BILL NUMBER: AB 613 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 14, 2009
INTRODUCED BY Assembly Member Beall
FEBRUARY 25, 2009
An act to amend Sections 14133.01, 14133.1, 14133.10,
14133.25, 14133.01 and 14133.9 of the Welfare
and Institutions Code, relating to Medi-Cal.
LEGISLATIVE COUNSEL'S DIGEST
AB 613, as amended, Beall. Medi-Cal: treatment authorization
requests.
Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, and
pursuant to which, health care services are provided to qualified
low-income persons.
Under existing law, one of the utilization controls to which
services are subject under the Medi-Cal program is the treatment
authorization request (TAR) process, which is approval by a
department consultant of a specified service in advance of the
rendering of that service based upon a determination of medical
necessity. Existing law requires the department to pursue means to
improve and streamline the TAR process.
This bill would require the department, in pursuing means to
improve and streamline the TAR process, to do so in specified ways,
including performing a cost-benefit analysis for each procedure
requiring a TAR and reducing the number of TARs required.
Existing law requires the Director of Health Care Services to
determine which of the utilization controls shall be applied to any
specific service or group of services which are subject to
utilization controls. Existing law authorizes the director, in
conducting Medi-Cal acute care inpatient hospital utilization
control, to establish a program of aggressive case management of
elective, nonemergency acute care hospital admissions. Existing law
requires the director to identify those surgical and medical
procedures capable of outpatient performance and establish conditions
for ensuring performance in an outpatient rather than inpatient
setting when medically appropriate.
This bill would require the director to carry out these duties in
a manner that is consistent with the above-described means for
improving the TAR process.
Existing law specifies the number of days within which certain
TARs shall are required to be
authorized.
This bill would reduce the number of days within which
these TARs shall be authorized.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14133.01 of the Welfare and Institutions Code
is amended to read:
14133.01. (a) Notwithstanding any other provision of law, the
director or his or her designee may apply prior authorization by
designing a sampling methodology that will result in a generally
acceptable audit standard for approval of a treatment authorization
request (TAR), or a class of TARs. The director or his or her
designee shall determine the applicable sampling methodology based
upon health care industry standards and discussions with applicable
Medi-Cal providers or their representatives. This sampling
methodology shall be implemented by no later than July 1, 2005, and
an outline of it shall be provided to the fiscal and policy
committees of both houses of the Legislature. It is the intent of the
Legislature for the department to review the sampling methodology on
an ongoing basis and update it as applicable on a periodic basis in
order to keep abreast of health care industry trends and the need to
manage an efficient and effective Medi-Cal program.
(b) The department shall pursue additional means to improve and
streamline the treatment authorization request process including,
where applicable, those identified by independent analyses such as
the July 2003 report by the California Healthcare Foundation entitled
Medi-Cal Treatment Authorizations and Claims Processing: Improving
Efficiency and Access to Care, and those identified by Medi-Cal
providers. The department shall pursue additional means to improve
and streamline the treatment authorization request process in all of
the following ways:
(1) Perform a cost-benefit analysis for each procedure
requiring a TAR and reduce the number of TARs
required. TARs required so that a TAR shall only
be required for services with documented overutilization or a high
level of fraudulent activity.
(2) Develop alternative approaches for fraud and abuse detection,
through targeted analysis of utilization baselines for each drug or
service, that identify potential anomalies.
(3) Develop an alternative to the requirement that a patient
obtain a TAR for each individual day of his or her stay in the
hospital and consider adopting a single TAR for the entire length of
a patient's hospital stay.
(4) Make publicly available the rules and criteria for determining
medical necessity.
(5) Work with licensed health care providers that are affected by
the TAR process in developing processes to improve efficiency and
access to care through a more streamlined and relevant TAR process.
(c) 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, provider bulletins, or similar
instructions. Thereafter, the department may 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.
SEC. 2. Section 14133.1 of the Welfare and
Institutions Code is amended to read:
14133.1. (a) The director shall determine which of the
utilization controls in Section 14133 shall be applied to any
specific service or group of services that are subject to utilization
controls. The director shall also determine which of the utilization
controls in Section 14133 are consistent with the means for
improvement provided for in subdivision (b) of Section 14133.01. Each
utilization control shall be reasonably related to the purpose for
which it is imposed.
(b) Except as provided in Sections 14103.6 and 14133.15, neither
prior authorization nor the limitation specified in subdivision (d)
of Section 14133 shall be required for the first two services per
month which are included among the services listed in subdivision (a)
of Section 14132, or for the first two drug prescriptions purchased
during any one month, provided that the prescription drugs are
included in the Medi-Cal Drug Formulary and the prescription
otherwise conforms to applicable formulary requirements.
(c) The director shall, after a determination of cost benefit,
modify or eliminate the requirement of prior authorization as a
control for treatment, supplies, or equipment which costs less than
one hundred dollars ($100), except for prescribed drugs, provided
that the requirement of prior authorization for treatment, supplies,
or equipment may be reinstituted upon a finding by the department
that the elimination of the requirement has resulted in unnecessary
utilization, and upon notice to the Joint Legislative Budget
Committee 30 days prior to the reinstitution of the requirement of
prior authorization. Modification of the utilization controls may
include establishing prior authorization review thresholds at levels
other than one hundred dollars ($100) if indicated by the
cost-benefit analysis.
SEC. 3. Section 14133.10 of the Welfare and
Institutions Code is amended to read:
14133.10. (a) Where it is expected to be cost-effective, the
director may, in conducting Medi-Cal acute care inpatient hospital
utilization control, establish a program of aggressive case
management of elective, nonemergency acute care hospital admissions
for the purpose of reducing both the numbers and duration of acute
care hospital stays by Medi-Cal beneficiaries. If the director
establishes a program of aggressive case management, he or she shall
do so in a manner that is consistent with the means for improvement
provided for in subdivision (b) of Section 14133.01.
(b) In conducting the case management program, the department may,
conduct daily reviews to determine the need for additional days of
inpatient care.
(c) In undertaking this case management program, the director may
enter into contracts, on a bid or nonbid basis, for the purposes of
obtaining the necessary expertise to train and educate utilization
control staff in case management concepts, principles and techniques,
identify and recommend cost-effective therapies, services and
technology as alternatives to elective acute care hospitalization or
to directly provide the case management and diversion services.
(d) 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
article may be on a nonbid basis, and shall be exempt from the
provisions of Chapter 2 (commencing with Section 10290) of Part 2 of
Division 2 of the Public Contract Code. Contracts shall have no force
and effect unless approved by the Department of Finance.
(e) The department shall seek all federal waivers necessary to
allow for federal financial participation under this section.
SEC. 4. Section 14133.25 of the Welfare and
Institutions Code is amended to read:
14133.25. (a) The director shall identify those surgical and
medical procedures capable of outpatient performance and establish
conditions for assuring performance in an outpatient rather than
inpatient setting when medically appropriate. The director shall
establish these conditions in a manner that is consistent with the
means for improvement provided for in subdivision (b) of Section
14133.01.
(b) The director shall identify and apply appropriate utilization
controls to review outpatient and office medical and surgical
procedures for medical necessity and program coverage. The director
may under this section identify and require prior authorization for
any specified outpatient or office medical or surgical procedure
performed during a month without regard to the provisions of Section
14133.1, provided that, with respect to outpatient or office medical
procedures, those medical procedures which remain not subject to
prior authorization are sufficient in number and scope as to achieve
the general purpose of Section 14133. 1.
(c) The director may establish a schedule of differential
reimbursement rates to the operating surgeon for surgery procedures.
Those surgery procedures which can safely be performed on an
outpatient basis may be reimbursed at a higher level when performed
in an outpatient setting than the same procedures performed on an
inpatient basis.
(d) Provisions of this section shall not be applied to mental
health services as defined under Division 5 (commencing with Section
5000) or Section 14021, or any other mental health services funded by
the Medi-Cal program.
SEC. 5. SEC. 2. Section 14133.9 of
the Welfare and Institutions Code is amended to read:
14133.9. The implementation of prior authorization permitted by
subdivision (a) of Section 14133 shall be subject to all of the
following provisions:
(a) The department shall secure a toll-free telephone number for
the use of providers of Medi-Cal services listed in Section 14132.
For providers, the department shall provide access to an individual
knowledgeable in the program to provide Medi-Cal providers with
information regarding available services. Access shall include a
toll-free telephone number that provides reasonable access to that
person. The toll-free telephone number shall be operated 24 hours a
day, seven days a week.
(b) For major categories of treatment subject to prior
authorization, the department shall publicize and continue to develop
its list of objective medical criteria that indicate when
authorization should be granted. Any request meeting these criteria,
as determined by the department, shall be approved, or deferred as
authorized in subdivision (e) by specific medical information.
(c) The objective medical criteria required by subdivision (d)
shall be adopted and published in accordance with the Administrative
Procedure Act, and shall be made available at appropriate cost.
(d) When a proposed treatment meets objective medical criteria,
and is not contraindicated, authorization for the treatment shall be
provided within an average of two working days. When a treatment
authorization request is not subject to objective medical criteria, a
decision on medical necessity shall be made by a professional
medical employee or contractor of the department within an average of
two working days.
(e) Notwithstanding the provisions of subdivisions (c) and (d),
the department shall adopt, by emergency regulations as provided by
this subdivision, a list of elective services that the director
determines may be nonurgent. In determining these services, the
department shall be guided by commonly accepted medical practice
parameters. Authorization for these services may be deferred for a
period of up to 15 days. In making determinations regarding these
referrals, the department may use criteria separate from, or in
addition to, those specified in subdivision (c). These deferrals
shall be determined through the treatment authorization request
process. When a proposed service is on the list of elective services
that the director determines may be considered nonurgent,
authorization for the service shall be granted or deferred within an
average of five working days. The State Department of Health Care
Services may adopt emergency regulations to implement this
subdivision 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 and one readoption of the initial regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety or general
welfare. Initial emergency regulations and the first readoption of
those regulations shall be exempt from review by the Office of
Administrative Law. The emergency regulations authorized by this
subdivision shall be submitted to the Office of Administrative Law
for filing with the Secretary of State and publication in the
California Code of Regulations and shall remain in effect for no more
than 120 days.
(f) The department shall submit to the Legislature, every three
months, its treatment authorization request status report.
(g) Final decisions of the department on denial of requests for
prior authorization for inpatient acute hospital care shall be
reviewable upon request of a provider by a Professional Standards
Review Organization established pursuant to Public Law 92-603, or a
successor organization if either of the following applies:
(1) The original decision on the request was not performed by a
Professional Standards Review Organization, or its successor
organization.
(2) The original decision on the request was performed by a
Professional Standards Review Organization, or its successor
organization, and the original decision was reversed by the
department. The department shall contract with one or more of these
organizations to, among other things, perform the review function
required by this subdivision. The review performed by the contracting
organization shall result in a finding that the department's
decision is either appropriate or unjustified, in accordance with
existing law, regulation, and medical criteria. The cost of each
review shall be borne by the party that does not prevail.
The decision of this body shall be reviewable by civil action.
(h) This section, and any amendments made to Section 14103.6 by
Assembly Bill 2254 of the 1985-86 Regular Legislative Session, shall
not apply to treatment or services provided under contracts awarded
by the department under which the contractor agrees to assume the
risk of utilization or costs of services.