BILL NUMBER: AB 361	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 3, 2013
	AMENDED IN SENATE  JUNE 19, 2013
	AMENDED IN ASSEMBLY  MAY 24, 2013
	AMENDED IN ASSEMBLY  APRIL 4, 2013

INTRODUCED BY   Assembly Member Mitchell
   (Principal coauthor: Assembly Member Atkins)
   ( Coauthor:   Assembly Member 
 Ammiano   Coauthors:   Assembly
Members   Ammiano   and Maienschein  )
   (  Coauthor:   Senator  
Beall   Coauthors:   Senators   Beall
  and Monning  )

                        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:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The Health Homes for Enrollees with Chronic Conditions option
(Health Homes option) under Section 2703 of the federal Patient
Protection and Affordable Care Act (Affordable Care Act) (42 U.S.C.
Sec. 1396w-4) offers an opportunity for California to address chronic
and complex health  conditions, including social 
 conditions through a "whole person" approach, while achieving
the "Triple Aim" goals of improved patient care, improved health, and
reduced   per-capita total costs. It is an opportunity to
reverse  determinants that lead to poor health outcomes and high
costs among Medi-Cal beneficiaries.
   (b) For example, people who frequently use hospitals for reasons
that could have been avoided with more appropriate care incur high
Medi-Cal costs and suffer high rates of early mortality due to the
complexity  and severity  of their conditions and, often,
their negative social determinants of health. Frequent users have
difficulties accessing regular or preventive care and complying with
treatment protocols, and the significant number who are homeless have
no place to store medications, cannot adhere to a healthy diet or
maintain appropriate hygiene, face frequent victimization, and lack
rest when recovering from illness.  Frequent hospital users who
are not homeless survive on extremely low incomes and live in
communities with limited resources and services.
   (c) Increasingly, health providers are partnering with community
behavioral health and social services providers to offer a
person-centered interdisciplinary system of care that effectively
addresses the needs of enrollees with multiple chronic or complex
conditions, including frequent hospital users and people experiencing
chronic homelessness  , in settings where enrollees live  .
These health homes help people with chronic and complex conditions
to access better care and better health, while decreasing costs.
   (d) Federal guidelines allow the state to access enhanced federal
 matching rates   financial participation 
for health home services under the Health Homes option for multiple
target populations to achieve more than one policy goal.
  SEC. 2.  Article 3.9 (commencing with Section 14127) is added to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:

      Article 3.9.  Health Homes for Medi-Cal Enrollees and Section
1115 Waiver Demonstration Populations with Chronic and Complex
Conditions


   14127.  For  the  purposes of this article, the
following definitions shall apply:
   (a) "Department" means the State Department of Health Care
Services.
   (b) "Federal guidelines" means all federal statutes, and all
regulatory and policy guidelines issued by the federal Centers for
Medicare and Medicaid Services regarding the Health Homes for
Enrollees with Chronic Conditions option under Section 2703 of the
federal Patient Protection and Affordable Care Act (Affordable Care
Act) (42 U.S.C. Sec. 1396w-4), including the State Medicaid Director
Letter issued on November 16, 2010.
   (c) (1) "Health home" means a provider or team of providers
designated by the department that satisfies all of the following:
   (A) Meets the criteria described in federal guidelines.
   (B) Offers a whole person approach, including, but not limited to,
coordinating other available services that address needs affecting a
participating individual's health.
   (C) Offers services in a range of settings, as appropriate, to
meet the needs of an individual eligible for health home services.
   (2)  Health home team members may include a health plan,
  A lead provider may contract with Medi-Cal providers,
including, but not limited to, a managed care health plan, a 
community clinic, a mental health plan, a hospital, physicians, a
clinical practice or clinical group practice,  a  rural
health clinic,  a  community health center,  a 
community mental health center, substance use disorder treatment
professionals, school-based health centers, community health workers,
community-based service organizations,  promotores,
  a  home health agency, nurse practitioners,
physician's assistants, social workers, and other 
paraprofessionals. Health home teams shall also partner with and
provide linkages to housing navigators and housing providers.
  paraprofessionals, to the extent that contracting with
these providers is allowed under federal Medicaid law. Health home
providers shall also establish noncontractual relationships with, and
provide linkages to, housing providers. 
   (3) For purposes of serving the population identified in
subdivision (c) of Section 14127.3, the department may require a lead
provider to be a physician, a community clinic, a mental health
plan, a community-based  nonprofit  organization, a
county health system,  a substance use disorder treatment
professional or facility,  or a hospital.
   (4) The department may determine the model of health home it
intends to create, including any entity, provider, or group of
providers operating as a health team, as a team of health care
professionals, or as a designated provider, as those terms are
defined in Sections 256a-1 and 1396w-4(h)(5) and (h)(6) of Title 42
of the United States Code, respectively. 
   (d) "Health Home Program" means all of the state plan amendments
and relevant waivers the department seeks and the federal Centers for
Medicine and Medicaid Services approves. 
   (d) 
    (e)  "Homeless" has the same meaning as that term is
defined in Section 91.5 of Title 24 of the Code of Federal
Regulations. A "chronically homeless individual" means  an
unaccompanied homeless individual with a condition limiting his or
her activities of daily living who has been continuously homeless for
a year or more, or has had at least four episodes of homelessness in
the past three years.   a homeless individual with a
condition limiting his or her activities of daily living who has been
continuously homeless for a year or more, or had at least four
episodes of homelessness in the past three years.  For purposes
of this article, an individual who is currently residing in
transitional housing  , as defined in Section 50675.2 of the
Health and Safety Code,  or who has been residing in permanent
supportive housing  , as defined in Section 50675.14 of the
Health and Safety Code,  for less than two years shall be
considered a chronically homeless individual if the individual was
chronically homeless prior to his or her residence.
   14127.1.  Subject to federal approval, the department may do all
of the following to create a California Health Home Program (Health
Home Program), as authorized under Section 2703 of the Affordable
Care Act:
   (a) Design, with opportunity for public comment, a program to
provide health home services to Medi-Cal beneficiaries and Section
1115 waiver demonstration populations with chronic conditions.
 In designing the Health Home Program, the department shall
give consideration to ensuring continuity of care and avoiding
disruption of care among a beneficiary's existing providers.

   (b) Contract with new providers, existing Medi-Cal providers,
 existing   Medi-Cal  managed care plans,
or counties, or one or more of these entities, to provide health home
services, as provided in Section 14128.
   (c) Submit any necessary applications to the federal Centers for
Medicare and Medicaid Services for one or more state plan amendments
 and any necessary Section 1115 waiver amendments  to
provide health home services to Medi-Cal beneficiaries, to newly
eligible Medi-Cal beneficiaries upon Medicaid expansion under the
Affordable Care Act, and, if applicable, to Low Income Health Program
(LIHP) enrollees in counties with LIHPs willing to match federal
funds.
   (d) Define the populations of eligible individuals.
   (e) Develop a payment methodology, including, but not limited to,
fee-for-service or per member, per month payment structures that may
include tiered payment rates that take into account the intensity of
services necessary to outreach to, engage, and serve the populations
the department identifies.
   (f) Identify the specific health home services needed for each
population targeted in the Health Home Program, consistent with
subdivision (b) of Section 14127.2.
   (g) Submit applications and operate, to the extent permitted by
federal law and to the extent federal approval is obtained, more than
one health home state plan amendment and any necessary Section 1115
waiver amendments for distinct populations, different providers or
contractors, or specific geographic areas.
   (h) Limit the availability of health home services geographically.

   14127.2.  (a) The department may design one or more state plan
amendments and any necessary Section 1115 waiver amendments to
provide health home services to children or adults, or both, pursuant
to Section 14127.1, and,  based on  
considering  consultation with stakeholders, shall develop the
geographic criteria, beneficiary eligibility criteria, and provider
eligibility criteria for each state plan amendment.
   (b) Subject to federal approval for receipt of the enhanced
federal  match   reimbursement  , services
provided under the Health Home Program established pursuant to this
article shall include all of the following: 
   (A) 
    (   1)  Comprehensive and individualized care
management. 
   (B) 
    (   2)  Care coordination and health promotion,
including connection to medical, mental health, and substance use
disorder care. 
   (C) 
    (   3)  Comprehensive transitional care from
inpatient to other settings, including appropriate followup. 

   (D) 
    (   4)  Individual and family support,
including authorized representatives. 
   (E) 
    (  5)  Referral to relevant community and
social services supports, including, but not limited to, connection
to housing for participants who are homeless or unstably housed,
transportation to appointments needed to manage health needs, healthy
lifestyle supports,  quality  child care when
appropriate, and peer recovery support. 
   (F) 
    (   6)  Health information technology to
identify eligible individuals and link services, if feasible and
appropriate.
   14127.3.  (a) If the department creates a Health Home Program
pursuant to this article, the department shall determine whether a
health home state plan amendment that targets adults is operationally
viable.
   (b) (1) In determining whether a health home state plan amendment
that targets adults is operationally viable, the department shall
consider whether a state plan amendment and any necessary Section
1115 waiver amendments could be designed in a manner that minimizes
the impact on the General Fund, whether the department has the
capacity to administer the  home health   health
home  state plan amendment through the state, a contracting
entity, a county, or regional approach, and whether a sufficient
provider network exists for providing health home services to
populations the department intends to target, including the
populations described in subdivision (c).
   (2) If the department determines that a health home state plan
amendment that targets adults is operationally viable pursuant to
paragraph (1), then the department shall design a state plan
amendment and any necessary Section 1115 waiver amendments to target
and provide health home services to beneficiaries who meet the
criteria specified in subdivision (c).
   (3) (A) If the department determines a health home state plan
amendment that targets adults is not operationally viable, then the
department shall  report to   inform  the
appropriate policy and fiscal committees of the  Legislature
the basis for this determination, as well as the service delivery
changes needed to improve care among chronically homeless
beneficiaries and frequent hospital users.  
Legislature, within 120 days of that determination, about current
efforts underway by the department that help to address health care
issues experienced by homeless Medi-Cal beneficiaries. 
   (B) The requirement for  submitting the report 
 informing the appropriate policy and fiscal committees of the
Legislature  under subparagraph (A) is inoperative four years
after the date the report is due, pursuant to Section 10231.5 of the
Government Code.
   (c) A state plan amendment and any necessary Section 1115 waiver
amendments submitted pursuant to this section shall target adult
beneficiaries who meet both of the following criteria:
   (1) Have current diagnoses of chronic, physical health, mental
health, or substance use disorders prevalent among frequent hospital
users.
   (2) Have a level of severity in conditions established by the
department, based on one or more of the following factors:
   (A) Frequent inpatient hospital admissions, including
hospitalization for medical, psychiatric, or substance use related
conditions.
   (B) Excessive use of crisis or emergency services.
   (C) Chronic homelessness.
   (d) (1) For the purposes of providing health home services to the
population identified in subdivision (c), the department shall select
health home providers or providers who plan to subcontract with
health home team members with all of the following:
   (A) Demonstrated experience working with frequent hospital or
emergency department users.
   (B) Demonstrated experience working with people who are
chronically homeless.
   (C) The capacity and administrative infrastructure to participate
in the Health Home Program, including the ability to meet
requirements of federal guidelines.
   (D) A viable plan, with roles identified among providers of the
health home, to do all of the following:
   (i) Reach out to and engage frequent hospital or emergency
department users and chronically homeless eligible individuals.
   (ii) Link eligible individuals who are homeless or experiencing
housing instability to permanent housing, such as supportive housing.

   (iii) Ensure coordination and linkages to services needed to
access and maintain health stability, including medical, mental
health, and substance use care, as well as social services and
supports to address social determinants of health.
   (2) The department may design additional provider criteria to
those identified in paragraph (1) after consultation with stakeholder
groups who have expertise in engagement and services for the
population identified in subdivision (c).
   (3) The department may authorize health home providers eligible
under this subdivision to serve Medi-Cal enrollees through a
fee-for-service or managed care delivery system  that may include
supplemental payments  , and may allow for county-operated and
other public and private providers to participate in this program.
   (4) If the department designs a state plan amendment designed to
serve the population identified in subdivision (c), the department
shall design strategies to outreach to, engage, and provide health
home services to the population identified in subdivision (c), based
on consultation with stakeholders who have expertise in engaging,
providing services to, and designing programs addressing the needs
of, the population.
   (5) If the department creates a health home program that targets
adults described in subdivision (c), the department may also submit
state plan amendments and any necessary waiver amendments targeting
other adult populations.
   14127.4.  (a) The department shall administer this article in a
manner that attempts to maximize federal financial participation,
consistent with federal law.
   (b) Except as provided in Section 14127.6, the nonfederal share
shall be provided by funds from local governments, private
foundations, or any other source permitted under  state and 
federal law  , including Section 1903(a) of the federal Social
Security Act (42 U.S.C. Sec. 1396b(a)) and Section 433.51 of Title 42
of the Code of Federal Regulations, and   may be used for
  administration, service delivery, evaluation, and design
of the Health Home Program  . The department, or counties
contracting with the department, may also enter into risk-sharing and
social impact bond program agreements to fund services under this
article.
   14127.5.  (a) If the department creates a Health Home Program, the
department shall ensure that an evaluation of the program is
completed and shall, within two years after implementation, submit a
report to the appropriate policy and fiscal committees of the
Legislature. Stakeholders, including philanthropy, nonprofit
organizations, and patient advocates, may participate in the
department's evaluation design. 
   (b) The requirement for submitting the report under subdivision
(a) is inoperative four years after the date the report is due,
pursuant to Section 10231.5 of the Government Code.
   14127.6.  (a)  The department shall fund health home
services   The Health Home Program shall be implemented
 only if and to the extent federal financial participation is
available and the federal Centers for Medicare and Medicaid Services
approves any state plan amendments  and any necessary waivers
 sought pursuant to this article.
   (b) Except as provided in subdivision (c), this article shall be
implemented only if no additional General Fund moneys are used to
fund the administration and costs of services.
   (c) Notwithstanding subdivision (b), if the department projects,
based on analysis of current and projected expenditures for health
home services prior to, during, or after the first eight quarters of
implementation, that this article can be implemented in a manner that
does not or will not result in a net increase in ongoing General
Fund costs for the Medi-Cal program, the department may use state
funds to fund any Health Home Program costs.
   (d) The department may use new funding in the form of enhanced
federal financial participation for health home services that are
currently  funded   provided  to fund
additional costs for new Health Home Program services.
   (e) The department shall seek to fund the creation,
implementation, and administration of the program with funding other
than state general funds.
   (f) The department may revise or terminate the Health Home Program
any time after the first eight quarters of implementation if the
department finds that the program fails to result in reduced
inpatient stays, hospital admission rates, and emergency department
visits, or results in substantial General Fund expense without
commensurate decreases in Medi-Cal costs among program participants.
   14128.  (a) In the event of a judicial challenge of the provisions
of this article, this article shall not be construed to create an
obligation on the part of the state to fund any payment from state
funds due to the absence or shortfall of federal funding.
   (b) For the purposes of implementing this article, the department
may enter into exclusive or nonexclusive contracts on a bid or
negotiated basis, and may amend existing managed care contracts to
provide or arrange for services under this article. Contracts may be
statewide or on a more limited geographic basis. Contracts entered
into or amended under this section shall be exempt from the
provisions of Chapter 2 (commencing with Section 10290) of Part 2 of
Division 2 of the Public Contract Code and Chapter 6 (commencing with
Section 14825) of Part 5.5 of Division 3 of the Government Code, and
shall be exempt from the review or approval of any division of the
Department of General Services.
   (c) (1) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific the process
set forth in this article by means of all-county letters, plan
letters, plan or provider bulletins, or similar instructions, without
taking regulatory action, until such time as regulations are
adopted. It is the intent of the Legislature that the department be
provided temporary authority as necessary to implement program
changes until completion of the regulatory process.
   (2) The department shall adopt emergency regulations no later than
two years after implementation of this article. The department may
readopt, up to two times, 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.
   (3) The initial adoption of emergency regulations implementing
this article and the readoptions 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 readoptions
authorized by this section shall be exempt from review by the Office
of Administrative Law. The initial emergency regulations and
readoptions authorized by this section shall be submitted to the
Office of Administrative Law for filing with the Secretary of State
and shall remain in effect for no more than 180 days, by which time
final regulations may be adopted.