BILL NUMBER: AB 97 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 16, 2011
AMENDED IN SENATE MARCH 16, 2011
AMENDED IN SENATE MARCH 14, 2011
INTRODUCED BY Committee on Budget (Blumenfield (Chair), Alejo,
Allen, Brownley, Buchanan, Butler, Cedillo, Chesbro, Dickinson,
Feuer, Gordon, Huffman, Mitchell, Monning, and Swanson)
JANUARY 10, 2011
An act to amend Sections 12693.43, 12693.60, 12693.615, and
12693.65 of the Insurance Code, and to amend Sections 4474.5,
14007.9, 14091.3, 14105.31, 14105.33, 14105.332, 14105.34, 14126.033,
14132, and 14154 of, to amend and repeal Sections 14105.191 and
14134.1 of, to amend, repeal, and add Section 14134 of, to add
Sections 14105.07, 14105.192, 14105.451, 14126.036, 14131.05, and
14131.07 to, and to add Article 6 (commencing with Section 14589) to
Chapter 8.7 of Part 3 of Division 9 of, the Welfare and Institutions
Code, relating to health care services, making an appropriation
therefor, and declaring the urgency thereof, to take
effect immediately, bill related to the budget.
LEGISLATIVE COUNSEL'S DIGEST
AB 97, as amended, Committee on Budget. Health care services.
(1) Existing law creates the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board, 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 families with
children participating in the program to pay specified family
contribution amounts. Existing law continuously appropriates funds,
including family contributions, to the board from the Healthy
Families Fund for the program.
This bill would, commencing on a specified date, increase those
family contribution amounts, subject to federal authorization and any
lesser increase in family contribution as is authorized by the
federal Department of Health and Human Services. By increasing moneys
deposited into a continuously appropriated fund, the bill would make
an appropriation.
(2) Existing law requires the board to establish the required
copayment levels for specific benefits and prohibits copayments from
exceeding the copayment level established for state employees under
the Public Employees' Retirement System (PERS) as of January 1, 1998,
and from exceeding $250 annually per family. Existing law also
requires covered health benefits provided under the program to be
equivalent to those provided to state employees under PERS as of
January 1, 1998.
This bill would require the board to set copayments for outpatient
emergency room and inpatient hospital services at specified amounts,
contingent upon federal approval and implementation of the same
copayments under Medi-Cal, as specified. The bill would also modify
the health benefit and copayment provisions to prohibit copayments
from exceeding those charged, and require covered health benefits to
be equivalent to those provided, to state employees under PERS in the
year prior to the program plan year, except as otherwise provided.
The bill would deem regulations of the board to implement these
provisions to be emergency regulations.
(3) Existing law provides, except as specified, that vision
benefits under the Healthy Families Program shall be equivalent to,
and subscriber copayment levels shall reflect, those provided to
state employees through the Department of Personnel Administration on
July 1, 1997.
This bill would delete the specified date of July 1, 1997, from
these provisions.
(4) 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
Program provisions.
Existing law requires the establishment of protocols to ensure
appropriate services are provided for persons transitioning as a
result of the planned closure of the Agnews Developmental Center and
the Lanterman Developmental Center. For persons transitioning under a
plan for the closure of these developmental centers who have service
needs for coordinated medical and specialty care identified in their
individual program plans that cannot be met using the traditional
Medi-Cal fee-for-service system, existing law establishes a structure
requiring provision of those services under Medi-Cal managed care
health plans that are currently operational in prescribed counties as
a county organized health system or a local initiative, if consumers
choose to enroll, and authorizes prescribed supplemental payments,
including payments for administrative services.
This bill would recast those provisions to require, for consumers
transitioning from the Lanterman Developmental Center, that the
Medi-Cal managed care health plan be any plan operating in the
various counties if the consumers choose to enroll, or as mandated by
prescribed statutory provisions; to delete consultation with the
Lanterman Developmental Center staff as an administrative service
eligible for supplemental reimbursement; and to require that plans be
paid a full-risk capitation payment.
(5) Existing law, operative 30 days after the date that the
increase in the state's federal medical assistance percentage (FMAP)
pursuant to the federal American Recovery and Reinvestment Act of
2009 (ARRA) is no longer available, requires, no later than 90 days
after this operative date, each individual to pay a monthly premium
that is equal to 5% of his or her individual or spousal countable
income, as described, except that the premium cannot fall below or
exceed a specified minimum and maximum premium payment, as provided.
This bill would, instead, make these provisions operative 30 days
after the execution of a declaration by the Director of Health Care
Services that states that implementation of these provisions will not
jeopardize the state's ability to receive certain federal funds, as
specified.
(6) Existing law, until January 1, 2012, 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, 2013.
(7) Existing law, until July 31, 2012, requires that money
appropriated for the purposes of the Medi-Cal Long-Term Care
Reimbursement Act shall be, in part, used for increasing rates,
except as otherwise provided, for freestanding nursing facilities, as
specified. Existing law requires that the maximum annual increase in
the weighted average Medi-Cal reimbursement rate for the purposes of
these provisions shall not exceed a specified amount plus the
projected cost of complying with new state and federal mandates.
Existing law requires the weighted average Medi-Cal reimbursement
rate increase for the 2010-11 and 2011-12 rate years to be adjusted
by the department for specified reasons.
This bill would require, except as provided, that for dates of
service on and after June 1, 2011, the payments resulting from the
application of these rate increases shall be reduced by 10% and would
authorize the Director of Health Care Services to adjust the
percentage reductions as specified. This bill would require, except
as provided, that payments to intermediate care facilities for the
developmentally disabled, as specified, for dates of service on and
after June 1, 2011, shall not exceed the reimbursement rates that
were applicable to those providers in the 2008-09 rate year, reduced
by 10%. This bill would also authorize the Director of Health Care
Services to adjust the percentage reductions as specified.
(8) Existing law requires, except as otherwise provided, Medi-Cal
provider payments to be reduced by 1% or 5%, as specified, for dates
of service on and after March 1, 2009. Existing law also requires
provider payments for specified non-Medi-Cal programs to be reduced
by 1% for dates of on and after March 1, 2009.
This bill would provide that these provisions shall become
inoperative for dates of service on and after June 1, 2011. This bill
would require, except as otherwise provided, that Medi-Cal and
specified non-Medi-Cal provider payments be reduced by 10%, as
prescribed, for dates of service on and after June 1, 2011.
(9) Existing law requires the reimbursement to Medi-Cal pharmacy
providers for legend and nonlegend drugs, as defined, to consist of
the estimated acquisition cost of the drug, as defined, plus a
professional fee for dispensing. Existing law authorizes the State
Department of Health Care Services to enter into contracts with
manufacturers of single-source and multiple-source drugs, on a bid or
nonbid basis, for drugs from each major therapeutic category.
Existing law requires, among other things, that contracts executed
pursuant to these provisions provide for an equalization payment
amount, as defined, to be remitted to the department by the
manufacturer on a quarterly basis.
This bill would, instead, provide that the contracts shall provide
for a state rebate, as defined, and would make conforming changes.
This bill would also provide that it is the intent of the Legislature
to enact legislation by August 1, 2011, that provides for the
development of a new reimbursement methodology for pharmacy
providers. This bill would, in relation to establishing the new
reimbursement methodology, authorize the State Department of Health
Care Services to require providers, manufacturers, and wholesalers to
submit any data the Director of Health Care Services determines is
necessary or useful in preparing for the transition from a
methodology based on average wholesale price to a methodology based
on actual acquisition price.
(10) Existing law requires Medi-Cal beneficiaries to make set
copayments for specified services. Copayments for services, under
existing law, do not reduce the reimbursement to the providers.
Existing law, with certain exceptions, prohibits a provider from
denying services to an individual solely because the person is unable
to pay the copayment.
This bill would, commencing as provided, revise the copayment
rates, expand the services for which copayments are due, and require
the department to reduce the amount of the payment to the provider by
the amount of the copayment. The bill would provide that, with
certain exceptions, a provider has no obligation to provide services
to a beneficiary who does not pay the copayment at the point of
service.
(11) Existing law, provides that outpatient services provided by a
physician are a covered benefit under the Medi-Cal program, subject
to utilization controls.
This bill would, to the extent permitted by federal law, limit
physician office and clinic visits that are a covered benefit under
the Medi-Cal program, with specified exceptions, to 7 visits per
beneficiary per fiscal year. This bill would require these provisions
to be implemented on the first day of the first calendar month
following 180 days after the effective date of the bill or on the
first day of the calendar month following 60 days after federal
approval, whichever is later.
(12) Existing law provides for a schedule of benefits under the
Medi-Cal program, which includes prescribed drugs subject to the
Medi-Cal List of Contract Drugs, enteral formulae subject to the
Medi-Cal list of enteral formulae, and hearing aids, all of which are
subject to utilization controls. Existing law provides that
nonlegend acetaminophen-containing products, with the exception of
children's Tylenol, selected by the department are not covered
benefits.
This bill would, in relation to these benefits, instead provide
that nonlegend acetaminophen-containing products, with the exception
of children's acetaminophen-containing products, and nonlegend cough
and cold products, selected by the department are not covered
benefits. This bill would, in relation to enteral formulae, instead
refer to the benefit as enteral nutrition products. This bill would,
except as specified, require that the purchase of enteral nutrition
products be limited to those products administered through a feeding
tube. This bill would also, with certain exceptions, establish an
annual per beneficiary benefit cap amount, as defined, for optional
hearing aid benefits.
(13) Existing law provides that it is the intent of the
Legislature to provide appropriate funding to the counties for the
effective administration of the Medi-Cal program, except for
specified fiscal years in regard to any cost-of-doing-business
adjustment.
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 2011-12 fiscal year.
(14) Existing law, the Adult Day Health Medi-Cal Law, establishes
adult day health care services as a Medi-Cal benefit for Medi-Cal
beneficiaries who meet certain criteria.
This bill would provide, to the extent permitted by federal law,
that notwithstanding existing law, adult day health care be excluded
from coverage under the Medi-Cal program. This bill would provide
that this provision shall be implemented on the first day of the
first calendar month following 90 days after the effective date of
the bill or on the first day of the first calendar month after
federal approval, whichever is later.
(15) This bill would appropriate $1,000 from the General Fund to
the State Department of Health Care Services.
(16) The California Constitution authorizes the Governor to
declare a fiscal emergency and to call the Legislature into special
session for that purpose. Governor Schwarzenegger issued a
proclamation declaring a fiscal emergency, and calling a special
session for this purpose, on December 6, 2010. Governor Brown issued
a proclamation on January 20, 2011, declaring and reaffirming that a
fiscal emergency exists and stating that his proclamation supersedes
the earlier proclamation for purposes of that constitutional
provision.
This bill would state that it addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation issued on
January 20, 2011, pursuant to the California Constitution.
(17) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
(18) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: majority 2/3 . Appropriation:
yes. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 12693.43 of the Insurance Code is amended to
read:
12693.43. (a) Applicants applying to the purchasing pool shall
agree to pay family contributions, unless the applicant has a family
contribution sponsor. Family contribution amounts consist of the
following two components:
(1) The flat fees described in subdivision (b) or (d).
(2) Any amounts that are charged to the program by participating
health, dental, and vision plans selected by the applicant that
exceed the cost to the program of the highest cost Family Value
Package in a given geographic area.
(b) In each geographic area, the board shall designate one or more
Family Value Packages for which the required total family
contribution is:
(1) Seven dollars ($7) per child with a maximum required
contribution of fourteen dollars ($14) per month per family for
applicants with annual household incomes up to and including 150
percent of the federal poverty level.
(2) (A) Nine dollars ($9) per child with a maximum required
contribution of twenty-seven dollars ($27) per month per family for
applicants with annual household incomes greater than 150 percent and
up to and including 200 percent of the federal poverty level and for
applicants on behalf of children described in clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70.
(B) Commencing the first day of the fifth month following the
enactment of the 2008-09 Budget Act, the family contribution pursuant
to this paragraph shall be twelve dollars ($12) per child with a
maximum required contribution of thirty-six dollars ($36) per month
per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be sixteen dollars ($16) per child with a
maximum required contribution of forty-eight dollars ($48) per month
per family.
(D) Subject to prior federal authorization, the family
contribution pursuant to this paragraph shall be thirty dollars ($30)
per child with a maximum required contribution of ninety dollars
($90) per month per family, or any lesser increase in family
contributions as is authorized by the federal Department of Health
and Human Services. The family contribution required by this
subparagraph shall commence the first day of the third month
following the later of the following:
(i) The effective date of the act adding this subparagraph.
(ii) Receipt of federal authorization for the contribution in the
form of an approved amendment to California's state plan under Title
XXI of the federal Social Security Act or a waiver of one or more
requirements of Title XXI of the federal Social Security Act.
(3) (A) On and after July 1, 2005, fifteen dollars ($15) per child
with a maximum required contribution of forty-five dollars ($45) per
month per family for applicants with annual household income to
which subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this subparagraph shall be applicable to the applicant on July
1, 2005, unless subparagraph (B) of paragraph (6) of subdivision (a)
of Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this subparagraph and, prior to the date the
premium increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income.
(B) Commencing the first day of the fifth month following the
enactment of the 2008-09 Budget Act, the family contribution pursuant
to this paragraph shall be seventeen dollars ($17) per child with a
maximum required contribution of fifty-one dollars ($51) per month
per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be twenty-four dollars ($24) per child with a
maximum required contribution of seventy-two dollars ($72) per month
per family.
(D) Subject to prior federal authorization, the family
contribution pursuant to this paragraph shall be forty-two dollars
($42) per child with a maximum required contribution of one hundred
twenty-six dollars ($126) per month per family, or any lesser
increase in family contributions as is authorized by the federal
Department of Health and Human Services. The family contribution
required by this subparagraph shall commence the first day of the
third month following the later of the following:
(i) The effective date of the act adding this subparagraph.
(ii) Receipt of federal authorization for the contribution in the
form of an approved amendment to California's state plan under Title
XXI of the federal Social Security Act or a waiver of one or more
requirements of Title XXI of the federal Social Security Act.
(c) Combinations of health, dental, and vision plans that are more
expensive to the program than the highest cost Family Value Package
may be offered to and selected by applicants. However, the cost to
the program of those combinations that exceeds the price to the
program of the highest cost Family Value Package shall be paid by the
applicant as part of the family contribution.
(d) The board shall provide a family contribution discount to
those applicants who select the health plan in a geographic area that
has been designated as the Community Provider Plan. The discount
shall reduce the portion of the family contribution described in
subdivision (b) to the following:
(1) A family contribution of four dollars ($4) per child with a
maximum required contribution of eight dollars ($8) per month per
family for applicants with annual household incomes up to and
including 150 percent of the federal poverty level.
(2) (A) Six dollars ($6) per child with a maximum required
contribution of eighteen dollars ($18) per month per family for
applicants with annual household incomes greater than 150 percent and
up to and including 200 percent of the federal poverty level and for
applicants on behalf of children described in clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70.
(B) Commencing the first day of the fifth month following the
enactment of the 2008-09 Budget Act, the family contribution pursuant
to this paragraph shall be nine dollars ($9) per child with a
maximum required contribution of twenty-seven dollars ($27) per month
per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be thirteen dollars ($13) per child with a
maximum required contribution of thirty-nine dollars ($39) per month
per family.
(D) Subject to prior federal authorization, the family
contribution pursuant to this paragraph shall be twenty-seven dollars
($27) per child with a maximum required contribution of eighty-one
dollars ($81) per month per family, or any lesser increase in family
contributions as is authorized by the federal Department of Health
and Human Services. The family contribution required by this
subparagraph shall commence the first day of the third month
following the later of the following:
(i) The effective date of the act adding this subparagraph.
(ii) Receipt of federal authorization for the contribution in the
form of an approved amendment to California's state plan under Title
XXI of the federal Social Security Act or a waiver of one or more
requirements of Title XXI of the federal Social Security Act.
(3) (A) On and after July 1, 2005, twelve dollars ($12) per child
with a maximum required contribution of thirty-six dollars ($36) per
month per family for applicants with annual household income to which
subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this subparagraph shall be applicable to the applicant on July
1, 2005, unless subparagraph (B) of paragraph (6) of subdivision (a)
of Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this subparagraph and, prior to the date the
premium increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income.
(B) Commencing the first day of the fifth month following the
enactment of the 2008-09 Budget Act, the family contribution pursuant
to this paragraph shall be fourteen dollars ($14) per child with a
maximum required contribution of forty-two dollars ($42) per month
per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be twenty-one dollars ($21) per child with a
maximum required contribution of sixty-three dollars ($63) per month
per family.
(D) Subject to prior federal authorization, the family
contribution pursuant to this paragraph shall be thirty-nine dollars
($39) per child with a maximum required contribution of one hundred
seventeen dollars ($117) per month per family, or any lesser increase
in family contributions as is authorized by the federal Department
of Health and Human Services. The family contribution required by
this subparagraph shall commence the first day of the third month
following the later of the following:
(i) The effective date of the act adding this subparagraph.
(ii) Receipt of federal authorization for the contribution in the
form of an approved amendment to California's state plan under Title
XXI of the federal Social Security Act or a waiver of one or more
requirements of Title XXI of the federal Social Security Act.
(e) Applicants, but not family contribution sponsors, who pay
three months of required family contributions in advance shall
receive the fourth consecutive month of coverage with no family
contribution required.
(f) Applicants, but not family contribution sponsors, who pay the
required family contributions by an approved means of electronic fund
transfer shall receive a 25-percent discount from the required
family contributions.
(g) It is the intent of the Legislature that the family
contribution amounts described in this section comply with the
premium cost sharing limits contained in Section 2103 of Title XXI of
the Social Security Act. If the amounts described in subdivision (a)
are not approved by the federal government, the board may adjust
these amounts to the extent required to achieve approval of the state
plan.
(h) The adoption and one readoption of regulations to implement
paragraph (3) of subdivision (b) and paragraph (3) of subdivision (d)
shall be deemed to be an emergency and necessary for the immediate
preservation of 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 specific facts showing the need for immediate action and
from review by the Office of Administrative Law. For purpose of
subdivision (e) of Section 11346.1 of the Government code, the
120-day period, as applicable to the effective period of an emergency
regulatory action and submission of specified materials to the
Office of Administrative law, is hereby extended to 180 days.
(i) The board may adopt, and may only one-time readopt,
regulations to implement the changes to this section that are
effective the first day of the fifth month following the enactment of
the 2008-09 Budget Act. The adoption and one-time readoption of a
regulation authorized by this section is deemed to address an
emergency, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the board is hereby exempted for this purpose
from the requirements of subdivision (b) of Section 11346.1 of the
Government Code.
(j) The program shall provide prior notice to any applicant for a
subscriber whose premium will increase as a result of amendments made
to this section and shall provide the applicant with an opportunity
to demonstrate that, based on reduced family income, the subscriber
is subject to a lower premium pursuant to this section.
(k) The adoption and readoption, by the board, of regulations to
implement the changes made to this section by the act that added this
subdivision shall be deemed to be an emergency and necessary to
avoid serious harm to the public peace, health, 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. 1.5. Section 12693.60 of the Insurance Code is amended to
read:
12693.60. (a) Coverage provided to subscribers shall meet the
federal coverage requirements in Section 2103 of Title XXI of the
Social Security Act. Except as otherwise provided in this part, the
covered health benefits provided to subscribers shall be equivalent
to those provided to state employees through the Public Employees'
Retirement System for the most recent plan year preceding the
applicable program plan year, except that the plans may provide a
mechanism for inpatient hospital care provided under the mental
health benefit through which applicants may agree to a treatment plan
in which each inpatient day may be substituted for two residential
treatment days or three day treatment program days.
(b) The adoption and readoption, by the Managed Risk Medical
Insurance Board, of regulations to implement the changes made to this
section by the act that added this subdivision, shall be deemed to
be an emergency and necessary to avoid serious harm to the public
peace, health, 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. 1.7. Section 12693.615 of the Insurance Code is amended to
read:
12693.615. (a) The board shall establish the required subscriber
copayment levels for specific benefits consistent with the
limitations of Section 2103 of Title XXI of the Social Security Act.
The copayment levels established by the board shall, to the extent
possible, reflect the copayment levels established for state
employees, effective January 1, 1998, through the Public Employees'
Retirement System. Except as otherwise provided in this section,
under no circumstances shall copayments exceed the copayment level
established for state employees for the most recent plan year
preceding the applicable program plan year through the Public
Employees' Retirement System. Total annual copayments charged to
subscribers shall not exceed two hundred fifty dollars ($250) per
family. The board shall instruct participating health plans to work
with their provider networks to provide for extended payment plans
for subscribers utilizing a significant number of health services for
which copayments are charged. The board shall track the number of
subscribers who meet the copayment maximum in each year and make
adjustments in the amount if a significant number of subscribers
reach the copayment maximum.
(b) No deductibles shall be charged to subscribers for health
benefits.
(c) Coverage provided to subscribers shall not contain any
preexisting condition exclusion requirements.
(d) No participating health, dental, or vision plan shall exclude
any subscriber on the basis of any actual or expected health
condition or claims experience of that subscriber or a member of that
subscriber's family.
(e) There shall be no variations in rates charged to subscribers
including premiums and copayments, on the basis of any actual or
expected health condition or claims experience of any subscriber or
subscriber's family member. The only variation in rates charged to
subscribers, including copayments and premiums, that shall be
permitted is that which is expressly authorized by Section 12693.43.
(f) There shall be no copayments for preventive services as
defined in Section 1367.35 of the Health and Safety Code.
(g) There shall be no annual or lifetime benefit maximums in any
of the coverage provided under the program.
(h) Plans that receive purchasing credits pursuant to Section
12693.39 shall comply with subdivisions (b), (c), (d), (e), (f), and
(g).
(i) (1) Effective October 1, 2011, or the first day of the month
following 120 days after the federal approval required by
subparagraphs (A) and (B) of paragraph (3), whichever occurs later,
copayments for emergency room and inpatient hospital services shall
be set by the board as follows:
(A) Fifty dollars ($50) for outpatient emergency room services.
The copayment shall be waived if the subscriber is hospitalized.
(B) One hundred dollars ($100) for each hospital inpatient day up
to a maximum of two hundred dollars ($200) per admission.
(2) The changes made to the copayments in paragraph (1) shall not
increase the maximum annual copayment of two hundred fifty dollars
($250) per family described in subdivision (a).
(3) The changes made to the copayments in paragraph (1) shall be
implemented only if, and to the extent that, both of the following
occur:
(A) The state receives prior federal authorization to implement
the copayments in the form of an approved amendment to the state plan
under Title XXI of the federal Social Security Act or a waiver of
one or more requirements of Title XXI of the federal Social Security
Act.
(B) The state receives prior federal authorization for, and
implements, copayments in the same amounts for all children enrolled
in the Medi-Cal program through an approved amendment to the state
plan under Title XIX of the federal Social Security Act or a waiver
of one or more requirements of Title XIX of the federal Social
Security Act.
(4) Notwithstanding paragraph (1), the state shall not implement
the copayments otherwise required by this subdivision at an earlier
date than the state implements copayments in the same amounts for all
children in the Medi-Cal program.
(5) The adoption and readoption, by the Managed Risk Medical
Insurance Board, of regulations to implement the changes made to this
section by the act that added this subdivision, shall be deemed to
be an emergency and necessary to avoid serious harm to the public
peace, health, 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. 2. Section 12693.65 of the Insurance Code is amended to read:
12693.65. (a) Vision benefits shall be provided to subscribers
and shall meet the federal coverage requirements in Section 2103 of
Title XXI of the Social Security Act.
(b) The covered benefits shall be equivalent to those provided to
state employees through the Department of Personnel Administration,
except for tinted lenses and also photochromatic lenses, unless
otherwise deemed medically necessary.
(c) The board shall establish the required subscriber copayment
levels for vision benefits consistent with the limitations of Section
2103 of Title XXI of the Social Security Act. The copayment levels
established by the board shall, to the extent possible, reflect the
copayment levels provided to state employees through the Department
of Personnel Administration.
(d) From March 1, 2011, to June 30, 2012, inclusive, the adoption
and readoption, by the board, of regulations to modify vision
benefits pursuant to this section, including, but not limited to,
restriction of providers through which covered vision benefits may be
obtained, restriction of benefits for services from nonparticipating
providers, or restriction of products and materials provided as
benefits pursuant to this section, shall be deemed to be an emergency
and necessary to avoid serious harm to the public peace, health,
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. 90. 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 in central and southern California counties pursuant to the
Plan for the Closure of Lanterman Developmental Center, whose
individual program plans document the need for coordinated medical
and specialty care that cannot be met using the traditional Medi-Cal
fee-for-service system, services provided under the contract shall be
provided by Medi-Cal managed care health plans that are currently
operational in these counties. For consumers transitioning from
Agnews Developmental Center, the Medi-Cal managed care health plan
shall be a county organized health system or a local initiative if
consumers, where applicable, choose to enroll. For consumers
transitioning from Lanterman Developmental Center, the Medi-Cal
managed care health plan shall be any plan operating in the various
counties if consumers choose to enroll or, where applicable, are
enrolled by mandate pursuant to Section 14182. 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) (1) Medi-Cal managed care health plans enrolling consumers
transitioning from Agnews Developmental Center as referred to in
subdivision (a) shall be further reimbursed for the reasonable cost
of administrative services.
(2) Notwithstanding subdivision (c), Medi-Cal managed care health
plans enrolling consumers transitioning from Lanterman Developmental
Center as referred to in subdivision (a) shall be paid a full-risk
capitation payment.
(3) "Administrative services" pursuant to this subdivision
include, but are not limited to, coordination of care and case
management not provided by a regional center, provider credentialing
and contracting, quality oversight, assuring member access to covered
services, consultation with Agnews Developmental Center staff,
regional center staff, State Department of Developmental Services
staff, contractors, and family members, and financial management of
the program, including claims processing. "Reasonable cost" means 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" means 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, subdivisions (a)
to (c), inclusive, shall be implemented only to the extent that
federal financial participation is available pursuant to necessary
federal approvals.
SEC. 91. Section 14007.9 of the Welfare and Institutions Code, as
amended by Section 1 of Chapter 282 of the Statutes of 2009, is
amended to read:
14007.9. (a) (1) The department shall adopt the option made
available under Section 1902(a)(10)(A)(ii)(XIII) of the federal
Social Security Act (42 U.S.C. Sec. 1396a(a)(10)(A)(ii)(XIII)). In
order to be eligible for benefits under this section, an individual
shall be required to meet all of the following requirements:
(A) His or her net countable income is less than 250 percent of
the federal poverty level for one person or, if the deeming of
spousal income applies to the individual, his or her net countable
income is less than 250 percent of the federal poverty level for two
persons.
(B) He or she is disabled under Title II of the federal Social
Security Act (42 U.S.C. Sec. 401 et seq.), Title XVI of the federal
Social Security Act (42 U.S.C. Sec. 1381 et seq.), or Section 1902(v)
of the federal Social
Security Act (42 U.S.C. Sec. 1396a(v)). An individual shall be
determined to be eligible under this section without regard to his or
her ability to engage in, or actual engagement in, substantial
gainful activity, as defined in Section 223(d)(4) of the federal
Social Security Act (42 U.S.C. Sec. 423(d)(4)).
(C) Except as otherwise provided in this section, his or her net
nonexempt resources, which shall be determined in accordance with the
methodology used under Title XVI of the federal Social Security Act
(42 U.S.C. Sec. 1381 et seq.), are not in excess of the limits
provided for under those provisions.
(2) To the extent federal financial participation is available, an
individual otherwise eligible under this section, but who is
temporarily unemployed, may elect to remain on Medi-Cal under this
section for up to 26 weeks, provided the individual continues to pay
premiums during the temporary period of unemployment.
(b) (1) Countable income shall be determined under Section 1612 of
the federal Social Security Act (42 U.S.C. Sec. 1382a), except that
the individual's disability income, including all federal and state
disability benefits and private disability insurance, shall be
exempted. Resources excluded under Section 1613 of the federal Social
Security Act (42 U.S.C. Sec. 1382b) shall be disregarded.
(2) Resources in the form of employer or individual retirement
arrangements authorized under the Internal Revenue Code shall be
exempted as authorized by Section 1902(r) of the federal Social
Security Act (42 U.S.C. Sec. 1396a(r)).
(3) (A) For the purposes of calculating countable income under
this section, an income exemption shall be applied as necessary to
adjust the income standard so that it is the same as the income
standard that was in place on May 1, 2009.
(B) This additional income exemption shall cease to be implemented
when the SSI/SSP program payment levels increase beyond those in
effect on May 1, 2009.
(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 implement this paragraph by means of an all-county
letter or similar instruction without taking regulatory action.
(4) Retained earned income of an eligible individual who is
receiving health care benefits under this section shall be considered
an exempt resource when held in a separately identifiable account
and not commingled with other resources, as authorized by Section
1902(r)(2) of the federal Social Security Act (42 U.S.C. Sec. 1396a
(r)(2)).
(5) Social security disability income that converts to social
security retirement income upon the retirement of an individual,
including any increases in the amount of that income, shall be
exempt. The department shall submit a state plan amendment for this
specific exemption, and the exemption shall be implemented only if,
and to the extent that, the state plan amendment is approved.
(c) All resources exempted pursuant to paragraph (2) of
subdivision (b) for an individual who is receiving health care
benefits under this section shall continue to be exempt under any
other Medi-Cal program that is subject to Section 1902(r)(2) of the
federal Social Security Act (42 U.S.C. Sec. 1396a(r)(2)) under which
the beneficiary later becomes eligible for medical assistance where
that eligibility is based on age, blindness, or disability. The
department shall submit a state plan amendment for this specific
exemption, and the exemption shall be implemented only if, and to the
extent that, the state plan amendment is approved.
(d) After an individual is determined eligible for Medi-Cal
benefits under this section, the individual's countable income, as
determined under Section 1612 of the federal Social Security Act (42
U.S.C. Sec. 1382a), shall be used to determine the amount of the
individual's required premium payment, as described in subdivision
(f). Disability income and converted retirement income made exempt
under paragraphs (1) and (5), respectively, of subdivision (b) for
eligibility purposes shall be considered countable income for
purposes of determining the amount of the required premium payment.
(e) Medi-Cal benefits provided under this chapter pursuant to this
section shall be available in the same amount, duration, and scope
as those benefits are available for persons who are eligible for
Medi-Cal benefits as categorically needy persons and as specified in
Section 14007.5.
(f) (1) Individuals eligible for Medi-Cal benefits under this
section shall be subject to the payment of premiums determined under
this subdivision. Each individual shall pay a monthly premium that is
equal to 5 percent of his or her individual countable income, as
described in subdivision (d), or if the deeming of spousal income of
an ineligible spouse applies, a monthly premium that is equal to 5
percent of the total countable income of both spouses, except that
the minimum premium payment per eligible individual shall be twenty
dollars ($20) per month, and the maximum premium payment per eligible
individual shall be two hundred fifty dollars ($250) per month.
(2) The amendments made to this subdivision by Chapter 282 of the
Statutes of 2009 shall be implemented no later than 90 days after the
operative date specified in paragraph (2) of subdivision (k).
(g) In order to implement the collection of premiums under this
section, the department may develop and execute a contract with a
public or private entity to collect premiums, or may amend any
existing or future premium-collection contract that it has executed.
Notwithstanding any other provision of law, any contract developed
and executed or amended pursuant to this subdivision is exempt from
the approval of the Director of General Services and from the Public
Contract Code.
(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 shall implement, without taking
any regulatory action, this section by means of an all-county letter
or similar instruction. 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.
(i) Notwithstanding any other law, this section shall be
implemented only if, and to the extent that, the department
determines that federal financial participation is available pursuant
to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396
et seq.) and only to the extent that the department seeks and
obtains approval of all necessary Medicaid state plan amendments.
(j) If any provision of this section, or its application, is held
invalid by a final judicial determination, it shall cease to be
implemented. A determination of invalidity shall not affect other
provisions or applications of this section that can be given effect
without the implementation of the invalid provision or application.
(k) (1) Except as provided in paragraph (2), the amendments made
to this section by Chapter 282 of the Statutes of 2009 shall not
become operative until 30 days after the date that the increase in
the state's federal medical assistance percentage (FMAP) pursuant to
the federal American Recovery and Reinvestment Act of 2009 (Public
Law 111-5) is no longer available under that act or any extension of
that act.
(2) The amendments made to this section by Chapter 282 of the
Statutes of 2009 contained in subdivisions (d) and (f) shall not
become operative until 30 days after the date that the director
executes a declaration stating that the implementation of
subdivisions (d) and (f) will not jeopardize the state's ability to
receive federal financial participation under the federal Patient
Protection and Affordable Care Act (Public Law 111-148) or any
amendment or extension of that act, any increase in the FMAP
available on or after October 1, 2008, or any additional federal
funds that the director, in consultation with the Department of
Finance, determines would be advantageous to the state.
(3) If at any time the director determines that the statement in
the declaration executed pursuant to paragraph (2) may no longer be
accurate, the director shall give notice to the Joint Legislative
Budget Committee and to the Department of Finance. After giving
notice, the amendments made to this section by Chapter 282 of the
Statutes of 2009 contained in subdivisions (d) and (f) shall become
inoperative on the date that the director executes a declaration
stating that the department has determined, in consultation with the
Department of Finance, that it is necessary to cease to implement
subdivisions (d) and (f) in order to receive federal financial
participation, any increase in the FMAP available on or after October
1, 2008, or any additional federal funds that the director, in
consultation with the Department of Finance, has determined would be
advantageous to the state, in which case, subdivision (d) of this
section, as stated by Section 32 of Chapter 5 of the Fourth
Extraordinary Session of the Statutes of 2009, shall be operative.
(4) The director shall post a declaration made pursuant to
paragraph (2) or (3) on the department's Internet Web site and the
director shall send the declaration to the Secretary of State, the
Secretary of the Senate, the Chief Clerk of the Assembly, and the
Legislative Counsel.
(l) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement subdivision (k) by means of all-county
letters or similar instruction, without taking regulatory action.
SEC. 92. 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) of this chapter, 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,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 93. Section 14105.07 is added to the Welfare and Institutions
Code, to read:
14105.07. (a) The Legislature finds and declares all of the
following:
(1) Costs within the Medi-Cal program continue to grow due to the
rising cost of providing health care throughout the state and also
due to increases in enrollment, which are more pronounced during
difficult economic times.
(2) In order to minimize the need for drastically cutting
enrollment standards or benefits during times of economic crisis, it
is crucial to find areas within the program where reimbursement
levels are higher than required under the standard provided in
Section 1902(a)(30)(A) of the federal Social Security Act and can be
reduced in accordance with federal law.
(3) The Medi-Cal program delivers its services and benefits to
Medi-Cal beneficiaries through a wide variety of health care
providers, some of which deliver care via managed care or other
contract models while others do so through fee-for-service
arrangements.
(4) The setting of rates within the Medi-Cal program is complex
and is subject to close supervision by the United States Department
of Health and Human Services.
(5) As the single state agency for Medicaid in California, the
State Department of Health Care Services has unique expertise that
can inform decisions that set or adjust reimbursement methodologies
and levels consistent with the requirements of federal law.
(b) Therefore, it is the intent of the Legislature for the
department to analyze and identify where reimbursement levels can be
reduced consistent with the standard provided in Section 1902(a)(30)
(A) of the federal Social Security Act and also consistent with
federal and state law and policies, including any exemptions
contained in the act that added this section, provided that the
reductions in reimbursement shall not exceed 10 percent on an
aggregate basis for all providers, services, and products.
(c) (1) Notwithstanding any other provision of law and except as
provided in paragraphs (2), (3), and (4), for dates of service on and
after June 1, 2011, payments to intermediate care facilities for the
developmentally disabled, licensed pursuant to subdivision (e), (g),
or (h) of Section 1250 of the Health and Safety Code, and facilities
providing continuous skilled nursing care to developmentally
disabled individuals pursuant to the pilot project established by
Section 14132.20, as determined by the applicable methodology for
setting reimbursement rates for these facilities, shall not exceed
the reimbursement rates that were applicable to those providers in
the 2008-09 rate year, reduced by 10 percent.
(2) Notwithstanding any other provision of law, the director may
adjust the percentage reductions specified in paragraph (1), as long
as the resulting reductions, in the aggregate, total no more than 10
percent.
(3) The adjustments authorized under this subdivision shall be
implemented only if the director determines that the payments
resulting from the adjustments comply with subdivision (d).
(4) Payments to facilities owned or operated by the state shall be
exempt from the payment reduction as required in paragraph (1).
(d) (1) Notwithstanding any other provision of this section, the
payment reductions and adjustments required by subdivision (c) shall
be implemented only if the director determines that the payments that
result from the application of subdivision (c) will comply with
applicable federal Medicaid requirements and that federal financial
participation will be available.
(2) In determining whether federal financial participation is
available, the director shall determine whether the payments 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 payments
do not comply with applicable federal Medicaid requirements or that
federal financial participation is not available with respect to any
payment that is reduced pursuant to this section, the director
retains the discretion to not implement the particular payment
reduction or adjustment and may adjust the payment as necessary to
comply with federal Medicaid requirements.
(4) The director shall seek any necessary federal approvals for
the implementation of this section. This section shall not be
implemented until federal approval is obtained. When federal approval
is obtained, the payments resulting from the application of
subdivision (c) shall be implemented retroactively to June 1, 2011,
or on any other date or dates as may be applicable.
(e) For managed care health plans that contract with the
department pursuant to this chapter and Chapter 8 (commencing with
Section 14200), except for contracts with the Senior Care Action
Network and AIDS Healthcare Foundation, and to the extent that these
services are provided through any of those contracts, payments shall
be reduced by the actuarial equivalent amount of the reduced provider
reimbursements specified in subdivision (c) pursuant to contract
amendments or change orders effective on July 1, 2011, or thereafter.
SEC. 93.2. Section 14105.191 of the Welfare and Institutions Code
is amended to read:
14105.191. (a) Notwithstanding any other provision of law, in
order to implement changes in the level of funding for health care
services, the director shall reduce provider payments, as specified
in this section.
(b) (1) Except as otherwise provided in this section, payments
shall be reduced by 1 percent for Medi-Cal fee-for-service benefits
for dates of service on and after March 1, 2009.
(2) Except as provided in subdivision (d), for dates of service on
and after March 1, 2009, payments to the following classes of
providers shall be reduced by 5 percent for Medi-Cal fee-for-service
benefits:
(A) Intermediate care facilities, excluding those facilities
identified in paragraph (5) of subdivision (d). For purposes of this
section, "intermediate care facility" has the same meaning as defined
in Section 51118 of Title 22 of the California Code of Regulations.
(B) Skilled nursing facilities that are distinct parts of general
acute care hospitals. For purposes of this section, "distinct part"
has the same meaning as defined in Section 72041 of Title 22 of the
California Code of Regulations.
(C) Rural swing-bed facilities.
(D) Subacute care units that are, or are parts of, distinct parts
of general acute care hospitals. For purposes of this subparagraph,
"subacute care unit" has the same meaning as defined in Section
51215.5 of Title 22 of the California Code of Regulations.
(E) Pediatric subacute care units that are, or are parts of,
distinct parts of general acute care hospitals. For purposes of this
subparagraph, "pediatric subacute care unit" has the same meaning as
defined in Section 51215.8 of Title 22 of the California Code of
Regulations.
(F) Adult day health care centers.
(3) Except as provided in subdivision (d), for dates of service on
and after March 1, 2009, Medi-Cal fee-for-service payments to
pharmacies shall be reduced by 5 percent.
(4) Except as provided in subdivision (d), payments shall be
reduced by 1 percent for non-Medi-Cal programs described in Article 6
(commencing with Section 124025) of Chapter 3 of Part 2 of Division
106 of the Health and Safety Code, and Section 14105.18, for dates of
service on and after March 1, 2009.
(5) For managed health care plans that contract with the
department pursuant to this chapter, Chapter 8 (commencing with
Section 14200), and Chapter 8.75 (commencing with Section 14590),
payments shall be reduced by the actuarial equivalent amount of the
payment reductions specified in this subdivision pursuant to contract
amendments or change orders effective on July 1, 2008, or
thereafter.
(c) Notwithstanding any other provision of this section, payments
to hospitals that are not under contract with the State Department of
Health Care Services pursuant to Article 2.6 (commencing with
Section 14081) for inpatient hospital services provided to Medi-Cal
beneficiaries and that are subject to Section 14166.245 shall be
governed by that section.
(d) To the extent applicable, the services, facilities, and
payments listed in this subdivision shall be exempt from the payment
reductions specified in subdivision (b):
(1) Acute hospital inpatient services that are paid under
contracts pursuant to Article 2.6 (commencing with Section 14081).
(2) Federally qualified health center services, including those
facilities deemed to have federally qualified health center status
pursuant to a waiver pursuant to subsection (a) of Section 1115 of
the federal Social Security Act (42 U.S.C. Sec. 1315(a)).
(3) Rural health clinic services.
(4) Skilled nursing facilities licensed pursuant to subdivision
(c) of Section 1250 of the Health and Safety Code other than those
specified in paragraph (2) of subdivision (b).
(5) Intermediate care facilities for the developmentally disabled
licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of
the Health and Safety Code, or facilities providing continuous
skilled nursing care to developmentally disabled individuals pursuant
to the pilot project established by Section 14495.10.
(6) Payments to facilities owned or operated by the State
Department of Mental Health or the State Department of Developmental
Services.
(7) Hospice services.
(8) Contract services, as designated by the director pursuant to
subdivision (g).
(9) Payments to providers to the extent that the payments are
funded by means of a certified public expenditure or an
intergovernmental transfer pursuant to Section 433.51 of Title 42 of
the Code of Federal Regulations.
(10) Services pursuant to local assistance contracts and
interagency agreements to the extent the funding is not included in
the funds appropriated to the department in the annual Budget Act.
(11) Payments to Medi-Cal managed care plans pursuant to Section
4474.5 for services to consumers transitioning from Agnews
Developmental Center into the Counties of Alameda, San Mateo, and
Santa Clara pursuant to the Plan for the Closure of Agnews
Developmental Center.
(12) Breast and cervical cancer treatment provided pursuant to
Section 14007.71 and as described in paragraph (3) of subdivision (a)
of Section 14105.18 or Article 1.5 (commencing with Section 104160)
of Chapter 2 of Part 1
of Division 103 of the Health and Safety Code.
(13) The Family Planning, Access, Care, and Treatment (Family
PACT) Waiver Program pursuant to subdivision (aa) of Section 14132.
(14) Small and rural hospitals, as defined in Section 124840 of
the Health and Safety Code.
(e) Subject to the exemptions listed in subdivision (d), the
payment reductions required by paragraph (1) of subdivision (b) shall
apply to the benefits rendered by any provider who may be authorized
to bill for provision of the benefit, including, but not limited to,
physicians, podiatrists, nurse practitioners, certified nurse
midwives, nurse anesthetists, and organized outpatient clinics.
(f) (1) Notwithstanding any other provision of law, Medi-Cal
reimbursement rates applicable to the classes of providers identified
in paragraph (2) of subdivision (b), for services rendered during
the 2009-10 rate year and each rate year thereafter, shall not exceed
the reimbursement rates that were applicable to those classes of
providers in the 2008-09 rate year.
(2) In addition to the classes of providers described in paragraph
(1), Medi-Cal reimbursement rates applicable to the following
classes of facilities for services rendered during the 2009-10 rate
year, and each rate year thereafter, shall not exceed the
reimbursement rates that were applicable to those facilities and
services in the 2008-09 rate year:
(A) Facilities identified in paragraph (5) of subdivision (d).
(B) Freestanding pediatric subacute care units, as defined in
Section 51215.8 of Title 22 of the California Code of Regulations.
(3) Paragraphs (1) and (2) shall not apply to providers that are
paid pursuant to Article 3.8 (commencing with Section 14126), or to
services, facilities, and payments specified in subdivision (d), with
the exception of facilities described in paragraph (5) of
subdivision (d).
(4) The limitation set forth in this subdivision shall be applied
only after the reductions in paragraph (2) of subdivision (b) have
been made.
(g) 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 and administer this section by means of
provider bulletins, or similar instructions, without taking
regulatory action.
(h) The reductions and limitations described in this section shall
apply only to payments for benefits when the General Fund share of
the payment is paid with funds directly appropriated to the
department in the annual Budget Act, and shall not apply to payments
for benefits paid with funds appropriated to other departments or
agencies.
(i) The department shall promptly seek any necessary federal
approvals for the implementation of this section. To the extent that
federal financial participation is not available with respect to any
payment that is reduced or limited pursuant to this section, the
director may elect not to implement that reduction or limitation.
(j) This section shall become inoperative for dates of service on
and after June 1, 2011, and shall, on July 1, 2014, be repealed.
SEC. 93.5. Section 14105.192 is added to the Welfare and
Institutions Code, to read:
14105.192. (a) The Legislature finds and declares the following:
(1) Costs within the Medi-Cal program continue to grow due to the
rising cost of providing health care throughout the state and also
due to increases in enrollment, which are more pronounced during
difficult economic times.
(2) In order to minimize the need for drastically cutting
enrollment standards or benefits during times of economic crisis, it
is crucial to find areas within the program where reimbursement
levels are higher than required under the standard provided in
Section 1902(a)(30)(A) of the federal Social Security Act and can be
reduced in accordance with federal law.
(3) The Medi-Cal program delivers its services and benefits to
Medi-Cal beneficiaries through a wide variety of health care
providers, some of which deliver care via managed care or other
contract models while others do so through fee-for-service
arrangements.
(4) The setting of rates within the Medi-Cal program is complex
and is subject to close supervision by the United States Department
of Health and Human Services.
(5) As the single state agency for Medicaid in California, the
department has unique expertise that can inform decisions that set or
adjust reimbursement methodologies and levels consistent with the
requirements of federal law.
(b) Therefore, it is the intent of the Legislature for the
department to analyze and identify where reimbursement levels can be
reduced consistent with the standard provided in Section 1902(a)(30)
(A) of the federal Social Security Act and consistent with federal
and state law and policies, including any exemptions contained in the
provisions of the act that added this section, provided that the
reductions in reimbursement shall not exceed 10 percent on an
aggregate basis for all providers, services and products.
(c) Notwithstanding any other provision of law, the director shall
adjust provider payments, as specified in this section.
(d) (1) Except as otherwise provided in this section, payments
shall be reduced by 10 percent for Medi-Cal fee-for-service benefits
for dates of service on and after June 1, 2011.
(2) For managed health care plans that contract with the
department pursuant to this chapter or Chapter 8 (commencing with
Section 14200), except contracts with Senior Care Action Network and
AIDS Healthcare Foundation, payments shall be reduced by the
actuarial equivalent amount of the payment reductions specified in
this section pursuant to contract amendments or change orders
effective on July 1, 2011, or thereafter.
(3) Payments shall be reduced by 10 percent for non-Medi-Cal
programs described in Article 6 (commencing with Section 124025) of
Chapter 3 of Part 2 of Division 106 of the Health and Safety Code,
and Section 14105.18, for dates of service on and after June 1, 2011.
This paragraph shall not apply to inpatient hospital services
provided in a hospital that is paid under contract pursuant to
Article 2.6 (commencing with Section 14081).
(4) (A) Notwithstanding any other provision of law, the director
may adjust the payments specified in paragraphs (1) and (3) of this
subdivision with respect to one or more categories of Medi-Cal
providers, or for one or more products or services rendered, or any
combination thereof, so long as the resulting reductions to any
category of Medi-Cal providers, in the aggregate, total no more than
10 percent.
(B) The adjustments authorized in subparagraph (A) shall be
implemented only if the director determines that, for each affected
product, service or provider category, the payments resulting from
the adjustment comply with subdivision (m).
(e) Notwithstanding any other provision of this section, payments
to hospitals that are not under contract with the State Department of
Health Care Services pursuant to Article 2.6 (commencing with
Section 14081) for inpatient hospital services provided to Medi-Cal
beneficiaries and that are subject to Section 14166.245 shall be
governed by that section.
(f) Notwithstanding any other provision of this section, the
following shall apply:
(1) Payments to providers that are paid pursuant to Article 3.8
(commencing with Section 14126) shall be governed by that article.
(2) (A) Subject to subparagraph (B), for dates of service on and
after June 1, 2011, Medi-Cal reimbursement rates for intermediate
care facilities for the developmentally disabled licensed pursuant to
subdivision (e), (g), or (h) of Section 1250 of the Health and
Safety Code, and facilities providing continuous skilled nursing care
to developmentally disabled individuals pursuant to the pilot
project established by Section 14132.20, as determined by the
applicable methodology for setting reimbursement rates for these
facilities, shall not exceed the reimbursement rates that were
applicable to providers in the 2008-09 rate year.
(B) (i) If Section 14105.07 is added to the Welfare and
Institutions Code during the 2011-12 Regular Session of the
Legislature, subparagraph (A) shall become inoperative.
(ii) If Section 14105.07 is added to the Welfare and Institutions
Code during the 2011-12 Regular Session of the Legislature, then for
dates of service on and after June 1, 2011, payments to intermediate
care facilities for the developmentally disabled licensed pursuant to
subdivision (e), (g), or (h) of Section 1250 of the Health and
Safety Code, and facilities providing continuous skilled nursing care
to developmentally disabled individuals pursuant to the pilot
project established by Section 14132.20, shall be governed by the
applicable methodology for setting reimbursement rates for these
facilities and by Section 14105.07.
(g) The department may enter into contracts with a vendor for the
purposes of implementing this section on a bid or nonbid basis. In
order to achieve maximum cost savings, the Legislature declares that
an expedited process for contracts under this subdivision is
necessary. Therefore, contracts entered into to implement this
section and all contract amendments and change orders shall be exempt
from Chapter 2 (commencing with Section 10290) of Part 2 Division 2
of the Public Contract Code.
(h) To the extent applicable, the services, facilities, and
payments listed in this subdivision shall be exempt from the payment
reductions specified in subdivision (d) as follows:
(1) Acute hospital inpatient services that are paid under
contracts pursuant to Article 2.6 (commencing with Section 14081).
(2) Federally qualified health center services, including those
facilities deemed to have federally qualified health center status
pursuant to a waiver pursuant to subsection (a) of Section 1115 of
the federal Social Security Act (42 U.S.C. Sec. 1315(a)).
(3) Rural health clinic services.
(4) Payments to facilities owned or operated by the State
Department of Mental Health or the State Department of Developmental
Services.
(5) Hospice services.
(6) Contract services, as designated by the director pursuant to
subdivision (k).
(7) Payments to providers to the extent that the payments are
funded by means of a certified public expenditure or an
intergovernmental transfer pursuant to Section 433.51 of Title 42 of
the Code of Federal Regulations. This paragraph shall apply to
payments described in paragraph (3) of subdivision (d) only to the
extent that they are also exempt from reduction pursuant to
subdivision (l).
(8) Services pursuant to local assistance contracts and
interagency agreements to the extent the funding is not included in
the funds appropriated to the department in the annual Budget Act.
(9) Breast and cervical cancer treatment provided pursuant to
Section 14007.71 and as described in paragraph (3) of subdivision (a)
of Section 14105.18 or Article 1.5 (commencing with Section 104160)
of Chapter 2 of Part 1 of Division 103 of the Health and Safety Code.
(10) The Family Planning, Access, Care, and Treatment (Family
PACT) Program pursuant to subdivision (aa) of Section 14132.
(i) Subject to the exception for services listed in subdivision
(h), the payment reductions required by subdivision (d) shall apply
to the benefits rendered by any provider who may be authorized to
bill for the service, including, but not limited to, physicians,
podiatrists, nurse practitioners, certified nurse-midwives, nurse
anesthetists, and organized outpatient clinics.
(j) Notwithstanding any other provision of law, for dates of
service on and after June 1, 2011, Medi-Cal reimbursement rates
applicable to the following classes of providers shall not exceed the
reimbursement rates that were applicable to those classes of
providers in the 2008-09 rate year, as described in subdivision (f)
of Section 14105.91, reduced by 10 percent:
(1) Intermediate care facilities, excluding those facilities
identified in paragraph (2) of subdivision (f). For purposes of this
section, "intermediate care facility" has the same meaning as defined
in Section 51118 of Title 22 of the California Code of Regulations.
(2) Skilled nursing facilities that are distinct parts of general
acute care hospitals. For purposes of this section, "distinct part"
has the same meaning as defined in Section 72041 of Title 22 of the
California Code of Regulations.
(3) Rural swing-bed facilities.
(4) Subacute care units that are, or are parts of, distinct parts
of general acute care hospitals. For purposes of this subparagraph,
"subacute care unit" has the same meaning as defined in Section
51215.5 of Title 22 of the California Code of Regulations.
(5) Pediatric subacute care units that are, or are parts of,
distinct parts of general acute care hospitals. For purposes of this
subparagraph, "pediatric subacute care unit" has the same meaning as
defined in Section 51215.8 of Title 22 of the California Code of
Regulations.
(6) Adult day health care centers.
(7) Freestanding pediatric subacute care units, as defined in
Section 51215.8 of Title 22 of the California Code of Regulations.
(k) 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 and administer this section by means of
provider bulletins, or similar instructions, without taking
regulatory action.
(l) The reductions described in this section shall apply only to
payments for services when the General Fund share of the payment is
paid with funds directly appropriated to the department in the annual
Budget Act and shall not apply to payments for services paid with
funds appropriated to other departments or agencies.
(m) Notwithstanding any other provision of this section, the
payment reductions and adjustments provided for in subdivision (d)
shall be implemented only if the director determines that the
payments that result from the application of this section will comply
with applicable federal Medicaid requirements and that federal
financial participation will be available.
(1) In determining whether federal financial participation is
available, the director shall determine whether the payments comply
with applicable federal Medicaid requirements, including those set
forth in Section 1396a(a)(30)(A) of Title 42 of the United States
Code.
(2) To the extent that the director determines that the payments
do not comply with the federal Medicaid requirements or that federal
financial participation is not available with respect to any payment
that is reduced pursuant to this section, the director retains the
discretion to not implement the particular payment reduction or
adjustment and may adjust the payment as necessary to comply with
federal Medicaid requirements.
(n) The department shall seek any necessary federal approvals for
the implementation of this section.
(o) This section shall not be implemented until federal approval
is obtained. When federal approval is obtained, the payments
resulting from the application of subdivision (d) shall be
implemented retroactively to June 1, 2011, or on such other date or
dates as may be applicable.
SEC. 94. Section 14105.31 of the Welfare and Institutions Code is
amended to read:
14105.31. For purposes of the Medi-Cal contract drug list, the
following definitions shall apply:
(a) "Single-source drug" means a drug that is produced and
distributed under an original New Drug Application approved by the
federal Food and Drug Administration. This shall include a drug
marketed by the innovator manufacturer and any cross-licensed
producers or distributors operating under the New Drug Application,
and shall also include a biological product, except for vaccines,
marketed by the innovator manufacturer and any cross-licensed
producers or distributors licensed by the federal Food and Drug
Administration pursuant to Section 262 of Title 42 of the United
States Code. A drug ceases to be a single-source drug when the same
drug in the same dosage form and strength manufactured by another
manufacturer is approved by the federal Food and Drug Administration
under the provisions for an Abbreviated New Drug Application.
(b) "Best price" means the negotiated price, or the manufacturer's
lowest price available to any class of trade organization or entity,
including, but not limited to, wholesalers, retailers, hospitals,
repackagers, providers, or governmental entities within the United
States, that contracts with a manufacturer for a specified price for
drugs, inclusive of cash discounts, free goods, volume discounts,
rebates, and on- or off-invoice discounts or credits, shall be based
upon the manufacturer's commonly used retail package sizes for the
drug sold by wholesalers to retail pharmacies.
(c) "Manufacturer" means any person, partnership, corporation, or
other institution or entity that is engaged in the production,
preparation, propagation, compounding, conversion, or processing of
drugs, either directly or indirectly by extraction from substances of
natural origin, or independently by means of chemical synthesis, or
by a combination of extraction and chemical synthesis, or in the
packaging, repackaging, labeling, relabeling, and distribution of
drugs.
(d) "Price escalator" means a mutually agreed upon price specified
in the contract, to cover anticipated cost increases over the life
of the contract.
(e) "Medi-Cal pharmacy costs" or "Medi-Cal drug costs" means all
reimbursements to pharmacy providers for services or merchandise,
including single-source or multiple-source prescription drugs,
over-the-counter medications, and medical supplies, or any other
costs billed by pharmacy providers under the Medi-Cal program.
(f) "Medicaid rebate" means the rebate payment made by drug
manufacturers pursuant to Section 1927 of the federal Social Security
Act (42 U.S.C. Sec. 1396r-8).
(g) "State rebate" means the amount negotiated between the
manufacturer and the department for reimbursement by the
manufacturer, as specified in the contract, in addition to the
Medicaid rebate.
(h) "Date of mailing" means the date that is evidenced by the
postmark date by the United States Postal Service or other common
mail carrier on the envelope.
SEC. 95. Section 14105.33 of the Welfare and Institutions Code is
amended to read:
14105.33. (a) The department may enter into contracts with
manufacturers of single-source and multiple-source drugs, on a bid or
nonbid basis, for drugs from each major therapeutic category, and
shall maintain a list of those drugs for which contracts have been
executed.
(b) (1) Contracts executed pursuant to this section shall be for
the manufacturer's best price, as defined in Section 14105.31, which
shall be specified in the contract, and subject to agreed-upon price
escalators, as defined in that section. The contracts shall provide
for a state rebate, as defined in Section 14105.31, to be remitted to
the department quarterly. The department shall submit an invoice to
each manufacturer for the state rebate, including supporting
utilization data from the department's prescription drug paid claims
tapes within 30 days of receipt of the federal Centers for Medicare
and Medicaid Services' file of manufacturer rebate information. In
lieu of paying the entire invoiced amount, a manufacturer may contest
the invoiced amount pursuant to procedures established by the
federal Centers for Medicare and Medicaid Services' Medicaid Drug
Rebate Program Releases or regulations by mailing a notice, that
shall set forth its grounds for contesting the invoiced amount, to
the department within 38 days of the department's mailing of the
state invoice and supporting utilization data. For purposes of state
accounting practices only, the contested balance shall not be
considered an accounts receivable amount until final resolution of
the dispute pursuant to procedures established by the federal Centers
for Medicare and Medicaid Services' Medicaid Drug Rebate Program
Releases or regulations that results in a finding of an underpayment
by the manufacturer. Manufacturers may request, and the department
shall timely provide, at cost, Medi-Cal provider level drug
utilization data, and other Medi-Cal utilization data necessary to
resolve a contested department-invoiced rebate amount.
(2) The department shall provide for an annual audit of
utilization data used to calculate the state rebate to verify the
accuracy of that data. The findings of the audit shall be documented
in a written audit report to be made available to manufacturers
within 90 days of receipt of the report from the auditor. Any
manufacturer may receive a copy of the audit report upon written
request. Contracts between the department and manufacturers shall
provide for any equalization payment adjustments determined necessary
pursuant to an audit.
(3) Utilization data used to determine the state rebate shall
exclude data from both of the following:
(A) Health maintenance organizations, as defined in Section 300e
(a) of Title 42 of the United States Code, including those
organizations that contract under Section 1396b(m) of Title 42 of the
United States Code.
(B) Capitated plans that include a prescription drug benefit in
the capitated rate, and that have negotiated contracts for rebates or
discounts with manufacturers.
(4) Except as provided in paragraph (3), utilization data used to
determine the state rebate shall include data from all programs that
qualify for federal drug rebates pursuant to Section 1927 of the
federal Social Security Act (42 U.S.C. Sec. 1396r-8) or that
otherwise qualify for federal funds under Title XIX of the federal
Social Security Act (42 U.S.C. Sec. 1396 et seq.) pursuant to the
Medicaid state plan or waivers.
(c) In order that Medi-Cal beneficiaries may have access to a
comprehensive range of therapeutic agents, the department shall
ensure that there is representation on the list of contract drugs in
all major therapeutic categories. Except as provided in subdivision
(a) of Section 14105.35, the department shall not be required to
contract with all manufacturers who negotiate for a contract in a
particular category. The department shall ensure that there is
sufficient representation of single-source and multiple-source drugs,
as appropriate, in each major therapeutic category.
(d) The department shall select the therapeutic categories to be
included on the list of contract drugs, and the order in which it
seeks contracts for those categories. The department may establish
different contracting schedules for single-source and multiple-source
drugs within a given therapeutic category.
(e) (1) In order to fully implement subdivision (d), the
department shall, to the extent necessary, negotiate or renegotiate
contracts to ensure there are as many single-source drugs within each
therapeutic category or subcategory as the department determines
necessary to meet the health needs of the Medi-Cal population. The
department may determine in selected therapeutic categories or
subcategories that no single-source drugs are necessary because there
are currently sufficient multiple-source drugs in the therapeutic
category or subcategory on the list of contract drugs to meet the
health needs of the Medi-Cal population. However, in no event shall a
beneficiary be denied continued use of a drug which is part of a
prescribed therapy in effect as of September 2, 1992, until the
prescribed therapy is no longer prescribed.
(2) In the development of decisions by the department on the
required number of single-source drugs in a therapeutic category or
subcategory, and the relative therapeutic merits of each drug in a
therapeutic category or subcategory, the department shall consult
with the Medi-Cal Contract Drug Advisory Committee. The committee
members shall communicate their comments and recommendations to the
department within 30 business days of a request for consultation, and
shall disclose any associations with pharmaceutical manufacturers or
any remuneration from pharmaceutical manufacturers.
(f) In order to achieve maximum cost savings, the Legislature
declares that an expedited process for contracts under this section
is necessary. Therefore, contracts entered into on a nonbid basis
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(g) In no event shall a beneficiary be denied continued use of a
drug that is part of a prescribed therapy in effect as of September
2, 1992, until the prescribed therapy is no longer prescribed.
(h) Contracts executed pursuant to this section shall be
confidential and shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(i) The department shall provide individual notice to Medi-Cal
beneficiaries at least 60 calendar days prior to the effective date
of the deletion or suspension of any drug from the list of contract
drugs. The notice shall include a description of the beneficiary's
right to a fair hearing and shall encourage the beneficiary to
consult a physician to determine if an appropriate substitute
medication is available from Medi-Cal.
(j) In carrying out the provisions of this section, the department
may contract either directly, or through the fiscal intermediary,
for pharmacy consultant staff necessary to initially accomplish the
treatment authorization request reviews.
(k) (1) Manufacturers shall calculate and pay interest on late or
unpaid rebates. The interest shall not apply to any prior period
adjustments of unit rebate amounts or department utilization
adjustments.
(2) For state rebate payments, manufacturers shall calculate and
pay interest on late or unpaid rebates for quarters that begin on or
after the effective date of the act that added this subdivision.
(3) Following final resolution of any dispute pursuant to
procedures established by the federal Centers for Medicare and
Medicaid Services' Medicaid Drug Rebate Program Releases or
regulations regarding the amount of a rebate, any underpayment by a
manufacturer shall be paid with interest calculated pursuant to
subdivisions (m) and (n), and any overpayment, together with interest
at the rate calculated pursuant to subdivisions (m) and (n), shall
be credited by the department against future rebates due.
(l) Interest pursuant to subdivision (k) shall begin accruing 38
calendar days from the date of mailing of the invoice, including
supporting utilization data sent to the manufacturer. Interest shall
continue to accrue until the date of mailing of
the manufacturer's payment.
(m) Except as specified in subdivision (n), interest rates and
calculations pursuant to subdivision (k) for Medicaid rebates and
state rebates shall be identical and shall be determined by the
federal Centers for Medicare and Medicaid Services' Medicaid Drug
Rebate Program Releases or regulations.
(n) If the date of mailing of a state rebate payment is 69 days or
more from the date of mailing of the invoice, including supporting
utilization data sent to the manufacturer, the interest rate and
calculations pursuant to subdivision (k) shall be as specified in
subdivision (m), however the interest rate shall be increased by 10
percentage points. This subdivision shall apply to payments for
amounts invoiced for any quarters that begin on or after the
effective date of the act that added this subdivision.
(o) If the rebate payment is not received, the department shall
send overdue notices to the manufacturer at 38, 68, and 98 days after
the date of mailing of the invoice, and supporting utilization data.
If the department has not received a rebate payment, including
interest, within 180 days of the date of mailing of the invoice,
including supporting utilization data, the manufacturer's contract
with the department shall be deemed to be in default and the contract
may be terminated in accordance with the terms of the contract. For
all other manufacturers, if the department has not received a rebate
payment, including interest, within 180 days of the date of mailing
of the invoice, including supporting utilization data, all of the
drug products of those manufacturers shall be made available only
through prior authorization effective 270 days after the date of
mailing of the invoice, including utilization data sent to
manufacturers.
(p) If the manufacturer provides payment or evidence of payment to
the department at least 40 days prior to the proposed date the drug
is to be made available only through prior authorization pursuant to
subdivision (o), the department shall terminate its actions to place
the manufacturers' drug products on prior authorization.
(q) The department shall direct the state's fiscal intermediary to
remove prior authorization requirements imposed pursuant to
subdivision (o) and notify providers within 60 days after payment by
the manufacturer of the rebate, including interest. If a contract was
in place at the time the manufacturers' drugs were placed on prior
authorization, removal of prior authorization requirements shall be
contingent upon good faith negotiations and a signed contract with
the department.
(r) A beneficiary may obtain drugs placed on prior authorization
pursuant to subdivision (o) if the beneficiary qualifies for
continuing care status. To be eligible for continuing care status, a
beneficiary must be taking the drug when its manufacturer is placed
on prior authorization status. Additionally, the department shall
have received a claim for the drug with a date of service that is
within 100 days prior to the date the manufacturer was placed on
prior authorization.
(s) A beneficiary may remain eligible for continuing care status,
provided that a claim is submitted for the drug in question at least
every 100 days and the date of service of the claim is within 100
days of the date of service of the last claim submitted for the same
drug.
(t) Drugs covered pursuant to Sections 14105.43 and 14133.2 shall
not be subject to prior authorization pursuant to subdivision (o),
and any other drug may be exempted from prior authorization by the
department if the director determines that an essential need exists
for that drug, and there are no other drugs currently available
without prior authorization that meet that need.
(u) It is the intent of the Legislature in enacting subdivisions
(k) to (t), inclusive, that the department and manufacturers shall
cooperate and make every effort to resolve rebate payment disputes
within 90 days of notification by the manufacturer to the department
of a dispute in the calculation of rebate payments.
SEC. 96. Section 14105.332 of the Welfare and Institutions Code is
amended to read:
14105.332. State and federal rebates that are owed to the state
for drugs dispensed to Medi-Cal beneficiaries shall not be reduced to
the state if a manufacturer reports, to the federal Centers for
Medicare and Medicaid Services or the department, a revised drug
product's average manufacturer price or best price as these terms are
defined pursuant to Section 1927 of the federal Social Security Act
(42 U.S.C. Sec. 1396r-8) for any calendar quarter in which the rebate
was due.
SEC. 97. Section 14105.34 of the Welfare and Institutions Code is
amended to read:
14105.34. (a) The department shall provide for an annual written
report of Medi-Cal pharmacy costs or Medi-Cal drug costs, as defined
in subdivision (e) of Section 14105.31.
(b) The annual report shall be consistent with the relevant
sections of the Quarterly Report of Expenditures for the Medi-Cal
Assistance Program, known as the CMS-64 Report, provided to the
federal Centers for Medicare and Medicaid Services. The report shall
include the following expenditure and receipt information:
(1) The total annual rebate amounts received by the department
pursuant to agreements with the federal Centers for Medicare and
Medicaid Services of the United States Department of Health and Human
Services.
(2) The total annual rebate amounts received pursuant to state
contracts with drug manufacturers.
(3) Total drug cost amounts upon which rebate payments were made.
SEC. 97.5. Section 14105.451 is added to the Welfare and
Institutions Code, to read:
14105.451. (a) (1) The Legislature finds and declares all of the
following:
(A) The United States Department of Health and Human Services has
identified the critical need for state Medicaid agencies to establish
pharmacy reimbursement rates based on a pricing benchmark that
reflects actual acquisition costs.
(B) The Medi-Cal program currently uses a methodology based on
average wholesale price.
(C) Investigations by the federal Office of Inspector General have
found that average wholesale price is inflated relative to average
acquisition cost.
(2) Therefore, it is the intent of the Legislature to enact
legislation by August 1, 2011, that provides for development of a new
reimbursement methodology that will enable the department to achieve
savings while continuing to reimburse pharmacy providers in
compliance with federal law.
(b) The department may require providers, manufacturers, and
wholesalers to submit any data the director determines necessary or
useful in preparing for the transition from a methodology based on
average wholesale price to a methodology based on actual acquisition
cost.
SEC. 98. Section 14126.033 of the Welfare and Institutions Code is
amended to read:
14126.033. (a) The Legislature finds and declares all of the
following:
(1) Costs within the Medi-Cal program continue to grow due to the
rising cost of providing health care throughout the state and also
due to increases in enrollment, which are more pronounced during
difficult economic times.
(2) In order to minimize the need for drastically cutting
enrollment standards or benefits during times of economic crisis, it
is crucial to find areas within the program where reimbursement
levels are higher than required under the standard provided in
Section 1902(a)(30)(A) of the federal Social Security Act and can be
reduced in accordance with federal law.
(3) The Medi-Cal program delivers its services and benefits to
Medi-Cal beneficiaries through a wide variety of health care
providers, some of which deliver care via managed care or other
contract models while others do so through fee-for-service
arrangements.
(4) The setting of rates within the Medi-Cal program is complex
and is subject to close supervision by the United States Department
of Health and Human Services.
(5) As the single state agency for Medicaid in California, the
State Department of Health Care Services has unique expertise that
can inform decisions that set or adjust reimbursement methodologies
and levels consistent with the requirements of federal law.
(b) Therefore, it is the intent of the Legislature for the
department to analyze and identify where reimbursement levels can be
reduced consistent with the standard provided in Section 1902(a)(30)
(A) of the federal Social Security Act and also consistent with
federal and state law and policies, including any exemptions
contained in the act that added this section, provided that the
reductions in reimbursement shall not exceed 10 percent on an
aggregate basis for all providers, services, and products.
(c) 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 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.
(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 mandates.
(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 Special 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.
(6) (A) (i) Notwithstanding any other provision of law, and except
as provided in subparagraphs (B), (C), and (D), payments resulting
from the application of paragraphs (3) and (4), the provisions of
paragraph (5), and all other applicable adjustments and limits as
required by this section, shall be reduced by 10 percent for dates of
service on and after June 1, 2011.
(ii) Notwithstanding any other provision of law, the director may
adjust the percentage reductions specified in clause (i), as long as
the resulting reductions, in the aggregate, total no more than 10
percent.
(iii) The adjustments authorized under this subparagraph shall be
implemented only if the director determines that the payments
resulting from the adjustments comply with paragraph (7).
(B) Notwithstanding any other provision of law, the 1 percent set
aside of the weighted average Medi-Cal reimbursement rate as required
by clause (i) of subparagraph (B) of paragraph (4) shall be exempt
from the payment reduction required by this paragraph.
(C) Notwithstanding any other provision of law, payments to
skilled nursing facilities pursuant to subdivision (m) of Section
14126.022 shall be exempt from the payment reduction required by this
paragraph.
(D) Payments to facilities owned or operated by the state shall be
exempt from the payment reduction required by this paragraph.
(7) (A) Notwithstanding any other provision of this section, the
payment reductions and adjustments required by paragraph (6) shall be
implemented only if the director determines that the payments that
result from the application of paragraph (6) will comply with
applicable federal Medicaid requirements and that federal financial
participation will be available.
(B) In determining whether federal financial participation is
available, the director shall determine whether the payments comply
with applicable federal Medicaid requirements, including those set
forth in Section 1396a(a)(30)(A) of Title 42 of the United States
Code.
(C) To the extent that the director determines that the payments
do not comply with applicable federal Medicaid requirements or that
federal financial participation is not available with respect to any
payment that is reduced pursuant to this section, the director
retains the discretion to not implement the particular payment
reduction or adjustment and may adjust the payment as necessary to
comply with federal Medicaid requirements.
(8) For managed care health plans that contract with the
department pursuant to this chapter and Chapter 8 (commencing with
Section 14200), except for contracts with the Senior Care Action
Network and AIDS Healthcare Foundation, and to the extent that these
services are provided through any of those contracts, payments shall
be reduced by the actuarial equivalent amount of the reduced provider
reimbursements specified in paragraph (6) pursuant to contract
amendments or change orders effective on July 1, 2011, or thereafter.
(9) The director shall seek any necessary federal approvals for
the implementation of this section. This section shall not be
implemented until federal approval is obtained. When federal approval
is obtained, the payments resulting from the application of
paragraph (6) shall be implemented retroactively to June 1, 2011, or
on any other date or dates as may be applicable.
(d) The rate methodology shall cease to be implemented after July
31, 2012.
(e) (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.
SEC. 99. Section 14126.036 is added to the Welfare and
Institutions Code, to read:
14126.036. This article shall become inoperative on August 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. 100. Section 14131.05 is added to the Welfare and
Institutions Code, to read:
14131.05. (a) Notwithstanding any other provision of this chapter
or Chapter 8 (commencing with Section 14200), optional hearing aid
benefits are subject to per beneficiary benefit cap amounts under the
Medi-Cal program.
(b) For the purposes of this section, "benefit cap amount" means
the maximum amount of Medi-Cal coverage for optional hearing aid
benefits as specified in subdivision (c), for each beneficiary, for
each fiscal year.
(c) Hearing aid benefits are subject to a benefit cap amount of
one thousand five hundred ten dollars ($1,510).
(d) Pregnancy-related benefits and benefits for the treatment of
other conditions that might complicate the pregnancy are not subject
to the benefit cap amount in subdivision (c).
(e) The benefit cap amount in subdivision (c) does not apply to
the following:
(1) Beneficiaries under the Early and Periodic Screening,
Diagnosis, and Treatment Program.
(2) Beneficiaries receiving long-term care in a nursing facility
that is both of the following:
(A) A skilled nursing facility or intermediate care facility as
defined in subdivisions (c), (d), (e), (g), and (h), respectively, of
Section 1250 of the Health and Safety Code, and facilities providing
continuous skilled nursing care to developmentally disabled
individuals pursuant to the program established by Section 14132.20.
(B) A licensed nursing facility pursuant to subdivision (k) of
Section 1250 of the Health and Safety Code.
(f) For managed care health plans that contract with the
department pursuant to this chapter or Chapter 8 (commencing with
Section 14200), except for contracts with the Senior Care Action
Network and AIDS Healthcare Foundation, payments for optional hearing
aid benefits shall be reduced by the actuarial equivalent amount of
the benefit reductions resulting from the implementation of the
benefit cap amount specified in this section pursuant to contract
amendments or change orders effective on July 1, 2011, or any date
thereafter.
(g) This section shall be implemented only to the extent permitted
by federal law.
(h) Notwithstanding 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),
the department may implement the provisions of this section by means
of all-county letters, provider bulletins, or similar instructions,
without taking further regulatory action.
(i) This section shall be implemented on the first day of the
first calendar month following 210 days after the effective date of
this section, or on the first day of the first calendar month
following 60 days after the date the department secures all necessary
federal approvals to implement this section, whichever is later. If
the implementation date occurs after July 1, 2011, then the benefit
cap described in subdivision (c) for the first year of implementation
shall be applied from the implementation date through June 30 of the
state fiscal year in which implementation commences. Thereafter, the
benefit cap shall apply on a state fiscal year basis.
SECTION 100.5. Section 14131.07 is added to the Welfare and
Institutions Code, to read:
14131.07. (a) Notwithstanding any other provision of this chapter
or Chapter 8 (commencing with Section 14200), the total number of
physician office and clinic visits for physician services provided by
a physician, or under the direction of a physician, that are a
covered benefit under the Medi-Cal program shall be limited to seven
visits per beneficiary per fiscal year, excepting visits that meet
the conditions set forth in subdivision (b). For purposes of this
limit, a visit shall include physician services provided at any
federally qualified health center, rural health clinic, community
clinic, outpatient clinic, and hospital outpatient department. The
department may seek input from consumer organizations and the
provider community, as applicable, prior to implementation.
(b) (1) Visits exceeding seven per beneficiary per fiscal year
shall be required to be certified by the physician, or other medical
professional under the supervision of a physician, attesting that one
or more of the following circumstances is applicable:
(A) The services will prevent deterioration in a beneficiary's
condition that would otherwise foreseeably result in admission to the
emergency department.
(B) The services will prevent deterioration in the beneficiary's
condition that would otherwise result in inpatient admission.
(C) The services will prevent disruption in ongoing medical
therapy or surgical therapy, or both, including, but not limited to,
medications, radiation, or wound management.
(D) The services constitute diagnostic workup in progress that
would otherwise foreseeably result in inpatient or emergency
department admission.
(E) The services are for the purpose of assessment and form
completion for Medi-Cal recipients seeking or receiving in-home
supportive services.
(2) The certification shall consist of a written declaration by
the physician, or other medical professional under the supervision of
the physician, that the visit meets the requirements of any one or
more of the circumstances set forth in paragraph (1), and shall
include a description of the services provided.
(3) The certification shall be maintained onsite at the physician'
s office or clinic location at which the medical records for the
beneficiary are maintained and shall be subject to audit and
inspection by the department.
(4) This subdivision does not authorize or direct a beneficiary to
obtain services at a physician office or clinic visit for an
emergency medical condition or that should properly be provided in
the emergency department or as hospital inpatient services.
(c) Specialty mental health services furnished or arranged for the
provision of mental health services to Medi-Cal beneficiaries
pursuant to Part 2.5 (commencing with Section 5775) of Division 5,
shall not be subject to the limit provided in subdivision (a).
(d) Any pregnancy-related visit, or any visit for the treatment of
any other condition that might complicate a pregnancy, shall not be
subject to the limit provided in subdivision (a).
(e) The limit on physician office and clinic visits provided in
subdivision (a) shall not apply to any of the following:
(1) A beneficiary under the Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) Program.
(2) A beneficiary receiving long-term care in a nursing facility
that is both of the following:
(A) A skilled nursing facility or intermediate care facility as
defined in subdivisions (c), (d), (e), (g), and (h), respectively, of
Section 1250 of the Health and Safety Code, and facilities providing
continuous skilled nursing care to persons with developmental
disabilities under the pilot project established pursuant to Section
14132.20.
(B) Licensed pursuant to subdivision (k) of Section 1250 of the
Health and Safety Code.
(f) For managed health care plans that contract with the
department pursuant to this chapter or Chapter 8 (commencing with
Section 14200), except for Senior Care Action Network or AIDS
Healthcare Foundation, payments shall be reduced by the actuarial
equivalent amount of the benefit reductions resulting from the
implementation of the benefit cap amounts specified in this section
pursuant to contract amendments or change orders effective on July 1,
2011, or thereafter.
(g) This section shall be implemented only to the extent permitted
by federal law.
(h) 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 all-county letters,
provider bulletins, or similar instructions, without taking
regulatory action.
(i) This section shall be implemented on the first day of the
first calendar month following 180 days after the effective date of
the act that added this section, or on the first day of the calendar
month following 60 days after the date the department secures all
necessary federal approvals to implement this section, whichever is
later. If the implementation date occurs after July 1, 2011, then the
benefit caps described in subdivision (a) for the first year of
implementation shall be applied from the implementation date to June
30 of the state fiscal year in which implementation begins.
Thereafter, the benefit caps shall apply on a state fiscal year
basis.
SEC. 101. 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) (i) For the purposes of this paragraph, nonlegend has the
same meaning as defined in subdivision (a) of Section 14105.45.
(ii) Nonlegend acetaminophen-containing products, with the
exception of children's acetaminophen-containing products, selected
by the department are not covered benefits.
(iii) Nonlegend cough and cold products selected by the department
are not covered benefits. This clause shall be implemented on the
first day of the first calendar month following 90 days after the
effective date of the act that added this clause, or on the first day
of the first calendar month following 60 days after the date the
department secures all necessary federal approvals to implement this
section, whichever is later.
(iv) Beneficiaries under the Early and Periodic Screening,
Diagnosis, and Treatment Program shall be exempt from clauses (ii)
and (iii).
(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) 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). 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 and, when applicable, the successor state plan amendment are
approved by the federal Centers for Medicare and Medicaid Services
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) (1) Purchase of prescribed enteral nutrition products is
covered, subject to the Medi-Cal list of enteral nutrition products
and utilization controls.
(2) Purchase of enteral nutrition products is limited to those
products to be administered through a feeding tube, including, but
not limited to, a gastric, nasogastric, or jejunostomy tube.
Beneficiaries under the Early and Periodic Screening, Diagnosis, and
Treatment Program shall be exempt from this paragraph.
(3) Notwithstanding paragraph (2), the department may deem an
enteral nutrition product, not administered through a feeding tube,
including, but not limited to, a gastric, nasogastric, or jejunostomy
tube, a benefit for patients with diagnoses, including, but not
limited to, malabsorption and inborn errors of metabolism, if the
product has been shown to be neither investigational nor experimental
when used as part of a therapeutic regimen to prevent serious
disability or death.
(4) 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 the amendments to this subdivision made by
the act that added this paragraph by means of all-county letters,
provider bulletins, or similar instructions, without taking
regulatory action.
(5) The amendments made to this subdivision by the act that added
this paragraph shall be implemented June 1, 2011, or on the first day
of the first calendar month following 60 days after the date the
department secures all necessary federal approvals to implement this
section, whichever is later.
(ac) Diabetic testing supplies are covered when provided by a
pharmacy, subject to utilization controls.
SEC. 101.2. Section 14134 of the Welfare and Institutions Code is
amended to read:
14134. (a) Except for any prescription, refill, visit, service,
device, or item for which the program's payment is ten dollars ($10)
or less, in which case no copayment shall be required, a recipient of
services under this chapter shall be required to make copayments not
to exceed the maximum permitted under federal regulations or federal
waivers as follows:
(1) Copayment of five dollars ($5) shall be made for nonemergency
services received in an emergency room. For the purposes of this
section, "nonemergency services" means any services not required for
the alleviation of severe pain or the immediate diagnosis and
treatment of severe medical conditions which, if not immediately
diagnosed and treated, would lead to disability or death.
(2) Copayment of one dollar ($1) shall be made for each drug
prescription or refill.
(3) Copayment of one dollar ($1) shall be made for each visit for
services under subdivisions (a) and (h) of Section 14132.
(4) The copayment amounts set forth in paragraphs (1), (2), and
(3) may be collected and retained or waived by the provider.
(5) The department shall not reduce the reimbursement otherwise
due to providers as a result of the copayment. The copayment amounts
shall be in addition to any reimbursement otherwise due the provider
for services rendered under this program.
(6) This section does not apply to emergency services, family
planning services, or to any services received by:
(A) Any child in AFDC-Foster Care, as defined in Section 11400.
(B) Any person who is an inpatient in a health facility, as
defined in Section 1250 of the Health and Safety Code.
(C) Any person 18 years of age or under.
(D) Any woman receiving perinatal care.
(7) Paragraph (2) does not apply to any person 65 years of age or
over.
(8) A provider of service shall not deny care or services to an
individual solely because of that person's inability to copay under
this section. An individual shall, however, remain liable to the
provider for any copayment amount owed.
(9) The department shall seek any federal waivers necessary to
implement this section. The provisions for which appropriate federal
waivers cannot be obtained shall not be implemented, but provisions
for which waivers are either obtained or found to be unnecessary
shall be unaffected by the inability to obtain federal waivers for
the other provisions.
(10) The director shall adopt any regulations necessary to
implement this section as emergency regulations in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code. The adoption of the regulations
shall be deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare. The director shall transmit these emergency regulations
directly to the Secretary of State for filing and the regulations
shall become effective immediately upon filing. Upon completion of
the formal regulation adoption process and prior to the expiration of
the 120 day duration period of emergency regulations, the director
shall transmit directly to the Secretary of State for filing the
adopted regulations, the rulemaking file, and the certification of
compliance as required by subdivision (e) of Section 11346.1 of the
Government Code.
(b) This section shall become inoperative on the implementation
date for copayments stated in the declaration executed by the
director pursuant to Section 14134 as added by Section 101.5 of the
act that added this subdivision, and is repealed on January 1 of the
following year.
SEC. 101.5. Section 14134 is added to the Welfare and Institutions
Code, to read:
14134. (a) The Legislature finds and declares all of the
following:
(1) Costs within the Medi-Cal program continue to grow due to the
rising cost of providing health care throughout the state and also
due to increases in enrollment, which are more pronounced during
difficult economic times.
(2) In order to minimize the need for drastically cutting
enrollment standards or benefits or imposing further reductions on
Medi-Cal providers during times of economic crisis, it is crucial to
find areas within the program where beneficiaries can share
responsibility for utilization of health care, whether they are
participating in the fee-for-service or the managed care model of
service delivery.
(3) The establishment of cost-sharing obligations within the
Medi-Cal program is complex and is subject to close supervision by
the United States Department of Health and Human Services.
(4) As the single state agency for Medicaid in California, the
State Department of Health Care Services has unique expertise that
can inform decisions that set or adjust cost sharing responsibilities
for Medi-Cal beneficiaries receiving health care services.
(b) Therefore, it is the intent of the Legislature for the
department to obtain federal approval to implement cost-sharing for
Medi-Cal beneficiaries and permit providers to require that
individuals meet their cost-sharing obligation prior to receiving
care or services.
(c) A Medi-Cal beneficiary shall be required to make copayments as
described in this section. These copayments represent a contribution
toward the rate of payment made to providers of Medi-Cal services
and shall be as follows:
(1) Copayment of up to fifty dollars ($50) shall be made for
nonemergency services received in an emergency room. For the purposes
of this section, "nonemergency services" means services not required
for the alleviation of severe pain or the immediate diagnosis and
treatment of unforeseen medical conditions that, if not immediately
diagnosed and treated, would lead to disability or death.
(2) Copayment of up to fifty dollars ($50) shall be made for
emergency services received in an emergency room. For purposes of
this section, "emergency services" means services required for the
alleviation of severe pain or the immediate diagnosis and treatment
of unforeseen medical conditions that, if not immediately diagnosed
and treated, would lead to disability or death.
(3) Copayment of up to one hundred dollars ($100) shall be made
for each hospital inpatient day, up to a maximum of two hundred
dollars ($200) per admission.
(4) Copayment of up to three dollars ($3) shall be made for each
preferred drug prescription or refill. A copayment of up to five
dollars ($5) shall be made for each nonpreferred drug prescription or
refill. Except as provided in subdivision (g), "preferred drug"
shall have the same meaning as in Section 1916A of the Social
Security Act (42 U.S.C. Sec. 1396o-1).
(5) Copayment of up to five dollars ($5) shall be made for each
visit for services under subdivision (a) of Section 14132 and for
dental services received on an outpatient basis provided as a
Medi-Cal benefit pursuant to this chapter or Chapter 8 (commencing
with Section 14200), as applicable.
(6) This section does not apply to services provided pursuant to
subdivision (aa) of Section 14132.
(d) The copayments established pursuant to subdivision (c) shall
be set by the department, at the maximum amount provided for in the
applicable paragraph, except that each copayment amount shall not
exceed the maximum amount allowable pursuant to the state plan
amendments or other federal approvals.
(e) The copayment amounts set forth in subdivision (c) may be
collected and retained or waived by the provider. The department
shall deduct the amount of the copayment from the payment the
department makes to the provider whether retained, waived, or not
collected by the provider.
(f) Notwithstanding any other provision of law, and only to the
extent allowed pursuant to federal law, a provider of service has no
obligation to provide services to a Medi-Cal beneficiary who does
not, at the point of service, pay the copayment assessed pursuant to
this section. If the provider provides services without collecting
the copayment, and has not waived the copayment, the provider may
hold the beneficiary liable for the copayment amount owed.
(g) (1) Notwithstanding any other provision of law, except as
described in paragraph (2), this section shall apply to Medi-Cal
beneficiaries enrolled in a health plan contracting with the
department pursuant to this chapter or Chapter 8 (commencing with
Section 14200), except for Senior Care Action Network or AIDS
Healthcare Foundation. To the extent permitted by federal law and
pursuant to any federal waivers or state plan adjustments obtained, a
managed care health plan may establish a lower copayment or no
copayment.
(2) For the purpose of paragraph (4) of subdivision (c),
copayments assessed against a beneficiary who receives Medi-Cal
services through a health plan described in paragraph (1) shall be
based on the plan's designation of a drug as preferred or
nonpreferred.
(3) To the extent provided by federal law, capitation payments
shall be calculated on an actuarial basis as if copayments described
in this section were collected.
(h) This section shall be implemented only to the extent that
federal financial participation is available. The department shall
seek and obtain any federal waivers or state plan amendments
necessary to implement this section. The provisions for which
appropriate federal waivers or state plan amendments cannot be
obtained shall not be implemented, but provisions for which waivers
or state plan amendments are either obtained or found to be
unnecessary shall be unaffected by the inability to obtain federal
waivers or state plan amendments for the other provisions.
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section by
means of all-county letters, all-plan letters, provider bulletins,
or similar instructions, without taking further regulatory actions.
(j) (1) This section shall become operative on the date that the
act adding this section is effective, but shall not be implemented
until the date in the declaration executed by the director pursuant
to paragraph (2). In no event shall the director set an
implementation date prior to the date federal approval is received.
(2) The director shall execute a declaration that states the date
that implementation of the copayments described in this section will
commence and shall post the declaration on the department's Internet
Web site and provide a copy of the declaration to the Chair of the
Joint Legislative Budget Committee, the Chief Clerk of the Assembly,
the Secretary of the Senate, the Office of the Legislative Counsel,
and the Secretary of State.
SEC. 101.7. Section 14134.1 of the Welfare and Institutions Code
is amended to read:
14134.1. (a) Except as provided in paragraph (2) of subdivision
(a) of Section 14134, no provider under this chapter may deny care or
services to an individual eligible for care or services under this
chapter because of the individual's inability to pay a copayment, as
defined in Section 14134. The requirements of this section shall not
extinguish the liability of the individual to whom the care or
services were furnished for payment of the copayment.
(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 implement, interpret, or make specific this section by
means of all-county letters, provider bulletins, or similar
instructions, without taking further regulatory action.
(c) This section shall become inoperative on the implementation
date for copayments stated in the declaration executed by the
director pursuant to Section 14134 as added by Section 101.5 of the
act that added this subdivision, and is repealed on January 1 of the
following year.
SEC. 102. 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.
(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), CalFresh, 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, 2009-10,
2010-11, and 2011-12 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 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 (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. 104. Article 6 (commencing with Section 14589) is added to
Chapter 8.7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 6. Cessation of Adult Day Health Care and Assistance
with Transition from Adult Day Health Care Services to Other Services
14589. (a) The Legislature finds and declares the following:
(1) During times of economic crisis, it is crucial to find areas
within the program where efficiencies can be achieved while
continuing to provide community-based services that support
independence.
(2) Adult Day Health Care (ADHC) has been vulnerable to fraud and,
despite attempts to curtail and prevent fraud, including, but not
limited to, a moratorium on new facilities and onsite treatment
authorization request review, fraud continues in this area.
(3) The state has added services and programs to enable vulnerable
populations to remain in the community, including, but not limited
to, the Money follows the Person project, California's 1115
Comprehensive Medi-Cal Demonstration Project Waiver: a Bridge to
Reform, and services and supports, including day programs, provided
under the Lanterman Act. It also continues to explore opportunities
to add additional services and programs to help individuals remain in
the community, including, but not limited to, pilot projects to
better meet the health care needs of individuals dually eligible for
both Medicare and Medicaid, and exploring the Community First Choice
Option as a Medi-Cal benefit.
(4) There are alternative services to meet the needs of Medi-Cal
beneficiaries utilizing ADHC, including in-home supportive services,
physical, occupational, and speech therapies, nonemergency medical
transportation, and home health services.
(b) Therefore, it is the intent of the Legislature for the
department to obtain federal approval to eliminate ADHC as an
optional Medi-Cal benefit.
14589.5. (a) Notwithstanding any other provision of law related
to the Medi-Cal program or to adult day health care, adult day health
care is excluded from coverage under the Medi-Cal program.
(b) This section shall only be implemented to the extent permitted
by federal law.
(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement the provisions of this section by means of
all-county letters, provider bulletins, or similar instructions,
without taking further regulatory action.
(d) This section shall be implemented on the first day of the
first calendar month following 90 days after the effective date of
the act that adds this section or on the first day of the first
calendar month following 60 days after the date the department
secures all necessary federal approvals to implement this section,
whichever is later.
14590. (a) As a result of the enactment of this article to
eliminate adult day health care as an optional benefit under the
Medi-Cal program, the department shall implement a short-term program
to fund organizations to assist individuals receiving ADHC services
to transition to other Medi-Cal services, social services, and
respite programs, or to provide social activities and respite
assistance for individuals who were receiving ADHC services at the
time the services were eliminated. The goal of this funding is to
minimize the risk of institutionalization by identifying needed
services available in the community and providing beneficiaries
assistance in accessing those services.
(b) To ensure a smooth transition, adult day health care centers
shall provide relevant participant information, including the most
recent copy of a participant's individual plan of care, to the
department. Final Medi-Cal payment to adult day health care centers
is contingent upon the provision of participants' individual plan of
care and all documentation supporting that individual plan of care,
including medical records, to the grantee. Failure to provide
documents under this section is grounds for a temporary withhold of
payment to the adult day health care center under the process
established pursuant to Section 14107.11.
(c) To implement this section, the department may contract with
public or private entities and utilize existing health care service
provider enrollment and payment mechanisms, including the Medi-Cal
program's fiscal intermediary. Contracts entered into for the
purposes of implementing this article, including any contract
amendments, system changes pursuant to a change order, and any
project or system development notices, may be developed using a
competitive process established by the department and shall be exempt
from Chapter 5.6 (commencing with Section 11545) of Part 1 of
Division 3 of Title 2 of the Government Code, Article 4 (commencing
with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2
of the Government Code, and the Public Contract Code, and any
associated policies, procedures, or regulations under those
provisions, and shall be exempt from review or approval by any
division of the Department of General Services and the California
Technology Agency. A contract may provide for periodic advance
payments for services to be performed.
(d) Notwithstanding 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),
the department may implement this article through provider bulletins
or similar instructions without taking regulatory action.
(e) Implementation of the short-term program to assist individuals
receiving ADHC services to transition to other Medi-Cal services,
social services, and respite programs, or to provide social
activities and respite assistance for individuals who were receiving
ADHC services at the time the services were eliminated, is subject to
an appropriation in the annual Budget Act.
SEC. 105. During the 2011-12 Regular Session of the Legislature,
legislation will be adopted to create a new program called the
Keeping Adults Free from Institutions (KAFI) program. This program
will provide a well-defined scope of services to eligible
beneficiaries who meet a high medical acuity standard and are at
significant risk of institutionalization in the absence of such
community-based services. It is the intent of the Legislature that
the program allow current recipients of Adult Day Health Care (ADHC)
services that meet certain high acuity measures to immediately
transition to KAFI services. As prescribed by subsequent statute, the
Department of Health Care Services shall develop a federal waiver to
maximize federal reimbursement for the KAFI program to the extent
permitted by federal law. The Budget Act of 2011 includes funding for
the KAFI program.
SEC. 105.5. The sum of one thousand dollars ($1,000) is hereby
appropriated from the General Fund to the State Department of Health
Care Services for administration.
SEC. 106. This act addresses the fiscal emergency declared and
reaffirmed by the Governor by proclamation on January 20, 2011,
pursuant to subdivision (f) of Section 10 of Article IV of the
California Constitution.
SEC. 107. This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.
SEC. 108. 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 2011 at the earliest possible time, it is necessary
that this act take effect immediately.