BILL NUMBER: SB 853 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY OCTOBER 7, 2010
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 11, 2010
An act relating to the Budget Act of 2010.
An act to amend Section 56.30 of the Civil Code, to amend Section
854.1 of the Government Code, to amend Sections 1324.20, 1324.21,
1324.22, 1324.23, 1324.27, 1324.28, 1324.30, 1567.50, 120917, 130251,
130500, 130507, 130509, and 130543 of, to amend and repeal Section
1324.29 of, and to add Sections 1356.2, 1417.5, 120971, 130250.1,
130251.15, 130252, 130253, and 130254 to, the Health and Safety Code,
to amend Sections 12693.21 and 12693.26 of, and to add Section
12693.23 to, the Insurance Code, to amend Sections 12009, 12204,
12207, 12242, 12251, 12253, 12254, 12257, 12258, 12260, 12301, 12302,
12303, 12304, 12305, 12307, 12412, 12413, 12421, 12422,
12423, 12427, 12428, 12429, 12431, 12433, 12434, 12491, 12493, 12494,
12601, 12602, 12631, 12632, 12636, 12636.5, 12679, 12681, 12801,
12951, 12977, 12983, 12984, and 13108 of, and to amend, add, and
repeal Section 12201 of, the Revenue and Taxation Code, to amend
Sections 4474.2, 4474.3, 4474.4, 4474.5, 4474.8, 4684.50, 4684.53,
4684.55, 4684.58, 4684.60, 4684.63, 4684.65, 4684.70, 4684.75,
5370.2, 10022, 14005.11, 14089, 14089.05, 14089.4, 14091.3,
14126.023, 14126.027, 14126.033, 14132, 14154, 14165.4, 14301.1, and
14301.11 of, to amend the heading of Article 3.5 (commencing with
Section 4684.50) of Chapter 6 of Division 4.5 of, to add Sections
4101.5, 4646.55, 4701.1, 4791, 5813.6, 14105.08, 14105.28, 14105.281,
14105.456, 14126.022, 14132.925, 14167.351, and 14183.6 to, to
repeal Article 3.8 (commencing with Section 14126) of Chapter 7 of
Part 3 of Division 9 of, to repeal and amend Section 14005.25 of, and
to repeal and add Section 4684.74 of, the Welfare and Institutions
Code, and to amend Section 10 of Chapter 13 of the Third
Extraordinary Session of the Statutes of 2009, relating to health,
making an appropriation therefor, and declaring the urgency thereof,
to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 853, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2010. Health.
Existing law establishes the Medi-Cal program, administered by the
State Department of Health Care Services, under which health care
services are provided to qualified, low-income persons. The Medi-Cal
program is, in part, governed and funded by federal Medicaid
provisions.
Pursuant to a federal waiver, the Medi-Cal program administers a
program known as the Family Planning, Access, Care, and Treatment
(Family PACT) Waiver Program, under which comprehensive clinical
family planning services, as defined, are provided to any person who
has a family income at or below 200% of the federal poverty level and
who is eligible to receive those services pursuant to the terms of
the waiver. Existing law requires the program to be operated only in
accordance with the waiver and certain statutes and regulations and
subject to the terms, conditions, and duration of the waiver.
This bill would rename the program as the Family PACT Program. The
bill would provide that in addition to being operated in accordance
with the waiver, the program may be operated in accordance with a
state plan amendment adopted pursuant to federal law, as specified,
known as the Family PACT successor state plan amendment and would
make conforming changes. The bill would expand the definition of
comprehensive clinical family planning services to include services,
drugs, devices, and supplies deemed by the federal Centers for
Medicare and Medicaid Services to be appropriate for the Family PACT
Program. The bill would permit the Director of Health Care Services
to implement the state plan amendment retroactively to July 1, 2010.
Existing law authorizes the Director of Health Care Services to
limit the rates of payment for health care services provided under
the Medi-Cal program.
This bill would require the director to reduce rates applicable to
radiology services so that they do not exceed 80% of the lowest
maximum allowance established under the federal Medicare program for
the same or similar services with dates of service on or after
October 1, 2010. This bill would require the director to implement
these provisions only to the extent that the director determines that
the rates will comply with applicable federal Medicaid requirements
and that federal financial participation is available.
This bill would require the department to develop and implement a
payment methodology based on diagnosis-related groups, subject to
federal approval, that reflects the costs and staffing levels
associated with quality of care for patients in all general acute
care hospitals, with certain exceptions, in state and out of state,
as specified. The bill would provide that the diagnosis-related
group-based payments apply to all claims, except as specified. The
bill would require the department to submit to the Legislature annual
status reports, commencing on April 1, 2011, and ending on April 1,
2014, on the implementation of the above-described provisions.
This bill would require, in order to enable the department to
develop and implement the above-mentioned payment methodology, the
Director of Health Care Services, subject to federal approval, to
freeze rates applicable to inpatient hospital services, as specified.
It would permit the department to modify this rate-freeze in order
to comply with federal Medicaid requirements. The bill would require
the department, within 90 days of the above-described provisions
becoming effective, to develop and provide to all hospitals the
methodology that will be utilized to implement the rate freeze for
noncontract hospitals.
Under existing law, one of the methods by which Medi-Cal services
are provided is pursuant to contracts with various types of managed
care plans.
Existing law, until January 1, 2011, requires the State Department
of Health Care Services, subject to any necessary federal approval,
to take all appropriate steps to amend the Medicaid state plan, to
implement a requirement that any hospital that does not have in
effect a contract with a Medi-Cal managed health care plan that
establishes payment amounts for services furnished to a beneficiary
enrolled in that plan shall accept, as payment in full, prescribed
payment amounts.
This bill would extend the duration of these provisions until
January 1, 2012.
Under existing law, the California Medical Assistance Commission
is authorized to negotiate contracts with managed health care plans
and other entities in clearly defined geographic areas for the
provision of Medi-Cal services, with these contracts being binding
upon the department.
This bill would, instead, provide that the department, rather than
the commission, has the exclusive authority to negotiate these
contracts, and would make conforming changes. It would provide that
contracts or contract amendments negotiated pursuant to the bill are
public records for purposes of the California Public Records Act.
Existing law specifies the procedures by which the State
Department of Health Care Services determines prospective capitation
rates to health plans participating in the Medi-Cal managed care
program, and permits 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.
This bill would provide that, prior to October 1, 2011, the
risk-adjusted countywide capitation rate shall comprise no more than
20% of the total capitation rate paid to each Medi-Cal managed care
plan.
Existing law imposes various taxes, including a tax at a specified
rate on the gross premiums of an insurer, as defined, and, until
January 1, 2011, on the total operating revenue, as specified, of a
Medi-Cal managed care plan, as defined. Existing law provides that
the tax on Medi-Cal managed care plans would have no force or effect
if any of specified conditions apply.
This bill would extend the imposition of the tax on the total
operating revenue of Medi-Cal managed care plans until July 1, 2011,
and make other conforming changes.
Existing law continuously appropriates the proceeds from the tax
on Medi-Cal managed care plans (1) to the department for purposes of
the Medi-Cal program in an amount equal to 38.41% of the proceeds
from the tax and (2) to the Managed Risk Medical Insurance Board for
purposes of the Healthy Families Program in an amount equal to 61.59%
of the proceeds from the tax.
This bill, from July 1, 2010, to June 1, 2011, inclusive, would,
instead, continuously appropriate (1) a percentage of the revenues
from the tax on Medi-Cal managed care plans equal to the difference
between 100% and the applicable federal medical assistance percentage
(FMAP) to the department for purposes of the Medi-Cal program and
(2) the remaining revenues to the Managed Risk Medical Insurance
Board for purposes of the Healthy Families Program. The bill would
make an appropriation by extending the continuous appropriation.
Existing law requires every return required to be filed with the
State Insurance Commissioner pursuant to provisions governing taxes
on the gross premiums of insurers and, until January 1, 2011, on the
total operating revenue of Medi-Cal managed care plans, to be signed
by the insurer or an executive officer of the insurer and to be made
under oath or contain a written declaration that it is made under
penalty of perjury.
This bill would, instead, require every return required to be
filed with the State Insurance Commissioner pursuant to provisions
governing taxes on the total operating revenue of Medi-Cal managed
care plans until July 1, 2011. By expanding the crime of perjury,
this bill would impose a state-mandated local program.
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, 2011, and these provisions will be repealed on
January 1, 2012.
This bill would provide that, beginning in the 2010-11 rate year,
specified multilevel facilities will no longer be exempt from the
quality assurance fee. However, the bill would provide that a
multilevel facility shall not be required to pay the quality
assurance fee until changes to the quality assurance fee and the rate
methodology enacted in the 2010 portion of the 2009-10 Regular
Session of the Legislature are approved by the federal Centers for
Medicare and Medicaid Services and the State Department of Health
Care Services has increased the Medi-Cal rates and the increased
rates are paid to facilities.
This bill would also extend the assessment and collection of the
uniform quality assurance fee through July 31, 2012. The bill
provides for the collection of all quality assurance fees and
penalties, including interest, that have been assessed, even after
the quality assurance fee ceases to be assessed and would modify the
remedies for collection of these fees. The bill would extend the
repeal date for these provisions until January 1, 2013.
This bill would require the State Department of Public Health, in
consultation with stakeholders, to develop recommendations, as
prescribed, to address the findings published in a specified report
and would require the State Department of Public Health to provide
the recommendations to the fiscal and policy committees of the
Legislature no later than March 1, 2011.
Existing law, the Medi-Cal Long-Term Reimbursement Act, requires
the department to implement a facility-specific reimbursement
ratesetting system for certain freestanding skilled nursing
facilities. Reimbursement rates for these facilities are funded by a
combination of federal funds and moneys collected pursuant to the
above-described uniform quality assurance fee. Existing law provides
that this rate methodology shall cease to be implemented on July 1,
2011, with these provisions to be repealed on January 1, 2012.
This bill would extend the implementation date of the freestanding
skilled nursing facility rate reimbursement provisions through July
31, 2012, would make various conforming changes in these provisions,
and would extend the repeal date for all of these provisions until
January 1, 2013. It would also modify, for the 2010-11 and 2011-12
rate years, the facility reimbursement formula to be used under these
provisions.
This bill would also require the department, by August 1, 2011, to
develop the Skilled Nursing Facility Quality and Accountability
Supplemental Payment System, as specified, subject to federal
approval and the availability of federal, state, or other funds. The
bill would provide that the system shall be utilized for providing
supplemental payments to skilled nursing facilities that improve the
quality and accountability of care rendered to residents and
penalizing those facilities that do not meet measurable standards, in
accordance with prescribed requirements. The bill would provide
specific methodologies to be used in calculating the supplemental
payments to be made and the penalties to be imposed.
The bill would create in the State Treasury the Skilled Nursing
Facility Quality and Accountability Special Fund and continuously
appropriate the moneys in the fund, without regard to fiscal year, to
the department to make the above-described supplemental payments.
The bill would provide that, upon appropriation of the Legislature,
the moneys in the fund may also be used to cover administrative costs
incurred by the State Department of Public Health and the State
Department of Health Care Services, for positions and contract
funding to implement the above-described provisions, and to provide
funding assistance for Long-Term Care Ombudsman program activities.
This bill would appropriate, for the 2010-11 fiscal year, $1.9
million from the Skilled Nursing Quality and Accountability Special
Fund to the California Department of Aging to fund Long-Term Care
Ombudsman program activities.
This bill would create in the Special Deposit Fund, the Skilled
Nursing Facility Minimum Staffing Penalty Account, and would require
the State Department of Public Health to deposit penalty payments
collected into the account. This bill would require the State
Department of Public Health to transfer, on a monthly basis, moneys
in the Skilled Nursing Facility Minimum Staffing Penalty Account to
the Skilled Nursing Quality and Accountability Special Fund.
The bill would make the above-described supplemental payment
provisions subject to federal approval and would provide that in the
event of a final judicial determination that these provisions are
unlawful, they shall become inoperative.
Existing law, subject to federal approval, imposes, as a condition
of participation in state-funded health insurance programs other
than the Medi-Cal program, a quality assurance fee, as specified, on
certain general acute care hospitals through and including December
31, 2010. Existing law creates the Hospital Quality Assurance Revenue
Fund in the State Treasury and requires that the money collected
from the quality assurance fee be deposited into the fund. Existing
law provides that the moneys in the fund shall, upon appropriation by
the Legislature, be available only for certain purposes, including
health care coverage for children.
This bill would provide that it is the intent of the Legislature
that the moneys in the fund for health care coverage for children be
used to expand and enhance health services for children when the
health of the economy and state budget are strong enough to allow for
program expansions, and strong enough to ensure that the funds
supplement, rather than supplant, existing funding for children's
health services during the time that the above-described provisions
are in effect.
Existing law requires the department to establish and maintain a
plan, known as the County Administrative Cost Control Plan, for the
purpose of effectively controlling costs related to the county
administration of the determination of eligibility for benefits under
the Medi-Cal program within the amounts annually appropriated for
that administration.
This bill would require the plan to delineate processes for
determining county administration base costs and funding for caseload
changes, cost-of-living adjustments, and program and other changes.
The bill would require the department and county welfare departments
to develop procedures to ensure the data clarity, consistency, and
reliability of information contained in the county budget survey
documents utilized under the plan that is submitted by counties to
the department, including the format of the budget survey documents
and use of the documents for the development of determining county
administration costs. By requiring county welfare departments to
develop the above-described procedures, this bill would impose a
state-mandated local program. The bill would require any changes
developed pursuant to the above-described provisions to be
incorporated within the state's annual budget process by not later
than the 2011-12 fiscal year.
Under existing law, the Legislature finds and declares that
linking appropriate funding for county Medi-Cal administrative
operations, including annual cost-of-doing-business adjustments, with
performance standards will give counties the incentive to meet the
performance standards and enable them to continue to do the work they
do on behalf of the state. Existing law provides that it is the
intent of the Legislature to provide appropriate funding to the
counties for a cost-of-doing-business adjustment, except for the
2008-09 and 2009-10 fiscal years.
This bill would additionally provide that it is the intent of the
Legislature to not appropriate funds for the cost-of-doing-business
adjustment for the 2010-11 fiscal year.
Existing law requires the State Department of Health Care
Services, to the extent required by federal law, for Medi-Cal
recipients who are qualified Medicare beneficiaries, to pay the
Medicare premiums, deductibles, and coinsurance for elderly and
disabled persons whose income does not exceed the federal poverty
level or 200% of a specified Supplemental Security Income program
standard. For beneficiaries with a share of cost at or below $500 who
do not qualify for assistance because their income exceeds the
above-described income requirements and they are not eligible for any
other federally funded assistance for the payment of their Medicare
Part B premium, existing law requires the State Department of Health
Care Services to pay the beneficiary's Medicare Part B premium on a
monthly basis regardless of whether the beneficiary's share of cost
has been met.
This bill would delete the requirement that the State Department
of Health Care Services pay the beneficiary's Medicare Part B premium
on a monthly basis regardless of whether the beneficiary's share of
cost has been met for the above-described beneficiaries with a share
of cost at or below $500.
Existing law, until July 1, 2012, requires the department, subject
to the availability of federal financial participation, to exercise
a federal option to expand continuous eligibility to children 19
years of age and younger for 6 months, after which date the
continuous eligibility period shall be from the date of a
determination of eligibility to the earlier of either the end of a
12-month period following the eligibility determination or the date
the child exceeds 19 years of age.
Existing law provides that the provisions limiting continuous
eligibility to 6 months shall be inoperative from March 27, 2009,
until the date the Director of Health Care Services executes a
declaration specifying that increased federal financial participation
is no longer available pursuant to the federal American Recovery and
Reinvestment Act of 2009 (ARRA). Existing law provides that during
period in which the provisions limiting continuous eligibility to 6
months are inoperative, the continuous eligibility period shall be
from the date of a determination of eligibility to the earlier of
either the end of a 12-month period following the eligibility
determination or the date the child exceeds 19 years of age.
This bill would delete the above-described provisions in effect
until July 1, 2012. This bill would delete the delayed operative date
of July 1, 2012, for the above-described provisions that provide
that the continuous eligibility period shall be from the date of a
determination of eligibility to the earlier of either the end of a
12-month period following the eligibility determination or the date
the child exceeds 19 years of age, thereby making those provisions
operative on the date this bill becomes effective.
Existing law requires reimbursement to Medi-Cal pharmacy providers
of legend and nonlegend drugs, as defined, to consist of the
estimated acquisition cost of the drug, as defined, plus a
professional fee for dispensing.
This bill, commencing January 1, 2011, and subject to federal
approval, would permit the department to reimburse Medi-Cal providers
for physician-administered drugs, as defined, using either the
Healthcare Common Procedure Coding System code rate or the National
Drug Code rate, as specified, except that the reimbursement rate
shall not be less than the Medicare reimbursement rate.
This bill would provide that nonlegend acetaminophen-containing
products, with the exception of children's Tylenol, selected by the
department are not covered benefits.
Existing law authorizes the State Department of Health Care
Services to enter into nonexclusive contracts with entities to
provide fiscal intermediary services in order to administer and
disburse funds available for Medi-Cal services to health care
providers in accordance with the provisions of the contract and any
schedule of charges or formula for determining payments established
pursuant to the contract.
This bill would require the department to provide the appropriate
fiscal and policy committees of the Legislature, the Legislative
Analyst's Office, the Office of the State Chief Information Officer
(OCIO), and the Bureau of State Audits (BSA) with quarterly reports
on the transition and takeover process efforts of the Medi-Cal fiscal
intermediary contract, as specified, including copies of any
oversight reports developed by contractors of the department for the
California Medicaid Management Information System (CA-MMIS) project
and any subsequent responses from the department. The bill would
provide that the reports be provided within 30 days of the close of
each quarter, commencing July 1, 2010, and continuing through the
life of the contract.
Upon request from the Chair of the Joint Legislative Budget
Committee (JLBC), this bill would require the department to provide
updates on the Implementation Advanced Planning Document provided to
the federal Centers for Medicare and Medicaid Services pertaining to
the CA-MMIS project. This bill would require the CA-MMIS project to
be subject to reviews and recommendations of the OCIO and would
require the OCIO to submit a copy of those reviews and
recommendations to the JLBC. The bill would require the BSA to review
the appropriate project documents and quarterly reports and make
recommendations about the new system implementation project, as
necessary, and would require the BSA to submit a copy of any reviews
and recommendations to the JLBC. This bill would authorize the Chair
of the JLBC to request an audit of the progress of the transition,
development, and implementation of the CA-MMIS.
Existing law provides that a person with private health care
coverage is not entitled to receive health care items or services
furnished or paid for by a publicly funded health care program, as
defined, if covered by that private health care coverage. Existing
law entitles a publicly funded health care program that furnishes or
pays for designated services to be subrogated to the rights that
person has against the carrier of the coverage, to the extent of the
health care items provided or services rendered. Under existing law,
an entity providing private health care coverage, as defined, is
required to respond to inquiries of, and agree not to deny claims
submitted by, the state, in connection with the provision of a health
care item or service, as specified. Existing law requires a claim
for payment to be made within 3 years after provision of the relevant
health care item or service.
This bill would extend the above requirements imposed upon an
entity providing private health care coverage to include inquiries
and claims submitted by providers, as defined.
Under existing law, the State Department of Developmental Services
contracts with the regional centers to provide services and supports
to persons with developmental disabilities. The services and
supports to be provided to
a regional center consumer are contained in an individual
program plan (IPP), developed in accordance with prescribed
requirements. Under existing law, Medi-Cal benefits include
intermediate care facility services for persons with developmental
disabilities.
This bill, effective July 1, 2007, would require certain types of
licensed intermediate care facilities for persons with developmental
disabilities (ICF-DDs), as specified, to be responsible for providing
day treatment and transportation services that are selected and
authorized through an IPP, as specified, for each beneficiary
receiving those services who resides in that licensed ICF-DD.
The bill would require the regional centers to arrange the day
treatment and transportation services and would require the licensed
ICF-DDs to reimburse the regional center for the full costs of making
disbursements to day treatment and transportation service providers.
This bill would require the State Department of Developmental
Services to be responsible for reimbursing a licensed ICF-DD for the
costs of reimbursing the regional center for the full cost of making
disbursements for day treatment and transportation services, plus a
coordination fee which will include an administrative fee and
reimbursement for increased costs associated with the quality
assurance fee. This bill, effective July 1, 2007, would authorize the
State Department of Developmental Services to make a supplemental
payment to an enrolled Medi-Cal provider that is a licensed ICF-DD
for day treatment and transportation services provided to Medi-Cal
beneficiaries residing in the ICF-DDs.
This bill would require the State Department of Developmental
Services to amend the regional center contracts for the 2007-08
fiscal year to extend the contract liquidation period until June 30,
2011.
This bill would require the State Department of Health Care
Services to request approval from the federal Centers for Medicare
and Medicaid Services for the implementation of the above-described
provisions. The bill would provide that if after seeking federal
approval, federal approval is not obtained or federal financial
participation is no longer available, the above-described provisions
shall not be implemented or shall become inoperative.
This bill would provide that due to a change in the availability
of federal funding that addresses the ability of California to
capture additional federal financial participation for day treatment
and transportation services provided to a Medi-Cal beneficiary
residing in a licensed ICF-DD, certain funds appropriated in the
Budget Act of 2007 shall be available for liquidation until June 30,
2011, which would extend the term for which existing appropriation is
available, thereby making an appropriation.
Existing law requires that, as a condition of participation in the
Medi-Cal program, there be imposed a quality assurance fee each
state fiscal year upon the entire gross receipts, as defined, of a
designated intermediate care facilities, as defined. Existing law
requires that the fee be placed in the General Fund and allocated to
intermediate care facilities to support their quality improvement
efforts, and distributed to each facility based on the number of
Medi-Cal patients at the eligible facility. Existing law requires the
department to seek federal approval for the implementation of the
fee.
This bill would provide that upon approval of the above-described
state plan amendment authorizing reimbursement for day treatment and
transportation services provided on or after July 1, 2007, the
reimbursement payments made by the State Department of Developmental
Services to the ICF-DDs shall be subject to the above-described
quality assurance fee.
Existing law requires regional centers, in order to implement
changes in the level of funding for regional center purchase of
services, from February 1, 2009, to June 30, 2011, inclusive, to
reduce certain payments for services delivered on or after February
1, 2009, by 3%, except as specified.
This bill would, instead, require regional centers to reduce the
payments for those services by 3% from February 1, 2009, to June 30,
2010, inclusive, and by 4.25% from July 1, 2010, to June 30, 2011,
inclusive.
This bill would, between July 1, 2010, and June 30, 2011, subject
to certain conditions, permit a regional center, for providers who
are subject to the 4.25% payment reduction, with certain exceptions,
to temporarily modify personnel requirements, functions, or
qualifications, or staff training requirements.
This bill would, from July 1, 2010, to June 30, 2011, inclusive,
suspend prescribed annual review and reporting requirements that are
imposed on providers whose payment is reduced by 4.25% pursuant to
the above-described provisions.
Existing law establishes various state developmental centers,
including the Agnews Developmental Center and the Lanterman
Developmental Center, for the care of developmentally disabled
persons. Existing law contains various provisions concerning the
closure of the Agnews Developmental Center, including a provision
authorizing the State Department of Developmental Services to operate
any facility, provide its employees to assist in the operation of
any facility, or provide other necessary services and supports if, in
the discretion of the department, it determines that the activity
will assist in meeting the goal of an orderly closure of Agnews
Developmental Center.
This bill would extend many of the above-described provisions
concerning the closure of the Agnews Developmental Center to the
Lanterman Developmental Center. This bill would provide that for the
Lanterman Developmental Center, the use of department employees is in
effect for up to 2 years following the transfer of the last resident
of the Lanterman Developmental Center, as specified. Additionally,
this bill would require the State Department of Developmental
Services to prepare a report on the use of the department's employees
in providing services in the community to assist in the orderly
closures of Agnews Developmental Center and Lanterman Developmental
Center. The bill would require the report to be submitted with the
Governor's proposed budget for the 2012-13 fiscal year to the fiscal
committees of both houses of the Legislature and annually thereafter.
Existing law requires a service agency, which is defined as a
developmental center or regional center that receives state funds to
provide services to persons with developmental disabilities, to
provide adequate notice, as defined, to an applicant for, or
recipient of, services from the service agency, and to the applicant'
s or recipient's authorized representative, if any, prior to the
agency making a decision without the mutual consent of the service
recipient or authorized representative to reduce, terminate, or
change services set forth in an IPP or prior to a recipient being
determined to be no longer eligible for agency services.
This bill would require the notice to inform the recipient and
authorized representative of whether or not the individual is
eligible for an exemption or exception to the action the service
agency proposes to take, as specified, and the specific law
supporting the exemption or exception.
Existing law, until January 1, 2011, authorizes the State
Department of Social Services and the State Department of
Developmental Services, to jointly establish and administer a pilot
project for licensing and regulating Adult Residential Facilities for
Persons with Special Health Care Needs (ARFPSHN), to the extent that
funds are appropriated for this purpose in the annual Budget Act.
Existing law authorizes the State Department of Social Services to,
subject to certain conditions, license an ARFPSHN to provide 24-hour
services to up to 5 adults with developmental disabilities who have
special health care and intensive support needs, as defined.
This bill would indefinitely extend the duration of the
above-described program and would make conforming changes. This bill
would impose a state-mandated local program by changing the
definition of crimes provided for under the California Community Care
Facilities Act.
Existing law provides that an ARFPSHN may be established in a
facility financed pursuant to certain provisions under which the
State Department of Developmental Services approves a regional center
proposal to provide for housing for persons eligible for regional
center services.
This bill would, instead, provide that an ARFPSHN may only be
established in a facility approved by the State Department of
Developmental Services to provide for housing for persons eligible
for regional center services or through an approved regional center
community placement plan, as specified. However, this bill would
provide that the State Department of Developmental Services shall
only approve the development of ARFPSHNs that are directly associated
with the orderly closure of the Lanterman Developmental Center.
Existing law prohibits a regional center from paying a rate to any
ARFPSHN for any consumer that exceeds the average annual cost of
serving a consumer at Agnews Developmental Center, as determined by
the State Department of Developmental Services.
This bill would, instead, prohibit a regional center from paying a
rate to any ARFPSHN for any consumer that exceeds the rate in the
State Department of Developmental Services approved community
placement plan for that facility unless the regional center
demonstrates that a higher rate is necessary to protect a consumer's
health and safety and the department has granted prior written
authorization.
Under existing law, the State Department of Mental Health operates
and maintains state institutions for the mentally disordered.
This bill would allow the State Department of Mental Health to
contract with providers of health care services and health care
network providers for the provision of emergency health care
services, as specified. The bill would also specify maximum rates of
payment for services received from health care providers either under
contract, or that do not contract, with the department.
Existing law requires the State Department of Mental Health to
contract with a single nonprofit agency, as specified, for the
provision of mental health patients' rights and advocacy services on
a multiyear basis for a contract term of up to 3 years.
This bill would, instead, require the State Department of Mental
Health to contract on a multiyear basis for a contract term of up to
5 years.
Existing law, the Mental Health Services Act, was approved by the
voters in November 2004 as Proposition 63, an initiative measure.
Under the act, the State Department of Mental Health is required to,
among other things, distribute funds for local assistance for
designated mental health programs.
Existing law requires the Director of Mental Health, at the time
of the release of the January 10 budget plan and the May Revision, to
submit information to the Legislature regarding the expenditure of
Proposition 63 funding for each state department and each major
program category.
This bill would require the information submitted to the
Legislature to include a complete listing of state support
expenditures for the current year and for the budget year by the
State Department of Mental Health, including the number of state
positions and any contract funds.
Existing law, the federal Children's Health Insurance Program
Reauthorization Act of 2009 (CHIPRA) requires state child health
plans to provide certain disenrollment rights and to establish
sanctions against managed care organizations, as specified. The act
also, among other things, requires state child health plans to
convert to the Medicaid prospective payment system for services
provided by federally qualified health centers and rural health
clinics.
Existing law creates the Healthy Families Program, administered by
the Managed Risk Medical Insurance Board (MRMIB), to arrange for the
provision of health, vision, and dental benefits to children less
than 19 years of age who meet certain criteria, including having a
limited household income. Existing law requires MRMIB to negotiate
separate contracts with participating health, dental, and vision
plans for specified benefit packages.
This bill would, on and after January 1, 2011, authorize MRMIB to
impose sanctions on participating health, dental, and vision plans by
applying a specified Medicaid managed care provision imposed under
CHIPRA. The bill would, on and after January 1, 2011, also authorize
MRMIB to enter into contracts with entities other than participating
health, dental, or vision plans in order to provide or pay benefits
to Healthy Families Program subscribers for certain purposes,
including ensuring that Healthy Families Program subscribers have
adequate access to benefits. The bill would exempt any interagency
agreement entered into pursuant to these provisions, and any contract
or contract amendment necessary to implement that agreement, from
competitive bidding laws and review or approval of the Department of
General Services. The bill would authorize MRMIB to adopt emergency
regulations for purposes of implementing these requirements or any
other provision of CHIPRA not addressed by those requirements.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law requires health care
service plans to pay specified assessments each fiscal year as a
reimbursement of their share of the costs and expenses reasonably
incurred in the administration of the act.
This bill would authorize the Director of the Department of
Managed Health Care, by notice to all licensed health care service
plans on or before October 15, 2010, to require health care service
plans to pay an additional assessment, which is separate and
independent of the above-described assessment, to provide the
department with sufficient revenues to support costs and expenses of
the department, as specified, for the 2010-11 fiscal year. The bill
would require the additional assessment to be paid in full by
December 1, 2010. By expanding the definition fo a crime, this bill
would impose a state-mandated local program.
Existing law limits the amount of the assessments paid by health
care service plans.
This bill would, on and after July 1, 2011, and until August 31,
2015, authorize the director to raise the assessment limit to
incorporate annual expenditure levels as set forth by the
above-described provisions relating to the additional assessment.
Existing law, the Confidentiality of Medical Information Act,
prohibits a health care provider, a contractor, or a health care
service plan from disclosing medical information, as defined,
regarding a patient of the provider or an enrollee or subscriber of
the health care service plan without first obtaining an
authorization, except as specified.
This bill would also exempt certain medical information and
records disclosed to, and their use by, MRMIB, as specified.
Existing law requires the department to submit an application to
the federal Centers for Medicare and Medicaid Services for a waiver
or demonstration project that would implement specified objectives.
This bill would require the State Department of Health Care
Services to enter into an interagency agreement with the Department
of Managed Health Care to have the Department of Managed Health Care,
on behalf of the State Department of Health Care Services, conduct
financial audits, medical surveys, and a review of the provider
networks of the managed care health plans participating in the
above-described demonstration project.
Existing law establishes the California Discount Prescription Drug
Program, which is administered by the State Department of Health
Care Services. Existing law provides that the program shall become
operative on or after July 1, 2010.
This bill would require the program to be implemented only if, and
to the extent that, a Budget Act or other statute that is enacted on
or before February 1, 2015, includes or makes an appropriation to
implement the program.
Existing law requires, on August 1, 2013, the department to
determine whether pharmaceutical manufacturer participation in the
program has been sufficient to meet certain benchmarks. It also
requires the department, on and after August 10, 2013, to reassess
program outcomes, at least once every year, consistent with the
benchmarks.
This bill would, if the program is implemented, extend the
above-described requirement dates to August 1, 2017.
Existing law establishes the Office of Health Information
Integrity within the California Health and Human Services Agency to
ensure the enforcement of state law mandating confidentiality of
medical information and to impose administrative fines for the
unauthorized use of medical information. Existing law authorizes the
California Health and Human Services Agency, or one of the
departments under its jurisdiction, to apply for federal funds made
available through the federal American Recovery and Reinvestment Act
of 2009 (ARRA) for health information technology and exchange, and
establishes the California Health Information Technology and Exchange
Fund for these purposes. Existing law provides that if the agency or
one of the departments under its jurisdiction, elects not to submit
an application for federal funds, the Governor shall designate a
qualified nonprofit entity to be the state-designated entity for the
purposes of establishing health information exchange.
This bill would, if the agency or one of its departments applies
for federal funds, authorize the agency or department to later choose
to subgrant, in whole or in part, portions of the federal grant to a
qualified nonprofit entity, which would be designated as the state
governance entity, for the purposes of establishing health
information exchange.
This bill would specify the duties of the agency, the
state-designated entity, or state governance entity in performing
these functions, and would modify the membership of the initial
governing board of the entity. The bill would require the agency to
develop a detailed implementation plan and to submit it to the
Legislature by November 1, 2010. The bill would, commencing October
1, 2010, require the agency to report, by October 1 and April 1 of
each year, to the Legislature regarding expenditures and the status
of health information technology and exchange activities funded
through the fund.
This bill would specify that the agency, state-designated entity,
or state governance entity shall establish and begin providing health
information exchange services no later than January 1, 2012.
This bill would provide that all deliverables, as defined in the
scope of work originated or prepared by the state-designated entity
or state governance entity, as specified, shall, upon delivery and
acceptance by the agency, become the exclusive property of the state,
and may be copyrighted by the state under the oversight of the
agency, as prescribed.
This bill would require the agency to require the state-designated
entity or state governance entity to develop specified policies and
procedures to provide the public with transparency of the actions of
the entity.
Existing law authorizes the State Public Health Officer, to the
extent that state and federal funds are appropriated in the annual
Budget Act for these purposes, to establish and administer a program
to provide drug treatments to persons infected with the human
immunodeficiency virus (HIV), the etiologic agent of acquired immune
deficiency syndrome (AIDS). Under the program, known as the AIDS Drug
Assistance Program (ADAP), the State Department of Public Health
subsidizes the cost of drugs for the treatment of persons infected
with HIV. Under existing law, moneys from the AIDS Drug Assistance
Program Rebate Fund, a continuously appropriated fund, are used to
cover costs related to the purchase of drugs and services provided
through the ADAP.
This bill would require the State Department of Health Care
Services and the State Department of Public Health, in the event
state expenditures for the ADAP are identified by California to be
used for a certified public expenditure for the purpose of obtaining
federal financial participation under the Medi-Cal program for any
purpose, to ensure the integrity of the ADAP in meeting its
maintenance of effort requirements to receive federal funds and to
obtain all ADAP drug rebates to support the ADAP.
Existing law establishes the Office of AIDS in the State
Department of Public Health. Existing law authorizes HIV counselors
trained by the Office of AIDS and working in an HIV counseling and
testing site funded by the State Department of Public Health through
a local health jurisdiction, or its agents, to perform skin punctures
for purposes of withdrawing blood for HIV test purposes.
This bill would additionally authorize HIV counselors to perform
skin punctures for purposes of withdrawing blood for HIV test
purposes if the HIV counselor is working at an HIV counseling and
testing site that utilizes HIV counseling staff who are trained by
the Office of AIDS, or its agents, and has a quality assurance plan
approved by the local health department, as specified, and staff who
comply with certain quality assurance requirements required by
regulation. The bill would authorize the Office of AIDS, or its
agents, to charge a fee for training HIV counselors. The bill would
authorize the local health department to charge a fee for the quality
assurance plan approval.
Existing law, the California Special Supplemental Food Program for
Women, Infants, and Children (WIC), authorizes establishment of a
statewide program, administered by the State Department of Public
Health, for providing nutritional food supplements to low-income
pregnant women, low-income postpartum and lactating women, and
low-income infants and children under 5 years of age, who have been
determined to be at nutritional risk. The program, which implements a
program authorized under existing federal law, provides for the
redemption of nutrition coupons by recipients at any authorized
retail food vendor.
This bill would, by no later than January 10 and May 14 of each
year, require the State Department of Public Health to provide the
fiscal committees of the Legislature with an estimate package for WIC
that shall include all significant assumptions underlying the
estimate for the WIC program's current-year and budget-year proposals
and concise information identifying applicable estimate components
necessary to support the estimate.
Existing law requires the State Department of Public Health to
provide breast cancer and cervical cancer screening services under a
federal grant made under the federal Centers for Disease Control and
Prevention breast and cervical cancer early detection program to
eligible low-income individuals. Funding for these
services is provided by a combination of
federal and state moneys. The above-described provisions are
collectively known as the Every Woman Counts program.
This bill would, by no later than January 10 and May 14 of each
year, require the State Department of Public Health to provide the
fiscal committees of the Legislature with an estimate package for the
Every Woman Counts program that includes all significant assumptions
underlying the estimate for this program, including current-year and
budget-year proposals, and that contains concise information
identifying applicable estimate components necessary to support the
estimate.
This bill would require the State Department of Public Health to
provide the fiscal and appropriate policy committees of the
Legislature with quarterly updates on caseload, estimated
expenditures, and related program monitoring data for the Every Woman
Counts program by no later than the 15th day of the month following
the end of each quarter of the fiscal year.
Existing law establishes specified licensing and certification
program fees for various health facilities, and contains provisions
relating to methodologies for adjustment of those fees. Existing law
requires the State Department of Public Health to annually prepare a
report of all costs for activities of the Licensing and Certification
Program. Existing law requires the report to include, among other
things, recommendations for Licensing and Certification Program fees
in accordance with specified criteria.
This bill would, by no later than January 10 and May 14 of each
year, require the State Department of Public Health to provide the
fiscal committees of the Legislature with an estimate package for the
Licensing and Certification Program that includes all significant
assumptions underlying the estimate for this program, including
current-year and budget-year proposals, and that contains concise
information identifying applicable estimate components, as specified.
This bill would, no later than January 20 of each year, require
the State Department of Public Health to provide a vacancy report,
effective as of December 1 of the previous calendar year, to the
Joint Legislative Budget Committee and the chairs of the fiscal
committees of both houses of the Legislature that identifies both
filled and vacant positions within the department by center,
division, branch, and classification.
This bill would require the State Department of Health Care
Services to seek support from one or more foundations to support and
develop a study or studies of the California Children's Services
(CCS) Program, to be provided to interested stakeholders and the
fiscal and appropriate policy committees of the Legislature by May
2011. It would express the intent of the Legislature concerning the
purposes to which the study or studies are to be used.
This bill would require the State Department of Health Care
Services to provide the fiscal and appropriate policy committees of
the Legislature with semiannual updates containing certain
information regarding all of California's Medicaid waivers to be
provided in March and October of each 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 with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
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 enact
statutory changes relating to the Budget Act of 2010.
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 56.30 of the Civil Code is amended to read:
56.30. The disclosure and use of the following medical
information shall not be subject to the limitations of this part:
(a) (Mental health and developmental disabilities) Information and
records obtained in the course of providing services under Division
4 (commencing with Section 4000), Division 4.1 (commencing with
Section 4400), Division 4.5 (commencing with Section 4500), Division
5 (commencing with Section 5000), Division 6 (commencing with Section
6000), or Division 7 (commencing with Section 7100) of the Welfare
and Institutions Code.
(b) (Public social services) Information and records that are
subject to Sections 10850, 14124.1, and 14124.2 of the Welfare and
Institutions Code.
(c) (State health services, communicable diseases, developmental
disabilities) Information and records maintained pursuant to former
Chapter 2 (commencing with Section 200) of Part 1 of Division 1 of
the Health and Safety Code and pursuant to the Communicable Disease
Prevention and Control Act (subdivision (a) of Section 27 of the
Health and Safety Code).
(d) (Licensing and statistics) Information and records maintained
pursuant to Division 2 (commencing with Section 1200) and Part 1
(commencing with Section 102100) of Division 102 of the Health and
Safety Code; pursuant to Chapter 3 (commencing with Section 1200) of
Division 2 of the Business and Professions Code; and pursuant to
Section 8608, 8817, or 8909 of the Family Code.
(e) (Medical survey, workers' safety) Information and records
acquired and maintained or disclosed pursuant to Sections 1380 and
1382 of the Health and Safety Code and pursuant to Division 5
(commencing with Section 6300) of the Labor Code.
(f) (Industrial accidents) Information and records acquired,
maintained, or disclosed pursuant to Division 1 (commencing with
Section 50), Division 4 (commencing with Section 3200), Division 4.5
(commencing with Section 6100), and Division 4.7 (commencing with
Section 6200) of the Labor Code.
(g) (Law enforcement) Information and records maintained by a
health facility which are sought by a law enforcement agency under
Chapter 3.5 (commencing with Section 1543) of Title 12 of Part 2 of
the Penal Code.
(h) (Investigations of employment accident or illness) Information
and records sought as part of an investigation of an on-the-job
accident or illness pursuant to Division 5 (commencing with Section
6300) of the Labor Code or pursuant to Section 105200 of the Health
and Safety Code.
(i) (Alcohol or drug abuse) Information and records subject to the
federal alcohol and drug abuse regulations (Part 2 (commencing with
Section 2.1) of subchapter A of Chapter 1 of Title 42 of the Code of
Federal Regulations) or to Section 11977 of the Health and Safety
Code dealing with narcotic and drug abuse.
(j) (Patient discharge data) Nothing in this part shall be
construed to limit, expand, or otherwise affect the authority of the
California Health Facilities Commission to collect patient discharge
information from health facilities.
(k) Medical information and records disclosed to, and their use
by, the Insurance Commissioner, the Director of the Department of
Managed Health Care, the Division of Industrial Accidents, the
Workers' Compensation Appeals Board, the Department of Insurance, or
the Department of Managed Health Care.
(l) Medical information and records related to services provided
on and after January 1, 2006, disclosed to, and their use by, the
Managed Risk Medical Insurance Board to the same extent that those
records are required to be provided to the board related to services
provided on and after July 1, 2009, to comply with Section 403 of the
federal Children's Health Insurance Program Reauthorization Act of
2009 (Public Law 111-3), applying subdivision (c) of Section 1932 of
the federal Social Security Act.
SEC. 2. Section 854.1 of the Government Code is amended to read:
854.1. (a) It is the intent of the Legislature to ensure
continuity of care for clients of Agnews Developmental Center
and Lanterman Developmental Center .
(b) In the effort to achieve these goals, it is the intent of the
Legislature to seek and implement recommendations that include all of
the following services to retain Agnews and Lanterman
staff as employees:
(1) Crisis management teams that provide behavioral, medical, and
dental treatment, training, and technical assistance.
(2) Specialized services, including adaptive equipment design and
fabrication, and medical, dental, psychological, and assessment
services.
(3) Staff support in community homes to assist individuals with
behavioral or psychiatric needs.
(c) As used in this chapter, the terms "mental institution" or
"medical facility" also include a developmental services facility.
For the purposes of this chapter "developmental services facility"
means any facility or place where a public employee provides
developmental services relating to the closure of Agnews
Developmental Center or Lanterman Developmental Center .
SEC. 3. Section 1324.20 of the Health and Safety Code is amended
to read:
1324.20. For purposes of this article, the following definitions
shall apply:
(a) (1) "Continuing care retirement
community" means a provider of a continuum of services, including
independent living services, assisted living services as defined in
paragraph (5) of subdivision (a) of Section 1771, and skilled nursing
care, on a single campus, that is subject to Section 1791, or a
provider of such a continuum of services on a single campus that has
not received a Letter of Exemption pursuant to subdivision
(b) (d) of Section 1771.3.
(2) Notwithstanding paragraph (1), beginning with the 2010-11 rate
year and for every rate year thereafter, the term "continuing care
retirement community" shall have the definition contained in
paragraph (11) of subdivision (c) of Section 1771.
(b) "Department," unless otherwise specified, means the State
Department of Health Care Services.
(b)
(c) (1) "Exempt facility" means a
skilled nursing facility that is part of a continuing care
retirement community, a skilled nursing facility operated by the
state or another public entity, a unit that provides pediatric
subacute services in a skilled nursing facility, a skilled nursing
facility that is certified by the State Department of Mental Health
for a special treatment program and is an institution for mental
disease as defined in Section 1396d(i) of Title 42 of the United
States Code, or a skilled nursing facility that is a distinct part of
a facility that is licensed as a general acute care hospital.
(2) Notwithstanding paragraph (1), beginning with the 2010-11 rate
year and for every rate year thereafter, the term "exempt facility"
shall mean a skilled nursing facility that is part of a continuing
care retirement community, as defined in paragraph (2) of subdivision
(a), a skilled nursing facility operated by the state or another
public entity, a unit that provides pediatric subacute services in a
skilled nursing facility, a skilled nursing facility that is
certified by the State Department of Mental Health for a special
treatment program and is an institution for mental disease as defined
in Section 1396d(i) of Title 42 of the United States Code, or a
skilled nursing facility that is a distinct part of a facility that
is licensed as a general acute care hospital.
(3) Notwithstanding paragraph (1), beginning with the 2010-11 rate
year and every rate year thereafter, a multilevel facility, as
described in paragraph (1) of subdivision (a), shall not be exempt
from the quality assurance fee requirements pursuant to this article,
unless it meets the definition of a continuing care retirement
community in paragraph (11) of subdivision (c) of Section 1771.
(c)
(d) (1) "Net revenue" means gross resident revenue for
routine nursing services and ancillary services provided to all
residents by a skilled nursing facility, less Medicare revenue for
routine and ancillary services, including Medicare revenue for
services provided to residents covered under a Medicare managed care
plan, less payer discounts and applicable contractual allowances as
permitted under federal law and regulation.
(2) Notwithstanding paragraph (1), for the 2009-10 and
2010-11 to 2011-12, inclusive, rate years, "net
revenue" means gross resident revenue for routine nursing services
and ancillary services provided to all residents by a skilled nursing
facility, including Medicare revenue for routine and ancillary
services and Medicare revenue for services provided to residents
covered under a Medicare managed care plan, less payer discounts and
applicable contractual allowances as permitted under federal law and
regulation. To implement this paragraph, the department shall request
federal approval pursuant to Section 1324.27.
(3) "Net revenue" does not mean charitable contributions and bad
debt.
(d)
(e) "Payer discounts and contractual allowances" means
the difference between the facility's resident charges for routine or
ancillary services and the actual amount paid.
(e)
(f) "Skilled nursing facility" means a licensed
facility as defined in subdivision (c) of Section 1250.
SEC. 4. 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 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 Care
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) (A) For the rate year 2005-06 and
subsequent rate years through and including the 2010-11
2009-10 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).
(B) For the 2010-11 rate year and subsequent rate years, 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 year's data trended forward, using
historical increases in net revenues. 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
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 fees collected annually pursuant to this
article, 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. 5. Section 1324.22 of the Health and Safety Code is amended
to read:
1324.22. (a) The quality assurance fee, as calculated pursuant to
Section 1324.21, shall be paid by the provider to the department for
deposit in the State Treasury on a monthly basis on or before the
last day of the month following the month for which the fee is
imposed, except as provided in subdivision (e) of Section 1324.21.
(b) On or before the last day of each calendar quarter, each
skilled nursing facility shall file a report with the department, in
a prescribed form, showing the facility's total resident days for the
preceding quarter and payments made. If it is determined that a
lesser amount was paid to the department, the facility shall pay the
amount owed in the preceding quarter to the department with the
report. Any amount determined to have been paid in excess to the
department during the previous quarter shall be credited to the
amount owed in the following quarter.
(c) On or before August 31 of each year, each skilled nursing
facility subject to an assessment pursuant to Section 1324.21 shall
report to the department, in a prescribed form, the facility's total
resident days and total payments made for the preceding state fiscal
year. If it is determined that a lesser amount was paid to the
department during the previous year, the facility shall pay the
amount owed to the department with the report.
(d) (1) A newly licensed skilled nursing
facility, as defined by the department,
facility shall complete all requirements of subdivision (a) for
any portion of the year in which it commences operations and of
subdivision (b) for any portion of the quarter in which it commences
operations.
(2) For purposes of this subdivision, "newly licensed skilled
nursing facility" means a location that has not been previously
licensed as a skilled nursing facility.
(e) (1) When a skilled nursing facility
fails to pay all or part of the quality assurance fee within 60 days
of the date that payment is due, the department may deduct the unpaid
assessment and interest owed from any Medi-Cal reimbursement
payments to the facility until the full amount is recovered. Any
deduction shall be made only after written notice to the facility and
may be taken over a period of time taking into account the financial
condition of the facility.
(2) In addition to the provisions of paragraph (1), any unpaid
quality assurance fee assessed by this article shall constitute a
debt due to the state and may be collected pursuant to Section
12419.5 of the Government Code.
(f) Notwithstanding any other provision of law, the department
shall continue to assess and collect the quality assurance fee,
including any previously unpaid quality assurance fee, from each
skilled nursing facility, irrespective of any changes in ownership or
ownership interest or control or the transfer of any portion of the
assets of the facility to another owner.
(g) During the time period in which a temporary manager is
appointed to a facility pursuant to Section 1325.5 or during which a
receiver is appointed by a court pursuant to Section 1327, the State
Department of Public Health shall not be responsible for any unpaid
quality assurance fee assessed prior to the time period of the
temporary manager or receiver. Nothing in this subdivision shall
affect the responsibility of the facility to make all payments of
unpaid or current quality assurance fees, as required by this section
and Section 1324.21.
(f) Should
(h) If all or any part of the
quality assurance fee remain remains
unpaid, the department may take either or both of the following
actions:
(1) Assess a penalty equal to 50 percent of the unpaid fee amount
for unpaid fees assessed during the 2004-05 to 2009-10,
inclusive, rate years, and up to 50 percent of the unpaid fee amount
for unpaid fees assessed during the 2010-11 rate year and any
subsequent rate year .
(2) (A) Delay license renewal.
(B) Beginning with the 2010-11 rate year, the department may
recommend to the State Department of Public Health that license
renewal be delayed until the full amount of the quality assurance
fee, penalties, and interest is recovered.
(g)
(i) In accordance with the provisions of the Medicaid
state plan State Plan , the payment of
the quality assurance fee shall be considered as an allowable cost
for Medi-Cal reimbursement purposes.
(h)
(j) The assessment process pursuant to this section
shall become operative not later than 60 days from receipt of federal
approval of the quality assurance fee, unless extended by the
department. The department may assess fees and collect payment in
accordance with subdivision (e) of Section 1324.21 in order to
provide retroactive payments for any rate increase authorized under
this article.
(k) The amendments made to subdivision (d) and the addition of
subdivision (f) by the act that added this subdivision shall not be
construed as substantive changes, but are merely clarifying existing
law.
SEC. 6. Section 1324.23 of the Health and Safety Code is amended
to read:
1324.23. (a) The Director of Health Care 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, 2010
2012 . It is the intent of the Legislature that
the regulations adopted pursuant to subdivision (b) shall be adopted
on or before July 31, 2010 2012 .
SEC. 7. Section 1324.27 of the Health and Safety Code is amended
to read:
1324.27. (a) (1) The department shall request approval from the
federal Centers for Medicare and Medicaid Services for the
implementation of this article. In making this request, the
department shall seek specific approval from the federal Centers for
Medicare and Medicaid Services to exempt facilities identified in
subdivision (b) (c) of Section 1324.20,
including the submission of a request for waiver of broad-based
requirement, waiver of uniform fee requirement, or both, pursuant to
paragraphs (1) and (2) of subdivision (e) of Section 433.68 of Title
42 of the Code of Federal Regulations.
(2) The director may alter the methodology specified in this
article, to the extent necessary to meet the requirements of federal
law or regulations or to obtain federal approval. The Director of
Health Services may also add new categories of exempt facilities or
apply a nonuniform fee to the skilled nursing facilities subject to
the fee in order to meet requirements of federal law or regulations.
The Director of Health Services may apply a zero fee to one or more
exempt categories of facilities, if necessary to obtain federal
approval.
(3) If after seeking federal approval, federal approval is not
obtained, this article shall not be implemented.
(b) The department shall make retrospective adjustments, as
necessary, to the amounts calculated pursuant to Section 1324.21 in
order to assure that the aggregate quality assurance fee for any
particular state fiscal year does not exceed 6 percent of the
aggregate annual net revenue of facilities subject to the fee.
SEC. 8. 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 the 2005-06 rate year ,
and for every subsequent rate year continuing through the
2010-11 2011- 12 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. 9. Section 1324.29 of the Health and Safety Code is amended
to read:
1324.29. (a) The quality assurance fee
shall cease to be assessed and collected on or
after July 31, 2011 2012 .
(b) Notwithstanding subdivision (a) and Section 1324.30, the
department's authority and obligation to collect all quality
assurance fees and penalties, including interest, shall continue in
effect and shall not cease until the date that all amounts are paid
or recovered in full.
(c) This
section shall remain operative until the date that all fees and
penalties, including interest, have been recovered pursuant to
subdivision (b), and as of that date is repealed.
SEC. 10. Section 1324.30 of the Health and Safety Code is amended
to read:
1324.30. This article shall become inoperative on
after July 31, 2011 2012
, and, as of January 1, 2012 2013
, is repealed, unless a later enacted statute, that becomes
operative on or before January 1, 2012 2013
, deletes or extends the dates on which it becomes inoperative
and is repealed.
SEC. 11. Section 1356.2 is added to the Health and Safety Code, to
read:
1356.2. The director, by notice to all licensed health care
service plans on or before October 15, 2010, may require health care
service plans to pay an additional assessment to provide the
department with sufficient revenues to support costs and expenses of
the department as set forth in subdivision (b) of Section 1341.4 and
Section 1356 for the 2010-11 fiscal year. The assessment paid
pursuant to this section shall be separate and independent of the
assessment imposed pursuant to subdivision (b) of Section 1356 and
shall not be aggregated with the assessment imposed pursuant to
subdivision (b) of Section 1356 for the purposes of limitation or
otherwise. The assessment paid pursuant to this section shall not be
subject to the limitations imposed on assessments pursuant to Section
1356.1. In imposing an assessment pursuant to this section, the
director shall levy on each health care service plan an amount
determined by the director using the categories of plans in the
schedules set forth in subdivision (b) of Section 1356. The
assessments imposed pursuant to this section shall be paid in full by
December 1, 2010. On and after July 1, 2011, and until August 31,
2015, the director may raise the assessment limit described in
subdivision (b) of Section 1356 to incorporate the annual expenditure
levels set forth in this section.
SEC. 12. Section 1417.5 is added to the Health and Safety Code, to
read:
1417.5. (a) The department, in consultation with stakeholders,
shall develop recommendations to address the findings published in
the June 2010 report entitled, "Department of Public Health: It
Reported Inaccurate Financial Information and Can Likely Increase
Revenues for the State and Federal Health Facilities Citation
Penalties Accounts" (Report 2010-108). The recommendations shall
address, but not be limited to, all of the following:
(1) Streamlining the citation appeal process, including the
citation review conference process.
(2) Increasing citation penalty amounts, including late penalty
fees, and annually adjusting penalty amounts to reflect an inflation
indicator, such as the California Consumer Price Index.
(3) Revising state law to enable the department to recommend that
the federal Centers for Medicare and Medicaid Services impose a
federal civil money penalty when the department's Licensing and
Certification Division determines that a facility is out of
compliance with both state and federal requirements.
(4) Authorizing the department to collect citation penalty amounts
upon appeal of the citation and allowing the department to place
those funds into a special interest bearing account.
(b) The department shall provide the recommendations to the fiscal
and policy committees of the Legislature no later than March 1,
2011.
SEC. 13. Section 1567.50 of the Health and Safety Code is amended
to read:
1567.50. (a) Notwithstanding that a community care facility means
a place that provides nonmedical care under subdivision (a) of
Section 1502, pursuant to Article 3.5 (commencing with Section
4684.50) of Chapter 6 of Division 4.5 of the Welfare and Institutions
Code, the department shall jointly implement with the State
Department of Developmental Services a pilot project to test
the effectiveness of providing licensing program to
provide special health care and intensive support services to
adults in homelike community settings.
(b) The State Department of Social Services may license, subject
to the following conditions, an Adult Residential Facility for
Persons with Special Health Care Needs to provide 24-hour services to
up to five adults with developmental disabilities who have special
health care and intensive support needs, as defined in subdivisions
(f) and (g) of Section 4684.50 of the Welfare and Institutions Code.
(1) The State Department of Developmental Services shall be
responsible for granting the certificate of program approval for an
Adult Residential Facility for Persons with Special Health Care Needs
(ARFPSHN). The State Department of Social Services shall not issue a
license unless the applicant has obtained a certification of program
approval from the State Department of Developmental Services.
(2) The State Department of Social Services shall ensure that the
ARFPSHN meets the administration requirements under Article 2
(commencing with Section 1520) including, but not limited to,
requirements relating to fingerprinting and criminal records under
Section 1522.
(3) The State Department of Social Services shall administer
employee actions under Article 5.5 (commencing with Section 1558).
(4) The regional center shall monitor and enforce compliance of
the program and health and safety requirements, including monitoring
and evaluating the quality of care and intensive support services.
The State Department of Developmental Services shall ensure that the
regional center performs these functions.
(5) The State Department of Developmental Services may decertify
any ARFPSHN that does not comply with program requirements. When the
State Department of Developmental Services determines that urgent
action is necessary to protect clients of the ARFPSHN from physical
or mental abuse, abandonment, or any other substantial threat to
their health and safety, the State Department of Developmental
Services may request the regional center or centers to remove the
clients from the ARFPSHN or direct the regional center or centers to
obtain alternative services for the consumers within 24 hours.
(6) The State Department of Social Services may initiate
proceedings for temporary suspension of the license pursuant to
Section 1550.5.
(7) The State Department of Developmental Services, upon its
decertification, shall inform the State Department of Social Services
of the licensee's decertification, with its recommendation
concerning revocation of the license, for which the State Department
of Social Services may initiate proceedings pursuant to Section 1550.
(8) The State Department of Developmental Services and the
regional centers shall provide the State Department of Social
Services all available documentation and evidentiary support
necessary for any enforcement proceedings to suspend the license
pursuant to Section 1550.5, to revoke or deny a license pursuant to
Section 1551, or to exclude an individual pursuant to Section 1558.
(9) The State Department of Social Services Community Care
Licensing Division shall enter into a memorandum of understanding
with the State Department of Developmental Services to outline a
formal protocol to address shared responsibilities, including
monitoring responsibilities, complaint investigations, administrative
actions, and closures.
(10) The licensee shall provide documentation that, in addition to
the administrator requirements set forth under paragraph (4) of
subdivision (a) of Section 4684.63 of the Welfare and Institutions
Code, the administrator, prior to employment, has completed a minimum
of 35 hours of initial training in the general laws, regulations and
policies and procedural standards applicable to facilities licensed
by the State Department of Social Services under Article 2
(commencing with Section 1520). Thereafter, the licensee shall
provide documentation every two years that the administrator has
completed 40 hours of continuing education in the general laws,
regulations and policies and procedural standards applicable to adult
residential facilities. The training specified in this section shall
be provided by a vendor approved by the State Department of Social
Services and the cost of the training shall be borne by the
administrator or licensee.
(c) The article shall remain in effect only until January 1, 2011,
and as of that date is repealed, unless a later enacted statute
extends or deletes that date.
(d)
(c) This article shall only be implemented to the
extent that funds are made available through an appropriation in the
annual Budget Act.
SEC. 14. Section 120917 of the Health and Safety Code is amended
to read:
120917. (a) An HIV counselor who is trained by the
Office of AIDS and working in an HIV counseling and testing site
funded by the department through a local health jurisdiction, or its
agents, meets the requirements of subdivision (e)
may do all of the following:
(1) Perform any HIV test that is classified as waived under the
federal Clinical Laboratory Improvement Act (CLIA) (42 U.S.C. Sec.
263a and following) if all of the following conditions exist:
(A) The performance of the HIV test meets the requirements of CLIA
and, subject to subparagraph (B), Chapter 3 (commencing with Section
1200) of Division 2 of the Business and Professions Code.
(B) Notwithstanding Section 1246 of the Business and Professions
Code, an HIV counselor may perform skin punctures for the purpose of
withdrawing blood for HIV testing, upon specific authorization from a
licensed physician and surgeon, provided that the person meets both
of the following requirements:
(i) He or she works under the direction of a licensed physician
and surgeon.
(ii) He or she has been trained in both rapid HIV test proficiency
for skin puncture blood tests and oral swab tests and in universal
infection control precautions, consistent with best infection control
practices established by the Division of Occupational Safety and
Health in the Department of Industrial Relations and the federal
Centers for Disease Control and Prevention.
(C) The person performing the HIV test meets the requirements for
the performance of waived laboratory testing pursuant to subdivision
(a) of Section 1206.5 of the Business and Professions Code. For
purposes of this subdivision and subdivision (a) of Section 1206.5 of
the Business and Professions Code, an HIV counselor trained
by the Office of AIDS who meets the requirements of
subdivision (e) shall be "other health care personnel providing
direct patient care" as referred to in paragraph (12) of subdivision
(a) of Section 1206.5 of the Business and Professions Code.
(D) The patient is informed that the preliminary result of the
test is indicative of the likelihood of HIV infection and that the
result must be confirmed by an additional more specific test, or, if
approved by the federal Centers for Disease Control and Prevention
for that purpose, a second different rapid HIV test. Nothing in this
subdivision shall be construed to allow an HIV counselor
trained by the Office of AIDS to perform any HIV test that
is not classified as waived under the CLIA.
(2) Notwithstanding Sections 1246.5 and 2053 of the Business and
Professions Code, order and report HIV test results from tests
performed pursuant to paragraph (1) to patients without authorization
from a licensed health care professional or his or her authorized
representative. Patients with indeterminate or positive test results
from tests performed pursuant to paragraph (1) shall be referred to a
licensed health care provider whose scope of practice includes the
authority to refer patients for laboratory testing for further
evaluation.
(b) An HIV counselor who has been certified pursuant to
subdivision (b) of Section 120871 prior to September 1, 2009, and who
will administer rapid HIV skin puncture tests shall obtain training
required by clause (ii) of subparagraph (B) of paragraph (1) of
subdivision (a) prior to September 1, 2011. The HIV counselor shall
not, unless also certified as a limited phlebotomist technician,
perform a skin puncture pursuant to this section until he or she has
completed the training required by that clause.
(c) An HIV counselor who meets the requirements of this section
with respect to performing any HIV test that is classified as waived
under the CLIA may not perform any other test unless that person
meets the statutory and regulatory requirements for performing that
other test.
(d) This section shall not be construed to certify an HIV
counselor as a phlebotomy technician or a limited phlebotomy
technician, or to fulfill any requirements for certification as a
phlebotomy technician or a limited phlebotomy technician, unless the
HIV counselor has otherwise satisfied the certification requirements
imposed pursuant to Section 1246 of the Business and Professions
Code.
(e) (1) An HIV counselor shall meet one of the following criteria:
(A) Is trained by the Office of AIDS and working in an HIV
counseling and testing site funded by the department through a local
health jurisdiction, or its agents.
(B) Is working in an HIV counseling and testing site that meets
both of the following criteria:
(i) Utilizes HIV counseling staff who are trained by the Office of
AIDS or its agents.
(ii) Has a quality assurance plan approved by the local health
department in the jurisdiction where the site is located and has HIV
counseling and testing staff who comply with the quality assurance
requirements specified in Section 1230 of Article 1 of Group 9 of
Subchapter 1 of Chapter 2 of Division 1 of Title 17 of the California
Code of Regulations.
(2) (A) The Office of AIDS or its agents may charge a fee for
training HIV counseling staff.
(B) The local health department may charge a fee for the quality
assurance plan approval.
SEC. 15. Section 120971 is added to the Health and Safety Code, to
read:
120971. (a) In the event state expenditures for the AIDS Drug
Assistance Program (ADAP) are identified by California to be used as
a certified public expenditure for the purpose of obtaining federal
financial participation under the Medi-Cal program for any purposes,
including federal demonstration waivers, the State Department of
Health Care Services and the State Department of Public Health shall
ensure the integrity of the ADAP in meeting its maintenance of effort
requirements to receive federal funds and to obtain all ADAP drug
rebates to support the ADAP.
(b) The State Department of Health Care Services and the State
Department of Public Health shall keep the appropriate policy and
fiscal committees of the Legislature informed of any potential
concerns that may arise in the event that state expenditures for the
ADAP are used as a certified public expenditure as described in
subdivision (a).
SEC. 16. Section 130250.1 is added to the Health and Safety Code,
to read:
130250.1. (a) This division shall be known, and may be cited, as
the California Health Information Technology Act.
(b) Any duties under the act are subject to the availability of
sufficient funding to carry out the duties. The provisions of this
act shall only be implemented to the extent permitted by federal law.
SEC. 17. Section 130251 of the Health and Safety Code is amended
to read:
130251. (a) The California Health and Human Services Agency or
one of the departments under its jurisdiction may apply for federal
funds made available through the federal American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) for health information
technology and exchange. If the California Health and Human
Services Agency or one of the departments under its jurisdiction
submits an application pursuant to this subdivision, and later
chooses to subgrant, in whole or in part, a portion of the federal
grant to a qualified nonprofit entity for the purposes of
establishing health information exchange, that entity shall be
designated as the state governance entity.
(b) In the event that the California Health and Human Services
Agency or one of the departments under its jurisdiction elects not to
submit an application described in subdivision (a), the Governor
shall designate a qualified nonprofit entity to be the
state-designated entity for the purposes of health information
exchange, pursuant to the requirements set forth in ARRA
the federal American Reinvestment and Recovery Act of
2009 .
(c) In addition to existing requirements applicable to nonprofit
entities, the state governance entity may be held to additional
requirements under federal and state law, and directives from the
California Health and Human Services Agency.
(c)
(d) The agency or state-designated entity shall execute
tasks related to accessing federal stimulus funds made available
through ARRA, and facilitate and expand the use and disclosure of
health information electronically among organizations according to
nationally recognized standards and implementation specifications
while protecting, to the greatest extent possible, individual privacy
and the confidentiality of electronic medical records.
(d)
(e) The agency or state-designated entity shall develop
a plan strategic and operational plans
to ensure that health information exchange capabilities are
available, adopted, and utilized statewide so that patients do not
experience disparities in access to the benefits of this technology
by age, race, ethnicity, language, income, insurance status,
geography, or otherwise.
(e)
(f) The agency or ,
state-designated entity , or state governance entity shall
create a plan for a self-sustaining funding mechanism that does not
include use of General Fund moneys that shall cover all reasonable
costs of the administration of health information exchange when
federal ARRA funds expire or are exhausted. A detailed business
plan and sustainability model shall be submitted to the Governor and
the Legislature by April 1, 2011. The plan may include a combination
of approaches to create viable revenue streams, and shall take into
account the needs of safety net institutions and providers.
(f)
(g) The state-designated entity or state
governance entity shall continually meet any conditions for
being so designated as determined by the Secretary of California
Health and Human Services. Failure to comply with this subdivision
may result in the applicable entity losing its
designation contract for state designation or subgrant
agreement .
(g)
(h) As a condition of receiving the state
designation contract for state designation or subgrant
agreement , the state-designated entity or state
governance entity shall comply with all of the following
requirements:
(1) It shall be subject to oversight by the California Health and
Human Services Agency.
(2) (A) It shall be governed by a an
initial board with a diverse composition from multiple types of
organizations from multiple regions throughout the state. The
initial governing board shall include , at a minimum,
all of the following:
(i) The Secretary of California Health and Human Services
on or his or her designee.
(ii) The Chair of the Senate Committee on Health or his or her
designee.
(iii) The Chair of the Assembly Committee on Health on
or his or her designee.
(iv) One administrator from a state department under the
jurisdiction of the California Health and Human Services Agency
responsible for a statewide health program.
(iv)
(v) At least two consumer representatives, one of whom
shall have expertise in privacy and security of health information.
(vi) One licensed physician and surgeon, representing a solo or
small group practice.
(vii) One licensed physician and surgeon, representing a medical
group or independent practice association.
(viii) One representative from a safety net clinic.
(ix) Two representatives of hospitals, one of whom shall represent
a public hospital.
(x) Two representatives of health plans or health insurers, one of
whom shall represent a publicly run health plan or insurer.
(xi) One local public health officer.
(xii) Two representatives of health information exchange
organizations, one from northern California, and one from southern
California.
(xiii) One representative of the medical informatics industry or
who has experience in medical informatics.
(xiv) One representative of an employer who provides employees
with health care coverage, or a group purchaser of health care
coverage.
(xv) One representative from labor.
(xvi) The chief executive officer of the nonprofit entity.
(xvii) Two at-large cochairs of the nonprofit entity.
(B) The majority of the board shall be comprised of
`nongovernmental nongovernmental employees.
(3) If the governing board convenes workgroups or
subcommittees, the workgroups or subcommittees shall be comprised of
representatives from multiple types of organizations from multiple
regions throughout the state, and meetings of any workgroup or
subcommittee shall be held in an open, public, and transparent way.
(4) It The state-designated entity or
state governance entity shall have nondiscrimination and
conflict-of-interest policies that demonstrate a commitment to open,
fair, and nondiscriminatory participation by stakeholders.
(h)
(i) The state-designated entity shall report
to the California Health and Human Services Agency
and the Legislature on its progress and activities at least annually
, in consultation with the initial governing board,
may modify the composition of the initial governing board. If a
modification is made to the composition of the initial governing
board pursuant to this subdivision, the agency shall inform the
Legislature of, and the reason for, the change implemented .
(j) Upon the completion of the initial one-year term of the two
at-large cochairs of the state-designated entity or state governance
entity, the board shall select a chair or two cochairs from its
membership.
SEC. 18. Section 130251.15 is added to the Health and Safety Code,
to read:
130251.15. (a) All deliverables, as defined in the scope of work
originated or prepared by the state-designated entity or state
governance entity pursuant to its applicable contract, including
papers, reports, charts, and other documentation, but not including
the applicable entity's administrative communications and records
relating to the contract, shall, upon delivery and acceptance by the
California Health and Human Services Agency, become the exclusive
property of the state, and may be copyrighted by the state under the
oversight of the agency.
(b) If any material funded pursuant to the contract may be
copyrighted, the agency reserves the right to copyright the material,
and the entity agrees not to copyright the material without prior
written approval from the Secretary of California Health and Human
Services. The secretary shall consent to, or give a reason for the
denial to, the entity in writing within 60 days of receipt of the
request.
(c) If the material is copyrighted with the consent of the agency,
the agency reserves a royalty-free, nonexclusive, and irrevocable
license to reproduce, prepare derivative works, publish, distribute,
and use the materials, in whole or in part, and to authorize others
to do so, provided written credit is given to the author.
(d) All inventions, discoveries, or improvements of the
techniques, programs, or materials developed pursuant to the contract
shall be the property of the agency. The agency agrees to grant a
royalty-free, nonexclusive license for any invention, discovery, or
improvement to the entity and further agrees that the entity may
sublicense additional persons on the same royalty-free basis subject
to the approval of the agency.
(e) Nothing in this section shall be construed to limit the
intellectual property and copyright authority of the federal
government.
SEC. 19. Section 130252 is added to the Health and Safety Code, to
read:
130252. (a) Subject to available funding, the California Health
and Human Services Agency shall be responsible for ensuring that all
federal grant deliverables are met. The agency shall coordinate
electronic health activities in the state and work with stakeholders,
state departments, and the Legislature to support policy needs for
health information technology and health information exchange in
California.
(b) In the event that a state governance entity is established,
all of the following conditions shall be met:
(1) The agency shall be responsible for ensuring that all
deliverables established in the strategic and operational plans
established pursuant to subdivision (e) of Section 130251, and as
required by the federal grant, are met.
(2) Any grant issued by the agency to the state governance entity
for health information exchange shall be deliverables based. All
deliverables shall be subject to approval and acceptance by the
agency.
(c) The agency, state-designated entity, or the state governance
entity shall establish and begin providing health information
exchange services by January 1, 2012.
(d) The state-designated entity or state governance entity shall
ensure that an effective model for health information exchange
governance and accountability is in place. In order to avoid any real
or apparent conflict of interest, the state-designated entity or
state governance entity shall ensure organizational and functional
separation exists between the governance functions of the entity and
its operational functions, specifically between operating entities
that are or may be involved in building and maintaining the health
information exchange. The agency shall conduct periodic internal
reviews at least once after an entity has received the designation,
and periodically as
necessary, to ensure this separation is maintained, and that the
state-designated entity or state governance entity operates in a
manner that ensures organizational integrity and accountability.
(e) The state-designated entity or state governance entity shall
provide a process for public comment and input, which may include
integrating public workgroups convened by the agency during the
operational planning process into its organizational structure.
(f) The state-designated entity or state governance entity, in
consultation with the Office of Health Information Integrity, shall
develop detailed standards and policies to be included in all
contracts with health care entities that are participants of the
state-designated entity's or governance entity's health information
exchange for health information exchange services provided by the
applicable entity. The state-designated entity or state governance
entity shall also work with the Office of Health Information
Integrity to ensure standardization of privacy and security policies
for health information exchange statewide. The state-designated
entity or state governance entity shall develop operational policies
based on privacy and security guidelines developed by the state, and
create a uniform set of privacy and security rules to be used by
other entities participating in health information exchanges
established by the state-designated entity or state governance entity
for health information exchange or a contract made by the applicable
entity for health information exchange.
(g) The agency shall develop a detailed implementation plan that
meets all requirements, deliverables, and goals specified in the
strategic and operational plans established pursuant to subdivision
(e) of Section 130251. The implementation plan shall be submitted to
the Legislature by November 1, 2010. The implementation plan shall
include, but need not be limited to, all of the following:
(1) A detailed work plan and communications plan.
(2) A model that defines the technical architecture for services
recommended in the operational plan.
(3) A description of specific core services enabled or provided by
the health information exchange and timeframes for the rollout of
those services.
(4) A determination of how to most effectively engage stakeholders
throughout the state.
(5) A description of specific deliverables and timeframes to
ensure that statewide health information exchange is achieved
pursuant to the state strategic and operational plans.
(6) Detailed information on internal infrastructure that ensures
the state governance entity for health information exchange meets
legal and regulatory criteria needed, including, but not limited to,
a comprehensive staffing plan.
(h) Any contract for state designation or subgrant agreement
pursuant to this section shall be made through an open and
competitive process as required by federal law.
(i) The state designated entity or state governance entity shall
comply with applicable provisions of the federal Health Information
Technology for Economic and Clinical Health Act (HITECH Act; Public
Law 111-5), the federal Public Health Service Act (42 U.S.C. Sec.
300x-26), and applicable federal policies, guidance, and
requirements. These provisions shall include, but are not limited to,
the requirement that funds be used to conduct activities to
facilitate and expand the electronic movement and use of health
information among organizations according to nationally recognized
standards in effect on December 31, 2010.
SEC. 20. Section 130253 is added to the Health and Safety Code, to
read:
130253. (a) To provide the public with transparency of the
actions by the state-designated entity or state governance entity,
the California Health and Human Services Agency shall require the
state-designated entity or state governance entity to develop
policies and procedures that include, but are not limited to, all of
the following areas:
(1) Conflicts of interest. The policies and procedures shall be
consistent with federal law and modeled on the Political Reform Act
of 1974 (Title 9 (commencing with Section 81000) of the Government
Code).
(2) Public access to meetings.
(A) (i) The state-designated entity or state governance entity
shall hold board and workgroup meetings open to the public, including
the entity's annual meeting.
(ii) The state-designated entity or state governance entity may
hold additional meetings as it determines are necessary or
appropriate. Subject to subparagraph (B), these meetings shall also
be open to the public.
(B) The state governance entity may conduct closed sessions when
it meets to consider or discuss confidential matters, including, but
not limited to, those concerning the appointment, employment,
performance, compensation, or dismissal of the entity's officers and
employees.
(C) The state-designated entity shall award grants and contracts
in public meetings consistent with federal requirements for an open
and competitive process, and shall adopt all governance, technical,
and policy standards in public meetings.
(3) Contracts.
(A) The Public Contract Code shall not apply to contracts issued
by the state governance entity. This subparagraph shall not be
construed to modify existing law regarding the application of the
Public Contract Code.
(B) For contracts entered into by the state governance entity,
policies shall be governed by applicable federal regulations,
policies specified by the Office of the National Coordinator for
Health Information Technology, including, but not limited to,
provisions required by the federal State Health Information Exchange
Cooperative Agreement Program and any additional requirements as
specified by the agency.
(b) The policies and procedures developed pursuant to this section
are exempt from 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. 21. Section 130254 is added to the Health and Safety Code, to
read:
130254. Notwithstanding Section 10231.5 of the Government Code,
commencing October 1, 2010, the California Health and Human Services
Agency shall report, by October 1 and April 1 of each year, to the
Legislature regarding the expenditures made from the California
Health Information Technology and Exchange Fund, and the status of
health information technology and exchange activities funded through
the fund. The report shall be in compliance with Section 9795 of the
Government Code. This report shall include, at a minimum, all of the
following:
(a) The agency's evaluation of the extent to which the state
governance entity for health information exchange has completed each
deliverable outlined in grant agreements or contracts between the
state and the entity, and the extent to which deliverables were
completed within the timelines specified in the grant agreements or
contracts.
(b) A detailed update on hiring and expenditures on staff hired
through this fund, including, but not limited to, staff hired by the
state governance entity for health information exchange.
(c) The status and amounts of grants and contracts awarded by the
state governance entity for health information exchange, including,
but not limited to, descriptions and deliverables.
SEC. 22. Section 130500 of the Health and Safety Code is amended
to read:
130500. (a) This division shall be known, and may be cited, as
the California Discount Prescription Drug Program.
(b) The provisions of this This
division shall become operative on or and
after July 1, 2010.
(c) The California Discount Prescription Drug Program shall be
implemented only if, and to the extent that, a Budget Act or other
statute that is enacted on or before February 1, 2015, includes or
makes an appropriation of moneys to the department to implement this
program.
(d) Notwithstanding any other provision of this division, if the
California Discount Prescription Drug Program is not implemented
pursuant to subdivision (c), this division shall become inoperative
on February 1, 2015, and as of January 1, 2016, is repealed, unless a
later enacted statute, that is enacted before January 1, 2016,
deletes or extends the dates on which it becomes inoperative and is
repealed.
SEC. 23. Section 130507 of the Health and Safety Code is amended
to read:
130507. (a) On August 1, 2013 2017 ,
the department shall determine whether manufacturer participation in
the program has been sufficient to meet both of the following
benchmarks:
(1) The number and type of drugs available through the program are
sufficient to give eligible Californians a formulary comparable to
the Medi-Cal list of contract drugs or, if this information is
available to the department, a formulary comparable to that provided
to CalPERS enrollees.
(2) The volume weighted average discount of single-source
prescription drugs offered pursuant to this program is equal to or
below any one of the benchmark prices described in subdivision (a) of
Section 130506.
(b) On and after August 10, 2013 1, 2017
, the department shall reassess program outcomes, at least once
every year, consistent with the benchmarks described in subdivision
(a).
SEC. 24. Section 130509 of the Health and Safety Code is amended
to read:
130509. (a) The department may require prior authorization in the
Medi-Cal program for any drug of a manufacturer if the manufacturer
fails to agree to a volume weighted average discount for
single-source prescription drugs that is equal to or below any one of
the benchmark prices described in subdivision (a) of Section 130506
and only to the extent that this requirement does not increase costs
to the Medi-Cal program, as determined pursuant to subdivision (c).
(b) If prior authorization is required for a drug pursuant to this
section, a Medi-Cal beneficiary shall not be denied the continued
use of a drug that is part of a prescribed therapy until that drug is
no longer prescribed for that beneficiary's therapy. The department
shall approve or deny requests for prior authorization necessitated
by this section as required by state or federal law.
(c) The department, in consultation with the Department of
Finance, shall determine the fiscal impact of placing a drug on prior
authorization pursuant to this section. In making this
determination, the department shall consider all of the following:
(1) The net cost of the drug, including any rebates that would be
lost if the drug is placed on prior authorization.
(2) The projected volume of purchases of the drug, before and
after the drug is placed on prior authorization, considering the
continuity of care provisions set forth in subdivision (b).
(3) The net cost of comparable drugs to which volume would be
shifted if a drug is placed on prior authorization, including any
additional rebates that would be received.
(4) The projected volume of purchases of comparable drugs, before
and after the drug is placed on prior authorization.
(5) Any other factors determined by the department to be relevant
to a determination of the fiscal impact of placing a drug on prior
authorization.
(d) This section shall be implemented only to the extent permitted
under federal law, and in a manner consistent with state and federal
laws.
(e) This section may apply to any manufacturer that has not
negotiated with the department.
(f) The department shall notify the Speaker of the Assembly and
the President pro Tempore of the Senate that the department is
requiring prior authorization no later than five days after making
this requirement.
(g) (1) Subject to paragraph (2), this section shall
become operative be implemented on and
after August 1, 2013 2017 .
(2) This section shall become operative be
implemented only if the department determines that
participation by manufacturers has been insufficient to meet both of
the benchmarks identified in Section 130507.
SEC. 25. Section 130543 of the Health and Safety Code is amended
to read:
130543. (a) The director may adopt regulations as are necessary
to implement and administer this division.
(b) 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 division, in whole or in part, by means of a
provider bulletin or other similar instructions, without taking
regulatory action, provided that no bulletin or other similar
instructions shall remain in effect after August 1, 2014
2015 . It is the intent that regulations adopted
pursuant to this section shall be adopted on or before August 1,
2014 2015 .
SEC. 26. Section 12693.21 of the Insurance Code is amended to
read:
12693.21. The board may do all of the following consistent with
the standards in this part:
(a) Determine eligibility criteria for the program.
(b) Determine the participation requirements of applicants,
subscribers, purchasing credit members, and participating health,
dental, and vision plans.
(c) Determine when subscribers' coverage begins and the extent and
scope of coverage.
(d) Determine family contribution amount schedules and collect the
contributions.
(e) Determine who may be a family contribution sponsor and provide
a mechanism for sponsorship.
(f) Provide or make available subsidized coverage through
participating health, dental, and vision plans, in a purchasing pool,
which may include the use of a purchasing credit mechanism, through
supplemental coverage, or through coordination with other state
programs.
(g) Provide for the processing of applications, the enrollment of
subscribers, and the distribution of purchasing credits.
(h) Determine and approve the benefit designs and copayments
required by health, dental, or vision plans participating in the
purchasing pool component program.
(i) Approve those health plans eligible to receive purchasing
credits.
(j) Enter into contracts.
(k) Sue and be sued.
( l ) Employ necessary staff.
(m) Authorize expenditures from the fund to pay program expenses
that exceed subscriber contributions, and to administer the program
as necessary.
(n) Maintain enrollment and expenditures to ensure that
expenditures do not exceed amounts available in the Healthy Families
Fund and if sufficient funds are not available to cover the estimated
cost of program expenditures, the board shall institute appropriate
measures to limit enrollment.
(o) Issue rules and regulations, as necessary. Until January 1,
2000, any rules and regulations issued pursuant to this subdivision
may be adopted as emergency regulations 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 adoption of these 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 become
effective immediately upon filing with the Secretary of State.
(p) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
part.
(q) Notwithstanding any other provision of law, on and after
January 1, 2011, impose any sanction on, and provide notice and a
hearing to, participating health, dental, and vision plans consistent
with Section 403 of the federal Children's Health Insurance Program
Reauthorization Act of 2009 (Public Law 111-3) by applying subsection
(e) of Section 1932 of the federal Social Security Act.
SEC. 27. Section 12693.23 is added to the Insurance Code, to read:
12693.23. Until July 1, 2012, the adoption and readoption of
regulations to implement subdivision (q) of Section 12693.21,
subdivision (b) of Section 12693.26, or subdivision (l) of Section
56.30 of the Civil Code, or any provision of the federal Children's
Health Insurance Program Reauthorization Act of 2009 (Public Law
111-3) not addressed by those sections, shall be deemed to be an
emergency and 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 board is hereby
exempted from the requirement that it describe facts showing the need
for immediate action and from review by the Office of Administrative
Law.
SEC. 28. Section 12693.26 of the Insurance Code is amended to
read:
12693.26. (a) The board shall establish a
purchasing pool for coverage of program subscribers to enable
applicants without access to affordable and comprehensive
employer-sponsored dependent coverage to provide their eligible
children with health, dental, and vision benefits. The board shall
negotiate separate contracts with participating health, dental, and
vision plans for each of the benefit packages described in Chapters 5
(commencing with Section 12693.60), 6 (commencing with Section
12693.63), and 7 (commencing with Section 12693.65).
(b) Notwithstanding any other provision of law, on and after
January 1, 2011, the board may negotiate contracts with entities that
are not participating health, dental, or vision plans, including,
but not limited to, interagency agreements with the State Department
of Health Care Services, to provide or pay for benefits to
subscribers under this part, if necessary for any of the following
purposes:
(1) To comply with Section 403 of the federal Children's Health
Insurance Program Reauthorization Act of 2009 (Public Law 111-3) by
applying paragraph (4) of subsection (a) of Section 1932 of the
federal Social Security Act.
(2) To comply with Section 503 of the federal Children's Health
Insurance Program Reauthorization Act of 2009 (Public Law 111-3) by
applying subsection (bb) of Section 1902 of the federal Social
Security Act.
(3) To ensure that subscribers have adequate access to benefits
under this part.
(c) Any interagency agreement entered into by a state agency with
the board pursuant to subdivision (b), and any other contract or
contract amendment necessary to implement that agreement, shall be
exempt from any provision of law relating to competitive bidding and
from the review or approval of any division of the Department of
General Services in the same manner as contracts entered into by the
board are exempt pursuant to Section 12693.54.
SEC. 29. Section 12009 of the Revenue and Taxation Code is amended
to read:
12009. (a) "Medi-Cal managed care plan" or "plan" means any
individual, organization, or entity, other than an insurer as
described in Section 12003 or a dental managed care plan as described
in Section 14087.46 of the Welfare and Institutions Code, that
enters into a contract with the State Department of Health Care
Services pursuant to Article 2.7 (commencing with Section 14087.3),
Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), Article 2.9 (commencing with
Section 14088), or Article 2.91 (commencing with Section 14089) of
Chapter 7 of, or pursuant to Article 1 (commencing with Section
14200) or Article 7 (commencing with Section 14490) of Chapter 8 of,
Part 3 of Division 9 of the Welfare and Institutions Code.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 30. Section 12201 of the Revenue and Taxation Code, as
amended by Section 5 of Chapter 157 of the Statutes of 2009, is
amended to read:
12201. (a) Every insurer and Medi-Cal managed care plan doing
business in this state shall annually pay to the state a tax on the
bases, at the rates, and subject to the deductions from the tax
hereinafter specified. For purposes of the tax imposed by this
chapter, "insurer" shall be deemed to include a home protection
company as defined in Section 12740 of the Insurance Code.
(b) Notwithstanding Section 13340 of the Government Code, the
revenues derived from the imposition of the tax by this chapter on
Medi-Cal managed care plans are hereby continuously appropriated as
follows:
(1) To the State Department of Health Care Services for purposes
of the Medi-Cal program in an amount equal to 38.41 percent of the
total revenues derived from the imposition of the tax by this chapter
on Medi-Cal managed care plans.
(2) To the Managed Risk Medical Insurance Board for purposes of
the Healthy Families Program in an amount equal to 61.59 percent of
the total revenues derived from the imposition of the tax by this
chapter on Medi-Cal managed care plans .
(c) For purposes of imposing the tax on Medi-Cal managed care
plans during the 2009 calendar year, the tax shall be based on total
revenue for the period of January 1, 2009, to December 31, 2009,
inclusive.
(d) The Insurance Commissioner shall report the amount of revenue
derived from the tax imposed on Medi-Cal managed care plans pursuant
to this section to the California Health and Human Services Agency,
the Joint Legislative Budget Committee, and the Department of
Finance.
(e) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(e) This section shall become inoperative on July 1, 2010, and, as
of January 1, 2011, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2011, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 31. Section 12201 is added to the Revenue and Taxation Code,
to read:
12201. (a) Every insurer and Medi-Cal managed care plan doing
business in this state shall annually pay to the state a tax on the
bases, at the rates, and subject to the deductions from the tax
hereinafter specified. For purposes of the tax imposed by this
chapter, "insurer" shall be deemed to include a home protection
company as defined in Section 12740 of the Insurance Code.
(b) Notwithstanding Section 13340 of the Government Code, the
revenues derived from the imposition of the tax by this chapter on
Medi-Cal managed care plans are hereby continuously appropriated as
follows:
(1) A percentage of the revenues derived from the imposition of
the tax by this chapter on Medi-Cal managed care plans equal to the
difference between 100 percent and the applicable federal medical
assistance percentage (FMAP) to the department for purposes of the
Medi-Cal program.
(2) After deducting the revenues appropriated pursuant to
paragraph (1), any remaining revenue to the Managed Risk Medical
Insurance Board for purposes of the Healthy Families Program.
(c) The Insurance Commissioner shall report the amount of revenue
derived from the tax imposed on Medi-Cal managed care plans pursuant
to this section to the California Health and Human Services Agency,
the Joint Legislative Budget Committee, and the Department of
Finance.
(d) This section shall become operative on July 1, 2010.
(e) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 32. Section 12201 of the Revenue and Taxation Code, as added
by Section 6 of Chapter 157 of the Statutes of 2009, is amended to
read:
12201. (a) Every insurer doing business in this state shall
annually pay to the state a tax on the bases, at the rates, and
subject to the deductions from the tax hereinafter specified. For
purposes of the tax imposed by this chapter, "insurer" shall be
deemed to include a home protection company as defined in Section
12740 of the Insurance Code.
(b) This section shall become operative on January
July 1, 2011.
SEC. 33. Section 12204 of the Revenue and Taxation Code, as
amended by Section 7 of Chapter 157 of the Statutes of 2009, is
amended to read:
12204. (a) The tax imposed on insurers by this chapter is in lieu
of all other taxes and licenses, state, county, and municipal, upon
those insurers and their property, except:
(1) Taxes upon their real estate.
(2) Any retaliatory exactions imposed by paragraph (3) of
subdivision (f) of Section 28 of Article XIII of the Constitution.
(3) The tax on ocean marine insurance.
(4) Motor vehicle and other vehicle registration license fees and
any other tax or license fee imposed by the state upon vehicles,
motor vehicles or the operation thereof.
(5) That each corporate or other attorney in fact of a reciprocal
or interinsurance exchange shall be subject to all taxes imposed upon
corporations or others doing business in the state, other than taxes
on income derived from its principal business as attorney in fact.
(b) This section shall not apply to any Medi-Cal managed care plan
and to any tax imposed on that plan by this chapter.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(c) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 34. Section 12204 of the Revenue and Taxation Code, as added
by Section 8 of Chapter 157 of the Statutes of 2009, is amended to
read:
12204. (a) The tax imposed on insurers by this chapter is in lieu
of all other taxes and licenses, state, county, and municipal, upon
those insurers and their property, except:
(1) Taxes upon their real estate.
(2) Any retaliatory exactions imposed by paragraph (3) of
subdivision (f) of Section 28 of Article XIII of the California
Constitution.
(3) The tax on ocean
marine insurance.
(4) Motor vehicle and other vehicle registration license fees and
any other tax or license fee imposed by the state upon vehicles,
motor vehicles or the operation thereof.
(5) That each corporate or other attorney in fact of a reciprocal
or interinsurance exchange shall be subject to all taxes imposed upon
corporations or others doing business in the state, other than taxes
on income derived from its principal business as attorney in fact.
(b) This section shall become operative on January
July 1, 2011.
SEC. 35. Section 12207 of the Revenue and Taxation Code is amended
to read:
12207. (a) Notwithstanding any other provision of this part, no
credit shall be allowed under Section 12206, 12208, or 12209 against
the tax imposed on Medi-Cal managed care plans pursuant to Section
12201.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 36. Section 12242 of the Revenue and Taxation Code is amended
to read:
12242. This article shall remain in effect only until
January 1, 2011, and as of that date is repealed.
This article shall become inoperative on July 1, 2011, and, as of
January 1, 2012, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2012, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 37. Section 12251 of the Revenue and Taxation Code, as
amended by Section 11 of Chapter 157 of the Statutes of 2009, is
amended to read:
12251. (a) For the calendar year 1970, and each calendar year
thereafter, insurers transacting insurance in this state and whose
annual tax for the preceding calendar year was five thousand dollars
($5,000) or more shall make prepayments of the annual tax for the
current calendar year imposed by Section 28 of Article XIII of the
California Constitution and this part, provided that no prepayments
shall be made with respect to the tax on ocean marine insurance
underwriting profit or any retaliatory tax.
(b) Medi-Cal managed care plans shall make prepayments of the tax
imposed by Section 12201 for the current calendar year, except that
no prepayments shall be required prior to the effective date of the
act adding this subdivision, and no penalties and interest shall be
imposed pursuant to Section 12261 for not making those prepayments.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(c) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 38. Section 12251 of the Revenue and Taxation Code, as added
by Section 12 of Chapter 157 of the Statutes of 2009, is amended to
read:
12251. (a) For the calendar year 1970, and each calendar year
thereafter, insurers transacting insurance in this state and whose
annual tax for the preceding calendar year was five thousand dollars
($5,000) or more shall make prepayments of the annual tax for the
current calendar year imposed by Section 28 of Article XIII of the
California Constitution and this part, provided that no prepayments
shall be made with respect to the tax on ocean marine insurance
underwriting profit or any retaliatory tax.
(b) This section shall become operative on January
July 1, 2011.
SEC. 39. Section 12253 of the Revenue and Taxation Code, as
amended by Section 13 of Chapter 157 of the Statutes of 2009, is
amended to read:
12253. (a) Each insurer and Medi-Cal managed care plan required
to make prepayments shall remit them on or before each of the dates
of April 1st, June 1st, September 1st, and December 1st of the
current calendar year. Remittances for prepayments shall be made
payable to the Controller and shall be delivered to the office of the
commissioner, accompanied by a prepayment form prescribed by the
commissioner.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 40. Section 12253 of the Revenue and Taxation Code, as added
by Section 14 of Chapter 157 of the Statutes of 2009, is amended to
read:
12253. (a) Each insurer required to make prepayments shall remit
them on or before each of the dates of April 1st, June 1st, September
1st, and December 1st of the current calendar year. Remittances for
prepayments shall be made payable to the Controller and shall be
delivered to the office of the commissioner, accompanied by a
prepayment form prescribed by the commissioner.
(b) This section shall become operative on January
July 1, 2011.
SEC. 41. Section 12254 of the Revenue and Taxation Code, as
amended by Section 15 of Chapter 157 of the Statutes of 2009, is
amended to read:
12254. (a) (1) For each insurer, the amount of each prepayment
shall be 25 percent of the amount of the annual insurance tax
liability reported on the return of the insurer for the preceding
calendar year.
(2) For each Medi-Cal managed care plan, the amount of each
prepayment shall be 25 percent of the amount of tax the plan
estimates as the amount of tax imposed by Section 12201 with respect
to the plan.
(b) In establishing the prepayment amount of an insurer that has
acquired the business of another insurer, the amount of tax liability
of the acquiring insurer reported for the preceding calendar year
shall be deemed to include the amount of tax liability of the
acquired insurer reported for that year.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(c) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 42. Section 12254 of the Revenue and Taxation Code, as added
by Section 16 of Chapter 157 of the Statutes of 2009, is amended to
read:
12254. (a) The amount of each prepayment shall be 25 percent of
the amount of the annual insurance tax liability reported on the
return of the insurer for the preceding calendar year.
(b) In establishing the prepayment amount of an insurer that has
acquired the business of another insurer, the amount of tax liability
of the acquiring insurer reported for the preceding calendar year
shall be deemed to include the amount of tax liability of the
acquired insurer reported for that year.
(c) This section shall become operative on January
July 1, 2011.
SEC. 43. Section 12257 of the Revenue and Taxation Code, as
amended by Section 17 of Chapter 157 of the Statutes of 2009, is
amended to read:
12257. (a) If the total amount of prepayments for any calendar
year exceeds the amount of annual tax for that year, the excess shall
be treated as an overpayment of annual tax and, at the election of
the insurer or Medi-Cal managed care plan, may be credited against
the amounts due and payable for the first prepayment of the following
year. Any amount of the overpayment not so credited shall be allowed
as a credit or refund under Article 2 (commencing with Section
12977) of Chapter 7 of this part.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 44. Section 12257 of the Revenue and Taxation Code, as added
by Section 18 of Chapter 157 of the Statutes of 2009, is amended to
read:
12257. (a) If the total amount of prepayments for any calendar
year exceeds the amount of annual tax for that year, the excess shall
be treated as an overpayment of annual tax and, at the election of
the insurer, may be credited against the amounts due and payable for
the first prepayment of the following year. Any amount of the
overpayment not so credited shall be allowed as a credit or refund
under Article 2 (commencing with Section 12977) of Chapter 7 of this
part.
(b) This section shall become operative on January
July 1, 2011.
SEC. 45. Section 12258 of the Revenue and Taxation Code, as
amended by Section 19 of Chapter 157 of the Statutes of 2009, is
amended to read:
12258. (a) Any insurer or Medi-Cal managed care plan that fails
to pay any prepayment within the time required shall pay a penalty of
10 percent of the amount of the required prepayment, plus interest
at the modified adjusted rate per month, or fraction thereof,
established pursuant to Section 6591.5, from the due date of the
prepayment until the date of payment but not for any period after the
due date of the annual tax. Assessments of prepayment deficiencies
may be made in the manner provided by deficiency assessments of the
annual tax.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 46. Section 12258 of the Revenue and Taxation Code, as added
by Section 20 of Chapter 157 of the Statutes of 2009, is amended to
read:
12258. (a) Any insurer that fails to pay any prepayment within
the time required shall pay a penalty of 10 percent of the amount of
the required prepayment, plus interest at the modified adjusted rate
per month, or fraction thereof, established pursuant to Section
6591.5, from the due date of the prepayment until the date of payment
but not for any period after the due date of the annual tax.
Assessments of prepayment deficiencies may be made in the manner
provided by deficiency assessments of the annual tax.
(b) This section shall become operative on January
July 1, 2011.
SEC. 47. Section 12260 of the Revenue and Taxation Code, as
amended by Section 21 of Chapter 157 of the Statutes of 2009, is
amended to read:
12260. (a) Notwithstanding any other provision of this article,
the commissioner may relieve an insurer or Medi-Cal managed care plan
of its obligation to make prepayments where the insurer or Medi-Cal
managed care plan establishes to the satisfaction of the commissioner
that the insurer has ceased to transact insurance in this state or
the Medi-Cal managed care plan has ceased to operate a plan in this
state, or the insurer's or Medi-Cal managed care plan's annual tax
for the current year will be less than five thousand dollars
($5,000).
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 48. Section 12260 of the Revenue and Taxation Code, as added
by Section 22 of Chapter 157 of the Statutes of 2009, is amended to
read:
12260. Notwithstanding any other provision of this article, the
commissioner may relieve an insurer of its obligation to make
prepayments where the insurer establishes to the satisfaction of the
commissioner that either the insurer has ceased to transact insurance
in this state, or the insurer's annual tax for the current year will
be less than five thousand dollars ($5,000).
(b) This section shall become operative on January
July 1, 2011.
SEC. 49. Section 12301 of the Revenue and Taxation Code, as
amended by Section 23 of Chapter 157 of the Statutes of 2009, is
amended to read:
12301. (a) The taxes imposed upon insurers by Section 28 of
Article XIII of the California Constitution and this part, except
with respect to taxes on ocean marine insurance and retaliatory
taxes, are due and payable annually on or before April 1st of the
year following the calendar year in which the insurer engaged in the
business of insurance or transacted insurance in this state. The
taxes imposed with respect to ocean marine insurance are due and
payable on or before June 15th of that year.
(b) With respect to Medi-Cal managed care plans, the taxes imposed
by Section 12201 shall be due and payable on or before April 1st of
the year following the calendar year in which the plan contracted
with the State Department of Health Care Services as described in
Section 12009.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed. However, any tax imposed by
Section 12201 shall continue to be due and payable until the tax is
paid.
(c) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
However, any tax imposed by Section 12201 shall continue to be due
and payable until the tax is paid.
SEC. 50. Section 12301 of the Revenue and Taxation Code, as added
by Section 24 of Chapter 157 of the Statutes of 2009, is amended to
read:
12301. (a) The taxes imposed upon insurers by Section 28 of
Article XIII of the California Constitution and this part, except
with respect to taxes on ocean marine insurance and retaliatory
taxes, are due and payable annually on or before April 1st of the
year following the calendar year in which the insurer engaged in the
business of insurance or transacted insurance in this state. The
taxes imposed with respect to ocean marine insurance are due and
payable on or before June 15th of that year.
(b) This section shall become operative on January
July 1, 2011.
SEC. 51. Section 12302 of the Revenue and Taxation Code, as
amended by Section 25 of Chapter 157 of the Statutes of 2009, is
amended to read:
12302. (a) On or before April 1st (or June 15th with respect to
taxes on ocean marine insurance) every person that is subject to any
tax imposed by Section 28 of Article XIII of the California
Constitution or this part, in respect to the preceding calendar year
shall file, in duplicate, a tax return with the commissioner in the
form as the commissioner may prescribe. The return shall show that
information pertaining to its insurance business, or in the case of a
Medi-Cal managed care plan, pertaining to contracts for providing
services as described in Section 12009, in this state as will reflect
the basis of its tax as set forth in Chapter 2 (commencing with
Section 12071) and Chapter 3 (commencing with Section 12201) of this
part, the computation of the amount of tax for the period covered by
the return, the total amount of any tax prepayments made pursuant to
Article 5 (commencing with Section 12251) of Chapter 3 of this part,
and any other information as the commissioner may require to carry
out the purposes of this part. Separate returns shall be filed with
respect to the following kinds of insurance:
(1) Life insurance (or life insurance and disability insurance).
(2) Ocean marine insurance.
(3) Title insurance.
(4) Insurance other than life insurance (or life insurance and
disability insurance), ocean marine insurance or title insurance.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 52. Section 12302 of the Revenue and Taxation Code, as added
by Section 26 of Chapter 157 of the Statutes of 2009, is amended to
read:
12302. (a) On or before April 1st (or June 15th with respect to
taxes on ocean marine insurance) every person that is subject to any
tax imposed by Section 28 of Article XIII of the California
Constitution or this part, in respect to the preceding calendar year
shall file, in duplicate, an insurance tax return with the
commissioner in the form as the commissioner may prescribe. The
return shall show that information pertaining to its insurance
business , or in the case of a Medi-Cal managed care plan,
pertaining to its total operating revenue as defined in Section
12241, in this state as will reflect the basis of its tax
as set forth in Chapter 2 (commencing with Section 12071) and Chapter
3 (commencing with Section 12201) of this part, the computation of
the amount of tax for the period covered by the return, the total
amount of any tax prepayments made pursuant to Article 5 (commencing
with Section 12251) of Chapter 3 of this part, and any other
information as the commissioner may require to carry out the purposes
of this part. Separate returns shall be filed with respect to the
following kinds of insurance:
(1) Life insurance (or life insurance and disability insurance).
(2) Ocean marine insurance.
(3) Title insurance.
(4) Insurance other than life insurance (or life insurance and
disability insurance), ocean marine insurance or title insurance.
(b) This section shall become operative on January
July 1, 2011.
SEC. 53. Section 12303 of the Revenue and Taxation Code, as
amended by Section 27 of Chapter 157 of the Statutes of 2009, is
amended to read:
12303. (a) Every return required by this article to be filed with
the commissioner shall be signed by the insurer or Medi-Cal managed
care plan or an executive officer of the insurer or plan and shall be
made under oath or contain a written declaration that it is made
under penalty of perjury. A return of a foreign insurer may be signed
and verified by its manager residing within this state. A return of
an alien insurer may be signed and verified by the United States
manager of the insurer.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 54. Section 12303 of the Revenue and Taxation Code, as added
by Section 28 of Chapter 157 of the Statutes of 2009, is amended to
read:
12303. (a) Every return required by this article to be filed with
the commissioner shall be signed by the insurer or an executive
officer of the insurer and shall be made under oath or contain a
written declaration that it is made under penalty of perjury. A
return of a foreign insurer may be signed and verified by its manager
residing within this state. A return of an alien insurer may be
signed and verified by the United States manager of the insurer.
(b) This section shall become operative on January
July 1, 2011.
SEC. 55. Section 12304 of the Revenue and Taxation Code, as
amended by Section 29 of Chapter 157 of the Statutes of 2009, is
amended to read:
12304. (a) Blank forms of returns shall be furnished by the
commissioner on application, but failure to secure the form shall not
relieve any insurer or Medi-Cal managed care plan from making or
filing a timely return.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 56. Section 12304 of the Revenue and Taxation Code, as added
by Section 30 of Chapter 157 of the Statutes of 2009, is amended to
read:
12304. (a) Blank forms of returns shall be furnished by the
commissioner on application, but failure to secure the form shall not
relieve any insurer from making or filing a timely return.
(b) This section shall become operative on January
July 1, 2011.
SEC. 57. Section 12305 of the Revenue and Taxation Code, as
amended by Section 31 of Chapter 157 of the Statutes of 2009, is
amended to read:
12305. (a) The insurer or Medi-Cal managed care plan required to
file a return shall deliver the return in duplicate, together with a
remittance payable to the Controller, for the amount of tax computed
and shown thereon, less any prepayments made pursuant to Article 5
(commencing with Section 12251) of Chapter 3 of this part, to the
office of the commissioner.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 58. Section 12305 of the Revenue and Taxation Code, as added
by Section 32 of Chapter 157 of the Statutes of 2009, is amended to
read:
12305. (a) The insurer required to file a return shall deliver
the return in duplicate, together with a remittance payable to the
Controller, for the amount of tax computed and shown thereon, less
any prepayments made pursuant to Article 5 (commencing with Section
12251) of Chapter 3 of this part, to the office of the commissioner.
(b) This section shall become operative on January
July 1, 2011.
SEC. 59. Section 12307 of the Revenue and Taxation Code, as
amended by Section 33 of Chapter 157 of the Statutes of 2009, is
amended to read:
12307. (a) Any insurer or Medi-Cal managed care plan to which an
extension is granted shall pay, in addition to the tax, interest at
the modified adjusted rate per month, or fraction thereof,
established pursuant to Section 6591.5, from April 1st until the date
of payment.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 60. Section 12307 of the Revenue and Taxation Code, as added
by Section 34 of Chapter 157 of the Statutes of 2009, is amended to
read:
12307. (a) Any insurer that is granted an extension shall pay, in
addition to the tax, interest at the modified adjusted rate per
month, or fraction thereof, established pursuant to Section 6591.5,
from April 1st until the date of payment.
(b) This section shall become operative on January
July 1, 2011.
SEC. 61. Section 12412 of the Revenue and Taxation Code, as
amended by Section 35 of Chapter 157 of the Statutes of 2009, is
amended to read:
12412. (a) Upon receipt of the duplicate copy of the return of an
insurer or Medi-Cal managed care plan the board shall initially
assess the tax in accordance with the data as reported by the insurer
or Medi-Cal managed care plan on the return.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 62. Section 12412 of the Revenue and Taxation Code, as added
by Section 36 of Chapter 157 of the Statutes of 2009, is amended to
read:
12412. (a) Upon receipt of the duplicate copy of the return of an
insurer the board shall initially assess the tax in accordance with
the data as reported by the insurer on the return.
(b) This section shall become operative on January
July 1, 2011.
SEC. 63. Section 12413 of the Revenue and Taxation Code, as
amended by Section 37 of Chapter 157 of the Statutes of 2009, is
amended to read:
12413. (a) The board shall promptly transmit notice of its
initial assessment to the commissioner and the Controller, and if the
initial assessment differs from the amount computed by the insurer
or Medi-Cal managed care plan, notice shall also be given to the
insurer or Medi-Cal managed care plan.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 64. Section 12413 of the Revenue and Taxation Code, as added by
Section 38 of Chapter 157 of the Statutes of 2009, is amended to
read:
12413. (a) The board shall promptly transmit notice of its
initial assessment to the commissioner and the Controller, and if the
initial assessment differs from the amount computed by the insurer,
notice shall also be given to the insurer.
(b) This section shall become operative on January
July 1, 2011.
SEC. 65. Section 12421 of the Revenue and Taxation Code, as
amended by Section 39 of Chapter 157 of the Statutes of 2009, is
amended to read:
12421. (a) As soon as practicable after an insurer's, surplus
line broker's, or Medi-Cal managed care plan's return is filed, the
commissioner shall examine it, together with any information within
his or her possession or that may come into his or her possession,
and he or she shall determine the correct amount of tax of the
insurer, surplus line broker, or Medi-Cal managed care plan.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 66. Section 12421 of the Revenue and Taxation Code, as added
by Section 40 of Chapter 157 of the Statutes of 2009, is amended to
read:
12421. (a) As soon as practicable after an insurer's or surplus
line broker's return is filed, the commissioner shall examine it,
together with any information within his or her possession or that
may come into his or her possession, and he or she shall determine
the correct amount of tax of the insurer or surplus line broker.
(b) This section shall become operative on January
July 1, 2011.
SEC. 67. Section 12422 of the Revenue and Taxation Code, as
amended by Section 41 of Chapter 157 of the Statutes of 2009, is
amended to read:
12422. (a) If the commissioner determines that the amount of tax
disclosed by the insurer's tax return and assessed by the board is
less than the amount of tax disclosed by his or her examination, he
or she shall propose, in writing, to the board a deficiency
assessment for the difference. The proposal shall set forth the basis
for the deficiency assessment and the details of its computation.
(b) If the commissioner determines that the amount of tax
disclosed by the surplus line broker's tax return is less than the
amount of tax disclosed by his or her examination, he or she shall
propose, in writing, to the board a deficiency assessment for the
difference. The proposal shall set forth the basis for the deficiency
assessment and the details of its computation.
(c) If the commissioner determines that the amount of tax
disclosed by the Medi-Cal managed care plan's tax return is less than
the amount of tax disclosed by his or her examination, he or she
shall propose, in writing, to the board a deficiency assessment for
the difference. The proposal shall set forth the basis for the
deficiency assessment and the details of its computation.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(d) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 68. Section 12422 of the Revenue and Taxation Code, as added
by Section 42 of Chapter 157 of the Statutes of 2009, is amended to
read:
12422. (a) If the commissioner determines that the amount of tax
disclosed by the insurer's tax return and assessed by the board is
less than the amount of tax disclosed by his or her examination, he
or she shall propose, in writing, to the board a deficiency
assessment for the difference. The proposal shall set forth the basis
for the deficiency assessment and the details of its computation.
(b) If the commissioner determines that the amount of tax
disclosed by the surplus line broker's tax return is less than the
amount of tax disclosed by his or her examination, he or she shall
propose, in writing, to the board a deficiency assessment for the
difference. The proposal shall set forth the basis for the deficiency
assessment and the details of its computation.
(c) This section shall become operative on January
July 1, 2011.
SEC. 69. Section 12423 of the Revenue and Taxation Code, as
amended by Section 43 of Chapter 157 of the Statutes of 2009, is
amended to read:
12423. (a) If an insurer, surplus line broker, or Medi-Cal
managed care plan fails to file a return, the commissioner may
require a return by mailing notice to the insurer, surplus line
broker, or Medi-Cal managed care plan to file a return by a specified
date or he or she may without requiring a return, or upon no return
having been filed pursuant to the demand therefor, make an estimate
of the amount of tax due for the calendar year or years in respect to
which the insurer, surplus line broker, or Medi-Cal managed care
plan failed to file the return. The estimate shall be made from any
available information which is in the commissioner's possession or
may come into his or her possession, and the commissioner shall
propose, in writing, to the board a deficiency assessment for the
amount of the estimated tax. The proposal shall set forth the basis
of the estimate and the details of the computation of the tax.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 70. Section 12423 of the Revenue and Taxation Code, as added
by Section 44 of Chapter 157 of the Statutes of 2009, is amended to
read:
12423. (a) If an insurer or surplus line broker fails to file a
return, the commissioner may require a return by mailing notice to
the insurer or surplus line broker to file a return by a specified
date or he or she may without requiring a return, or upon no return
having been filed pursuant to the demand therefor, make an estimate
of the amount of tax due for the calendar year or years in respect to
which the insurer or surplus line broker failed to file the return.
The estimate shall be made from any available information which is in
the commissioner's possession or may come into his or her
possession, and the commissioner shall propose, in writing, to the
board a deficiency assessment for the amount of the estimated tax.
The proposal shall set forth the basis of the estimate and the
details of the computation of the tax.
(b) This section shall become operative on January
July 1, 2011.
SEC. 71. Section 12427 of the Revenue and Taxation Code, as
amended by Section 45 of Chapter 157 of the Statutes of 2009, is
amended to read:
12427. (a) The board shall promptly notify the insurer, surplus
line broker, or Medi-Cal managed care plan of a deficiency assessment
made against the insurer, surplus line broker, or Medi-Cal managed
care plan.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 72. Section 12427 of the Revenue and Taxation Code, as added
by Section 46 of Chapter 157 of the Statutes of 2009, is amended to
read:
12427. (a) The board shall promptly notify the insurer or surplus
line broker of a deficiency assessment made against the insurer or
surplus line broker.
(b) This section shall become operative on January
July 1, 2011.
SEC. 73. Section 12428 of the Revenue and Taxation Code, as
amended by Section 47 of Chapter 157 of the Statutes of 2009, is
amended to read:
12428. (a) An insurer, surplus line broker, or Medi-Cal managed
care plan against which a deficiency assessment is made under Section
12424 or 12425 may petition for redetermination of the deficiency
assessment within 30 days after service upon the insurer, surplus
line broker, or Medi-Cal managed care plan of the notice thereof, by
filing with the board a written petition setting forth the grounds of
objection to the deficiency assessment and the correction sought. At
the time the petition is filed with the board, a copy of the
petition shall be filed with the commissioner.
If a petition for redetermination is not filed within the period
prescribed by this section, the deficiency assessment becomes final
and due and payable at the expiration of that period.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 74. Section 12428 of the Revenue and Taxation Code, as added
by Section 48 of Chapter 157 of the Statutes of 2009, is amended to
read:
12428. (a) An insurer or surplus line broker against which a
deficiency assessment is made under Section 12424 or 12425 may
petition for redetermination of the deficiency assessment within 30
days after service upon the insurer or surplus line broker of the
notice thereof, by filing with the board a written petition setting
forth the grounds of objection to the deficiency assessment and the
correction sought. At the time the petition is filed with the board,
a copy of the petition shall be filed with the commissioner.
If a petition for redetermination is not filed within the period
prescribed by this section, the deficiency assessment becomes final
and due and payable at the expiration of that period.
(b) This section shall become operative on January
July 1, 2011.
SEC. 75. Section 12429 of the Revenue and Taxation Code, as
amended by Section 49 of Chapter 157 of the Statutes of 2009, is
amended to read:
12429. (a) If a petition for redetermination of a deficiency
assessment is filed within the time allowed under Section 12428, the
board shall reconsider the deficiency assessment and, if the insurer,
surplus line broker, or Medi-Cal managed care plan has so requested
in the petition, shall grant an oral hearing for the presentation of
evidence and argument before the board or its authorized
representative. The board shall give the petitioner and the
commissioner at least 20 days' notice of the time and place of
hearing. The hearing may be continued from time to time as may be
necessary.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 76. Section 12429 of the Revenue and Taxation Code, as added
by Section 50 of Chapter 157 of the Statutes of 2009, is amended to
read:
12429. (a) If a petition for redetermination of a deficiency
assessment is filed within the time allowed under Section 12428, the
board shall reconsider the deficiency assessment and, if the insurer
or surplus line broker has so requested in the petition, shall grant
an oral hearing for the presentation of evidence and argument before
the board or its authorized representative. The board shall give the
petitioner and the commissioner at least 20 days' notice of the time
and place of hearing. The hearing may be continued from time to time
as may be necessary.
(b) This section shall become operative on January
July 1, 2011.
SEC. 77. Section 12431 of the Revenue and Taxation Code, as
amended by Section 51 of Chapter 157 of the Statutes of 2009, is
amended to read:
12431. (a) The order or decision of the board upon a petition for
redetermination of a deficiency assessment becomes final 30 days
after service on the insurer, surplus line broker, or Medi-Cal
managed care plan of a notice thereof, and any resulting deficiency
assessment is due and payable at the time the order or decision
becomes final.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 78. Section 12431 of the Revenue and Taxation Code, as added
by Section 52 of Chapter 157 of the Statutes of 2009, is amended to
read:
12431. (a) The order or decision of the board upon a petition for
redetermination of a deficiency assessment becomes final 30 days
after service on the insurer or surplus line broker of a notice
thereof, and any resulting deficiency assessment is due and payable
at the time the order or decision becomes final.
(b) This section shall become operative on January
July 1, 2011.
SEC. 79. Section 12433 of the Revenue and Taxation Code, as
amended by Section 53 of Chapter 157 of the Statutes of 2009, is
amended to read:
12433. (a) If before the expiration of the time prescribed in
Section 12432 for giving of a notice of deficiency assessment the
insurer, surplus line broker, or Medi-Cal managed care plan has
consented in writing to the giving of the notice after that time, the
notice may be given at any time prior to the expiration of the time
agreed upon. The period so agreed upon may be extended by subsequent
agreements in writing made before the expiration of the period
previously agreed upon.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 80. Section 12433 of the Revenue and Taxation Code, as added
by Section 54 of Chapter 157 of the Statutes of 2009, is amended to
read:
12433. (a) If before the expiration of the time prescribed in
Section 12432 for giving of a notice of deficiency assessment the
insurer or surplus line broker has consented in writing to the giving
of the notice after that time, the notice may be given at any time
prior to the expiration of the time agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made before
the expiration of the period previously agreed upon.
(b) This section shall become operative on January
July 1, 2011.
SEC. 81. Section 12434 of the Revenue and Taxation Code, as
amended by Section 55 of Chapter 157 of the Statutes of 2009, is
amended to read:
12434. (a) Any notice required by this article shall be placed in
a sealed envelope, with postage paid, addressed to the insurer,
surplus line broker, or Medi-Cal managed care plan at its address as
it appears in the records of the commissioner or the board. The
giving of notice shall be deemed complete at the time of deposit of
the notice in the United States Post Office, or a mailbox, subpost
office, substation or mail chute or other facility regularly
maintained or provided by the United States Postal Service, without
extension of time for any reason. In lieu of mailing, a notice may be
served personally by delivering to the person to be served and
service shall be deemed complete at the time of the delivery.
Personal service to a corporation may be made by delivery of a notice
to any person designated in the Code of Civil Procedure to be served
for the corporation with summons and complaint in a civil action.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 82. Section 12434 of the Revenue and Taxation Code, as added
by Section 56 of Chapter 157 of the Statutes of 2009, is amended to
read:
12434. (a) Any notice required by this article shall be placed in
a sealed envelope, with postage paid, addressed to the insurer or
surplus line broker at its address as it appears in the records of
the commissioner or the board. The giving of notice shall be deemed
complete at the time of deposit of the notice in the United States
Post Office, or a mailbox, subpost office, substation or mail chute
or other facility regularly maintained or provided by the United
States Postal Service, without extension of time for any reason. In
lieu of mailing, a notice may be served personally by delivering to
the person to be served and service shall be deemed complete at the
time of the delivery. Personal service to a corporation may be made
by delivery of a notice to any person designated in the Code of Civil
Procedure to be served for the corporation with summons and
complaint in a civil action.
(b) This section shall become operative on January
July 1, 2011.
SEC. 83. Section 12491 of the Revenue and Taxation Code, as
amended by Section 57 of Chapter 157 of the Statutes of 2009, is
amended to read:
12491. (a) Every tax levied upon an insurer under Article XIII of
the California Constitution and this part is a lien upon all
property and franchises of every kind and nature belonging to the
insurer, and has the effect of a judgment against the insurer.
(b) (1) Every tax levied upon a surplus line broker under Part 7.5
(commencing with Section 13201) of Division 2 is a lien upon all
property and franchises of every kind and nature belonging to the
surplus line broker, and has the effect of a judgment against the
surplus line broker.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the surplus line broker.
(c) (1) Every tax levied upon a Medi-Cal managed care plan under
Chapter 1 (commencing with Section 12001) is a lien upon all property
and franchises of every kind and nature belonging to the Medi-Cal
managed care plan, and has the effect of a judgment against the
Medi-Cal managed care plan.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the Medi-Cal managed care plan.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(d) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 84. Section 12491 of the Revenue and Taxation Code, as added
by Section 58 of Chapter 157 of the Statutes of 2009, is amended to
read:
12491. (a) Every tax levied upon an insurer under the provisions
of Article XIII of the California Constitution and of this part is a
lien upon all property and franchises of every kind and nature
belonging to the insurer, and has the effect of a judgment against
the insurer.
(b) (1) Every tax levied upon a surplus line broker under the
provisions of Part 7.5 (commencing with Section 13201) of Division 2
is a lien upon all property and franchises of every kind and nature
belonging to the surplus line broker, and has the effect of a
judgment against the surplus line broker.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the surplus line broker.
(c) This section shall become operative on January
July 1, 2011.
SEC. 85. Section 12493 of the Revenue and Taxation Code, as
amended by Section 59 of Chapter 157 of the Statutes of 2009, is
amended to read:
12493. (a) Every lien has the effect of an execution duly levied
against all property of a delinquent insurer, surplus line broker, or
Medi-Cal managed care plan.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 86. Section 12493 of the Revenue and Taxation Code, as added
by Section 60 of Chapter 157 of the Statutes of 2009, is amended to
read:
12493. (a) Every lien has the effect of an execution duly levied
against all property of a delinquent insurer or surplus line broker.
(b) This section shall become operative on January
July 1, 2011.
SEC. 87. Section 12494 of the Revenue and Taxation Code, as
amended by Section 61 of Chapter 157 of the Statutes of 2009, is
amended to read:
12494. (a) No judgment is satisfied nor lien removed until
either:
(1) The taxes, interest, penalties, and costs are paid.
(2) The insurer's, surplus line broker's, or Medi-Cal managed care
plan's property is sold for the payment thereof.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 88. Section 12494 of the Revenue and Taxation Code, as added
by Section 62 of Chapter 157 of the Statutes of 2009, is amended to
read:
12494. (a) No judgment is satisfied nor lien removed until
either:
(1) The taxes, interest, penalties, and costs are paid.
(2) The insurer's or surplus line broker's property is sold for
the payment thereof.
(b) This section shall become operative on January
July 1, 2011.
SEC. 89. Section 12601 of the Revenue and Taxation Code, as
amended by Section 63 of Chapter 157 of the Statutes of 2009, is
amended to read:
12601. (a) Amounts of taxes, interest, and penalties not remitted
to the commissioner with the original return of the insurer or
Medi-Cal managed care plan shall be payable to the Controller.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 90. Section 12601 of the Revenue and Taxation Code, as added
by Section 64 of Chapter 157 of the Statutes of 2009, is amended to
read:
12601. (a) Amounts of taxes, interest, and penalties not remitted
to the commissioner with the original return of the insurer shall be
payable to the Controller.
(b) This section shall become operative on January
July 1, 2011.
SEC. 91. Section 12602 of the Revenue and Taxation Code, as
amended by Section 65 of Chapter 157 of the Statutes of 2009, is
amended to read:
12602. (a) (1) On and after January 1, 1994, and before January
1, 1995, each insurer whose annual taxes exceed fifty thousand
dollars ($50,000) shall make payment by electronic funds transfer, as
defined by Section 45 of the Insurance Code. On and after January 1,
1995, each insurer whose annual taxes exceed twenty thousand dollars
($20,000) shall make payment by electronic funds transfer. The
insurer shall choose one of the acceptable methods described in
Section 45 of the Insurance Code for completing the electronic funds
transfer.
(2) Each Medi-Cal managed care plan shall make payment by
electronic funds transfer, as defined by Section 45 of the Insurance
Code. The plan shall choose one of the acceptable methods described
in Section 45 of the Insurance Code for completing the electronic
funds transfer.
(b) Payment shall be deemed complete on the date the electronic
funds transfer is initiated, if settlement to the state's demand
account occurs on or before the banking day following the date the
transfer is initiated. If settlement to the state's demand account
does not occur on or before the banking day following the date the
transfer is initiated, payment shall be deemed to occur on the date
settlement occurs.
(c) (1) Any insurer or Medi-Cal managed care plan required to
remit taxes by electronic funds transfer pursuant to this section
that remits those taxes by means other than an appropriate electronic
funds transfer, shall be assessed a penalty in an amount equal to 10
percent of the taxes due at the time of the payment.
(2) If the Department of Insurance finds that an insurer's or
Medi-Cal managed care plan's failure to make payment by an
appropriate electronic funds transfer in accordance with subdivision
(a) is due to reasonable cause or circumstances beyond the insurer's
or Medi-Cal managed care plan's control, and occurred notwithstanding
the exercise of ordinary care and in the absence of willful neglect,
that insurer or Medi-Cal
managed care plan shall be relieved of the penalty provided in
paragraph (1).
(3) Any insurer or Medi-Cal managed care plan seeking to be
relieved of the penalty provided in paragraph (1) shall file with the
Department of Insurance a statement under penalty of perjury setting
forth the facts upon which the claim for relief is based.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(d) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 92. Section 12602 of the Revenue and Taxation Code, as added
by Section 66 of Chapter 157 of the Statutes of 2009, is amended to
read:
12602. (a) On and after January 1, 1994, and before January 1,
1995, each insurer whose annual taxes exceed fifty thousand dollars
($50,000) shall make payment by electronic funds transfer, as defined
by Section 45 of the Insurance Code. On and after January 1, 1995,
each insurer whose annual taxes exceed twenty thousand dollars
($20,000) shall make payment by electronic funds transfer. The
insurer shall choose one of the acceptable methods described in
Section 45 of the Insurance Code for completing the electronic funds
transfer.
(b) Payment shall be deemed complete on the date the electronic
funds transfer is initiated, if settlement to the state's demand
account occurs on or before the banking day following the date the
transfer is initiated. If settlement to the state's demand account
does not occur on or before the banking day following the date the
transfer is initiated, payment shall be deemed to occur on the date
settlement occurs.
(c) (1) Any insurer required to remit taxes by electronic funds
transfer pursuant to this section that remits those taxes by means
other than an appropriate electronic funds transfer, shall be
assessed a penalty in an amount equal to 10 percent of the taxes due
at the time of the payment.
(2) If the Department of Insurance finds that an insurer's failure
to make payment by an appropriate electronic funds transfer in
accordance with subdivision (a) is due to reasonable cause or
circumstances beyond the insurer's control, and occurred
notwithstanding the exercise of ordinary care and in the absence of
willful neglect, that insurer shall be relieved of the penalty
provided in paragraph (1).
(3) Any insurer seeking to be relieved of the penalty provided in
paragraph (1) shall file with the Department of Insurance a statement
under penalty of perjury setting forth the facts upon which the
claim for relief is based.
(d) This section shall become operative on January
July 1, 2011.
SEC. 93. Section 12631 of the Revenue and Taxation Code, as
amended by Section 67 of Chapter 157 of the Statutes of 2009, is
amended to read:
12631. (a) Any insurer or Medi-Cal managed care plan that fails
to pay any tax, except a tax determined as a deficiency assessment by
the board under Article 3 (commencing with Section 12421) of Chapter
4, within the time required, shall pay a penalty of 10 percent of
the amount of the tax in addition to the tax, plus interest at the
modified adjusted rate per month, or fraction thereof, established
pursuant to Section 6591.5, from the due date of the tax until the
date of payment.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 94. Section 12631 of the Revenue and Taxation Code, as added
by Section 68 of Chapter 157 of the Statutes of 2009, is amended to
read:
12631. (a) Any insurer that fails to pay any tax, except a tax
determined as a deficiency assessment by the board under Article 3
(commencing with Section 12421) of Chapter 4, within the time
required, shall pay a penalty of 10 percent of the amount of the tax
in addition to the tax, plus interest at the modified adjusted rate
per month, or fraction thereof, established pursuant to Section
6591.5, from the due date of the tax until the date of payment.
(b) This section shall become operative on January
July 1, 2011.
SEC. 95. Section 12632 of the Revenue and Taxation Code, as
amended by Section 69 of Chapter 157 of the Statutes of 2009, is
amended to read:
12632. (a) An insurer or Medi-Cal managed care plan that fails to
pay any deficiency assessment when it becomes due and payable shall,
in addition to the deficiency assessment, pay a penalty of 10
percent of the amount of the deficiency assessment, exclusive of
interest and penalties. The amount of any deficiency assessment,
exclusive of penalties, shall bear interest at the modified adjusted
rate per month, or fraction thereof, established pursuant to Section
6591.5, from the date on which the amount, or any portion thereof,
would have been payable if properly reported and assessed until the
date of payment.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 96. Section 12632 of the Revenue and Taxation Code, as added
by Section 70 of Chapter 157 of the Statutes of 2009, is amended to
read:
12632. (a) An insurer that fails to pay any deficiency assessment
when it becomes due and payable shall, in addition to the deficiency
assessment, pay a penalty of 10 percent of the amount of the
deficiency assessment, exclusive of interest and penalties. The
amount of any deficiency assessment, exclusive of penalties, shall
bear interest at the modified adjusted rate per month, or fraction
thereof, established pursuant to Section 6591.5, from the date on
which the amount, or any portion thereof, would have been payable if
properly reported and assessed until the date of payment.
(b) This section shall become operative on January
July 1, 2011.
SEC. 97. Section 12636 of the Revenue and Taxation Code, as
amended by Section 71 of Chapter 157 of the Statutes of 2009, is
amended to read:
12636. (a) If the board finds that an insurer's or Medi-Cal
managed care plan's failure to make a timely return or payment is due
to reasonable cause and to circumstances beyond the insurer's or
Medi-Cal managed care plan's control, and which occurred despite the
exercise of ordinary care and in the absence of willful neglect, the
insurer or Medi-Cal managed care plan may be relieved of the penalty
provided by Section 12258, 12282, 12287, 12631, 12632, or 12633.
Any insurer or Medi-Cal managed care plan seeking to be relieved
of the penalty shall file with the board a statement under penalty of
perjury setting forth the facts upon which the claim for relief is
based.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 98. Section 12636 of the Revenue and Taxation Code, as added
by Section 72 of Chapter 157 of the Statutes of 2009, is amended to
read:
12636. (a) If the board finds that an insurer's failure to make a
timely return or payment is due to reasonable cause and to
circumstances beyond the insurer's control, and which occurred
despite the exercise of ordinary care and in the absence of willful
neglect, the insurer may be relieved of the penalty provided by
Section 12258, 12282, 12287, 12631, 12632, or 12633.
Any insurer seeking to be relieved of the penalty shall file with
the board a statement under penalty of perjury setting forth the
facts upon which the claim for relief is based.
(b) This section shall become operative on January
July 1, 2011.
SEC. 99. Section 12636.5 of the Revenue and Taxation Code, as
amended by Section 73 of Chapter 157 of the Statutes of 2009, is
amended to read:
12636.5. (a) Every payment on an insurer's, surplus line broker'
s, or Medi-Cal managed care plan's delinquent annual tax shall be
applied as follows:
(1) First, to any interest due on the tax.
(2) Second, to any penalty imposed by this part.
(3) The balance, if any, to the tax itself.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 100. Section 12636.5 of the Revenue and Taxation Code, as
added by Section 74 of Chapter 157 of the Statutes of 2009, is
amended to read:
12636.5. (a) Every payment on an insurer's or surplus line broker'
s delinquent annual tax shall be applied as follows:
(1) First, to any interest due on the tax.
(2) Second, to any penalty imposed by this part.
(3) The balance, if any, to the tax itself.
(b) This section shall become operative on January
July 1, 2011.
SEC. 101. Section 12679 of the Revenue and Taxation Code, as
amended by Section 75 of Chapter 157 of the Statutes of 2009, is
amended to read:
12679. (a) If an insurer's or Medi-Cal managed care plan's right
to do business has been forfeited or its corporate powers suspended,
service of summons may be made upon the persons designated by law to
be served as agents or officers of the insurer or Medi-Cal managed
care plan, and these persons are the agents of the insurer or
Medi-Cal managed care plan for all purposes necessary in order to
prosecute the action. In the case of corporations whose powers have
been suspended, the persons constituting the board of directors may
defend the action.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 102. Section 12679 of the Revenue and Taxation Code, as added
by Section 76 of Chapter 157 of the Statutes of 2009, is amended to
read:
12679. (a) If an insurer's right to do business has been
forfeited or its corporate powers suspended, service of summons may
be made upon the persons designated by law to be served as agents or
officers of the insurer, and these persons are the agents of the
insurer for all purposes necessary in order to prosecute the action.
In the case of corporations whose powers have been suspended, the
persons constituting the board of directors may defend the action.
(b) This section shall become operative on January
July 1, 2011.
SEC. 103. Section 12681 of the Revenue and Taxation Code, as
amended by Section 77 of Chapter 157 of the Statutes of 2009, is
amended to read:
12681. (a) In the action, a certificate of the Controller or of
the secretary of the board, showing unpaid taxes against an insurer
or Medi-Cal managed care plan is prima facie evidence of:
(1) The assessment of the taxes.
(2) The delinquency.
(3) The amount of the taxes, interest, and penalties due and
unpaid to the state.
(4) That the insurer or Medi-Cal managed care plan is indebted to
the state in the amount of taxes, interest, and penalties appearing
unpaid.
(5) That there has been compliance with all the requirements of
law in relation to the assessment of the taxes.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 104. Section 12681 of the Revenue and Taxation Code, as added
by Section 78 of Chapter 157 of the Statutes of 2009, is amended to
read:
12681. (a) In the action, a certificate of the Controller or of
the secretary of the board, showing unpaid taxes against an insurer
is prima facie evidence of:
(1) The assessment of the taxes.
(2) The delinquency.
(3) The amount of the taxes, interest, and penalties due and
unpaid to the state.
(4) That the insurer is indebted to the state in the amount of
taxes, interest, and penalties appearing unpaid.
(5) That there has been compliance with all the requirements of
law in relation to the assessment of the taxes.
(b) This section shall become operative on January
July 1, 2011.
SEC. 105. Section 12801 of the Revenue and Taxation Code, as
amended by Section 79 of Chapter 157 of the Statutes of 2009, is
amended to read:
12801. (a) Annually, between December 10th and 15th, the
Controller shall transmit to the commissioner a statement showing the
names of all insurers and Medi-Cal managed care plans that failed to
pay on or before December 10th the whole or any portion of the tax
that became delinquent in the preceding June or which has been unpaid
for more than 30 days from the date it became due and payable as a
deficiency assessment under this part or the whole or any part of the
interest or penalties due with respect to the tax. The statement
shall show the amount of the tax, interest, and penalties due from
each insurer or Medi-Cal managed care plan.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 106. Section 12801 of the Revenue and Taxation Code, as added
by Section 80 of Chapter 157 of the Statutes of 2009, is amended to
read:
12801. (a) Annually, between December 10th and 15th, the
Controller shall transmit to the commissioner a statement showing the
names of all insurers that failed to pay on or before December 10th
the whole or any portion of the tax that became delinquent in the
preceding June or which has been unpaid for more than 30 days from
the date it became due and payable as a deficiency assessment under
this part or the whole or any part of the interest or penalties due
with respect to the tax. The statement shall show the amount of the
tax, interest, and penalties due from each insurer.
(b) This section shall become operative on January
July 1, 2011.
SEC. 107. Section 12951 of the Revenue and Taxation Code, as
amended by Section 81 of Chapter 157 of the Statutes of 2009, is
amended to read:
12951. (a) If any amount has been illegally assessed, the board
shall set forth that fact in its records, certify the amount
determined to be assessed in excess of the amount legally assessed
and the insurer, surplus line broker, or Medi-Cal managed care plan
against which the assessment was made, and authorize the cancellation
of the amount upon the records of the Controller and the board. The
board shall mail a notice to the insurer, surplus line broker, or
Medi-Cal managed care plan of any cancellation authorized. Any
proposed determination by the board pursuant to this section with
respect to an amount in excess of fifty thousand dollars ($50,000)
shall be available as a public record for at least 10 days prior to
the effective date of that determination.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 108. Section 12951 of the Revenue and Taxation Code, as added
by Section 82 of Chapter 157 of the Statutes of 2009, is amended to
read:
12951. (a) If any amount has been illegally assessed, the board
shall set forth that fact in its records, certify the amount
determined to be assessed in excess of the amount legally assessed
and the insurer or surplus line broker against which the assessment
was made, and authorize the cancellation of the amount upon the
records of the Controller and the board. The board shall mail a
notice to the insurer or surplus line broker of any cancellation
authorized. Any proposed determination by the board pursuant to this
section with respect to an amount in excess of fifty thousand dollars
($50,000) shall be available as a public record for at least 10 days
prior to the effective date of that determination.
(b) This section shall become operative on January
July 1, 2011.
SEC. 109. Section 12977 of the Revenue and Taxation Code, as
amended by Section 83 of Chapter 157 of the Statutes of 2009, is
amended to read:
12977. (a) If the board determines that any tax, interest, or
penalty has been paid more than once or has been erroneously or
illegally collected or computed, the board shall set forth that fact
in its records of the board, certify the amount of the taxes,
interest, or penalties collected in excess of what was legally due,
and from whom they were collected or by whom paid, and certify the
excess to the Controller for credit or refund.
(b) The Controller upon receipt of a certification for credit or
refund shall credit the excess on any amounts then due and payable
from the insurer, surplus line broker, or Medi-Cal managed care plan
under this part and refund the balance.
(c) Any proposed determination by the board pursuant to this
section with respect to an amount in excess of fifty thousand dollars
($50,000) shall be available as a public record for at least 10 days
prior to the effective date of that determination.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(d) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 110. Section 12977 of the Revenue and Taxation Code, as added
by Section 84 of Chapter 157 of the Statutes of 2009, is amended to
read:
12977. (a) If the board determines that any tax, interest, or
penalty has been paid more than once or has been erroneously or
illegally collected or computed, the board shall set forth that fact
in its records of the board, certify the amount of the taxes,
interest, or penalties collected in excess of what was legally due,
and from whom they were collected or by whom paid, and certify the
excess to the Controller for credit or refund.
(b) The Controller upon receipt of a certification for credit or
refund shall credit the excess on any amounts then due and payable
from the insurer or surplus line broker under this part and refund
the balance.
(c) Any proposed determination by the board pursuant to this
section with respect to an amount in excess of fifty thousand dollars
($50,000) shall be available as a public record for at least 10 days
prior to the effective date of that determination.
(d) This section shall become operative on January
July 1, 2011.
SEC. 111. Section 12983 of the Revenue and Taxation Code, as
amended by Section 85 of Chapter 157 of the Statutes of 2009, is
amended to read:
12983. (a) Interest shall be allowed upon the amount of any
overpayment of tax by an insurer or Medi-Cal managed care plan
pursuant to this part at the modified adjusted rate per month
established pursuant to Section 6591.5, from the first day of the
monthly period following the period during which the overpayment was
made. For purposes of this section, "monthly period" means the month
commencing on the day after the due date of the payment through the
same date as the due date in each successive month. In addition, a
refund or credit shall be made of any interest imposed upon the
claimant with respect to the amount being refunded or credited.
The interest shall be paid as follows:
(1) In the case of a refund, to the last day of the calendar month
following the date upon which the claimant is notified in writing
that a claim may be filed or the date upon which the claim is
approved by the board, whichever date is the earlier.
(2) In the case of a credit, to the same date as that to which
interest is computed on the tax or amount against which the credit is
applied.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 112. Section 12983 of the Revenue and Taxation Code, as added
by Section 86 of Chapter 157 of the Statutes of 2009, is amended to
read:
12983. (a) Interest shall be allowed upon the amount of any
overpayment of tax by an insurer pursuant to this part at the
modified adjusted rate per month established pursuant to Section
6591.5, from the first day of the monthly period following the period
during which the overpayment was made. For purposes of this section,
"monthly period" means the month commencing on the day after the due
date of the payment through the same date as the due date in each
successive month. In addition, a refund or credit shall be made of
any interest imposed upon the claimant with respect to the amount
being refunded or credited.
The interest shall be paid as follows:
(1) In the case of a refund, to the last day of the calendar month
following the date upon which the claimant is notified in writing
that a claim may be filed or the date upon which the claim is
approved by the board, whichever date is the earlier.
(2) In the case of a credit, to the same date as that to which
interest is computed on the tax or amount against which the credit is
applied.
(b) This section shall become operative on January
July 1, 2011.
SEC. 113. Section 12984 of the Revenue and Taxation Code, as
amended by Section 87 of Chapter 157 of the Statutes of 2009, is
amended to read:
12984. (a) If the board determines that any overpayment has been
made intentionally or made not incident to a bona fide and orderly
discharge of a liability reasonably assumed by the insurer, surplus
line broker, or Medi-Cal managed care plan to be imposed by law, no
interest shall be allowed on the overpayment.
(b) If any insurer, surplus line broker, or Medi-Cal managed care
plan which has filed a claim for refund requests the board to defer
action on its claim, the board, as a condition to deferring action,
may require the claimant to waive interest for the period during
which the insurer, surplus line broker, or Medi-Cal managed care plan
requests the board to defer action on the claim.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(c) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 114. Section 12984 of the Revenue and Taxation Code, as added
by Section 88 of Chapter 157 of the Statutes of 2009, is amended to
read:
12984. (a) If the board determines that any overpayment has been
made intentionally or made not incident to a bona fide and orderly
discharge of a liability reasonably assumed by the insurer or surplus
line broker to be imposed by law, no interest shall be allowed on
the overpayment.
(b) If any insurer or surplus line broker which has filed a claim
for refund requests the board to defer action on its claim, the
board, as a condition to deferring action, may require the claimant
to waive interest for the period during which the insurer or surplus
line broker requests the board to defer action on the claim.
(c) This section shall become operative on January
July 1, 2011.
SEC. 115. Section 13108 of the Revenue and Taxation Code, as
amended by Section 89 of Chapter 157 of the Statutes of 2009, is
amended to read:
13108. (a) A judgment shall not be rendered in favor of the
plaintiff when the action is brought by or in the name of an assignee
of the insurer paying the tax, interest, or penalties, or by any
person other than the insurer or Medi-Cal managed care plan that has
paid the tax, interest, or penalties.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 116. Section 13108 of the Revenue and Taxation Code,
as added by Section 90 of Chapter 157 of the Statutes of 2009, is
amended to read:
13108. (a) A judgment shall not be rendered in favor of the
plaintiff when the action is brought by or in the name of an assignee
of the insurer paying the tax, interest, or penalties, or by any
person other than the insurer that has paid the tax, interest, or
penalties.
(b) This section shall become operative on January
July 1, 2011.
SEC. 117. Section 4101.5 is added to the Welfare and Institutions
Code, to read:
4101.5. (a) Notwithstanding any other law, the State Department
of Mental Health may contract with providers of health care services
and health care network providers, including, but not limited to,
health plans, preferred provider organizations, and other health care
network managers. Hospitals that do not contract with the department
for emergency health care services shall provide these services to
the department on the same basis as they are required to provide
these services pursuant to Section 489.24 of Title 42 of the Code of
Federal Regulations.
(b) The department may only reimburse a noncontract provider of
hospital or physician services at a rate equal to or less than the
amount payable under the Medicare Fee Schedule, regardless of whether
the hospital is located within or outside of California. An entity
that provides ambulance or any other emergency or nonemergency
response service to the department, and that does not contract with
the department for that service, shall be reimbursed for the service
at the rate payable under the Medicare Fee Schedule, regardless of
whether the provider is located within or outside of California.
(c) Until regulations or emergency regulations are adopted in
accordance with subdivision (g), the department shall not reimburse a
contract provider of hospital services at a rate that exceeds 130
percent of the amount payable under the Medicare Fee Schedule, a
contract provider of physician services at a rate that exceeds 110
percent of the amount payable under the Medicare Fee Schedule, or a
contract provider of ambulance services at a rate that exceeds 120
percent of the amount payable under the Medicare Fee Schedule. The
maximum rates established by this subdivision shall not apply to
reimbursement for administrative days, transplant services, services
provided pursuant to competitively bid contracts, or services
provided pursuant to a contract executed prior to September 1, 2009.
(d) The maximum rates set forth in this section shall not apply to
contracts entered into through the department's designated health
care network provider, if any. The rates for those contracts shall be
negotiated at the lowest rate possible under the circumstances.
(e) The department and its designated health care network provider
may enter into exclusive or nonexclusive contracts on a bid or
negotiated basis for hospital, physician, and ambulance services
contracts.
(f) The Director of Mental Health may adopt regulations to
implement this section. The adoption, amendment, or repeal of a
regulation authorized by this section is hereby exempted from 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).
(g) The Director of Mental Health may change the maximum rates set
forth in this section by regulation or emergency regulation, adopted
in accordance with the Administrative Procedure Act, but no sooner
than 30 days after notification to the Joint Legislative Budget
Committee. Those changes may include, but are not limited to,
increasing or decreasing rates, or adding location-based
differentials such as those provided to small and rural hospitals as
defined in Section 124840 of the Health and Safety Code. The
adoption, amendment, repeal, or readoption of a regulation authorized
by this subdivision is deemed to address an emergency, for purposes
of Sections 11346.1 and 11349.6 of the Government Code, and the
director is hereby exempted for this purpose from the requirements of
subdivision (b) of Section 11346.1 of the Government Code.
(h) For persons who are transferred from the Department of
Corrections and Rehabilitation to, or are housed in, a state hospital
or psychiatric program under the jurisdiction of the State
Department of Mental Health, and while these persons remain under the
jurisdiction of the Department of Corrections and Rehabilitation as
inmates or parolees, health care or emergency services provided for
these persons outside of a State Department of Mental Health state
hospital or psychiatric program shall continue to be paid for or
reimbursed by the Department of Corrections and Rehabilitation in
accordance with Section 5023.5 of the Penal Code.
SEC. 118. Section 4474.2 of the Welfare and Institutions Code is
amended to read:
4474.2. (a) Notwithstanding any provision
of law to the contrary, the department may operate any facility,
provide its employees to assist in the operation of any facility, or
provide other necessary services and supports if , in the
discretion of the department , it determines that the
activity will assist in meeting the goal of an
the orderly closure closures
of Agnews Developmental Center and Lanterman Developmental
Center . The department may contract with any entity for the
use of the department's employees to provide services in furtherance
of an the orderly closure
closures of Agnews Developmental Center and
Lanterman Developmental Center . For the Lanterman
Developmental Center, the use of department
employees is in effect for up to two years following the transfer of
the last resident of the Lanterman Developmental Center, unless a
later enacted statute deletes or extends this provision.
(b) The department shall prepare a report on the use of the
department's employees in providing services in the community to
assist in the orderly closures of Agnews Developmental Center and
Lanterman Developmental Center. The report shall include data on the
number and classification of state employees working in the community
program. The report shall be submitted with the Governor's proposed
budget for the 2012-13 fiscal year to the fiscal committees of both
houses of the Legislature and annually thereafter.
SEC. 119. Section 4474.3 of the Welfare and Institutions Code is
amended to read:
4474.3. The provisions of Section 10411 of the Public Contract
Code shall not apply to any person who, in connection with the
closure closures of Agnews
Developmental Center or Lanterman Developmental Center ,
provides developmental services.
SEC. 120. Section 4474.4 of the Welfare and Institutions Code is
amended 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 and Lanterman 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. 121. Section 4474.5 of the Welfare and Institutions Code is
amended 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 , and consumers
transitioning from Lanterman Developmental Center into various health
plans , 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, Lanterman 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. 122. Section 4474.8 of the Welfare and Institutions Code is
amended 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 and the
Lanterman Outpatient Clinic until such time as the State
Department of Developmental Services is no longer responsible for the
property at the respective developmental center, as applicable
.
SEC. 123. Section 4646.55 is added to the Welfare and Institutions
Code, to read:
4646.55. (a) Notwithstanding any other provision of law or
regulation to the contrary, and to the extent federal financial
participation is available, effective July 1, 2007, the State
Department of Developmental Services is hereby authorized to make
supplemental payment to an enrolled Medi-Cal provider that is a
licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled, for day treatment and
transportation services provided pursuant to Sections 4646 and
4646.5, applicable regulations, and Section 14132.925, to Medi-Cal
beneficiaries residing in a licensed intermediate care
facility/developmentally disabled-habilitative, licensed intermediate
care facility/developmentally disabled-nursing, or licensed
intermediate care facility/developmentally disabled. These payments
shall be considered supplemental payments to the enrolled Medi-Cal
provider and shall be comprised of the full costs of reimbursing
regional centers for making disbursements to day treatment and
transportation service providers, plus a coordination fee which will
include an administrative fee and reimbursement for the increased
costs associated with the quality assurance fee paid accordingly and
without a separate State Department of Developmental Services
contract.
(b) Notwithstanding any other provision of law and to the extent
federal financial participation is available, and in furtherance of
this section and Section 14132.925, the State Department of
Developmental Services shall amend the regional center contracts for
the 2007-08 fiscal year to extend the contract liquidation period
until June 30, 2011. The contract amendments and budget adjustments
shall be exempt from the provisions of Article 1 (commencing with
Section 4620).
SEC. 124. The heading of Article 3.5 (commencing with Section
4684.50) of Chapter 6 of Division 4.5 of the Welfare and Institutions
Code is amended to read:
Article 3.5. Adult Residential Facilities for Persons with
Special Health Care Needs: Pilot Program
Needs
SEC. 125. Section 4684.50 of the Welfare and Institutions Code is
amended to read:
4684.50. (a) (1) "Adult Residential Facility for Persons with
Special Health Care Needs (ARFPSHN)" means any adult residential
facility that provides 24-hour health care and intensive support
services in a homelike setting that is licensed to serve up to five
adults with developmental disabilities as defined in Section 4512.
(2) For purposes of this article, an ARFPSHN may only
be established in a facility financed
approved pursuant to Section 4688.5 or through an approved
regional center community placement plan pursuant to Section 4418.25
.
(b) "Consultant" means a person professionally qualified by
training and experience to give expert advice, information, training,
or to provide health-related assessments and interventions specified
in a consumer's individual health care plan.
(c) "Direct care personnel" means all personnel who directly
provide program or nursing services to consumers. Administrative and
licensed personnel shall be considered direct care personnel when
directly providing program or nursing services to clients.
Consultants shall not be considered direct care personnel.
(d) "Individual health care plan" means the plan that identifies
and documents the health care and intensive support service needs of
a consumer.
(e) "Individual health care plan team" means those individuals who
develop, monitor, and revise the individual health care plan for
consumers residing in an Adult Residential Facility for Persons with
Special Health Care Needs. The team shall, at a minimum, be composed
of all of the following individuals:
(1) Regional center service coordinator and other regional center
representative, as necessary.
(2) Consumer, and, where appropriate, his or her parents, legal
guardian or conservator, or authorized representative.
(3) Consumer's primary care physician, or other physician as
designated by the regional center.
(4) ARFPSHN administrator.
(5) ARFPSHN registered nurse.
(6) Others deemed necessary for developing a comprehensive and
effective plan.
(f) "Intensive support needs" means the consumer requires physical
assistance in performing four or more of the following activities of
daily living:
(1) Eating.
(2) Dressing.
(3) Bathing.
(4) Transferring.
(5) Toileting.
(6) Continence.
(g) "Special health care needs" means the consumer has health
conditions that are predictable and stable, as determined by the
individual health care plan team, and for which the individual
requires nursing supports for any of the following types of care:
(1) Nutrition support, including total parenteral feeding and
gastrostomy feeding, and hydration.
(2) Cardiorespiratory monitoring.
(3) Oxygen support, including continuous positive airway pressure
and bilevel positive airway pressure, and use of other
inhalation-assistive devices.
(4) Nursing interventions for tracheostomy care and suctioning.
(5) Nursing interventions for colostomy, ileostomy, or other
medical or surgical procedures.
(6) Special medication regimes including injection and intravenous
medications.
(7) Management of insulin-dependent diabetes.
(8) Manual fecal impaction, removal, enemas, or suppositories.
(9) Indwelling urinary catheter/catheter procedure.
(10) Treatment for staphylococcus infection.
(11) Treatment for wounds or pressure ulcers (stages 1 and 2).
(12) Postoperative care and rehabilitation.
(13) Pain management and palliative care.
(14) Renal dialysis.
SEC. 126. Section 4684.53 of the Welfare and Institutions Code is
amended to read:
4684.53. (a) The State Department of Developmental Services and
the State Department of Social Services shall jointly implement a
pilot project to test the effectiveness of providing
licensing program to provide special health care
and intensive support services to adults in homelike community
settings.
(b) The pilot project shall be implemented through the following
regional centers only:
(1) The San Andreas Regional Center.
(2) The Regional Center of the East Bay.
(3) The Golden Gate Regional Center.
(4) All regional centers involved in the closure of the Lanterman
Developmental Center, as determined by the State Department of
Developmental Services.
(c) The regional centers participating in this pilot project may
contract for an aggregate total of services for no more than 120
persons in an ARFPSHN.
(d)
(c) Each ARFPSHN shall possess a community care
facility license issued pursuant to Article 9 (commencing with
Section 1567.50) of Chapter 3 of Division 2 of the Health and Safety
Code, and shall be subject to the requirements of Chapter 1
(commencing with Section 80000) of Division 6 of Title 22 of the
California Code of Regulations, except for Article 8 (commencing with
Section 80090).
(e)
(d) For purposes of this article, a health facility
licensed pursuant to subdivision (e) or (h) of Section 1250 may place
its licensed bed capacity in voluntary suspension for the purpose of
using licensing the facility to
operate an ARFPSHN if the facility is selected to participate
in the pilot project pursuant to Section 4684.58.
Consistent with subdivision (a) of Section 4684.50, any facility
selected to participate in the program shall be
licensed to pursuant to this section shall
serve up to five adults. A facility's bed capacity shall not be
placed in voluntary suspension until all consumers residing in the
facility under the license to be suspended have been relocated. No
consumer may be relocated unless it is reflected in the consumer's
individual program plan developed pursuant to Sections 4646 and
4646.5.
(f)
(e) Each ARFPSHN shall be subject to the requirements
of Subchapters 5 through 9 of Chapter 1 of, and Subchapters 2 and 4
of Chapter 3 of, Division 2 of Title 17 of the California Code of
Regulations.
(g)
(f) Each ARFPSHN shall ensure that an operable
automatic fire sprinkler system is installed and maintained.
(h)
(g) Each ARFPSHN shall have an operable automatic fire
sprinkler system that is approved by the State Fire Marshal and that
meets the National Fire Protection Association (NFPA) 13D standard
for the installation of sprinkler systems in single- and two-family
dwellings and manufactured homes. A local jurisdiction shall not
require a sprinkler system exceeding this standard by amending the
standard or by applying standards other than NFPA 13D. A public water
agency shall not interpret this section as changing the status of a
facility from a residence entitled to residential water rates, nor
shall a new meter or larger connection pipe be required of the
facility.
(i)
(h) Each ARFPSHN shall provide an alternative power
source to operate all functions of the facility for a minimum of six
hours in the event the primary power source is interrupted. The
alternative power source shall comply with Section 517-50 of
the California Electric Code the manufacturer's
recommendations for installation and operation . The
alternative power source shall be maintained in safe operating
condition, and shall be tested every 14 days under the full load
condition for a minimum of 10 minutes. Written records of inspection,
performance, exercising period, and repair of the alternative power
source shall be regularly maintained on the premises and available
for inspection by the State Department of Developmental Services.
SEC. 127. Section 4684.55 of the Welfare and Institutions Code is
amended to read:
4684.55. (a) No regional center may pay a rate to any ARFPSHN for
any consumer that exceeds the average annual cost of
serving a consumer at Agnews Developmental Center, as determined by
the State Department of Developmental Services rate in
the State Department of Developmental Services' approved community
placement plan for that facility unless the regional center
demonstrates that a higher rate is necessary to protect a consumer's
health and safety, and the department has granted prior written
authorization .
(b) The payment rate for ARFPSHN services shall be negotiated
between the regional center and the ARFPSHN, and shall be paid by the
regional center under the service code "Specialized Residential
Facility (Habilitation)."
(c) The established rate for a full month of service shall be made
by the regional center when a consumer is temporarily absent from
the ARFPSHN 14 days or less per month. When the consumer's temporary
absence is due to the need for inpatient care in a health facility,
as defined in subdivision (a), (b), or (c) of Section 1250 of the
Health and Safety Code, the regional center shall continue to pay the
established rate as long as no other consumer occupies the vacancy
created by the consumer's temporary absence, or until the individual
health care plan team has determined that the consumer will not
return to the facility. In all other cases, the established rate
shall be prorated for a partial month of service by dividing the
established rate by 30.44 then by multiplying the quotient by the
number of days the consumer resided in the facility.
SEC. 128. Section 4684.58 of the Welfare and Institutions Code is
amended to read:
4684.58. (a) The regional center may
recommend for participation, to the State Department of
Developmental Services, an applicant for this pilot project
to provide services as part of an approved community
placement plan when the applicant meets all of the following
requirements and has been selected through a request for
proposals process issued by one or more of the three participating
regional centers: requirements:
(a)
(1) The applicant employs or contracts with a program
administrator who has a successful record of administering
residential services for at least two years, as evidenced by
substantial compliance with the applicable state licensing
requirements.
(b)
(2) The applicant prepares and submits, to the regional
center, a complete facility program plan that includes, but is not
limited to, all of the following:
(1)
(A) The total number of the consumers to be served.
(2)
(B) A profile of the consumer population to be served,
including their health care and intensive support needs.
(3)
(C) A description of the program components, including
a description of the health care and intensive support services to be
provided.
(4)
(D) A week's program schedule, including proposed
consumer day and community integration activities.
(5)
(E) A week's proposed program staffing pattern,
including licensed, unlicensed, and support personnel and the number
and distribution of hours for such personnel.
(6)
(F) An organizational chart, including identification
of lead and supervisory personnel.
(7)
(G) The consultants to be utilized, including their
professional disciplines and hours to be worked per week or month, as
appropriate.
(8)
(H) The plan for accessing and retaining consultant and
health care services, including assessments, in the areas of
physical therapy, occupational therapy, respiratory therapy, speech
pathology, audiology, pharmacy, dietary/nutrition, dental, and other
areas required for meeting the needs identified in consumers'
individual health care plans.
(9)
(I) A description, including the size, layout,
location, and condition of the proposed home.
(10)
(J) A description of the equipment and supplies
available, or to be obtained, for programming and care.
(11)
(K) The type, location, and response time of emergency
medical service personnel.
(12)
(L) The in-service training program plan for at least
the next 12 months , which shall include the plan for
ensuring that the direct care personnel understands their roles and
responsibilities related to implementing individual health care
plans, prior to, or within, the first seven days of providing direct
care in the home and for ensuring the administrator understands the
unique roles, responsibilities, and expectations for administrators
of community-based facilities .
(13)
(M) The plan for ensuring that outside services are
coordinated, integrated, and consistent with those provided by the
ARFPSHN.
(14)
(N) Written certification that an alternative power
system required by subdivision (i) (g)
of Section 4684.53 meets the manufacturer's recommendations for
installation and operation.
(c)
(3) Submits a proposed budget itemizing direct and
indirect costs, total costs, and the rate for services.
(d) Certifies, in writing,
(4) The applicant submits written
certification that the applicant has
they have the ability to comply with all of the requirements of
Section 1520 of the Health and Safety Code.
(e)
(b) The regional center shall provide all documentation
specified in subdivisions (b) to (d), inclusive, of Section
4684.58 paragraphs (2) to (4), inclusive, of
subdivision (a) and a letter recommending program certification
to the State Department of Developmental Services.
(f)
(c) The State Department of Developmental Services
shall either approve or deny the recommendation and transmit its
written decision to the regional center and to the State Department
of Social Services within 30 days of its decision. The decision of
the State Department of Developmental Services not to approve an
application for program certification shall be the final
administrative decision.
(g)
(d) Any change in the ARFPSHN operation that alters the
contents of the approved program plan shall be reported to the State
Department of Developmental Services and the contracting regional
center, and approved by both agencies, prior to implementation.
SEC. 129. Section 4684.60 of the Welfare and Institutions Code is
amended to read:
4684.60. The vendoring regional center shall, before placing any
consumer into an ARFPSHN, ensure that the ARFPSHN has a license
issued by the State Department of Social Services for not more than
five adults and a contract with the regional center that includes, at
a minimum, all of the following:
(a) The names of the regional center and the licensee.
(b) The purpose of the pilot project.
(c)
(b) A requirement that the contractor shall comply with
all applicable statutes and regulations, including Section 4681.1.
(d)
(c) The effective date and termination date of the
contract.
(e) A requirement that, under no circumstances, shall the contract
extend beyond the stated termination date, which shall not be longer
than the pilot legislation end date of January 1, 2011.
(f)
(d) The definition of terms.
(g)
(e) A requirement that the execution of any amendment
or modification to the contract be in accordance with all applicable
federal and state statutes and regulations and be by mutual agreement
of both parties.
(h)
(f) A requirement that the licensee and the agents and
employees of the licensee, in the performance of the contract, shall
act in an independent capacity, and not as officers or employees or
agents of the regional center.
(i)
(g) A requirement that the assignment of the contract
for consumer services shall not be allowed.
(j)
(h) The rate of payment per consumer.
(k)
(i) Incorporation, by reference, of the ARFPSHN's
approved program plan.
(l)
(j) A requirement that the contractor verify, and
maintain for the duration of the project, possession of commercial
general liability insurance in the amount of at least one million
dollars ($1,000,000) per occurrence.
(m)
(k) Contractor performance criteria.
(n) An agreement to provide, to the evaluation contractor engaged
pursuant to subdivision (a) of Section 4684.74, all information
necessary for evaluating the project.
SEC. 130. Section 4684.63 of the Welfare and Institutions Code is
amended to read:
4684.63. (a) Each ARFPSHN shall do all of the following:
(1) Meet the minimum requirements for a Residential Facility
Service Level 4-i pursuant to Sections 56004 and 56013 of Title 17 of
the California Code of Regulations, and ensure that all of the
following conditions are met:
(A) That a licensed registered nurse, licensed vocational nurse,
or licensed psychiatric technician, is awake and on duty 24-hours per
day, seven days per week.
(B) That a licensed registered nurse is awake and on duty at least
eight hours per person, per week.
(C) That at least two staff on the premises are awake and on duty
when providing care to four or more consumers.
(2) Ensure the consumer remains under the care of a physician at
all times and is examined by the primary care physician at least once
every 60 days, or more often if required by the consumer's
individual health care plan.
(3) Ensure that an administrator is on duty at least 20 hours per
week to ensure the effective operation of the ARFPSHN.
(4) The Ensure that the
administrator shall have completes the
35-hour administrator certification program pursuant to paragraph (1)
of subdivision (c) of Section 1562.3 of the Health and Safety Code
without exception, has at least one year of administrative and
supervisory experience in a licensed residential program for persons
with developmental disabilities , and shall meet
is one or more of the following
qualifications :
(A) Be a A licensed registered
nurse.
(B) Be a A licensed nursing home
administrator.
(C) Be a A licensed psychiatric
technician with at least five years of experience serving individuals
with developmental disabilities.
(D) Be an An individual with a
bachelors degree or more advanced degree in the health or
human services field and two years experience working in a licensed
residential program for persons with developmental disabilities and
special health care needs.
(b) The regional center may shall
require an ARFPSHN to provide additional professional,
administrative, or supportive personnel whenever the regional center
determines, in consultation with the individual health care plan
team, that additional personnel are needed to provide for the health
and safety of consumers.
(c) ARFPSHNs may utilize appropriate staff from Agnews
Developmental Center.
(d) All
(c) An ARFPSHN shall ensure that all
direct care personnel shall be subject to
complete the training requirements specified in Section
4695.2.
SEC. 131. Section 4684.65 of the Welfare and Institutions Code is
amended to read:
4684.65. (a) A regional center shall not place, or fund the
placement for, any consumer in an ARFPSHN until the individual health
care plan team has prepared a written individual health care plan
that can be fully and immediately implemented upon the consumer's
placement.
(b) (1) An ARFPSHN shall only accept, for initial admission,
consumers who meet the following requirements:
(A) Reside at Agnews Lanter man
Developmental Center at the time of the proposed placement.
(B) Have an individual program plan that specifies placement in an
ARFPSHN.
(C) Have special health care and intensive support needs.
(2) Except as provided in paragraph (3), when a vacancy in an
ARFPSHN occurs due to the permanent relocation or death of a
resident, the vacancy may only be filled by a consumer who meets the
requirements of paragraph (1).
(3) If there is no resident residing at Agnews
Developmental Center in a developmental center
who meets the requirements of subparagraphs (B) and (C) of paragraph
(1), a vacancy may be filled by a consumer who is residing
at another developmental center or who is at risk of
placement into a developmental center, as determined by the regional
center, and who meets the requirements of subparagraphs (B) and (C)
of paragraph (1).
(c) The ARFPSHN shall not admit a consumer if the individual
health care plan team determines that the consumer is likely to
exhibit behaviors posing a threat of substantial harm to others, or
has a serious health condition that is unpredictable or unstable. A
determination that the individual is a threat to others may only be
based on objective evidence or recent behavior and a determination
that the threat cannot be mitigated by reasonable interventions.
SEC. 132. Section 4684.70 of the Welfare and Institutions Code is
amended to read:
4684.70. (a) The State Department of Social Services, in
administering the licensing program, shall not have any
responsibility for evaluating consumers' level of care or health care
provided by ARFPSHN. Any suspected deficiencies in a consumer's
level of care or health care identified by the State Department of
Social Services' personnel shall be reported immediately to the
appropriate regional center and the State Department of Developmental
Services for investigation.
(b) The regional center shall have responsibility for monitoring
and evaluating the implementation of the consumer's individual plan
objectives, including, but not limited to, the health care and
intensive support service needs identified in the consumer's
individual health care plan and the consumer's integration and
participation in community life.
(c) For each consumer placed in an ARFPSHN, the regional center
shall assign a service coordinator pursuant to subdivision (b) of
Section 4647.
(d) A regional center licensed registered nurse shall visit, with
or without prior notice, the consumer, in person, at least monthly in
the ARFPSHN, or more frequently if specified in the consumer's
individual health care plan. At least four of these visits, annually,
shall be unannounced.
(e) The State Department of Developmental Services shall monitor
and ensure the regional centers' compliance with the requirements of
this article. The monitoring shall include onsite visits to all the
ARFPSHNs at least every six months for the duration of the
pilot project .
SEC. 133. Section 4684.74 of the Welfare and Institutions Code is
repealed.
4684.74. (a) By July 1, 2006, the State Department of
Developmental Services shall contract with an independent agency or
organization to evaluate the pilot project and prepare a written
report of its findings. The scope of services for the contractor
shall be jointly prepared by the State Department of Developmental
Services, the State Department of Social Services, the State
Department of Public Health, and the State Department of Health Care
Services and, at a minimum, shall address all of the following:
(1) The number, business status, and location of all the ARFPSHNs.
(2) The number and characteristics of the consumers served.
(3) The effectiveness of the pilot project in addressing consumers'
health care and intensive support needs.
(4) The extent of consumers' community integration and
satisfaction.
(5) The consumers' access to, and quality of, community-based
health care and dental services.
(6) The types, amounts, qualifications, and sufficiency of
staffing.
(7) The overall impressions, problems encountered, and
satisfaction with the ARFPSHN service model by ARFPSHN employees,
regional center participants, state licensing and monitoring
personnel, and consumers and families.
(8) The costs of all direct, indirect, and ancillary services.
(9) An analysis and summary findings of all ARFPSHN consumer
special incident reports and unusual occurrences reported during the
evaluation period.
(10) The recommendations for improving the ARFPSHN service model.
(11) The cost-effectiveness of the ARFPSHN model of care compared
with other existing public and private models of care serving similar
consumers.
(b) The contractor's written report shall be submitted to the
State Department of Developmental Services, the State Department of
Social Services, the State Department of Public Health, and the State
Department of Health Care Services. The State Department of
Developmental Services shall submit the report to the appropriate
fiscal and policy committees of the Legislature by January 1, 2010.
SEC. 134. Section 4684.74 is added to the Welfare and Institutions
Code, to read:
4684.74. The State Department of Developmental Services shall
only approve the development of Adult Residential Facilities for
Persons with Special Health Care Needs (ARFPSHNs) that are directly
associated with the orderly closure of the Lanterman Developmental
Center, unless a later enacted statute deletes or extends this
provision.
SEC. 135. Section 4684.75 of the Welfare and Institutions Code is
amended to read:
4684.75. (a) The State Department of Developmental Services may
adopt emergency regulations 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
State Department of Developmental Services is hereby exempted from
the requirement that it describe specific facts showing the need for
immediate action. A certificate of compliance for these implementing
regulations shall be filed within 24 months following the adoption of
the first emergency regulations filed pursuant to this section.
(b) This article shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted statute
extends or deletes that date.
(c)
(b) This article shall only be implemented to the
extent that funds are made available through an appropriation in the
annual Budget Act.
SEC. 136. Section 4701.1 is added to the Welfare and Institutions
Code, to read:
4701.1. Adequate notice, as defined by Section 4701, shall inform
the recipient and authorized representative of both of the
following:
(a) Whether or not the individual is eligible for an exemption or
exception to the action the service agency proposes to take as
specified in subparagraph (D) of paragraph (6) of subdivision (a) of
Section 4648, subdivision (d) of Section 4648.35, subdivision (c) of
Section 4648.5, subdivision (d) of Section 4659, subparagraph (A) of
paragraph (3) of subdivision (a) of Section 4686.5, subdivision (i)
of Section 4689, and subdivisions (a) and (d) of Section 4689.05,
subdivision (b) of Section 95004 of the Government Code, and
paragraph (3) of subdivision (e) of Section 95020 of the Government
Code.
(b) The specific law supporting any of the above-specified
exemptions or exceptions.
SEC. 137. Section 4791 is added to the Welfare and Institutions
Code, to read:
4791. (a) Notwithstanding any other provision of law or
regulation, between July 1, 2010, and June 30, 2011, inclusive,
regional centers may temporarily modify personnel requirements,
functions, or qualifications, or staff training requirements for
providers, except for licensed or certified residential providers,
whose payments are reduced by 4.25 percent pursuant to the amendments
to Section 10 of Chapter 13 of the Third Extraordinary Session of
the Statutes of 2009, as contained in Section 164 of the act that
adds this section.
(b) A temporary modification pursuant to subdivision (a),
effective during any agreed upon period of time between July 1, 2010,
and June 30, 2011, inclusive, may only be approved when the regional
center determines that the change will not do any of the following:
(1) Adversely affect the health and safety of a consumer receiving
services or supports from the provider.
(2) Result in a consumer receiving services in a more restrictive
environment.
(3) Negatively impact the availability of federal financial
participation.
(4) Violate any state licensing or labor laws or other provisions
of Title 17 of the California Code of Regulations not eligible for
modification pursuant to this section.
(c) A temporary modification pursuant to subdivision (a) shall be
described in a written services contract between the regional center
purchasing the services and the provider, and a copy of the written
services contract and any related documentation shall be retained by
the provider and the regional center purchasing the services from the
provider.
(d) Notwithstanding any other provision of law or regulation, the
department shall suspend, from July 1, 2010, to June 30, 2011,
inclusive, the requirements described in Sections 56732 and 56800 of
Title 17 of the California Code of Regulations requiring
community-based day programs and in-home respite agencies to conduct
annual reviews and to submit written reports to vendoring regional
centers, user regional centers, and the department.
(e) Notwithstanding any other provision of law or regulation, from
July 1, 2010, to June 30, 2011, inclusive, a residential service
provider, vendored by a regional center and whose payment is reduced
by 4.25 percent pursuant to the amendments to Section 10 of Chapter
13 of the Third Extraordinary Session of the Statutes of 2009, as
contained in Section 163 of the act that adds this section, shall not
be required to complete quarterly and semiannual progress reports
required in subdivisions (b) and (c) of Section 56026 of Title 17 of
the California Code of Regulations. During program review, the
provider shall inform the regional center case manager of the
consumer's progress and any barrier to the implementation of the
individual program plan for each consumer residing in the residence.
SEC. 138. Section 5370.2 of the Welfare and Institutions Code is
amended to read:
5370.2. (a) Beginning January 1, 1996, the State Department of
Mental Health shall contract with a single nonprofit agency that
meets the criteria specified in subdivision (b) of Section 5510 to
conduct the following activities:
(1) Provide patients' rights advocacy services for, and conduct
investigations of alleged or suspected abuse and neglect of,
including deaths of, persons with mental disabilities residing in
state hospitals.
(2) Investigate and take action as appropriate and necessary to
resolve complaints from or concerning recipients of mental health
services residing in licensed health or community care facilities
regarding abuse, and unreasonable denial, or punitive withholding of
rights guaranteed under this division that cannot be resolved by
county patients' rights advocates.
(3) Provide consultation, technical assistance, and support to
county patients' rights advocates in accordance with their duties
under Section 5520.
(4) Conduct program review of patients' rights programs.
(b) The services shall be provided in coordination with the
appropriate mental health patients' rights advocates.
(c) (1) The contractor shall develop a plan to provide patients'
rights advocacy services for, and conduct investigations of alleged
or suspected abuse and neglect of, including the deaths of, persons
with mental disabilities residing in state hospitals.
(2) The contractor shall develop the plan in consultation with the
statewide organization of mental health patients' rights advocates,
the statewide organization of mental health clients, and the
statewide organization of family members of persons with mental
disabilities, and the statewide organization of county mental health
directors.
(3) In order to ensure that persons with mental disabilities have
access to high quality advocacy services, the contractor shall
establish a grievance procedure and shall advise persons receiving
services under the contract of the availability of other advocacy
services, including services provided by the protection and advocacy
agency specified in Section 4901 and the county patients' rights
advocates specified in Section 5520.
(d) Nothing contained in this section shall be construed to
restrict or limit the authority of the department to conduct the
reviews and investigations it deems necessary for personnel,
criminal, and litigation purposes.
(e) The State Department of Mental Health shall contract on a
multiyear basis for a contract term of up to three
five years.
SEC. 139. Section 5813.6 is added to the Welfare and Institutions
Code, to read:
5813.6. (a) At the time of the release of the January 10 budget
plan and the May Revision, the Director of Mental Health shall submit
to the Legislature information regarding the projected expenditure
of Proposition 63 funding for each state department, and for each
major program category specified in the measure, for local
assistance. This shall include actual past-year expenditures,
estimated current-year expenditures, and projected budget-year
expenditures of local assistance funding. In addition, it shall
include a complete listing of state support expenditures for the
current year and for the budget year by the State Department of
Mental Health, including the number of state positions and any
contract funds. A description of these state expenditures shall
accompany the fiscal information the director is required to submit
to the Legislature pursuant to this section.
(b) During each fiscal year, the Director of Mental Health shall
submit to the fiscal committees of the Legislature, 30 days in
advance, written notice of the intention to expend Proposition 63
local assistance funding in excess of the amounts presented in its
May Revision projection for that fiscal year. The written notice
shall include information regarding the amount of the additional
spending and its purpose.
SEC. 140. Section 10022 of the Welfare and Institutions Code is
amended to read:
10022. (a) Each publicly funded health care program , as
defined in paragraph (1) of subdivision (b) of Section 10020,
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 person has against the
carrier of the coverage to the extent of the health care items
provided or services rendered.
(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 or a provider, as
defined in subdivision (o) of Section 14043.1, including a billing
agent or a billing agent of the provider, as defined in subdivision
(a) of Section 14040.1, 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 or a
provider, as defined in paragraph (2), 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 or a provider, as
defined in paragraph (2), within the three-year period
beginning on the date on which the item or service was furnished.
(B) Any action by the state or a provider, as defined in
paragraph (2), to enforce its rights with respect to that claim
is commenced within six years of the state's or provider's
submission of the claim.
SEC. 141. Section 14005.11 of the Welfare and Institutions Code is
amended to read:
14005.11. (a) To the extent required by federal law for qualified
Medicare beneficiaries, the department shall pay the premiums,
deductibles, and coinsurance for elderly and disabled persons
entitled to benefits under Title XVIII of the federal Social Security
Act, whose income does not exceed the federal poverty level and
whose resources do not exceed 200 percent of the Supplemental
Security Income program standard.
(b) The department shall, in addition to subdivision (a), pay
applicable additional premiums, deductibles, and coinsurance for drug
coverage extended to qualified Medicare beneficiaries.
(c) The deductible payments required by subdivision (b) may be
covered by providing the same drug coverage as offered to
categorically needy recipients, as defined in Section 14050.1.
(d) As specified in this section, it is the intent of the
Legislature to assist in the payment of Medicare Part B premiums for
qualified low-income Medi-Cal beneficiaries who are ineligible for
federal sharing or federal contribution for the payment of those
premiums.
(e)
Except as provided in subdivision (f), for For a
Medi-Cal beneficiary who has a share of cost but who is ineligible
for the assistance provided pursuant to subdivision (a), or who is
ineligible for any other federally funded assistance for the payment
of the beneficiary's Medicare Part B premium, the department shall
pay for the beneficiary's Medicare Part B premium in the month
following each month that the beneficiary's share of cost has been
met.
(f) For a Medi-Cal beneficiary who has a share of cost at or below
five hundred dollars ($500) but who is ineligible for the assistance
provided pursuant to subdivision (a), and is ineligible for any
other federally funded assistance for the payment of the beneficiary'
s Medicare Part B premium, the department shall pay for the
beneficiary's Medicare Part B premium on a monthly basis, regardless
of whether the beneficiary's share of cost has been met.
(g)
(f) When a county is informed that an applicant or
beneficiary is eligible for Medicare benefits, the county shall
determine whether that individual is eligible under the Qualified
Medicare Beneficiary (QMB) program, the Specified Low-Income Medicare
Beneficiary (SLMB) program, or the Qualifying Individual program and
enroll the applicant or beneficiary in the appropriate program.
SEC. 142. Section 14005.25 of the Welfare and Institutions Code,
as amended by Section 1 of Chapter 24 of the 3rd Extraordinary
Session of the Statutes of 2009, is repealed.
14005.25. (a) To the extent federal financial participation is
available, the department shall exercise the option under Section
1902(e)(12) of the federal Social Security Act (42 U.S.C. Sec. 1396a
(e)(12)) to extend continuous eligibility to children 19 years of age
and younger. A child shall remain eligible pursuant to this
subdivision from the date of a determination of eligibility for
Medi-Cal benefits until the earlier of either:
(1) The end of a 12-month period following the eligibility
determination.
(2) The date the individual exceeds the age of 19 years.
(b) This section shall be implemented only if, and to the extent
that, federal financial participation is available.
(c) 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 regulatory action, implement this
section by means of all county letters or similar instructions.
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.
(d) In order to implement changes in the level of funding for
health care services, commencing on the first day of the month
following 90 days after the operative date of amendments to this
section that added this subdivision, the continuous eligibility time
period provided in paragraph (1) of subdivision (a) shall be reduced
to six months.
(e) (1) Subdivision (d) shall be inoperative from the date the act
adding this subdivision becomes effective until the date the
Director of Health Care Services executes a declaration specifying
that increased federal financial participation is no longer available
pursuant to the federal American Recovery and Reinvestment Act of
2009 (Public Law 111-5).
(2) The department shall redetermine the continuous eligibility
period of any child whose continuous eligibility period was
determined or redetermined pursuant to subdivision (d) during the
first calendar year quarter of 2009 and shall grant to that child the
period of continuous eligibility provided for in subdivision (a),
retroactive to the date that the determination or redetermination
under subdivision (d) was made.
(f) This section shall become inoperative on July 1, 2012, and as
of January 1, 2013, is repealed, unless a later enacted statute, that
is enacted before January 1, 2013, deletes or extends that date.
SEC. 143. Section 14005.25 of the Welfare and Institutions Code,
as amended by Section 2 of Chapter 24 of the 3rd Extraordinary
Session of the Statutes of 2009, is amended to read:
14005.25. (a) To the extent federal financial participation is
available, the department shall exercise the option under Section
1902(e)(12) of the federal Social Security Act (42 U.S.C. Sec. 1396a
(e)(12)) to extend continuous eligibility to children 19 years of age
and younger. A child shall remain eligible pursuant to this
subdivision from the date of a determination of eligibility for
Medi-Cal benefits until the earlier of either:
(1) The end of a 12-month period following the eligibility
determination.
(2) The date the individual exceeds the age of 19 years.
(b) This section shall be implemented only if, and to the extent
that, federal financial participation is available.
(c) 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 regulatory action, implement this
section by means of all county letters or similar instructions.
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.
(d) This section shall become operative on July 1, 2012.
SEC. 144. 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, and 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 department may
seek proposals and then shall contract enter
into contracts 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 that
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)
(d) (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. The 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 CalWORKs applicant or
beneficiary shall be informed of the 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.
(2) No later than 30 days following the date a Medi-Cal or
CalWORKs recipient is informed of the health care options described
in paragraph (1), 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 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, 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 by the name of the primary care provider and clinic, 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 County
(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 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
a 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 A Medi-Cal or 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)
(e) 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)
(f) 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)
(g) 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.
(h) Notwithstanding any other provision of law, on and after the
effective date of the act adding this subdivision, the department
shall have exclusive authority to set the rates, terms, and
conditions of geographic managed care contracts and contract
amendments under this article. As of that date, all references to
this article to the negotiator or to the California Medical
Assistance Commission shall be deemed to mean the department.
(i) Notwithstanding subdivision (q) of Section 6254 of the
Government Code, a contract or contract amendments executed by both
parties after the effective date of the act adding this subdivision
shall be considered a public record for purposes of the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code) and shall be disclosed
upon request. This subdivision includes contracts that reveal the
department's rates of payment for health care services, the rates
themselves, and rate manuals.
SEC. 145. Section 14089.05 of the Welfare and Institutions Code is
amended to read:
14089.05. (a) (1) Pursuant to subdivision (g) of Section
14089, the The department and the
California Medical Assistance Commission may implement a
multiplan project in the County of San Diego, upon approval of the
Board of Supervisors of the County of San Diego, for the provision of
benefits under this chapter to eligible Medi-Cal recipients. The
multiplan project implemented in San Diego County pursuant to this
section shall provide diagnostic, therapeutic, and preventive
services provided under the Medi-Cal program, and additional benefits
including, but not limited to, medical-related transportation,
comprehensive patient management, and referral to other support
services.
(2) The County of San Diego shall be eligible to receive funds
transferred pursuant to paragraph (1) of subdivision (p) of Section
14163 for the development and implementation of this section. These
funds in the amount allocated by the department for the County of San
Diego shall be paid by the department upon the enactment of this
section to the County of San Diego to reimburse a portion of the
costs of the development of the project. To the full extent permitted
by state and federal law, these funds shall be distributed by the
department for expenditure by the County of San Diego in a manner
that qualifies for federal financial participation under the medicaid
program and the department shall expedite the payment of the federal
funds to the County of San Diego. The department shall seek
additional state, federal, and other funds to pay for costs that are
incurred by the County of San Diego to develop the multiplan project
in excess of the payment required by this section, and the department
shall assist the county in obtaining the additional funds.
(b) (1) The County of San Diego may establish two advisory boards,
one of which shall be composed of consumer representatives and the
other of which shall be composed of health care professional's
representatives. Each board shall advise the Department of Health
Services of the County of San Diego and review and comment on all
aspects of the implementation of the multiplan project. At least one
of the members of each advisory board shall be appointed by the board
of supervisors. The board of supervisors shall establish a number of
members to serve on each advisory board, with each supervisor to
appoint an equal number of members from his or her district. Each
advisory board shall vote on all pilot project policies and issues
that are submitted to the board of supervisors.
(2) Notwithstanding any other provision of law, a member of an
advisory board established pursuant to this section shall not be
deemed to be interested in a contract entered into by the department
within the meaning of Article 4 (commencing with Section 1090) of
Chapter 1 of Division 4 of Title 1 of the Government Code if the
member is a Medi-Cal recipient or if all of the following apply:
(A) The member was appointed to represent the interests of
physicians, health care practitioners, hospitals, pharmacies, or
other health care organizations.
(B) The contract authorizes the member or the organization the
member represents to provide Medi-Cal services under the multiplan
project.
(C) The contract contains substantially the same terms and
conditions as contracts entered into with other individuals or
organizations the member was appointed to represent.
(D) The member does not influence or attempt to influence the
joint advisory board or another member of the joint advisory board to
recommend that the department enter into the contract in which the
member is interested.
(E) The member discloses the interest to the joint advisory board
and abstains from voting on any recommendation on the contract.
(F) The advisory board notes the member's disclosure and
abstention in its official records.
(3) Members of the advisory boards shall not be paid compensation
for activities relating to their duties as members, but members who
are Medi-Cal recipients shall be reimbursed an appropriate amount by
the County of San Diego for travel and child care expenses incurred
in performing their duties under this section.
(c) At the discretion of the department, the County of San Diego,
the department, or other appropriate entities may perform any of the
following in a manner that accomplishes the integration of the intake
of eligible beneficiaries to the project, the assessment of
beneficiary individual and family needs and circumstances, and the
timely referral of beneficiaries to health care and other services to
respond to their individual and family needs:
(1) Determine the eligibility of Medi-Cal applicants and
recipients in a manner and environment that is accessible to the
recipients and applicants.
(2) Perform enrollment activities in a manner that ensures that
recipients be given the opportunity to select the provider of their
choice in a manner and environment that is accessible to the
recipients.
(3) The department may negotiate and amend its contract with the
county to provide for specified quality improvement activities, and
may require each of the health plans to participate in those
activities. The department shall also participate in the county's
quality improvement activities.
(d) Notwithstanding Section 14089 or any other provision of law,
the County of San Diego, when contracting with the department
pursuant to this section or subdivision (d), (i), or (j) of Section
14089, shall not be liable for damages for injury to persons or
property arising out of the actions or inactions of the department,
the department's other contractors, or providers of health care or
other services, or Medi-Cal recipients. This section shall not
relieve the County of San Diego from liability arising out of its
actions or inactions.
(e) The County of San Diego, when contracting with the department
pursuant to Section 14089 or this section, shall have no legal duty
to provide health care or other services to Medi-Cal recipients, and
shall have no financial responsibility for the department's other
contractors or providers of health care or other services, except to
the extent specifically set forth in contracts between the department
and the county.
(f) Notwithstanding Section 14089.6, the department may terminate
any existing managed care contract with either a prepaid health plan
or a primary care case management plan for services in the County of
San Diego in accordance with the terms and conditions set forth in
the existing contract, at any time that the department determines
that termination is in the best interest of the state. The department
shall notify an existing prepaid health plan at least 90 days prior
to termination. The department shall notify a primary care case
management plan at least 30 days prior to termination.
(g) All contracts entered into by the department and the County of
San Diego pursuant to Section 14089 or this section shall not be for
the benefit of any third party, and no third-party beneficiary
relationship shall be established between the county and any other
party, except as may be specifically set forth in contracts between
the department and the County of San Diego.
(h) The department shall report to the appropriate committees of
the Legislature on the project implemented pursuant to this section.
(i) (1) For purposes of this section, "multiplan project" means a
program authorized by this section in which a number of Knox-
Keene licensed health plans
designated by the county and approved by the department to
negotiate with the California Medical Assistance Commission
shall be the only Medi-Cal managed care health plans authorized to
operate within San Diego County, with the exception of special
projects approved by the department.
(2) Designated health plans shall include, but not be limited to,
health plans sponsored by traditional Medi-Cal physicians,
neighborhood health centers, community clinics, health systems,
including hospitals and other providers, or a combination thereof.
(3) Participating health plans shall first be designated by the
county for approval by the department. Health plans approved by the
department shall be eligible to negotiate contract
rates, terms, and conditions with the
California Medical Assistance Commission department
. Designation by the county and approval by the department
provides the health plan only with the opportunity to compete for a
contract through negotiations with the California Medical
Assistance Commission and does not guarantee a contract
with the state.
(4) Designation requirements imposed by the county shall not
conflict with the requirements imposed by the department, the federal
medicaid program, and the Medi-Cal program, and may not impose
stricter requirements, without the department's approval, than those
imposed by the department, the federal medicaid program, and the
Medi-Cal program.
(5) Designation of health plans by the county will continue for
the term of the Medi-Cal contract.
(j) Nothing in this section relieves the county of duties or
liabilities imposed by Part 5 (commencing with Section 17000) or
which it has assumed through contract with entities other than the
department.
(k) Indian health facilities in San Diego County may contract
directly with the department as Medi-Cal fee-for-service case
management providers apart from the geographic managed care program
or may participate in the network of one or more of the geographic
managed care plans. Indian health service facilities that contract
with the department as fee-for-service case management providers may
enroll Medi-Cal recipients, including, but not limited to, recipients
who are in any of the geographic managed care mandatory enrollment
aid codes.
SEC. 146. Section 14089.4 of the Welfare and Institutions Code is
amended to read:
14089.4. The negotiator department
may consult with the Department of Insurance or the Department of
Managed Health Care and shall consult with the Department of Justice
Medi-Cal Fraud Unit, the appropriate licensing boards ,
and the laboratory field services unit of the department for the
purposes of determining the qualifications, performance capability,
and financial stability of prospective contractors.
SEC. 147. Section 14091.3 of the Welfare and Institutions Code is
amended to read:
14091.3. (a) For purposes of this section, the following
definitions shall apply:
(1) "Medi-Cal managed care plan contracts" means those contracts
entered into with the department by any individual, organization, or
entity pursuant to Article 2.7 (commencing with Section 14087.3),
Article 2.8 (commencing with Section 14087.5), Article 2.91
(commencing with Section 14089), or Article 1 (commencing with
Section 14200) or Article 7 (commencing with Section 14490) of
Chapter 8, or Chapter 8.75 (commencing with Section 14590).
(2) "Medi-Cal managed care health plan" means an individual,
organization, or entity operating under a Medi-Cal managed care plan
contract with the department under this chapter, Chapter 8
(commencing with Section 14200), or Chapter 8.75 (commencing with
Section 14590).
(b) The department shall take all appropriate steps to amend the
Medicaid State Plan, if necessary, to carry out this section. This
section shall be implemented only to the extent that federal
financial participation is available. The department shall adopt
rules and regulations to carry out this section. Until January 1,
2010, any rules and regulations adopted pursuant to this subdivision
may be adopted as emergency regulations 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 adoption of these 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 become
effective immediately upon filing with the Secretary of State.
(c) Any hospital that does not have in effect a contract with a
Medi-Cal managed care health plan, as defined in paragraph (2) of
subdivision (a), that establishes payment amounts for services
furnished to a beneficiary enrolled in that plan shall accept as
payment in full, from all these plans, the following amounts:
(1) For outpatient services, the Medi-Cal Fee-For-Service (FFS)
payment amounts.
(2) For emergency inpatient services, the average per diem
contract rate specified in paragraph (2) of subdivision (b) of
Section 14166.245, except that the payment amount shall not be
reduced by 5 percent. For the purposes of this paragraph, this
payment amount shall apply to all hospitals, including hospitals that
contract with the department under the Medi-Cal Selective Provider
Contracting Program described in Article 2.6 (commencing with Section
14081), and small and rural hospitals specified in Section 124840 of
the Health and Safety Code.
(3) For poststabilization services following an emergency
admission, payment amounts shall be consistent with subdivision (e)
of Section 438.114 of Title 42 of the Code of Federal Regulations.
This paragraph shall only be implemented to the extent that contract
amendment language providing for these payments is approved by CMS.
For purposes of this paragraph, this payment amount shall apply to
all hospitals, including hospitals that contract with the department
under the Medi-Cal Selective Provider Contracting Program pursuant to
Article 2.6 (commencing with Section 14081).
(d) Medi-Cal managed care health plans that, pursuant to the
department's encouragement in All Plan Letter 07003, have been paying
out-of-network hospitals the most recent California Medical
Assistance Commission regional average per diem rate as a temporary
rate for purposes of Section 1932(b)(2)(D) of the Social Security Act
(SSA), which became effective January 1, 2007, shall make
reconciliations and adjustments for all hospital payments made since
January 1, 2007, based upon rates published by the department
pursuant to Section 1932(b)(2)(D) of the SSA and effective January 1,
2007, to June 30, 2008, inclusive, and, if applicable, provide
supplemental payments to hospitals as necessary to make payments that
conform with Section 1932(b)(2)(D) of the SSA. In order to provide
managed care health plans with 60 working days to make any necessary
supplemental payments to hospitals prior to these payments becoming
subject to the payment of interest, Section 1300.71 of Title 28 of
the California Code of Regulations shall not apply to these
supplemental payments until 30 working days following the publication
by the department of the rates.
(e) (1) The department shall provide a written report to the
policy and fiscal committees of the Legislature on October 1, 2009,
and May 1, 2010, on the implementation and impact made by this
section, including the impact of these changes on access to hospitals
by managed care enrollees and on contracting between hospitals and
managed care health plans, including the increase or decrease in the
number of these contracts.
(2) Not later than August 1, 2010, the department shall report to
the Legislature on the implementation of this section. The report
shall include, but not be limited to, information and analyses
addressing managed care enrollee access to hospital services, the
impact of this section on managed care health plan capitation rates,
the impact of this section on the extent of contracting between
managed care health plans and hospitals, and fiscal impact on the
state.
(3) For the purposes of preparing the annual status reports and
the final evaluation report required pursuant to this subdivision,
Medi-Cal managed care health plans shall provide the department with
all data and documentation, including contracts with providers,
including hospitals, as deemed necessary by the department to
evaluate the impact of the implementation of this section. In order
to ensure the confidentiality of managed care health plan proprietary
information, and thereby enable the department to have access to all
of the data necessary to provide the Legislature with accurate and
meaningful information regarding the impact of this section, all
information and documentation provided to the department pursuant to
this section 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 (Division 7 (commencing with Section 6250) of
Title 1 of the Government Code).
(f) This section shall remain in effect only until January 1,
2011 2012 , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2011 2012 , deletes or
extends that date.
SEC. 148. Section 14105.08 is added to the Welfare and
Institutions Code, to read:
14105.08. (a) Notwithstanding any other provision of law, in
order to implement changes in the level of funding for radiology
services, as defined in Section 51139 of Title 22 of the California
Code of Regulations, the director shall reduce reimbursement rates
applicable to radiology services, as specified in this section.
(b) Except as otherwise provided in this section, reimbursement
rates applicable to radiology services shall not exceed 80 percent of
the lowest maximum allowance established under the federal Medicare
program for the same or similar services with dates of service on or
after October 1, 2010.
(c) 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 department may take the actions specified
in this section by means of a provider bulletin or notice, policy
letter, or other similar instruction, without taking regulatory
action.
(d) (1) The reimbursement rates provided for in this section shall
be implemented only if the director determines that the rates, as
established by this section, will comply with applicable federal
Medicaid requirements and that federal financial participation will
be available.
(2) In assessing whether federal financial participation is
available, the director shall determine whether the rates comply with
applicable federal Medicaid requirements, including those set forth
in Section 1396a(a)(30)(A) of Title 42 of the United States Code.
(3) To the extent that the director determines that the rates do
not comply with applicable federal Medicaid requirements, the
director shall retain the discretion not to implement that rate and
may revise the rate as necessary to comply with the federal Medicaid
requirements.
(e) The director shall seek any necessary federal approval for the
implementation of this section. To the extent that federal financial
participation is not available with respect to any rate of
reimbursement described by this section, the director shall retain
the discretion not to implement that rate and may revise the rate as
necessary to comply with the federal Medicaid requirements.
SEC. 149. Section 14105.28 is added to the Welfare and
Institutions Code, to read:
14105.28. (a) It is the intent of the Legislature to design a new
Medi-Cal inpatient hospital reimbursement methodology based on
diagnosis-related groups that more effectively ensures all of the
following:
(1) Encouragement of access by setting higher payments for
patients with more serious conditions.
(2) Rewards for efficiency by allowing hospitals to retain savings
from decreased length of stays and decreased cost per day.
(3) Improvement of transparency and understanding by defining the
"product" of a hospital in a way that is understandable to both
clinical and financial managers.
(4) Improvement of fairness so that different hospitals receive
similar payment for similar care and payments to hospitals are
adjusted for significant cost factors that are outside the hospital's
control.
(5) Encouragement of administrative efficiency and minimizing
administrative burdens on hospitals and the Medi-Cal program.
(6) That payments depend on data that has high consistency and
credibility.
(7) Simplification of the process for determining and making
payments to the hospitals.
(8) Facilitation of improvement of quality and outcomes.
(9) Facilitation of implementation of state and federal provisions
related to hospital acquired conditions.
(10) Support of provider compliance with all applicable state and
federal requirements.
(b) (1) (A) (i) The department shall develop and implement a
payment methodology based on diagnosis-related groups, subject to
federal approval, that reflects the costs and staffing levels
associated with quality of care for patients in all general acute
care hospitals in state and out of state, including Medicare critical
access hospitals, but excluding public hospitals, psychiatric
hospitals, and rehabilitation hospitals, which include alcohol and
drug rehabilitation hospitals.
(ii) This section shall be implemented on the date that the
replacement Medicaid Management Information System, described in
subparagraph (C), becomes fully operational, but no later than June
30, 2014. The director shall execute a declaration stating the date
on which the replacement system has become fully operational.
(B) The diagnosis-related group-based payments shall apply to all
claims, except claims for psychiatric inpatient days, rehabilitation
inpatient days, managed care inpatient days, and swing bed stays for
long-term care services, provided, however, that psychiatric and
rehabilitation inpatient days shall be excluded regardless of whether
the stay was in a distinct-part unit. The department may exclude or
include other claims and services as may be determined during the
development of the payment methodology.
(C) Implementation of the new payment methodology shall be
coordinated with the development and implementation of the
replacement Medicaid Management Information System pursuant to the
contract entered into pursuant to Section 14104.3, effective on May
3, 2010.
(2) The department shall evaluate alternative diagnosis-related
group algorithms for the new Medi-Cal reimbursement system for the
hospitals to which paragraph (1) applies. The evaluation shall
include, but not be limited to, consideration of all of the following
factors:
(A) The basis for determining diagnosis-related group base price,
and whether different base prices should be used taking into account
factors such as geographic location, hospital size, teaching status,
the local hospital wage area index, and any other variables that may
be relevant.
(B) Classification of patients based on appropriate acuity
classification systems.
(C) Hospital case mix factors.
(D) Geographic or regional differences in the cost of operating
facilities and providing care.
(E) Payment models based on diagnosis-related groups used in other
states.
(F) Frequency of grouper updates for the diagnosis-related groups.
(G) The extent to which the particular grouping algorithm for the
diagnosis-related groups accommodates ICD-10 diagnosis and procedure
codes, and applicable requirements of the federal Health Insurance
Portability and Accountability Act of 1996.
(H) The basis for calculating relative weights for the various
diagnosis-related groups.
(I) Whether policy adjusters should be used, for which care
categories they should be used, and the frequency of updates to the
policy adjusters.
(J) The extent to which the payment system is budget neutral and
can be expected to result in state budget savings in future years.
(K) Other factors that may be relevant to determining payments,
including, but not limited to, add-on payments, outlier payments,
capital payments, payments for medical education, payments in the
case of early transfers of patients, and payments based on
performance and quality of care.
(c) The department shall submit to the Legislature a status report
on the implementation of this section on April 1, 2011, April 1,
2012, April 1, 2013, and April 1, 2014.
(d) The alternatives for a new system described in paragraph (2)
of subdivision (b) shall be developed in consultation with recognized
experts with experience in hospital reimbursement, economists, the
federal Centers for Medicare and Medicaid Services, and other
interested parties.
(e) In implementing this section, the department may contract, as
necessary, on a bid or nonbid basis, for professional consulting
services from nationally recognized higher education and research
institutions, or other qualified individuals and entities not
associated with a particular hospital or hospital group, with
demonstrated expertise in hospital reimbursement systems. The rate
setting system described in subdivision (b) shall be developed with
all possible expediency. This subdivision establishes an accelerated
process for issuing contracts pursuant to this section and contracts
entered into pursuant to this subdivision shall be exempt from the
requirements of Chapter 1 (commencing with Section 10100) and Chapter
2 (commencing with Section 10290) of Part 2 of Division 2 of the
Public Contract Code.
(f) (1) The department may adopt emergency regulations to
implement the provisions of this section in accordance with
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). 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 one readoption of
those regulations shall be exempt from review by the Office of
Administrative Law. The initial emergency regulations and the one
readoption of those regulations authorized by this section shall be
submitted to the Office of Administrative Law for filing with the
Secretary of State and publication in the California Code of
Regulations.
(2) As an alternative to paragraph (1), 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, or any
other provision of law, the department may implement and administer
this section by means of provider bulletins, all-county letters,
manuals, or other similar instructions, without taking regulatory
action. The department shall notify the fiscal and appropriate policy
committees of the Legislature of its intent to issue a provider
bulletin, all-county letter, manual, or other similar instruction, at
least five days prior to issuance. In addition, the department shall
provide a copy of any provider bulletin, all-county letter, manual,
or other similar instruction issued under this paragraph to the
fiscal and appropriate policy committees of the Legislature.
SEC. 150. Section 14105.281 is added to the Welfare and
Institutions Code, to read:
14105.281. (a) The Legislature finds and declares all of the
following:
(1) That because the implementation of Section 14105.28 is
expected to require several years and further rate changes may make
the transition to an inpatient hospital reimbursement methodology
based on diagnosis-related groups more difficult, and because of the
need to take into account the amount of base payments when combined
with supplemental payments made to inpatient hospitals, including
payments provided as a result of the hospital fee set forth in
Article 5.22 (commencing with Section 14167.31) and Article 5.225
(commencing with Section 14167.41), it is necessary to impose the
rate freeze enacted in this section.
(2) (A) Upon implementation of Article 5.21 (commencing with
Section 14167.1) and Article 5.22 (commencing with Section 14167.31),
as added by Assembly Bill 1383 of the 2009-10 Regular Session,
supplemental payments shall be made to hospitals that have contracts
negotiated pursuant to the Selective Provider Contracting Program,
provided that rates under these contracts are not reduced below the
contract rates in effect on the effective date of Article 5.21
(commencing with Section 14167.1), as added by Assembly Bill 1383 of
the 2009-10 Regular Session.
(B) Assembly Bill 1383 of the 2009-10 Regular Session was signed
into law on October 11, 2009, and the effective date of Article 5.21
(commencing with Section 14167.1) was January 1, 2010. Therefore, in
consideration of the notice provided by Assembly Bill 1383 of the
2009-10 Regular Session, and in further consideration that the
negotiated contract rates in effect on January 1, 2010, or the rates
in effect on July 1, 2010, to the extent those rates are lower than
the rates in effect on January 1, 2010, as provided in paragraph (1)
of subdivision (c), are sufficient to conform with the standards set
forth in Section 1396a(a)(30)(A) of Title 42 of the United States
Code, as well as the existence of supplemental payments to be made
under Article 5.21 (commencing with Section 14167.1), the Legislature
exercises its discretion, in consultation with the department, to
freeze rates at the levels in effect for these hospitals on January
1, 2010, or the rates in effect on July 1, 2010, to the extent that
those rates are lower than the rates in effect on January 1, 2010, as
provided in paragraph (1) of subdivision (c).
(3) The freeze shall remain in effect during the period of time
supplemental payments are made under Article 5.21 (commencing with
Section 14167.1), and thereafter, to the extent that the rates, alone
or in combination with any available supplemental payments, are
consistent with federal law as provided in this section.
(b) Notwithstanding any other provision of law, in order to
develop and implement changes in the methodology for payments for
hospital inpatient services, the director shall freeze rates
applicable to inpatient hospital services, as specified in this
section.
(c) (1) Reimbursement rates for inpatient hospital services for
all hospitals, except designated public hospitals, as defined in
subdivision (d) of Section 14166.1, that receive Medi-Cal
reimbursement from the State Department of Health Care Services, both
under contract with the Selective Provider Contracting Program as
well as noncontract hospitals, shall be frozen to the lesser of the
amount paid on January 1, 2010, or the amount paid on July 1, 2010.
The rate freeze shall be in effect for reimbursements for inpatient
hospital services provided to Medi-Cal beneficiaries beginning on
July 1, 2010, through and including the date on which the Medicaid
Management Information System converts to claim processing based on
the new reimbursement methodology developed pursuant to Section
14105.28 and described in paragraph (1) of subdivision (b) of that
section.
(2) In the event a contract hospital terminates its contract and
becomes a noncontract hospital, the hospital shall receive the same
rate or rates as provided in paragraph (1) as a contract hospital for
inpatient hospital services provided to Medi-Cal eligible
individuals while the rate freeze specified in paragraph (1) remains
in effect.
(3) This section nullifies any agreement between the state and a
hospital for rate adjustments that would be inconsistent with this
section. Other provisions of any of those agreements shall be
unchanged by this section.
(4) In the event a noncontract hospital elects to become a
contract hospital after July 1, 2010, at a negotiated rate or
negotiated rates less than the freeze amount provided in paragraph
(1), the hospital shall receive the contract rate or rates while the
freeze remains in effect.
(d) For purposes of this section, the reimbursement for inpatient
hospital services includes the amounts paid for all categories of
inpatient services allowable by Medi-Cal and shall not include any
supplemental payments. The reimbursement includes the amounts paid
for routine services together with all related ancillary services.
(e) Within 90 days of the date this section becomes effective, the
department shall develop and provide to all hospitals the
methodology that will be utilized to implement the rate freeze
required by this section for noncontract hospitals.
(f) (1) For dates of service on and after July 1, 2010, the
department shall reconcile the payments, as limited by subdivision
(c), to the amounts that the hospitals, that are subject to the new
methodology set forth in Section 14105.28, would have received if the
new methodology had been in effect. The department shall identify
the data that will be used in making the reconciliations.
(2) The department shall implement the reconciliation process on
the date that the payment methodology based on diagnosis-related
groups has been made final, but no later than June 30, 2012. The
director shall execute a declaration stating the date on which the
new payment methodology has become final.
(3) In the process of reconciliation, no payment, with respect to
dates of service prior to the effective date of the act that added
this section, shall be reduced below the amount paid pursuant to
subdivision (c).
(4) Rates paid to hospitals, or for specified services, that are
not subject to the methodology in paragraph (1) of subdivision (b) of
Section 14105.28, shall be increased subject to the annual Budget
Act.
(g) Notwithstanding subdivision (c) or any other provision of this
section, for the 2011-12 fiscal year and each fiscal year
thereafter, or portion thereof, in which subdivision (c) remains in
effect, the department shall, subject to an appropriation in the
annual Budget Act applicable to the particular fiscal year, apply an
increase in reimbursement rates for all hospital services that result
from the freeze imposed pursuant to subdivision (c).
(h) 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 department may take the actions specified
in this section by means of provider
bulletins or notices, policy letters, or other
similar instructions, without taking regulatory action.
(i) (1) The rates provided for in this section shall be
implemented only if the director determines that the rates, as
established by this section, will comply with applicable federal
Medicaid requirements and that federal financial participation will
be available.
(2) In assessing whether federal financial participation is
available, the director shall determine whether the rates comply with
applicable federal Medicaid requirements, including those set forth
in Section 1396a(a)(30)(A) of Title 42 of the United States Code.
(3) To the extent that the director determines that the rates do
not comply with the federal Medicaid requirements, the director
retains the discretion not to implement that rate and may revise the
rate as necessary to comply with federal Medicaid requirements.
(j) The director shall seek any necessary federal approval for the
implementation of this section. To the extent that federal financial
participation is not available with respect to any rate of
reimbursement described by this section, the director retains the
discretion not to implement that rate and may revise the rate as
necessary to comply with the federal Medicaid requirements.
SEC. 151. Section 14105.456 is added to the Welfare and
Institutions Code, to read:
14105.456. (a) For purposes of this section, the following
definitions shall apply:
(1) "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 Council (USANC) and accepted by the
federal Food and Drug Administration (FDA), as those drug products
having the same chemical ingredients.
(2) "Legend drug" means any drug with a label that states
"Caution: Federal law prohibits dispensing without prescription," "Rx
only," or words of similar import.
(3) "Medicare rate" means the rate of reimbursement established by
the Centers for Medicare and Medicaid Services for the Medicare
program.
(4) "Nonlegend drug" means any drug with a label that does not
contain a statement referenced in paragraph (2).
(5) "Pharmacy rate of reimbursement" means the reimbursement to a
Medi-Cal pharmacy provider pursuant to the provisions of paragraph
(2) of subdivision (b) of Section 14105.45.
(6) "Physician-administered drug" means any legend drug, nonlegend
drug, or vaccine administered or dispensed to a beneficiary by a
Medi-Cal provider other than a pharmacy provider and billed to the
department on a fee-for-service basis.
(7) "Volume-weighted average" means the aggregated average volume
for generically equivalent drugs, weighted by each drug's percentage
of the total volume in the Medi-Cal fee-for-service program during
the previous six months. For purposes of this paragraph, volume is
based on the standard billing unit used for the generically
equivalent drugs.
(b) The department may reimburse providers for a
physician-administered drug using either a Healthcare Common
Procedure Coding System code or a National Drug Code.
(c) The Healthcare Common Procedure Coding System code rate of
reimbursement for a physician-administered drug shall be equal to the
volume-weighted average of the pharmacy rate of reimbursement for
generically equivalent drugs. The department shall publish the
Healthcare Common Procedure Coding System code rates of
reimbursement.
(d) The National Drug Code rate of reimbursement shall equal the
pharmacy rate of reimbursement.
(e) Notwithstanding subdivisions (c) and (d), the department may
reimburse providers for physician-administered drugs at a rate not
less than the Medicare rate.
(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 implement this section by means of a provider bulletin
or notice, policy letter, or other similar instructions, without
taking regulatory action.
(g) (1) The rates provided for in this section shall be
implemented commencing January 1, 2011, but only if the director
determines that the rates comply with applicable federal Medicaid
requirements and that federal financial participation will be
available.
(2) In assessing whether federal financial participation is
available, the director shall determine whether the rates comply with
the federal Medicaid requirements, including those set forth in
Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the
extent that the director determines that a rate of reimbursement
described in this section does not comply with the federal Medicaid
requirements, the director retains the discretion not to implement
that rate and may revise the rate as necessary to comply with the
federal Medicaid requirements.
(h) The director shall seek any necessary federal approval for the
implementation of this section. To the extent that federal financial
participation is not available with respect to a rate of
reimbursement described in this section, the director retains the
discretion not to implement that rate and may revise the rate as
necessary to comply with the federal Medicaid requirements.
SEC. 152. Section 14126.022 is added to the Welfare and
Institutions Code, to read:
14126.022. (a) (1) By August 1, 2011, the department shall
develop the Skilled Nursing Facility Quality and Accountability
Supplemental Payment System, subject to approval by the federal
Centers for Medicare and Medicaid Services, and the availability of
federal, state, or other funds.
(2) The system shall be utilized to provide supplemental payments
to skilled nursing facilities that improve the quality and
accountability of care rendered to residents in skilled nursing
facilities, as defined in subdivision (c) of Section 1250 of the
Health and Safety Code, and to penalize those facilities that do not
meet measurable standards.
(3) The system shall be phased in, beginning with the 2010-11 rate
year.
(4) The department may utilize the system to do all of the
following:
(A) Assess overall facility quality of care and quality of care
improvement, and assign quality and accountability payments to
skilled nursing facilities pursuant to performance measures described
in subdivision (i).
(B) Assign quality and accountability payments or penalties
relating to quality of care, or direct care staffing levels, wages,
and benefits, or both.
(C) Limit the reimbursement of legal fees incurred by skilled
nursing facilities engaged in the defense of governmental legal
actions filed against the facilities.
(D) Publish each facility's quality assessment and quality and
accountability payments in a manner and form determined by the
director, or his or her designee.
(b) (1) There is hereby created in the State Treasury, the Skilled
Nursing Facility Quality and Accountability Special Fund. The fund
shall contain moneys deposited pursuant to subdivisions (g) and (j)
to (l), inclusive. Notwithstanding Section 16305.7 of the Government
Code, the fund shall contain all interest and dividends earned on
moneys in the fund.
(2) Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated without regard to fiscal year to
the department for making quality and accountability payments, in
accordance with subdivision (m), to facilities that meet or exceed
predefined measures as established by this section.
(3) Upon appropriation by the Legislature, moneys in the fund may
also be used for any of the following purposes:
(A) To cover the administrative costs incurred by the State
Department of Public Health for positions and contract funding
required to implement this section.
(B) To cover the administrative costs incurred by the State
Department of Health Care Services for positions and contract funding
required to implement this section.
(C) To provide funding assistance for the Long-Term Care Ombudsman
for program activities pursuant to Chapter 11 (commencing with
Section 9700) of Division 8.5.
(c) No appropriation associated with this bill is intended to
implement the provisions of Section 1276.65 of the Health and Safety
Code.
(d) (1) There is hereby appropriated for the 2010-11 fiscal year,
one million nine hundred thousand dollars ($1,900,000) from the
Skilled Nursing Facility Quality and Accountability Special Fund to
the California Department of Aging for the Long-Term Care Ombudsman
program activities pursuant to Chapter 11 (commencing with Section
9700) of Division 8.5. It is the intent of the Legislature for the
one million nine hundred thousand dollars ($1,900,000) from the fund
to be in addition to the four million one hundred sixty-eight
thousand dollars ($4,168,000) proposed in the Governor's May Revision
for the 2010-11 Budget. It is further the intent of the Legislature
to increase this level of appropriation in subsequent years to
provide support sufficient to carry out the mandates and activities
pursuant to Chapter 11 (commencing with Section 9700) of Division
8.5.
(2) The department, in partnership with the California Department
of Aging, shall seek approval from the federal Centers for Medicare
and Medicaid Services to obtain federal Medicaid reimbursement for
activities conducted by the Long-Term Care Ombudsman program. The
department shall report to the fiscal committees of the Legislature
during budget hearings on progress being made and any unresolved
issues during the 2011-12 budget deliberations.
(e) There is hereby created in the Special Deposit Fund
established pursuant to Section 16370 of the Government Code, the
Skilled Nursing Facility Minimum Staffing Penalty Account. The
account shall contain all moneys deposited pursuant to subdivision
(f).
(f) (1) Beginning with the 2010-11 fiscal year, the State
Department of Public Health shall use the direct care staffing level
data it collects to determine whether a skilled nursing facility has
met the nursing hours per patient per day requirements pursuant to
Section 1276.5 of the Health and Safety Code.
(2) (A) Beginning with the 2010-11 fiscal year, the State
Department of Public Health shall assess a skilled nursing facility,
licensed pursuant to subdivision (c) of Section 1250 of the Health
and Safety Code, an administrative penalty if the State Department of
Public Health determines that the skilled nursing facility fails to
meet the nursing hours per patient per day requirements pursuant to
Section 1276.5 of the Health and Safety Code as follows:
(i) Fifteen thousand dollars ($15,000) if the facility fails to
meet the requirements for 5 percent or more of the audited days up to
49 percent.
(ii) Thirty thousand dollars ($30,000) if the facility fails to
meet the requirements for over 49 percent or more of the audited
days.
(B) (i) If the skilled nursing facility does not dispute the
determination or assessment, the penalties shall be paid in full by
the licensee to the State Department of Public Health within 30 days
of the facility's receipt of the notice of penalty and deposited into
the Skilled Nursing Facility Minimum Staffing Penalty Account.
(ii) The State Department of Public Health may, upon written
notification to the licensee, request that the department offset any
moneys owed to the licensee by the Medi-Cal program or any other
payment program administered by the department to recoup the penalty
provided for in this section.
(C) (i) If a facility disputes the determination or assessment
made pursuant to this paragraph, the facility shall, within 15 days
of the facility's receipt of the determination and assessment,
simultaneously submit a request for appeal to both the department and
the State Department of Public Health. The request shall include a
detailed statement describing the reason for appeal and include all
supporting documents the facility will present at the hearing.
(ii) Within 10 days of the State Department of Public Health's
receipt of the facility's request for appeal, the State Department of
Public Health shall submit, to both the facility and the department,
all supporting documents that will be presented at the hearing.
(D) The department shall hear a timely appeal and issue a decision
as follows:
(i) The hearing shall commence within 60 days from the date of
receipt by the department of the facility's timely request for
appeal.
(ii) The department shall issue a decision within 120 days from
the date of receipt by the department of the facility's timely
request for appeal.
(iii) The decision of the department's hearing officer, when
issued, shall be the final decision of the State Department of Public
Health.
(E) The appeals process set forth in this paragraph shall be
exempt from Chapter 4.5 (commencing with Section 11400) and Chapter 5
(commencing with Section 11500), of Part 1 of Division 3 of Title 2
of the Government Code. The provisions of Section 100171 and 131071
of the Health and Safety Code shall not apply to appeals under this
paragraph.
(F) If a hearing decision issued pursuant to subparagraph (D) is
in favor of the State Department of Public Health, the skilled
nursing facility shall pay the penalties to the State Department of
Public Health within 30 days of the facility's receipt of the
decision. The penalties collected shall be deposited into the Skilled
Nursing Facility Minimum Staffing Penalty Account.
(G) The assessment of a penalty under this subdivision does not
supplant the State Department of Public Health's investigation
process or issuance of deficiencies or citations under Chapter 2.4
(commencing with Section 1417) of Division 2 of the Health and Safety
Code.
(g) The State Department of Public Health shall transfer, on a
monthly basis, all penalty payments collected pursuant to subdivision
(f) into the Skilled Nursing Facility Quality and Accountability
Special Fund.
(h) Nothing in this section shall impact the effectiveness or
utilization of Section 1278.5 or 1432 of the Health and Safety Code
relating to whistleblower protections, or Section 1420 of the Health
and Safety Code relating to complaints.
(i) (1) Beginning in the 2010-11 fiscal year, the department, in
consultation with representatives from the long-term care industry,
organized labor, and consumers, shall establish and publish quality
and accountability measures, benchmarks, and data submission
deadlines by November 30, 2010.
(2) The methodology developed pursuant to this section shall
include, but not be limited to, the following requirements and
performance measures:
(A) Beginning in the 2011-12 rate year:
(i) Immunization rates.
(ii) Facility acquired pressure ulcer incidence.
(iii) The use of physical restraints.
(iv) Compliance with the nursing hours per patient per day
requirements pursuant to Section 1276.5 of the Health and Safety
Code.
(v) Resident and family satisfaction.
(vi) Direct care staff retention, if sufficient data is available.
(B) If this act is extended beyond the dates on which it becomes
inoperative and is repealed, in accordance with Section 14126.033,
the department, in consultation with representatives from the
long-term care industry, organized labor, and consumers, beginning in
the 2012-13 rate year, shall incorporate additional measures into
the system, including, but not limited to, quality and accountability
measures required by federal health care reform that are identified
by the federal Centers for Medicare and Medicaid Services.
(C) The department, in consultation with representatives from the
long-term care industry, organized labor, and consumers, may
incorporate additional performance measures, including, but not
limited to, the following:
(i) Compliance with state policy associated with the United States
Supreme Court decision in Olmstead v. L.C. ex rel. Zimring (1999)
527 U.S. 581.
(ii) Direct care staff retention, if not addressed in the 2011-12
rate year.
(iii) The use of chemical restraints.
(j) Beginning with the 2010-11 rate year, and pursuant to
subparagraph (B) of paragraph (5) of subdivision (a) of Section
14126.023, the department shall set aside savings achieved from
setting the professional liability insurance cost category, including
any insurance deductible costs paid by the facility, at the 75th
percentile. From this amount, the department shall transfer the
General Fund portion into the Skilled Nursing Facility Quality and
Accountability Special Fund. A skilled nursing facility shall provide
supplemental data on insurance deductible costs to facilitate this
adjustment, in the format and by the deadlines determined by the
department. If this data is not provided, a facility's insurance
deductible costs will remain in the administrative costs category.
(k) Beginning with the 2011-12 rate year, the department shall set
aside 1 percent of the weighted average Medi-Cal reimbursement rate,
from which the department shall transfer the General Fund portion
into the Skilled Nursing Facility Quality and Accountability Special
Fund.
(l) If this act is extended beyond the dates on which it becomes
inoperative and is repealed, in accordance with Section 14126.033,
beginning with the 2012-13 rate year, in addition to the amount set
aside pursuant to subdivision (k), if there is a rate increase in the
weighted average Medi-Cal reimbursement rate, the department shall
set aside at least one-third of the weighted average Medi-Cal
reimbursement rate increase, up to a maximum of 1 percent, from which
the department shall transfer the General Fund portion of this
amount into the Skilled Nursing Facility Quality and Accountability
Special Fund.
(m) (1) Beginning with the 2011-12 rate year, the department shall
pay a supplemental payment, by April 30, 2012, to skilled nursing
facilities based on all of the criteria in subdivision (i), as
published by the department, and according to performance measure
benchmarks determined by the department in consultation with
stakeholders.
(2) Skilled nursing facilities that do not submit required
performance data by the department's specified data submission
deadlines pursuant to subdivision (i) shall not be eligible to
receive supplemental payments.
(3) Notwithstanding paragraph (1), if a facility appeals the
performance measure of compliance with the nursing hours per patient
per day requirements, pursuant to Section 1276.5 of the Health and
Safety Code, to the State Department of Public Health, and it is
unresolved by the department's published due date, the department
shall not use that performance measure when determining the facility'
s supplemental payment.
(4) Notwithstanding paragraph (1), if the department is unable to
pay the supplemental payments by April 30, 2012, then on May 1, 2012,
the department shall use the funds available in the Skilled Nursing
Facility Quality and Accountability Special Fund as a result of
savings identified in subdivisions (k) and (l), less the
administrative costs required to implement subparagraphs (A) and (B)
of paragraph (3) of subdivision (b), in addition to any Medicaid
funds that are available as of December 31, 2011, to increase
provider rates retroactively to August 1, 2011.
(n) The department shall seek necessary approvals from the federal
Centers for Medicare and Medicaid Services to implement this
section. The department shall implement this section only in a manner
that is consistent with federal Medicaid law and regulations, and
only to the extent that approval is obtained from the federal Centers
for Medicare and Medicaid Services and federal financial
participation is available.
(o) In implementing this section, the department and the State
Department of Public Health may contract as necessary, with
California's Medicare Quality Improvement Organization, or other
entities deemed qualified by the department or the State Department
of Public Health, not associated with a skilled nursing facility, to
assist with development, collection, analysis, and reporting of the
performance data pursuant to subdivision (i), and with demonstrated
expertise in long-term care quality, data collection or analysis, and
accountability performance measurement models pursuant to
subdivision (i). This subdivision establishes an accelerated process
for issuing any contract pursuant to this section. Any contract
entered into pursuant to this subdivision shall be exempt from the
requirements of the Public Contract Code, through December 31, 2012.
(p) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
following shall apply:
(1) The director shall implement this section, in whole or in
part, by means of provider bulletins, or other similar instructions
without taking regulatory action.
(2) The State Public Health Officer may implement this section by
means of all facility letters, or other similar instructions without
taking regulatory action.
(q) Notwithstanding paragraph (1) of subdivision (m), if a final
judicial determination is made by any state or federal court that is
not appealed, in any action by any party, or a final determination by
the administrator of the federal Centers for Medicare and Medicaid
Services, that any payments pursuant to subdivisions (a) and (m), are
invalid, unlawful, or contrary to any provision of federal law or
regulations, or of state law, these subdivisions shall become
inoperative, and for the 2011-12 rate year, the rate increase
provided under subparagraph (A) of paragraph (4) of subdivision (a)
of Section 14126.033 shall be reduced by the amounts described in
subdivisions (j) and (k). For the 2012-13 rate year and for each
subsequent rate year, any rate increase shall be reduced by the
amounts described in subdivisions (j) and (l).
SEC. 153. Section 14126.023 of the Welfare and Institutions Code
is amended to read:
14126.023. (a) The methodology developed pursuant to this article
shall be facility specific and reflect the sum of the projected cost
of each cost category and passthrough costs, as follows:
(1) Labor costs limited as specified in subdivision (c)
subdivisions (d) and (e) .
(2) Indirect care nonlabor costs limited to the 75th percentile.
(3) (A) Administrative costs limited to the
50th percentile.
(B) Notwithstanding subparagraph (A), beginning with the 2010-11
rate year and in each subsequent rate year, the administrative cost
category shall not include any legal and consultant fees in
connection with a fair hearing or other litigation against or
involving any governmental agency or department until all issues
related to the fair hearing or litigation issues are ultimately
decided or resolved.
(C) Notwithstanding subparagraph (A), beginning with the 2010-11
rate year and in each subsequent rate year, the department shall not
allow any cost associated with legal or consultant fees in connection
with a fair hearing or other litigation against any governmental
agency or department where any of the following apply:
(i) A decision has been rendered in favor of the governmental
agency or department.
(ii) The determination of the governmental agency or department
otherwise stands.
(iii) A settlement or similar resolution has been reached
regarding any citation issued under subdivision (c), (d), or (e) of
Section 1424 of the Health and Safety Code or regarding any remedy
imposed under Subpart F of Part 489 of Title 42 of the Code of
Federal Regulations.
(iv) A settlement or similar resolution has been reached under the
provisions of Section 14123 or 14171.
(D) Facilities shall report supplemental data required to disallow
costs described in subparagraph (C) in a format and by the deadline
determined by the department.
(4) Capital costs based on a fair rental value system (FRVS)
limited as specified in subdivision (d) (f)
.
(5) (A) Direct passthrough of proportional
Medi-Cal costs for property taxes, facility license fees, new state
and federal mandates, caregiver training costs, and liability
insurance projected on the prior year's costs.
(B) (i) Notwithstanding subparagraph (A), for the 2010-11 rate
year and each rate year thereafter, professional liability insurance
costs, including any insurance deductible costs paid by the facility,
shall be limited to the 75th percentile computed on a specific
geographic peer group basis.
(ii) Facilities shall report supplemental data described in this
subparagraph in a format and by the deadline determined by the
department, or the insurance deductible costs shall continue to be
reimbursed in the administrative cost category.
(b) (1) The percentiles in paragraphs (1)
through (3) of subdivision (a) shall be based on annualized costs
divided by total resident days and computed on a specific geographic
peer group basis. Costs within a specific cost category shall not be
shifted to any other cost category.
(2) Notwithstanding paragraph (1), for the 2010-11 and 2011-12
rate years, the percentiles in paragraphs (1) to (5), inclusive, of
subdivision (a) shall be based on annualized audited costs divided by
total resident days and computed on a specific geographic peer group
basis. Costs within a specific category shall not be shifted to any
other cost category.
(c) (1) Facilities newly certified to participate in the Medi-Cal
program shall receive a reimbursement rate based on the peer group
weighted average Medi-Cal reimbursement rate. Facilities shall
continue to receive the peer group weighted average Medi-Cal
reimbursement rate until either of the following conditions is met:
(A) The department shall calculate the Freestanding Skilled
Nursing Facility-B facility specific rate when a minimum of six
months of Medi-Cal cost data has been audited. The facility specific
rate shall be calculated prospectively and shall be effective on
August 1 of each rate year, pursuant to Section 14126.021.
(B) The department shall calculate the Freestanding Subacute
Skilled Nursing Facility-B facility specific rate when a cost report
with a minimum of 12 months of Medi-Cal cost
data has been audited. The facility specific
rate shall be calculated prospectively and shall be effective on
August 1 of each rate year, pursuant to Section 14126.021.
(2) Facilities that have been decertified for less than six months
and upon recertification shall continue to receive the facility per
diem reimbursement rate in effect prior to decertification.
Facilities shall continue to receive the facility per diem
reimbursement rate until either of the following conditions is met:
(A) The department shall calculate the Freestanding Skilled
Nursing Facility-B facility specific rate when a minimum of six
months of Medi-Cal cost data has been audited. The facility specific
rate based on the audited six months of Medi-Cal cost data shall be
calculated prospectively and shall be effective on August 1 of each
rate year, pursuant to Section 14126.021.
(B) The department shall calculate the Freestanding Subacute
Skilled Nursing Facility-B facility specific rate when a cost report
with a minimum of 12 months of Medi-Cal cost data has been audited.
The facility-specific rate shall be calculated prospectively and
shall be effective on August 1 of each rate year, pursuant to Section
14126.021.
(3) Facilities that have been decertified for six months or longer
and upon recertification shall receive a reimbursement rate based on
the peer group weighted average Medi-Cal reimbursement rate.
Facilities shall continue to receive the peer group weighted average
Medi-Cal reimbursement rate until either of the following conditions
is met:
(A) The department shall calculate the Freestanding Skilled
Nursing Facility-B facility specific rate when a minimum of six
months of Medi-Cal cost data has been audited. The facility-specific
rate shall be calculated prospectively and shall be effective on
August 1 of each rate year, pursuant to Section 14126.021.
(B) The department shall calculate the Freestanding Subacute
Skilled Nursing Facility-B facility specific rate when a cost report
with a minimum of 12 months of Medi-Cal cost data has been audited.
The facility-specific rate shall be calculated prospectively and
shall be effective on August 1 of each rate year, pursuant to Section
14126.021.
(4) Facilities that have a change of ownership or change of the
licensed operator shall continue to receive the facility per diem
reimbursement rate in effect with the previous owner. Facilities
shall continue to receive the facility per diem reimbursement rate
until either of the following conditions is met:
(A) The department shall calculate the Freestanding Skilled
Nursing Facility-B facility specific rate when a minimum of six
months of Medi-Cal cost data has been audited. The facility-specific
rate shall be calculated prospectively and shall be effective on
August 1 of each rate year, pursuant to Section 14126.021.
(B) The department shall calculate the Freestanding Subacute
Skilled Nursing Facility B facility-specific rate when a cost report
with a minimum of 12 months of Medi-Cal cost data has been audited.
The facility-specific rate shall be calculated prospectively and
shall be effective on August 1 of each rate year, pursuant to Section
14126.021.
(5) This subdivision represents codification of existing rules
promulgated by the department under the authority of Section
14126.027.
(c)
(d) The labor costs category shall be comprised of a
direct resident care labor cost category, an indirect care labor cost
category, and a labor-driven operating allocation cost category, as
follows:
(1) Direct resident care labor cost category which shall include
all labor costs related to routine nursing services including all
nursing, social services, activities, and other direct care
personnel. These costs shall be limited to the 90th percentile.
(2) Indirect care labor cost category which shall include all
labor costs related to staff supporting the delivery of patient care
including, but not limited to, housekeeping, laundry and linen,
dietary, medical records, inservice education, and plant operations
and maintenance. These costs shall be limited to the 90th percentile.
(3) Labor-driven operating allocation shall include an amount
equal to 8 percent of labor costs, minus expenditures for temporary
staffing, which may be used to cover allowable Medi-Cal expenditures.
In no instance shall the operating allocation exceed 5 percent of
the facility's total Medi-Cal reimbursement rate.
(e) Notwithstanding subdivision (d), beginning with the 2010-11
rate year and each rate year thereafter, the labor cost category
shall not include the labor-driven operating allocation and shall be
comprised only of a direct resident care labor cost category and an
indirect care labor cost category.
(d)
(f) The capital cost category shall be based on a FRVS
that recognizes the value of the capital related assets necessary to
care for Medi-Cal residents. The capital cost category includes
mortgage principal and interest, leases, leasehold improvements,
depreciation of real property, equipment, and other capital related
expenses. The FRVS methodology shall be based on the formula
developed by the department that assesses facility value based on age
and condition and uses a recognized market interest factor. Capital
investment and improvement expenditures included in the FRVS formula
shall be documented in cost reports or supplemental reports required
by the department. The capital costs based on FRVS shall be limited
as follows:
(1) For the 2005-06 rate year, the capital cost category for all
facilities in the aggregate shall not exceed the department's
estimated value for this cost category for the 2004-05 rate year.
(2) For the 2006-07 rate year and subsequent rate years, the
maximum annual increase for the capital cost category for all
facilities in the aggregate shall not exceed 8 percent of the prior
rate year's FRVS cost component.
(3) If the total capital costs for all facilities in the aggregate
for the 2005-06 rate year exceeds the value of the capital costs for
all facilities in the aggregate for the 2004-05 rate year, or if
that capital cost category for all facilities in the aggregate for
the 2006-07 rate year or any rate year thereafter exceeds 8 percent
of the prior rate year's value, the department shall reduce the
capital cost category for all facilities in equal proportion in order
to comply with paragraphs (1) and (2).
(e)
(g) For the 2005-06 and 2006-07 rate years, the
facility specific Medi-Cal reimbursement rate calculated under this
article shall not be less than the Medi-Cal rate that the specific
facility would have received under the rate methodology in effect as
of July 31, 2005, plus Medi-Cal's projected proportional costs for
new state or federal mandates for rate years 2005-06 and 2006-07,
respectively.
(f)
(h) The department shall update each facility specific
rate calculated under this methodology annually. The update process
shall be prescribed in the Medicaid state plan
State Plan , regulations, and the provider bulletins or
similar instructions described in Section 14126.027, and shall be
adjusted in accordance with the results of facility specific audit
and review findings in accordance with subdivisions (h) and
(i) (i), (j), and (k) .
(g)
(i) (1) The department shall
establish rates pursuant to this article on the basis of facility
cost data reported in the integrated long-term care disclosure and
Medi-Cal cost report required by Section 128730 of the Health and
Safety Code for the most recent reporting period available, and cost
data reported in other facility financial disclosure reports or
supplemental information required by the department in order to
implement this article.
(2) Notwithstanding paragraph (1), or any other provision of law,
beginning with the 2010-11 and 2011-12 rate years, the department
shall establish rates pursuant to this article on the basis of
facility audited cost data reported in the integrated long-term care
disclosure and Medi-Cal cost report described in Section 128730 of
the Health and Safety Code and audited cost data reported in other
facility financial disclosure reports or audited supplemental
information required by the department in order to implement this
article.
(3) Notwithstanding paragraph (1), or any other provision of law,
beginning with the 2010-11 rate year and each rate year thereafter,
the department may determine a facility ineligible to receive
supplemental payments pursuant to Section 14126.022 if a facility
fails to provide supplemental data as requested by the department.
(4) This subdivision represents codification of existing rules
promulgated by the department under the authority of Section
14126.027.
(h)
(j) The department shall conduct financial audits of
facility and home office cost data as follows:
(1) The department shall audit facilities a minimum of once every
three years to ensure accuracy of reported costs.
(2) It is the intent of the Legislature that the department
develop and implement limited scope audits of key cost centers or
categories to assure that the rate paid in the years between each
full scope audit required in paragraph (1) accurately reflects actual
costs.
(3) For purposes of updating facility specific rates, the
department shall adjust or reclassify costs reported consistent with
applicable requirements of the Medicaid state plan as required by
Part 413 (commencing with Section 413.1) of Title 42 of the Code of
Federal Regulations.
(4) Overpayments to any facility shall be recovered in a manner
consistent with applicable recovery procedures and requirements of
state and federal laws and regulations.
(i)
(k) (1) On an annual basis, the department shall use
the results of audits performed pursuant to subdivision (h)
subdivisions (i) and (j) , the results of any
federal audits, and facility cost reports, including supplemental
reports of actual costs incurred in specific cost centers or
categories as required by the department, to determine any difference
between reported costs used to calculate a facility's rate and
audited facility expenditures in the rate year.
(2) If the department determines that there is a difference
between reported costs and audited facility expenditures pursuant to
paragraph (1), the department shall adjust a facility's reimbursement
prospectively over the intervening years between audits by an amount
that reflects the difference, consistent with the methodology
specified in this article.
(j)
(l) For nursing facilities that obtain an audit appeal
decision that results in revision of the facility's allowable costs,
the facility shall be entitled to seek a retroactive adjustment in
its facility specific reimbursement rate.
(k) Compliance
(m) Except as provided in Section
14126.022, compliance by each facility with state laws and
regulations regarding staffing levels shall be documented annually
either through facility cost reports, including supplemental reports,
or through the annual licensing inspection process specified in
Section 1422 of the Health and Safety Code.
SEC. 154. Section 14126.027 of the Welfare and Institutions Code
is amended to read:
14126.027. (a) (1) The Director of Health Care 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,
2010 2012 . It is the intent that
regulations adopted pursuant to subdivision (b) shall be in place on
or before July 31, 2010 2012 .
SEC. 155. 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 federal
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) For the 2009-10 and 2010-11 rate years
rate year , the weighted average Medi-Cal reimbursement rate
required for purposes of this article shall not be increased with
respect to the weighted average Medi-Cal reimbursement rate for the
2008-09 rate year, as adjusted for the projected cost of complying
with new state or federal mandates.
(E) To the extent that new rates are projected to exceed the
adjusted limits calculated pursuant to subparagraphs (A) to (D),
inclusive, as applicable, the department shall adjust each skilled
nursing facility's projected rate for the applicable rate year by an
equal percentage.
(3) (A) For the 2010-11 rate year, if the increase in the federal
medical assistance percentage (FMAP) pursuant to the federal American
Recovery and Reinvestment Act of 2009 (ARRA) (Public Law 111-5) is
extended for the entire 2010-11 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate for the
purposes of this article shall not exceed 3.93 percent, or 3.14
percent, if the increase in the FMAP pursuant to ARRA is not extended
for that period of time, plus the projected cost of complying with
new state or federal mandates. If the increase in the FMAP pursuant
to ARRA is extended at a different rate, or for a different time
period, the rate adjustment for facilities shall be adjusted
accordingly.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(iii) To ensure that the state does not incur any additional
General Fund expenses to pay for the 2010-11 weighted average
Medi-Cal reimbursement rate increase.
(C) If the maximum annual increase in the weighted average
Medi-Cal rate is reduced pursuant to subparagraph (B), the department
shall recalculate and publish the final maximum annual increase in
the weighted average Medi-Cal reimbursement rate.
(4) (A) Subject to the following provisions, for the 2011-12 rate
year, the maximum annual increase in the weighted average Medi-Cal
reimbursement rate for the purpose of this article shall not exceed
2.4 percent, plus the projected cost of complying with new state or
federal mandate.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) For the 2011-12 rate year, the department shall set aside 1
percent of the weighted average Medi-Cal reimbursement rate, from
which the department shall transfer the General Fund portion into the
Skilled Nursing Facility Quality and Accountability Fund, to be used
for the supplemental rate pool.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve exemption changes to the facilities subject to the
quality assurance fee.
(iii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(iv) To ensure that the state does not incur any additional
General Fund expenses to pay for the 2011-12 weighted average
Medi-Cal reimbursement rate increase.
(C) The department may recalculate and publish the weighted
average Medi-Cal reimbursement rate increase for the 2011-12 rate
year if the difference in the projected quality assurance fee
collections from the 2011-12 rate year, compared to the projected
quality assurance fee collections for the 2010-11 rate year, would
result in any additional General Fund expense to pay for the 2011-12
rate year weighted average reimbursement rate increase.
(5) To the extent that rates are projected to exceed the adjusted
limits calculated pursuant to subparagraphs (A) to (D), inclusive, of
paragraph (2) and, as applicable, paragraphs (3) and (4), the
department shall adjust 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, 2011 2012
.
(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, 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 article shall
become inoperative on after July 31,
2011 2012 , and as of January 1,
2012 2013 , is repealed, unless a later
enacted statute, that is enacted before January 1, 2012
2013 , deletes or extends the dates on which it
becomes inoperative and is repealed.
SEC. 156. Section 14132 of the Welfare and Institutions Code is
amended to read:
14132. The following is the schedule of benefits under this
chapter:
(a) Outpatient services are covered as follows:
Physician, hospital or clinic outpatient, surgical center,
respiratory care, optometric, chiropractic, psychology, podiatric,
occupational therapy, physical therapy, speech therapy, audiology,
acupuncture to the extent federal matching funds are provided for
acupuncture, and services of persons rendering treatment by prayer or
healing by spiritual means in the practice of any church or
religious denomination insofar as these can be encompassed by federal
participation under an approved plan, subject to utilization
controls.
(b) Inpatient hospital services, including, but not limited to,
physician and podiatric services, physical therapy and occupational
therapy, are covered subject to utilization controls.
(c) Nursing facility services, subacute care services, and
services provided by any category of intermediate care facility for
the developmentally disabled, including podiatry, physician, nurse
practitioner services, and prescribed drugs, as described in
subdivision (d), are covered subject to utilization controls.
Respiratory care, physical therapy, occupational therapy, speech
therapy, and audiology services for patients in nursing facilities
and any category of intermediate care facility for the
developmentally disabled are covered subject to utilization controls.
(d) (1) Purchase of prescribed drugs is covered subject to the
Medi-Cal List of Contract Drugs and utilization controls.
(2) Purchase of drugs used to treat erectile dysfunction or any
off-label uses of those drugs are covered only to the extent that
federal financial participation is available.
(3) (A) To the extent required by federal law, the purchase of
outpatient prescribed drugs, for which the prescription is executed
by a prescriber in written, nonelectronic form on or after April 1,
2008, is covered only when executed on a tamper resistant
prescription form. The implementation of this paragraph shall conform
to the guidance issued by the federal Centers of Medicare and
Medicaid Services but shall not conflict with state statutes on the
characteristics of tamper resistant prescriptions for controlled
substances, including Section 11162.1 of the Health and Safety Code.
The department shall provide providers and beneficiaries with as much
flexibility in implementing these rules as allowed by the federal
government. The department shall notify and consult with appropriate
stakeholders in implementing, interpreting, or making specific this
paragraph.
(B) 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 subparagraph (A) by
means of a provider bulletin or notice, policy letter, or other
similar instructions without taking regulatory action.
(4) (A) Nonlegend acetaminophen-containing products, with
the exception of children's Tylenol, selected by the department are
not covered benefits. For the purposes of this paragraph, nonlegend
has the same meaning as defined in subdivision (a) of Section
14105.45.
(B) 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 subparagraph (A) by
means of a provider bulletin or notice, policy letter, or other
similar instruction without taking regulatory action.
(e) Outpatient dialysis services and home hemodialysis services,
including physician services, medical supplies, drugs and equipment
required for dialysis, are covered, subject to utilization controls.
(f) Anesthesiologist services when provided as part of an
outpatient medical procedure, nurse anesthetist services when
rendered in an inpatient or outpatient setting under conditions set
forth by the director, outpatient laboratory services, and X-ray
services are covered, subject to utilization controls. Nothing in
this subdivision shall be construed to require prior authorization
for anesthesiologist services provided as part of an outpatient
medical procedure or for portable X-ray services in a nursing
facility or any category of intermediate care facility for the
developmentally disabled.
(g) Blood and blood derivatives are covered.
(h) (1) Emergency and essential diagnostic and restorative dental
services, except for orthodontic, fixed bridgework, and partial
dentures that are not necessary for balance of a complete artificial
denture, are covered, subject to utilization controls. The
utilization controls shall allow emergency and essential diagnostic
and restorative dental services and prostheses that are necessary to
prevent a significant disability or to replace previously furnished
prostheses which are lost or destroyed due to circumstances beyond
the beneficiary's control. Notwithstanding the foregoing, the
director may by regulation provide for certain fixed artificial
dentures necessary for obtaining employment or for medical conditions
that preclude the use of removable dental prostheses, and for
orthodontic services in cleft palate deformities administered by the
department's California Children Services Program.
(2) For persons 21 years of age or older, the services specified
in paragraph (1) shall be provided subject to the following
conditions:
(A) Periodontal treatment is not a benefit.
(B) Endodontic therapy is not a benefit except for vital
pulpotomy.
(C) Laboratory processed crowns are not a benefit.
(D) Removable prosthetics shall be a benefit only for patients as
a requirement for employment.
(E) The director may, by regulation, provide for the provision of
fixed artificial dentures that are necessary for medical conditions
that preclude the use of removable dental prostheses.
(F) Notwithstanding the conditions specified in subparagraphs (A)
to (E), inclusive, the department may approve services for persons
with special medical disorders subject to utilization review.
(3) Paragraph (2) shall become inoperative July 1, 1995.
(i) Medical transportation is covered, subject to utilization
controls.
(j) Home health care services are covered, subject to utilization
controls.
(k) Prosthetic and orthotic devices and eyeglasses are covered,
subject to utilization controls. Utilization controls shall allow
replacement of prosthetic and orthotic devices and eyeglasses
necessary because of loss or destruction due to circumstances beyond
the beneficiary's control. Frame styles for eyeglasses replaced
pursuant to this subdivision shall not change more than once every
two years, unless the department so directs.
Orthopedic and conventional shoes are covered when provided by a
prosthetic and orthotic supplier on the prescription of a physician
and when at least one of the shoes will be attached to a prosthesis
or brace, subject to utilization controls. Modification of stock
conventional or orthopedic shoes when medically indicated, is covered
subject to utilization controls. When there is a clearly established
medical need that cannot be satisfied by the modification of stock
conventional or orthopedic shoes, custom-made orthopedic shoes are
covered, subject to utilization controls.
Therapeutic shoes and inserts are covered when provided to
beneficiaries with a diagnosis of diabetes, subject to utilization
controls, to the extent that federal financial participation is
available.
(l) Hearing aids are covered, subject to utilization controls.
Utilization controls shall allow replacement of hearing aids
necessary because of loss or destruction due to circumstances beyond
the beneficiary's control.
(m) Durable medical equipment and medical supplies are covered,
subject to utilization controls. The utilization controls shall allow
the replacement of durable medical equipment and medical supplies
when necessary because of loss or destruction due to circumstances
beyond the beneficiary's control. The utilization controls shall
allow authorization of durable medical equipment needed to assist a
disabled beneficiary in caring for a child for whom the disabled
beneficiary is a parent, stepparent, foster parent, or legal
guardian, subject to the availability of federal financial
participation. The department shall adopt emergency regulations to
define and establish criteria for assistive durable medical equipment
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).
(n) Family planning services are covered, subject to utilization
controls.
(o) Inpatient intensive rehabilitation hospital services,
including respiratory rehabilitation services, in a general acute
care hospital are covered, subject to utilization controls, when
either of the following criteria are met:
(1) A patient with a permanent disability or severe impairment
requires an inpatient intensive rehabilitation hospital program as
described in Section 14064 to develop function beyond the limited
amount that would occur in the normal course of recovery.
(2) A patient with a chronic or progressive disease requires an
inpatient intensive rehabilitation hospital program as described in
Section 14064 to maintain the patient's present functional level as
long as possible.
(p) (1) Adult day health care is covered in accordance with
Chapter 8.7 (commencing with Section 14520).
(2) Commencing 30 days after the effective date of the act that
added this paragraph, and notwithstanding the number of days
previously approved through a treatment authorization request, adult
day health care is covered for a maximum of three days per week.
(3) As provided in accordance with paragraph (4), adult day health
care is covered for a maximum of five days per week.
(4) As of the date that the director makes the declaration
described in subdivision (g) of Section 14525.1, paragraph (2) shall
become inoperative and paragraph (3) shall become operative.
(q) (1) Application of fluoride, or other appropriate fluoride
treatment as defined by the department, other prophylaxis treatment
for children 17 years of age and under, are covered.
(2) All dental hygiene services provided by a registered dental
hygienist in alternative practice pursuant to Sections 1768 and 1770
of the Business and Professions Code may be covered as long as they
are within the scope of Denti-Cal benefits and they are necessary
services provided by a registered dental hygienist in alternative
practice.
(r) (1) Paramedic services performed by a city, county, or special
district, or pursuant to a contract with a city, county, or special
district, and pursuant to a program established under Article 3
(commencing with Section 1480) of Chapter 2.5 of Division 2 of the
Health and Safety Code by a paramedic certified pursuant to that
article, and consisting of defibrillation and those services
specified in subdivision (3) of Section 1482 of the article.
(2) All providers enrolled under this subdivision shall satisfy
all applicable statutory and regulatory requirements for becoming a
Medi-Cal provider.
(3) This subdivision shall be implemented only to the extent
funding is available under Section 14106.6.
(s) In-home medical care services are covered when medically
appropriate and subject to utilization controls, for beneficiaries
who would otherwise require care for an extended period of time in an
acute care hospital at a cost higher than in-home medical care
services. The director shall have the authority under this section to
contract with organizations qualified to provide in-home medical
care services to those persons. These services may be provided to
patients placed in shared or congregate living arrangements, if a
home setting is not medically appropriate or available to the
beneficiary. As used in this section, "in-home medical care service"
includes utility bills directly attributable to continuous, 24-hour
operation of life-sustaining medical equipment, to the extent that
federal financial participation is available.
As used in this subdivision, in-home medical care services,
include, but are not limited to:
(1) Level of care and cost of care evaluations.
(2) Expenses, directly attributable to home care activities, for
materials.
(3) Physician fees for home visits.
(4) Expenses directly attributable to home care activities for
shelter and modification to shelter.
(5) Expenses directly attributable to additional costs of special
diets, including tube feeding.
(6) Medically related personal services.
(7) Home nursing education.
(8) Emergency maintenance repair.
(9) Home health agency personnel benefits which permit coverage of
care during periods when regular personnel are on vacation or using
sick leave.
(10) All services needed to maintain antiseptic conditions at
stoma or shunt sites on the body.
(11) Emergency and nonemergency medical transportation.
(12) Medical supplies.
(13) Medical equipment, including, but not limited to, scales,
gurneys, and equipment racks suitable for paralyzed patients.
(14) Utility use directly attributable to the requirements of home
care activities which are in addition to normal utility use.
(15) Special drugs and medications.
(16) Home health agency supervision of visiting staff which is
medically necessary, but not included in the home health agency rate.
(17) Therapy services.
(18) Household appliances and household utensil costs directly
attributable to home care activities.
(19) Modification of medical equipment for home use.
(20) Training and orientation for use of life-support systems,
including, but not limited to, support of respiratory functions.
(21) Respiratory care practitioner services as defined in Sections
3702 and 3703 of the Business and Professions Code, subject to
prescription by a physician and surgeon.
Beneficiaries receiving in-home medical care services are entitled
to the full range of services within the Medi-Cal scope of benefits
as defined by this section, subject to medical necessity and
applicable utilization control. Services provided pursuant to this
subdivision, which are not otherwise included in the Medi-Cal
schedule of benefits, shall be available only to the extent that
federal financial participation for these services is available in
accordance with a home- and community-based services waiver.
(t) Home- and community-based services approved by the United
States Department of Health and Human Services may be covered to the
extent that federal financial participation is available for those
services under waivers granted in accordance with Section 1396n of
Title 42 of the United States Code. The director may seek waivers for
any or all home- and community-based services approvable under
Section 1396n of Title 42 of the United States Code. Coverage for
those services shall be limited by the terms, conditions, and
duration of the federal waivers.
(u) Comprehensive perinatal services, as provided through an
agreement with a health care provider designated in Section 14134.5
and meeting the standards developed by the department pursuant to
Section 14134.5, subject to utilization controls.
The department shall seek any federal waivers necessary to
implement the provisions of this subdivision. The provisions for
which appropriate federal waivers cannot be obtained shall not be
implemented. Provisions for which waivers are obtained or for which
waivers are not required shall be implemented notwithstanding any
inability to obtain federal waivers for the other provisions. No
provision of this subdivision shall be implemented unless matching
funds from Subchapter XIX (commencing with Section 1396) of Chapter 7
of Title 42 of the United States Code are available.
(v) Early and periodic screening, diagnosis, and treatment for any
individual under 21 years of age is covered, consistent with the
requirements of Subchapter XIX (commencing with Section 1396) of
Chapter 7 of Title 42 of the United States Code.
(w) Hospice service which is Medicare-certified hospice service is
covered, subject to utilization controls. Coverage shall be
available only to the extent that no additional net program costs are
incurred.
(x) When a claim for treatment provided to a beneficiary includes
both services which are authorized and reimbursable under this
chapter, and services which are not reimbursable under this chapter,
that portion of the claim for the treatment and services authorized
and reimbursable under this chapter shall be payable.
(y) Home- and community-based services approved by the United
States Department of Health and Human Services for beneficiaries with
a diagnosis of AIDS or ARC, who require intermediate care or a
higher level of care.
Services provided pursuant to a waiver obtained from the Secretary
of the United States Department of Health and Human Services
pursuant to this subdivision, and which are not otherwise included in
the Medi-Cal schedule of benefits, shall be available only to the
extent that federal financial participation for these services is
available in accordance with the waiver, and subject to the terms,
conditions, and duration of the waiver. These services shall be
provided to individual beneficiaries in accordance with the client's
needs as identified in the plan of care, and subject to medical
necessity and applicable utilization control.
The director may under this section contract with organizations
qualified to provide, directly or by subcontract, services provided
for in this subdivision to eligible beneficiaries. Contracts or
agreements entered into pursuant to this division shall not be
subject to the Public Contract Code.
(z) Respiratory care when provided in organized health care
systems as defined in Section 3701 of the Business and Professions
Code, and as an in-home medical service as outlined in subdivision
(s).
(aa) (1) There is hereby established in the department, a program
to provide comprehensive clinical family planning services to any
person who has a family income at or below 200 percent of the federal
poverty level, as revised annually, and who is eligible to receive
these services pursuant to the waiver identified in paragraph (2).
This program shall be known as the Family Planning, Access, Care, and
Treatment (Family PACT) Waiver Program.
(2) The department shall seek a waiver in accordance with
Section 1315 of Title 42 of the United States Code, or a state plan
amendment adopted in accordance with Section 1396a(a)(10)(A)(ii)(XXI)
(ii)(2) of Title 42 of the United States Code, which was added to
Section 1396a of Title 42 of the United States Code by Section 2303
(a)(2) of the federal Patient Protection and Affordable Care Act
(PPACA) (Public Law 111-148), for a program to provide
comprehensive clinical family planning services as described in
paragraph (8). The Under the waiver, the
program shall be operated only in accordance with the waiver
and the statutes and regulations in paragraph (4) and subject to the
terms, conditions, and duration of the waiver. Under the state
plan amendment, which shall replace the waiver and shall be known as
the Family PACT successor state plan amendment, the program shall be
operated only in accordance with this subdivision and the statutes
and regulations in paragraph (4). The state shall use the standards
and processes imposed by the state on January 1, 2007, including the
application of an eligibility discount factor to the extent required
by the federal Centers for Medicare and Medicaid Services,
for purposes of determining eligibility as permitted under Section
1396a(a)(10)(A)(ii)(XXI)(ii)(2) of Title 42 of the United States
Code. To the extent that federal financial participation is
available, the program shall continue to conduct education, outreach,
enrollment, service delivery, and evaluation services as specified
under the waiver. The services shall be provided under the
program only if the waiver is and, when
applicable, the successor state plan amendment are approved by
the federal Centers for Medicare and Medicaid Services in
accordance with Section 1396n of Title 42 of the United States Code
and only to the extent that federal financial participation
is available for the services. Nothing in this section shall
prohibit the department from seeking the Family PACT successor state
plan amendment during the operation of the waiver.
(3) Solely for the purposes of the waiver or Family PACT
successor state plan amendment and notwithstanding any other
provision of law, the collection and use of an individual's social
security number shall be necessary only to the extent required by
federal law.
(4) Sections 14105.3 to 14105.39, inclusive, 14107.11, 24005, and
24013, and any regulations adopted under these statutes shall apply
to the program provided for under this subdivision. No other
provision of law under the Medi-Cal program or the State-Only Family
Planning Program shall apply to the program provided for under this
subdivision.
(5) 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, without taking regulatory action, the
provisions of the waiver after its approval by the federal Health
Care Financing Administration and the provisions of this section by
means of an all-county letter or similar instruction to providers.
Thereafter, the department shall adopt regulations to implement this
section and the approved waiver 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. Beginning six months after the
effective date of the act adding this subdivision, the department
shall provide a status report to the Legislature on a semiannual
basis until regulations have been adopted.
(6) In the event that the Department of Finance determines that
the program operated under the authority of the waiver described in
paragraph (2) or the Family PACT successor state plan amendment
is no longer cost effective, this subdivision shall become
inoperative on the first day of the first month following the
issuance of a 30-day notification of that determination in writing by
the Department of Finance to the chairperson in each house that
considers appropriations, the chairpersons of the committees, and the
appropriate subcommittees in each house that considers the State
Budget, and the Chairperson of the Joint Legislative Budget
Committee.
(7) If this subdivision ceases to be operative, all persons who
have received or are eligible to receive comprehensive clinical
family planning services pursuant to the waiver described in
paragraph (2) shall receive family planning services under the
Medi-Cal program pursuant to subdivision (n) if they are otherwise
eligible for Medi-Cal with no share of cost, or shall receive
comprehensive clinical family planning services under the program
established in Division 24 (commencing with Section 24000) either if
they are eligible for Medi-Cal with a share of cost or if they are
otherwise eligible under Section 24003.
(8) For purposes of this subdivision, "comprehensive clinical
family planning services" means the process of establishing
objectives for the number and spacing of children, and selecting the
means by which those objectives may be achieved. These means include
a broad range of acceptable and effective methods and services to
limit or enhance fertility, including contraceptive methods, federal
Food and Drug Administration approved contraceptive drugs, devices,
and supplies, natural family planning, abstinence methods, and basic,
limited fertility management. Comprehensive clinical family planning
services include, but are not limited to, preconception counseling,
maternal and fetal health counseling, general reproductive health
care, including diagnosis and treatment of infections and conditions,
including cancer, that threaten reproductive capability, medical
family planning treatment and procedures, including supplies and
followup, and informational, counseling, and educational services.
Comprehensive clinical family planning services shall not include
abortion, pregnancy testing solely for the purposes of referral for
abortion or services ancillary to abortions, or pregnancy care that
is not incident to the diagnosis of pregnancy. Comprehensive clinical
family planning services shall be subject to utilization control and
include all of the following:
(A) Family planning related services and male and female
sterilization. Family planning services for men and women shall
include emergency services and services for complications directly
related to the contraceptive method, federal Food and Drug
Administration approved contraceptive drugs, devices, and supplies,
and followup, consultation, and referral services, as indicated,
which may require treatment authorization requests.
(B) All United States Department of Agriculture, federal Food and
Drug Administration approved contraceptive drugs, devices, and
supplies that are in keeping with current standards of practice and
from which the individual may choose.
(C) Culturally and linguistically appropriate health education and
counseling services, including informed consent, that include all of
the following:
(i) Psychosocial and medical aspects of contraception.
(ii) Sexuality.
(iii) Fertility.
(iv) Pregnancy.
(v) Parenthood.
(vi) Infertility.
(vii) Reproductive health care.
(viii) Preconception and nutrition counseling.
(ix) Prevention and treatment of sexually transmitted infection.
(x) Use of contraceptive methods, federal Food and Drug
Administration approved contraceptive drugs, devices, and supplies.
(xi) Possible contraceptive consequences and followup.
(xii) Interpersonal communication and negotiation of relationships
to assist individuals and couples in effective contraceptive method
use and planning families.
(D) A comprehensive health history, updated at the next periodic
visit (between 11 and 24 months after initial examination) that
includes a complete obstetrical history, gynecological history,
contraceptive history, personal medical history, health risk factors,
and family health history, including genetic or hereditary
conditions.
(E) A complete physical examination on initial and subsequent
periodic visits.
(F) Services, drugs, devices, and supplies deemed by the federal
Centers for Medicare and Medicaid Services to be appropriate for
inclusion in the program.
(9) In order to maximize the availability of federal financial
participation under this subdivision, the director shall have the
discretion to implement the Family PACT successor state plan
amendment retroactively to July 1, 2010.
(ab) Purchase of prescribed enteral formulae is covered, subject
to the Medi-Cal list of enteral formulae and utilization controls.
(ac) Diabetic testing supplies are covered when provided by a
pharmacy, subject to utilization controls.
SEC. 157. Section 14132.925 is added to the Welfare and
Institutions Code, to read:
14132.925. (a) (1) Notwithstanding any other provision of law or
regulation to the contrary, to the extent federal financial
participation is available, in furtherance of Section 14105.06 and
subdivisions (a) and (c) of Section 14132.92, effective July 1, 2007,
a licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled shall be responsible for
providing day treatment and transportation services consistent with
Section 14105.06 and subdivision (a) of Section 14132.92, that are
selected and authorized through the individual program plan process
pursuant to Sections 4646 and 4646.5 and applicable regulations, for
each beneficiary receiving those services who resides in that
licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled.
(2) (A) The services described in paragraph (1) shall be arranged
by the regional center pursuant to Sections 4646 and 4646.5 and
applicable regulations.
(B) The licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled shall reimburse the regional
center for the full costs of making the disbursements to day
treatment and transportation service providers.
(3) Nothing in this section shall authorize the licensed
intermediate care facility/developmentally disabled-habilitative,
licensed intermediate care facility/developmentally disabled-nursing,
or licensed intermediate care facility/developmentally disabled to
substitute day treatment or transportation services not selected and
authorized through the individual program plan process pursuant to
Sections 4646 and 4646.5 and
applicable regulations.
(b) (1) The State Department of Developmental Services shall be
responsible for reimbursing a licensed intermediate care
facility/developmentally disabled-habilitative, licensed intermediate
care facility/developmentally disabled-nursing, or licensed
intermediate care facility/developmentally disabled for the costs of
reimbursing the regional center for the full cost of making
disbursements for day treatment and transportation services, plus a
coordination fee which will include an administrative fee and
reimbursement for increased costs associated with the quality
assurance fee. This payment shall be a supplement to the Medi-Cal
payment from the State Department of Health Care Services described
in Sections 14105.06 and 14132.92.
(2) A licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled may authorize the regional
center to invoice the State Department of Developmental Services on
its behalf for the services described in subdivision (a).
(3) (A) The licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled shall reimburse the regional
center for the full costs of making disbursements for day treatment
and transportation services within 30 days of receipt of payment from
the State Department of Developmental Services pursuant to
instructions from the State Department of Developmental Services.
(B) If there is a failure to reimburse the regional center within
30 days of receipt of payment from the State Department of
Developmental Services, for all or part of the costs associated with
disbursement for day treatment and transportation services, the
outstanding amount shall be recovered by any of the following
methods:
(i) Lump sum payment by the provider.
(ii) Offset against current payments due to the provider from the
State of California.
(iii) A repayment agreement between the provider and the State of
California.
(c) (1) A licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled shall report the costs
incurred pursuant to subdivision (a) according to instructions from
the State Department of Health Care Services.
(2) 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 this subdivision by means of a provider
bulletin or similar instruction.
(d) (1) If the services meeting the conditions of subdivision (a)
have been provided to a Medi-Cal beneficiary on or after July 1,
2007, and, notwithstanding Section 14115, a licensed intermediate
care facility/developmentally disabled-habilitative, licensed
intermediate care facility/developmentally disabled-nursing, or
licensed intermediate care facility/developmentally disabled may
authorize the regional center to invoice the State Department of
Developmental Services on its behalf for arranging for the services
described in subdivision (a). The licensed intermediate care
facility/developmentally disabled-habilitative, licensed intermediate
care facility/developmentally disabled-nursing, or licensed
intermediate care facility/developmentally disabled shall reimburse
the regional center the full cost of making disbursements for day
treatment and transportation services within 30 days of receipt of
payment from the State Department of Developmental Services pursuant
to instruction from the State Department of Developmental Services.
If a licensed intermediate care facility/developmentally
disabled-habilitative, licensed intermediate care
facility/developmentally disabled-nursing, or licensed intermediate
care facility/developmentally disabled fails to reimburse the
regional center within 30 days of receipt of payment from the State
Department of Developmental Services, for all or part of the costs
associated with the day treatment and transportation services, the
outstanding amount shall be recovered by any of the following
methods:
(A) Lump sum payment by the provider.
(B) Offset against current payments due to the provider from the
State of California.
(C) A repayment agreement between the provider and the State of
California.
(2) The department shall seek federal financial participation,
including any moneys available pursuant to the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5), pursuant to a federally
approved state plan amendment authorizing reimbursement for costs
incurred pursuant to subdivision (a) for day treatment and
transportation services provided on or after July 1, 2007.
(3) Upon approval of the state plan amendment, the reimbursement
payments made pursuant to this section by the State Department of
Developmental Services to a licensed intermediate care
facility/developmentally disabled-habilitative, licensed intermediate
care facility/developmentally disabled-nursing, or licensed
intermediate care facility/developmentally disabled shall be subject
to the quality assurance fee imposed upon designated intermediate
care facilities pursuant to Article 7.5 (commencing with Section
1324) of Chapter 2 of Division 2 of the Health and Safety Code.
(4) If federal financial participation is not made available for
day treatment and transportation services provided on or after July
1, 2007, the services nonetheless shall be reimbursed from the
General Fund by the State Department of Developmental Services.
(e) The State Department of Health Care Services shall request
approval from the federal Centers for Medicare and Medicaid Services
for the implementation of this section. The Director of Health Care
Services, with the concurrence of the Director of Developmental
Services, may alter the methodology specified in this section to the
extent necessary to meet the requirements of federal law or
regulations or to obtain federal approval. If after seeking federal
approval, federal approval is not obtained or federal financial
participation is no longer available, this section and Section
4646.55 shall not be implemented or shall become inoperative.
SEC. 158. Section 14154 of the Welfare and Institutions Code is
amended to read:
14154. (a) (1) The department shall
establish and maintain a plan whereby costs for county administration
of the determination of eligibility for benefits under this chapter
will be effectively controlled within the amounts annually
appropriated for that administration. The plan, to be known as the
County Administrative Cost Control Plan, shall establish standards
and performance criteria, including workload, productivity, and
support services standards, to which counties shall adhere. The plan
shall include standards for controlling eligibility determination
costs that are incurred by performing eligibility determinations at
county hospitals, or that are incurred due to the outstationing of
any other eligibility function. Except as provided in Section
14154.15, reimbursement to a county for outstationed eligibility
functions shall be based solely on productivity standards applied to
that county's welfare department office. The
(2) (A) The plan shall delineate both of the following:
(i) The process for determining county administration base costs,
which include salaries and benefits, support costs, and staff
development.
(ii) The process for determining funding for caseload changes,
cost-of-living adjustments, and program and other changes.
(B) The annual county budget survey document utilized under the
plan shall be constructed to enable the counties to provide
sufficient detail to the department to support their budget requests.
(3) The plan shall be part of a
single state plan, jointly developed by the department and the State
Department of Social Services, in conjunction with the counties, for
administrative cost control for the California Work Opportunity and
Responsibility to Kids (CalWORKs), Food Stamp, and Medical Assistance
(Medi-Cal) programs. Allocations shall be made to each county and
shall be limited by and determined based upon the County
Administrative Cost Control Plan. In administering the plan to
control county administrative costs, the department shall not
allocate state funds to cover county cost overruns that result from
county failure to meet requirements of the plan. The department and
the State Department of Social Services shall budget, administer, and
allocate state funds for county administration in a uniform and
consistent manner.
(4) The department and county welfare departments shall develop
procedures to ensure the data clarity, consistency, and reliability
of information contained in the county budget survey document
submitted by counties to the department. These procedures shall
include the format of the county budget survey document and process,
data submittal and its documentation, and the use of the county
budget survey documents for the development of determining county
administration costs. Communication between the department and the
county welfare departments shall be ongoing as needed regarding the
content of the county budget surveys and any potential issues to
ensure the information is complete and well understood by involved
parties. Any changes developed pursuant to this section shall be
incorporated within the state's annual budget process by no later
than the 2011-12 fiscal year.
(5) The department shall provide a clear narrative description
along with fiscal detail in the Medi-Cal estimate package, submitted
to the Legislature in January and May of each year, of each component
of the county administrative funding for the Medi-Cal program. This
shall describe how the information obtained from the county budget
survey documents was utilized and, where applicable, modified and the
rationale for the changes.
(b) Nothing in this section, Section 15204.5, or Section 18906
shall be construed so as to limit the administrative or budgetary
responsibilities of the department in a manner that would violate
Section 14100.1, and thereby jeopardize federal financial
participation under the Medi-Cal program.
(c) (1) The Legislature finds and declares that in order for
counties to do the work that is expected of them, it is necessary
that they receive adequate funding, including adjustments for
reasonable annual cost-of-doing-business increases. The Legislature
further finds and declares that linking appropriate funding for
county Medi-Cal administrative operations, including annual
cost-of-doing-business adjustments, with performance standards will
give counties the incentive to meet the performance standards and
enable them to continue to do the work they do on behalf of the
state. It is therefore the Legislature's intent to provide
appropriate funding to the counties for the effective administration
of the Medi-Cal program at the local level to ensure that counties
can reasonably meet the purposes of the performance measures as
contained in this section.
(2) It is the intent of the Legislature to not appropriate funds
for the cost-of-doing-business adjustment for the 2008-09
and , 2009-10 , and 2010-11 fiscal
years.
(d) The department is responsible for the Medi-Cal program in
accordance with state and federal law. A county shall determine
Medi-Cal eligibility in accordance with state and federal law. If in
the course of its duties the department becomes aware of accuracy
problems in any county, the department shall, within available
resources, provide training and technical assistance as appropriate.
Nothing in this section shall be interpreted to eliminate any remedy
otherwise available to the department to enforce accurate county
administration of the program. In administering the Medi-Cal
eligibility process, each county shall meet the following performance
standards each fiscal year:
(1) Complete eligibility determinations as follows:
(A) Ninety percent of the general applications without applicant
errors and are complete shall be completed within 45 days.
(B) Ninety percent of the applications for Medi-Cal based on
disability shall be completed within 90 days, excluding delays by the
state.
(2) (A) The department shall establish best-practice guidelines
for expedited enrollment of newborns into the Medi-Cal program,
preferably with the goal of enrolling newborns within 10 days after
the county is informed of the birth. The department, in consultation
with counties and other stakeholders, shall work to develop a process
for expediting enrollment for all newborns, including those born to
mothers receiving CalWORKs assistance.
(B) Upon the development and implementation of the best-practice
guidelines and expedited processes, the department and the counties
may develop an expedited enrollment timeframe for newborns that is
separate from the standards for all other applications, to the extent
that the timeframe is consistent with these guidelines and
processes.
(C) Notwithstanding the rulemaking procedures of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the department may implement this section by
means of all-county letters or similar instructions, without further
regulatory action.
(3) Perform timely annual redeterminations, as follows:
(A) Ninety percent of the annual redetermination forms shall be
mailed to the recipient by the anniversary date.
(B) Ninety percent of the annual redeterminations shall be
completed within 60 days of the recipient's annual redetermination
date for those redeterminations based on forms that are complete and
have been returned to the county by the recipient in a timely manner.
(C) Ninety percent of those annual redeterminations where the
redetermination form has not been returned to the county by the
recipient shall be completed by sending a notice of action to the
recipient within 45 days after the date the form was due to the
county.
(D) When a child is determined by the county to change from no
share of cost to a share of cost and the child meets the eligibility
criteria for the Healthy Families Program established under Section
12693.98 of the Insurance Code, the child shall be placed in the
Medi-Cal-to-Healthy Families Bridge Benefits Program, and these cases
shall be processed as follows:
(i) Ninety percent of the families of these children shall be sent
a notice informing them of the Healthy Families Program within five
working days from the determination of a share of cost.
(ii) Ninety percent of all annual redetermination forms for these
children shall be sent to the Healthy Families Program within five
working days from the determination of a share of cost if the parent
has given consent to send this information to the Healthy Families
Program.
(iii) Ninety percent of the families of these children placed in
the Medi-Cal-to-Healthy Families Bridge Benefits Program who have not
consented to sending the child's annual redetermination form to the
Healthy Families Program shall be sent a request, within five working
days of the determination of a share of cost, to consent to send the
information to the Healthy Families Program.
(E) Subparagraph (D) shall not be implemented until 60 days after
the Medi-Cal and Joint Medi-Cal and Healthy Families applications and
the Medi-Cal redetermination forms are revised to allow the parent
of a child to consent to forward the child's information to the
Healthy Families Program.
(e) The department shall develop procedures in collaboration with
the counties and stakeholder groups for determining county review
cycles, sampling methodology and procedures, and data reporting.
(f) On January 1 of each year, each applicable county, as
determined by the department, shall report to the department on the
county's results in meeting the performance standards specified in
this section. The report shall be subject to verification by the
department. County reports shall be provided to the public upon
written request.
(g) If the department finds that a county is not in compliance
with one or more of the standards set forth in this section, the
county shall, within 60 days, submit a corrective action plan to the
department for approval. The corrective action plan shall, at a
minimum, include steps that the county shall take to improve its
performance on the standard of or
standards with which the county is out of compliance. The plan shall
establish interim benchmarks for improvement that shall be expected
to be met by the county in order to avoid a sanction.
(h) (1) If a county does not meet the performance standards for
completing eligibility determinations and redeterminations as
specified in this section, the department may, at its sole
discretion, reduce the allocation of funds to that county in the
following year by 2 percent. Any funds so reduced may be restored by
the department if, in the determination of the department, sufficient
improvement has been made by the county in meeting the performance
standards during the year for which the funds were reduced. If the
county continues not to meet the performance standards, the
department may reduce the allocation by an additional 2 percent for
each year thereafter in which sufficient improvement has not been
made to meet the performance standards.
(2) No reduction of the allocation of funds to a county shall be
imposed pursuant to this subdivision for failure to meet performance
standards during any period of time in which the
cost-of-doing-business increase is suspended.
(i) The department shall develop procedures, in collaboration with
the counties and stakeholders, for developing instructions for the
performance standards established under subparagraph (D) of paragraph
(3) of subdivision (c) (d) , no later
than September 1, 2005.
(j) No later than September 1, 2005, the department shall issue a
revised annual redetermination form to allow a parent to indicate
parental consent to forward the annual redetermination form to the
Healthy Families Program if the child is determined to have a share
of cost.
(k) The department, in coordination with the Managed Risk Medical
Insurance Board, shall streamline the method of providing the Healthy
Families Program with information necessary to determine Healthy
Families eligibility for a child who is receiving services under the
Medi-Cal-to-Healthy Families Bridge Benefits Program.
SEC. 159. 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. 160. Section 14167.351 is added to the Welfare and
Institutions Code, to read:
14167.351. It is the intent of the Legislature that the funds in
the Hospital Quality Assurance Revenue Fund identified pursuant to
paragraph (2) of subdivision (c) of Section 14167.35 are to be used
to expand and enhance health services for children when the health of
the economy and state budget are strong enough to allow for the
expansion of children's health services programs, and strong enough
to ensure that these funds supplement, rather than supplant, existing
funding for children's health services during the time that this
article is in effect.
SEC. 161. Section 14183.6 is added to the Welfare and Institutions
Code, to read:
14183.6. The department shall enter into an interagency agreement
with the Department of Managed Health Care to have the Department of
Managed Health Care, on behalf of the department, conduct financial
audits, medical surveys, and a review of the provider networks of the
managed care health plans participating in the demonstration
project. The interagency agreement shall be updated, as necessary, on
an annual basis in order to maintain functional clarity regarding
the roles and responsibilities of these core activities. The
department shall not delegate its authority under this division to
the Department of Managed Health Care.
SEC. 162. Section 14301.1 of the Welfare and Institutions Code is
amended 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) (1) 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.
(2) For contracts entered into between the department and any
entity pursuant to Article 2.8 (commencing with Section 14087.5) of
Chapter 7, the department, by June 30 of each year, or, if the budget
has not passed by that date, no later than five working days after
the budget is signed, shall provide preliminary rates for the
upcoming fiscal year.
(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
(Division 7 (commencing with Section 6250) of Title 1 of the
Government Code).
(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.
(j) Prior to October 1, 2011, the risk-adjusted countywide
capitation rate shall comprise no more than 20 percent of the total
capitation rate paid to each Medi-Cal managed care plan.
SEC. 163. Section 14301.11 of the Welfare and Institutions Code is
amended to read:
14301.11. (a) The department shall use funds attributable to the
tax on Medi-Cal managed care plans imposed by Section 12201 of the
Revenue and Taxation Code for the purpose specified in paragraph (1)
of subdivision (b) of Section 12201 of the Revenue and Taxation Code.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
(b) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2012, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 164. Section 10 of Chapter 13 of the Third Extraordinary
Session of the Statutes of 2009, as amended by Section 3 of Chapter 4
of the Eighth Extraordinary Session of the Statutes of 2010, is
amended to read:
Sec. 10. (a) Notwithstanding any other provision of law, in order
to implement changes in the level of funding for regional center
purchase of services, regional centers shall reduce payments for
services and supports provided pursuant to Title 14 (commencing with
Section 95000) of the Government Code and Division 4.1 (commencing
with Section 4400) and Division 4.5 (commencing with Section 4500) of
the Welfare and Institutions Code. From February 1, 2009, to June
30, 2011 2010 , inclusive, regional
centers shall reduce all payments for these services and supports
paid from purchase of services funds for services delivered on or
after February 1, 2009, by 3 percent, and from July 1, 2010, to
June 30, 2011, inclusive, by 4.25 percent, unless the regional
center demonstrates that a nonreduced
payment is necessary to protect the health and
safety of the individual for whom the services and supports are
proposed to be purchased, and the State Department of Developmental
Services has granted prior written approval.
(b) Regional centers shall not reduce payments pursuant to
subdivision (a) for the following:
(1) Supported employment services with rates set by Section 4860
of the Welfare and Institutions Code.
(2) Services with "usual and customary" rates established pursuant
to Section 57210 of Title 17 of the California Code of Regulations.
(3) Payments to offset reductions in Supplemental Security
Income/State Supplementary Payment (SSI/SSP) benefits for consumers
receiving supported and independent living services.
(c) Notwithstanding any other provision of law, in order to
implement changes in the level of funding appropriated for regional
centers, the department shall amend regional center contracts to
adjust regional center budgets accordingly for the 2008-09 fiscal
year through the 2010-11 fiscal year. The contract amendments and
budget adjustments shall be exempt from the provisions of Article 1
(commencing with Section 4620) of Chapter 5 of Division 4.5 of the
Welfare and Institutions Code.
SEC. 165. Due to a change in the availability of federal funding
that addresses the ability of California to capture additional
federal financial participation for day treatment and transportation
services provided to a Medi-Cal beneficiary residing in a licensed
intermediate care facility/developmentally disabled-habilitative, a
licensed intermediate care facility/developmentally disabled-nursing,
or a licensed intermediate care facility/developmental disability,
as specified in Sections 4646.55 and 14132.925 of the Welfare and
Institutions Code, funds appropriated in Item 4300-101-0001 of the
Budget Act of 2007 (Chapters 171 and 172, Statutes of 2007) shall be
available for liquidation until June 30, 2011.
SEC. 166. (a) The State Department of Health Care Services shall
provide the appropriate fiscal and policy committees of the
Legislature, the Legislative Analyst's Office, the Office of the
State Chief Information Officer (OCIO), and the Bureau of State
Audits (BSA) with quarterly reports on the transition and takeover
progress efforts of the Medi-Cal Fiscal Intermediary Contract. These
quarterly reports shall be provided within 30 days of the close of
each quarter, commencing July 1, 2010, and continuing throughout the
life of the new system implementation project. These quarterly
reports shall contain the following information:
(1) A project status summary that identifies the progress or key
milestones and objectives for the quarter on transition and takeover
efforts by the prime contractor and the legacy contractor.
(2) A description of whether the project is on budget.
(3) Copies of any oversight reports developed by contractors of
the department for the California Medicaid Management Information
System (CA-MMIS) project and any subsequent responses from the
department.
(b) Upon request from the Chair of the Joint Legislative Budget
Committee (JLBC), the department shall provide updates on the
Implementation Advanced Planning Document provided to the federal
Centers for Medicare and Medicaid Services pertaining to the CA-MMIS
project.
(c) The CA-MMIS project shall be subject to the reviews and
recommendations of the OCIO. The OCIO shall submit a copy of its
reviews and recommendations to the JLBC. In conducting its review,
the OCIO shall consult with the department to review the project
governance and management framework to ensure that it is best
designed for success and will serve as a resource throughout the
project implementation.
(d) The BSA shall review the appropriate project documents and
quarterly reports and make recommendations about the new system
implementation project, as necessary. The BSA shall submit a copy of
any reviews and recommendations to the JLBC.
(e) The Chair of the JLBC may request an audit of the progress of
the transition, development, and implementation of the CA-MMIS.
SEC. 167. By no later than January 10 and May 14 of each year, the
State Department of Public Health shall provide the fiscal
committees of the Legislature with an estimate package for the
California Special Supplemental Food Program for Women, Infants, and
Children (the WIC program). This estimate package shall include all
significant assumptions underlying the estimate for the WIC program's
current-year and budget-year proposals, and shall contain concise
information identifying applicable estimate components, such as
caseload, policy changes, federal fund information, manufacturer
rebate information, state positions and organization charts, and
other assumptions necessary to support the estimate.
SEC. 168. By no later than January 10 and May 14 of each year, the
State Department of Public Health shall provide the fiscal
committees of the Legislature with an estimate package for the Every
Woman Counts Program. This estimate package shall include all
significant assumptions underlying the estimate for the Every Woman
Counts Program's current-year and budget-year proposals, and shall
contain concise information identifying applicable estimate
components, such as caseload, policy changes, contractor information,
special fund and federal fund information, and other assumptions
necessary to support the estimate.
SEC. 169. The State Department of Public Health shall provide the
fiscal and appropriate policy committees of the Legislature with
quarterly updates on caseload, estimated expenditures, and related
program monitoring data for the Every Woman Counts Program. These
updates shall be provided by no later than the 15th day of the month
following the end of each quarter of the fiscal year, which would be
October 15, January 15, April 15, and August 15. The purpose of these
updates is to provide the Legislature with the most recent
information on the program, and is in response to previously failed
efforts by the State Department of Public Health to adequately track,
monitor, and report information regarding the Every Woman Counts
Program as articulated in two recent audits conducted by the
Department of Finance and the Bureau of State Audits in Spring 2010.
SEC. 170. By no later than January 10 and May 14 of each year, the
State Department of Public Health shall provide the fiscal
committees of the Legislature with an estimate package for the
Licensing and Certification Program. This estimate package shall
include all significant assumptions underlying the estimate for the
Licensing and Certification Program, including current-year and
budget-year proposals, and shall contain concise information
identifying applicable estimate components, such as licensing visits,
personnel needs, policy changes, all fund sources, and any other
applicable information, including organization charts and other
assumptions necessary to support the estimate. This estimate package
shall not serve as a replacement for any other reporting requirements
regarding Licensing and Certification Program fees.
SEC. 171. No later than January 20 of each year, the State
Department of Public Health shall provide a vacancy report, effective
as of December 1 of the previous calendar year, to the Joint
Legislative Budget Committee and the chairs of the fiscal committees
of both houses of the Legislature. This report shall identify both
filled and vacant positions within the department by center,
division, branch, and classification.
SEC. 172. (a) The State Department of Health Care Services shall
seek support from one or more foundations to support and develop a
study or studies of the California Children's Services (CCS) Program
to be provided to interested stakeholders and the fiscal and
appropriate policy committees of the Legislature by no later than May
2011. Issues to be addressed by these analyses may include the
following:
(1) Systems analysis of core business processes and practices of
the program, including service authorization requests (SARs),
requests for durable medical equipment, and reimbursement processing.
(2) Review of CCS provider certification and enrollment process.
(3) Review of medical eligibility processing.
(4) Oversight and monitoring of quality of care.
(5) Identification of best practices for case management and care
coordination functions, including discharge planning.
(6) Opportunities for the use of web-based tools, telemedicine,
e-prescribing, and other technologies to reduce costs and to
streamline.
(b) It is the intent of the Legislature for the study or studies
to be used to do all of the following:
(1) Administratively streamline the CCS Program.
(2) Serve as a tool to facilitate the development of statewide
policies and procedures to improve the program.
(3) Serve as a baseline for development of CCS Program pilots
implemented through the state's Section 1115 Medicaid Waiver.
SEC. 173. The State Department of Health Care Services shall
provide the fiscal and appropriate policy committees of the
Legislature with semiannual updates regarding all of California's
Medicaid waivers to be provided in March and October of each year. At
a minimum, the semiannual updates shall include a listing of all
Medicaid waivers with all of the following information for each
waived:
(a) Description of what federal laws or regulations are being
waived.
(b) Description of the purpose of the wavier.
(c) Description of whom the waiver serves and the number of
enrollees.
(d) Status of the waiver, including its expiration date and
pending renewal dates where applicable.
(e) State plan amendment number listing and date that is
applicable to the waiver.
(f) Department that administers the program.
(g) Any other information deemed useful by the department,
including any separate attachments or reports on a particular waiver.
SEC. 174. (a) It is the intent of the Legislature, consistent with
current law contained in subdivision (e) of Section 1324.21 of the
Health and Safety Code, that beginning in the 2010-11 rate year or in
any other rate year thereafter, a multilevel facility, as defined in
paragraph (1) of subdivision (a) of Section 1324.20 of the Health
and Safety Code, may be assessed the amount the facility would be
required to pay the department, but shall not be required to pay the
quality assurance fee until both of the following occur:
(1) Changes to both the quality assurance fee and the rate
methodology enacted in the 2010 portion of the 2009-10 Regular
Session of the Legislature are approved by the federal Centers for
Medicare and Medicaid Services.
(2) The State Department of Health Care Services has increased
Medi-Cal rates and the increased rates are paid to facilities.
(b) A multilevel facility, as defined in paragraph (1) of
subdivision (a) of Section 1324.20 of the Health and Safety Code,
that has been assessed a fee by the department shall pay the fee
assessed within 60 days of the date rates are increased in accordance
with Section 1324.28 and paid to the facilities.
SEC. 175. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for
certain costs that may be incurred by a local agency or school
district because, in that regard, this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
However, if the Commission on State Mandates determines that this
act contains other 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. 176. 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 2010, it is necessary that this act take effect
immediately.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2010.