Amended in Senate June 19, 2013

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
P3    1people with chronic and complex conditions to access better care
2and better health, while decreasing costs.

3(d) Federal guidelines allow the state to access enhanced federal
4matching rates for health home services under the Health Homes
5option for multiple target populations to achieve more than one
6policy goal.

7

SEC. 2.  

Article 3.9 (commencing with Section 14127) is added
8to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
9Code
, to read:

10 

11Article 3.9.  Health Homes for Medi-Cal Enrollees and Section
121115 Waiver Demonstration Populations with Chronic and
13Complex Conditions
14

 

15

14127.  

For the purposes of this article, the following definitions
16shall apply:

17(a) “Department” means the State Department of Health Care
18Services.

19(b) “Federal guidelines” means all federal statutes, and all
20regulatory and policy guidelines issued by the federal Centers for
21Medicare and Medicaid Services regarding the Health Homes for
22Enrollees with Chronic Conditions option under Section 2703 of
23the federal Patient Protection and Affordable Care Act (Affordable
24Care Act) (42 U.S.C. Sec. 1396w-4), including the State Medicaid
25Director Letter issued on November 16, 2010.

26(c) (1) “Health home” means a provider or team of providers
27designated by the department that satisfies all of the following:

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

29(B) Offers a whole person approach, including, but not limited
30to, coordinating other available services that address needs affecting
31a participating individual’s health.

32(C) Offers services in a range of settings, as appropriate, to meet
33the needs of an individual eligible for health home services.

34(2) Health homebegin delete partners may include, but are not limited to,end delete
35begin insert team members may includeend insert a health plan, community clinic, a
36mental health plan, a hospital, physicians, a clinical practice or
37clinical group practice, rural health clinic, community health center,
38community mental health center,begin insert substance use disorder treatment
39professionals, school-based health centers, community health
40workers, community-based service organizations, promotorend insert
begin insertes, end insert
P4    1 home health agency, nurse practitioners,begin insert physician’s assistants,end insert
2 social workers,begin insert and other end insert paraprofessionalsbegin delete,end deletebegin insert. Health home teams
3shall also partner with and provide linkages toend insert
housing navigatorsbegin delete,end delete
4 and housing providers.

5(3) For purposes of servingbegin delete targeted beneficiariesend deletebegin insert the populationend insert
6 identified in subdivision (c) of Section 14127.3, the department
7begin delete shallend deletebegin insert mayend insert require a lead provider to be a physician, a community
8clinic, a mental health plan, a community-based nonprofit
9organization, a county health system,begin insert a substance use disorder
10treatment professional or facility,end insert
or a hospital.

11(4) The department may determine the model of health home
12it intends to create, including any entity, provider, or group of
13providers operating as a health team, as a team of health care
14professionals, or as a designated provider, as those terms are
15defined in Sectionsbegin delete 3502(c)(2) and 1945(h)(5) and (h)(6) of the
16Affordable Care Act,end delete
begin insert 256a-1 and 1396w-4(h)(5) and (h)(6) of Title
1742 of the United States Code,end insert
respectively.

18(d) “Homeless” has the same meaning as that term is defined
19in Section 91.5 of Title 24 of the Code of Federal Regulations. A
20“chronically homeless individual” means anbegin delete individual whose
21conditions limit his or her activities of daily living and who has
22experienced homelessness for longer than a year or for four or
23more episodes over three years. Anend delete
begin insert unaccompanied homeless
24individual with a condition limiting his or her activities of daily
25living who has been continuously homeless for a year or more, or
26has had at least four episodes of homelessness in the past three
27years. For purposes of this article, anend insert
individual who is currently
28residing in transitional housing or who has been residing in
29permanent supportive housing for less than two years shall be
30considered a chronically homeless individual if the individual was
31chronically homeless prior to his or her residence.

begin delete

32(e) “Targeted beneficiary” means an individual who meets the
33criteria specified in subdivision (c) of Section 14127.3.

end delete
34

14127.1.  

Subject to federal approval, the department may do
35all of the following to create a California Health Home Program
36begin insert (Health Home Program)end insert, as authorized under Section 2703 of the
37Affordable Care Act:

38(a) Design, with opportunity for public comment, a program to
39provide health home services to Medi-Cal beneficiaries and Section
401115 waiver demonstration populations with chronic conditions.
P5    1begin insert In designing the Health Home Program, the department shall give
2consideration to ensuring continuity of care and avoiding
3disruption of care among a beneficiary’s existing providers.end insert

4(b) Contract with new providers, begin deletenew managed care plans, end delete
5existing Medi-Cal providers, existing managed care plans, or
6countiesbegin insert, or one or more of these entities,end insert to provide health home
7services, as provided in Section 14128.

8(c) Submit any necessary applications to the federal Centers for
9Medicare and Medicaid Services for one or more state plan
10amendments to provide health home services to Medi-Cal
11beneficiaries, to newly eligible Medi-Cal beneficiaries upon
12Medicaid expansion under the Affordable Care Act, and, if
13applicable, to Low Income Health Program (LIHP) enrollees in
14counties with LIHPs willing to match federal funds.

15(d) Define the populations of eligible individuals.

16(e) Develop a payment methodology, including, but not limited
17to, fee-for-service or per member, per month payment structures
18thatbegin insert mayend insert include tiered payment rates that take into account the
19intensity of services necessary to outreach to, engage, and serve
20the populations the department identifies.

begin delete

21(f) Identify health home services, consistent with federal
22guidelines.

end delete
begin insert

23(f) Identify the specific health home services needed for each
24population targeted in the Health Home Program, consistent with
25subdivision (b) of Section 14127.2.

end insert

26(g) begin deleteThe department may submit end deletebegin insertSubmit end insertapplications and operate,
27to the extent permitted by federal law and to the extent federal
28approval is obtained, more than one health homebegin delete programend deletebegin insert state
29plan amendment and any necessary Section 1115 waiver
30amendmentsend insert
for distinct populations, different providers or
31contractors, or specific geographic areas.

begin insert

32(h) Limit the availability of health home services geographically.

end insert
33

14127.2.  

(a) The department may design one or more state
34plan amendmentsbegin insert and any necessary Section 1115 waiver
35amendmentsend insert
to provide health home services to childrenbegin delete andend deletebegin insert or end insert
36 adultsbegin insert, or both,end insert pursuant to Section 14127.1, and,begin delete inend deletebegin insert based onend insert
37 consultation with stakeholders, shall develop the geographic
38criteria, beneficiary eligibility criteria, and provider eligibility
39criteria for each state plan amendment.

P6    1(b) begin delete(1)end deletebegin deleteend deleteSubject to federal approval for receipt of the enhanced
2federal match, services provided under thebegin delete programend deletebegin insert Health Home
3Programend insert
established pursuant to this article shall include all of the
4following:

5(A) Comprehensive and individualized care management.

6(B) Care coordination and health promotion, including
7connection to medical, mental health, and substance usebegin insert disorderend insert
8 care.

9(C) Comprehensive transitional care from inpatient to other
10settings, including appropriate followup.

11(D) Individual and family support, including authorized
12representatives.

13(E) Referral to relevant community and social services supports,
14including, but not limited to, connection to housing for participants
15who are homeless or unstably housed, transportation to
16appointments needed tobegin delete managedend deletebegin insert manageend insert health needs,begin insert healthy
17lifestyle supports, quality child care when appropriate,end insert
and peer
18recovery support.

19(F) Health information technology to identify eligible individuals
20and link services, if feasible and appropriate.

begin delete

21(2) According to beneficiary needs, the health home provider
22 may provide less intensive services or graduate the beneficiary
23completely from the program upon stabilization.

end delete
24

14127.3.  

(a) If the department creates abegin delete health home programend delete
25begin insert Health Home Programend insert pursuant to this article, the department
26shall determine whether a health homebegin delete programend deletebegin insert state plan
27amendmentend insert
that targets adults is operationally viable.

28(b) (1) In determining whether a health homebegin delete programend deletebegin insert state
29plan amendmentend insert
that targets adults is operationally viable, the
30department shall consider whether a state plan amendmentbegin insert and
31any necessary Section 1115 waiver amendmentsend insert
could be designed
32in a manner that minimizes the impact on the General Fund,
33whether the department has the capacity to administer thebegin delete programend delete
34begin insert home health state plan amendment through the state, a contracting
35entity, a county, or regional approachend insert
, and whether a sufficient
36provider network exists for providing health home services to
37begin delete targeted beneficiariesend deletebegin insert populations the department intends to target,
38including the populationsend insert
described in subdivision (c).

39(2) If the department determines that a health homebegin delete programend delete
40begin insert state plan amendment end insert that targets adults is operationally viable
P7    1pursuant to paragraph (1), then the department shall design a state
2plan amendmentbegin insert and any necessary Section 1115 waiver
3amendmentsend insert
to targetbegin insert and provide health home services toend insert
4 beneficiaries who meet the criteria specified in subdivision (c).

5(3) (A) If the department determines a health homebegin delete programend delete
6begin insert state plan amendment end insert that targets adults is not operationally viable,
7then the department shall reportbegin insert to the appropriate policy and
8fiscal committees of the Legislatureend insert
the basis for this determination,
9as well asbegin delete a plan to address the health needs ofend deletebegin insert the service delivery
10changes needed to improve care amongend insert
chronically homeless
11beneficiaries and frequent hospital usersbegin delete to the appropriate policy
12and fiscal committees of the Legislatureend delete
.

13(B) The requirement for submitting the reportbegin delete and planend delete under
14subparagraph (A) is inoperative four years after the date the report
15is due, pursuant to Section 10231.5 of the Government Code.

16(c) A state plan amendmentbegin insert and any necessary Section 1115
17waiver amendmentsend insert
submitted pursuant to this section shall target
18adult beneficiaries who meet both of the following criteria:

19(1) Have current diagnoses of chronic,begin delete co-occurringend delete physical
20health, mental health, or substance use disorders prevalent among
21frequent hospital users.

22(2) Have a level of severity in conditions established by the
23department, based on one or more of the following factors:

24(A) Frequent inpatient hospital admissions, including
25hospitalization for medical, psychiatric, or substance use related
26conditions.

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

28(C) Chronic homelessness.

29(d) (1) For the purposes of providing health home services to
30begin delete targeted beneficiaries who meet the criteriaend deletebegin insert the population
31identifiedend insert
in subdivision (c), the department shall selectbegin delete designatedend delete
32 health home providersbegin delete, managed care organizations subcontracting
33with providers, or counties acting as or subcontracting with
34providers operating as a health home team that haveend delete
begin insert or providers
35who plan to subcontract with health home team members withend insert
all
36of the following:

37(A) Demonstrated experience working with frequent hospital
38begin insert or emergency department end insert users.

39(B) Demonstrated experience working with people who are
40chronically homeless.

P8    1(C) The capacity and administrative infrastructure to participate
2in thebegin delete programend deletebegin insert Health Home Programend insert, including the ability to
3meet requirements of federal guidelines.

4(D) A viable plan, with roles identified among providers of the
5health home, to do all of the following:

6(i) Reach out to and engage frequent hospitalbegin insert or emergency
7departmentend insert
users and chronically homeless eligible individuals.

8(ii) Link eligible individuals who are homeless or experiencing
9housing instability to permanent housing, such as supportive
10housing.

11(iii) Ensure coordination and linkages to services needed to
12access and maintain health stability, including medical, mental
13health,begin insert andend insert substance use care,begin delete andend deletebegin insert as well asend insert social servicesbegin insert and
14supportsend insert
to address social determinants of health.

15(2) The department may design additional provider criteria to
16those identified in paragraph (1) after consultation with stakeholder
17groups who have expertise in engagement and services forbegin delete targeted
18beneficiaries described in this sectionend delete
begin insert the population identified in
19subdivision (c)end insert
.

20(3) The department may authorize health home providers eligible
21under this subdivision to serve Medi-Cal enrollees through a
22fee-for-service or managed care delivery system, andbegin delete shallend deletebegin insert mayend insert
23 allow forbegin delete bothend delete county-operated andbegin insert other public andend insert private
24providers to participate inbegin delete the California Health Home programend delete
25begin insert this programend insert.

26(4) begin deleteThe end deletebegin insertIf the department designs a state plan amendment
27designed to serve the population identified in subdivision (c), the end insert

28department shall design strategies to outreach to, engage, and
29provide health home services tobegin delete the targeted beneficiariesend deletebegin insert the
30population end insert
identified in subdivision (c), based on consultation
31with begin delete stakeholder groupsend deletebegin insert stakeholdersend insert who have expertise in
32engagingbegin delete andend deletebegin insert,end insert providing services tobegin delete these targeted beneficiariesend deletebegin insert,
33and designing programs addressing the needs of, the populationend insert
.

begin delete

34(5) The department shall design other health home elements,
35including provider rates specific to targeted beneficiaries described
36in subdivision (c), after consultation with stakeholder groups who
37have expertise in engaging and providing services to these targeted
38beneficiaries.

39(6)

end delete

P9    1begin insert(5)end insert If the department creates a health home program that targets
2adults described in subdivision (c), the department may also submit
3state plan amendmentsbegin insert and any necessary waiver amendmentsend insert
4 targeting other adult populations.

5

14127.4.  

(a) The department shall administer this article in a
6manner that attempts to maximize federal financial participation,
7consistent with federal law.

8(b) Except as provided in Section 14127.6, the nonfederal share
9shall be provided by funds from local governments, private
10foundations, or any other source permitted under federal law. The
11department, or counties contracting with the department, may also
12enter into risk-sharing and social impact bond program agreements
13to fund services under this article.

begin delete

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

end delete
17

14127.5.  

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

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) begin deleteThis article shall be implemented end deletebegin insertThe department
26shall fund health home services end insert
only if and to the extent federal
27financial participation is available and the federal Centers for
28Medicare and Medicaid Services approves any state plan
29amendments sought pursuant to this article.

30(b) Except as provided inbegin delete subdivisions (c) and (d)end deletebegin insert subdivision
31(c)end insert
, this article shall be implemented only if no additional General
32Fund moneys are used to fund the administration and costs of
33services.

34(c) Notwithstanding subdivision (b),begin delete prior to and during the first
35eight quarters of implementation,end delete
if the department projects, based
36on analysis of current and projected expenditures for health home
37servicesbegin delete,end deletebegin insert prior to, during, or after the first eight quarters of
38implementation,end insert
that this article can be implemented in a manner
39that does notbegin insert or will notend insert result in a net increase in ongoing General
P10   1Fund costs for the Medi-Cal program, the department may use
2state funds to fund anybegin delete programend deletebegin insert Health Home Programend insert costs.

begin delete

3(d) Notwithstanding subdivision (b), if the department projects,
4after the first eight quarters of implementation, that implementation
5of this article has not resulted in a net increase in ongoing General
6Fund costs for the Medi-Cal program, the department may use
7state funds to fund any program costs.

end delete
begin delete

8(e)

end delete

9begin insert(end insertbegin insertd)end insert The department may use new funding in the form of
10enhanced federal financial participation for health home services
11that are currently funded to fundbegin delete anyend delete additional costs for newbegin delete health
12home programend delete
begin insert Health Home Programend insert services.

begin delete

13(f)

end delete

14begin insert(end insertbegin inserte)end insert The department shall seek to fund the creation,
15implementation, and administration of the program with funding
16other than state general funds.

begin delete

17(g)

end delete

18begin insert(end insertbegin insertf)end insert The department may revise or terminate thebegin delete health home
19programend delete
begin insert Health Home Programend insert any time after the first eight
20quarters of implementation if the department finds that the program
21fails to result inbegin delete improved health outcomesend deletebegin insert reduced inpatient stays,
22hospital admission rates, and emergency department visits,end insert
or
23results in substantial General Fund expense without commensurate
24decreases in Medi-Cal costs among program participants.

25

14128.  

(a) In the event of a judicial challenge of the provisions
26of this article, this article shall not be construed to create an
27obligation on the part of the state to fund any payment from state
28funds due to the absence or shortfall of federal funding.

29(b) For the purposes of implementing this article, the department
30may enter into exclusive or nonexclusive contracts on a bid or
31negotiated basis, and may amend existing managed care contracts
32to provide or arrange for services under this article. Contracts may
33be statewide or on a more limited geographic basis. Contracts
34entered into or amended under this section shall be exempt from
35the provisions of Chapter 2 (commencing with Section 10290) of
36Part 2 of Division 2 of the Public Contract Code and Chapter 6
37(commencing with Section 14825) of Part 5.5 of Division 3 of the
38Government Code, and shall be exempt from the review or
39approval of any division of the Department of General Services.

P11   1(c) (1) Notwithstanding Chapter 3.5 (commencing with Section
211340) of Part 1 of Division 3 of Title 2 of the Government Code,
3the department may implement, interpret, or make specific the
4process set forth in this article by means of all-county letters, plan
5letters, plan or provider bulletins, or similar instructions, without
6taking regulatory action, until such time as regulations are adopted.
7It is the intent of the Legislature that the department be provided
8temporary authority as necessary to implement program changes
9until completion of the regulatory process.

10(2) The department shall adopt emergency regulations no later
11than two years after implementation of this article. The department
12may readopt, up to two times, any emergency regulation authorized
13by this section that is the same as or substantially equivalent to an
14emergency regulation previously adopted pursuant to this section.

15(3) The initial adoption of emergency regulations implementing
16this article and the readoptions of emergency regulations authorized
17by this section shall be deemed an emergency and necessary for
18the immediate preservation of the public peace, health, safety, or
19general welfare. Initial emergency regulations and readoptions
20authorized by this section shall be exempt from review by the
21Office of Administrative Law. The initial emergency regulations
22and readoptions authorized by this section shall be submitted to
23the Office of Administrative Law for filing with the Secretary of
24State and shall remain in effect for no more than 180 days, by
25which time final regulations may be adopted.



O

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