Amended in Assembly May 24, 2013

Amended in Assembly April 4, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 361


Introduced by Assembly Member Mitchell

(Principal coauthor: Assembly Member Atkins)

(Coauthor: Assembly Member Ammiano)

(Coauthor: Senator Beall)

February 14, 2013


An act to add Article 3.9 (commencing with Section 14127) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

AB 361, as amended, Mitchell. Medi-Cal: Health Homes for Medi-Cal Enrollees and Section 1115 Waiver Demonstration Populations with Chronic and Complex Conditions.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes a state, subject to federal approval of a state plan amendment, to offer health home services, as defined, to eligible individuals with chronic conditions.

This bill would authorize the department, subject to federal approval, to create a health home program for enrollees with chronic conditions, as prescribed, as authorized under federal law. This bill would provide that those provisions shall not be implemented unless federal financial participation is available and additional General Fund moneys are not used to fund the administration and service costs, except as specified. This bill would require the department to ensure that an evaluation of the program is completed, if created by the department, and would require that the department submit a report to the appropriate policy and fiscal committees of the Legislature within 2 years after implementation of the program.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) The Health Homes for Enrollees with Chronic Conditions
4option (Health Homes option) under Section 2703 of the federal
5Patient Protection and Affordable Care Act (Affordable Care Act)
6(42 U.S.C. Sec. 1396w-4) offers an opportunity for California to
7address chronic and complex health conditions, including social
8determinants that lead to poor health outcomes and high costs
9among Medi-Cal beneficiaries.

10(b) For example, people who frequently use hospitals for reasons
11that could have been avoided with more appropriate care incur
12 high Medi-Cal costs and suffer high rates of early mortality due
13to the complexity of their conditions and, often, their negative
14social determinants of health. Frequent users have difficulties
15accessing regular or preventive care and complying with treatment
16protocols, and the significant number who are homeless have no
17place to store medications, cannot adhere to a healthy diet or
18maintain appropriate hygiene, face frequent victimization, and
19lack rest when recovering from illness.

20(c) Increasingly, health providers are partnering with community
21behavioral health and social services providers to offer a
22person-centered interdisciplinary system of care that effectively
23addresses the needs of enrollees with multiple chronic or complex
24conditions, including frequent hospital users and people
25experiencing chronic homelessness. These health homes help
26people with chronic and complex conditions to access better care
27and better health, while decreasing costs.

P3    1(d) Federal guidelines allow the state to access enhanced federal
2matching rates for health home services under the Health Homes
3option for multiple target populations to achieve more than one
4policy goal.

5

SEC. 2.  

Article 3.9 (commencing with Section 14127) is added
6to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
7Code
, to read:

8 

9Article 3.9.  Health Homes for Medi-Cal Enrollees and Section
101115 Waiver Demonstration Populations with Chronic and
11Complex Conditions
12

 

13

14127.  

For the purposes of this article, the following definitions
14shall apply:

15(a) “Department” means the State Department of Health Care
16Services.

17(b) “Federal guidelines” means all federal statutes, and all
18regulatory and policy guidelines issued by the federal Centers for
19Medicare and Medicaid Services regarding the Health Homes for
20Enrollees with Chronic Conditions option under Section 2703 of
21the federal Patient Protection and Affordable Care Act (Affordable
22Care Act) (42 U.S.C. Sec. 1396w-4), including the State Medicaid
23Director Letter issued on November 16, 2010.

24(c) (1) “Health home” means a provider or team of providers
25designated by the department that satisfies all of the following:

26(A) Meets the criteria described in federal guidelines.

27(B) Offers a whole person approach, including, but not limited
28to, coordinating other available services that address needs affecting
29a participating individual’s health.

30(C) Offers services in a range of settings, as appropriate, to meet
31the needs of an individual eligible for health home services.

32(2) Health home partners may include, but are not limited to, a
33health plan, community clinic, a mental health plan, a hospital,
34physicians, a clinical practice or clinical group practice, rural health
35clinic, community health center, community mental health center,
36home health agency, nurse practitioners, social workers,
37 paraprofessionals, housing navigators, and housing providers.

38(3) For purposes of serving targeted beneficiaries identified in
39subdivision (c) of Section 14127.3, the department shall require a
40lead provider to be a physician, a community clinic, a mental health
P4    1plan, a community-based nonprofit organization, a county health
2system, or a hospital.

3(4) The department may determine the model of health home
4it intends to create, including any entity, provider, or group of
5providers operating as a health team, as a team of health care
6professionals, or as a designated provider, as those terms are
7defined in Sections 3502(c)(2) and 1945(h)(5) and (h)(6) of the
8Affordable Care Act, respectively.

9(d) “Homeless” has the same meaning as that term is defined
10in Section 91.5 of Title 24 of the Code of Federal Regulations. A
11“chronically homeless individual” means an individual whose
12conditions limit his or her activities of daily living and who has
13experienced homelessness for longer than a year or for four or
14more episodes over three years. An individual who is currently
15residing in transitional housing or who has been residing in
16permanent supportive housing for less than two years shall be
17considered a chronically homeless individual if the individual was
18chronically homeless prior to his or her residence.

19(e) “Targeted beneficiary” means an individual who meets the
20criteria specified in subdivision (c) of Section 14127.3.

21

14127.1.  

Subject to federal approval, the department may do
22all of the following to create a California Health Home Program,
23as authorized under Section 2703 of the Affordable Care Act:

24(a) Design, with opportunity for public comment, a program to
25provide health home services to Medi-Cal beneficiaries and Section
261115 waiver demonstration populations with chronic conditions.

27(b) Contract with new providers, new managed care plans,
28existing Medi-Cal providers, existing managed care plans, or
29counties to provide health home services, as provided in Section
3014128.

31(c) Submit any necessary applications to the federal Centers for
32Medicare and Medicaid Services for one or more state plan
33amendments to provide health home services to Medi-Cal
34beneficiaries, to newly eligible Medi-Cal beneficiaries upon
35Medicaid expansion under the Affordable Care Act, and, if
36applicable, to Low Income Health Program (LIHP) enrollees in
37counties with LIHPs willing to match federal funds.

38(d) Define the populations of eligible individuals.

39(e) Develop a payment methodology, including, but not limited
40to, fee-for-service or per member, per month payment structures
P5    1that include tiered payment rates that take into account the intensity
2of services necessary to outreach to, engage, and serve the
3populations the department identifies.

4(f) Identify health home services, consistent with federal
5guidelines.

6(g) The department may submit applications and operate, to the
7extent permitted by federal law and to the extent federal approval
8is obtained, more than one health home program for distinct
9populations, different providers or contractors, or specific
10geographic areas.

11

14127.2.  

(a) The department may design one or more state
12plan amendments to provide health home services to children and
13adults pursuant to Section 14127.1, and, in consultation with
14stakeholders, shall develop the geographic criteria, beneficiary
15eligibility criteria, and provider eligibility criteria for each state
16plan amendment.

17(b) (1) Subject to federal approval for receipt of the enhanced
18federal match, services provided under the program established
19pursuant to this article shall include all of the following:

20(A) Comprehensive and individualized care management.

21(B) Care coordination and health promotion, including
22connection to medical, mental health, and substance use care.

23(C) Comprehensive transitional care from inpatient to other
24settings, including appropriate followup.

25(D) Individual and family support, including authorized
26representatives.

27(E) Referral to relevant community and social services supports,
28including, but not limited to, connection to housing for participants
29who are homeless or unstably housed, transportation to
30appointments needed to managed health needs, and peer recovery
31support.

32(F) Health information technology to identify eligible individuals
33and link services, if feasible and appropriate.

34(2) According to beneficiary needs, the health home provider
35 may provide less intensive services or graduate the beneficiary
36completely from the program upon stabilization.

37

14127.3.  

(a) If the department creates a health home program
38pursuant to this article, the department shall determine whether a
39health home program that targets adults is operationally viable.

P6    1(b) (1) In determining whether a health home program that
2targets adults is operationally viable, the department shall consider
3whether a state plan amendment could be designed in a manner
4that minimizes the impact on the General Fund, whether the
5department has the capacity to administer the program, and whether
6a sufficient provider network exists for providing health home
7services to targeted beneficiaries described in subdivision (c).

8(2) If the department determines that a health home program
9that targets adults is operationally viable pursuant to paragraph
10(1), then the department shall design a state plan amendment to
11target beneficiaries who meet the criteria specified in subdivision
12(c).

13(3) (A) If the department determines a health home program
14that targets adults is not operationally viable, then the department
15shall report the basis for this determination, as well as a plan to
16address the health needs of chronically homeless beneficiaries and
17frequent hospital users to the appropriate policy and fiscal
18committees of the Legislature.

19(B) The requirement for submitting the report and plan under
20subparagraph (A) is inoperative four years after the date the report
21is due, pursuant to Section 10231.5 of the Government Code.

22(c) A state plan amendment submitted pursuant to this section
23shall target adult beneficiaries who meet both of the following
24criteria:

25(1) Have current diagnoses of chronic, co-occurring physical
26health, mental health, or substance use disorders prevalent among
27frequent hospital users.

28(2) Have a level of severity in conditions established by the
29department, based on one or more of the following factors:

30(A) Frequent inpatient hospital admissions, including
31hospitalization for medical, psychiatric, or substance use related
32conditions.

33(B) Excessive use of crisis or emergency services.

34(C) Chronic homelessness.

35(d) (1) For the purposes of providing health home services to
36targeted beneficiaries who meet the criteria in subdivision (c), the
37department shall select designated health home providers, managed
38care organizations subcontracting with providers, or counties acting
39as or subcontracting with providers operating as a health home
40team that have all of the following:

P7    1(A) Demonstrated experience working with frequent hospital
2users.

3(B) Demonstrated experience working with people who are
4chronically homeless.

5(C) The capacity and administrative infrastructure to participate
6in the program, including the ability to meet requirements of federal
7guidelines.

8(D) A viable plan, with roles identified among providers of the
9health home, to do all of the following:

10(i) Reach out to and engage frequent hospital users and
11chronically homeless eligible individuals.

12(ii) Link eligible individuals who are homeless or experiencing
13housing instability to permanent housing, such as supportive
14housing.

15(iii) Ensure coordination and linkages to services needed to
16access and maintain health stability, including medical, mental
17health, substance use care, and social services to address social
18determinants of health.

19(2) The department may design additional provider criteria to
20those identified in paragraph (1) after consultation with stakeholder
21groups who have expertise in engagement and services for targeted
22beneficiaries described in this section.

23(3) The department may authorize health home providers eligible
24under this subdivision to serve Medi-Cal enrollees through a
25fee-for-service or managed care delivery system, and shall allow
26for both county-operated and private providers to participate in
27the California Health Home program.

28(4) The department shall design strategies to outreach to, engage,
29and provide health home services to the targeted beneficiaries
30identified in subdivision (c), based on consultation with
31begin delete stakeholdersend deletebegin insert stakeholderend insert groups who have expertise in engaging
32and providing services to these targeted beneficiaries.

33(5) The department shall design other health home elements,
34including provider rates specific to targeted beneficiaries described
35in subdivision (c), after consultation with stakeholder groups who
36have expertise in engaging and providing services to these targeted
37beneficiaries.

38(6) If the department creates a health home program that targets
39adults described in subdivision (c), the department may also submit
40state plan amendments targeting other adult populations.

P8    1

14127.4.  

(a) The department shall administer this article in a
2manner that attempts to maximize federal financial participation,
3consistent with federal law.

4(b) begin deleteThis article shall not be construed to preclude local
5governments or foundations from contributing the nonfederal share
6of costs for services provided under this program, so long as those
7contributions are permitted under federal law. end delete
begin insertExcept as provided
8in Section 14127.6, the nonfederal share shall be provided by funds
9from local governments, private foundations, or any other source
10permitted under federal law. end insert
The department, or counties
11contracting with the department, may also enter into risk-sharing
12and social impact bond program agreements to fund services under
13this article.

14(c) In accordance with federal guidelines, the state may limit
15availability of health home or enhanced health home services
16 geographically.

17

14127.5.  

(a) If the department creates a health home program,
18the department shall ensure that an evaluation of the program is
19completed and shall, within two years after implementation, submit
20a report to the appropriate policy and fiscal committees of the
21Legislature.

22(b) The requirement for submitting the report under subdivision
23(a) is inoperative four years after the date the report is due, pursuant
24to Section 10231.5 of the Government Code.

25

14127.6.  

(a) This article shall be implemented only if and to
26the extent federal financial participation is available and the federal
27Centers for Medicare and Medicaid Services approves any state
28plan amendments sought pursuant to this article.

29(b) Except as provided in subdivisions (c) and (d), this article
30shall be implemented only if no additional General Fund moneys
31are used to fund the administration and costs of services.

32(c) Notwithstanding subdivision (b), prior to and during the first
33eight quarters of implementation, if the department projects, based
34on analysis of current and projected expenditures for health home
35services, that this article can be implemented in a manner that does
36not result in a net increase in ongoing General Fund costs for the
37Medi-Cal program, the department may use state funds to fund
38any program costs.

39(d) Notwithstanding subdivision (b), if the department projects,
40after the first eight quarters of implementation, that implementation
P9    1of this article has not resulted in a net increase in ongoing General
2Fund costs for the Medi-Cal program, the department may use
3state funds to fund any program costs.

4(e) The department may use new funding in the form of
5enhanced federal financial participation for health home services
6that are currently funded to fund any additional costs for new health
7home program services.

8(f) The department shall seek to fund the creation,
9implementation, and administration of the program with funding
10other than state general funds.

11(g) The department may revise or terminate the health home
12program any time after the first eight quarters of implementation
13if the department finds that the program fails to result in improved
14health outcomes or results in substantial General Fund expense
15without commensurate decreases in Medi-Cal costs among program
16participants.

17

14128.  

(a) In the event of a judicial challenge of the provisions
18of this article, this article shall not be construed to create an
19obligation on the part of the state to fund any payment from state
20funds due to the absence or shortfall of federal funding.

21(b) For the purposes of implementing this article, the department
22may enter into exclusive or nonexclusive contracts on a bid or
23negotiated basis, and may amend existing managed care contracts
24to provide or arrange for services under this article. Contracts may
25be statewide or on a more limited geographic basis. Contracts
26entered into or amended under this section shall be exempt from
27the provisions of Chapter 2 (commencing with Section 10290) of
28Part 2 of Division 2 of the Public Contract Code and Chapter 6
29(commencing with Section 14825) of Part 5.5 of Division 3 of the
30Government Code, and shall be exempt from the review or
31approval of any division of the Department of General Services.

32(c) (1) Notwithstanding Chapter 3.5 (commencing with Section
3311340) of Part 1 of Division 3 of Title 2 of the Government Code,
34the department may implement, interpret, or make specific the
35process set forth in this article by means of all-county letters, plan
36letters, plan or provider bulletins, or similar instructions, without
37taking regulatory action, until such time as regulations are adopted.
38It is the intent of the Legislature that the department be provided
39temporary authority as necessary to implement program changes
40until completion of the regulatory process.

P10   1(2) The department shall adopt emergency regulations no later
2than two years after implementation of this article. The department
3may readopt, up to two times, any emergency regulation authorized
4by this section that is the same as or substantially equivalent to an
5emergency regulation previously adopted pursuant to this section.

6(3) The initial adoption of emergency regulations implementing
7this article and the readoptions of emergency regulations authorized
8by this section shall be deemed an emergency and necessary for
9the immediate preservation of the public peace, health, safety, or
10general welfare. Initial emergency regulations and readoptions
11authorized by this section shall be exempt from review by the
12Office of Administrative Law. The initial emergency regulations
13and readoptions authorized by this section shall be submitted to
14the Office of Administrative Law for filing with the Secretary of
15State and shall remain in effect for no more than 180 days, by
16which time final regulations may be adopted.



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