BILL NUMBER: AB 1494	AMENDED
	BILL TEXT

	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 relating to the Budget Act of 2012.  
An act to amend Section 7575 of, and to add Section 7582 to, the
Government Code, to amend Sections 123865, 123870, 123875, 123940,
and 123955 of the Health and Safety Code, to add Chapter 16.2
(commencing with Section 12694.1) to Part 6.2 of Division 2 of the
Insurance Code, and to amend Section 14105.22 of, and to add Sections
14005.26 and 14005.27 to, the Welfare and Institutions Code,
relating to health coverage, and making an appropriation therefor, to
take effect immediately, bill related to the budget. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1494, as amended, Committee on Budget.  Budget Act of
2012.   Healthy Families Program: Medi-Cal: program
transition: expansion.  
   Under existing law, the Robert W. Crown California Children's
Services Act, the State Department of Health Care Services and each
county administer the California Children's Services Program (CCS
program) for treatment services for persons under 21 years of age
diagnosed with severe chronic disease or severe physical limitations,
as specified. Existing law generally limits eligibility for CCS
program services to persons in families with an annual adjusted gross
income of $40,000 or less. Under existing law, the department, or
any designated local agency administering the program, is responsible
for providing medically necessary occupational and physical therapy
to eligible children, as specified. Existing law requires that
specified assessments and therapy treatment services rendered to a
child referred to a local education agency for an assessment or a
disabled child or youth with an IEP be exempt from financial
eligibility standards and family repayment requirements.  
   This bill would make technical, nonsubstantive changes to these
provisions.  
   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 a federal program, the 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.  
   Under existing law, the Director of Health Care Services may
contract with any qualified individual, organization, or entity to
provide services to, arrange for, or case manage the care of Medi-Cal
beneficiaries, subject to specified requirements. Existing law
requires a Medi-Cal applicant or beneficiary to be informed of the
managed care and fee-for-service options available regarding methods
of receiving Medi-Cal benefits.  
   This bill would provide 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. This bill would provide that the transition would
take place in 4 phases, as specified, for individuals enrolled in
either a Healthy Families Program plan that is also a Medi-Cal
managed care plan (Phase 1) or enrolled in a Healthy Families Program
plan that is a subcontractor of a Medi-Cal managed care plan or
other specified plans (Phase 2 and Phase 3), or for individuals
residing in a county that is not a Medi-Cal managed care county
(Phase 4).  
   This bill would require the department to exercise certain options
under federal law to provide benefits to optional targeted
low-income children, as described, and seek appropriate federal
approvals and state plan amendments, in order to implement the
Healthy Families Program to Medi-Cal program transition and Medi-Cal
program expansion provided for in the bill. This bill would require
MRMIB to coordinate with the department to implement these
provisions, and would make related changes. This bill would make
related changes to the California Children's Services Program
provisions.  
   By increasing county responsibilities with respect to determining
Medi-Cal eligibility, this bill would impose a state-mandated local
program.  
   Existing law provides that reimbursement for clinical laboratory
or laboratory services under the Medi-Cal program, as defined, may
not exceed 80% of the lowest maximum allowance established by the
federal Medicare Program for the same or similar services.  

   This bill would, upon federal approval, change the rate
methodology for clinical laboratory or laboratory services, as
specified. This bill would also require that rates for clinical
laboratory or laboratory services be reduced by 10% until federal
approval is obtained for this new rate methodology.  
   This bill would appropriate $400,000 from the Managed Care Fund to
the Department of Managed Health Care for administration, as
specified.  
   This bill would make legislative findings and declarations as to
the necessity of a special statute for the Counties of Los Angeles
and Sacramento.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.  
   This bill would declare that it is to take effect immediately as a
bill providing for appropriations related to the Budget Bill. 

   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2012. 
   Vote: majority. Appropriation:  no  yes 
. Fiscal committee:  no   yes  .
State-mandated local program:  no   yes  .


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

   SECTION 1.    Section 7575 of the  
Government Code   is amended to read: 
   7575.  (a) (1) Notwithstanding any other provision of law, the
State Department of Health  Care  Services, or any
designated local agency administering the California Children's
Services, shall be responsible for the provision of medically
necessary occupational therapy and physical therapy, as specified by
Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of
Division 106 of the Health and Safety Code, by reason of medical
diagnosis and when contained in the child's individualized education
program.
   (2) Related services or designated instruction and services not
deemed to be medically necessary by the State Department of Health
 Care  Services, that the individualized education program
team determines are necessary in order to assist a child to benefit
from special education, shall be provided by the local education
agency by qualified personnel whose employment standards are covered
by the Education Code and implementing regulations.
   (b) The department shall determine whether a California Children's
Services eligible pupil, or a pupil with a private medical referral
needs medically necessary occupational therapy or physical therapy. A
medical referral shall be based on a written report from a licensed
physician and surgeon who has examined the pupil. The written report
shall include the following:
   (1) The diagnosed neuromuscular, musculoskeletal, or physical
disabling condition prompting the referral.
   (2) The referring physician's treatment goals and objectives.
   (3) The basis for determining the recommended treatment goals and
objectives, including how these will ameliorate or improve the pupil'
s diagnosed condition.
   (4) The relationship of the medical disability to the pupil's need
for special education and related services.
   (5) Relevant medical records.
   (c) The department shall provide the service directly or by
contracting with another public agency, qualified individual, or a
state-certified nonpublic nonsectarian school or agency.
   (d) Local education agencies shall provide necessary space and
equipment for the provision of occupational therapy and physical
therapy in the most efficient and effective manner.
   (e) The department shall also be responsible for providing the
services of a home health aide when the local education agency
considers a less restrictive placement from home to school for a
pupil for whom both of the following conditions exist:
   (1) The California Medical Assistance Program provides a
life-supporting medical service via a home health agency during the
time in which the pupil would be in school or traveling between
school and home.
   (2) The medical service provided requires that the pupil receive
the personal assistance or attention of a nurse, home health aide,
parent or guardian, or some other specially trained adult in order to
be effectively delivered.
   SEC. 2.    Section 7582 is added to the  
Government Code   , to read:  
   7582.  Assessments and therapy treatment services provided under
programs of the State Department of Health Care Services, or its
designated local agencies, rendered to a child referred by a local
education agency for an assessment or a disabled child or youth with
an individualized education program, shall be exempt from financial
eligibility standards and family repayment requirements for these
services when rendered pursuant to this chapter. 
   SEC. 3.    Section 123865 of the   Health
and Safety Code   is amended to read: 
   123865.   Whenever   If  the parents or
estate of a handicapped child is wholly or partly unable to furnish
for the child necessary services, the parents or guardian may apply
to the agency of the county that has been designated by the board of
supervisors of the county of residence under the terms of Section
123850 to administer the provisions for handicapped children.
Residence shall be determined in accordance with Sections 243 and 244
of the Government Code.
   SEC. 4.    Section 123870 of the   Health
and Safety Code   is amended to read: 
   123870.  (a) The department shall establish standards of financial
eligibility for treatment services under the California Children's
Services Program (CCS program).
   (1) Financial eligibility for treatment services under this
program shall be limited to persons in families with an adjusted
gross income of forty thousand dollars ($40,000) or less in the most
recent tax year, as calculated for California state income tax
purposes. If a person is enrolled in the Healthy Families Program
(Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code), the financial documentation required for that
program in Section 2699.6600 of Title 10 of the California Code of
Regulations may be used instead of the person's California state
income tax return.  If a person is enrolled in the Medi-Cal
program pursuant to   Section 14005.26 of the Welfare and
Institutions Code, the financial documentation required to establish
eligibility for the Medi-Cal program may be used instead of the
person   's California state income tax return   .
 However, the director may authorize treatment services for
persons in families with higher incomes if the estimated cost of care
to the family in one year is expected to exceed 20 percent of the
family's adjusted gross income.
   (2) Children enrolled in the Healthy Families Program  , 
 or enrolled in the Medi-Cal program pursuant to Section
14005.26 of the Welfare and Institutions Code,  who have a CCS
program eligible medical condition under Section 123830, and whose
families do not meet the financial eligibility requirements of
paragraph (1), shall be deemed financially eligible for CCS program
benefits.
   (b) Necessary medical therapy treatment services under the
California Children's Services Program rendered in the public schools
shall be exempt from financial eligibility standards and enrollment
fee requirements for the services when rendered to any handicapped
child whose educational or physical development would be impeded
without the services.
   (c) All counties shall use the uniform standards for financial
eligibility and enrollment fees established by the department. All
enrollment fees shall be used in support of the California Children's
Services Program.
   (d) Annually, every family with a child eligible to receive
services under this article shall pay a fee of twenty dollars ($20),
that shall be in addition to any other program fees for which the
family is liable. This assessment shall not apply to any child who is
eligible for full scope Medi-Cal benefits without a share of cost,
for children receiving therapy through the California Children's
Services Program as a related service in their individualized
education plans, for children from families having incomes of less
than 100 percent of the federal poverty level, or for children
covered under the Healthy Families Program.
   SEC. 5.    Section 123875 of the   Health
and Safety Code   is amended to read: 
   123875.   When   If  the California
Children's Service medical therapy unit conference team, based on a
medical referral recommending medically necessary occupational or
physical therapy in accordance with subdivision (b) of Section 7575
of the Government Code, finds that a handicapped child, as defined in
Section 123830, needs medically necessary occupational or physical
therapy, that child shall be determined to be eligible for therapy
services. If the California Children's Services medical consultant
disagrees with the determination of eligibility by the California
Children's Services medical therapy unit conference team, the medical
consultant shall communicate with the conference team to ask for
further justification of its determination, and shall weigh the
conference team's arguments in support of its decision in reaching
his or her own determination.
   This section shall not change eligibility criteria for the
California Children's Services programs as described in Sections
123830 and 123860.
   This section shall not apply to children diagnosed as specific
learning disabled, unless they otherwise meet the eligibility
criteria of the California Children's Services.
   SEC. 6.    Section 123940 of the   Health
and Safety Code   is amended to read: 
   123940.  (a) (1) Annually, the board of supervisors shall
appropriate a sum of money for services for handicapped children of
the county, including diagnosis, treatment, and therapy services for
physically handicapped children in public schools, equal to 25
percent of the actual expenditures for the county program under this
article for the 1990-91 fiscal year, except as specified in paragraph
(2).
   (2) If the state certifies that a smaller amount is needed in
order for the county to pay 25 percent of costs of the county's
program from this source. The smaller amount certified by the state
shall be the amount that the county shall appropriate.
   (b) In addition to the amount required by subdivision (a), the
county shall allocate an amount equal to the amount determined
pursuant to subdivision (a) for purposes of this article from
revenues allocated to the county pursuant to Chapter 6 (commencing
with Section 17600) of Division 9 of the Welfare and Institutions
Code.
   (c) (1) The state shall match county expenditures for this article
from funding provided pursuant to subdivisions (a) and (b).
   (2) County expenditures shall be waived for payment of services
for children who are eligible pursuant to paragraph (2) of
subdivision (a) of Section 123870.
   (d) The county may appropriate and expend moneys in addition to
those set forth in subdivision (a) and (b) and the state shall match
the expenditures, on a dollar-for-dollar basis, to the extent that
state funds are available for this article. 
   (e) County appropriations under subdivisions (a) and (b) shall
include county financial participation in the nonfederal share of
expenditures for services for children who are enrolled in the
Medi-Cal program pursuant to Section 14005.26 of the Welfare and
Institutions Code, and who are eligible for services under this
article pursuant to paragraph (1) of subdivision (a) of Section
123870, to the extent that federal financial participation is
available at the enhanced federal reimbursement rate under Title XXI
of the federal Social Security Act (42 U.S.C. Sec. 1397aa et seq.)
and funds are appropriated for the California Children's Services
Program in the state budget.  
   (e) 
    (f)  Nothing in this section shall require the county to
expend more than the amount set forth in subdivision (a) plus the
amount set forth in subdivision (b) nor shall it require the state to
expend more than the amount of the match set forth in subdivision
(c). 
   (g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department, without taking further regulatory action, shall implement
this section by means of California Children's Services numbered
letters. 
   SEC. 7.    Section 123955 of the   Health
and Safety Code   is amended to read: 
   123955.  (a) The state and the counties shall share in the cost of
administration of the California Children's Services Program at the
local level.
   (b) (1) The director shall adopt regulations establishing minimum
standards for the administration, staffing, and local implementation
of this article subject to reimbursement by the state.
   (2) The standards shall allow necessary flexibility in the
administration of county programs, taking into account the
variability of county needs and resources, and shall be developed and
revised jointly with state and county representatives.
   (c) The director shall establish minimum standards for
administration, staffing and local operation of the program subject
to reimbursement by the state.
   (d) Until July 1, 1992, reimbursable administrative costs, to be
paid by the state to counties, shall not exceed 4.1 percent of the
gross total expenditures for diagnosis, treatment and therapy by
counties as specified in Section 123940.
   (e) Beginning July 1, 1992, this subdivision shall apply with
respect to all of the following:
   (1) Counties shall be reimbursed by the state for 50 percent of
the amount required to meet state administrative standards for that
portion of the county caseload under this article that is ineligible
for Medi-Cal to the extent funds are available in the state budget
for the California Children's Services Program. 
   (2) Counties shall be reimbursed by the state for 50 percent of
the nonfederal share of the amount required to meet state
administrative standards for that portion of the county caseload
under this article that is enrolled in the Medi-Cal program pursuant
to Section 14005.26 of the Welfare and Institutions Code and who are
eligible for services under this article pursuant to subdivision (a)
of Section 123870, to the extent that federal financial participation
is available at the enhanced federal reimbursement rate under Title
XXI of the federal Social Security Act (42 U.S.C. Sec. 1397aa et
seq.) and funds are appropriated for the California Children's
Services Program in the state budget.  
   (2) 
    (3)  On or before September 15 of each year, each county
program implementing this article shall submit an application for
the subsequent fiscal year that provides information as required by
the state to determine if the county administrative staff and budget
meet state standards. 
   (3) 
    (4)  The state shall determine the maximum amount of
state funds available for each county from state funds appropriated
for CCS county administration. If the amount appropriated for any
fiscal year in the Budget Act for county administration under this
article differs from the amounts approved by the department, each
county shall submit a revised application in a form and at the time
specified by the department.
   (f) The department and counties shall maximize the use of federal
funds for administration  ,  of the programs
implemented pursuant to this article, including using state and
county funds to match funds claimable under  Title 19
  Title XIX or Title XXI  of the  federal 
Social Security Act  (42 U.S.C. Sec. 1396 et seq.; 42 U.S.C.
Sec. 1397aa et seq.)  .
   SEC. 8.    Chapter 16.2 (commencing with Section
12694.1) is added to Part 6.2 of Division 2 of the  
Insurance Code   , to read:  
      CHAPTER 16.2.  TRANSITION OF HEALTHY FAMILIES PROGRAM ENROLLEES
TO MEDI-CAL


   12694.1.  (a) Pursuant to Sections 14005.26 and 14005.27 of the
Welfare and Institutions Code, subscribers enrolled in the Healthy
Families Program pursuant to this part shall, no sooner than January
1, 2013, transition to the Medi-Cal program pursuant to Sections
14005.26 and 14005.27 of the Welfare and Institutions Code to the
extent they are otherwise eligible. AIM-linked infants, as defined in
Section 12695.03, with incomes above 250 percent of the federal
poverty level are exempt from this transition.
   (b) The board shall coordinate with the State Department of Health
Care Services to implement Sections 14005.26 and 14005.27 of the
Welfare and Institutions Code.
   (c) The board's actions to coordinate with the State Department of
Health Care Services to implement Sections 14005.26 and 14005.27 of
the Welfare and Institutions Code, as specified in subdivision (b),
shall include, but not be limited to, all of the following:
   (1) Notwithstanding Section 12693.74, disenrollment of subscribers
in the manner, and at the times, specified in Section 14005.27 of
the Welfare and Institutions Code. The board may retain a subscriber
in the program for longer than 12 months if needed to ensure a smooth
transition to the Medi-Cal program.
   (2) In coordination with the State Department of Health Care
Services, provision of reasonable notice to applicants concerning
disenrollment of subscribers consistent with Section 14005.27 of the
Welfare and Institutions Code.
   (3) Notwithstanding Section 12693.51 of the Insurance Code,
transfers of subscribers from one participating plan to another at
the times and under the conditions prescribed by the board, without
the obligation that the board provide an annual opportunity for
subscribers to transfer from one participating plan to another.
   (d) Nothing in subdivision (e) of Section 12693.43 shall be
construed to require any refund or adjustment of family contributions
if an applicant has paid for three months of required family
contributions in advance and the subscriber for whom the applicant
has paid these family contributions is disenrolled pursuant to this
section, or for any other reason, without receiving a fourth
consecutive month of coverage.
   (e) (1) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, the
board shall, without taking any further regulatory action,
implement, interpret, or make specific this section by means of
business rules, program bulletins, program correspondence to
subscribers and contractors, letters, or similar instructions.
   (2) The board may adopt and readopt emergency regulations
implementing this section. The adoption and readoption, by the board,
of regulations implementing this section shall be deemed an
emergency and necessary to avoid serious harm to the public peace,
health, safety, or general welfare for purposes of Sections 11346.1
and 11349.6 of the Government Code, and the board is hereby exempted
from the requirement that it describe facts showing the need for
immediate action and from review by the Office of Administrative Law.

   (f) The Healthy Families Program, pursuant to this part, shall
cease to enroll new subscribers no sooner than the date transition
begins pursuant to subdivision (a), and any transition of children
shall be in compliance with the implementation plan or plans as
contained in Section 14005.27 of the Welfare and Institutions Code.
   12694.2.  All civil service employees who are currently employed
by the Managed Risk Medical Insurance Board, whose functions are
transferred to the State Department of Health Care Services as a
result of the act adding this section, shall retain their positions,
status, and rights pursuant to Section 19050.9 of the Government Code
and the State Civil Service Act (Part 2 (commencing with Section
18500) of Division 5 of Title 2 of the Government Code). 
   SEC. 9.    Section 14105.22 of the   
 Welfare and Institutions Code   , as added by Section
64 of Chapter 230 of the Statutes of 2003, is amended to read: 
   14105.22.   (a)     (1)   
Reimbursement for clinical laboratory or laboratory services, as
defined in Section 51137.2 of Title 22 of the California Code of
Regulations, may not exceed 80 percent of the lowest maximum
allowance established by the federal Medicare  program
  Program  for the same or similar services. 
   (2) This subdivision shall be implemented only until the new rate
methodology under subdivision (b) is approved by the federal Centers
for Medicare and Medicaid Services (CMS).  
   (b) (1) It is the intent of the Legislature that the department
develop reimbursement rates for clinical laboratory or laboratory
services that are comparable to the payment amounts received from
other payers for clinical laboratory or laboratory services.
Development of these rates will enable the department to reimburse
clinical laboratory or laboratory service providers in compliance
with state and federal law.  
   (2) (A) The provisions of Section 51501(a) of Title 22 of the
California Code of Regulations shall not apply to laboratory
providers reimbursed under the new rate methodology developed for
clinical laboratories or laboratory services pursuant to this
subdivision.  
   (B) In addition to subparagraph (A), laboratory providers
reimbursed under any payment reductions implemented pursuant to this
section shall not be subject to the provisions of Section 51501(a) of
Title 22 of the California Code of Regulations for 12 months
following the date of implementation of this reduction.  
   (3) Reimbursement to providers for clinical laboratory or
laboratory services shall not exceed the lowest of the following:
 
   (A) The amount billed.  
   (B) The charge to the general public.  
   (C) Eighty percent of the lowest maximum allowance established by
the federal Medicare Program for the same or similar services. 

   (D) A reimbursement rate based on an average of the lowest amount
that other payers and other state Medicaid programs are paying for
similar clinical laboratory or laboratory services.  
   (4) (A) In addition to the payment reductions implemented pursuant
to Section 14105.192, payments shall be reduced by up to 10 percent
for clinical laboratory or laboratory services, as defined in Section
51137.2 of Title 22 of the California Code of Regulations, for dates
of service on and after July 1, 2012. The payment reductions
pursuant to this paragraph shall continue until the new rate
methodology under this subdivision has been approved by CMS. 

   (B) Notwithstanding subparagraph (A), the Family Planning, Access,
Care, and Treatment (Family PACT) Program pursuant to subdivision
(aa) of Section 14132 shall be exempt from the payment reduction
specified in this section.  
   (5) (A) For purposes of establishing reimbursement rates for
clinical laboratory or laboratory services based on the lowest
amounts other payers are paying providers for similar clinical
laboratory or laboratory services, laboratory service providers shall
submit data reports within six months of the date the act that added
this paragraph becomes effective and annually thereafter. The data
provided shall be based on the previous calendar year and shall
specify the provider's lowest amounts other payers are paying,
including other state Medicaid programs and private insurance, minus
discounts and rebates. The specific data required for submission
under this subparagraph and the format for the data submission shall
be determined and specified by the department after receiving
stakeholder input pursuant to paragraph (7).  
   (B) The data submitted pursuant to subparagraph (A) may be used to
determine reimbursement rates by procedure code based on an average
of the lowest amount other payers are paying providers for similar
clinical laboratory or laboratory services, excluding significant
deviations of cost or volume factors and with consideration to
geographical areas. The department shall have the discretion to
determine the specific methodology and factors used in the
development of the lowest average amount under this subparagraph to
ensure compliance with federal Medicaid law and regulations as
specified in paragraph (10).  
   (C) For purposes of subparagraph (B), the department may  contract
with a vendor for the purposes of collecting payment data reports
from clinical laboratories, analyzing payment information, and
calculating a proposed rate.  
   (D) The proposed rates calculated by the vendor described in
subparagraph (C) may be used in determining the lowest reimbursement
rate for clinical laboratories or laboratory services in accordance
with paragraph (3).  
   (E) Data reports submitted to the department shall be certified by
the provider's certified financial officer or an authorized
individual.  
   (F) Clinical laboratory providers that fail to submit data reports
within 30 working days from the time requested by the department
shall be subject to the suspension provisions of subdivisions (a) and
(c) of Section 14123.  
   (6) Data reports provided to the department pursuant to this
section shall be confidential and shall be exempt from disclosure
under the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
 
   (7) The department shall seek stakeholder input on the rate
setting methodology.  
   (8) (A) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, the
department shall, without taking any further regulatory action,
implement, interpret, or make specific this section by means of
provider bulletins or similar instructions until regulations are
adopted. It is the intent of the Legislature that the department have
temporary authority as necessary to implement program changes until
completion of the regulatory process.  
   (B) The department shall adopt emergency regulations no later than
July 1, 2014. The department may readopt any emergency regulation
authorized by this section that is the same as or substantially
equivalent to an emergency regulation previously adopted pursuant to
this section. The initial adoption of
              emergency regulations implementing the amendments to
this section and the one readoption of emergency regulations
authorized by this section shall be deemed an emergency and necessary
for the immediate preservation of the public peace, health, safety,
or general welfare. Initial emergency regulations and the one
readoption of emergency regulations authorized by this section shall
be exempt from review by the Office of Administrative Law.  

   (C) The initial emergency regulations and the one readoption of
emergency regulations authorized by this section shall be submitted
to the Office of Administrative Law for filing with the Secretary of
State and each shall remain in effect for no more than 180 days, by
which time final regulations may be adopted.  
   (9) To the extent that the director determines that the new
methodology or payment reductions are not consistent with the
requirements of Section 1396a(a)(30)(A) of Title 42 of the United
States Code, the department may revert to the methodology under
subdivision (a) to ensure access to care is not compromised. 

   (10) (A) The department shall implement this section in a manner
that is consistent with federal Medicaid law and regulations. The
director shall seek any necessary federal approvals for the
implementation of this section. This section shall be implemented
only to the extent that federal approval is obtained.  
   (B) In determining whether federal financial participation is
available, the director shall determine whether the rates and
payments comply with applicable federal Medicaid requirements,
including those set forth in Section 1396a(a)(30)(A) of Title 42 of
the United States Code.  
   (C) To the extent that the director determines that the rates and
payments do not comply with applicable federal Medicaid requirements
or that federal financial participation is not available with respect
to any reimbursement rate, the director retains the discretion not
to implement that rate or payment and may revise the rate or payment
as necessary to comply with federal Medicaid requirements. The
department shall notify the Joint Legislative Budget Committee 10
days prior to revising the rate or payment to comply with federal
Medicaid requirements. 
   SEC. 10.    Section 14005.26 is added to the 
 Welfare and Institutions Code   , 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 children who have attained six
years of age but have not attained 19 years of age, who are 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) 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.
   (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 90 days after the
effective date of the act that added this section, or October 1,
2012, whichever is later.
   (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) (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. 11.    Section 14005.27 is added to the 
 Welfare and Institutions Code   , 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) and (B) 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 and
Phase 3, as described in subparagraphs (B) and (C) 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 (d).
   (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 (d), and at least 90 days prior to transition of
individuals in Phases 2 and 3, as described in subparagraphs (B) and
(C) of paragraph (1) of subdivision (d).
   (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 90 days after enactment
of this section or January 1, 2013, whichever is later.
   (4) Twelve months after implementation of this section pursuant to
subdivision (d), 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) (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. 12.    The sum of four hundred thousand dollars
($400,000) is hereby appropriated from the Managed Care Fund to the
Department of Managed Health Care for administration of the call
center to assist individuals with the Healthy Families transition,
and any other aspects related to health plan readiness and
coordination functions with the Department of Health Care Services
and the Managed Risk Medical Insurance Board. 
   SEC. 13.    The Legislature finds and declares that a
special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because the Counties of Los Angeles and
Sacramento are the only counties that have Medi-Cal dental managed
care arrangements and Sacramento County is the only county with
mandatory dental managed care enrollment. 
   SEC. 14.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code. 
   SEC. 15.    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.  
  SECTION 1.    It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2012.