BILL NUMBER: AB 1468	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 29, 2012
	PASSED THE ASSEMBLY  AUGUST 30, 2012
	AMENDED IN SENATE  AUGUST 24, 2012
	AMENDED IN SENATE  AUGUST 21, 2012
	AMENDED IN SENATE  JUNE 25, 2012

INTRODUCED BY   Committee on Budget (Blumenfield (Chair), Alejo,
Bonilla, Brownley, Buchanan, Butler, Cedillo, Chesbro, Dickinson,
Feuer, Gordon, Huffman, Mitchell, Monning, and Swanson)

                        JANUARY 10, 2012

   An act to amend Sections 8803 and 56475 of the Education Code, to
amend Sections 12803.65, 95001, 95003, 95012, and 95020 of the
Government Code, to amend Section 124174.2 of the Health and Safety
Code, and to amend Sections 4510, 5213, 5256.1, 5875, 14005.26,
14005.27, 14105.18, 14105.196, 14132.24, 14132.275, 14132.276,
14139.22, 14166.12, 14166.17, 14182.16, 14182.17, 14183.6, 14186.2,
14301.1, 14301.2, and 15912.1 of the Welfare and Institutions Code,
relating to health, and making an appropriation therefor, to take
effect immediately, bill related to the budget.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1468, Committee on Budget. Health.
   (1) Under existing law, the State Department of Health Care
Services is authorized and required to perform various functions
relating to the care and treatment of persons with mental disorders.
Under existing law, services for these individuals may be provided in
psychiatric hospitals or other types of facilities, as well as in
community settings. Under existing law, psychiatric health facilities
are licensed and regulated by the State Department of Social
Services. Existing law provides for state hospitals for the care,
treatment, and education of mentally disordered persons, which are
under the jurisdiction of the State Department of State Hospitals.
   This bill would make technical, nonsubstantive changes to various
provisions of law to, in part, delete obsolete references to the
State Department of Mental Health.
   (2) Existing law creates the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board (MRMIB), to
arrange for the provision of health, vision, and dental benefits to
eligible children pursuant to the federal Children's Health Insurance
Program. Existing law also provides for the Medi-Cal program, which
is administered by the State Department of Health Care Services,
under which basic health care services are provided to qualified
low-income persons. The Medi-Cal program is, in part, governed and
funded by federal Medicaid provisions.
   Existing law provides for the transition of specified enrollees of
the Healthy Families Program to the Medi-Cal program, to the extent
that those individuals are otherwise eligible, no sooner than January
1, 2013. Existing law requires this transition to take place in 4
phases, as prescribed. Existing law requires the Department of Health
Care Services to exercise the option to provide full-scope benefits
with no share of cost to children who have attained 6 years of age
but have not attained 19 years of age and who are optional targeted
low-income children, as specified.
   This bill would delete the age restriction on the option to
provide full-scope benefits to optional targeted low-income children.
The bill would modify the monthly premiums imposed under these
provisions, and would authorize the State Department of Health Care
Services to enter into and continue contracts with the Health
Families Program administrative vendor for the purposes of
implementing and maintaining the necessary systems and activities for
providing health care coverage to these children. This bill would
authorize the State Department of Health Care Services to enter into
a contract with the Health Care Options Broker of the department for
purposes of managed care enrollment activities and would make other
changes related to the implementation of these provisions.
   (3) Existing law requires, to the extent required by federal law,
and beginning January 1, 2013, through and including December 31,
2014, that payments for primary care services provided by specified
physicians be no less than 100% of the payment rate that applies to
those services and physicians as established by the Medicare Program,
for both fee-for-service and managed care plans.
   This bill would provide that payment increases made pursuant to
these provisions shall not apply to certain provider rates of
payment.
   (4) One of the methods by which Medi-Cal services are provided is
pursuant to contracts with various types of managed care health
plans. Existing law, to the extent that federal financial
participation is available, and pursuant to a demonstration project
or waiver of federal law, requires the State Department of Health
Care Services to establish demonstration sites, as defined, in up to
8 counties no sooner than March 1, 2013, to enable beneficiaries
eligible under both the Medi-Cal and Medicare programs to receive a
continuum of services that maximizes access to the continuum of
long-term services and supports and behavioral health services.
Existing law requires the department, with exceptions, to enroll dual
eligible beneficiaries into a demonstration site unless the dual
eligible beneficiary makes an affirmative choice to opt out of
enrollment or is already enrolled in specific entities, as specified.

   This bill would modify the criteria that must be met to be
excluded from enrollment in the demonstration project and would
modify the provisions relating to the disclosure of information
relating to beneficiaries who have been diagnosed with HIV/AIDS.
   Existing law requires the State Department of Health Care Services
to ensure and improve the care coordination and integration of
health care services for Medi-Cal beneficiaries residing in counties
participating in the demonstration project.
   This bill would delete the requirement under these provisions that
the Department of Managed Health Care monitor whether beneficiaries
are able to receive timely access to primary and specialty care
services as prescribed.
   (5) Existing law requires the department to enter into an
interagency agreement with the Department of Managed Health Care to
conduct financial audits, medical surveys, and a review of the
provider networks of the managed care plans participating in a
certain demonstration project and provide consumer assistance to
beneficiaries affected by certain provisions.
   This bill would additionally require the department to enter into
an interagency agreement with the Department of Managed Health Care
to conduct financial audits, medical surveys, and a review of the
provider networks in connection with the expansion of Medi-Cal
managed care into rural counties.
   (6) Existing law requires the department to pay capitation rates
to health plans participating in the Medi-Cal managed care program
using actuarial methods and authorizes the department to establish
health-plan- and county-specific rates, as specified.
   This bill would provide that as the department adds additional
factors, such as managed care plan costs, to the Medi-Cal managed
care plan default assignment algorithm, it shall consult with the
Auto Assignment Performance Incentive Program stakeholder workgroup,
as specified.
   (7) Existing law authorizes, to the extent consistent with federal
law, the State Department of Health Care Services to defer payments
to Medi-Cal managed care health plans and providers, as applicable,
contracting with the department, as specified, which are payable to
the plans during the final month of the 2012-13 state fiscal year, if
certain conditions are satisfied.
   This bill would modify these provisions to eliminate the
limitation of the deferral to the 2012-13 state fiscal year and would
additionally authorize the State Department of Health Care Services
to defer fee-for-service payments under these provisions.
   (8) Existing law requires the State Department of Health Care
Services, in collaboration with the State Department of Public
Health, and in consultation with stakeholders, to develop polices and
guidance on the transition of persons diagnosed with HIV/AIDS from
programs funded under the federal Ryan White Act to the Low Income
Health Program (LIHP).
   This bill would, for purposes of implementing LIHP, authorize the
State Department of Public Health to share relevant data related to a
beneficiary's enrollment in federal Ryan White Act funded programs
who may be eligible for LIHP services, and would authorize a
participating entity, as defined, to share relevant data relating to
persons diagnosed with HIV/AIDS with the State Department of Public
Health, as prescribed.
   (9) This bill would appropriate $1,000 to the State Department of
Health Care Services for administration.
   (10) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
   Appropriation: yes.


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

  SECTION 1.  Section 8803 of the Education Code is amended to read:
   8803.  In order to encourage the integration of children's
services, it is the intent of the Legislature to promote interagency
coordination and collaboration among the state agencies responsible
for the provision of support services to children and their families.

   Therefore, the Legislature hereby establishes the Healthy Start
Support Services for Children Program Council, as follows:
   (a) Members of the council shall include the Superintendent, the
agency secretary, and the directors of the State Department of Health
Care Services, the State Department of Social Services, and the
State Department of Alcohol and Drug Programs.
   (b) Duties of the council shall include:
   (1) Developing, promoting, and implementing policy supporting the
Healthy Start Support Services for Children Grant Program.
   (2) Assisting the lead agency in reviewing grant applications
submitted to the lead agency and providing the lead agency with
recommendations for awarding grants pursuant to Section 8804.
   (3) Soliciting input regarding program policy and direction from
individuals and entities with experience in the integration of
children's services.
   (4) Assisting the lead agency in fulfilling its responsibilities
under this chapter.
   (5) Providing recommendations to the Governor, the Legislature,
and the lead agency regarding the Healthy Start Support Services for
Children Grant Program.
   (6) At the request of the Superintendent, assisting the local
educational agency or consortium in planning and implementing this
program, including assisting with local technical assistance, and
developing agency collaboration.
  SEC. 2.  Section 56475 of the Education Code is amended to read:
   56475.  (a) The Superintendent and the directors of the State
Department of Health Care Services, the State Department of
Developmental Services, the State Department of Social Services, the
Department of Rehabilitation, the Department of Corrections and
Rehabilitation, Division of Juvenile Facilities, and the Employment
Development Department shall develop written interagency agreements
or adopt joint regulations that include responsibilities, in
accordance with Section 1412(a)(12) of Title 20 of the United States
Code and Section 300.154 of Title 34 of the Code of Federal
Regulations, for the provision of special education and related
services to individuals with exceptional needs in the State of
California.
   (b) The Superintendent shall develop interagency agreements with
other state and local public agencies, as deemed necessary by the
Superintendent, to carry out the provisions of state and federal law.

   (c) (1) Each interagency agreement shall be submitted by the
Superintendent to each legislative fiscal committee, education
committee, and policy committee, responsible for legislation relating
to those individuals with exceptional needs that will be affected by
the agreement if it is effective.
   (2) An interagency agreement shall not be effective sooner than 30
days after it has been submitted to each of the legislative
committees specified in paragraph (1).
  SEC. 3.  Section 12803.65 of the Government Code is amended to
read:
   12803.65.  (a) The Governor shall rename and establish, in the
California Health and Human Services Agency, Department of
Rehabilitation, the existing "California Governor's Committee on
Employment of People with Disabilities" as the "California Committee
on Employment of People with Disabilities."
   (b) (1) The California Committee on Employment of People with
Disabilities shall include, but not be limited to, the following:
   (A) Four individuals with disabilities representing disabled
persons, one each appointed by the Senate Committee on Rules and the
Speaker of the Assembly and two appointed by the Secretary of
California Health and Human Services, each for a three-year term.
   (B) The Directors of the Employment Development Department, State
Department of Health Care Services, State Department of Developmental
Services, State Department of Social Services, and Department of
Rehabilitation, and the Chair of the State Independent Living
Council.
   (C) A representative from the California Health Incentive
Improvement Project.
   (D) A representative from the California Workforce Investment
Board who is nominated by that board.
   (E) At the discretion of the Secretary of California Health and
Human Services, representatives from any other department or program
that may have a role in increasing the capacity of state programs to
support the employment-related needs of individuals with
disabilities.
   (F) A representative from a local one-stop or local workforce
investment board, to be nominated by the California Workforce
Investment Board.
   (G) Three business representatives with experience in employing
persons with disabilities, to be appointed by the Secretary of
California Health and Human Services.
   (2) The members of the California Committee on Employment of
People with Disabilities shall select a chair from among the members,
and shall hold open meetings no less than four times a year.
   (c) The California Committee on Employment of People with
Disabilities shall consult with and advise the Labor and Workforce
Development Agency and the California Health and Human Services
Agency on all issues related to full inclusion in the workforce of
persons with disabilities, including development of the comprehensive
strategy required pursuant to Section 12803.6.
   (d) The California Committee on Employment of People with
Disabilities shall coordinate and provide leadership, as necessary,
with regard to efforts to increase inclusion in the workforce of
persons with disabilities, including, but not limited to, one annual
event for youth with disabilities, to the extent funding is
available.
   (e) The California Committee on Employment of People with
Disabilities shall meet four times a year with the California Health
Incentive Improvement Project and the project's steering committee,
to the extent funding for the project continues and the activities of
the California Committee on Employment of People with Disabilities
are not inconsistent with the charge of the California Health
Incentive Improvement Project.
   (f) Using existing funding, the California Committee on Employment
of People with Disabilities shall facilitate, promote, and
coordinate collaborative dissemination of information on employment
supports and benefits, which shall include the Ticket to Work program
and health benefits, to individuals with disabilities, consumers of
public services, employers, service providers, and state and local
agency staff.
   (g) Using existing funding, the California Committee on Employment
of People with Disabilities shall receive primary administrative and
staff support from the Department of Rehabilitation, subject to
funding from the Employment Development Department.
  SEC. 4.  Section 95001 of the Government Code is amended to read:
   95001.  (a) The Legislature hereby finds and declares all of the
following:
   (1) There is a need to provide appropriate early intervention
services individually designed for infants and toddlers from birth to
two years of age, inclusive, who have disabilities or are at risk of
having disabilities, to enhance their development and to minimize
the potential for developmental delays.
   (2) Early intervention services for infants and toddlers with
disabilities or who are at risk of having disabilities represent an
investment of resources, in that these services reduce the ultimate
costs to our society, by minimizing the need for special education
and related services in later school years and by minimizing the
likelihood of institutionalization. These services also maximize the
ability of families to better provide for the special needs of their
children. Early intervention services for infants and toddlers with
disabilities maximize the potential of the individuals to be
effective in the context of daily life and activities, including the
potential to live independently, and exercise the full rights of
citizenship. The earlier intervention is started, the greater is the
ultimate cost-effectiveness and the higher is the educational
attainment and quality of life achieved by children with
disabilities.
   (3) The family is the constant in the child's life, while the
service system and personnel within those systems fluctuate. Because
the primary responsibility of an infant's or toddler's well-being
rests with the family, services should support and enhance the family'
s capability to meet the special developmental needs of their infant
or toddler with disabilities.
   (4) Family-to-family support strengthens families' ability to
fully participate in services planning and their capacity to care for
their infants or toddlers with disabilities.
   (5) Meeting the complex needs of infants with disabilities and
their families requires active state and local coordinated,
collaborative, and accessible service delivery systems that are
flexible, culturally competent, and responsive to family-identified
needs. When health, developmental, educational, and social programs
are coordinated, they are proven to be cost effective, not only for
systems, but for families as well.
   (6) Family-professional collaboration contributes to changing the
ways that early intervention services are provided and to enhancing
their effectiveness.
   (7) Infants and toddlers with disabilities are a part of their
communities, and as citizens make valuable contributions to society
as a whole.
   (b) Therefore, it is the intent of the Legislature that:
   (1) Funding provided under Part C of the federal Individuals with
Disabilities Education Act (20 U.S.C. Sec. 1431 et seq.) be used to
improve and enhance early intervention services as defined in this
title by developing innovative ways of providing family focused,
coordinated services, which are built upon existing systems.
   (2) The State Department of Developmental Services, the State
Department of Education, the State Department of Health Care
Services, the State Department of Social Services, and the State
Department of Alcohol and Drug Programs coordinate services to
infants and toddlers with disabilities and their families. These
agencies need to collaborate with families and communities to provide
a family-centered, comprehensive, multidisciplinary, interagency,
community-based, early intervention system for infants and toddlers
with disabilities.
   (3) Families be well informed, supported, and respected as capable
and collaborative decisionmakers regarding services for their child.

   (4) Professionals be supported to enhance their training and
maintain a high level of expertise in their field, as well as
knowledge of what constitutes most effective early intervention
practices.
   (5) Families and professionals join in collaborative partnerships
to develop early intervention services that meet the needs of infants
and toddlers with disabilities, and that those partnerships be the
basis for the development of services that meet the needs of the
culturally and linguistically diverse population of California.
   (6) To the maximum extent possible, infants and toddlers with
disabilities and their families be provided services in the most
natural environment, and include the use of natural supports and
existing community resources.
   (7) The services delivery system be responsive to the families and
children it serves within the context of cooperation and
coordination among the various agencies.
   (8) Early intervention program quality be ensured and maintained
through established early intervention program and personnel
standards.
   (9) The early intervention system be responsive to public input
and participation in the development of implementation policies and
procedures for early intervention services through the forum of an
interagency coordinating council established pursuant to federal
regulations under Part C of the federal Individuals with Disabilities
Education Act.
   (c) It is not the intent of the Legislature to require the State
Department of Education to implement this title unless adequate
reimbursement, as specified and agreed to by the department, is
provided to the department from federal funds from Part C of the
federal Individuals with Disabilities Education Act.
  SEC. 5.  Section 95003 of the Government Code, as added by Section
4 of Chapter 945 of the Statutes of 1993, is amended to read:
   95003.  It is the intent of the Legislature that the State
Department of Health Care Services, the State Department of
Developmental Services, the State Department of Social Services, and
the State Department of Education work together to provide
coordinated, interagency services to high-risk and disabled infants
and their families.
  SEC. 6.  Section 95012 of the Government Code is amended to read:
   95012.  (a) The following departments shall cooperate and
coordinate their early intervention services for eligible infants and
their families under this title, and need to collaborate with
families and communities, to provide a family-centered,
comprehensive, multidisciplinary, interagency, community-based early
intervention system:
   (1) State Department of Developmental Services.
   (2) State Department of Education.
   (3) State Department of Health Care Services.
   (4) State Department of Social Services.
   (5) State Department of Alcohol and Drug Programs.
   (b) Each participating department shall enter into an interagency
agreement with the State Department of Developmental Services. Each
interagency agreement shall specify, at a minimum, the agency's
current and continuing level of financial participation in providing
services to infants and toddlers with disabilities and their
families. Each interagency agreement shall also specify procedures
for resolving disputes in a timely manner. Interagency agreements
shall also contain provisions for ensuring effective cooperation and
coordination among agencies concerning policymaking activities
associated with the implementation of this title, including
legislative proposals, regulation development, and fiscal planning.
All interagency agreements shall be reviewed annually and revised as
necessary.
  SEC. 7.  Section 95020 of the Government Code is amended to read:
   95020.  (a) An eligible infant or toddler shall have an
individualized family service plan. The individualized family service
plan shall be used in place of an individualized education program
required pursuant to Sections 4646 and 4646.5 of the Welfare and
Institutions Code, the individualized program plan required pursuant
to Section 56340 of the Education Code, or any other applicable
service plan.
   (b) For an infant or toddler who has been evaluated for the first
time, a meeting to share the results of the evaluation, to determine
eligibility and, for children who are eligible, to develop the
initial individualized family service plan shall be conducted within
45 calendar days of receipt of the written referral. Evaluation
results and determination of eligibility may be shared in a meeting
with the family prior to the individualized family service plan.
Written parent consent to evaluate and assess shall be obtained
within the 45-day timeline. A regional center, local educational
agency, or the designee of one of those entities shall initiate and
conduct this meeting. Families shall be afforded the opportunity to
participate in all decisions regarding eligibility and services.
During intake and assessment, but no later than the IFSP meeting, the
parents, legal guardian, or conservator shall provide copies of any
health benefit cards under which the consumer is eligible to receive
health benefits, including, but not limited to, private health
insurance, a health care service plan, Medi-Cal, Medicare, and
TRICARE. If the individual, or, where appropriate, the parents, legal
guardians, or conservators, have no such benefits, the regional
center shall not use that fact to negatively impact the services that
the individual may or may not receive from the regional center.
   (c) Parents shall be fully informed of their rights, including the
right to invite another person, including a family member or an
advocate or peer parent, or any or all of them, to accompany them to
any or all individualized family service plan meetings. With parental
consent, a referral shall be made to the local family resource
center or network.
   (d) The individualized family service plan shall be in writing and
shall address all of the following:
   (1) A statement of the infant's or toddler's present levels of
physical development including vision, hearing, and health status,
cognitive development, communication development, social and
emotional development, and adaptive developments.
   (2) With the concurrence of the family, a statement of the family'
s concerns, priorities, and resources related to meeting the special
developmental needs of the eligible infant or toddler.
   (3) A statement of the major outcomes expected to be achieved for
the infant or toddler and family where services for the family are
related to meeting the special developmental needs of the eligible
infant or toddler.
   (4) The criteria, procedures, and timelines used to determine the
degree to which progress toward achieving the outcomes is being made
and whether modifications or revisions are necessary.
   (5) (A) A statement of the specific early intervention services
necessary to meet the unique needs of the infant or toddler as
identified in paragraph (3), including, but not limited to, the
frequency, intensity, location, duration, and method of delivering
the services, and ways of providing services in natural generic
environments, including group training for parents on behavioral
intervention techniques in lieu of some or all of the in-home parent
training component of the behavior intervention services, and
purchase of neighborhood preschool services and needed qualified
personnel in lieu of infant development programs.
   (B) Effective July 1, 2009, at the time of development, review, or
modification of an infant's or toddler's individualized family
service plan, the regional center shall consider both of the
following:
   (i) The use of group training for parents on behavior intervention
techniques, in lieu of some or all of the in-home parent training
component of the behavior intervention services.
   (ii) The purchase of neighborhood preschool services and needed
qualified personnel, in lieu of infant development programs.
   (6) A statement of the agency responsible for providing the
identified services.
   (7) The name of the service coordinator who shall be responsible
for facilitating implementation of the plan and coordinating with
other agencies and persons.
   (8) The steps to be taken to ensure transition of the infant or
toddler upon reaching three years of age to other appropriate
services. These may include, as appropriate, special education or
other services offered in natural environments.
   (9) The projected dates for the initiation of services in
paragraph (5) and the anticipated duration of those services.
   (e) Each service identified on the individualized family service
plan shall be designated as one of three types:
   (1) An early intervention service, as defined in subsection (4) of
Section 1432 of Title 20 of the United States Code, and applicable
regulations, that is provided or purchased through the regional
center, local educational agency, or other participating agency. The
State Department of Health Care Services, State Department of Social
Services, and State Department of Alcohol and Drug Programs shall
provide services in accordance with state and federal law and
applicable regulations, and up to the level of funding as
appropriated by the Legislature. Early intervention services
identified on an individualized family service plan that exceed the
funding, statutory, and regulatory requirements of these departments
shall be provided or purchased by regional centers or local
educational agencies under subdivisions (b) and (c) of Section 95014.
The State Department of Health Care Services, State Department of
Social Services, and State Department of Alcohol and Drug Programs
shall not be required to provide early intervention services over
their existing funding, statutory, and regulatory requirements.
   (2) Another service, other than those specified in paragraph (1),
which the eligible infant or toddler or his or her family may receive
from other state programs, subject to the eligibility standards of
those programs.
   (3) A referral to a nonrequired service that may be provided to an
eligible infant or toddler or his or her family. Nonrequired
services are those services that are not defined as early
intervention services or do not relate to meeting the special
developmental needs of an eligible infant or toddler related to the
disability, but that may be helpful to the family. The granting or
denial of nonrequired services by a public or private agency is not
subject to appeal under this title. Notwithstanding any other
provision of law or regulation to the contrary, effective July 1,
2009, with the exception of durable medical equipment, regional
centers shall not purchase nonrequired services, but may refer a
family to a nonrequired service that may be available to an eligible
infant or toddler or his or her family.
   (f) An annual review, and other periodic reviews, of the
individualized family service plan for an infant or toddler and the
infant's or toddler's family shall be conducted to determine the
degree of progress that is being made in achieving the outcomes
specified in the plan and whether modification or revision of the
outcomes or services is necessary. The frequency, participants,
purpose, and required processes for annual and periodic reviews shall
be consistent with the statutes and regulations under Part C of the
federal Individuals with Disabilities Education Act (20 U.S.C. Sec.
1431 et seq.) and this title, and shall be specified in regulations
adopted pursuant to Section 95028. At the time of the review, the
parents, legal guardian, or conservator shall provide copies of any
health benefit cards under which the consumer is eligible to receive
health benefits, including, but not limited to, private health
insurance, a health care service plan, Medi-Cal, Medicare, and
TRICARE. If the parents, legal guardian, or conservator have no such
benefit cards, the regional center shall not use that fact to
negatively impact the services that the individual may or may not
receive from the regional center.
  SEC. 8.  Section 124174.2 of the Health and Safety Code is amended
to read:
   124174.2.  (a) The department, in cooperation with the State
Department of Education, shall establish a Public School Health
Center Support Program.
   (b) The program, in collaboration with the State Department of
Education, shall perform the following program functions:
   (1) Provide technical assistance to school health centers on
effective outreach and enrollment strategies to identify children who
are eligible for, but not enrolled in, the Medi-Cal program, the
Healthy Families Program, or any other applicable program.
   (2) Serve as a liaison between organizations within the
department, including, but not limited to, prevention services,
primary care, and family health.
   (3) Serve as a liaison between other state entities, as
appropriate, including, but not limited to, the State Department of
Health Care Services, the State Department of Alcohol and Drug
Programs, the Department of Managed Health Care, the California
Emergency Management Agency, and the Managed Risk Medical Insurance
Board.
   (4) Provide technical assistance to facilitate and encourage the
establishment, retention, or expansion of, school health centers. For
purposes of this paragraph, technical assistance may include, but is
not limited to, identifying available public and private sources of
funding, which may include federal Medicaid funds, funds from
third-party reimbursements, and available federal or foundation grant
moneys.
   (c) The department shall consult with interested parties and
appropriate stakeholders, including the California School Health
Centers Association and representatives of youth and parents, in
carrying out its responsibilities under this article.
  SEC. 9.  Section 4510 of the Welfare and Institutions Code is
amended to read:
   4510.  The State Department of Developmental Services, the State
Department of Health Care Services, and the State Department of State
Hospitals shall jointly develop and implement a statewide program
for encouraging the establishment of sufficient numbers and types of
living arrangements, both in communities and state hospitals, as
necessary to meet the needs of persons served by those departments.
The departments shall consult with the following organizations in the
development of procedures pursuant to this section:
   (a) The League of California Cities, the County Supervisors
Association of California, and representatives of other local
agencies.
   (b) Organizations or advocates for clients receiving services in
residential care services.
   (c) Providers of residential care services.
  SEC. 10.  Section 5213 of the Welfare and Institutions Code is
amended to read:
   5213.  (a) If, upon evaluation, the person is found to be in need
of treatment because he or she is, as a result of mental disorder, a
danger to others, or to himself or herself, or is gravely disabled,
he or she may be detained for treatment in a facility for 72-hour
treatment and evaluation. Saturdays, Sundays, and holidays may be
excluded from the 72-hour period if the State Department of Social
Services certifies for each facility that evaluation and treatment
services cannot reasonably be made available on those days. The
certification by the department is subject to renewal every two
years. The department shall adopt regulations defining criteria for
determining whether a facility can reasonably be expected to make
evaluation and treatment services available on Saturdays, Sundays,
and holidays.
   (b) Persons who have been detained for evaluation and treatment,
who are receiving medications as a result of their mental illness,
shall be given, as soon as possible after detention, written and oral
information about the probable effects and possible side effects of
the medication, by a person designated by the mental health facility
where the person is detained. The State Department of Social Services
shall develop and promulgate written materials on the effects of
medications, for use by county mental
                health programs as disseminated or as modified by the
county mental health program, addressing the probable effects and
the possible side effects of the medication. The following
information shall be given orally to the patient:
   (1) The nature of the mental illness, or behavior, that is the
reason the medication is being given or recommended.
   (2) The likelihood of improving or not improving without the
medications.
   (3) Reasonable alternative treatments available.
   (4) The name and type, frequency, amount, and method of dispensing
the medications, and the probable length of time that the
medications will be taken.
   The fact that the information has or has not been given shall be
indicated in the patient's chart. If the information has not been
given, the designated person shall document in the patient's chart
the justification for not providing the information. A failure to
give information about the probable effects and possible side effects
of the medication shall not constitute new grounds for release.
  SEC. 11.  Section 5256.1 of the Welfare and Institutions Code is
amended to read:
   5256.1.  The certification review hearing shall be conducted by
either a court-appointed commissioner or a referee, or a
certification review hearing officer. The certification review
hearing officer shall be either a state qualified administrative law
hearing officer, a physician and surgeon, a licensed psychologist, a
registered nurse, a lawyer, a certified law student, a licensed
clinical social worker, a licensed marriage and family therapist, or
a licensed professional clinical counselor. Licensed psychologists,
licensed clinical social workers, licensed marriage and family
therapists, licensed professional clinical counselors, and registered
nurses who serve as certification review hearing officers shall have
had a minimum of five years' experience in mental health.
Certification review hearing officers shall be selected from a list
of eligible persons unanimously approved by a panel composed of the
local mental health director, the county public defender, and the
county counsel or district attorney designated by the county board of
supervisors. No employee of the county mental health program or of
any facility designated by the county and approved by the State
Department of Social Services as a facility for 72-hour treatment and
evaluation may serve as a certification review hearing officer.
   The location of the certification review hearing shall be
compatible with, and least disruptive of, the treatment being
provided to the person certified. In addition, hearings conducted by
certification review officers shall be conducted at an appropriate
place at the facility where the person certified is receiving
treatment.
  SEC. 12.  Section 5875 of the Welfare and Institutions Code is
amended to read:
   5875.  The Secretary of California Health and Human Services shall
require the State Department of Health Care Services to develop an
administrative waiver process for counties that either propose to be,
or are considered, system of care counties by the department.
  SEC. 13.  Section 14005.26 of the Welfare and Institutions Code, as
added by Section 10 of Chapter 28 of the Statutes of 2012, is
amended to read:
   14005.26.  (a) The department shall exercise the option pursuant
to Section 1902(a)(l0)(A)(ii)(XIV) of the federal Social Security Act
(42 U.S.C. Sec. 1396a(a)(10)(A)(ii)(XIV)) to provide full-scope
benefits with no share of cost under this chapter and Chapter 8
(commencing with Section 14200) to optional targeted low-income
children pursuant to Section 1905(u)(2)(B) of the federal Social
Security Act (42 U.S.C. Sec. 1396d(u)(2)(B)), with family incomes up
to and including 200 percent of the federal poverty level. The
department shall seek federal approval of a state plan amendment to
implement this subdivision.
   (b) Pursuant to Section 1902(r)(2) of the federal Social Security
Act (42 U.S.C. Sec. 1396a(r)(2)), the department shall adopt the
option to use less restrictive income and resource methodologies to
exempt all resources and disregard income at or above 200 percent and
up to and including 250 percent of the federal poverty level for the
individuals described in subdivision (a). The department shall seek
federal approval of a state plan amendment to implement this
subdivision.
   (c) For purposes of carrying out the provisions of this section,
the department may adopt the option pursuant to Section 1902(e)(13)
of the federal Social Security Act (42 U.S.C. Sec. 1396a(e)(13)) to
rely upon findings of the Managed Risk Medical Insurance Board
(MRMIB) regarding one or more components of eligibility.
   (d) (1) The department shall exercise the option pursuant to
Section 1916A of the federal Social Security Act (42 U.S.C. Sec.
1396o-1) to impose premiums for individuals described in subdivision
(a) whose family income has been determined to be above 150 percent
and up to and including 200 percent of the federal poverty level,
after application of the income disregard pursuant to subdivision
(b). The department shall not impose premiums under this subdivision
for individuals described in subdivision (a) whose family income has
been determined to be at or below 150 percent of the federal poverty
level, after application of the income disregard pursuant to
subdivision (b). The department shall obtain federal approval for the
implementation of this subdivision.
   (2) (A) Monthly premiums imposed under this section shall equal
thirteen dollars ($13) per child with a maximum contribution of
thirty-nine dollars ($39) per family.
   (B) Families that pay three months of required premiums in advance
shall receive the fourth consecutive month of coverage with no
premium required. For purposes of the discount provided by this
subparagraph, family contributions paid in the Healthy Families
Program for children transitioned to Medi-Cal pursuant to Section
14005.27 shall be credited as Medi-Cal premiums paid.
   (C) Families that pay the required premium by an approved means of
electronic funds transfer, including credit card payment, shall
receive a 25-percent discount from the required premium. If the
department and the Managed Risk Medical Insurance Board determine
that it is feasible, the department shall treat an authorization for
electronic funds transfer or credit card payment to the Healthy
Families Program as an authorization for electronic funds transfer or
credit card payment to Medi-Cal.
   (e) This section shall be implemented only to the extent that all
necessary federal approvals and waivers described in this section
have been obtained and the enhanced rate of federal financial
participation under Title XXI of the federal Social Security Act (42
U.S.C. Sec. 1397aa et seq.) is available for targeted low-income
children pursuant to that act.
   (f) The department shall not enroll targeted low-income children
described in this section in the Medi-Cal program until all necessary
federal approvals and waivers have been obtained, and no sooner than
January 1, 2013.
   (g) (1) To the extent the new budget methodology pursuant to
paragraph (6) of subdivision (a) of Section 14154 is not fully
operational, for the purposes of implementing this section, for
individuals described in subdivision (a) whose family income has been
determined to be up to and including 150 percent of the federal
poverty level, as determined pursuant to subdivision (b), the
department shall utilize the budgeting methodology for this
population as contained in the November 2011 Medi-Cal Local
Assistance Estimate for Medi-Cal county administration costs for
eligibility operations.
   (2) For purposes of implementing this section, the department
shall include in the Medi-Cal Local Assistance Estimate an amount for
Medi-Cal eligibility operations associated with the individuals
whose family income is determined to be above 150 percent and up to
and including 200 percent of the federal poverty level, after
application of the income disregard pursuant to subdivision (b). In
developing an estimate for this activity, the department shall
consider the projected number of final eligibility determinations
each county will process and projected county costs. Within 60 days
of the passage of the annual Budget Act, the department shall notify
each county of their allocation for this activity based upon the
amount allotted in the annual Budget Act for this purpose.
   (h) When the new budget methodology pursuant to paragraph (6) of
subdivision (a) of Section 14154 is fully operational, the new budget
methodology shall be utilized to reimburse counties for eligibility
determinations made for individuals pursuant to this section.
   (i) Eligibility determinations and annual redeterminations made
pursuant to this section shall be performed by county eligibility
workers.
   (j) In conducting eligibility determinations for individuals
pursuant to this section and Section 14005.27, the following
reporting and performance standards shall apply to all counties:
   (1) Counties shall report to the department, in a manner and for a
time period prescribed by the department, in consultation with the
County Welfare Directors Association, the number of applications
processed on a monthly basis, a breakout of the applications based on
income using the federal percentage of poverty levels, the final
disposition of each application, including information on the
approved Medi-Cal program, if applicable, and the average number of
days it took to make the final eligibility determination for
applications submitted directly to the county and from the single
point of entry (SPE).
   (2) Notwithstanding any other provision of law, the following
performance standards shall be applied to counties regarding
eligibility determinations for individuals eligible pursuant to this
section:
   (A) For children whose applications are received by the county
human services department from the SPE, the following standards shall
apply:
   (i) Applications for children who are granted accelerated
enrollment by the SPE shall be processed according to the timeframes
specified in subdivision (d) of Section 14154.
   (ii) Applications for children who are not granted accelerated
enrollment by the SPE due to the existence of an already active
Medi-Cal case shall be processed according to the timeframes
specified in subdivision (d) of Section 14154.
   (iii) For applications for children who are not described in
clause (i) or (ii), 90 percent shall be processed within 10 working
days of being received, complete and without client errors.
   (iv) If an application described in this section also contains
adults, and the adult applicants are required to submit additional
information beyond the information provided for the children, the
county shall process the eligibility for the child or children
without delay, consistent with this section while gathering the
necessary information to process eligibility for the adults.
   (B) The department, in consultation with the County Welfare
Directors Association, shall develop reporting requirements for the
counties to provide regular data to the state regarding the
timeliness and outcomes of applications processed by the counties
that are received from the SPE.
   (C) Performance thresholds and corrective action standards as set
forth in Section 14154 shall apply.
   (D) For applications submitted directly to the county, these
applications shall be processed by the counties in accordance with
the performance standards established under subdivision (d) of
Section 14154.
   (3) This subdivision shall be implemented no sooner than January
1, 2013.
   (4) Twelve months after implementation of this section pursuant to
subdivision (f), the department shall provide enrollment information
regarding individuals determined eligible pursuant to subdivision
(a) to the fiscal and appropriate policy committees of the
Legislature.
   (k) (1) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, for
purposes of this transition, the department, without taking any
further regulatory action, shall implement, interpret, or make
specific this section by means of all-county letters, plan letters,
plan or provider bulletins, or similar instructions until the time
regulations are adopted. It is the intent of the Legislature that the
department be allowed temporary authority as necessary to implement
program changes until completion of the regulatory process.
   (2) To the extent otherwise required by Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, the department shall adopt emergency regulations
implementing this section no later than July 1, 2014. The department
may thereafter readopt the emergency regulations pursuant to that
chapter. The adoption and readoption, by the department, of
regulations implementing 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 department 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.
   (l) To implement this section, the department may enter into and
continue contracts with the Healthy Families Program administrative
vendor, for the purposes of implementing and maintaining the
necessary systems and activities for providing health care coverage
to optional targeted low-income children in the Medi-Cal program for
purposes of accelerated enrollment application processing by single
point of entry, noneligibility-related case maintenance and premium
collection, maintenance of the Health-E-App Web portal, call center
staffing and operations, certified application assistant services,
and reporting capabilities. To further implement this section, the
department may also enter into a contract with the Health Care
Options Broker of the department for purposes of managed care
enrollment activities. The contracts entered into or amended under
this section may initially be completed on a noncompetitive bid basis
and are exempt from the Public Contract Code. Contracts thereafter
shall be entered into or amended on a competitive bid basis and shall
be subject to the Public Contract Code.
   (m) (1) If at any time the director determines that this section
or any part of this section may 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, or any additional federal funds
that the director, in consultation with the Department of Finance,
determines would be advantageous to the state, the director shall
give notice to the fiscal and policy committees of the Legislature
and to the Department of Finance. After giving notice, this section
or any part of this section 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 this section or a part or parts
thereof, in order to receive federal financial participation, any
increase in the federal medical assistance percentage 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.
   (2) The director shall retain the declaration described in
paragraph (1), shall provide a copy of the declaration to the
Secretary of the State, the Secretary of the Senate, the Chief Clerk
of the Assembly, and the Legislative Counsel, and shall post the
declaration on the department's Internet Web site.
   (3) In the event that the director makes a determination under
paragraph (1) and this section ceases to be implemented, the children
shall be enrolled back into the Healthy Families Program.
  SEC. 14.  Section 14005.27 of the Welfare and Institutions Code, as
added by Section 11 of Chapter 28 of the Statutes of 2012, is
amended to read:
   14005.27.  (a) Individuals enrolled in the Healthy Families
Program pursuant to Part 6.2 (commencing with Section 12693) of
Division 2 of the Insurance Code on the effective date of the act
that added this section and who are determined eligible to receive
benefits pursuant to subdivisions (a) and (b) of Section 14005.26,
shall be transitioned into Medi-Cal, pursuant to this section.
   (b) To the extent necessary and for the purposes of carrying out
the provisions of this section, in performing initial eligibility
determinations for children enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693) of Division 2 of
the Insurance Code, the department shall adopt the option pursuant
to Section 1902(e)(13) of the federal Social Security Act (42 U.S.C.
Sec. 1396a(e)(13)) to allow the department or county human services
departments to rely upon findings made by the Managed Risk Medical
Insurance Board (MRMIB) regarding one or more components of
eligibility. The department shall seek federal approval of a state
plan amendment to implement this subdivision.
   (c) To the extent necessary, the department shall seek federal
approval of a state plan amendment or a waiver to provide presumptive
eligibility for the optional targeted low-income category of
eligibility pursuant to Section 14005.26 for individuals
presumptively eligible for or enrolled in the Healthy Families
Program pursuant to Part 6.2 (commencing with Section 12693) of
Division 2 of the Insurance Code. The presumptive eligibility shall
be based upon the most recent information contained in the individual'
s Healthy Families Program file. The timeframe for the presumptive
eligibility shall begin no sooner than January 1, 2013, and shall
continue until a determination of Medi-Cal eligibility is made, which
determination shall be performed within one year of the individual's
Healthy Families Program annual review date.
   (d) (1) The California Health and Human Services Agency, in
consultation with the Managed Risk Medical Insurance Board, the State
Department of Health Care Services, the Department of Managed Health
Care, and diverse stakeholders groups, shall provide the fiscal and
policy committees of the Legislature with a strategic plan for the
transition of the Healthy Families Program pursuant to this section
by no later than October 1, 2012. This strategic plan shall, at a
minimum, address all of the following:
   (A) State, county, and local administrative components which
facilitate a successful subscriber transition such as communication
and outreach to subscribers and applicants, eligibility processing,
enrollment, communication, and linkage with health plan providers,
payments of applicable premiums, and overall systems operation
functions.
   (B) Methods and processes for diverse stakeholder engagement
throughout the entire transition, including all phases of the
transition.
   (C) State monitoring of managed care health plans' performance and
accountability for provision of services, and initial quality
indicators for children and adolescents transitioning to Medi-Cal.
   (D) Health care and dental delivery system components such as
standards for informing and enrollment materials, network adequacy,
performance measures and metrics, fiscal solvency, and related
factors that ensure timely access to quality health and dental care
for children and adolescents transitioning to Medi-Cal.
   (E) Inclusion of applicable operational steps, timelines, and key
milestones.
   (F) A time certain for the transfer of the Healthy Families
Advisory Board, as described in Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code, to the State Department
of Health Care Services.
   (2) The intent of this strategic plan is to serve as an overall
guide for the development of each plan for each phase of this
transition, pursuant to paragraphs (1) to (8), inclusive, of
subdivision (e), to ensure clarity and consistency in approach and
subscriber continuity of care. This strategic plan may also be
updated by the California Health and Human Services Agency as
applicable and provided to the Legislature upon completion.
   (e) (1) The department shall transition individuals from the
Healthy Families Program to the Medi-Cal program in four phases, as
follows:
   (A) Phase 1. Individuals enrolled in a Healthy Families Program
health plan that is a Medi-Cal managed care health plan shall be
enrolled in the same plan no earlier than January 1, 2013, pursuant
to the requirements of this section and Section 14011.6, and to the
extent the individual is otherwise eligible under this chapter and
Chapter 8 (commencing with Section 14200).
   (B) Phase 2. Individuals enrolled in a Healthy Families Program
managed care health plan that is a subcontractor of a Medi-Cal
managed health care plan, to the extent possible, shall be enrolled
into a Medi-Cal managed health care plan that includes the
individuals' current plan pursuant to the requirements of this
section and Section 14011.6, and to the extent the individuals are
otherwise eligible under this chapter and Chapter 8 (commencing with
Section 14200). The transition of individuals described in this
subparagraph shall begin no earlier than April 1, 2013.
   (C) Phase 3. Individuals enrolled in a Healthy Families Program
plan that is not a Medi-Cal managed care plan and does not contract
or subcontract with a Medi-Cal managed care plan shall be enrolled in
a Medi-Cal managed care plan in that county. Enrollment shall
include consideration of the individuals' primary care providers
pursuant to the requirements of this section and Section 14011.6, and
to the extent the individuals are otherwise eligible under this
chapter and Chapter 8 (commencing with Section 14200). The transition
of individuals described in this subparagraph shall begin no earlier
than August 1, 2013.
   (D) Phase 4.
   (i) Individuals residing in a county that is not a Medi-Cal
managed care county shall be provided services under the Medi-Cal
fee-for-service delivery system, subject to clause (ii). The
transition of individuals described in this subparagraph shall begin
no earlier than September 1, 2013.
   (ii) In the event the department creates a managed health care
system in the counties described in clause (i), individuals residing
in those counties shall be enrolled in managed health care plans
pursuant to this chapter and Chapter 8 (commencing with Section
14200).
   (2) For the transition of individuals pursuant to subparagraphs
(A), (B), (C), and (D) of paragraph (1), implementation plans shall
be developed to ensure state and county systems readiness, health
plan network adequacy, and continuity of care with the goal of
ensuring there is no disruption of service and there is continued
access to coverage for all transitioning individuals. If an
individual is not retained with his or her current primary care
provider, the implementation plan shall require the managed care plan
to report to the department as to how continuity of care is being
provided. Transition of individuals described in subparagraphs (A),
(B), (C), and (D) of paragraph (1) shall not occur until 90 days
after the department has submitted an implementation plan to the
fiscal and policy committees of the Legislature. The implementation
plans shall include, but not be limited to, information on health and
dental plan network adequacy, continuity of care, eligibility and
enrollment requirements, consumer protections, and family
notifications.
   (3) The following requirements shall be in place prior to
implementation of Phase 1, and shall be required for all phases of
the transition:
   (A) Managed care plan performance measures shall be integrated and
coordinated with the Healthy Families Program performance standards
including, but not limited to, child-only Healthcare Effectiveness
Data and Information Set (HEDIS) measures, and measures indicative of
performance in serving children and adolescents. These performance
measures shall also be in compliance with all performance
requirements under the Knox-Keene Health Care Service Plan Act of
1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code) and existing Medi-Cal managed care
performance measurements and standards as set forth in this chapter
and Chapter 8 (commencing with Section 14200), Title 22 of the
California Code of Regulations, and all-plan letters, including, but
not limited to, network adequacy and linguistic services, and shall
be met prior to the transition of individuals pursuant to Phase 1.
   (B) Medi-Cal managed care health plans shall allow enrollees to
remain with their current primary care provider. If an individual
does not remain with the current primary care provider, the plan
shall report to the department as to how continuity of care is being
provided.
   (4) (A) As individuals are transitioned pursuant to subparagraphs
(A), (B), (C), and (D) of paragraph (1), for individuals residing in
all counties except the Counties of Sacramento and Los Angeles, their
dental coverage shall transition to fee-for-service dental coverage
and may be provided by their current provider if the provider is a
Medi-Cal fee-for-service dental provider.
   (B) For individuals residing in the County of Sacramento, their
dental coverage shall continue to be provided by their current dental
managed care plan if their plan is a Medi-Cal dental managed care
plan. If their plan is not a Medi-Cal dental managed care plan, they
shall select a Medi-Cal dental managed care plan. If they do not
choose a Medi-Cal dental managed care plan, they shall be assigned to
a plan with preference to a plan with which their current provider
is a contracted provider. Any children in the Healthy Families
Program transitioned into Medi-Cal dental managed care plans shall
also have access to the beneficiary dental exception process,
pursuant to Section 14089.09. Further, the Sacramento advisory
committee, established pursuant to Section 14089.08, shall be
consulted regarding the transition of children in the Healthy
Families Program into Medi-Cal dental managed care plans.
   (C) (i) For individuals residing in the County of Los Angeles, for
purposes of continuity of care, their dental coverage shall continue
to be provided by their current dental managed care plan if that
plan is a Medi-Cal dental managed care plan. If their plan is not a
Medi-Cal dental managed care plan, they may select a Medi-Cal dental
managed care plan or choose
       to move into Medi-Cal fee-for-service dental coverage.
   (ii) It is the intent of the Legislature that children
transitioning to Medi-Cal under this section have a choice in dental
coverage, as provided under existing law.
   (5) Dental health plan performance measures and benchmarks shall
be in accordance with Section 14459.6.
   (6) Medi-Cal managed care health and dental plans shall report to
the department, as frequently as specified by the department,
specified information pertaining to transition implementation,
enrollees, and providers, including, but not limited to, grievances
related to access to care, continuity of care requests and outcomes,
and changes to provider networks, including provider enrollment and
disenrollment changes. The plans shall report this information by
county, and in the format requested by the department.
   (7) The department may develop supplemental implementation plans
to separately account for the transition of individuals from the
Healthy Families Program to specific Medi-Cal delivery systems.
   (8) The department shall consult with the Legislature and
stakeholders, including, but not limited to, consumers, families,
consumer advocates, counties, providers, and health and dental plans,
in the development of implementation plans described in paragraph
(3) for individuals who are transitioned to Medi-Cal in Phase 2,
Phase 3, and Phase 4, as described in subparagraphs (B), (C), and (D)
of paragraph (1).
   (9) (A) The department shall consult and collaborate with the
Department of Managed Health Care in assessing Medi-Cal managed care
health plan network adequacy in accordance with the Knox-Keene Health
Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code) for purposes of
the developed transition plans pursuant to paragraph (2) for each of
the phases.
   (B) For purposes of individuals transitioning in Phase 1, as
described in subparagraph (A) of paragraph (1), network adequacy
shall be assessed as described in this paragraph and findings from
this assessment shall be provided to the fiscal and appropriate
policy committees of the Legislature 60 days prior to the effective
date of implementing this transition.
   (10) The department shall provide monthly status reports to the
fiscal and policy committees of the Legislature on the transition
commencing no later than February 15, 2013. This monthly status
transition report shall include, but not be limited to, information
on health plan grievances related to access to care, continuity of
care requests and outcomes, changes to provider networks, including
provider enrollment and disenrollment changes, and eligibility
performance standards pursuant to subdivision (m). A final
comprehensive report shall be provided within 90 days after
completion of the last phase of transition.
   (f) (1) The department and MRMIB shall work collaboratively in the
development of notices for individuals transitioned pursuant to
paragraph (1) of subdivision (e).
   (2) The state shall provide written notice to individuals enrolled
in the Healthy Families Program of their transition to the Medi-Cal
program at least 60 days prior to the transition of individuals in
Phase 1, as described in subparagraph (A) of paragraph (1) of
subdivision (e), and at least 90 days prior to transition of
individuals in Phases 2, 3, and 4, as described in subparagraphs (B)
and (C), and (D) of paragraph (1) of subdivision (e).
   (3) Notices developed pursuant to this subdivision shall ensure
individuals are informed regarding the transition, including, but not
limited to, how individuals' systems of care may change, when the
changes will occur, and whom they can contact for assistance when
choosing a Medi-Cal managed care plan, if applicable, including a
toll-free telephone number, and with problems they may encounter. The
department shall consult with stakeholders regarding notices
developed pursuant to this subdivision. These notices shall be
developed using plain language, and written translation of the
notices shall be available for those who are limited English
proficient or non-English speaking in all Medi-Cal threshold
languages.
   (4) The department shall designate department liaisons responsible
for the coordination of the Healthy Families Program and may
establish a children's-focused section for this purpose and to
facilitate the provision of health care services for children
enrolled in Medi-Cal.
   (5) The department shall provide a process for ongoing stakeholder
consultation and make information publicly available, including the
achievement of benchmarks, enrollment data, utilization data, and
quality measures.
   (g) (1) In order to aid the transition of Healthy Families Program
enrollees, MRMIB, on the effective date of the act that added this
section and continuing through the completion of the transition of
Healthy Families Program enrollees to the Medi-Cal program, shall
begin requesting and collecting from health plans contracting with
MRMIB pursuant to Part 6.2 (commencing with Section 12693) of
Division 2 of the Insurance Code, information about each health plan'
s provider network, including, but not limited to, the primary care
and all specialty care providers assigned to individuals enrolled in
the health plan. MRMIB shall obtain this information in a manner that
coincides with the transition activities described in subdivision
(d), and shall provide all of the collected information to the
department within 60 days of the department's request for this
information to ensure timely transitions of the Healthy Family
Programs enrollees.
   (2) The department shall analyze the existing Healthy Families
Program delivery system network and the Medi-Cal fee-for-service
provider networks, including, but not limited to, Medi-Cal dental
providers, to determine overlaps of the provider networks in each
county for which there are no Medi-Cal managed care plans or dental
managed care plans. To the extent there is a lack of existing
Medi-Cal fee-for-service providers available to serve the Healthy
Families Program enrollees, the department shall work with the
Healthy Families Program provider community to encourage
participation of those providers in the Medi-Cal program, and develop
a streamlined process to enroll them as Medi-Cal providers.
   (3) (A) MRMIB, within 60 days of a request by the department,
shall provide the department any data, information, or record
concerning the Healthy Families Program as is necessary to implement
the transition of enrollment required pursuant to this section.
   (B) Notwithstanding any other provision of law, all of the
following shall apply:
   (i) The term "data, information, or record" shall include, but is
not limited to, personal information as defined in Section 1798.3 of
the Civil Code.
   (ii) Any data, information, or record shall be exempt from
disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of the Government Code)
and any other law, to the same extent that it was exempt from
disclosure or privileged prior to the provision of the data,
information, or record to the department.
   (iii) The provision of any such data, information, or record to
the department shall not constitute a waiver of any evidentiary
privilege or exemption from disclosure.
   (iv) The department shall keep all data, information, or records
provided by MRMIB confidential to the full extent permitted by law,
including, but not limited to, the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of the
Government Code), and consistent with MRMIB's contractual obligations
to keep the data, information, or records confidential.
   (h) This section shall be implemented only to the extent that all
necessary federal approvals and waivers have been obtained and the
enhanced rate of federal financial participation under Title XXI of
the federal Social Security Act (42 U.S.C. Sec. 1397aa et seq.) is
available for targeted low-income children pursuant to that act.
   (i) (1) The department shall exercise the option pursuant to
Section 1916A of the federal Social Security Act (42 U.S.C. Sec.
1396o-1) to impose premiums for individuals described in subdivision
(a) of Section 14005.26 whose family income has been determined to be
above 150 percent and up to and including 200 percent of the federal
poverty level, after application of the income disregard pursuant to
subdivision (b) of Section 14005.26. The department shall not impose
premiums under this subdivision for individuals described in
subdivision (a) of Section 14005.26 whose family income has been
determined to be at or below 150 percent of the federal poverty
level, after application of the income disregard pursuant to
subdivision (b) of Section 14005.26. The department shall obtain
federal approval for the implementation of this subdivision.
   (2) All premiums imposed under this section shall equal the family
contributions described in paragraph (2) of subdivision (d) of
Section 12693.43 of the Insurance Code and shall be reduced in
conformity with subdivisions (e) and (f) of Section 12693.43 of the
Insurance Code.
   (j) The department shall not enroll targeted low-income children
described in this section in the Medi-Cal program until all necessary
federal approvals and waivers have been obtained, or no sooner than
January 1, 2013.
   (k) (1) To the extent the new budget methodology pursuant to
paragraph (6) of subdivision (a) of Section 14154 is not fully
operational, for the purposes of implementing this section, for
individuals described in subdivision (a) whose family income has been
determined to be at or below 150 percent of the federal poverty
level, as determined pursuant to subdivision (b), the department
shall utilize the budgeting methodology for this population as
contained in the November 2011 Medi-Cal Local Assistance Estimate for
Medi-Cal county administration costs for eligibility operations.
   (2) For purposes of implementing this section, the department
shall include in the Medi-Cal Local Assistance Estimate an amount for
Medi-Cal eligibility operations associated with the transfer of
Healthy Families Program enrollees eligible pursuant to subdivision
(a) of Section 14005.26 and whose family income is determined to be
above 150 percent and up to and including 200 percent of the federal
poverty level, after application of the income disregard pursuant to
subdivision (b) of Section 14005.26. In developing an estimate for
this activity, the department shall consider the projected number of
final eligibility determinations each county will process and
projected county costs. Within 60 days of the passage of the annual
Budget Act, the department shall notify each county of their
allocation for this activity based upon the amount allotted in the
annual Budget Act for this purpose.
   (l) When the new budget methodology pursuant to paragraph (6) of
subdivision (a) of Section 14154 is fully operational, the new budget
methodology shall be utilized to reimburse counties for eligibility
determinations made for individuals pursuant to this section.
   (m) Except as provided in subdivision (b), eligibility
determinations and annual redeterminations made pursuant to this
section shall be performed by county eligibility workers.
   (n) In conducting the eligibility determinations for individuals
pursuant to this section and Section 14005.26, the following
reporting and performance standards shall apply to all counties:
   (1) Counties shall report to the department, in a manner and for a
time period determined by the department, in consultation with the
County Welfare Directors Association, the number of applications
processed on a monthly basis, a breakout of the applications based on
income using the federal percentage of poverty levels, the final
disposition of each application, including information on the
approved Medi-Cal program, if applicable, and the average number of
days it took to make the final eligibility determination for
applications submitted directly to the county and from the single
point of entry (SPE).
   (2) Notwithstanding any other law, the following performance
standards shall be applied to counties for eligibility determinations
for individuals eligible pursuant to this section:
   (A) For children whose applications are received by the county
human services department from the SPE, the following standards shall
apply:
   (i) Applications for children who are granted accelerated
enrollment by the SPE shall be processed according to the timeframes
specified in subdivision (d) of Section 14154.
   (ii) Applications for children who are not granted accelerated
enrollment by the SPE due to the existence of an already active
Medi-Cal case shall be processed according to the timeframes
specified in subdivision (d) of Section 14154.
   (iii) For applications for children who are not described in
clause (i) or (ii), 90 percent shall be processed within 10 working
days of being received, complete and without client errors.
   (iv) If an application described in this section also contains
adults, and the adult applicants are required to submit additional
information beyond the information provided for the children, the
county shall process the eligibility for the child or children
without delay, consistent with this section while gathering the
necessary information to process eligibility for the adults.
   (B) The department, in consultation with the County Welfare
Directors Association, shall develop reporting requirements for the
counties to provide regular data to the state regarding the
timeliness and outcomes of applications processed by the counties
that are received from the SPE.
   (C) Performance thresholds and corrective action standards as set
forth in Section 14154 shall apply.
   (D) For applications received directly into the county, these
applications shall be processed by the counties in accordance with
the performance standards established under subdivision (d) of
Section 14154.
   (3) This subdivision shall be implemented no sooner than January
1, 2013.
   (4) Twelve months after implementation of this section pursuant to
subdivision (e), the department shall provide enrollment information
regarding individuals determined eligible pursuant to subdivision
(a) to the fiscal and appropriate policy committees of the
Legislature.
   (o) (1) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, for
purposes of this transition, the department, without taking any
further regulatory action, shall implement, interpret, or make
specific this section by means of all-county letters, plan letters,
plan or provider bulletins, or similar instructions until the time
regulations are adopted. It is the intent of the Legislature that the
department be allowed temporary authority as necessary to implement
program changes until completion of the regulatory process.
   (2) To the extent otherwise required by Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, the department shall adopt emergency regulations
implementing this section no later than July 1, 2014. The department
may thereafter readopt the emergency regulations pursuant to that
chapter. The adoption and readoption, by the department, of
regulations implementing 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 department 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.
   (p) To implement this section, the department may enter into and
continue contracts with the Healthy Families Program administrative
vendor, for the purposes of implementing and maintaining the
necessary systems and activities for providing health care coverage
to optional targeted low-income children in the Medi-Cal program for
purposes of accelerated enrollment application processing by single
point of entry, noneligibility-related case maintenance and premium
collection, maintenance of the Health-E-App Web portal, call center
staffing and operations, certified application assistant services,
and reporting capabilities. To further implement this section, the
department may also enter into a contract with the Health Care
Options Broker of the department for purposes of managed care
enrollment activities. The contracts entered into or amended under
this section may initially be completed on a noncompetitive bid basis
and are exempt from the Public Contract Code. Contracts thereafter
shall be entered into or amended on a competitive bid basis and shall
be subject to the Public Contract Code.
   (q) (1) If at any time the director determines that this section
or any part of this section may 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, or any additional federal funds
that the director, in consultation with the Department of Finance,
determines would be advantageous to the state, the director shall
give notice to the fiscal and policy committees of the Legislature
and to the Department of Finance. After giving notice, this section
or any part of this section 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 this section or a part or parts
thereof in order to receive federal financial participation, any
increase in the federal medical assistance percentage 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.
   (2) The director shall retain the declaration described in
paragraph (1), shall provide a copy of the declaration to the
Secretary of the State, the Secretary of the Senate, the Chief Clerk
of the Assembly, and the Legislative Counsel, and shall post the
declaration on the department's Internet Web site.
   (3) In the event that the director makes a determination under
paragraph (1) and this section ceases to be implemented, the children
shall be enrolled back into the Healthy Families Program.
  SEC. 15.  Section 14105.18 of the Welfare and Institutions Code is
amended to read:
   14105.18.  (a) Notwithstanding any other provision of law,
provider rates of payment for services rendered in all of the
following programs shall be identical to the rates of payment for the
same service performed by the same provider type pursuant to the
Medi-Cal program:
   (1) The California Children's Services Program established
pursuant to Article 5 (commencing with Section 123800) of Chapter 3
of Part 2 of Division 106 of the Health and Safety Code.
   (2) The Genetically Handicapped Person's Program established
pursuant to Article 1 (commencing with Section 125125) of Chapter 2
of Part 5 of Division 106 of the Health and Safety Code.
   (3) The Breast and Cervical Cancer Early Detection Program
established pursuant to Article 1.3 (commencing with Section 104150)
of Chapter 2 of Part 1 of Division 103 of the Health and Safety Code
and the breast cancer programs specified in Section 30461.6 of the
Revenue and Taxation Code.
   (4) The State-Only Family Planning Program established pursuant to
Division 24 (commencing with Section 24000).
   (5) The Family Planning, Access, Care, and Treatment (Family PACT)
Program established pursuant to subdivision (aa) of Section 14132.
   (6) The Healthy Families Program established pursuant to Part 6.2
(commencing with Section 12693) of Division 2 of the Insurance Code
if the health care services are provided by a Medi-Cal provider
pursuant to subdivision (b) of Section 12693.26 of the Insurance
Code.
   (7) The Access for Infants and Mothers Program established
pursuant to Part 6.3 (commencing with Section 12695) of Division 2 of
the Insurance Code if the health care services are provided by a
Medi-Cal provider.
   (b) The director may identify in regulations other programs not
listed in subdivision (a) in which providers shall be paid rates of
payment that are identical to the rates of payments in the Medi-Cal
program pursuant to subdivision (a).
   (c) Notwithstanding subdivision (a), services provided under any
of the programs described in subdivisions (a) and (b) may be
reimbursed at rates greater than the Medi-Cal rate that would
otherwise be applicable if those rates are adopted by the director in
regulations.
   (d) Payment increases made pursuant to Section 14105.196 shall not
apply to provider rates of payment described in this section for
services provided to individuals not eligible for Medi-Cal or Family
PACT.
   (e) This section shall become operative on January 1, 2011.
  SEC. 16.  Section 14105.196 of the Welfare and Institutions Code is
amended to read:
   14105.196.  (a) It is the intent of the Legislature to comply with
the provisions of the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152) and temporarily
increase reimbursement to certain primary care providers at the same
levels as Medicare rates for the 2013 and 2014 calendar years for
specified services.
   (b) (1) Notwithstanding any other law, to the extent required by
federal law and regulations, beginning January 1, 2013, through and
including December 31, 2014, payments for primary care services
provided by a physician with a primary specialty designation of
family medicine, general internal medicine, or pediatric medicine
shall not be less than 100 percent of the payment rate that applies
to those services and physicians as established by the Medicare
Program, for both fee-for-service and managed care plans.
   (2) Notwithstanding any other law, to the extent required by
federal law and regulations, beginning January 1, 2013, through and
including December 31, 2014, the payments for primary care services
implemented pursuant to this section shall be exempt from the payment
reductions under Sections 14105.191 and 14105.192.
   (3) Payment increases made pursuant to this section shall not
apply to provider rates of payment described in Section 14105.18 for
services provided to individuals not eligible for Medi-Cal or the
Family Planning, Access, Care, and Treatment (Family PACT) Program.
   (c) For purposes of this section, "primary care services" and
"primary specialty" means the services and primary specialties
defined in Section 1202 of the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152; 42 U.S.C. Sec. 1396a
(a)(13)(C)) and related federal regulations.
   (d) Notwithstanding any other law, effective on or after January
1, 2013, the payment increase implemented pursuant to this section
shall apply to managed care health plans that contract with the
department pursuant to Chapter 8.75 (commencing with Section 14591)
and to contracts with the Senior Care Action Network and the AIDS
Healthcare Foundation, and to the extent that the services are
provided through any of these contracts, payments shall be increased
by the actuarial equivalent amount of the payment increases pursuant
to contract amendments or change orders effective on or after January
1, 2013.
   (e) 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, clarify, make specific, and define the
provisions of this section by means of provider bulletins or similar
instructions, without taking regulatory action.
   (f) Notwithstanding paragraph (1) of subdivision (b), if a final
judicial determination is made by any state or federal court that is
not appealed, in any action by any party, or a final determination is
made by the administrator of the federal Centers for Medicare and
Medicaid Services, that any payments pursuant to this section are
invalid, unlawful, or contrary to any provision of federal law or
regulations, or of state law, this section shall become inoperative.
   (g) (1) The director shall implement the increased payments for
primary care services and primary specialties provided for in this
section only to the extent that the federal medical assistance
percentage is equal to 100 percent.
   (2) In assessing 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, the
director shall retain the discretion not to implement the changes and
may revise the payments as necessary to comply with the federal
Medicaid requirements.
   (h) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
  SEC. 17.  Section 14132.24 of the Welfare and Institutions Code is
amended to read:
   14132.24.  (a) The department shall develop and implement a
program to provide a community-living support benefit to eligible
Medi-Cal beneficiaries. The department shall submit any waiver
application, modification of any existing waiver, or amendment to the
Medicaid state plan, that is necessary to provide this benefit, and
shall implement the benefit only to the extent that federal financial
participation is available.
   (b) The community-living support benefit shall include both of the
following:
   (1) (A) Reimbursement for an array of health-related and
psychosocial services provided or coordinated at community-based
housing sites that enable beneficiaries to remain in the least
restrictive and most homelike environment while receiving the
health-related services, including personal care and psychosocial
services, necessary to protect their health and well-being. These
community-based housing units may include, but are not limited to,
the living area or unit within a facility that is specifically
designed to provide ongoing assisted living services, licensed
residential care facilities for the elderly, publicly funded senior
and disabled housing projects, or supportive housing sites that serve
chronically homeless individuals with chronic or disabling health
conditions.
                                                              (B) For
purposes of this section, "assisted living services" includes, but
is not limited to, assistance with personal activities of daily
living, including dressing, feeding, toileting, bathing, grooming,
mobility, and associated tasks, to help provide for and maintain
physical and psychological comfort.
   (2) Access to community-living support services provided or
coordinated at the community-based housing site, including, but not
limited to, the personal care and health services specified in
paragraph (8) of subdivision (a) of Section 1788 of the Health and
Safety Code, and the health related support services specified in
Section 53290 of the Health and Safety Code.
   (c) Services available through the community-living support
benefit shall not duplicate services available through the Medi-Cal
state plan, other Medi-Cal waivers, or other programs financed by the
state.
   (d) An individual shall be eligible for the community-living
support benefit if he or she is eligible for the Medi-Cal program, is
a resident of San Francisco who would otherwise be homeless, living
in shelters, or institutionalized, and meets one or both of the
following criteria:
   (1) The department determines that he or she would benefit from
supportive housing, as defined in subdivision (c) of Section 53260 of
the Health and Safety Code.
   (2) The department determines that he or she is eligible for
placement in a skilled nursing facility, as defined in subdivision
(c) of Section 1250 of the Health and Safety Code, or an intermediate
care facility, as defined in subdivision (d) of that section.
   (e) The department may modify the eligibility criteria specified
in subdivision (d), if needed, to qualify the community-living
support benefit for federal financial participation.
   (f) The department shall seek to maximize resources for
community-based housing by coordinating the community-living support
benefit with existing efforts to coordinate care, improve health
outcomes, and reduce long-term care costs for the targeted
population.
   (g) This section shall be implemented only upon adoption of a
resolution by the Board of Supervisors of the City and County of San
Francisco providing county funds for use by the state to match
federal Medicaid funds to receive federal funds for services provided
under the waiver specified in this section, and for any costs
associated with implementing and monitoring the waiver, to limit
additional state costs.
  SEC. 18.  Section 14132.275 of the Welfare and Institutions Code,
as amended by Section 1 of Chapter 33 of the Statutes of 2012, is
amended to read:
   14132.275.  (a) The department shall seek federal approval to
establish the demonstration project described in this section
pursuant to a Medicare or a Medicaid demonstration project or waiver,
or a combination thereof. Under a Medicare demonstration, the
department may contract with the federal Centers for Medicare and
Medicaid Services (CMS) and demonstration sites to operate the
Medicare and Medicaid benefits in a demonstration project that is
overseen by the state as a delegated Medicare benefit administrator,
and may enter into financing arrangements with CMS to share in any
Medicare program savings generated by the demonstration project.
   (b) After federal approval is obtained, the department shall
establish the demonstration project that enables dual eligible
beneficiaries to receive a continuum of services that maximizes
access to, and coordination of, benefits between the Medi-Cal and
Medicare programs and access to the continuum of long-term services
and supports and behavioral health services, including mental health
and substance use disorder treatment services. The purpose of the
demonstration project is to integrate services authorized under the
federal Medicaid Program (Title XIX of the federal Social Security
Act (42 U.S.C. Sec. 1396 et seq.)) and the federal Medicare Program
(Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395
et seq.)). The demonstration project may also include additional
services as approved through a demonstration project or waiver, or a
combination thereof.
   (c) For purposes of this section, the following definitions shall
apply:
   (1) "Behavioral health" means Medi-Cal services provided pursuant
to Section 51341 of Title 22 of the California Code of Regulations
and Drug Medi-Cal substance abuse services provided pursuant to
Section 51341.1 of Title 22 of the California Code of Regulations,
and any mental health benefits available under the Medicare Program.
   (2) "Capitated payment model" means an agreement entered into
between CMS, the state, and a managed care health plan, in which the
managed care health plan receives a capitation payment for the
comprehensive, coordinated provision of Medi-Cal services and
benefits under Medicare Part C (42 U.S.C. Sec. 1395w-21 et seq.) and
Medicare Part D (42 U.S.C. Sec. 1395w-101 et seq.), and CMS shares
the savings with the state from improved provision of Medi-Cal and
Medicare services that reduces the cost of those services. Medi-Cal
services include long-term services and supports as defined in
Section 14186.1, behavioral health services, and any additional
services offered by the demonstration site.
   (3) "Demonstration site" means a managed care health plan that is
selected to participate in the demonstration project under the
capitated payment model.
   (4) "Dual eligible beneficiary" means an individual 21 years of
age or older who is enrolled for benefits under Medicare Part A (42
U.S.C. Sec. 1395c et seq.) and Medicare Part B (42 U.S.C. Sec. 1395j
et seq.) and is eligible for medical assistance under the Medi-Cal
State Plan.
   (d) No sooner than March 1, 2011, the department shall identify
health care models that may be included in the demonstration project,
shall develop a timeline and process for selecting, financing,
monitoring, and evaluating the demonstration sites, and shall provide
this timeline and process to the appropriate fiscal and policy
committees of the Legislature. The department may implement these
demonstration sites in phases.
   (e) The department shall provide the fiscal and appropriate policy
committees of the Legislature with a copy of any report submitted to
CMS to meet the requirements under the demonstration project.
   (f) Goals for the demonstration project shall include all of the
following:
   (1) Coordinate Medi-Cal and Medicare benefits across health care
settings and improve the continuity of care across acute care,
long-term care, behavioral health, including mental health and
substance use disorder services, and home- and community-based
services settings using a person-centered approach.
   (2) Coordinate access to acute and long-term care services for
dual eligible beneficiaries.
   (3) Maximize the ability of dual eligible beneficiaries to remain
in their homes and communities with appropriate services and supports
in lieu of institutional care.
   (4) Increase the availability of and access to home- and
community-based services.
   (5) Coordinate access to necessary and appropriate behavioral
health services, including mental health and substance use disorder
services.
   (6) Improve the quality of care for dual eligible beneficiaries.
   (7) Promote a system that is both sustainable and person and
family centered by providing dual eligible beneficiaries with timely
access to appropriate, coordinated health care services and community
resources that enable them to attain or maintain personal health
goals.
   (g) No sooner than March 1, 2013, demonstration sites shall be
established in up to eight counties, and shall include at least one
county that provides Medi-Cal services via a two-plan model pursuant
to Article 2.7 (commencing with Section 14087.3) and at least one
county that provides Medi-Cal services under a county organized
health system pursuant to Article 2.8 (commencing with Section
14087.5). The director shall consult with the Legislature, CMS, and
stakeholders when determining the implementation date for this
section. In determining the counties in which to establish a
demonstration site, the director shall consider the following:
   (1) Local support for integrating medical care, long-term care,
and home- and community-based services networks.
   (2) A local stakeholder process that includes health plans,
providers, mental health representatives, community programs,
consumers, designated representatives of in-home supportive services
personnel, and other interested stakeholders in the development,
implementation, and continued operation of the demonstration site.
   (h) In developing the process for selecting, financing,
monitoring, and evaluating the health care models for the
demonstration project, the department shall enter into a memorandum
of understanding with CMS. Upon completion, the memorandum of
understanding shall be provided to the fiscal and appropriate policy
committees of the Legislature and posted on the department's Internet
Web site.
   (i) The department shall negotiate the terms and conditions of the
memorandum of understanding, which shall address, but are not
limited to, the following:
   (1) Reimbursement methods for a capitated payment model. Under the
capitated payment model, the demonstration sites shall meet all of
the following requirements:
   (A) Have Medi-Cal managed care health plan and Medicare dual
eligible-special needs plan contract experience, or evidence of the
ability to meet these contracting requirements.
   (B) Be in good financial standing and meet licensure requirements
under the Knox-Keene Health Care Service Plan Act of 1975 (Chapter
2.2 (commencing with Section 1340) of Division 2 of the Health and
Safety Code), except for county organized health system plans that
are exempt from licensure pursuant to Section 14087.95.
   (C) Meet quality measures, which may include Medi-Cal and Medicare
Healthcare Effectiveness Data and Information Set measures and other
quality measures determined or developed by the department or CMS.
   (D) Demonstrate a local stakeholder process that includes dual
eligible beneficiaries, managed care health plans, providers, mental
health representatives, county health and human services agencies,
designated representatives of in-home supportive services personnel,
and other interested stakeholders that advise and consult with the
demonstration site in the development, implementation, and continued
operation of the demonstration project.
   (E) Pay providers reimbursement rates sufficient to maintain an
adequate provider network and ensure access to care for
beneficiaries.
   (F) Follow final policy guidance determined by CMS and the
department with regard to reimbursement rates for providers pursuant
to paragraphs (4) to (7), inclusive, of subdivision (o).
   (G) To the extent permitted under the demonstration, pay
noncontracted hospitals prevailing Medicare fee-for-service rates for
traditionally Medicare covered benefits and prevailing Medi-Cal
fee-for-service rates for traditionally Medi-Cal covered benefits.
   (2) Encounter data reporting requirements for both Medi-Cal and
Medicare services provided to beneficiaries enrolling in the
demonstration project.
   (3) Quality assurance withholding from the demonstration site
payment, to be paid only if quality measures developed as part of the
memorandum of understanding and plan contracts are met.
   (4) Provider network adequacy standards developed by the
department and CMS, in consultation with the Department of Managed
Health Care, the demonstration site, and stakeholders.
   (5) Medicare and Medi-Cal appeals and hearing process.
   (6) Unified marketing requirements and combined review process by
the department and CMS.
   (7) Combined quality management and consolidated reporting process
by the department and CMS.
   (8) Procedures related to combined federal and state contract
management to ensure access, quality, program integrity, and
financial solvency of the demonstration site.
   (9) To the extent permissible under federal requirements,
implementation of the provisions of Sections 14182.16 and 14182.17
that are applicable to beneficiaries simultaneously eligible for
full-scope benefits under Medi-Cal and the Medicare Program.
   (10) (A) In consultation with the hospital industry, CMS approval
to ensure that Medicare supplemental payments for direct graduate
medical education and Medicare add-on payments, including indirect
medical education and disproportionate share hospital adjustments
continue to be made available to hospitals for services provided
under the demonstration.
   (B) The department shall seek CMS approval for CMS to continue
these payments either outside the capitation rates or, if contained
within the capitation rates, and to the extent permitted under the
demonstration project, shall require demonstration sites to provide
this reimbursement to hospitals.
   (11) To the extent permitted under the demonstration project, the
default rate for non-contracting providers of physician services
shall be the prevailing Medicare fee schedule for services covered by
the Medicare program and the prevailing Medi-Cal fee schedule for
services covered by the Medi-Cal program.
   (j) (1) The department shall comply with and enforce the terms and
conditions of the memorandum of understanding with CMS, as specified
in subdivision (i). To the extent that the terms and conditions do
not address the specific selection, financing, monitoring, and
evaluation criteria listed in subdivision (i), the department:
   (A) Shall require the demonstration site to do all of the
following:
   (i) Comply with additional site readiness criteria specified by
the department.
   (ii) Comply with long-term services and supports requirements in
accordance with Article 5.7 (commencing with Section 14186).
   (iii) To the extent permissible under federal requirements, comply
with the provisions of Sections 14182.16 and 14182.17 that are
applicable to beneficiaries simultaneously eligible for full-scope
benefits under both Medi-Cal and the Medicare Program.
   (iv) Comply with all transition of care requirements for Medicare
Part D benefits as described in Chapters 6 and 14 of the Medicare
Managed Care Manual, published by CMS, including transition
timeframes, notices, and emergency supplies.
   (B) May require the demonstration site to forgo charging premiums,
coinsurance, copayments, and deductibles for Medicare Part C and
Medicare Part D services.
   (2) The department shall notify the Legislature within 30 days of
the implementation of each provision in paragraph (1).
   (k) The director may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis and may amend existing managed
care contracts to provide or arrange for services provided under
this section. Contracts entered into or amended pursuant to this
section shall be exempt from the provisions of Chapter 2 (commencing
with Section 10290) of Part 2 of Division 2 of the Public Contract
Code and Chapter 6 (commencing with Section 14825) of Part 5.5 of
Division 3 of Title 2 of the Government Code.
   (l) (1) (A) Except for the exemptions provided for in this
section, the department shall enroll dual eligible beneficiaries into
a demonstration site unless the beneficiary makes an affirmative
choice to opt out of enrollment or is already enrolled on or before
June 1, 2013, in a managed care organization licensed under the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) that has previously contracted with the department as a
primary care case management plan pursuant to Article 2.9 (commencing
with Section 14088) to provide services to beneficiaries who are HIV
positive or who have been diagnosed with AIDS or in any entity with
a contract with the department pursuant to Chapter 8.75 (commencing
with Section 14591).
   (B) Dual eligible beneficiaries who opt out of enrollment into a
demonstration site may choose to remain enrolled in fee-for-service
Medicare or a Medicare Advantage plan for their Medicare benefits,
but shall be mandatorily enrolled into a Medi-Cal managed care health
plan pursuant to Section 14182.16, except as exempted under
subdivision (c) of Section 14182.16.
   (C) (i) Persons meeting requirements for the Program of
All-Inclusive Care for the Elderly (PACE) pursuant to Chapter 8.75
(commencing with Section 14591) or a managed care organization
licensed under the Knox-Keene Health Care Service Plan Act of 1975
(Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code) that has previously contracted with the
department as a primary care case management plan pursuant to Article
2.9 (commencing with Section 14088) of Chapter 7 to provide services
to beneficiaries who are HIV positive or who have been diagnosed
with AIDS may select either of these managed care health plans for
their Medicare and Medi-Cal benefits if one is available in that
county.
   (ii) In areas where a PACE plan is available, the PACE plan shall
be presented as an enrollment option, included in all enrollment
materials, enrollment assistance programs, and outreach programs
related to the demonstration project, and made available to
beneficiaries whenever enrollment choices and options are presented.
Persons meeting the age qualifications for PACE and who choose PACE
shall remain in the fee-for-service Medi-Cal and Medicare programs,
and shall not be assigned to a managed care health plan for the
lesser of 60 days or until they are assessed for eligibility for PACE
and determined not to be eligible for a PACE plan. Persons enrolled
in a PACE plan shall receive all Medicare and Medi-Cal services from
the PACE program pursuant to the three-way agreement between the PACE
program, the department, and the Centers for Medicare and Medicaid
Services.
   (2) To the extent that federal approval is obtained, the
department may require that any beneficiary, upon enrollment in a
demonstration site, remain enrolled in the Medicare portion of the
demonstration project on a mandatory basis for six months from the
date of initial enrollment. After the sixth month, a dual eligible
beneficiary may elect to enroll in a different demonstration site, a
different Medicare Advantage plan, fee-for-service Medicare, PACE, or
a managed care organization licensed under the Knox-Keene Health
Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code) that has
previously contracted with the department as a primary care case
management plan pursuant to Article 2.9 (commencing with Section
14088) to provide services to beneficiaries who are HIV positive or
who have been diagnosed with AIDS, for his or her Medicare benefits.
   (A) During the six-month mandatory enrollment in a demonstration
site, a beneficiary may continue receiving services from an
out-of-network Medicare provider for primary and specialty care
services only if all of the following criteria are met:
   (i) The dual eligible beneficiary demonstrates an existing
relationship with the provider prior to enrollment in a demonstration
site.
   (ii) The provider is willing to accept payment from the
demonstration site based on the current Medicare fee schedule.
   (iii) The demonstration site would not otherwise exclude the
provider from its provider network due to documented quality of care
concerns.
   (B) The department shall develop a process to inform providers and
beneficiaries of the availability of continuity of services from an
existing provider and ensure that the beneficiary continues to
receive services without interruption.
   (3) (A) Notwithstanding subparagraph (A) of paragraph (1) of
subdivision (l), a dual eligible beneficiary shall be excluded from
enrollment in the demonstration project if the beneficiary meets any
of the following:
   (i) The beneficiary has a prior diagnosis of end-stage renal
disease. This clause shall not apply to beneficiaries diagnosed with
end-stage renal disease subsequent to enrollment in the demonstration
project. The director may, with stakeholder input and federal
approval, authorize beneficiaries with a prior diagnosis of end-stage
renal disease in specified counties to voluntarily enroll in the
demonstration project.
   (ii) The beneficiary has other health coverage, as defined in
paragraph (4) of subdivision (b) of Section 14182.16.
   (iii) The beneficiary is enrolled in a home- and community-based
waiver that is a Medi-Cal benefit under Section 1915(c) of the
federal Social Security Act (42 U.S.C. Sec. 1396n et seq.), except
for persons enrolled in Multipurpose Senior Services Program
services.
   (iv) The beneficiary is receiving services through a regional
center or state developmental center.
   (v) The beneficiary resides in a geographic area or ZIP Code not
included in managed care, as determined by the department and CMS.
   (vi) The beneficiary resides in one of the Veterans' Homes of
California, as described in Chapter 1 (commencing with Section 1010)
of Division 5 of the Military and Veterans Code.
   (B) (i) Beneficiaries who have been diagnosed with HIV/AIDS may
opt out of the demonstration project at the beginning of any month.
The State Department of Public Health may share relevant data
relating to a beneficiary's enrollment in the AIDS Drug Assistance
Program with the department, and the department may share relevant
data relating to HIV-positive beneficiaries with the State Department
of Public Health.
   (ii) The information provided by the State Department of Public
Health pursuant to this subparagraph shall not be further disclosed
by the State Department of Health Care Services, and shall be subject
to the confidentiality protections of subdivisions (d) and (e) of
Section 121025 of the Health and Safety Code, except this information
may be further disclosed as follows:
   (I) To the person to whom the information pertains or the
designated representative of that person.
   (II) To the Office of AIDS within the State Department of Public
Health.
   (C) Beneficiaries who are Indians receiving Medi-Cal services in
accordance with Section 55110 of Title 22 of the California Code of
Regulations may opt out of the demonstration project at the beginning
of any month.
   (D) The department, with stakeholder input, may exempt specific
categories of dual eligible beneficiaries from enrollment
requirements in this section based on extraordinary medical needs of
specific patient groups or to meet federal requirements.
   (4) For the 2013 calendar year, the department shall offer federal
Medicare Improvements for Patients and Providers Act of 2008 (Public
Law 110-275) compliant contracts to existing Medicare Advantage
Special Needs Plans (D-SNP plans) to continue to provide Medicare
benefits to their enrollees in their service areas as approved on
January 1, 2012. In the 2013 calendar year, beneficiaries in Medicare
Advantage and D-SNP plans shall be exempt from the enrollment
provisions of subparagraph (A) of paragraph (1), but may voluntarily
choose to enroll in the demonstration project. Enrollment into the
demonstration project's managed care health plans shall be reassessed
in 2014 depending on federal reauthorization of the D-SNP model and
the department's assessment of the demonstration plans.
   (5) For the 2013 calendar year, demonstration sites shall not
offer to enroll dual eligible beneficiaries eligible for the
demonstration project into the demonstration site's D-SNP.
   (6) The department shall not terminate contracts in a
demonstration site with a managed care organization licensed under
the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) that has previously contracted with the department as a
primary care case management plan pursuant to Article 2.9 (commencing
with Section 14088) to provide services to beneficiaries who are HIV
positive beneficiaries or who have been diagnosed with AIDS and with
any entity with a contract pursuant to Chapter 8.75 (commencing with
Section 14591), except as provided in the contract or pursuant to
state or federal law.
   (m) Notwithstanding Section 10231.5 of the Government Code, the
department shall conduct an evaluation, in partnership with CMS, to
assess outcomes and the experience of dual eligibles in these
demonstration sites and shall provide a report to the Legislature
after the first full year of demonstration operation, and annually
thereafter. A report submitted to the Legislature pursuant to this
subdivision shall be submitted in compliance with Section 9795 of the
Government Code. The department shall consult with stakeholders
regarding the scope and structure of the evaluation.
   (n) This section shall be implemented only if and to the extent
that federal financial participation or funding is available.
   (o) It is the intent of the Legislature that:
   (1) In order to maintain adequate provider networks, demonstration
sites shall reimburse providers at rates sufficient to ensure access
to care for beneficiaries.
   (2) Savings under the demonstration project are intended to be
achieved through shifts in utilization, and not through reduced
reimbursement rates to providers.
   (3) Reimbursement policies shall not prevent demonstration sites
and providers from entering into payment arrangements that allow for
the alignment of financial incentives and provide opportunities for
shared risk and shared savings in order to promote appropriate
utilization shifts, which encourage the use of home- and
community-based services and quality of care for dual eligible
beneficiaries enrolled in the demonstration sites.
   (4) To the extent permitted under the demonstration project, and
to the extent that a public entity voluntarily provides an
intergovernmental transfer for this purpose, both of the following
shall apply:
   (A) The department shall work with CMS in ensuring that the
capitation rates under the demonstration project are inclusive of
funding currently provided through certified public expenditures
supplemental payment programs that would otherwise be impacted by the
demonstration project.
   (B) Demonstration sites shall pay to a public entity voluntarily
providing intergovernmental transfers that previously received
reimbursement under a certified public expenditures supplemental
payment program, rates that include the additional funding under the
capitation rates that are funded by the public entity's
intergovernmental transfer.
   (5) The department shall work with CMS in developing other
reimbursement policies and shall inform demonstration sites,
providers, and                                               the
Legislature of the final policy guidance.
   (6) The department shall seek approval from CMS to permit the
provider payment requirements contained in subparagraph (G) of
paragraph (1) and paragraphs (10) and (11) of subdivision (i), and
Section 14132.276.
   (7) Demonstration sites that contract with hospitals for hospital
services on a fee-for-service basis that otherwise would have been
traditionally Medicare services will achieve savings through
utilization changes and not by paying hospitals at rates lower than
prevailing Medicare fee-for-service rates.
   (p) The department shall enter into an interagency agreement with
the Department of Managed Health Care to perform some or all of the
department's oversight and readiness review activities specified in
this section. These activities may include providing consumer
assistance to beneficiaries affected by this section and conducting
financial audits, medical surveys, and a review of the adequacy of
provider networks of the managed care health plans participating in
this section. The interagency agreement shall be updated, as
necessary, on an annual basis in order to maintain functional clarity
regarding the roles and responsibilities of the Department of
Managed Health Care and the department. The department shall not
delegate its authority under this section as the single state
Medicaid agency to the Department of Managed Health Care.
   (q) (1) Beginning with the May Revision to the 2013-14 Governor's
Budget, and annually thereafter, the department shall report to the
Legislature on the enrollment status, quality measures, and state
costs of the actions taken pursuant to this section.
   (2) (A) By January 1, 2013, or as soon thereafter as practicable,
the department shall develop, in consultation with CMS and
stakeholders, quality and fiscal measures for health plans to reflect
the short- and long-term results of the implementation of this
section. The department shall also develop quality thresholds and
milestones for these measures. The department shall update these
measures periodically to reflect changes in this program due to
implementation factors and the structure and design of the benefits
and services being coordinated by managed care health plans.
   (B) The department shall require health plans to submit Medicare
and Medi-Cal data to determine the results of these measures. If the
department finds that a health plan is not in compliance with one or
more of the measures set forth in this section, the health plan
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 health plan shall take to improve its
performance based on the standard or standards with which the health
plan is out of compliance. The plan shall establish interim
benchmarks for improvement that shall be expected to be met by the
health plan in order to avoid a sanction pursuant to Section 14304.
Nothing in this subparagraph is intended to limit Section 14304.
   (C) The department shall publish the results of these measures,
including via posting on the department's Internet Web site, on a
quarterly basis.
   (r) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. Prior to
issuing any letter or similar instrument authorized pursuant to this
section, the department shall notify and consult with stakeholders,
including advocates, providers, and beneficiaries. The department
shall notify the appropriate policy and fiscal committees of the
Legislature of its intent to issue instructions under this section at
least five days in advance of the issuance.
  SEC. 19.  Section 14132.276 of the Welfare and Institutions Code,
as added by Section 2 of Chapter 33 of the Statutes of 2012, is
amended to read:
   14132.276.  For nursing facility services provided under the
demonstration project as established in Section 14132.275, to the
extent these provisions are authorized under the memorandum of
understanding specified in subdivision (j) of Section 14132.275, the
following shall apply:
   (a) The demonstration site shall not combine the rates of payment
for post-acute skilled and rehabilitation care provided by a nursing
facility and long-term and chronic care provided by a nursing
facility in order to establish a single payment rate for dual
eligible beneficiaries requiring skilled nursing services.
   (b) The demonstration site shall pay nursing facilities providing
post-acute skilled and rehabilitation care or long-term and chronic
care rates that reflect the different level of services and intensity
required to provide these services.
   (c) For the purposes of determining the appropriate rate for the
type of care identified in subdivision (b), the demonstration site
shall pay no less than the recognized rates under Medicare and
Medi-Cal for these service types.
   (d) With respect to services under this section, the demonstration
site shall not offer, and the nursing facility shall not accept, any
discounts, rebates, or refunds as compensation or inducements for
the referral of patients or residents.
   (e) It is the intent of the Legislature that savings under the
demonstration projects be achieved through shifts in utilization, and
not through reduced reimbursement rates to providers.
   (f) In order to encourage quality improvement and promote
appropriate utilization incentives, including reduced
rehospitalization and shorter lengths of stay, for nursing facilities
providing the services under this section, the demonstration sites
may do any of the following:
   (1) Utilize incentive or bonus payment programs that are in
addition to the rates identified in subdivisions (b) and (c).
   (2) Opt to direct beneficiaries to facilities that demonstrate
better performance on quality or appropriate utilization factors.
  SEC. 20.  Section 14139.22 of the Welfare and Institutions Code is
amended to read:
   14139.22.  (a) The department shall convene a working group that
shall include the Director of Health Care Services, the Director of
Social Services, and the Director of the California Department of
Aging, or the program staff from each of those departments who have
direct responsibility for the programs listed in subdivision (b) of
Section 14139.32, and may include the Director of Rehabilitation, or
program staff from those departments with direct responsibilities for
programs that may be included as a service in any pilot project
site, and representatives from each pilot project site upon its
selection.
   (b) The department shall consult with the working group during the
designing of the pilot program, in the selection of the pilot
project sites, and in the monitoring of the program under this
article, and shall utilize the working group as a resource for
problem solving and a means of maintaining interdepartmental and
intersite communication.
   (c) The working group shall strive to ensure that the pilot
program under this article makes maximum use of home-based and
community-based services, and throughout the continuum of care for
each beneficiary, encourages the use of the least restrictive
environment in which the beneficiary can receive appropriate care.
  SEC. 21.  Section 14166.12 of the Welfare and Institutions Code, as
amended by Section 90 of Chapter 23 of the Statutes of 2012, is
amended to read:
   14166.12.  (a) The California Medical Assistance Commission shall
negotiate payment amounts, in accordance with the selective provider
contracting program established pursuant to Article 2.6 (commencing
with Section 14081), from the Private Hospital Supplemental Fund
established pursuant to subdivision (b) for distribution to private
hospitals that satisfy the criteria of subdivision (s). Pursuant to
Section 14165, on and after July 1, 2012, the Director of Health Care
Services shall exercise the discretion granted to the California
Medical Assistance Commission.
   (b) The Private Hospital Supplemental Fund is hereby established
in the State Treasury. For purposes of this section, "fund" means the
Private Hospital Supplemental Fund.
   (c) Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated to the department for the
purposes specified in this section.
   (d) Except as otherwise limited by this section, the fund shall
consist of all of the following:
   (1) One hundred eighteen million four hundred thousand dollars
($118,400,000), which shall be transferred annually from General Fund
amounts appropriated in the annual Budget Act for the Medi-Cal
program, except as follows:
   (A) For the 2008-09 fiscal year, this amount shall be reduced by
thirteen million six hundred thousand dollars ($13,600,000) and by an
amount equal to one-half of the difference between eighteen million
three hundred thousand dollars ($18,300,000) and the amount of any
reduction in the additional payments for distressed hospitals
calculated pursuant to subparagraph (B) of paragraph (3) of
subdivision (b) of Section 14166.20.
   (B) For the 2012-13 fiscal year, this amount shall be reduced by
seventeen million five hundred thousand dollars ($17,500,000).
   (C) For the 2013-14 fiscal year, this amount shall be reduced by
eight million seven hundred fifty thousand dollars ($8,750,000).
   (2) Any additional moneys appropriated to the fund.
   (3) All stabilization funding transferred to the fund pursuant to
paragraph (2) of subdivision (a) of Section 14166.14.
   (4) Any moneys that any county, other political subdivision of the
state, or other governmental entity in the state may elect to
transfer to the department for deposit into the fund, as permitted
under Section 433.51 of Title 42 of the Code of Federal Regulations
or any other applicable federal Medicaid laws.
   (5) All private moneys donated by private individuals or entities
to the department for deposit in the fund as permitted under
applicable federal Medicaid laws.
   (6) Any interest that accrues on amounts in the fund.
   (e) Any public agency transferring moneys to the fund may, for
that purpose, utilize any revenues, grants, or allocations received
from the state for health care programs or purposes, unless otherwise
prohibited by law. A public agency may also utilize its general
funds or any other public moneys or revenues for purposes of
transfers to the fund, unless otherwise prohibited by law.
   (f) The department may accept or not accept moneys offered to the
department for deposit in the fund. If the department accepts moneys
pursuant to this section, the department shall obtain federal
financial participation to the full extent permitted by law. With
respect to funds transferred or donated from private individuals or
entities, the department shall accept only those funds that are
certified by the transferring or donating entity that qualify for
federal financial participation under the terms of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991
(Public Law 102-234) or Section 433.51 of Title 42 of the Code of
Federal Regulations, as applicable. The department may return any
funds transferred or donated in error.
   (g) Moneys in the fund shall be used as the source for the
nonfederal share of payments to hospitals under this section.
   (h) Any funds remaining in the fund at the end of a fiscal year
shall be carried forward for use in the following fiscal year.
   (i) Moneys shall be allocated from the fund by the department and
shall be applied to obtain federal financial participation in
accordance with customary Medi-Cal accounting procedures for purposes
of payments under this section. Distributions from the fund shall be
supplemental to any other Medi-Cal reimbursement received by the
hospitals, including amounts that hospitals receive under the
selective provider contracting program (Article 2.6 (commencing with
Section 14081)), and shall not affect provider rates paid under the
selective provider contracting program.
   (j) Each private hospital that was a private hospital during the
2002-03 fiscal year, received payments for the 2002-03 fiscal year
from any of the prior supplemental funds, and, during the project
year, satisfies the criteria in subdivision (s) to be eligible to
negotiate for distributions under any of those sections, shall
receive no less from the Private Hospital Supplemental Fund for the
project year than 100 percent of the amount the hospital received
from the prior supplemental funds for the 2002-03 fiscal year. Each
private hospital described in this subdivision shall be eligible for
additional payments from the fund pursuant to subdivision (k).
   (k) All amounts that are in the fund for a project year in excess
of the amount necessary to make the payments under subdivision (j)
shall be available for negotiation by the California Medical
Assistance Commission, along with corresponding federal financial
participation, for supplemental payments to private hospitals, which
for the project year satisfy the criteria under subdivision (s) to be
eligible to negotiate for distributions under any of those sections,
and paid for services rendered during the project year pursuant to
the selective provider contracting program established under Article
2.6 (commencing with Section 14081).
   (l) The amount of any stabilization funding transferred to the
fund, or the amount of intergovernmental transfers deposited to the
fund pursuant to subdivision (o), together with the associated
federal reimbursement, with respect to a particular project year,
may, in the discretion of the California Medical Assistance
Commission, until its dissolution on June 30, 2012, be paid for
services furnished in the same project year regardless of when the
stabilization funds or intergovernmental transfer funds, and the
associated federal reimbursement, become available, provided the
payment is consistent with other applicable federal or state law
requirements and does not result in a hospital exceeding any
applicable reimbursement limitations. On and after July 1, 2012, the
Director of Health Care Services shall exercise the discretion
granted to the California Medical Assistance Commission by this
subdivision.
   (m) The department shall pay amounts due to a private hospital
from the fund for a project year, with the exception of stabilization
funding, in up to four installment payments, unless otherwise
provided in the hospital's contract negotiated with the California
Medical Assistance Commission, except that hospitals that are not
described in subdivision (j) shall not receive the first installment
payment. The first payment shall be made as soon as practicable after
the issuance of the tentative disproportionate share hospital list
for the project year, and in no event later than January 1 of the
project year. The second and subsequent payments shall be made after
the issuance of the final disproportionate hospital list for the
project year, and shall be made only to hospitals that are on the
final disproportionate share hospital list for the project year. The
second payment shall be made by February 1 of the project year or as
soon as practicable after the issuance of the final disproportionate
share hospital list for the project year. The third payment, if
scheduled, shall be made by April 1 of the project year. The fourth
payment, if scheduled, shall be made by June 30 of the project year.
This subdivision does not apply to hospitals that are scheduled to
receive payments from the fund because they meet the criteria under
paragraph (2) of subdivision (s) and do not meet the criteria under
paragraph (1), (3), or (4) of subdivision (s), which shall be paid in
accordance with the applicable contract or contract amendment
negotiated by the California Medical Assistance Commission.
   (n) The department shall pay stabilization funding transferred to
the fund in amounts negotiated by the California Medical Assistance
Commission and shall pay the scheduled payments in accordance with
the applicable contract or contract amendment.
   (o) Payments to private hospitals that are eligible to receive
payments pursuant to subdivision (s) may be made using funds
transferred from governmental entities to the state, at the option of
the governmental entity. Any payments funded by intergovernmental
transfers shall remain with the private hospital and shall not be
transferred back to any unit of government. An amount equal to 25
percent of the amount of any intergovernmental transfer made in the
project year that results in a supplemental payment made for the same
project year to a project year private DSH hospital designated by
the governmental entity that made the intergovernmental transfer
shall be deposited in the fund for distribution as determined by the
California Medical Assistance Commission. An amount equal to 75
percent shall be deposited in the fund and distributed to the private
hospitals designated by the governmental entity.
   (p) A private hospital that receives payment pursuant to this
section for a particular project year shall not submit a notice for
the termination of its participation in the selective provider
contracting program established pursuant to Article 2.6 (commencing
with Section 14081) until the later of the following dates:
   (1) On or after December 31 of the next project year.
   (2) The date specified in the hospital's contract, if applicable.
   (q) (1) For the 2007-08, 2008-09, and 2009-10 project years, the
County of Los Angeles shall make intergovernmental transfers to the
state to fund the nonfederal share of increased Medi-Cal payments to
those private hospitals that serve the South Los Angeles population
formerly served by Los Angeles County Martin Luther King, Jr.-Harbor
Hospital. The intergovernmental transfers required under this
subdivision shall be funded by county tax revenues and shall total
five million dollars ($5,000,000) per project year, except that, in
the event that the director determines that any amount is due to the
County of Los Angeles under the demonstration project for services
rendered during the portion of a project year during which Los
Angeles County Martin Luther King, Jr.-Harbor Hospital was
operational, the amount of intergovernmental transfers required under
this subdivision shall be reduced by a percentage determined by
reducing 100 percent by the percentage reduction in Los Angeles
County Martin Luther King, Jr.-Harbor Hospital's baseline, as
determined under subdivision (c) of Section 14166.5 for that project
year.
   (2) Notwithstanding subdivision (o), an amount equal to 100
percent of the county's intergovernmental transfers under this
subdivision shall be deposited in the fund and, within 30 days after
receipt of the intergovernmental transfer, shall be distributed,
together with related federal financial participation, to the private
hospitals designated by the county in the amounts designated by the
county. The director shall disregard amounts received pursuant to
this subdivision in calculating the OBRA 1993 payment limitation, as
defined in paragraph (24) of subdivision (a) of Section 14105.98, for
purposes of determining the amount of disproportionate share
hospital replacement payments due a private hospital under Section
14166.11.
   (r) (1) The reductions in supplemental payments under this section
that result from the reductions in the amounts transferred from the
General Fund to the Private Hospital Supplemental Fund for the
2012-13 and 2013-14 fiscal years under subparagraphs (B) and (C) of
paragraph (1) of subdivision (d) shall be allocated equally in the
aggregate between children's hospitals eligible for supplemental
payments under this section and other hospitals eligible for
supplemental payments under this section. When negotiating payment
amounts to a hospital under this section for the 2012-13 and 2013-14
fiscal years, the California Medical Assistance Commission, or its
successor agency, shall identify both a payment amount that would
have been made absent the funding reductions in subparagraphs (B) and
(C) of paragraph (1) of subdivision (d) and the payment amount that
will be made taking into account the funding reductions under
subparagraphs (B) and (C) of paragraph (1) of subdivision (d). For
purposes of this subdivision, "children's hospital" shall have the
meaning set forth in paragraph (13) of subdivision (a) of Section
14105.98.
   (2) This subdivision shall not preclude the department from
including some or all of the reductions under this section within the
payments made under a new diagnosis-related group payment
methodology for the 2012-13 fiscal year or the 2013-14 fiscal year.
In the event the department includes some or all of the amounts,
including reductions, within the payments made under a new
diagnosis-related group payment methodology for the 2012-13 fiscal
year or the 2013-14 fiscal year, the department, in implementing the
reductions in paragraph (1) of subdivision (d), shall, to the extent
feasible, utilize the allocation specified in paragraph (1).
   (s) In order for a hospital to receive distributions pursuant to
Article 2.6 (commencing with Section 14081), the hospital shall
satisfy the eligibility criteria in paragraph (1), (2), (3), or (4)
of this subdivision.
   (1) The hospital meets all of the following criteria:
   (A) The hospital is contracting under Article 2.6 (commencing with
Section 14081).
   (B) The hospital meets the criteria contained in the Medicaid
State Plan for disproportionate share hospital status.
   (C) The hospital is one of the following:
   (i) A licensed provider of basic emergency services as described
in Section 70411 of Title 22 of the California Code of Regulations.
   (ii) A licensed provider of comprehensive emergency medical
services as defined in Section 70451 of Title 22 of the California
Code of Regulations.
   (iii) A children's hospital, as defined in Section 14087.21, that
satisfies clause (i) or (ii), or that jointly provides basic or
comprehensive emergency services in conjunction with another licensed
hospital.
   (iv) A hospital owned and operated by a public agency that
operates two or more hospitals that qualify under subparagraph (A) or
(B) with respect to the particular state fiscal year.
   (v) A hospital designated by the National Cancer Institute as a
comprehensive or clinical cancer research center that primarily
treats acutely ill cancer patients and that is exempt from the
federal Medicare prospective payment system pursuant to Section 1886
(d)(1)(B)(v) of the federal Social Security Act (42 U.S.C. Sec.
1395ww(d)(1)(B)(v)).
   (D) The hospital is able to demonstrate a purpose for additional
funding under the selective provider contracting program including
proposals relating to emergency services and other health care
services, including infrequent yet high-cost services, such as
anti-AB human antitoxin treatment for infant botulism (human
botulinum immune globulin (HBIG), commonly referred to as "Baby-BIG"
), that are made available, or will be made available, to Medi-Cal
beneficiaries.
   (2) The hospital is contracting under Article 2.6 (commencing with
Section 14081) and meets the definition of a university teaching
hospital or major, nonuniversity, teaching hospital as set forth on
page 51 and as listed on page 57 of the department's report dated May
1991, entitled "Hospital Peer Grouping." Payments from the fund
shall be used solely for the purposes identified in the contract
between the hospital and the state.
   (3) The hospital is contracting under Article 2.6 (commencing with
Section 14081), and meets the definition of any of the following:
   (A) A large teaching emphasis hospital, as set forth on page 51
and listed on page 57 of the department's report dated May 1991,
entitled "Hospital Peer Grouping," and also meets the definition of
eligible hospital as defined in paragraph (3) of subdivision (a) of
Section 14105.98.
   (B) A children's hospital pursuant to Section 10727, and also
meets the definition of eligible hospital as defined in paragraph (3)
of subdivision (a) of Section 14105.98.
   (C) Notwithstanding the requirement in subparagraph (A) that a
hospital must be listed on page 57 of the department's report dated
May 1991, entitled "Hospital Peer Grouping," any hospital whose
license pursuant to Chapter 2 (commencing with Section 1250) of
Division 2 of the Health and Safety Code was consolidated during the
1999 calendar year with a large teaching emphasis hospital that is
listed on page 57 of the above-described report shall be eligible.
All other requirements of paragraph (3) shall continue to apply.
   (4) The hospital meets all of the following criteria:
   (A) The hospital is contracting under Article 2.6 (commencing with
Section 14081).
   (B) The hospital satisfies the Medicaid State Plan criteria for
disproportionate share hospital status.
   (C) The hospital is a small and rural hospital as defined in
Section 124840 of the Health and Safety Code.
   (D) The hospital is a licensed provider of standby emergency
services as described in Section 70649 of Title 22 of the California
Code of Regulations.
   (E) The hospital is able to demonstrate a purpose for additional
funding under the selective provider contracting program with
proposals relating to health care services that are made available,
or will be made available, to Medi-Cal beneficiaries.
   (F) The hospital is determined by the California Medical
Assistance Commission to be a hospital that provides an important
community service that otherwise would not be provided in the
community.
  SEC. 22.  Section 14166.17 of the Welfare and Institutions Code, as
amended by Section 97 of Chapter 23 of the Statutes of 2012, is
amended to read:
   14166.17.  (a) The California Medical Assistance Commission shall
negotiate payment amounts in accordance with the selective provider
contracting program established pursuant to Article 2.6 (commencing
with Section 14081) from the Nondesignated Public Hospital
Supplemental Fund established pursuant to subdivision (b) for
distribution to nondesignated public hospitals that satisfy the
criteria of subdivision (o). Pursuant to Section 14165, on and after
July 1, 2012, the Director of Health Care Services shall exercise the
discretion granted to the California Medical Assistance Commission.
   (b) The Nondesignated Public Hospital Supplemental Fund is hereby
established in the State Treasury. For purposes of this section,
"fund" means                                               the
Nondesignated Public Hospital Supplemental Fund.
   (c) Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated to the department for the
purposes specified in this section.
   (d) Except as otherwise limited by this section, the fund shall
consist of all of the following:
   (1) One million nine hundred thousand dollars ($1,900,000), which
shall be transferred annually from General Fund amounts appropriated
in the annual Budget Act for the fund.
   (2) Any additional moneys appropriated to the fund.
   (3) All stabilization funding transferred to the fund.
   (4) All private moneys donated by private individuals or entities
to the department for deposit in the fund as permitted under
applicable federal Medicaid laws.
   (5) Any interest that accrues on amounts in the fund.
   (e) The department may accept or not accept moneys offered to the
department for deposit in the fund. If the department accepts moneys
pursuant to this section, the department shall obtain federal
financial participation to the full extent permitted by law. With
respect to funds transferred or donated from private individuals or
entities, the department shall accept only those funds that are
certified by the transferring or donating entity as qualifying for
federal financial participation under the terms of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991
(Public Law 102-234) or Section 433.51 of Title 42 of the Code of
Federal Regulations, as applicable. The department may return any
funds transferred or donated in error.
   (f) Moneys in the funds shall be used as the source for the
nonfederal share of payments to hospitals under this section.
   (g) Any funds remaining in the fund at the end of a fiscal year
shall be carried forward for use in the following fiscal year.
   (h) Moneys shall be allocated from the fund by the department and
shall be applied to obtain federal financial participation in
accordance with customary Medi-Cal accounting procedures for purposes
of payments under this section. Distributions from the fund shall be
supplemental to any other Medi-Cal reimbursement received by the
hospitals, including amounts that hospitals receive under the
selective provider contracts negotiated under Article 2.6 (commencing
with Section 14081), and shall not affect provider rates paid under
the selective provider contracting program.
   (i) Each nondesignated public hospital that was a nondesignated
public hospital during the 2002-03 fiscal year, received payments for
the 2002-03 fiscal year from any of the prior supplemental funds,
and, during the project year satisfies the criteria in subdivision
(o) to be eligible to negotiate for distributions under any of those
sections shall receive no less from the Nondesignated Public Hospital
Supplemental Fund for the project year than 100 percent of the
amount the hospital received from the prior supplemental funds for
the 2002-03 fiscal year, minus the total amount of intergovernmental
transfers made by or on behalf of the hospital pursuant to
subdivision (o) for the same fiscal year. Each hospital described in
this subdivision shall be eligible for additional payments from the
fund pursuant to subdivision (j).
   (j) All amounts that are in the fund for a project year in excess
of the amount necessary to make the payments under subdivision (i)
shall be available for negotiation by the California Medical
Assistance Commission, along with corresponding federal financial
participation, for supplemental payments to nondesignated public
hospitals that for the project year satisfy the criteria under
subdivision (o) to be eligible to negotiate for distributions under
any of those sections, and paid for services rendered during the
project year pursuant to the selective provider contracting program
under Article 2.6 (commencing with Section 14081).
   (k) The amount of any stabilization funding transferred to the
fund with respect to a project year may in the discretion of the
California Medical Assistance Commission, until its dissolution on
June 30, 2012, to be paid for services furnished in the same project
year regardless of when the stabilization funds become available,
provided the payment is consistent with other applicable federal or
state legal requirements and does not result in a hospital exceeding
any applicable reimbursement limitations. On and after July 1, 2012,
the Director of Health Care Services shall exercise the discretion
granted to the California Medical Assistance Commission by this
subdivision.
   (l) The department shall pay amounts due to a nondesignated
hospital from the fund for a project year, with the exception of
stabilization funding, in up to four installment payments, unless
otherwise provided in the hospital's contract negotiated with the
California Medical Assistance Commission, except that hospitals that
are not described in subdivision (i) shall not receive the first
installment payment. The first payment shall be made as soon as
practicable after the issuance of the tentative disproportionate
share hospital list for the project year, and in no event later than
January 1 of the project year. The second and subsequent payments
shall be made after the issuance of the final disproportionate
hospital list for the project year, and shall be made only to
hospitals that are on the final disproportionate share hospital list
for the project year. The second payment shall be made by February 1
of the project year or as soon as practicable after the issuance of
the final disproportionate share hospital list for the project year.
The third payment, if scheduled, shall be made by April 1 of the
project year. The fourth payment, if scheduled, shall be made by June
30 of the project year. This subdivision does not apply to hospitals
that are scheduled to receive payments from the fund because they
meet the criteria under paragraph (2) of subdivision (o) but do not
meet the criteria under paragraph (1), (3), or (4) of subdivision
(o).
   (m)  The department shall pay stabilization funding transferred to
the fund in amounts negotiated by the California Medical Assistance
Commission and paid in accordance with the applicable contract or
contract amendment.
   (n) A nondesignated public hospital that receives payment pursuant
to this section for a particular project year shall not submit a
notice for the termination of its participation in the selective
provider contracting program established pursuant to Article 2.6
(commencing with Section 14081) until the later of the following
dates:
   (1) On or after December 31 of the next project year.
   (2) The date specified in the hospital's contract, if applicable.
   (o) In order for a hospital to receive distributions pursuant to
Article 2.6 (commencing with Section 14081), the hospital shall
satisfy the eligibility criteria in paragraph (1), (2), (3), or (4)
of this subdivision.
   (1) The hospital meets all of the following criteria:
   (A) The hospital is contracting under Article 2.6 (commencing with
Section 14081).
   (B) The hospital meets the criteria contained in the Medicaid
State Plan for disproportionate share hospital status.
   (C) The hospital is one of the following:
   (i) A licensed provider of basic emergency services as described
in Section 70411 of Title 22 of the California Code of Regulations.
   (ii) A licensed provider of comprehensive emergency medical
services as defined in Section 70451 of Title 22 of the California
Code of Regulations.
   (iii) A children's hospital, as defined in Section 14087.21, that
satisfies clause (i) or (ii), or that jointly provides basic or
comprehensive emergency services in conjunction with another licensed
hospital.
   (iv) A hospital owned and operated by a public agency that
operates two or more hospitals that qualify under subparagraph (A) or
(B) with respect to the particular state fiscal year.
   (v) A hospital designated by the National Cancer Institute as a
comprehensive or clinical cancer research center that primarily
treats acutely ill cancer patients and that is exempt from the
federal Medicare prospective payment system pursuant to Section 1886
(d)(1)(B)(v) of the federal Social Security Act (42 U.S.C. Sec.
1395ww(d)(1)(B)(v)).
   (D) (1) The hospital is able to demonstrate a purpose for
additional funding under the selective provider contracting program
including proposals relating to emergency services and other health
care services, including infrequent yet high-cost services, such as
anti-AB human antitoxin treatment for infant botulism (human
botulinum immune globulin (HBIG), commonly referred to as "Baby-BIG"
), that are made available, or will be made available, to Medi-Cal
beneficiaries.
   (2) The hospital is contracting under Article 2.6 (commencing with
Section 14081) and meets the definition of a university teaching
hospital or major, nonuniversity, teaching hospital as set forth on
page 51 and as listed on page 57 of the department's report dated May
1991, entitled "Hospital Peer Grouping." Payments from the fund
shall be used solely for the purposes identified in the contract
between the hospital and the state.
   (3) The hospital is contracting under Article 2.6 (commencing with
Section 14081) and meets the definition of any of the following:
   (A) A large teaching emphasis hospital, as set forth on page 51
and listed on page 57 of the department's report dated May 1991,
entitled "Hospital Peer Grouping," and also meets the definition of
eligible hospital as defined in paragraph (3) of subdivision (a) of
Section 14105.98.
   (B) A children's hospital pursuant to Section 10727, and also
meets the definition of eligible hospital as defined in paragraph (3)
of subdivision (a) of Section 14105.98.
   (C) Notwithstanding the requirement in subparagraph (A) of
paragraph (3) that a hospital must be listed on page 57 of the
department's report dated May 1991, entitled "Hospital Peer Grouping,"
any hospital whose license pursuant to Chapter 2 (commencing with
Section 1250) of Division 2 of the Health and Safety Code was
consolidated during the 1999 calendar year with a large teaching
emphasis hospital that is listed on page 57 of the above-described
report shall be eligible. All other requirements of paragraph (3)
shall continue to apply.
   (4) The hospital meets all of the following criteria:
   (A) The hospital is contracting under Article 2.6 (commencing with
Section 14081).
   (B) The hospital satisfies the Medicaid State Plan criteria for
disproportionate share hospital status.
   (C) The hospital is a small and rural hospital as defined in
Section 124840 of the Health and Safety Code.
   (D) The hospital is a licensed provider of standby emergency
services as described in Section 70649 of Title 22 of the California
Code of Regulations.
   (E) The hospital is able to demonstrate a purpose for additional
funding under the selective provider contracting program with
proposals relating to health care services that are made available,
or will be made available, to Medi-Cal beneficiaries.
   (F) The hospital is determined by the California Medical
Assistance Commission to be a hospital that provides an important
community service that otherwise would not be provided in the
community.
  SEC. 23.  Section 14182.16 of the Welfare and Institutions Code, as
added by Section 4 of Chapter 33 of the Statutes of 2012, is amended
to read:
   14182.16.  (a) The department shall require Medi-Cal beneficiaries
who have dual eligibility in Medi-Cal and the Medicare Program to be
assigned as mandatory enrollees into new or existing Medi-Cal
managed care health plans for their Medi-Cal benefits in counties
participating in the demonstration project pursuant to Section
14132.275.
   (b) For the purposes of this section and Section 14182.17, the
following definitions shall apply:
   (1) "Dual eligible beneficiary" means an individual 21 years of
age or older who is enrolled for benefits under Medicare Part A (42
U.S.C. Sec. 1395c et seq.) or Medicare Part B (42 U.S.C. Sec. 1395j
et seq.), or both, and is eligible for medical assistance under the
Medi-Cal State Plan.
   (2) "Full-benefit dual eligible beneficiary" means an individual
21 years of age or older who is eligible for benefits under Medicare
Part A (42 U.S.C. Sec. 1395c et seq.), Medicare Part B (42 U.S.C.
Sec. 1395j et seq.), and Medicare Part D (42 U.S.C. Sec. 1395w-101),
and is eligible for medical assistance under the Medi-Cal State Plan.

   (3) "Managed care health plan" means an individual, organization,
or entity that enters into a contract with the department pursuant to
Article 2.7 (commencing with Section 14087.3), Article 2.81
(commencing with Section 14087.96), or Article 2.91 (commencing with
Section 14089), of this chapter, or Chapter 8 (commencing with
Section 14200).
   (4) "Other health coverage" means health coverage providing the
same full or partial benefits as the Medi-Cal program, health
coverage under another state or federal medical care program except
for the Medicare Program (Title XVIII of the federal Social Security
Act (42 U.S.C. Sec. 1395 et seq.)), or health coverage under a
contractual or legal entitlement, including, but not limited to, a
private group or indemnification insurance program.
   (5) "Out-of-network Medi-Cal provider" means a health care
provider that does not have an existing contract with the beneficiary'
s managed care health plan or its subcontractors.
   (6) "Partial-benefit dual eligible beneficiary" means an
individual 21 years of age or older who is enrolled for benefits
under Medicare Part A (42 U.S.C. Sec. 1395c et seq.), but not
Medicare Part B (42 U.S.C. Sec. 1395j et seq.), or who is eligible
for Medicare Part B (42 U.S.C. Sec. 1395j et seq.), but not Medicare
Part A (42 U.S.C. Sec. 1395c et seq.), and is eligible for medical
assistance under the Medi-Cal State Plan.
   (c) (1) Notwithstanding subdivision (a), a dual eligible
beneficiary is exempt from mandatory enrollment in a managed care
health plan if the dual eligible beneficiary meets any of the
following:
   (A) Except in counties with county organized health systems
operating pursuant to Article 2.8 (commencing with Section 14087.5),
the beneficiary has other health coverage.
   (B) The beneficiary receives services through a foster care
program, including the program described in Article 5 (commencing
with Section 11400) of Chapter 2.
   (C) The beneficiary is under 21 years of age.
   (D) The beneficiary is not eligible for enrollment in managed care
health plans for medically necessary reasons determined by the
department.
   (E) The beneficiary resides in one of the Veterans Homes of
California, as described in Chapter 1 (commencing with Section 1010)
of Division 5 of the Military and Veterans Code.
   (F) The beneficiary is enrolled in any entity with a contract with
the department pursuant to Chapter 8.75 (commencing with Section
14591).
   (G) The beneficiary is enrolled in a managed care organization
licensed under the Knox-Keene Health Care Service Plan Act of 1975
(Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code) that has previously contracted with the
department as a primary care case management plan pursuant to Article
2.9 (commencing with Section 14088) of Chapter 7.
   (2) A beneficiary who has been diagnosed with HIV/AIDS is not
exempt from mandatory enrollment, but may opt out of managed care
enrollment at the beginning of any month.
   (d) Implementation of this section shall incorporate the
provisions of Section 14182.17 that are applicable to beneficiaries
eligible for benefits under Medi-Cal and the Medicare Program.
   (e) At the director's sole discretion, in consultation with
stakeholders, the department may determine and implement a phased-in
enrollment approach that may include Medi-Cal beneficiary enrollment
into managed care health plans immediately upon implementation of
this section in a specific county, over a 12-month period, or other
phased approach. The phased-in enrollment shall commence no sooner
than March 1, 2013, and not until all necessary federal approvals
have been obtained.
   (f) To the extent that mandatory enrollment is required by the
department, an enrollee's access to fee-for-service Medi-Cal shall
not be terminated until the enrollee has selected or been assigned to
a managed care health plan.
   (g) Except in a county where Medi-Cal services are provided by a
county organized health system, and notwithstanding any other law, in
any county in which fewer than two existing managed health care
plans contract with the department to provide Medi-Cal services under
this chapter that are available to dual eligible beneficiaries,
including long-term services and supports, the department may
contract with additional managed care health plans to provide
Medi-Cal services.
   (h) For partial-benefit dual eligible beneficiaries, the
department shall inform these beneficiaries of their rights to
continuity of care from out-of-network Medi-Cal providers pursuant to
subparagraph (G) of paragraph (5) of subdivision (d) of Section
14182.17, and that the need for medical exemption criteria applied to
counties operating under Chapter 4.1 (commencing with Section 53800)
of Subdivision 1 of Division 3 of Title 22 of the California Code of
Regulations may not be necessary to continue receiving Medi-Cal
services from an out-of-network provider.
   (i) The department may contract with existing managed care health
plans to provide or arrange for services under this section.
Notwithstanding any other law, the department may enter into the
contract without the need for a competitive bid process or other
contract proposal process, provided that the managed care health plan
provides written documentation that it meets all of the
qualifications and requirements of this section and Section 14182.17.

   (j) The development of capitation rates for managed care health
plan contracts shall include the analysis of data specific to the
dual eligible population. For the purposes of developing capitation
rates for payments to managed care health plans, the department shall
require all managed care health plans, including existing managed
care health plans, to submit financial, encounter, and utilization
data in a form, at a time, and including substance as deemed
necessary by the department. Failure to submit the required data
shall result in the imposition of penalties pursuant to Section
14182.1.
   (k) Persons meeting participation requirements for the Program of
All-Inclusive Care for the Elderly (PACE) pursuant to Chapter 8.75
(commencing with Section 14591) may select a PACE plan if one is
available in that county.
   (l) Except for dual eligible beneficiaries participating in the
demonstration project pursuant to Section 14132.275, persons meeting
the participation requirements in effect on January 1, 2010, for a
Medi-Cal primary case management plan in operation on that date, may
select that primary care case management plan or a successor health
care plan that is licensed pursuant to the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code) to provide services
within the same geographic area that the primary care case management
plan served on January 1, 2010.
   (m) The department may implement an intergovernmental transfer
arrangement with a public entity that elects to transfer public funds
to the state to be used solely as the nonfederal share of Medi-Cal
payments to managed care health plans for the provision of services
to dual eligible beneficiaries pursuant to Section 14182.15.
   (n) To implement this section, the department may contract with
public or private entities. Contracts or amendments entered into
under this section may be on an exclusive or nonexclusive basis and
on a noncompetitive bid basis and shall be exempt from all of the
following:
   (1) Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code and any policies, procedures, or regulations
authorized by that part.
   (2) Article 4 (commencing with Section 19130) of Chapter 5 of Part
2 of Division 5 of Title 2 of the Government Code.
   (3) Review or approval of contracts by the Department of General
Services.
   (o) Any otherwise applicable provisions of this chapter, Chapter 8
(commencing with Section 14200), or Chapter 8.75 (commencing with
Section 14591) not in conflict with this section or with the Special
Terms and Conditions of the waiver shall apply to this section.
   (p) The department shall, in coordination with and consistent with
an interagency agreement with the Department of Managed Health Care,
at a minimum, monitor on a quarterly basis the adequacy of provider
networks of the managed care health plans.
   (q) The department shall suspend new enrollment of dual eligible
beneficiaries into a managed care health plan if it determines that
the managed care health plan does not have sufficient primary or
specialty care providers and long-term service and supports to meet
the needs of its enrollees.
   (r) Managed care health plans shall pay providers in accordance
with Medicare and Medi-Cal coordination of benefits.
   (s) This section shall be implemented only to the extent that all
federal approvals and waivers are obtained and only if and to the
extent that federal financial participation is available.
   (t) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. Prior to
issuing any letter or similar instrument authorized pursuant to this
section, the department shall notify and consult with stakeholders,
including advocates, providers, and beneficiaries. The department
shall notify the appropriate policy and fiscal committees of the
Legislature of its intent to issue instructions under this section at
least five days in advance of the issuance.
   (u) A managed care health plan that contracts with the department
for the provision of services under this section shall ensure that
beneficiaries have access to the same categories of licensed
providers that are available under fee-for-service Medicare. Nothing
in this section shall prevent a managed care health plan from
contracting with selected providers within a category of licensure.
  SEC. 24.  Section 14182.17 of the Welfare and Institutions Code, as
added by Section 5 of Chapter 33 of the Statutes of 2012, is amended
to read:
   14182.17.  (a) For the purposes of this section, the definitions
in subdivision (b) of Section 14182.16 shall apply.
   (b) The department shall ensure and improve the care coordination
and integration of health care services for Medi-Cal beneficiaries
residing in counties participating in the demonstration project
pursuant to Section 14132.275 who are either of the following:
   (1) Dual eligible beneficiaries, as defined in subdivision (b) of
Section 14182.16, who receive Medi-Cal benefits and services through
the demonstration project established pursuant to Section 14132.275
or through mandatory enrollment in managed care health plans pursuant
to Section 14182.16.
   (2) Medi-Cal beneficiaries who receive long-term services and
supports pursuant to Article 5.7 (commencing with Section 14186).
   (c) The department shall develop an enrollment process to be used
in counties participating in the demonstration project pursuant to
Section 14132.275 to do the following:
   (1) Except in a county that provides Medi-Cal services under a
county organized health system pursuant to Article 2.8 (commencing
with Section 14087.5), provide a choice of Medi-Cal managed care
plans to a dual eligible beneficiary who has opted for Medicare
fee-for-service, and establish an algorithm to assign beneficiaries
who do not make a choice.
   (2) Ensure that only beneficiaries required to make a choice or
affirmatively opt out are sent enrollment materials.
   (3) Establish enrollment timelines, developed in consultation with
health plans and stakeholders, and approved by CMS, for each
demonstration site. The timeline may provide for combining or phasing
in enrollment for Medicare and Medi-Cal benefits.
   (d) Before the department contracts with managed care health plans
or Medi-Cal providers to furnish Medi-Cal benefits and services
pursuant to subdivision (b), the department shall do all of the
following:
   (1) Ensure timely and appropriate communications with
beneficiaries as follows:
   (A) At least 90 days prior to enrollment, inform dual eligible
beneficiaries through a notice written at not more than a sixth-grade
reading level that includes, at a minimum, how the Medi-Cal system
of care will change, when the changes will occur, and who they can
contact for assistance with choosing a managed care health plan or
with problems they encounter.
   (B) Develop and implement an outreach and education program for
beneficiaries to inform them of their enrollment options and rights,
including specific steps to work with consumer and beneficiary
community groups.
   (C) Develop, in consultation with consumers, beneficiaries, and
other stakeholders, an overall communications plan that includes all
aspects of developing beneficiary notices.
   (D) Ensure that managed care health plans and their provider
networks are able to provide communication and services to dual
eligible beneficiaries in alternative formats that are culturally,
linguistically, and physically appropriate through means, including,
but not limited to, assistive listening systems, sign language
interpreters, captioning, written communication, plain language, and
written translations.
   (E) Ensure that managed care health plans have prepared materials
to inform beneficiaries of procedures for obtaining Medi-Cal
benefits, including grievance and appeals procedures, that are
offered by the plan or are available through the Medi-Cal program.
   (F) Ensure that managed care health plans have policies and
procedures in effect to address the effective transition of
beneficiaries from Medicare Part D plans not participating in the
demonstration project. These policies shall include, but not be
limited to, the transition of care requirements for Medicare Part D
benefits as described in Chapters 6 and 14 of the Medicare Managed
Care Manual, published by CMS, including a determination of which
beneficiaries require information about their transition supply, and,
within the first 90 days of coverage under
                 a new plan, provide for a temporary fill when the
beneficiary requests a refill of a nonformulary drug.
   (G) Contingent upon available private or public funds other than
moneys from the General Fund, contract with community-based,
nonprofit consumer, or health insurance assistance organizations with
expertise and experience in assisting dual eligible beneficiaries in
understanding their health care coverage options.
   (H) Develop, with stakeholder input, informing and enrollment
materials and an enrollment process in the demonstration site
counties. The department shall ensure all of the following prior to
implementing enrollment:
   (i) Enrollment materials shall be made public at least 60 days
prior to the first mailing of notices to dual eligible beneficiaries,
and the department shall work with stakeholders to incorporate
public comment into the materials.
   (ii) The materials shall be in a not more than sixth grade reading
level and shall be available in all the Medi-Cal threshold
languages, as well as in alternative formats that are culturally,
linguistically, and physically appropriate. For in-person enrollment
assistance, disability accommodation shall be provided, when
appropriate, through means including, but not limited to, assistive
listening systems, sign language interpreters, captioning, and
written communication.
   (iii) The materials shall plainly state that the beneficiary may
choose fee-for-service Medicare or Medicare Advantage, but must
return the form to indicate this choice, and that if the beneficiary
does not return the form, the state shall assign the beneficiary to a
plan and all Medicare and Medi-Cal benefits shall only be available
through that plan.
   (iv) The materials shall plainly state that the beneficiary shall
be enrolled in a Medi-Cal managed care health plan even if he or she
chooses to stay in fee-for-service Medicare.
   (v) The materials shall plainly explain all of the following:
   (I) The plan choices.
   (II) Continuity of care provisions.
   (III) How to determine which providers are enrolled in each plan.
   (IV) How to obtain assistance with the choice forms.
   (vi) The enrollment contractor recognizes, in compliance with
existing statutes and regulations, authorized representatives,
including, but not limited to, a caregiver, family member,
conservator, or a legal services advocate, who is recognized by any
of the services or programs that the person is already receiving or
participating in.
   (I) Make available to the public and to all Medi-Cal providers
copies of all beneficiary notices in advance of the date the notices
are sent to beneficiaries. These copies shall be available on the
department's Internet Web site.
   (2) Require that managed care health plans perform an assessment
process that, at a minimum, does all of the following:
   (A) Assesses each new enrollee's risk level and needs by
performing a risk assessment process using means such as telephonic,
Web-based, or in-person communication, or review of utilization and
claims processing data, or by other means as determined by the
department, with a particular focus on identifying those enrollees
who may need long-term services and supports. The risk assessment
process shall be performed in accordance with all applicable federal
and state laws.
   (B) Assesses the care needs of dual eligible beneficiaries and
coordinates their Medi-Cal benefits across all settings, including
coordination of necessary services within, and, when necessary,
outside of the managed care health plan's provider network.
   (C) Uses a mechanism or algorithm developed by the managed care
health plan pursuant to paragraph (7) of subdivision (b) of Section
14182 for risk stratification of members.
   (D) At the time of enrollment, applies the risk stratification
mechanism or algorithm approved by the department to determine the
health risk level of members.
   (E) Reviews historical Medi-Cal fee-for-service utilization data
and Medicare data, to the extent either is accessible to and provided
by the department, for dual eligible beneficiaries upon enrollment
in a managed care health plan so that the managed care health plans
are better able to assist dual eligible beneficiaries and prioritize
assessment and care planning.
   (F) Analyzes Medicare claims data for dual eligible beneficiaries
upon enrollment in a demonstration site pursuant to Section 14132.275
to provide an appropriate transition process for newly enrolled
beneficiaries who are prescribed Medicare Part D drugs that are not
on the demonstration site's formulary, as required under the
transition of care requirements for Medicare Part D benefits as
described in Chapters 6 and 14 of the Medicare Managed Care Manual,
published by CMS.
   (G) Assesses each new enrollee's behavioral health needs and
historical utilization, including mental health and substance use
disorder treatment services.
   (H) Follows timeframes for reassessment and, if necessary,
circumstances or conditions that require redetermination of risk
level, which shall be set by the department.
   (3) Ensure that the managed care health plans arrange for primary
care by doing all of the following:
   (A) Except for beneficiaries enrolled in the demonstration project
pursuant to Section 14132.275, forgo interference with a beneficiary'
s choice of primary care physician under Medicare, and not assign a
full-benefit dual eligible beneficiary to a primary care physician
unless it is determined through the risk stratification and
assessment process that assignment is necessary, in order to properly
coordinate the care of the beneficiary or upon the beneficiary's
request.
   (B) Assign a primary care physician to a partial-benefit dual
eligible beneficiary receiving primary or specialty care through the
Medi-Cal managed care plan.
   (C) Provide a mechanism for partial-benefit dual eligible
enrollees to request a specialist or clinic as a primary care
provider if these services are being provided through the Medi-Cal
managed care health plan. A specialist or clinic may serve as a
primary care provider if the specialist or clinic agrees to serve in
a primary care provider role and is qualified to treat the required
range of conditions of the enrollees.
   (4) Ensure that the managed care health plans perform, at a
minimum, and in addition to, other statutory and contractual
requirements, care coordination, and care management activities as
follows:
   (A) Reflect a member-centered, outcome-based approach to care
planning, consistent with the CMS model of care approach and with
federal Medicare requirements and guidance.
   (B) Adhere to a beneficiary's determination about the appropriate
involvement of his or her medical providers and caregivers, according
to the federal Health Insurance Portability and Accountability Act
of 1996 (Public Law 104-191).
   (C) Develop care management and care coordination for the
beneficiary across the medical and long-term services and supports
care system, including transitions among levels of care and between
service locations.
   (D) Develop individual care plans for higher risk beneficiaries
based on the results of the risk assessment process with a particular
focus on long-term services and supports.
   (E) Use nurses, social workers, the beneficiary's primary care
physician, if appropriate, and other medical professionals to provide
care management and enhanced care management, as applicable,
particularly for beneficiaries in need of or receiving long-term
services and supports.
   (F) Consider behavioral health needs of beneficiaries and
coordinate those services with the county mental health department as
part of the beneficiary's care management plan when appropriate.
   (G) Facilitate a beneficiary's ability to access appropriate
community resources and other agencies, including referrals as
necessary and appropriate for behavioral services, such as mental
health and substance use disorders treatment services.
   (H) Monitor skilled nursing facility utilization and develop care
transition plans and programs that move beneficiaries back into the
community to the extent possible. Plans shall monitor and support
beneficiaries in the community to avoid further institutionalization.

   (5) Ensure that the managed care health plans comply with, at a
minimum, and in addition to other statutory and contractual
requirements, network adequacy requirements as follows:
   (A) Provide access to providers that comply with applicable state
and federal law, including, but not limited to, physical
accessibility and the provision of health plan information in
alternative formats.
   (B) Meet provider network adequacy standards for long-term
services and supports that the department shall develop.
   (C) Maintain an updated, accurate, and accessible listing of a
provider's ability to accept new patients, which shall be made
available to beneficiaries, at a minimum, by phone, written material,
and the Internet, and in accessible formats, upon request.
   (D) Monitor an appropriate provider network that includes an
adequate number of accessible facilities within each service area.
   (E) Contract with and assign patients to safety net and
traditional providers as defined in subdivisions (hh) and (jj),
respectively, of Section 53810 of Title 22 of the California Code of
Regulations, including small and private practice providers who have
traditionally treated dual eligible patients, based on available
medical history to ensure access to care and services. A managed care
health plan shall establish participation standards to ensure
participation and broad representation of traditional and safety net
providers within a service area.
   (F) Maintain a liaison to coordinate with each regional center
operating within the plan's service area to assist dual eligible
beneficiaries with developmental disabilities in understanding and
accessing services and act as a central point of contact for
questions, access and care concerns, and problem resolution.
   (G) Maintain a liaison and provide access to out-of-network
providers, for up to 12 months, for new members enrolled under
Sections 14132.275 and 14182.16 who have an ongoing relationship with
a provider, if the provider will accept the health plan's rate for
the service offered, or for nursing facilities and Community-Based
Adult Services, or the applicable Medi-Cal fee-for-service rate,
whichever is higher, and the managed care health plan determines that
the provider meets applicable professional standards and has no
disqualifying quality of care issues in accordance with guidance from
the department, including all-plan letters. A partial-benefit dual
eligible beneficiary enrolled in Medicare Part A who only receives
primary and specialty care services through a Medi-Cal managed care
health plan shall be able to receive these Medi-Cal services from an
out-of-network Medi-Cal provider for 12 months after enrollment. This
subparagraph shall not apply to out-of-network providers that
furnish ancillary services.
   (H) Assign a primary care physician who is the primary clinician
for the beneficiary and who provides core clinical management
functions for partial-benefit dual eligible beneficiaries who are
receiving primary and specialty care through the Medi-Cal managed
care health plan.
   (I) Employ care managers directly or contract with nonprofit or
proprietary organizations in sufficient numbers to provide
coordinated care services for long-term services and supports as
needed for all members.
   (6) Ensure that the managed care health plans address medical and
social needs as follows:
   (A) Offer services beyond those required by Medicare and Medi-Cal
at the managed care health plan's discretion.
   (B) Refer beneficiaries to community resources or other agencies
for needed medical or social services or items outside the managed
care health plan's responsibilities.
   (C) Facilitate communication among a beneficiary's health care and
personal care providers, including long-term services and supports
and behavioral health providers when appropriate.
   (D) Engage in other activities or services needed to assist
beneficiaries in optimizing their health status, including assisting
with self-management skills or techniques, health education, and
other modalities to improve health status.
   (E) Facilitate timely access to primary care, specialty care,
medications, and other health services needed by the beneficiary,
including referrals to address any physical or cognitive barriers to
access.
   (F) Utilize the most recent common procedure terminology (CPT)
codes, modifiers, and correct coding initiative edits.
   (7) (A) Ensure that the managed care health plans provide, at a
minimum, and in addition to other statutory and contractual
requirements, a grievance and appeal process that does both of the
following:
   (i) Provides a clear, timely, and fair process for accepting and
acting upon complaints, grievances, and disenrollment requests,
including procedures for appealing decisions regarding coverage or
benefits, as specified by the department. Each managed care health
plan shall have a grievance process that complies with Section 14450,
and Sections 1368 and 1368.01 of the Health and Safety Code.
   (ii) Complies with a Medicare and Medi-Cal grievance and appeal
process, as applicable. The appeals process shall not diminish the
grievance and appeals rights of IHSS recipients pursuant to Section
10950.
   (B) In no circumstance shall the process for appeals be more
restrictive than what is required under the Medi-Cal program.
   (e) The department shall do all of the following:
   (1) Monitor the managed care health plans' performance and
accountability for provision of services, in addition to all other
statutory and contractual monitoring and oversight requirements, by
doing all of the following:
   (A) Develop performance measures that are required as part of the
contract to provide quality indicators for the Medi-Cal population
enrolled in a managed care health plan and for the dual eligible
subset of enrollees. These performance measures may include measures
from the Healthcare Effectiveness Data and Information Set or
measures indicative of performance in serving special needs
populations, such as the National Committee for Quality Assurance
structure and process measures, or other performance measures
identified or developed by the department.
   (B) Implement performance measures that are required as part of
the contract to provide quality assurance indicators for long-term
services and supports in quality assurance plans required under the
plans' contracts. These indicators shall include factors such as
affirmative member choice, increased independence, avoidance of
institutional care, and positive health outcomes. The department
shall develop these quality assurance indicators in consultation with
stakeholder groups.
   (C) Effective January 10, 2014, and for each subsequent year of
the demonstration project authorized under Section 14132.275, provide
a report to the Legislature describing the degree to which Medi-Cal
managed care health plans in counties participating in the
demonstration project have fulfilled the quality requirements, as set
forth in the health plan contracts.
   (D) Effective June 1, 2014, and for each subsequent year of the
demonstration project authorized by Section 14132.275, provide a
joint report, from the department and from the Department of Managed
Health Care, to the Legislature summarizing information from both of
the following:
   (i) The independent audit report required to be submitted annually
to the Department of Managed Health Care by managed care health
plans participating in the demonstration project authorized by
Section 14132.275.
   (ii) Any routine financial examinations of managed care health
plans operating in the demonstration project authorized by Section
14132.275 that have been conducted and completed for the previous
calendar year by the Department of Managed Health Care and the
department.
   (2) Monitor on a quarterly basis the utilization of covered
services of beneficiaries enrolled in the demonstration project
pursuant to Section 14132.275 or receiving long-term services and
supports pursuant to Article 5.7 (commencing with Section 14186).
   (3) Develop requirements for managed care health plans to solicit
stakeholder and member participation in advisory groups for the
planning and development activities relating to the provision of
services for dual eligible beneficiaries.
   (4) Submit to the Legislature the following information:
   (A) Provide, to the fiscal and appropriate policy committees of
the Legislature, a copy of any report submitted to CMS pursuant to
the approved federal waiver described in Section 14180.
   (B) Together with the State Department of Social Services, the
California Department of Aging, and the Department of Managed Health
Care, in consultation with stakeholders, develop a programmatic
transition plan, and submit that plan to the Legislature within 90
days of the effective date of this section. The plan shall include,
but is not limited to, the following components:
   (i) A description of how access and quality of service shall be
maintained during and immediately after implementation of these
provisions, in order to prevent unnecessary disruption of services to
beneficiaries.
   (ii) Explanations of the operational steps, timelines, and key
milestones for determining when and how the components of paragraphs
(1) to (9), inclusive, shall be implemented.
   (iii) The process for addressing consumer complaints, including
the roles and responsibilities of the departments and health plans
and how those roles and responsibilities shall be coordinated. The
process shall outline required response times and the method for
tracking the disposition of complaint cases. The process shall
include the use of an ombudsman, liaison, and 24-hour hotline
dedicated to assisting Medi-Cal beneficiaries navigate among the
departments and health plans to help ensure timely resolution of
complaints.
   (iv) A description of how stakeholders were included in the
various phases of the planning process to formulate the transition
plan, and how their feedback shall be taken into consideration after
transition activities begin.
   (C) The department, together with the State Department of Social
Services, the California Department of Aging, and the Department of
Managed Health Care, convene and consult with stakeholders at least
twice during the period following production of a draft of the
implementation plan and before submission of the plan to the
Legislature. Continued consultation with stakeholders shall occur on
an ongoing basis for the implementation of the provisions of this
section.
   (D) No later than 90 days prior to the initial plan enrollment
date of the demonstration project pursuant to the provisions of
Sections 14132.275, 14182.16, and of Article 5.7 (commencing with
Section 14186), assess and report to the fiscal and appropriate
policy committees of the Legislature on the readiness of the managed
care health plans to address the unique needs of dual eligible
beneficiaries and Medi-Cal only seniors and persons with disabilities
pursuant to the applicable readiness evaluation criteria and
requirements set forth in paragraphs (1) to (8), inclusive, of
subdivision (b) of Section 14087.48. The report shall also include an
assessment of the readiness of the managed care health plans in each
county participating in the demonstration project to have met the
requirements set forth in paragraphs (1) to (9), inclusive.
   (E) The department shall submit two reports to the Legislature,
with the first report submitted five months prior to the commencement
date of enrollment and the second report submitted three months
prior to the commencement date of enrollment, that describe the
status of all of the following readiness criteria and activities that
the department shall complete:
   (i) Enter into contracts, either directly or by funding other
agencies or community-based, nonprofit, consumer, or health insurance
assistance organizations with expertise and experience in providing
health plan counseling or other direct health consumer assistance to
dual eligible beneficiaries, in order to assist these beneficiaries
in understanding their options to participate in the demonstration
project specified in Section 14132.275 and to exercise their rights
and address barriers regarding access to benefits and services.
   (ii) Develop a plan to ensure timely and appropriate
communications with beneficiaries as follows:
   (I) Develop a plan to inform beneficiaries of their enrollment
options and rights, including specific steps to work with consumer
and beneficiary community groups described in clause (i), consistent
with the provisions of paragraph (1).
   (II) Design, in consultation with consumers, beneficiaries, and
stakeholders, all enrollment-related notices, including, but not
limited to, summary of benefits, evidence of coverage, prescription
formulary, and provider directory notices, as well as all appeals and
grievance-related procedures and notices produced in coordination
with existing federal Centers for Medicare and Medicaid Services
(CMS) guidelines.
   (III) Design a comprehensive plan for beneficiary and provider
outreach, including specific materials for persons in nursing and
group homes, family members, conservators, and authorized
representatives of beneficiaries, as appropriate, and providers of
services and supports.
   (IV) Develop a description of the benefits package available to
beneficiaries in order to assist them in plan selection and how they
may select and access services in the demonstration project's
assessment and care planning process.
   (V) Design uniform and plain language materials and a process to
inform seniors and persons with disabilities of copays and covered
services so that beneficiaries can make informed choices.
   (VI) Develop a description of the process, except in those
demonstration counties that have a county operated health system, of
automatically assigning beneficiaries into managed care health plans
that shall include a requirement to consider Medicare service
utilization, provider data, and consideration of plan quality.
   (iii) Finalize rates and comprehensive contracts between the
department and participating health plans to facilitate effective
outreach, enroll network providers, and establish benefit packages.
To the extent permitted by CMS, the plan rates and contract structure
shall be provided to the appropriate fiscal and policy committees of
the Legislature and posted on the department's Internet Web site so
that they are readily available to the public.
   (iv) Ensure that contracts have been entered into between plans
and providers including, but not limited to, agreements with county
agencies as necessary.
   (v) Develop network adequacy standards for medical care and
long-term supports and services that reflect the provisions of
paragraph (5).
   (vi) Identify dedicated department or contractor staff with
adequate training and availability during business hours to address
and resolve issues between health plans and beneficiaries, and
establish a requirement that health plans have similar points of
contact and are required to respond to state inquiries when
continuity of care issues arise.
   (vii) Develop a tracking mechanism for inquiries and complaints
for quality assessment purposes, and post publicly on the department'
s Internet Web site information on the types of issues that arise and
data on the resolution of complaints.
   (viii) Prepare scripts and training for the department and plan
customer service representatives on all aspects of the program,
including training for enrollment brokers and community-based
organizations on rules of enrollment and counseling of beneficiaries.

   (ix) Develop continuity of care procedures.
   (x) Adopt quality measures to be used to evaluate the
demonstration projects. Quality measures shall be detailed enough to
enable measurement of the impact of automatic plan assignment on
quality of care.
   (xi) Develop reporting requirements for the plans to report to the
department, including data on enrollments and disenrollments,
appeals and grievances, and information necessary to evaluate quality
measures and care coordination models. The department shall report
this information to the appropriate fiscal and policy committees of
the Legislature, and this information shall be posted on the
department's Internet Web site.
   (f) This section shall be implemented only to the extent that all
federal approvals and waivers are obtained and only if and to the
extent that federal financial participation is available.
   (g) To implement this section, the department may contract with
public or private entities. Contracts or amendments entered into
under this section may be on an exclusive or nonexclusive basis and a
noncompetitive bid basis and shall be exempt from the following:
   (1) Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code and any policies, procedures, or regulations
authorized by that part.
   (2) Article 4 (commencing with Section 19130) of Chapter 5 of Part
2 of Division 5 of Title 2 of the Government Code.
   (3) Review or approval of contracts by the Department of General
Services.
   (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, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. Prior to
issuing any letter or similar instrument authorized pursuant to this
section, the department shall notify and consult with stakeholders,
including advocates, providers, and beneficiaries. The department
shall notify the appropriate policy and fiscal committees of the
Legislature of its intent to issue instructions under this section at
least five days in advance of the issuance.
  SEC. 25.  Section 14183.6 of the Welfare and Institutions Code, as
amended by Section 6 of Chapter 33 of the Statutes of 2012, is
amended to read:
   14183.6.  The department shall enter into an interagency agreement
with the Department of Managed Health Care to have the Department of
Managed Health Care, on behalf of the department, conduct financial
audits, medical surveys, and a review of the provider networks of the
managed care health plans participating in the demonstration project
and the Medi-Cal managed care expansion into rural
                               counties, and to provide consumer
assistance to beneficiaries affected by the provisions of Sections
14182.16 and 14182.17. The interagency agreement shall be updated, as
necessary, on an annual basis in order to maintain functional
clarity regarding the roles and responsibilities of these core
activities. The department shall not delegate its authority under
this division as the single state Medicaid agency to the Department
of Managed Health Care.
  SEC. 26.  Section 14186.2 of the Welfare and Institutions Code, as
added by Section 7 of Chapter 33 of the Statutes of 2012, is amended
to read:
   14186.2.  (a) (1) Not sooner than March 1, 2013, all Medi-Cal
long-term services and supports (LTSS) described in subdivision (b)
of Section 14186.1 shall be services that are covered under managed
care health plan contracts and shall be available only through
managed care health plans to beneficiaries residing in counties
participating in the demonstration project authorized under Section
14132.275, except for the exemptions provided for in subdivision (c).
The director shall consult with the Legislature, CMS, and
stakeholders when determining the implementation date for this
section. The department shall pay managed care health plans using a
capitation ratesetting methodology that pays for all Medi-Cal
benefits and services, including all LTSS, covered under the managed
care health plan contract. In order to receive any LTSS through
Medi-Cal, Medi-Cal beneficiaries shall mandatorily enroll in a
managed care health plan for the provision of Medi-Cal benefits.
   (2) HCBS plan benefits may be covered services that are provided
under managed care health plan contracts for beneficiaries residing
in counties participating in the demonstration authorized under
Section 14132.275, except for the exemptions provided for in
subdivision (c).
   (3) Beneficiaries who are not mandatorily enrolled in a managed
care health plan pursuant to paragraph (15) of subdivision (b) of
Section 14182 shall not be required to receive LTSS through a managed
care health plan.
   (4) The transition of the provision of LTSS through managed care
health plans shall occur after the department obtains any federal
approvals through necessary federal waivers or amendments, or state
plan amendments.
   (5) Counties where LTSS are not covered through managed care
health plans shall not be subject to this article.
   (6) Beneficiaries residing in counties not participating in the
dual eligible demonstration project pursuant to Section 14132.275
shall not be subject to this article.
   (b) (1) The provisions of this article shall be applicable to a
Medi-Cal beneficiary enrolled in a managed care health plan in a
county where this article is effective.
   (2) At the director's sole discretion, in consultation with
coordinating departments and stakeholders, the department may
determine and implement a phased-in enrollment approach that may
include the addition of Medi-Cal long-term services and supports in a
beneficiary's Medi-Cal managed care benefits immediately upon
implementation of this article in a specific county, over a 12-month
period, or other phased approach, but no sooner than March 1, 2013.
   (c) (1) The provisions of this article shall not apply to any of
the following individuals:
   (A) Medi-Cal beneficiaries who meet any of the following and
shall, therefore, continue to receive any medically necessary
Medi-Cal benefits, including LTSS, through fee-for-service Medi-Cal:
   (i) Except in counties with county organized health systems
operating pursuant to Article 2.8 (commencing with Section 14087.5),
have other health coverage.
   (ii) Receive services through any state foster care program
including the program described in Article 5 (commencing with Section
11400) Chapter 2, unless the beneficiary is already receiving
services through a managed care health plan.
   (iii) Are not eligible for enrollment in managed care health plans
for medically necessary reasons determined by the department.
   (iv) Reside in one of the Veterans' Homes of California, as
described in Chapter 1 (commencing with Section 1010) of Division 5
of the Military and Veterans Code.
   (B) Persons enrolled in the Program of All-Inclusive Care for the
Elderly (PACE) pursuant to Chapter 8.75 (commencing with Section
14591), or a managed care organization licensed under the Knox-Keene
Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with
Section 1340) of Division 2 of the Health and Safety Code) that has
previously contracted with the department as a primary care case
management plan pursuant to Article 2.9 (commencing with Section
14088) of Chapter 7 to provide services to beneficiaries who are HIV
positive or who have been diagnosed with AIDS.
   (C) Persons who are under 21 years of age.
   (D) Other specific categories of beneficiaries specified by the
department based on extraordinary medical needs of specific patient
groups or to meet federal requirements, in consultation with
stakeholders.
   (2) Beneficiaries who have been diagnosed with HIV/AIDS are not
exempt from mandatory enrollment, but may opt out of managed care
enrollment at the beginning of any month.
  SEC. 27.  Section 14301.1 of the Welfare and Institutions Code, as
amended by Section 8 of Chapter 33 of the Statutes of 2012, is
amended to read:
   14301.1.  (a) For rates established on or after August 1, 2007,
the department shall pay capitation rates to health plans
participating in the Medi-Cal managed care program using actuarial
methods and may establish health-plan- and county-specific rates.
Notwithstanding any other law, this section shall apply to any
managed care organization, licensed under the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code), that has contracted
with the department as a primary care case management plan pursuant
to Article 2.9 (commencing with Section 14088) of Chapter 7 to
provide services to beneficiaries who are HIV positive or who have
been diagnosed with AIDS for rates established on or after July 1,
2012. The department shall utilize a county- and model-specific rate
methodology to develop Medi-Cal managed care capitation rates for
contracts entered into between the department and any entity pursuant
to Article 2.7 (commencing with Section 14087.3), Article 2.8
(commencing with Section 14087.5), and Article 2.91 (commencing with
Section 14089) of Chapter 7 that includes, but is not limited to, all
of the following:
   (1) Health-plan-specific encounter and claims data.
   (2) Supplemental utilization and cost data submitted by the health
plans.
   (3) Fee-for-service data for the underlying county of operation or
other appropriate counties as deemed necessary by the department.
   (4) Department of Managed Health Care financial statement data
specific to Medi-Cal operations.
   (5) Other demographic factors, such as age, gender, or
diagnostic-based risk adjustments, as the department deems
appropriate.
   (b) To the extent that the department is unable to obtain
sufficient actual plan data, it may substitute plan model, similar
plan, or county-specific fee-for-service data.
   (c) The department shall develop rates that include administrative
costs, and may apply different administrative costs with respect to
separate aid code groups.
   (d) The department shall develop rates that shall include, but are
not limited to, assumptions for underwriting, return on investment,
risk, contingencies, changes in policy, and a detailed review of
health plan financial statements to validate and reconcile costs for
use in developing rates.
   (e) The department may develop rates that pay plans based on
performance incentives, including quality indicators, access to care,
and data submission.
   (f) The department may develop and adopt condition-specific
payment rates for health conditions, including, but not limited to,
childbirth delivery.
   (g) (1) Prior to finalizing Medi-Cal managed care capitation
rates, the department shall provide health plans with information on
how the rates were developed, including rate sheets for that specific
health plan, and provide the plans with the opportunity to provide
additional supplemental information.
   (2) For contracts entered into between the department and any
entity pursuant to Article 2.8 (commencing with Section 14087.5) of
Chapter 7, the department, by June 30 of each year, or, if the budget
has not passed by that date, no later than five working days after
the budget is signed, shall provide preliminary rates for the
upcoming fiscal year.
   (h) For the purposes of developing capitation rates through
implementation of this ratesetting methodology, Medi-Cal managed care
health plans shall provide the department with financial and
utilization data in a form and substance as deemed necessary by the
department to establish rates. This data shall be considered
proprietary and shall be exempt from disclosure as official
information pursuant to subdivision (k) of Section 6254 of the
Government Code as contained in the California Public Records Act
(Division 7 (commencing with Section 6250) of Title 1 of the
Government Code).
   (i) Notwithstanding any other provision of law, on and after the
effective date of the act adding this subdivision, the department may
apply this section to the capitation rates it pays under any managed
care health plan contract.
   (j) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may set and implement managed care capitation rates, and
interpret or make specific this section and any applicable federal
waivers and state plan amendments by means of plan letters, plan or
provider bulletins, or similar instructions, without taking
regulatory action.
   (k) The department shall report, upon request, to the fiscal and
policy committees of the respective houses of the Legislature
regarding implementation of this section.
   (l) Prior to October 1, 2011, the risk-adjusted countywide
capitation rate shall comprise no more than 20 percent of the total
capitation rate paid to each Medi-Cal managed care plan.
   (m) (1) It is the intent of the Legislature to preserve the policy
goal to support and strengthen traditional safety net providers who
treat high volumes of uninsured and Medi-Cal patients when Medi-Cal
enrollees are defaulted into Medi-Cal managed care plans.
   (2) As the department adds additional factors, such as managed
care plan costs, to the Medi-Cal managed care plan default assignment
algorithm, it shall consult with the Auto Assignment Performance
Incentive Program stakeholder workgroup to develop cost factor
disregards related to intergovernmental transfers and required
wraparound payments that support safety net providers.
  SEC. 28.  Section 14301.2 of the Welfare and Institutions Code, as
added by Section 9 of Chapter 33 of the Statutes of 2012, is amended
to read:
   14301.2.  The director may defer fee-for-service payments or
payments to Medi-Cal managed care health plans contracting with the
department pursuant to Article 2.7 (commencing with Section 14087.3),
Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), Article 2.9 (commencing with
Section 14088), or Article 2.91 (commencing with Section 14089) of
this chapter, or Chapter 8 (commencing with Section 14200) or Chapter
8.75 (commencing with Section 14591), the Senior Care Action Network
Health Plan, and Medi-Cal managed care health plan providers, as
applicable, which are payable during the final month of the state
fiscal year. This section may be implemented only to the extent
consistent with federal law.
  SEC. 29.  Section 15912.1 of the Welfare and Institutions Code, as
added by Section 119 of Chapter 23 of the Statutes of 2012, is
amended to read:
   15912.1.  (a) The department, in collaboration with the State
Department of Public Health, shall develop policies and guidance on
the transition of persons diagnosed with HIV/AIDS from federal Ryan
White HIV/AIDS Treatment Extension Act of 2009 (Ryan White Act)
funded programs, pursuant to Section 131019 of the Health and Safety
Code, to the Low Income Health Program (LIHP) pursuant to this part.
These policies and guidance shall be provided to local LIHPs, federal
Ryan White Act providers, and to persons receiving services pursuant
to the federal Ryan White Act, as applicable. Guidance shall
include, but not be limited to, operational processes and procedures
supporting the transition of persons receiving services pursuant to
the federal Ryan White Act in order to minimize disruption of access
to and availability of care and services.
   (b) The department, in collaboration with the State Department of
Public Health, shall consult with stakeholders, including
administrators, advocates, providers, and persons receiving services
pursuant to the federal Ryan White Act, to obtain advice in forming
the policy decisions regarding the transition of persons receiving
services pursuant to the federal Ryan White Act to the local LIHPs.
   (c) Notwithstanding any other law, for the purpose of implementing
LIHP, pursuant to this part, the State Department of Public Health
may share relevant data related to a beneficiary's enrollment in
federal Ryan White Act funded programs who may be eligible for LIHP
services with the participating entity, as defined in Section
15909.1, operating a LIHP, and the participating entity may share
relevant data relating to persons diagnosed with HIV/AIDS with the
State Department of Public Health.
   (1) The information provided by the State Department of Public
Health pursuant to this section shall not be further disclosed by a
participating entity, as defined in Section 15909.1, operating a
LIHP, except to any of the following:
   (A) The person to whom the information pertains or the designated
representative of the person.
   (B) The health care provider that provides HIV/AIDS care to the
person to whom the information pertains.
   (C) The Office of AIDS within the State Department of Public
Health.
   (2) Information shared pursuant to this section is subject to the
confidentiality protections of subdivisions (d) and (e) of Section
121025 of the Health and Safety Code.
  SEC. 30.  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. 31.  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.