the
provider will accept the health plan or the county alternative model
of care's rate for the service offered, or the applicable Medi-Cal
fee-for-service rate, whichever is higher, and the health plan or
county alternative model of care determines that the provider meets
applicable professional standards and has no disqualifying quality of
care issues.
   (13) Ensure that managed care health plans and county alternative
models of care participating in the demonstration project comply with
continuity of care requirements in Section 1373.96 of the Health and
Safety Code.
   (14) Ensure that the medical exemption criteria applied in
counties operating under Chapter 4.1 (commencing with Section 53800)
or Chapter 4.5 (commencing with Section 53900) of Subdivision 1 of
Division 3 of Title 22 of the California Code of Regulations are
applied to seniors and persons with disabilities served under this
section.
   (c) Prior to exercising its authority under this section and
Section 14180, the department shall ensure that each managed care
health plan or county alternative model of care participating in the
demonstration project is able to do all of the following:
   (1) Comply with the applicable readiness evaluation criteria and
requirements set forth in paragraphs (1) to (8), inclusive of
subdivision (b) of Section 14087.48. The assessment of network
adequacy shall be determined in collaboration with the Department of
Managed Health Care.
   (2) Ensure and monitor an appropriate provider network, including
primary care physicians, specialists, professional, allied, and
medical supportive personnel, and an adequate number of accessible
facilities within each service area. Health plans and county
alternative models shall maintain an updated, accurate, and
accessible listing of a provider's ability to accept new patients and
made available to enrollees, at a minimum, by phone, written
material, or Internet Web site.
   (3) Assess the health care needs of beneficiaries who are seniors
or persons with disabilities and coordinate their care across all
settings, including coordination of necessary services within and,
where necessary, outside of the plan's provider network.
   (4) Ensure that the provider network and informational materials
meet the linguistic and other special needs of seniors and persons
with disabilities, including providing information in an
understandable manner in plain language, maintaining toll-free
telephone lines, and offering member or ombudsperson services.
   (5) Provide clear, timely, and fair processes for accepting and
acting upon complaints, grievances, and disenrollment requests,
including procedures for appealing decisions regarding coverage or
benefits. Each plan participating in the demonstration project shall
have a grievance process that complies with Sections 1368 and 1368.01
of the Health and Safety Code.
   (6) Solicit stakeholder and member participation in advisory
groups for the planning and development activities related to the
provision of services for seniors and persons with disabilities.
   (7) Contract with safety net and traditional providers as defined
in subdivisions (hh) and (jj) of Section 53810, of Title 22 of the
California Code of Regulations, to ensure access to care and
services. The managed care health plan or county alternative model of
care shall establish participation standards to ensure participation
and broad representation of traditional and safety net providers
within a service area.
   (8) Inform seniors and persons with disabilities of procedures for
obtaining transportation services to service sites that are offered
by the plan or are available through the Medi-Cal program.
   (9) Monitor the quality and appropriateness of care for children
with special health care needs, including children eligible for, or
enrolled in, the California Children Services Program, and seniors
and persons with disabilities.
   (10) Maintain a dedicated liaison to coordinate with each regional
center operating within the plan's service area to assist members
with developmental disabilities in understanding and accessing
services and act as a central point of contact for questions, access
and care concerns, and problem resolution.
   (11) Stratify incoming beneficiaries with aide codes applicable to
seniors and persons with disabilities of high or low risk by
applying a risk stratification algorithm approved by the department
to member specific fee-for-service claims data provided to the
managed care health plan or county alternative model of care at the
time of enrollment of the beneficiary.
   (12) (A) Administer a risk assessment survey tool approved by the
department to determine risk level of enrollees, which shall be
utilized by managed care health plans and county alternative models
of care participating under the demonstration project. Managed care
health plans and county alternative models of care shall perform a
telephonic assessment of newly enrolled beneficiaries based on their
risk as determined by the risk stratification algorithm specified in
paragraph (11) within the following timeframes:
   (i) Within 45 days of plan enrollment for higher risk
beneficiaries.
   (ii) Within 105 days of plan enrollment for lower risk
beneficiaries.
   (B) Based on the results of the telephonic health risk assessment,
managed care health plans and county alternative models of care
shall develop individual care plans for higher risk beneficiaries
that shall include the following minimum components:
   (i) Redetermination of risk level if indicated.
   (ii) Identification of medical care needs, including primary care,
specialty care, durable medical equipment, medications, and other
needs with a plan for care coordination as needed.
   (iii) Identification of needs and referral to appropriate
community resources and other agencies as needed for services outside
the scope of responsibility of the managed care health plan or
county alternative model of care.
   (iv) Appropriate involvement of caregivers.
   (v) Determination of timeframes for recontact or reassessment.
   (13) Establish medical homes to which enrollees are assigned that
include at a minimum all of the following elements:
   (A) The primary care physician who is the primary clinician for
the beneficiary and who provides core clinical management functions.
   (B) Care management and care coordination for the beneficiary
across the health care system including transitions among levels of
care.
   (C) Identification of the beneficiary's needs and referral to
community resources and other agencies for services or items outside
the scope of responsibility of the managed care health plan or county
alternative model of care.
   (D) Use of clinical data to identify beneficiaries at the care
site with chronic illness or other significant health issues.
   (E) Ensuring appropriate timeframes at the site and alternatives
for the beneficiary's access to care for preventive, acute or chronic
illness treatment as needed.
   (F) Use of clinical guidelines or other evidence based medicine
when applicable for treatment of beneficiaries' health care issues or
timing of clinical preventive services.
   (14) Perform, at a minimum, the following care management and care
coordination functions and activities for enrollees who are seniors
or persons with disabilities:
   (A) Assessment of the new enrollees risk level and health needs
through a standardized, telephonic health risk assessment to
determine risk level.
   (B) Facilitation of timely access to primary care, specialty care,
durable medical equipment, medications, and other health services
needed by the enrollee, including referrals for any physical or
cognitive barriers to access.
   (C) Active referral to community resources or other agencies for
needed services or items outside the managed care health plans and
county alternative models of care responsibilities.
   (D) Facilitating communication among the beneficiaries' health
care providers, including mental health and substance abuse providers
when appropriate.
   (E) Other activities or services needed to assist beneficiaries in
optimizing their health status, including assisting with self
management skills or techniques, health education, and other
modalities to improve health status.
   (d) Beneficiaries enrolled in managed care health plans or county
alternative models of care pursuant to this section shall have the
choice to continue an established patient-provider relationship in a
managed care health plan or county alternative model of care
participating in the demonstration project if his or her treating
provider is a primary care provider or clinic contracting with the
managed care health plan or county alternative model of care and
agrees to continue to treat that beneficiary.
   (e) The department, or as applicable, the California Medical
Assistance Commission, may contract with existing managed care health
plans operating under the demonstration project to provide or
arrange for services under this section. Notwithstanding any other
provision of law, the department, or as applicable, the commission,
may enter into the contract without the need for a competitive bid
process or other contract proposal process, provided the managed care
health plan provides written documentation that it meets all
qualifications and requirements of this section. Alternatively, and
notwithstanding any provision of law to the contrary, the department,
or as applicable, the commission, may seek applications and
thereafter contract with any qualified individual, entity, or
organization to provide or arrange for services under this section.
   (f) (1) Except for counties operating under the county organized
health systems model, and notwithstanding any requirements specified
in Article 2.7 (commencing with Section 14087.3) and Article 2.91
(commencing with Section 14089), a county shall have the option,
subject to approval by the department, to develop an alternative
model of care consistent with the terms of the demonstration project
to provide health care services within the scope of the county's
contract with the department to beneficiaries categorized as seniors
or persons with disabilities under the demonstration project. The
county alternative model of care may be managed by county staff and
shall not be required to obtain licensure 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), unless the model
is a capitated model that assumes full risk for its beneficiaries.
   (2) For purposes of this subdivision, county alternative models of
care may include, at the discretion of the department,
administrative services organizations, primary care case management
plan, outpatient managed care models, and other models the department
determines acceptable.
   (3) A county shall be required to select the county alternative
model of care option prior to commencement of mandatory enrollment of
seniors or persons with disabilities in a county pursuant to
subdivision (a), but no later than January 1, 2012.
   (4) The department shall determine an actuarially sound rate for
the county alternative models of care that is adequate and sufficient
to ensure access to services, and that is budget neutral to the
state.
   (g) This section shall be implemented only to the extent that
federal financial participation is available.
   (h) The development and negotiation of capitation rates for
managed care health plan contracts shall include the analysis of data
specific to the seniors and persons with disabilities population.
For the purposes of developing or negotiating capitation rates for
payments to managed care health plans, the director may require
managed care health plans, including existing managed health care
plans, to submit financial and utilization data in a form, time, and
substance as deemed necessary by the department.
   (i) Persons meeting participation requirements for the Program of
All-Inclusive Care for the Elderly (PACE) pursuant to Chapter 8.75
(commencing with Section 14590), may select a PACE plan if one is
available in that county.
   (j) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments
                                     by means of all-county letters,
plan letters, plan or provider bulletins, or similar instructions,
without taking regulatory action.
   (k) Consistent with state law that exempts Medi-Cal managed care
contracts from Chapter 2 (commencing with Section 10290) of Part 2 of
Division 2 of the Public Contract Code, and in order to achieve
maximum cost savings, the Legislature hereby determines that an
expedited contract process is necessary for managed care health plan
contracts entered into or amended pursuant to this section. The
contracts and amendments entered into or amended pursuant to this
section shall be exempt from Chapter 2 (commencing with Section
10290) of Part 2 of Division 2 of the Public Contract Code and the
requirements of State Administrative Management Manual Memo 03-10.
The department shall make the terms of a contract available to the
public within 30 days of the contract's effective date.
   (l) In the event of a conflict between the terms and conditions of
the approved demonstration project, including any attachment
thereto, and any provision of this part, the terms and conditions
shall control.
   (m) In the event of a conflict between the provisions of this
article and any other provision of this part, the provisions of this
article shall control.
   (n) Any otherwise applicable provisions of this chapter, Chapter 8
(commencing with Section 14200), or Chapter 8.75 (commencing with
Section 14500) not in conflict with this article or with the terms
and conditions of the demonstration project shall apply to this
section.
   (o) To the extent that the director utilizes state plan amendments
or waivers to accomplish the purposes of this article in addition to
waivers granted under the demonstration project, the terms of the
state plan amendments or waivers shall control in the event of a
conflict with any provision of this part.
   (p) Enrollment of seniors and persons with disabilities into a
managed care health plan or county alternative model of care under
this section shall be accomplished using a phased-in process to be
determined by the department and shall not commence until necessary
federal approvals have been acquired or until February 1, 2011,
whichever is later.
   (q) A managed care health plan or county alternative model of care
established pursuant to this section, or under the terms and
conditions of the demonstration project pursuant to Section 14180,
shall be subject to, and comply with, the requirement for submission
of encounter data specified in Section 14183.1.
   (r) Commencing January 1, 2011, and until January 1, 2014, the
department shall provide the fiscal and policy committees of the
Legislature with semiannual updates regarding core activities for the
enrollment of seniors and persons with disabilities into managed
care health plans or county alternative models of care pursuant to
the pilot program. The semiannual updates shall include key
milestones, progress towards the objectives of the pilot program,
relevant or necessary changes to the program, submittal of state plan
amendments to the federal Centers for Medicare and Medicaid
Services, submittal of any federal waiver documents, and other key
activities related to the mandatory enrollment of seniors and persons
with disabilities into managed care health plans or county
alternative models of care. The department may also include updates
on the transition of individuals into managed care health plans and
county alternative models of care, the health outcomes of enrollees,
the care management and coordination process, and other information
concerning the success or overall status of the pilot program.
   (s) The department, in collaboration with the State Department of
Social Services and county welfare departments, shall monitor the
utilization and caseload of the In-Home Supportive Services (IHSS)
program before and during the implementation of the pilot program.
This information shall be monitored in order to identify the impact
of the pilot program on the IHSS program for the affected population.

   (t) The department, in cooperation with the Department of Managed
Health Care, shall, at a minimum, monitor on a quarterly basis the
adequacy of provider networks of the managed care health plans or
county alternative models of care.
   (u) The department shall suspend new enrollment of seniors and
persons with disabilities into a managed care health plan or county
alternative care model if it determines that the managed care health
plan or county alternative care model does not have sufficient
primary or specialty providers to meet the needs of their enrollees.

   SEC. 3.    Section 14183.1 is added to the  
Welfare and Institutions Code   , to read:  
   14183.1.  (a) Commencing January 1, 2011, all managed care health
plans and other managed care arrangements, including county
alternative models of care developed pursuant to Section 14183, as
the department shall specify, shall be required to submit data,
including, but not limited to, encounter data and financial data, in
the form of and to the specifications prescribed by the department
for the development of rates, monitoring plan performance, and
ensuring quality.
   (b) Failure of a managed care health plan or other managed care
arrangement to comply with the requirements established by the
department under this section shall result in a penalty, imposed by
the department monthly, of 2 percent of the total monthly capitation
rate for that plan or arrangement per month until the plan or
arrangement has fully complied with the requirements.
   (c) The requirements for reporting data, pursuant to subdivision
(a), shall apply to all services provided to members under this
chapter, Chapter 8 (commencing with Section 14200), and Chapter 8.75
(commencing with Section 14500), regardless of whether or not the
member is a senior or a person with a disability or disabilities.
   (d) Failure of a provider or subcontractor to submit data to a
managed care health plan or arrangement shall not relieve the plan or
arrangement from its responsibilities under this section and shall
not affect imposition of the penalty as described in subdivision (b).

   (e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section by
means of all-county letters, plan letters, plan or provider
bulletins, or similar instructions, without taking regulatory action.
If the department elects to adopt regulations, 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. 
   SEC. 4.    Section 14183.5 is added to the  
Welfare and Institutions Code   , to read:  
   14183.5.  In conjunction with the implementation of Section 14183,
the department shall work with counties to develop a method to be
used in determining the appropriate contribution to cover the
nonfederal share of inpatient hospital expenses for seniors and
persons with disabilities in the Medi-Cal program. 
   SEC. 5.    Section 14184 is added to the  
Welfare and Institutions Code   , to read:  
   14184.  (a) Notwithstanding Section 14094.3, in furtherance of the
demonstration project developed pursuant to Section 14180, the
director shall establish, by January 1, 2012, organized health care
delivery models for children eligible for California Children
Services (CCS) under Article 5 (commencing with Section 123800) of
Chapter 3 of Part 2 of Division 106 of the Health and Safety Code.
These models shall include at least one of the following:
   (1) An enhanced primary care case management program.
   (2) A provider-based accountable care organization.
   (3) A specialty health care plan.
   (4) A Medi-Cal managed care plan that includes payment and
coverage for CCS-eligible conditions.
   (b) Each model shall do all of the following:
   (1) Establish clear standards and criteria for participation,
exemption, enrollment, and disenrollment.
   (2) Provide care coordination that links children and youth with
special health care needs with appropriate services and resources in
a coordinated manner to achieve optimum health.
   (3) Establish networks that include CCS-approved providers and
maintain the current system of regionalized pediatric specialty and
subspecialty services to ensure that children and youth have timely
access to appropriate and qualified providers.
   (4) Coordinate out-of-network access if appropriate and qualified
providers are not part of the network or in the region.
   (5) Ensure that children enrolled in the model receive care for
their CCS-eligible medical conditions from CCS-approved providers
consistent with the CCS standards of care.
   (6) Participate in a statewide quality improvement collaborative
that includes stakeholders.
   (7) Establish and support medical homes, incorporating all of the
following principles:
   (A) Each child has a personal physician.
   (B) The medical home is a physician-directed medical practice.
   (C) The medical home utilizes a whole child orientation.
   (D) Care is coordinated or integrated across all of the elements
of the health care system and the family and child's community.
   (E) Information, education, and support to consumers and families
in the program is provided in a culturally competent manner.
   (F) Quality and safety practices and measures.
   (G) Provides enhanced access to care, including access to
after-hours care.
   (H) Payment is structured appropriately to recognized the added
value provided to children and their families.
   (8) Provide the department with data for quality monitoring and
improvement measures, as determined necessary by the department. The
department shall institute quality monitoring and improvement
measures that are appropriate for children and youth with special
health care needs.
   (c) The services provided under these models shall not be limited
to medically necessary services required to treat the CCS-eligible
medical condition.
   (d) Notwithstanding any other provision of law, and to the extent
permitted by federal law, the department may require eligible
individuals to enroll in these models.
   (e) At the election of the Managed Risk Medical Insurance Board,
and with the consent of the director, children enrolled in the
Healthy Families Program pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code, who are eligible
for CCS under Article 5 (commencing with Section 123800) of Chapter 3
of Part 2 of Division 106 of the Health and Safety Code, may enroll
in the organized health care delivery models established under this
section.
   (f) For the purposes of implementing this section, the department
shall seek proposals to establish and test these models of organized
health care delivery systems, may enter into exclusive or
nonexclusive contracts on a bid or negotiated basis, and may amend
existing managed care contracts to provide or arrange for services
under this section. Contracts may be statewide or on a more limited
geographic basis. Contracts entered into or amended under this
section shall be exempt from the provisions of Chapter 2 (commencing
with Section 10290) of Part 2 of Division 2 of the Public Contract
Code and Chapter 6 (commencing with Section 14825) of Part 5.5 of
Division 3 of the Government Code.
   (g) (1) Entities contracting with the department under this
section shall report expenditures for the services provided under the
contract.
   (2) If a contractor is paid according to a capitated or risk-based
payment methodology, the rates shall be actuarially sound and take
into account care coordination activities.
   (h) (1) The department shall conduct an evaluation to assess the
effectiveness of each model in improving the delivery of health care
services for children who are eligible for CCS. The department shall
consult with stakeholders in developing an evaluation for the models
being tested.
   (2) The evaluation process shall begin simultaneously with the
development and implementation of the model delivery systems to
compare the care provided to, and outcomes of, children enrolled in
the models with those not enrolled in the models. The evaluation
shall include, at a minimum, an assessment of all of the following:
   (A) The types of services and expenditures for services.
   (B) Improvement in the coordination of care for children.
   (C) Improvement in the quality of care.
   (D) Improvement in the value of care provided.
   (E) The rate of growth of expenditures.
   (F) Parent satisfaction.
   (i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. 
   SEC. 6.    Section 15908 of the   Welfare
and Institutions Code   is amended to read: 
   15908.   (a)    This part shall become
inoperative on the date that the director executes a declaration,
which shall be retained by the director and provided to the fiscal
and appropriate policy committees of the Legislature, stating that
the federal demonstration project provided for in this part has been
terminated by the federal Centers for Medicare and Medicaid Services,
and shall, six months after the date the declaration is executed, be
repealed. 
   (b) Notwithstanding subdivision (a), the director may
alternatively execute a declaration continuing the projects
established in this part, to the extent the projects are authorized
and consistent with the terms and conditions of a successor federal
waiver or demonstration project secured pursuant to Section 14180.
 
   (c) Notwithstanding subdivision (a), the director may continue and
administer any extensions, modifications, or continuation of the
projects under this part approved by the federal Centers for Medicare
and Medicaid Services. 
   SEC. 7.    Part 3.6 (commencing with Section 15909)
is added to Division 9 of the   Welfare and Institutions
Code   , to read:  

      PART 3.6.  Coverage Expansion and Enrollment Demonstration
Projects


   15909.  The Legislature finds and declares all of the following:
   (a) Pursuant to Section 14180, the Legislature directed the
department to apply for a successor federal waiver or demonstration
project, in part, to coincide with the end of the waiver described in
relevant part in subdivision (b) of Section 15900 to, among other
requirements, optimize opportunities to increase federal financial
participation and maximize financial resources to address
uncompensated care.
   (b) Passage of federal health care reform, pursuant to the federal
Patient Protection and Affordable Care Act (Public Law 111-148), as
amended by the federal Health Care and Reconciliation Act (Public Law
111-152), presents new options of federal support for coverage of
low-income individuals and significant expansion of state coverage
programs in 2014. Through the success of the Health Care Coverage
Initiatives established pursuant to Part 3.5 (commencing with Section
15900), and with implementation of a successor federal Medicaid
waiver or demonstration project, California is well positioned to
develop enrollment and coverage expansion models that will lead the
way to full implementation of comprehensive health care reforms in
2014.
   15910.  (a) Subject to federal approval of a successor Section
1115 Medicaid waiver or demonstration project effective on or after
September 1, 2010, the department shall, by no later than January 1,
2011, or alternatively, 180 days after federal approval of the
successor federal waiver or demonstration project, whichever occurs
later, develop local Coverage Expansion and Enrollment Demonstration
(CEED) projects to provide scheduled health care benefits for
uninsured adults 19 to 64, inclusive, years of age, with incomes up
to 200 percent of the federal poverty level and who are not otherwise
eligible for Medicare or Medi-Cal, consistent with the terms and
conditions of the successor federal waiver or demonstration project.
   (b) Counties, consistent with the terms and conditions of the
successor federal waiver or demonstration project, may perform
outreach and enrollment activities to target populations, including,
but not limited to, the homeless, individuals who frequently use
hospital inpatient or emergency department services for avoidable
reasons, or people with mental health treatment needs.
   (c) CEED projects shall be designed and implemented with the
systems and program elements necessary to facilitate the transition
of those eligible individuals to Medi-Cal coverage, or alternatively,
to coverage through the state health insurance exchange, by 2014,
pursuant to state and federal law, and the terms and conditions of
the successor federal waiver or demonstration project.
   (d) The department shall develop projects that meet the
requirements and desired outcomes set forth in this part and the
terms and conditions of the successor federal waiver or demonstration
project.
   (e) The projects shall include the following elements, subject to
the terms and conditions of the successor federal waiver or
demonstration project:
   (1) Development of standardized eligibility and enrollment
procedures that interface with Medi-Cal processes according to the
milestones developed in consultation with the counties, county health
departments, public hospitals, and county human service departments.
Coverage initiatives shall migrate to the standardized procedures in
accordance with the terms and conditions of the successor federal
waiver or demonstration project.
   (2) (A) Designation of a medical home and assignment of eligible
individuals to a primary care provider. For purposes of this
paragraph, "medical home" means a single provider or facility that
maintains all of an individual's medical information and, at a
minimum, coordinates health and medical care services for enrolled
individuals.
   (B) Provision of an enhanced medical home, to be specifically
defined by the terms and conditions of the successor federal waiver
or demonstration project, that targets those enrollees who are
frequent users of public inpatient hospital services or have been
diagnosed with chronic medical or mental health conditions. The
enhanced medical home may include case management services.
   (3) Provision of the scheduled benefit package of services
required under the terms and conditions of the successor federal
waiver or demonstration project described in subdivision (a).
   (4) A provider network and service delivery system that includes
participation by public and private providers in order to provide the
scheduled services in the project, and to ensure the capacity to
transition those eligible individuals to the applicable Medi-Cal
coverage, or alternatively, to coverage through the state health
insurance exchange, in 2014.
   (5) Development of an outreach and enrollment plan that does both
of the following:
   (A) Reaches potential project enrollees.
   (B) Includes the public and private providers necessary to serve
those eligible individuals in Medi-Cal coverage, or alternatively, in
coverage through the state health insurance exchange, beginning in
2014.
   (6) A quality measurement and quality monitoring system.
   (7) Data tracking systems to provide the department with required
data for quality monitoring, quality improvement, and evaluation.
   (8) The ability to demonstrate how the CEED projects will promote
the viability of the existing safety net health care system.
   (9) Demonstration of how the CEED projects will provide consumer
assistance to individuals applying for, participating in, or
accessing, services in the projects.
   (10) Ability to meet program requirements, standards, and
performance measurements developed by the department, in consultation
with participating counties, for the CEED projects.
   (f) A CEED project provider network and service delivery system
may include contracts or subcontracts with primary care clinics
licensed under subdivision (a) of Section 1204 of the Health and
Safety Code.
   (g) Services provided pursuant to this part shall be available to
those eligible uninsured individuals enrolled in the applicable CEED
project. Notwithstanding any other provision of law, nothing in this
part shall be construed to create an entitlement program of any kind.

   (h) CEED projects shall be established and implemented only to the
extent that federal financial participation is available.
   15911.  (a) A county, city and county, consortium of counties
serving a region consisting of more than one county, or health
authority shall be eligible to apply for a CEED project federal fund
allocation.
   (b) The department shall develop methodologies for distributing
available federal funds for the projects established by this part and
for determining the amount of federal funding available, consistent
with the terms and conditions of the successor federal waiver or
demonstration project.
   (c) The department shall seek to balance the allocations
throughout geographic areas of the state, consistent with the terms
and conditions of the successor federal waiver or demonstration
project.
   (d) Each county, city and county, consortium of counties, or
health authority that chooses to administer a CEED project and
receive federal funding shall provide the necessary local funds for
the nonfederal share of the certified public expenditures, or
intergovernmental transfers to the extent allowable under the
successor federal waiver or demonstration project, required to claim
the federal funds made available from the federal allotment. The
certified public expenditures or intergovernmental transfers, to the
extent allowable under the successor federal waiver or demonstration
project, shall meet the requirements of the terms and conditions of
the successor federal waiver or demonstration project referenced in
subdivision (a) of Section 15910. Nothing in this part shall be
construed to require a political subdivision of the state to
participate in the CEED project, and those local funds expended for
the nonfederal share of CEED project services under this part shall
be considered voluntary contributions for purposes of the federal
Patient Protection and Affordable Care Act (Public Law 111-148), as
amended by the federal Health Care and Reconciliation Act (Public Law
111-152), and the federal American Recovery and Reinvestment Act of
2009 (Public Law 111-5), as amended by the Patient Protection and
Affordable Care Act.
   (e) Selected projects shall expend the funds according to an
expenditure schedule determined by the department consistent with the
terms and conditions of the successor federal waiver or
demonstration project described in subdivision (a) of Section 15910.
   (f) Except as otherwise provided in the annual Budget Act, no
state General Fund moneys shall be used to fund CEED project
services, nor to fund any related administrative costs provided to
counties or any other political subdivision of the state.
                                                 (g) The department
may reallocate the available federal funds among selected projects,
if necessary, to maximize receipt of federal funds or meet federal
requirements regarding the timing of expenditures. Selected projects
receiving reallocated funds must have the ability to make the
certified public expenditures necessary to claim the applicable
reallocated federal funds.
   15912.  (a) The department shall ensure that the CEED projects
established under this part are evaluated to determine to what extent
the projects have met the requirements of the successor federal
waiver or demonstration project referenced in this part and
successfully developed the necessary systems and program elements
required to transition those eligible persons to Medi-Cal coverage,
or alternatively, to coverage through the state health insurance
exchange, in 2014.
   (b) The department may seek federal or private funds or enter into
partnership with an independent, nonprofit group or foundation, an
academic institution, or a governmental entity providing grants for
health-related activities, to evaluate the programs funded under this
part.
   15913.  Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this part, and
the terms and conditions of the successor federal waiver or
demonstration project secured pursuant to subdivision (a) of Section
15910, by means of all-county letters, plan letters, plan or provider
bulletins, or similar instructions.
   15914.  This part shall not be subject to Part 2 (commencing with
Section 10100) of Division 2 of the Public Contract Code.
   15915.  In the event of a conflict between a provision of this
part and a term or condition of the successor federal waiver or
demonstration project pursuant to subdivision (a) of Section 15910,
the terms and conditions of the successor federal waiver or
demonstration project shall control. 
   SEC. 7.    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 changes to state funded health care programs at
the earliest possible time, it is necessary that this act take effect
immediately. 
   SEC. 8.    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 changes to state funded health care programs at
the earliest possible time, it is necessary that this act take effect
immediately.  
  SECTION 1.    Article 5.4 (commencing with Section
14180) is added to Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, to read:

      Article 5.4.  Health Care Improvement Waiver


   14180.  (a) The department shall submit an application to the
federal Centers for Medicare and Medicaid Services for a waiver to
implement a demonstration project that does all of the following:
   (1) Strengthens California's health care safety net, which
includes disproportionate share hospitals, for low-income and
vulnerable Californians.
   (2) Maximizes opportunities to expand coverage to eligible, but
uninsured populations.
   (3) Optimizes opportunities to increase federal financial
participation and maximizes financial resources to address
uncompensated care.
   (4) Promotes long-term, efficient, and effective use of state and
local funds.
   (5) Improves health care outcomes.
   (b) In developing the waiver application, the department shall
consult with interested stakeholders and the Legislature.
   (c) The department shall determine the form of waiver most
appropriate to achieve the purposes listed in subdivision (a).
   (d) The department shall submit the waiver application to the
federal Centers for Medicare and Medicaid Services by a date that
shall ensure that the waiver is approved by September 1, 2010.
   (e) If the federal Centers for Medicare and Medicaid Services
approves the waiver, the department shall only implement the
demonstration project upon enactment of subsequent statutory
authorization.  
  SEC. 2.    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 ensure that health care for Californians is improved
at the earliest possible time, it is necessary for this act to take
effect immediately.