Amended in Assembly June 13, 2013

Senate Bill No. 94

Introduced by Committee on Budget and Fiscal Review

January 10, 2013

begin delete An act relating to the Budget Act of 2013. end delete begin insert An act to amend Section 6253.2 of the Government Code, to amend Sections 10101.1, 12300.7, 12306, 12306.1, 12306.15, 14182.16, 14182.17, 14186, 14186.1, 14186.2, 14186.3, 14186.36, and 14186.4 of, to amend and add Sections 14132.275, 14183.6 and 14301.1, of, and to add Sections 14132.277, 14182.18, and 14186.11 to, the Welfare and Institutions Code, to repeal Section 10 of Chapter 33 of the Statutes of 2012, and to repeal Sections 15, 16, and 17 of Chapter 45 of the Statutes of 2012, relating to Medi-Cal, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 94, as amended, Committee on Budget and Fiscal Review. begin delete Budget Act of 2013. end delete begin insert Medi-Cal: managed care: long-term services and supports: in-home supportive services. end insert

begin insert

(1) 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 law requires the department to seek federal approval to establish a demonstration project as described in law pursuant to a Medicare or a Medicaid demonstration project or waiver, or a combination thereof. Existing law provides that if the department has not received by February 1, 2013, federal approval, or notification indicating pending approval, of a mutual ratesetting process, shared federal savings, and a 6-month enrollment period in the demonstration project, effective March 1, 2013, Chapter 45 of the Statutes of 2012, and specified provisions of Chapter 33 of the Statutes of 2012, are inoperative, as provided. Chapter 33 of the Statutes of 2012, among other things, requires that Medi-Cal beneficiaries who have dual eligibility in the Medi-Cal and Medicare programs be assigned as mandatory enrollees into managed care plans in counties participating in the demonstration project, and requires that no sooner than March 1, 2013, all Medi-Cal long-term services and supports, which includes Multipurpose Senior Services Program (MSSP) services, be covered under managed care plan contracts and only available through managed care plans to beneficiaries residing in counties participating in the demonstration project. Chapter 45 of the Statutes of 2012, among other things, establishes the California In-Home Supportive Services Authority (Statewide Authority), and provides that the In-Home Supportive Services Program is a Medi-Cal benefit available through managed care health care plans in specified counties, as specified. Existing law provides that no sooner than March 1, 2103, the Statewide Authority shall assume specified responsibilities in a county or city and county upon notification by the Director of Health Care Services that the enrollment of eligible Medi-Cal beneficiaries described in specified provisions of law has been completed in that county or city and county.

end insert begin insert

This bill would instead require enrollment of eligible Medi-Cal beneficiaries into managed care pursuant to the demonstration project or other specified provisions, including managed care for long-term services and supports, as one of the conditions that would be required to be completed before the Statewide Authority assumes the specified responsibilities. The bill would modify the provisions governing when MSSP becomes a Medi-Cal benefit only through managed care health plans, as prescribed. The bill would delete the provision authorizing the Director of Health Care Services to forgo the provision of long-term services and supports only through managed care, in its entirety or partially, if and to the extent the director determines that the quality of care for managed care beneficiaries, efficiency, or cost-effectiveness of the program would be jeopardized. The bill would require the State Department of Health Care Services to convene quarterly meetings with stakeholders to make recommendations regarding the Coordinated Care Initiative, as specified. The bill would require that in Coordinated Care Initiative Counties for managed care health plans providing long-term services and supports, the department shall include in its contract with those plans risk corridors to provide protections against either significant overpayment or significant underpayments. The bill would also repeal the provisions conditioning the operation of Chapter 45 of the Statutes of 2012 and specified provisions of Chapter 33 of the Statutes of 2012 on receipt of federal approval or notification of pending approval by February 1, 2013. The bill would instead condition implementation of the Coordinated Care Initiative, as defined, on whether the Director of Finance estimates that the Coordinated Care Initiative will generate net General Fund savings, as specified. The bill would also make other related technical, nonsubstantive changes.

end insert begin insert

(2) The bill would appropriate the amount of $500,000 from the General Fund to the State Department of Health Care Services for the Coordinated Care Initiative for purposes of notifying dual eligible beneficiaries and providers regarding the provisions of this act, and would provide that those funds be available for encumbrance and expenditure until June 30, 2014.

end insert begin insert

(3) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

end insert begin delete

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2013.

end delete

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 6253.2 of the end insert begin insert Government Code end insert begin insert , as
amended by Section 2 of Chapter 439 of the Statutes of 2012, is
amended to read: end insert

6253.2.  

(a) Notwithstanding any other provision of this chapter
to the contrary, information regarding persons paid by the state to
provide in-home supportive services pursuant to Article 7
(commencing with Section 12300) of Chapter 3 of Part 3 of
Division 9 of the Welfare and Institutions Code, or services
provided pursuant to Section 14132.95, 14132.952, or 14132.956
of the Welfare and Institutions Code, begin delete shall end delete begin insert is end insert not begin delete be end delete subject to
public disclosure pursuant to this chapter, except as provided in
subdivision (b).

(b) Copies of names, addresses, and telephone numbers of
persons described in subdivision (a) shall be made available, upon
request, to an exclusive bargaining agent and to any labor
organization seeking representation rights pursuant to Section
12301.6 or 12302.25 of the Welfare and Institutions Code or the
In-Home Supportive Services Employer-Employee Relations Act
(Title 23 (commencing with Section 110000)). This information
shall not be used by the receiving entity for any purpose other than
the employee organizing, representation, and assistance activities
of the labor organization.

(c) This section begin delete shall apply end delete begin insert applies end insert solely to individuals who
provide services under the In-Home Supportive Services Program
(Article 7 (commencing with Section 12300) of Chapter 3 of Part
3 of Division 9 of the Welfare and Institutions Code), the Personal
Care Services Program pursuant to Section 14132.95 of the Welfare
and Institutions Code, the In-Home Supportive Services Plus
Option pursuant to Section 14132.952 of the Welfare and
Institutions Code, or the Community First Choice Option pursuant
to Section 14132.956 of the Welfare and Institutions Code.

(d) Nothing in this section is intended to alter or shall be
interpreted to alter the rights of parties under the In-Home
Supportive Services Employer-Employee Relations Act (Title 23
(commencing with Section 110000)) or any other labor relations
law.

begin delete

(e) This section shall become inoperative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(e) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 6253.2 of the end insert begin insert Government Code end insert begin insert , as amended
by Section 1 of Chapter 439 of the Statutes of 2012, is amended
to read: end insert

6253.2.  

(a) Notwithstanding any other provision of this chapter
to the contrary, information regarding persons paid by the state to
provide in-home supportive services pursuant to Article 7
(commencing with Section 12300) of Chapter 3 of Part 3 of
Division 9 of the Welfare and Institutions Code or personal care
services pursuant to Section 14132.95 of the Welfare and
Institutions Code, begin delete shall end delete begin insert is end insert not begin delete be end delete subject to public disclosure
pursuant to this chapter, except as provided in subdivision (b).

(b) Copies of names, addresses, and telephone numbers of
persons described in subdivision (a) shall be made available, upon
request, to an exclusive bargaining agent and to any labor
organization seeking representation rights pursuant to subdivision
(c) of Section 12301.6 or Section 12302.25 of the Welfare and
Institutions Code or Chapter 10 (commencing with Section 3500)
of Division 4 of Title 1. This information shall not be used by the
receiving entity for any purpose other than the employee
organizing, representation, and assistance activities of the labor
organization.

(c) This section begin delete shall apply end delete begin insert applies end insert solely to individuals who
provide services under the In-Home Supportive Services Program
(Article 7 (commencing with Section 12300) of Chapter 3 of Part
3 of Division 9 of the Welfare and Institutions Code) or the
Personal Care Services Program pursuant to Section 14132.95 of
the Welfare and Institutions Code.

(d) Nothing in this section is intended to alter or shall be
interpreted to alter the rights of parties under the
Meyers-Milias-Brown Act (Chapter 10 (commencing with Section
3500) of Division 4) or any other labor relations law.

begin delete

(e) This section shall become operative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(e) This section shall be operative only if Section 1 of the act
that added this subdivision becomes inoperative pursuant to
subdivision (e) of that Section 1.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

[Reserved]

end insert

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

[Reserved]

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 10101.1 of the end insert begin insert Welfare and Institutions Code end insert begin insert ,
as amended by Section 23 of Chapter 439 of the Statutes of 2012,
is amended to read: end insert

10101.1.  

(a) For the 1991-92 fiscal year and each fiscal year
thereafter, the state’s share of the costs of the county services block
grant and the in-home supportive services administration
requirements shall be 70 percent of the actual nonfederal
expenditures or the amount appropriated by the Legislature for
that purpose, whichever is less.

(b) Federal funds received under Title 20 of the federal Social
Security Act (42 U.S.C. Sec. 1397 et seq.) and appropriated by the
Legislature for the county services block grant and the in-home
supportive services administration shall be considered part of the
state share of cost and not part of the federal expenditures for this
purpose.

(c) For the period during which Section 12306.15 is operative,
each county’s share of the nonfederal costs of the county services
block grant and the in-home supportive services administration
requirements as specified in subdivision (a) shall remain, but the
County IHSS Maintenance of Effort pursuant to Section 12306.15
shall be in lieu of that share.

begin delete

(d) This section shall become inoperative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(d) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 10101.1 of the end insert begin insert Welfare and Institutions Code end insert begin insert ,
as amended by Section 22 of Chapter 439 of the Statutes of 2012,
is amended to read: end insert

10101.1.  

(a) For the 1991-92 fiscal year and each fiscal year
thereafter, the state’s share of the costs of the county services block
grant and the in-home supportive services administration
requirements shall be 70 percent of the actual nonfederal
expenditures or the amount appropriated by the Legislature for
that purpose, whichever is less.

(b) Federal funds received under Title 20 of the federal Social
Security Act (42 U.S.C. Sec. 1397 et seq.) and appropriated by the
Legislature for the county services block grant and the in-home
supportive services administration shall be considered part of the
state share of cost and not part of the federal expenditures for this
purpose.

begin delete

(c) This section shall become operative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(c) This section shall be operative only if Section 5 of the act
that added this subdivision becomes inoperative pursuant to
subdivision (d) of that Section 5.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 12300.7 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

12300.7.  

(a) No sooner than March 1, 2013, the California
In-Home Supportive Services Authority shall assume the
responsibilities set forth in Title 23 (commencing with Section
110000) of the Government Code in a county or city and county
upon notification by the Director of Health Care Services that the
enrollment of eligible Medi-Cal beneficiaries described in begin delete Sections
14132.275, end delete begin insert Section 14132.275 or end insert 14182.16, begin delete and 14182.17 end delete begin insert or
Article 5.7 (commencing with Section 14186) of Chapter 7 end insert has
been completed in that county or city and county.

(b) A county or city and county, subject to subdivision (a) and
upon notification from the Director of Health Care Services, shall
do one or both of the following:

(1) Have the entity that performed functions set forth in the
county ordinance or contract in effect at the time of the notification
pursuant to subdivision (a) and established pursuant to Section
12301.6 continue to perform those functions, excluding subdivision
(c) of that section.

(2) Assume the functions performed by the entity, at the time
of the notification pursuant to subdivision (a), pursuant to Section
12301.6, excluding subdivision (c) of that section.

(c) If a county or city and county assumes the functions
described in paragraph (2) of subdivision (b), it may establish or
contract with an entity for the performance of any or all of the
functions assumed.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 12306 of the end insert begin insert Welfare and Institutions Code end insert begin insert ,
as amended by Section 37 of Chapter 439 of the Statutes of 2012,
is amended to read: end insert

12306.  

(a) The state and counties shall share the annual cost
of providing services under this article as specified in this section.

(b) Except as provided in subdivisions (c) and (d), the state shall
pay to each county, from the General Fund and any federal funds
received under Title XX of the federal Social Security Act available
for that purpose, 65 percent of the cost of providing services under
this article, and each county shall pay 35 percent of the cost of
providing those services.

(c) For services eligible for federal funding pursuant to Title
XIX of the federal Social Security Act under the Medi-Cal program
and, except as provided in subdivisions (b) and (d) the state shall
pay to each county, from the General Fund and any funds available
for that purpose 65 percent of the nonfederal cost of providing
services under this article, and each county shall pay 35 percent
of the nonfederal cost of providing those services.

(d) (1) For the period of July 1, 1992, to June 30, 1994,
inclusive, the state’s share of the cost of providing services under
this article shall be limited to the amount appropriated for that
purpose in the annual Budget Act.

(2) The department shall restore the funding reductions required
by subdivision (c) of Section 12301, fully or in part, as soon as
administratively practicable, if the amount appropriated from the
General Fund for the 1992-93 fiscal year under this article is
projected to exceed the sum of the General Fund expenditures
under Section 14132.95 and the actual General Fund expenditures
under this article for the 1992-93 fiscal year. The entire amount
of the excess shall be applied to the restoration. Services shall not
be restored under this paragraph until the Department of Finance
has determined that the restoration of services would result in no
additional costs to the state or to the counties relative to the
combined state appropriation and county matching funds for
in-home supportive services under this article in the 1992-93 fiscal
year.

(e) For the period during which Section 12306.15 is operative,
each county’s share of the costs of providing services pursuant to
this article specified in subdivisions (b) and (c) shall remain, but
the County IHSS Maintenance of Effort pursuant to Section
12306.15 shall be in lieu of that share.

begin delete

(f) This section shall become inoperative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(f) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 12306 of the end insert begin insert Welfare and Institutions Code end insert begin insert ,
as amended by Section 36 of Chapter 439 of the Statutes of 2012,
is amended to read: end insert

12306.  

(a) The state and counties shall share the annual cost
of providing services under this article as specified in this section.

(b) Except as provided in subdivisions (c) and (d), the state shall
pay to each county, from the General Fund and any federal funds
received under Title XX of the federal Social Security Act available
for that purpose, 65 percent of the cost of providing services under
this article, and each county shall pay 35 percent of the cost of
providing those services.

(c) For services eligible for federal funding pursuant to Title
XIX of the federal Social Security Act under the Medi-Cal program
and, except as provided in subdivisions (b) and (d) the state shall
pay to each county, from the General Fund and any funds available
for that purpose 65 percent of the nonfederal cost of providing
services under this article, and each county shall pay 35 percent
of the nonfederal cost of providing those services.

(d) (1) For the period of July 1, 1992, to June 30, 1994,
inclusive, the state’s share of the cost of providing services under
this article shall be limited to the amount appropriated for that
purpose in the annual Budget Act.

(2) The department shall restore the funding reductions required
by subdivision (c) of Section 12301, fully or in part, as soon as
administratively practicable, if the amount appropriated from the
General Fund for the 1992-93 fiscal year under this article is
projected to exceed the sum of the General Fund expenditures
under Section 14132.95 and the actual General Fund expenditures
under this article for the 1992-93 fiscal year. The entire amount
of the excess shall be applied to the restoration. Services shall not
be restored under this paragraph until the Department of Finance
has determined that the restoration of services would result in no
additional costs to the state or to the counties relative to the
combined state appropriation and county matching funds for
in-home supportive services under this article in the 1992-93 fiscal
year.

begin delete

(e)  This section shall become operative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(e) This section shall be operative only if Section 8 of the act
that added this subdivision becomes inoperative pursuant to
subdivision (f) of that Section 8.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 12306.1 of the end insert begin insert Welfare and Institutions Code end insert begin insert ,
as amended by Section 7 of Chapter 4 of the Statutes of 2013, is
amended to read: end insert

12306.1.  

(a) When any increase in provider wages or benefits
is negotiated or agreed to by a public authority or nonprofit
consortium under Section 12301.6, then the county shall use
county-only funds to fund both the county share and the state share,
including employment taxes, of any increase in the cost of the
program, unless otherwise provided for in the annual Budget Act
or appropriated by statute. No increase in wages or benefits
negotiated or agreed to pursuant to this section shall take effect
unless and until, prior to its implementation, the department has
obtained the approval of the State Department of Health Care
Services for the increase pursuant to a determination that it is
consistent with federal law and to ensure federal financial
participation for the services under Title XIX of the federal Social
Security Act, and unless and until all of the following conditions
have been met:

(1) Each county has provided the department with
documentation of the approval of the county board of supervisors
of the proposed public authority or nonprofit consortium rate,
including wages and related expenditures. The documentation shall
be received by the department before the department and the State
Department of Health Care Services may approve the increase.

(2) Each county has met department guidelines and regulatory
requirements as a condition of receiving state participation in the
rate.

(b) Any rate approved pursuant to subdivision (a) shall take
effect commencing on the first day of the month subsequent to the
month in which final approval is received from the department.
The department may grant approval on a conditional basis, subject
to the availability of funding.

(c) The state shall pay 65 percent, and each county shall pay 35
percent, of the nonfederal share of wage and benefit increases
negotiated by a public authority or nonprofit consortium pursuant
to Section 12301.6 and associated employment taxes, only in
accordance with subdivisions (d) to (f), inclusive.

(d) (1) The state shall participate as provided in subdivision (c)
in wages up to seven dollars and fifty cents ($7.50) per hour and
individual health benefits up to sixty cents ($0.60) per hour for all
public authority or nonprofit consortium providers. This paragraph
shall be operative for the 2000-01 fiscal year and each year
thereafter unless otherwise provided in paragraphs (2), (3), (4),
and (5), and without regard to when the wage and benefit increase
becomes effective.

(2) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to nine dollars
and ten cents ($9.10) per hour, if wages have reached at least seven
dollars and fifty cents ($7.50) per hour. Counties shall determine,
pursuant to the collective bargaining process provided for in
subdivision (c) of Section 12301.6, what portion of the nine dollars
and ten cents ($9.10) per hour shall be used to fund wage increases
above seven dollars and fifty cents ($7.50) per hour or individual
health benefit increases, or both. This paragraph shall be operative
for the 2001-02 fiscal year and each fiscal year thereafter, unless
otherwise provided in paragraphs (3), (4), and (5).

(3) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to ten dollars
and ten cents ($10.10) per hour, if wages have reached at least
seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided
for in subdivision (c) of Section 12301.6, what portion of the ten
dollars and ten cents ($10.10) per hour shall be used to fund wage
increases above seven dollars and fifty cents ($7.50) per hour or
individual health benefit increases, or both. This paragraph shall
be operative commencing with the next state fiscal year for which
the May Revision forecast of General Fund revenue, excluding
transfers, exceeds by at least 5 percent, the most current estimate
of revenue, excluding transfers, for the year in which paragraph
(2) became operative.

(4) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to eleven dollars
and ten cents ($11.10) per hour, if wages have reached at least
seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided
for in subdivision (c) of Section 12301.6, what portion of the eleven
dollars and ten cents ($11.10) per hour shall be used to fund wage
increases or individual health benefits, or both. This paragraph
shall be operative commencing with the next state fiscal year for
which the May Revision forecast of General Fund revenue,
excluding transfers, exceeds by at least 5 percent, the most current
estimate of revenues, excluding transfers, for the year in which
paragraph (3) became operative.

(5) The state shall participate as provided in subdivision (c) in
a total cost of wages and individual health benefits up to twelve
dollars and ten cents ($12.10) per hour, if wages have reached at
least seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided
for in subdivision (c) of Section 12301.6, what portion of the
twelve dollars and ten cents ($12.10) per hour shall be used to fund
wage increases above seven dollars and fifty cents ($7.50) per hour
or individual health benefit increases, or both. This paragraph shall
be operative commencing with the next state fiscal year for which
the May Revision forecast of General Fund revenue, excluding
transfers, exceeds by at least 5 percent, the most current estimate
of revenues, excluding transfers, for the year in which paragraph
(4) became operative.

(e) (1) On or before May 14 immediately prior to the fiscal
year for which state participation is provided under paragraphs (2)
to (5), inclusive, of subdivision (d), the Director of Finance shall
certify to the Governor, the appropriate committees of the
Legislature, and the department that the condition for each
subdivision to become operative has been met.

(2) For purposes of certifications under paragraph (1), the
General Fund revenue forecast, excluding transfers, that is used
for the relevant fiscal year shall be calculated in a manner that is
consistent with the definition of General Fund revenues, excluding
transfers, that was used by the Department of Finance in the
2000-01 Governor’s Budget revenue forecast as reflected on
Schedule 8 of the Governor’s Budget.

(f) Any increase in overall state participation in wage and benefit
increases under paragraphs (2) to (5), inclusive, of subdivision (d),
shall be limited to a wage and benefit increase of one dollar ($1)
per hour with respect to any fiscal year. With respect to actual
changes in specific wages and health benefits negotiated through
the collective bargaining process, the state shall participate in the
costs, as approved in subdivision (c), up to the maximum levels
as provided under paragraphs (2) to (5), inclusive, of subdivision
(d).

(g) For the period during which Section 12306.15 is operative,
each county’s share of the costs of negotiated wage and benefit
increases specified in subdivision (c) shall remain, but the County
IHSS Maintenance of Effort pursuant to Section 12306.15 shall
be in lieu of that share.

begin delete

(h) This section shall become inoperative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(h) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 12306.1 of the end insert begin insert Welfare and Institutions Code end insert begin insert ,
as amended by Section 8 of Chapter 4 of the Statutes of 2013, is
amended to read: end insert

12306.1.  

(a) When any increase in provider wages or benefits
is negotiated or agreed to by a public authority or nonprofit
consortium under Section 12301.6, then the county shall use
county-only funds to fund both the county share and the state share,
including employment taxes, of any increase in the cost of the
program, unless otherwise provided for in the annual Budget Act
or appropriated by statute. No increase in wages or benefits
negotiated or agreed to pursuant to this section shall take effect
unless and until, prior to its implementation, the department has
obtained the approval of the State Department of Health Care
Services for the increase pursuant to a determination that it is
consistent with federal law and to ensure federal financial
participation for the services under Title XIX of the federal Social
Security Act, and unless and until all of the following conditions
have been met:

(1) Each county has provided the department with
documentation of the approval of the county board of supervisors
of the proposed public authority or nonprofit consortium rate,
including wages and related expenditures. The documentation shall
be received by the department before the department and the State
Department of Health Care Services may approve the increase.

(2) Each county has met department guidelines and regulatory
requirements as a condition of receiving state participation in the
rate.

(b) Any rate approved pursuant to subdivision (a) shall take
effect commencing on the first day of the month subsequent to the
month in which final approval is received from the department.
The department may grant approval on a conditional basis, subject
to the availability of funding.

(c) The state shall pay 65 percent, and each county shall pay 35
percent, of the nonfederal share of wage and benefit increases
negotiated by a public authority or nonprofit consortium pursuant
to Section 12301.6 and associated employment taxes, only in
accordance with subdivisions (d) to (f), inclusive.

(d) (1) The state shall participate as provided in subdivision (c)
in wages up to seven dollars and fifty cents ($7.50) per hour and
individual health benefits up to sixty cents ($0.60) per hour for all
public authority or nonprofit consortium providers. This paragraph
shall be operative for the 2000-01 fiscal year and each year
thereafter unless otherwise provided in paragraphs (2), (3), (4),
and (5), and without regard to when the wage and benefit increase
becomes effective.

(2) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to nine dollars
and ten cents ($9.10) per hour, if wages have reached at least seven
dollars and fifty cents ($7.50) per hour. Counties shall determine,
pursuant to the collective bargaining process provided for in
subdivision (c) of Section 12301.6, what portion of the nine dollars
and ten cents ($9.10) per hour shall be used to fund wage increases
above seven dollars and fifty cents ($7.50) per hour or individual
health benefit increases, or both. This paragraph shall be operative
for the 2001-02 fiscal year and each fiscal year thereafter, unless
otherwise provided in paragraphs (3), (4), and (5).

(3) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to ten dollars
and ten cents ($10.10) per hour, if wages have reached at least
seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided
for in subdivision (c) of Section 12301.6, what portion of the ten
dollars and ten cents ($10.10) per hour shall be used to fund wage
increases above seven dollars and fifty cents ($7.50) per hour or
individual health benefit increases, or both. This paragraph shall
be operative commencing with the next state fiscal year for which
the May Revision forecast of General Fund revenue, excluding
transfers, exceeds by at least 5 percent, the most current estimate
of revenue, excluding transfers, for the year in which paragraph
(2) became operative.

(4) The state shall participate as provided in subdivision (c) in
a total of wages and individual health benefits up to eleven dollars
and ten cents ($11.10) per hour, if wages have reached at least
seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided
for in subdivision (c) of Section 12301.6, what portion of the eleven
dollars and ten cents ($11.10) per hour shall be used to fund wage
increases or individual health benefits, or both. This paragraph
shall be operative commencing with the next state fiscal year for
which the May Revision forecast of General Fund revenue,
excluding transfers, exceeds by at least 5 percent, the most current
estimate of revenues, excluding transfers, for the year in which
paragraph (3) became operative.

(5) The state shall participate as provided in subdivision (c) in
a total cost of wages and individual health benefits up to twelve
dollars and ten cents ($12.10) per hour, if wages have reached at
least seven dollars and fifty cents ($7.50) per hour. Counties shall
determine, pursuant to the collective bargaining process provided
for in subdivision (c) of Section 12301.6, what portion of the
twelve dollars and ten cents ($12.10) per hour shall be used to fund
wage increases above seven dollars and fifty cents ($7.50) per hour
or individual health benefit increases, or both. This paragraph shall
be operative commencing with the next state fiscal year for which
the May Revision forecast of General Fund revenue, excluding
transfers, exceeds by at least 5 percent, the most current estimate
of revenues, excluding transfers, for the year in which paragraph
(4) became operative.

(e) (1) On or before May 14 immediately prior to the fiscal
year for which state participation is provided under paragraphs (2)
to (5), inclusive, of subdivision (d), the Director of Finance shall
certify to the Governor, the appropriate committees of the
Legislature, and the department that the condition for each
subdivision to become operative has been met.

(2) For purposes of certifications under paragraph (1), the
General Fund revenue forecast, excluding transfers, that is used
for the relevant fiscal year shall be calculated in a manner that is
consistent with the definition of General Fund revenues, excluding
transfers, that was used by the Department of Finance in the
2000-01 Governor’s Budget revenue forecast as reflected on
Schedule 8 of the Governor’s Budget.

(f) Any increase in overall state participation in wage and benefit
increases under paragraphs (2) to (5), inclusive, of subdivision (d),
shall be limited to a wage and benefit increase of one dollar ($1)
per hour with respect to any fiscal year. With respect to actual
changes in specific wages and health benefits negotiated through
the collective bargaining process, the state shall participate in the
costs, as approved in subdivision (c), up to the maximum levels
as provided under paragraphs (2) to (5), inclusive, of subdivision
(d).

begin delete

(g) This section shall become operative only if Chapter 45 of
the Statutes of 2012 is deemed inoperative pursuant to Section 15
of that chapter.

end delete begin insert

(g) This section shall be operative only if Section 10 of the act
that added this subdivision becomes inoperative pursuant to
subdivision (h) of that Section 10.

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 12306.15 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

12306.15.  

(a) Commencing July 1, 2012, all counties shall
have a County IHSS Maintenance of Effort (MOE). In lieu of
paying the nonfederal share of IHSS costs as specified in Sections
10101.1, 12306, and 12306.1, counties shall pay the County IHSS
MOE.

(b) (1) The County IHSS MOE base year shall be the 2011-12
state fiscal year. The County IHSS MOE base shall be defined as
the amount actually expended by each county on IHSS services
and administration in the County IHSS MOE base year, as reported
by each county to the department, except that for administration,
the County IHSS MOE base shall include no more or no less than
the full match for the county’s allocation from the state.

(2) Administration expenditures shall include both county
administration and public authority administration. The County
IHSS MOE base shall be unique to each individual county.

(3) For a county that made 14 months of health benefit payments
for IHSS providers in the 2011-12 fiscal year, the Department of
Finance shall adjust that county’s County IHSS MOE base
calculation.

(4) The County IHSS MOE base for each county shall be no
less than each county’s 2011-12 expenditures for the Personal
Care Services Program and IHSS used in the caseload growth
calculation pursuant to Section 17605.

(c) (1) On July 1, 2014, the County IHSS MOE base shall be
adjusted by an inflation factor of 3.5 percent.

(2) Beginning on July 1, 2015, and annually thereafter, the
County IHSS MOE from the previous year shall be adjusted by
an inflation factor of 3.5 percent.

(3) (A) Notwithstanding paragraphs (1) and (2), in fiscal years
when the combined total of 1991 realignment revenues received
pursuant to Sections 11001.5, 6051.2, and 6201.2 of the Revenue
and Taxation Code, for the prior fiscal year is less than the
combined total received for the next prior fiscal year, the inflation
factor shall be zero.

(B) The Department of Finance shall provide notification to the
appropriate legislative fiscal committees and the California State
Association of Counties by May 14 of each year whether the
inflation factor will apply for the following fiscal year, based on
the calculation in subparagraph (A).

(d) In addition to the adjustment in subdivision (c), the County
IHSS MOE shall be adjusted for the annualized cost of increases
in provider wages or health benefits that are locally negotiated,
mediated, or imposed before the Statewide Authority assumes the
responsibilities set forth in Section 110011 of the Government
Code for a given county as provided in Section 12300.7.

(1) (A) If the department approves the rates and other economic
terms for a locally negotiated, mediated, or imposed increase in
the provider wages, health benefits, or other economic terms
pursuant to Section 12306.1 and paragraph (3), the state shall pay
65 percent, and the affected county shall pay 35 percent, of the
nonfederal share of the cost increase in accordance with
subparagraph (B).

(B) With respect to any increase in provider wages or health
benefits approved after July 1, 2012, pursuant to subparagraph
(A), the state shall participate in that increase as provided in
subparagraph (A) up to the amount specified in subdivision (d) of
Section 12306.1.

(C) The county share of these expenditures shall be included in
the County IHSS MOE, in addition to the amount established under
subdivisions (b) and (c). For any increase in provider wages or
health benefits that becomes effective on a date other than July 1,
the Department of Finance shall adjust the county’s County IHSS
MOE to reflect the annualized cost of the county’s share of the
nonfederal cost of the wage or health benefit increase.

(2) (A) If the department does not approve the rates and other
economic terms for a locally negotiated, mediated, or imposed
increase in the provider wages, health benefits, or other economic
terms pursuant to Section 12306.1 or paragraph (3), the county
shall pay the entire nonfederal share of the cost increase.

(B) The county share of these expenditures shall be included in
the County IHSS MOE, in addition to the amount established under
subdivisions (b) and (c). For any increase in provider wages or
health benefits that becomes effective on a date other than July 1,
the Department of Finance shall adjust the county’s County IHSS
MOE to reflect the annualized cost of the county’s share of the
nonfederal cost of the wage or health benefit increase.

(3) In addition to the rate approval requirements in Section
12306.1, it shall be presumed by the department that locally
negotiated rates and other economic terms within the following
limits are approved:

(A) A net increase in the combined total of wages and health
benefits of up to 10 percent per year above the current combined
total of wages and health benefits paid in that county.

(B) A cumulative total of up to 20 percent in the sum of the
combined total of changes in wages or health benefits, or both,
until the Statewide Authority assumes the responsibilities set forth
in Section 110011 of the Government Code for a given county as
provided in Section 12300.7.

(e) The County IHSS MOE shall only be adjusted pursuant to
subdivisions (c) and (d).

(f) The Department of Finance shall consult with the California
State Association of Counties to implement the County IHSS MOE,
which shall include, but not be limited to, determining each
county’s County IHSS MOE base pursuant to subdivision (b),
developing the computation for the annualized amount pursuant
to subdivision (d), and the process by which it will be determined
that each county has met its County IHSS MOE each year.

begin delete

(g) If the demonstration project and the responsibilities of the
Statewide Authority become inoperative pursuant to Section 15,
16, or 17 of the act adding this section on a date other than July 1,
this section shall become inoperative on the first day of the
following state fiscal year.

end delete

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 14132.275 of the end insert begin insert Welfare and Institutions
Code end insert begin insert is amended to read: end insert

14132.275.  

(a) The department shall seek federal approval to
establish the demonstration project described in this section
pursuant to a Medicare or a Medicaid demonstration project or
waiver, or a combination thereof. Under a Medicare demonstration,
the department may contract with the federal Centers for Medicare
and Medicaid Services (CMS) and demonstration sites to operate
the Medicare and Medicaid benefits in a demonstration project
that is overseen by the state as a delegated Medicare benefit
administrator, and may enter into financing arrangements with
CMS to share in any Medicare program savings generated by the
demonstration project.

(b) After federal approval is obtained, the department shall
establish the demonstration project that enables dual eligible
beneficiaries to receive a continuum of services that maximizes
access to, and coordination of, benefits between the Medi-Cal and
Medicare programs and access to the continuum of long-term
services and supports and behavioral health services, including
mental health and substance use disorder treatment services. The
purpose of the demonstration project is to integrate services
authorized under the federal Medicaid Program (Title XIX of the
federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)) and the
federal Medicare Program (Title XVIII of the federal Social
Security Act (42 U.S.C. Sec. 1395 et seq.)). The demonstration
project may also include additional services as approved through
a demonstration project or waiver, or a combination thereof.

(c) For purposes of this section, the following definitions shall
apply:

(1) “Behavioral health” means Medi-Cal services provided
pursuant to Section 51341 of Title 22 of the California Code of
Regulations and Drug Medi-Cal substance abuse services provided
pursuant to Section 51341.1 of Title 22 of the California Code of
Regulations, and any mental health benefits available under the
Medicare Program.

(2) “Capitated payment model” means an agreement entered
into between CMS, the state, and a managed care health plan, in
which the managed care health plan receives a capitation payment
for the comprehensive, coordinated provision of Medi-Cal services
and benefits under Medicare Part C (42 U.S.C. Sec. 1395w-21 et
seq.) and Medicare Part D (42 U.S.C. Sec. 1395w-101 et seq.),
and CMS shares the savings with the state from improved provision
of Medi-Cal and Medicare services that reduces the cost of those
services. Medi-Cal services include long-term services and supports
as defined in Section 14186.1, behavioral health services, and any
additional services offered by the demonstration site.

(3) “Demonstration site” means a managed care health plan that
is selected to participate in the demonstration project under the
capitated payment model.

(4) “Dual eligible beneficiary” means an individual 21 years of
age or older who is enrolled for benefits under Medicare Part A
(42 U.S.C. Sec. 1395c et seq.) and Medicare Part B (42 U.S.C.
Sec. 1395j et seq.) and is eligible for medical assistance under the
Medi-Cal State Plan.

(d) No sooner than March 1, 2011, the department shall identify
health care models that may be included in the demonstration
project, shall develop a timeline and process for selecting,
financing, monitoring, and evaluating the demonstration sites, and
shall provide this timeline and process to the appropriate fiscal
and policy committees of the Legislature. The department may
implement these demonstration sites in phases.

(e) The department shall provide the fiscal and appropriate
policy committees of the Legislature with a copy of any report
submitted to CMS to meet the requirements under the
demonstration project.

(f) Goals for the demonstration project shall include all of the
following:

(1) Coordinate Medi-Cal and Medicare benefits across health
care settings and improve the continuity of care across acute care,
long-term care, behavioral health, including mental health and
substance use disorder services, and home- and community-based
services settings using a person-centered approach.

(2) Coordinate access to acute and long-term care services for
dual eligible beneficiaries.

(3) Maximize the ability of dual eligible beneficiaries to remain
in their homes and communities with appropriate services and
supports in lieu of institutional care.

(4) Increase the availability of and access to home- and
community-based services.

(5) Coordinate access to necessary and appropriate behavioral
health services, including mental health and substance use disorder
services.

(6) Improve the quality of care for dual eligible beneficiaries.

(7) Promote a system that is both sustainable and person and
family centered by providing dual eligible beneficiaries with timely
access to appropriate, coordinated health care services and
community resources that enable them to attain or maintain
personal health goals.

(g) No sooner than March 1, 2013, demonstration sites shall be
established in up to eight counties, and shall include at least one
county that provides Medi-Cal services via a two-plan model
pursuant to Article 2.7 (commencing with Section 14087.3) and
at least one county that provides Medi-Cal services under a county
organized health system pursuant to Article 2.8 (commencing with
Section 14087.5). The director shall consult with the Legislature,
CMS, and stakeholders when determining the implementation date
for this section. In determining the counties in which to establish
a demonstration site, the director shall consider the following:

(1) Local support for integrating medical care, long-term care,
and home- and community-based services networks.

(2) A local stakeholder process that includes health plans,
providers, mental health representatives, community programs,
consumers, designated representatives of in-home supportive
services personnel, and other interested stakeholders in the
development, implementation, and continued operation of the
demonstration site.

(h) In developing the process for selecting, financing,
monitoring, and evaluating the health care models for the
demonstration project, the department shall enter into a
memorandum of understanding with CMS. Upon completion, the
memorandum of understanding shall be provided to the fiscal and
appropriate policy committees of the Legislature and posted on
the department’s Internet Web site.

(i) The department shall negotiate the terms and conditions of
the memorandum of understanding, which shall address, but are
not limited to, the following:

(1) Reimbursement methods for a capitated payment model.
Under the capitated payment model, the demonstration sites shall
meet all of the following requirements:

(A) Have Medi-Cal managed care health plan and Medicare
dual eligible-special needs plan contract experience, or evidence
of the ability to meet these contracting requirements.

(B) Be in good financial standing and meet licensure
requirements under the Knox-Keene Health Care Service Plan Act
of 1975 (Chapter 2.2 (commencing with Section 1340) of Division
2 of the Health and Safety Code), except for county organized
health system plans that are exempt from licensure pursuant to
Section 14087.95.

(C) Meet quality measures, which may include Medi-Cal and
Medicare Healthcare Effectiveness Data and Information Set
measures and other quality measures determined or developed by
the department or CMS.

(D) Demonstrate a local stakeholder process that includes dual
eligible beneficiaries, managed care health plans, providers, mental
health representatives, county health and human services agencies,
designated representatives of in-home supportive services
personnel, and other interested stakeholders that advise and consult
with the demonstration site in the development, implementation,
and continued operation of the demonstration project.

(E) Pay providers reimbursement rates sufficient to maintain
an adequate provider network and ensure access to care for
beneficiaries.

(F) Follow final policy guidance determined by CMS and the
department with regard to reimbursement rates for providers
pursuant to paragraphs (4) to (7), inclusive, of subdivision (o).

(G) To the extent permitted under the demonstration, pay
noncontracted hospitals prevailing Medicare fee-for-service rates
for traditionally Medicare covered benefits and prevailing Medi-Cal
fee-for-service rates for traditionally Medi-Cal covered benefits.

(2) Encounter data reporting requirements for both Medi-Cal
and Medicare services provided to beneficiaries enrolling in the
demonstration project.

(3) Quality assurance withholding from the demonstration site
payment, to be paid only if quality measures developed as part of
the memorandum of understanding and plan contracts are met.

(4) Provider network adequacy standards developed by the
department and CMS, in consultation with the Department of
Managed Health Care, the demonstration site, and stakeholders.

(5) Medicare and Medi-Cal appeals and hearing process.

(6) Unified marketing requirements and combined review
process by the department and CMS.

(7) Combined quality management and consolidated reporting
process by the department and CMS.

(8) Procedures related to combined federal and state contract
management to ensure access, quality, program integrity, and
financial solvency of the demonstration site.

(9) To the extent permissible under federal requirements,
implementation of the provisions of Sections 14182.16 and
14182.17 that are applicable to beneficiaries simultaneously eligible
for full-scope benefits under Medi-Cal and the Medicare Program.

(10) (A) In consultation with the hospital industry, CMS
approval to ensure that Medicare supplemental payments for direct
graduate medical education and Medicare add-on payments,
including indirect medical education and disproportionate share
hospital adjustments continue to be made available to hospitals
for services provided under the demonstration.

(B) The department shall seek CMS approval for CMS to
continue these payments either outside the capitation rates or, if
contained within the capitation rates, and to the extent permitted
under the demonstration project, shall require demonstration sites
to provide this reimbursement to hospitals.

(11) To the extent permitted under the demonstration project,
the default rate for non-contracting providers of physician services
shall be the prevailing Medicare fee schedule for services covered
by the Medicare program and the prevailing Medi-Cal fee schedule
for services covered by the Medi-Cal program.

(j) (1) The department shall comply with and enforce the terms
and conditions of the memorandum of understanding with CMS,
as specified in subdivision (i). To the extent that the terms and
conditions do not address the specific selection, financing,
monitoring, and evaluation criteria listed in subdivision (i), the
department:

(A) Shall require the demonstration site to do all of the
following:

(i) Comply with additional site readiness criteria specified by
the department.

(ii) Comply with long-term services and supports requirements
in accordance with Article 5.7 (commencing with Section 14186).

(iii) To the extent permissible under federal requirements,
comply with the provisions of Sections 14182.16 and 14182.17
that are applicable to beneficiaries simultaneously eligible for
full-scope benefits under both Medi-Cal and the Medicare Program.

(iv) Comply with all transition of care requirements for Medicare
Part D benefits as described in Chapters 6 and 14 of the Medicare
Managed Care Manual, published by CMS, including transition
timeframes, notices, and emergency supplies.

(B) May require the demonstration site to forgo charging
premiums, coinsurance, copayments, and deductibles for Medicare
Part C and Medicare Part D services.

(2) The department shall notify the Legislature within 30 days
of the implementation of each provision in paragraph (1).

(k) The director may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis and may amend existing
managed care contracts to provide or arrange for services provided
under this section. Contracts entered into or amended pursuant to
this section shall be exempt from the provisions of Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the
Public Contract Code and Chapter 6 (commencing with Section
14825) of Part 5.5 of Division 3 of Title 2 of the Government
Code.

(l) (1) (A) Except for the exemptions provided for in this
section, the department shall enroll dual eligible beneficiaries into
a demonstration site unless the beneficiary makes an affirmative
choice to opt out of enrollment or is already enrolled on or before
June 1, 2013, in a managed care organization licensed under the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and
Safety Code) that has previously contracted with the department
as a primary care case management plan pursuant to Article 2.9
(commencing with Section 14088) to provide services to
beneficiaries who are HIV positive or who have been diagnosed
with AIDS or in any entity with a contract with the department
pursuant to Chapter 8.75 (commencing with Section 14591).

(B) Dual eligible beneficiaries who opt out of enrollment into
a demonstration site may choose to remain enrolled in
fee-for-service Medicare or a Medicare Advantage plan for their
Medicare benefits, but shall be mandatorily enrolled into a
Medi-Cal managed care health plan pursuant to Section 14182.16,
except as exempted under subdivision (c) of Section 14182.16.

(C) (i) Persons meeting requirements for the Program of
All-Inclusive Care for the Elderly (PACE) pursuant to Chapter
8.75 (commencing with Section 14591) or a managed care
organization licensed under the Knox-Keene Health Care Service
Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code) that has previously
contracted with the department as a primary care case management
plan pursuant to Article 2.9 (commencing with Section 14088) of
Chapter 7 to provide services to beneficiaries who are HIV positive
or who have been diagnosed with AIDS may select either of these
managed care health plans for their Medicare and Medi-Cal benefits
if one is available in that county.

(ii) In areas where a PACE plan is available, the PACE plan
shall be presented as an enrollment option, included in all
enrollment materials, enrollment assistance programs, and outreach
programs related to the demonstration project, and made available
to beneficiaries whenever enrollment choices and options are
presented. Persons meeting the age qualifications for PACE and
who choose PACE shall remain in the fee-for-service Medi-Cal
and Medicare programs, and shall not be assigned to a managed
care health plan for the lesser of 60 days or until they are assessed
for eligibility for PACE and determined not to be eligible for a
PACE plan. Persons enrolled in a PACE plan shall receive all
Medicare and Medi-Cal services from the PACE program pursuant
to the three-way agreement between the PACE program, the
department, and the Centers for Medicare and Medicaid Services.

(2) To the extent that federal approval is obtained, the
department may require that any beneficiary, upon enrollment in
a demonstration site, remain enrolled in the Medicare portion of
the demonstration project on a mandatory basis for six months
from the date of initial enrollment. After the sixth month, a dual
eligible beneficiary may elect to enroll in a different demonstration
site, a different Medicare Advantage plan, fee-for-service Medicare,
PACE, or a managed care organization licensed under the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and
Safety Code) that has previously contracted with the department
as a primary care case management plan pursuant to Article 2.9
(commencing with Section 14088) to provide services to
beneficiaries who are HIV positive or who have been diagnosed
with AIDS, for his or her Medicare benefits.

(A) During the six-month mandatory enrollment in a
demonstration site, a beneficiary may continue receiving services
from an out-of-network Medicare provider for primary and
specialty care services only if all of the following criteria are met:

(i) The dual eligible beneficiary demonstrates an existing
relationship with the provider prior to enrollment in a
demonstration site.

(ii) The provider is willing to accept payment from the
demonstration site based on the current Medicare fee schedule.

(iii) The demonstration site would not otherwise exclude the
provider from its provider network due to documented quality of
care concerns.

(B) The department shall develop a process to inform providers
and beneficiaries of the availability of continuity of services from
an existing provider and ensure that the beneficiary continues to
receive services without interruption.

(3) (A) Notwithstanding subparagraph (A) of paragraph (1) of
subdivision (l), a dual eligible beneficiary shall be excluded from
enrollment in the demonstration project if the beneficiary meets
any of the following:

(i) The beneficiary has a prior diagnosis of end-stage renal
disease. This clause shall not apply to beneficiaries diagnosed with
end-stage renal disease subsequent to enrollment in the
demonstration project. The director may, with stakeholder input
and federal approval, authorize beneficiaries with a prior diagnosis
of end-stage renal disease in specified counties to voluntarily enroll
in the demonstration project.

(ii) The beneficiary has other health coverage, as defined in
paragraph begin delete (4) end delete begin insert (5) end insert of subdivision (b) of Section 14182.16.

(iii) The beneficiary is enrolled in a home- and community-based
waiver that is a Medi-Cal benefit under Section 1915(c) of the
federal Social Security Act (42 U.S.C. Sec. 1396n et seq.), except
for persons enrolled in Multipurpose Senior Services Program
services.

(iv) The beneficiary is receiving services through a regional
center or state developmental center.

(v) The beneficiary resides in a geographic area or ZIP Code
not included in managed care, as determined by the department
and CMS.

(vi) The beneficiary resides in one of the Veterans’ Homes of
California, as described in Chapter 1 (commencing with Section
1010) of Division 5 of the Military and Veterans Code.

(B) (i) Beneficiaries who have been diagnosed with HIV/AIDS
may opt out of the demonstration project at the beginning of any
month. The State Department of Public Health may share relevant
data relating to a beneficiary’s enrollment in the AIDS Drug
Assistance Program with the department, and the department may
share relevant data relating to HIV-positive beneficiaries with the
State Department of Public Health.

(ii) The information provided by the State Department of Public
Health pursuant to this subparagraph shall not be further disclosed
by the State Department of Health Care Services, and shall be
subject to the confidentiality protections of subdivisions (d) and
(e) of Section 121025 of the Health and Safety Code, except this
information may be further disclosed as follows:

(I) To the person to whom the information pertains or the
designated representative of that person.

(II) To the Office of AIDS within the State Department of Public
Health.

(C) Beneficiaries who are Indians receiving Medi-Cal services
in accordance with Section 55110 of Title 22 of the California
Code of Regulations may opt out of the demonstration project at
the beginning of any month.

(D) The department, with stakeholder input, may exempt specific
categories of dual eligible beneficiaries from enrollment
requirements in this section based on extraordinary medical needs
of specific patient groups or to meet federal requirements.

(4) For the 2013 calendar year, the department shall offer federal
Medicare Improvements for Patients and Providers Act of 2008
(Public Law 110-275) compliant contracts to existing Medicare
Advantage Special Needs Plans (D-SNP plans) to continue to
provide Medicare benefits to their enrollees in their service areas
as approved on January 1, 2012. In the 2013 calendar year,
beneficiaries in Medicare Advantage and D-SNP plans shall be
exempt from the enrollment provisions of subparagraph (A) of
paragraph (1), but may voluntarily choose to enroll in the
demonstration project. Enrollment into the demonstration project’s
managed care health plans shall be reassessed in 2014 depending
on federal reauthorization of the D-SNP model and the
department’s assessment of the demonstration plans.

(5) For the 2013 calendar year, demonstration sites shall not
offer to enroll dual eligible beneficiaries eligible for the
demonstration project into the demonstration site’s D-SNP.

(6) The department shall not terminate contracts in a
demonstration site with a managed care organization licensed
under the Knox-Keene Health Care Service Plan Act of 1975
(Chapter 2.2 (commencing with Section 1340) of Division 2 of
the Health and Safety Code) that has previously contracted with
the department as a primary care case management plan pursuant
to Article 2.9 (commencing with Section 14088) to provide services
to beneficiaries who are HIV positive beneficiaries or who have
been diagnosed with AIDS and with any entity with a contract
pursuant to Chapter 8.75 (commencing with Section 14591), except
as provided in the contract or pursuant to state or federal law.

(m) Notwithstanding Section 10231.5 of the Government Code,
the department shall conduct an evaluation, in partnership with
CMS, to assess outcomes and the experience of dual eligibles in
these demonstration sites and shall provide a report to the
Legislature after the first full year of demonstration operation, and
annually thereafter. A report submitted to the Legislature pursuant
to this subdivision shall be submitted in compliance with Section
9795 of the Government Code. The department shall consult with
stakeholders regarding the scope and structure of the evaluation.

(n) This section shall be implemented only if and to the extent
that federal financial participation or funding is available.

(o) It is the intent of the Legislature that:

(1) In order to maintain adequate provider networks,
demonstration sites shall reimburse providers at rates sufficient to
ensure access to care for beneficiaries.

(2) Savings under the demonstration project are intended to be
achieved through shifts in utilization, and not through reduced
reimbursement rates to providers.

(3) Reimbursement policies shall not prevent demonstration
sites and providers from entering into payment arrangements that
allow for the alignment of financial incentives and provide
opportunities for shared risk and shared savings in order to promote
appropriate utilization shifts, which encourage the use of home-
and community-based services and quality of care for dual eligible
beneficiaries enrolled in the demonstration sites.

(4) To the extent permitted under the demonstration project,
and to the extent that a public entity voluntarily provides an
intergovernmental transfer for this purpose, both of the following
shall apply:

(A) The department shall work with CMS in ensuring that the
capitation rates under the demonstration project are inclusive of
funding currently provided through certified public expenditures
supplemental payment programs that would otherwise be impacted
by the demonstration project.

(B) Demonstration sites shall pay to a public entity voluntarily
providing intergovernmental transfers that previously received
reimbursement under a certified public expenditures supplemental
payment program, rates that include the additional funding under
the capitation rates that are funded by the public entity’s
intergovernmental transfer.

(5) The department shall work with CMS in developing other
reimbursement policies and shall inform demonstration sites,
providers, and the Legislature of the final policy guidance.

(6) The department shall seek approval from CMS to permit
the provider payment requirements contained in subparagraph (G)
of paragraph (1) and paragraphs (10) and (11) of subdivision (i),
and Section 14132.276.

(7) Demonstration sites that contract with hospitals for hospital
services on a fee-for-service basis that otherwise would have been
traditionally Medicare services will achieve savings through
utilization changes and not by paying hospitals at rates lower than
prevailing Medicare fee-for-service rates.

(p) The department shall enter into an interagency agreement
with the Department of Managed Health Care to perform some or
all of the department’s oversight and readiness review activities
specified in this section. These activities may include providing
consumer assistance to beneficiaries affected by this section and
conducting financial audits, medical surveys, and a review of the
adequacy of provider networks of the managed care health plans
participating in this section. The interagency agreement shall be
updated, as necessary, on an annual basis in order to maintain
functional clarity regarding the roles and responsibilities of the
Department of Managed Health Care and the department. The
department shall not delegate its authority under this section as
the single state Medicaid agency to the Department of Managed
Health Care.

(q) (1) Beginning with the May Revision to the 2013-14
Governor’s Budget, and annually thereafter, the department shall
report to the Legislature on the enrollment status, quality measures,
and state costs of the actions taken pursuant to this section.

(2) (A) By January 1, 2013, or as soon thereafter as practicable,
the department shall develop, in consultation with CMS and
stakeholders, quality and fiscal measures for health plans to reflect
the short- and long-term results of the implementation of this
section. The department shall also develop quality thresholds and
milestones for these measures. The department shall update these
measures periodically to reflect changes in this program due to
implementation factors and the structure and design of the benefits
and services being coordinated by managed care health plans.

(B) The department shall require health plans to submit
Medicare and Medi-Cal data to determine the results of these
measures. If the department finds that a health plan is not in
compliance with one or more of the measures set forth in this
section, the health plan shall, within 60 days, submit a corrective
action plan to the department for approval. The corrective action
plan shall, at a minimum, include steps that the health plan shall
take to improve its performance based on the standard or standards
with which the health plan is out of compliance. The plan shall
establish interim benchmarks for improvement that shall be
expected to be met by the health plan in order to avoid a sanction
pursuant to Section 14304. Nothing in this subparagraph is intended
to limit Section 14304.

(C) The department shall publish the results of these measures,
including via posting on the department’s Internet Web site, on a
quarterly basis.

(r) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may implement, interpret, or make specific this
section and any applicable federal waivers and state plan
amendments by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions, without taking regulatory
action. Prior to issuing any letter or similar instrument authorized
pursuant to this section, the department shall notify and consult
with stakeholders, including advocates, providers, and
beneficiaries. The department shall notify the appropriate policy
and fiscal committees of the Legislature of its intent to issue
instructions under this section at least five days in advance of the
issuance.

begin insert

(s) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 14132.275 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14132.275. end insert   

(a) The department shall seek federal approval to
establish pilot projects described in this section pursuant to a
Medicare or a Medicaid demonstration project or waiver, or a
combination thereof. Under a Medicare demonstration, the
department may operate the Medicare component of a pilot project
as a delegated Medicare benefit administrator, and may enter into
financing arrangements with the federal Centers for Medicare and
Medicaid Services to share in any Medicare program savings
generated by the operation of any pilot project.

(b) After federal approval is obtained, the department shall
establish pilot projects that enable dual eligibles to receive a
continuum of services, and that maximize the coordination of
benefits between the Medi-Cal and Medicare programs and access
to the continuum of services needed. The purpose of the pilot
projects is to develop effective health care models that integrate
services authorized under the federal Medicaid Program (Title
XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.))
and the federal Medicare Program (Title XVIII of the federal Social
Security Act (42 U.S.C. Sec. 1395 et seq.)). These pilot projects
may also include additional services as approved through a
demonstration project or waiver, or a combination thereof.

(c) Not sooner than March 1, 2011, the department shall identify
health care models that may be included in a pilot project, shall
develop a timeline and process for selecting, financing, monitoring,
and evaluating these pilot projects, and shall provide this timeline
and process to the appropriate fiscal and policy committees of the
Legislature. The department may implement these pilot projects
in phases.

(d) Goals for the pilot projects shall include all of the following:

(1) Coordinating Medi-Cal benefits, Medicare benefits, or both,
across health care settings and improving continuity of acute care,
long-term care, and home- and community-based services.

(2) Coordinating access to acute and long-term care services
for dual eligibles.

(3) Maximizing the ability of dual eligibles to remain in their
homes and communities with appropriate services and supports
in lieu of institutional care.

(4) Increasing the availability of and access to home- and
community-based alternatives.

(e) Pilot projects shall be established in up to four counties,
and shall include at least one county that provides Medi-Cal
services via a two-plan model pursuant to Article 2.7 (commencing
with Section 14087.3) and at least one county that provides
Medi-Cal services under a county organized health system pursuant
to Article 2.8 (commencing with Section 14087.5). In determining
the counties in which to establish a pilot project, the director shall
consider the following:

(1) Local support for integrating medical care, long-term care,
and home- and community-based services networks.

(2) A local stakeholder process that includes health plans,
providers, community programs, consumers, and other interested
stakeholders in the development, implementation, and continued
operation of the pilot project.

(f) The director may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis and may amend existing
managed care contracts to provide or arrange for services
provided under this section. Contracts entered into or amended
pursuant to this section shall be exempt from the provisions of
Chapter 2 (commencing with Section 10290) of Part 2 of Division
2 of the Public Contract Code and Chapter 6 (commencing with
Section 14825) of Part 5.5 of Division 3 of Title 2 of the
Government Code.

(g) Services under Section 14132.95 or 14132.952, or Article
7 (commencing with Section 12300) of Chapter 3 that are provided
under the pilot projects established by this section shall be provided
through direct hiring of personnel, contract, or establishment of
a public authority or nonprofit consortium, in accordance with,
and subject to, Section 12302 or 12301.6, as applicable.

(h) Notwithstanding any other provision of state law, the
department may require that dual eligibles be assigned as
mandatory enrollees into managed care plans established or
expanded as part of a pilot project established under this section.
Mandatory enrollment in managed care for dual eligibles shall be
applicable to the beneficiary’s Medi-Cal benefits only. Dual
eligibles shall have the option to enroll in a Medicare Advantage
special needs plan (SNP) offered by the managed care plan
established or expanded as part of a pilot project established
pursuant to subdivision (e). To the extent that mandatory
enrollment is required, any requirement of the department and the
health plans, and any requirement of continuity of care protections
for enrollees, as specified in Section 14182, shall be applicable to
this section. Dual eligibles shall have the option to forgo receiving
Medicare benefits under a pilot project. Nothing in this section
shall be interpreted to reduce benefits otherwise available under
the Medi-Cal program or the Medicare Program.

(i) For purposes of this section, a “dual eligible” means an
individual who is simultaneously eligible for full scope benefits
under Medi-Cal and the federal Medicare Program.

(j) Persons meeting requirements for the Program of
All-Inclusive Care for the Elderly (PACE) pursuant to Chapter
8.75 (commencing with Section 14591), may select a PACE plan
if one is available in that county.

(k) Notwithstanding Section 10231.5 of the Government Code,
the department shall conduct an evaluation to assess outcomes
and the experience of dual eligibles in these pilot projects and
shall provide a report to the Legislature after the first full year of
pilot operation, and annually thereafter. A report submitted to the
Legislature pursuant to this subdivision shall be submitted in
compliance with Section 9795 of the Government Code. The
department shall consult with stakeholders regarding the scope
and structure of the evaluation.

(l) This section shall be implemented only if and to the extent
that federal financial participation or funding is available to
establish these pilot projects.

(m) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may implement, interpret, or make specific this
section and any applicable federal waivers and state plan
amendments by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions, without taking
regulatory action. Prior to issuing any letter or similar instrument
authorized pursuant to this section, the department shall notify
and consult with stakeholders, including advocates, providers,
and beneficiaries. The department shall notify the appropriate
policy and fiscal committees of the Legislature of its intent to issue
instructions under this section at least five days in advance of the
issuance.

(n) This section shall be operative only if Section 13 of the act
that added this section becomes inoperative pursuant to subdivision
(s) of that Section 13.

end insert

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 14132.277 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14132.277. end insert   

(a) For purposes of this section, the following
definitions shall apply:

(1) “Coordinated Care Initiative county” means the Counties
of Alameda, Los Angeles, Orange, Riverside, San Bernardino, San
Diego, San Mateo, and Santa Clara, and any other county
identified in Appendix 3 of the memorandum of understanding
between the state and the Centers for Medicare and Medicaid
Services Regarding A Federal-State Partnership to Test a
Capitated Financial Alignment Model for Medicare-Medicaid
Enrollees, inclusive of all amendments, as authorized by Section
14132.275.

(2) “D-SNP plan” means a Medicare Advantage Special Needs
Plan.

(3) “D-SNP contract” means a federal Medicare Improvements
for Patients and Provider Act of 2008 (Public Law 110-275)
compliant contract between the department and a D-SNP plan.

(b) For calendar year 2014, the department shall offer D-SNP
contracts to existing D-SNP plans to continue to provide benefits
to their enrollees in their service areas as approved on January
1, 2013. The director may include in any D-SNP contract
provisions requiring that the D-SNP plan do the following:

(1) Submit to the department a complete and accurate copy of
the bid submitted by the plan to the Centers for Medicare and
Medicaid Services for its D-SNP contract.

(2) Submit to the department copies of all utilization and quality
management reports submitted to the Centers for Medicare and
Medicaid Services.

(c) In Coordinated Care Initiative counties, Medicare Advantage
Plans and D-SNP plans may continue to enroll beneficiaries in
2014. In the 2014 calendar year, beneficiaries enrolled in a
Medicare Advantage or D-SNP plan operating in a Coordinated
Care Initiative county shall be exempt from the enrollment
provisions of subparagraph (A) of paragraph (1) of subdivision
(l) of Section 14132.275. Those beneficiaries may at any time
voluntarily choose to disenroll from their Medicare Advantage or
D-SNP plan and enroll in a demonstration site operating pursuant
to subdivision (g) of Section 14132.275. If a beneficiary chooses
to do so, that beneficiary may subsequently disenroll from the
demonstration site and return to fee-for-service Medicare or to a
D-SNP plan or Medicare Advantage plan.

end insert

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 14182.16 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14182.16.  

(a) The department shall require Medi-Cal
beneficiaries who have dual eligibility in Medi-Cal and the
Medicare Program to be assigned as mandatory enrollees into new
or existing Medi-Cal managed care health plans for their Medi-Cal
benefits in begin delete counties participating in the demonstration project
pursuant to Section 14132.275 end delete begin insert Coordinated Care Initiative
counties end insert .

(b) For the purposes of this section and Section 14182.17, the
following definitions shall apply:

begin insert

(1) “Coordinated Care Initiative counties” means the Counties
of Alameda, Los Angeles, Orange, Riverside, San Bernardino, San
Diego, San Mateo, and Santa Clara.

end insert begin delete

(1)

end delete

begin insert ( end insert begin insert 2) end insert  “Dual eligible beneficiary” means an individual 21 years of
age or older who is enrolled for benefits under Medicare Part A
(42 U.S.C. Sec. 1395c et seq.) or Medicare Part B (42 U.S.C. Sec.
1395j et seq.), or both, and is eligible for medical assistance under
the Medi-Cal State Plan.

begin delete

(2)

end delete

begin insert ( end insert begin insert 3) end insert  “Full-benefit dual eligible beneficiary” means an individual
21 years of age or older who is eligible for benefits under Medicare
Part A (42 U.S.C. Sec. 1395c et seq.), Medicare Part B (42 U.S.C.
Sec. 1395j et seq.), and Medicare Part D (42 U.S.C. Sec.
1395w-101), and is eligible for medical assistance under the
Medi-Cal State Plan.

begin delete

(3)

end delete

begin insert ( end insert begin insert 4) end insert  “Managed care health plan” means an individual,
organization, or entity that enters into a contract with the
department pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.81 (commencing with Section 14087.96), or
Article 2.91 (commencing with Section 14089), of this chapter,
or Chapter 8 (commencing with Section 14200).

begin delete

(4)

end delete

begin insert ( end insert begin insert 5) end insert  “Other health coverage” means health coverage providing
the same full or partial benefits as the Medi-Cal program, health
coverage under another state or federal medical care program
except for the Medicare Program (Title XVIII of the federal Social
Security Act (42 U.S.C. Sec. 1395 et seq.)), or health coverage
under a contractual or legal entitlement, including, but not limited
to, a private group or indemnification insurance program.

begin delete

(5)

end delete

begin insert ( end insert begin insert 6) end insert  “Out-of-network Medi-Cal provider” means a health care
provider that does not have an existing contract with the
beneficiary’s managed care health plan or its subcontractors.

begin delete

(6)

end delete

begin insert ( end insert begin insert 7) end insert  “Partial-benefit dual eligible beneficiary” means an
individual 21 years of age or older who is enrolled for benefits
under Medicare Part A (42 U.S.C. Sec. 1395c et seq.), but not
Medicare Part B (42 U.S.C. Sec. 1395j et seq.), or who is eligible
for Medicare Part B (42 U.S.C. Sec. 1395j et seq.), but not
Medicare Part A (42 U.S.C. Sec. 1395c et seq.), and is eligible for
medical assistance under the Medi-Cal State Plan.

(c) (1) Notwithstanding subdivision (a), a dual eligible
beneficiary is exempt from mandatory enrollment in a managed
care health plan if the dual eligible beneficiary meets any of the
following:

(A) Except in counties with county organized health systems
operating pursuant to Article 2.8 (commencing with Section
14087.5), the beneficiary has other health coverage.

(B) The beneficiary receives services through a foster care
program, including the program described in Article 5
(commencing with Section 11400) of Chapter 2.

(C) The beneficiary is under 21 years of age.

(D) The beneficiary is not eligible for enrollment in managed
care health plans for medically necessary reasons determined by
the department.

(E) The beneficiary resides in one of the Veterans Homes of
California, as described in Chapter 1 (commencing with Section
1010) of Division 5 of the Military and Veterans Code.

(F) The beneficiary is enrolled in any entity with a contract with
the department pursuant to Chapter 8.75 (commencing with Section
14591).

(G) The beneficiary is enrolled in a managed care organization
licensed under the Knox-Keene Health Care Service Plan Act of
1975 (Chapter 2.2 (commencing with Section 1340) of Division
2 of the Health and Safety Code) that has previously contracted
with the department as a primary care case management plan
pursuant to Article 2.9 (commencing with Section 14088) of
Chapter 7.

(2) A beneficiary who has been diagnosed with HIV/AIDS is
not exempt from mandatory enrollment, but may opt out of
managed care enrollment at the beginning of any month.

(d) Implementation of this section shall incorporate the
provisions of Section 14182.17 that are applicable to beneficiaries
eligible for benefits under Medi-Cal and the Medicare Program.

(e) At the director’s sole discretion, in consultation with
stakeholders, the department may determine and implement a
phased-in enrollment approach that may include Medi-Cal
beneficiary enrollment into managed care health plans immediately
upon implementation of this section in a specific county, over a
12-month period, or other phased approach. The phased-in
enrollment shall commence no sooner than March 1, 2013, and
not until all necessary federal approvals have been obtained.

(f) To the extent that mandatory enrollment is required by the
department, an enrollee’s access to fee-for-service Medi-Cal shall
not be terminated until the enrollee has selected or been assigned
to a managed care health plan.

(g) Except in a county where Medi-Cal services are provided
by a county organized health system, and notwithstanding any
other law, in any county in which fewer than two existing managed
health care plans contract with the department to provide Medi-Cal
services under this chapter that are available to dual eligible
beneficiaries, including long-term services and supports, the
department may contract with additional managed care health plans
to provide Medi-Cal services.

(h) For partial-benefit dual eligible beneficiaries, the department
shall inform these beneficiaries of their rights to continuity of care
from out-of-network Medi-Cal providers pursuant to subparagraph
(G) of paragraph (5) of subdivision (d) of Section 14182.17, and
that the need for medical exemption criteria applied to counties
operating under Chapter 4.1 (commencing with Section 53800) of
Subdivision 1 of Division 3 of Title 22 of the California Code of
Regulations may not be necessary to continue receiving Medi-Cal
services from an out-of-network provider.

(i) The department may contract with existing managed care
health plans to provide or arrange for services under this section.
Notwithstanding any other law, the department may enter into the
contract without the need for a competitive bid process or other
contract proposal process, provided that the managed care health
plan provides written documentation that it meets all of the
qualifications and requirements of this section and Section
14182.17.

(j) The development of capitation rates for managed care health
plan contracts shall include the analysis of data specific to the dual
eligible population. For the purposes of developing capitation rates
for payments to managed care health plans, the department shall
require all managed care health plans, including existing managed
care health plans, to submit financial, encounter, and utilization
data in a form, at a time, and including substance as deemed
necessary by the department. Failure to submit the required data
shall result in the imposition of penalties pursuant to Section
14182.1.

(k) Persons meeting participation requirements for the Program
of All-Inclusive Care for the Elderly (PACE) pursuant to Chapter
8.75 (commencing with Section 14591) may select a PACE plan
if one is available in that county.

(l) Except for dual eligible beneficiaries participating in the
demonstration project pursuant to Section 14132.275, persons
meeting the participation requirements in effect on January 1,
2010, for a Medi-Cal primary case management plan in operation
on that date, may select that primary care case management plan
or a successor health care plan that is licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and
Safety Code) to provide services within the same geographic area
that the primary care case management plan served on January 1,
2010.

(m) The department may implement an intergovernmental
transfer arrangement with a public entity that elects to transfer
public funds to the state to be used solely as the nonfederal share
of Medi-Cal payments to managed care health plans for the
provision of services to dual eligible beneficiaries pursuant to
Section 14182.15.

(n) To implement this section, the department may contract with
public or private entities. Contracts or amendments entered into
under this section may be on an exclusive or nonexclusive basis
and on a noncompetitive bid basis and shall be exempt from all of
the following:

(1) Part 2 (commencing with Section 10100) of Division 2 of
the Public Contract Code and any policies, procedures, or
regulations authorized by that part.

(2) Article 4 (commencing with Section 19130) of Chapter 5
of Part 2 of Division 5 of Title 2 of the Government Code.

(3) Review or approval of contracts by the Department of
General Services.

(o) Any otherwise applicable provisions of this chapter, Chapter
8 (commencing with Section 14200), or Chapter 8.75 (commencing
with Section 14591) not in conflict with this section or with the
Special Terms and Conditions of the waiver shall apply to this
section.

(p) The department shall, in coordination with and consistent
with an interagency agreement with the Department of Managed
Health Care, at a minimum, monitor on a quarterly basis the
adequacy of provider networks of the managed care health plans.

(q) The department shall suspend new enrollment of dual eligible
beneficiaries into a managed care health plan if it determines that
the managed care health plan does not have sufficient primary or
specialty care providers and long-term service and supports to
meet the needs of its enrollees.

(r) Managed care health plans shall pay providers in accordance
with Medicare and Medi-Cal coordination of benefits.

(s) This section shall be implemented only to the extent that all
federal approvals and waivers are obtained and only if and to the
extent that federal financial participation is available.

(t) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may implement, interpret, or make specific this
section and any applicable federal waivers and state plan
amendments by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions, without taking regulatory
action. Prior to issuing any letter or similar instrument authorized
pursuant to this section, the department shall notify and consult
with stakeholders, including advocates, providers, and
beneficiaries. The department shall notify the appropriate policy
and fiscal committees of the Legislature of its intent to issue
instructions under this section at least five days in advance of the
issuance.

(u) A managed care health plan that contracts with the
department for the provision of services under this section shall
ensure that beneficiaries have access to the same categories of
licensed providers that are available under fee-for-service
Medicare. Nothing in this section shall prevent a managed care
health plan from contracting with selected providers within a
category of licensure.

begin insert

(v) The department shall, commencing August 1, 2013, convene
stakeholders, at least quarterly, to review progress on the
Coordinated Care Initiative and make recommendations to the
department and the Legislature for the duration of the Coordinated
Care Initiative. The stakeholders shall include beneficiaries,
counties, and health plans, and representatives from primary care
providers, specialists, hospitals, nursing facilities, MSSP programs,
CBAS programs, other social service providers, the IHSS program,
behavioral health providers, and substance use disorders
stakeholders.

end insert

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 14182.17 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14182.17.  

(a) For the purposes of this section, the definitions
in subdivision (b) of Section 14182.16 shall apply.

(b) The department shall ensure and improve the care
coordination and integration of health care services for Medi-Cal
beneficiaries residing in begin insert Coordinated Care Initiative end insert counties
begin delete participating in the demonstration project pursuant to Section
14132.275 end delete who are either of the following:

(1) Dual eligible beneficiaries, as defined in subdivision (b) of
Section 14182.16, who receive Medi-Cal benefits and services
through the demonstration project established pursuant to Section
14132.275 or through mandatory enrollment in managed care
health plans pursuant to Section 14182.16.

(2) Medi-Cal beneficiaries who receive long-term services and
supports pursuant to Article 5.7 (commencing with Section 14186).

(c) The department shall develop an enrollment process to be
used in begin delete counties participating in the demonstration project pursuant
to Section 14132.275 end delete begin insert Coordinated Care Initiative counties end insert to do
the following:

(1) Except in a county that provides Medi-Cal services under a
county organized health system pursuant to Article 2.8
(commencing with Section 14087.5), provide a choice of Medi-Cal
managed care plans to a dual eligible beneficiary who has opted
for Medicare fee-for-service, and establish an algorithm to assign
beneficiaries who do not make a choice.

(2) Ensure that only beneficiaries required to make a choice or
affirmatively opt out are sent enrollment materials.

(3) Establish enrollment timelines, developed in consultation
with health plans and stakeholders, and approved by CMS, for
each demonstration site. The timeline may provide for combining
or phasing in enrollment for Medicare and Medi-Cal benefits.

(d) Before the department contracts with managed care health
plans or Medi-Cal providers to furnish Medi-Cal benefits and
services pursuant to subdivision (b), the department shall do all of
the following:

(1) Ensure timely and appropriate communications with
beneficiaries as follows:

(A) At least 90 days prior to enrollment, inform dual eligible
beneficiaries through a notice written at not more than a sixth-grade
reading level that includes, at a minimum, how the Medi-Cal
system of care will change, when the changes will occur, and who
they can contact for assistance with choosing a managed care health
plan or with problems they encounter.

(B) Develop and implement an outreach and education program
for beneficiaries to inform them of their enrollment options and
rights, including specific steps to work with consumer and
beneficiary community groups.

(C) Develop, in consultation with consumers, beneficiaries, and
other stakeholders, an overall communications plan that includes
all aspects of developing beneficiary notices.

(D) Ensure that managed care health plans and their provider
networks are able to provide communication and services to dual
eligible beneficiaries in alternative formats that are culturally,
linguistically, and physically appropriate through means, including,
but not limited to, assistive listening systems, sign language
interpreters, captioning, written communication, plain language,
and written translations.

(E) Ensure that managed care health plans have prepared
materials to inform beneficiaries of procedures for obtaining
Medi-Cal benefits, including grievance and appeals procedures,
that are offered by the plan or are available through the Medi-Cal
program.

(F) Ensure that managed care health plans have policies and
procedures in effect to address the effective transition of
beneficiaries from Medicare Part D plans not participating in the
demonstration project. These policies shall include, but not be
limited to, the transition of care requirements for Medicare Part D
benefits as described in Chapters 6 and 14 of the Medicare
Managed Care Manual, published by CMS, including a
determination of which beneficiaries require information about
their transition supply, and, within the first 90 days of coverage
under a new plan, provide for a temporary fill when the beneficiary
requests a refill of a nonformulary drug.

(G) Contingent upon available private or public funds other
than moneys from the General Fund, contract with
community-based, nonprofit consumer, or health insurance
assistance organizations with expertise and experience in assisting
dual eligible beneficiaries in understanding their health care
coverage options.

(H) Develop, with stakeholder input, informing and enrollment
materials and an enrollment process in the demonstration site
counties. The department shall ensure all of the following prior to
implementing enrollment:

(i) Enrollment materials shall be made public at least 60 days
prior to the first mailing of notices to dual eligible beneficiaries,
and the department shall work with stakeholders to incorporate
public comment into the materials.

(ii) The materials shall be in a not more than sixth grade reading
level and shall be available in all the Medi-Cal threshold languages,
as well as in alternative formats that are culturally, linguistically,
and physically appropriate. For in-person enrollment assistance,
disability accommodation shall be provided, when appropriate,
through means including, but not limited to, assistive listening
systems, sign language interpreters, captioning, and written
communication.

(iii) The materials shall plainly state that the beneficiary may
choose fee-for-service Medicare or Medicare Advantage, but must
return the form to indicate this choice, and that if the beneficiary
does not return the form, the state shall assign the beneficiary to
a plan and all Medicare and Medi-Cal benefits shall only be
available through that plan.

(iv) The materials shall plainly state that the beneficiary shall
be enrolled in a Medi-Cal managed care health plan even if he or
she chooses to stay in fee-for-service Medicare.

(v) The materials shall plainly explain all of the following:

(I) The plan choices.

(II) Continuity of care provisions.

(III) How to determine which providers are enrolled in each
plan.

(IV) How to obtain assistance with the choice forms.

(vi) The enrollment contractor recognizes, in compliance with
existing statutes and regulations, authorized representatives,
including, but not limited to, a caregiver, family member,
conservator, or a legal services advocate, who is recognized by
any of the services or programs that the person is already receiving
or participating in.

(I) Make available to the public and to all Medi-Cal providers
copies of all beneficiary notices in advance of the date the notices
are sent to beneficiaries. These copies shall be available on the
department’s Internet Web site.

(2) Require that managed care health plans perform an
assessment process that, at a minimum, does all of the following:

(A) Assesses each new enrollee’s risk level and needs by
performing a risk assessment process using means such as
telephonic, Web-based, or in-person communication, or review of
utilization and claims processing data, or by other means as
determined by the department, with a particular focus on
identifying those enrollees who may need long-term services and
supports. The risk assessment process shall be performed in
accordance with all applicable federal and state laws.

(B) Assesses the care needs of dual eligible beneficiaries and
coordinates their Medi-Cal benefits across all settings, including
coordination of necessary services within, and, when necessary,
outside of the managed care health plan’s provider network.

(C) Uses a mechanism or algorithm developed by the managed
care health plan pursuant to paragraph (7) of subdivision (b) of
Section 14182 for risk stratification of members.

(D) At the time of enrollment, applies the risk stratification
mechanism or algorithm approved by the department to determine
the health risk level of members.

(E) Reviews historical Medi-Cal fee-for-service utilization data
and Medicare data, to the extent either is accessible to and provided
by the department, for dual eligible beneficiaries upon enrollment
in a managed care health plan so that the managed care health
plans are better able to assist dual eligible beneficiaries and
prioritize assessment and care planning.

(F) Analyzes Medicare claims data for dual eligible beneficiaries
upon enrollment in a demonstration site pursuant to Section
14132.275 to provide an appropriate transition process for newly
enrolled beneficiaries who are prescribed Medicare Part D drugs
that are not on the demonstration site’s formulary, as required
under the transition of care requirements for Medicare Part D
benefits as described in Chapters 6 and 14 of the Medicare
Managed Care Manual, published by CMS.

(G) Assesses each new enrollee’s behavioral health needs and
historical utilization, including mental health and substance use
disorder treatment services.

(H) Follows timeframes for reassessment and, if necessary,
circumstances or conditions that require redetermination of risk
level, which shall be set by the department.

(3) Ensure that the managed care health plans arrange for
primary care by doing all of the following:

(A) Except for beneficiaries enrolled in the demonstration
project pursuant to Section 14132.275, forgo interference with a
beneficiary’s choice of primary care physician under Medicare,
and not assign a full-benefit dual eligible beneficiary to a primary
care physician unless it is determined through the risk stratification
and assessment process that assignment is necessary, in order to
properly coordinate the care of the beneficiary or upon the
beneficiary’s request.

(B) Assign a primary care physician to a partial-benefit dual
eligible beneficiary receiving primary or specialty care through
the Medi-Cal managed care plan.

(C) Provide a mechanism for partial-benefit dual eligible
enrollees to request a specialist or clinic as a primary care provider
if these services are being provided through the Medi-Cal managed
care health plan. A specialist or clinic may serve as a primary care
provider if the specialist or clinic agrees to serve in a primary care
provider role and is qualified to treat the required range of
conditions of the enrollees.

(4) Ensure that the managed care health plans perform, at a
minimum, and in addition to, other statutory and contractual
requirements, care coordination, and care management activities
as follows:

(A) Reflect a member-centered, outcome-based approach to
care planning, consistent with the CMS model of care approach
and with federal Medicare requirements and guidance.

(B) Adhere to a beneficiary’s determination about the
appropriate involvement of his or her medical providers and
caregivers, according to the federal Health Insurance Portability
and Accountability Act of 1996 (Public Law 104-191).

(C) Develop care management and care coordination for the
beneficiary across the medical and long-term services and supports
care system, including transitions among levels of care and between
service locations.

(D) Develop individual care plans for higher risk beneficiaries
based on the results of the risk assessment process with a particular
focus on long-term services and supports.

(E) Use nurses, social workers, the beneficiary’s primary care
physician, if appropriate, and other medical professionals to provide
care management and enhanced care management, as applicable,
particularly for beneficiaries in need of or receiving long-term
services and supports.

(F) Consider behavioral health needs of beneficiaries and
coordinate those services with the county mental health department
as part of the beneficiary’s care management plan when
appropriate.

(G) Facilitate a beneficiary’s ability to access appropriate
community resources and other agencies, including referrals as
necessary and appropriate for behavioral services, such as mental
health and substance use disorders treatment services.

(H) Monitor skilled nursing facility utilization and develop care
transition plans and programs that move beneficiaries back into
the community to the extent possible. Plans shall monitor and
support beneficiaries in the community to avoid further
institutionalization.

(5) Ensure that the managed care health plans comply with, at
a minimum, and in addition to other statutory and contractual
requirements, network adequacy requirements as follows:

(A) Provide access to providers that comply with applicable
state and federal law, including, but not limited to, physical
accessibility and the provision of health plan information in
alternative formats.

(B) Meet provider network adequacy standards for long-term
services and supports that the department shall develop.

(C) Maintain an updated, accurate, and accessible listing of a
provider’s ability to accept new patients, which shall be made
available to beneficiaries, at a minimum, by phone, written
material, and the Internet, and in accessible formats, upon request.

(D) Monitor an appropriate provider network that includes an
adequate number of accessible facilities within each service area.

(E) Contract with and assign patients to safety net and traditional
providers as defined in subdivisions (hh) and (jj), respectively, of
Section 53810 of Title 22 of the California Code of Regulations,
including small and private practice providers who have
traditionally treated dual eligible patients, based on available
medical history to ensure access to care and services. A managed
care health plan shall establish participation standards to ensure
participation and broad representation of traditional and safety net
providers within a service area.

(F) Maintain a liaison to coordinate with each regional center
operating within the plan’s service area to assist dual eligible
beneficiaries with developmental disabilities in understanding and
accessing services and act as a central point of contact for
questions, access and care concerns, and problem resolution.

(G) Maintain a liaison and provide access to out-of-network
providers, for up to 12 months, for new members enrolled under
Sections 14132.275 and 14182.16 who have an ongoing
relationship with a provider, if the provider will accept the health
plan’s rate for the service offered, or for nursing facilities and
Community-Based Adult Services, or the applicable Medi-Cal
fee-for-service rate, whichever is higher, and the managed care
health plan determines that the provider meets applicable
professional standards and has no disqualifying quality of care
issues in accordance with guidance from the department, including
all-plan letters. A partial-benefit dual eligible beneficiary enrolled
in Medicare Part A who only receives primary and specialty care
services through a Medi-Cal managed care health plan shall be
able to receive these Medi-Cal services from an out-of-network
Medi-Cal provider for 12 months after enrollment. This
subparagraph shall not apply to out-of-network providers that
furnish ancillary services.

(H) Assign a primary care physician who is the primary clinician
for the beneficiary and who provides core clinical management
functions for partial-benefit dual eligible beneficiaries who are
receiving primary and specialty care through the Medi-Cal
managed care health plan.

(I) Employ care managers directly or contract with nonprofit
or proprietary organizations in sufficient numbers to provide
coordinated care services for long-term services and supports as
needed for all members.

(6) Ensure that the managed care health plans address medical
and social needs as follows:

(A) Offer services beyond those required by Medicare and
Medi-Cal at the managed care health plan’s discretion.

(B) Refer beneficiaries to community resources or other agencies
for needed medical or social services or items outside the managed
care health plan’s responsibilities.

(C) Facilitate communication among a beneficiary’s health care
and personal care providers, including long-term services and
supports and behavioral health providers when appropriate.

(D) Engage in other activities or services needed to assist
beneficiaries in optimizing their health status, including assisting
with self-management skills or techniques, health education, and
other modalities to improve health status.

(E) Facilitate timely access to primary care, specialty care,
medications, and other health services needed by the beneficiary,
including referrals to address any physical or cognitive barriers to
access.

(F) Utilize the most recent common procedure terminology
(CPT) codes, modifiers, and correct coding initiative edits.

(7) (A) Ensure that the managed care health plans provide, at
a minimum, and in addition to other statutory and contractual
requirements, a grievance and appeal process that does both of the
following:

(i) Provides a clear, timely, and fair process for accepting and
acting upon complaints, grievances, and disenrollment requests,
including procedures for appealing decisions regarding coverage
or benefits, as specified by the department. Each managed care
health plan shall have a grievance process that complies with
Section 14450, and Sections 1368 and 1368.01 of the Health and
Safety Code.

(ii) Complies with a Medicare and Medi-Cal grievance and
appeal process, as applicable. The appeals process shall not
diminish the grievance and appeals rights of IHSS recipients
pursuant to Section 10950.

(B) In no circumstance shall the process for appeals be more
restrictive than what is required under the Medi-Cal program.

(e) The department shall do all of the following:

(1) Monitor the managed care health plans’ performance and
accountability for provision of services, in addition to all other
statutory and contractual monitoring and oversight requirements,
by doing all of the following:

(A) Develop performance measures that are required as part of
the contract to provide quality indicators for the Medi-Cal
population enrolled in a managed care health plan and for the dual
eligible subset of enrollees. These performance measures may
include measures from the Healthcare Effectiveness Data and
Information Set or measures indicative of performance in serving
special needs populations, such as the National Committee for
Quality Assurance structure and process measures, or other
performance measures identified or developed by the department.

(B) Implement performance measures that are required as part
of the contract to provide quality assurance indicators for long-term
services and supports in quality assurance plans required under
the plans’ contracts. These indicators shall include factors such as
affirmative member choice, increased independence, avoidance
of institutional care, and positive health outcomes. The department
shall develop these quality assurance indicators in consultation
with stakeholder groups.

(C) Effective January 10, 2014, and for each subsequent year
of the demonstration project authorized under Section 14132.275,
provide a report to the Legislature describing the degree to which
Medi-Cal managed care health plans in counties participating in
the demonstration project have fulfilled the quality requirements,
as set forth in the health plan contracts.

(D) Effective June 1, 2014, and for each subsequent year of the
demonstration project authorized by Section 14132.275, provide
a joint report, from the department and from the Department of
Managed Health Care, to the Legislature summarizing information
from both of the following:

(i) The independent audit report required to be submitted
annually to the Department of Managed Health Care by managed
care health plans participating in the demonstration project
authorized by Section 14132.275.

(ii) Any routine financial examinations of managed care health
plans operating in the demonstration project authorized by Section
14132.275 that have been conducted and completed for the
previous calendar year by the Department of Managed Health Care
and the department.

(2) Monitor on a quarterly basis the utilization of covered
services of beneficiaries enrolled in the demonstration project
pursuant to Section 14132.275 or receiving long-term services and
supports pursuant to Article 5.7 (commencing with Section 14186).

(3) Develop requirements for managed care health plans to
solicit stakeholder and member participation in advisory groups
for the planning and development activities relating to the provision
of services for dual eligible beneficiaries.

(4) Submit to the Legislature the following information:

(A) Provide, to the fiscal and appropriate policy committees of
the Legislature, a copy of any report submitted to CMS pursuant
to the approved federal waiver described in Section 14180.

(B) Together with the State Department of Social Services, the
California Department of Aging, and the Department of Managed
Health Care, in consultation with stakeholders, develop a
programmatic transition plan, and submit that plan to the
Legislature within 90 days of the effective date of this section. The
plan shall include, but is not limited to, the following components:

(i) A description of how access and quality of service shall be
maintained during and immediately after implementation of these
provisions, in order to prevent unnecessary disruption of services
to beneficiaries.

(ii) Explanations of the operational steps, timelines, and key
milestones for determining when and how the components of
paragraphs (1) to (9), inclusive, shall be implemented.

(iii) The process for addressing consumer complaints, including
the roles and responsibilities of the departments and health plans
and how those roles and responsibilities shall be coordinated. The
process shall outline required response times and the method for
tracking the disposition of complaint cases. The process shall
include the use of an ombudsman, liaison, and 24-hour hotline
dedicated to assisting Medi-Cal beneficiaries navigate among the
departments and health plans to help ensure timely resolution of
complaints.

(iv) A description of how stakeholders were included in the
various phases of the planning process to formulate the transition
plan, and how their feedback shall be taken into consideration after
transition activities begin.

(C) The department, together with the State Department of
Social Services, the California Department of Aging, and the
Department of Managed Health Care, convene and consult with
stakeholders at least twice during the period following production
of a draft of the implementation plan and before submission of the
plan to the Legislature. Continued consultation with stakeholders
shall occur on an ongoing basis for the implementation of the
provisions of this section.

(D) No later than 90 days prior to the initial plan enrollment
date of the demonstration project pursuant to the provisions of
Sections 14132.275, 14182.16, and of Article 5.7 (commencing
with Section 14186), assess and report to the fiscal and appropriate
policy committees of the Legislature on the readiness of the
managed care health plans to address the unique needs of dual
eligible beneficiaries and Medi-Cal only seniors and persons with
disabilities pursuant to the applicable readiness evaluation criteria
and requirements set forth in paragraphs (1) to (8), inclusive, of
subdivision (b) of Section 14087.48. The report shall also include
an assessment of the readiness of the managed care health plans
in each county participating in the demonstration project to have
met the requirements set forth in paragraphs (1) to (9), inclusive.

(E) The department shall submit two reports to the Legislature,
with the first report submitted five months prior to the
commencement date of enrollment and the second report submitted
three months prior to the commencement date of enrollment, that
describe the status of all of the following readiness criteria and
activities that the department shall complete:

(i) Enter into contracts, either directly or by funding other
agencies or community-based, nonprofit, consumer, or health
insurance assistance organizations with expertise and experience
in providing health plan counseling or other direct health consumer
assistance to dual eligible beneficiaries, in order to assist these
beneficiaries in understanding their options to participate in the
demonstration project specified in Section 14132.275 and to
exercise their rights and address barriers regarding access to
benefits and services.

(ii) Develop a plan to ensure timely and appropriate
communications with beneficiaries as follows:

(I) Develop a plan to inform beneficiaries of their enrollment
options and rights, including specific steps to work with consumer
and beneficiary community groups described in clause (i),
consistent with the provisions of paragraph (1).

(II) Design, in consultation with consumers, beneficiaries, and
stakeholders, all enrollment-related notices, including, but not
limited to, summary of benefits, evidence of coverage, prescription
formulary, and provider directory notices, as well as all appeals
and grievance-related procedures and notices produced in
coordination with existing federal Centers for Medicare and
Medicaid Services (CMS) guidelines.

(III) Design a comprehensive plan for beneficiary and provider
outreach, including specific materials for persons in nursing and
group homes, family members, conservators, and authorized
representatives of beneficiaries, as appropriate, and providers of
services and supports.

(IV) Develop a description of the benefits package available to
beneficiaries in order to assist them in plan selection and how they
may select and access services in the demonstration project’s
assessment and care planning process.

(V) Design uniform and plain language materials and a process
to inform seniors and persons with disabilities of copays and
covered services so that beneficiaries can make informed choices.

(VI) Develop a description of the process, except in those
demonstration counties that have a county operated health system,
of automatically assigning beneficiaries into managed care health
plans that shall include a requirement to consider Medicare service
utilization, provider data, and consideration of plan quality.

(iii) Finalize rates and comprehensive contracts between the
department and participating health plans to facilitate effective
outreach, enroll network providers, and establish benefit packages.
To the extent permitted by CMS, the plan rates and contract
structure shall be provided to the appropriate fiscal and policy
committees of the Legislature and posted on the department’s
Internet Web site so that they are readily available to the public.

(iv) Ensure that contracts have been entered into between plans
and providers including, but not limited to, agreements with county
agencies as necessary.

(v) Develop network adequacy standards for medical care and
long-term supports and services that reflect the provisions of
paragraph (5).

(vi) Identify dedicated department or contractor staff with
adequate training and availability during business hours to address
and resolve issues between health plans and beneficiaries, and
establish a requirement that health plans have similar points of
contact and are required to respond to state inquiries when
continuity of care issues arise.

(vii) Develop a tracking mechanism for inquiries and complaints
for quality assessment purposes, and post publicly on the
department’s Internet Web site information on the types of issues
that arise and data on the resolution of complaints.

(viii) Prepare scripts and training for the department and plan
customer service representatives on all aspects of the program,
including training for enrollment brokers and community-based
organizations on rules of enrollment and counseling of
beneficiaries.

(ix) Develop continuity of care procedures.

(x) Adopt quality measures to be used to evaluate the
demonstration projects. Quality measures shall be detailed enough
to enable measurement of the impact of automatic plan assignment
on quality of care.

(xi) Develop reporting requirements for the plans to report to
the department, including data on enrollments and disenrollments,
appeals and grievances, and information necessary to evaluate
quality measures and care coordination models. The department
shall report this information to the appropriate fiscal and policy
committees of the Legislature, and this information shall be posted
on the department’s Internet Web site.

(f) This section shall be implemented only to the extent that all
federal approvals and waivers are obtained and only if and to the
extent that federal financial participation is available.

(g) To implement this section, the department may contract with
public or private entities. Contracts or amendments entered into
under this section may be on an exclusive or nonexclusive basis
and a noncompetitive bid basis and shall be exempt from the
following:

(1) Part 2 (commencing with Section 10100) of Division 2 of
the Public Contract Code and any policies, procedures, or
regulations authorized by that part.

(2) Article 4 (commencing with Section 19130) of Chapter 5
of Part 2 of Division 5 of Title 2 of the Government Code.

(3) Review or approval of contracts by the Department of
General Services.

(h) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may implement, interpret, or make specific this
section and any applicable federal waivers and state plan
amendments by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions, without taking regulatory
action. Prior to issuing any letter or similar instrument authorized
pursuant to this section, the department shall notify and consult
with stakeholders, including advocates, providers, and
beneficiaries. The department shall notify the appropriate policy
and fiscal committees of the Legislature of its intent to issue
instructions under this section at least five days in advance of the
issuance.

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 14182.18 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14182.18. end insert   

(a) It is the intent of the Legislature that both the
managed care plans participating in and providing long-term
services and supports under Sections 14182.16 and 14186.2 and
the state have protections against either significant overpayment
or significant underpayments. Risk corridors are one method of
risk sharing that may limit the financial risk of misaligning the
payments associated with a contract to furnish long-term services
and supports pursuant to a contract under the Coordinated Care
Initiative on an at-risk basis.

(b) In Coordinated Care Initiative counties, as defined in
paragraph (1) of subdivision (b) of Section 14182.16, for managed
care health plans providing long-term services and supports, the
department shall include in its contract with those plans risk
corridors designed with the following parameters:

(1) Risk corridors shall apply only to the costs of the individuals
and services identified below:

(A) Health care service costs for full benefit dual eligible
beneficiaries as defined in paragraph (3) of subdivision (b) of
Section 14182.16 for whom both of the following are true:

(i) The beneficiary is enrolled in the managed care health plan
and the plan’s contract covers all Medi-Cal long-term services
and supports.

(ii) The beneficiary is not enrolled in the demonstration project.

(B) Long-term services and supports costs for partial benefit
dual eligible beneficiaries as defined in paragraph (7) of
subdivision (b) of Section 14182 and non-dual-eligible
beneficiaries who are enrolled in the managed care health plan
and the plan’s contract covers all Medi-Cal long-term services
and supports.

(2) Risk corridors applied to costs of beneficiary services
identified in subparagraph (A) of paragraph (1) shall only be in
place for a period of 24 months starting with the first month in
which both mandatory enrollment of full benefit dual eligible
beneficiaries pursuant to Section 14182.16 and mandatory
coverage of all Medi-Cal long-term services and supports pursuant
to Section 14186.2 have occurred.

(3) Risk corridors applied to costs of beneficiary services
identified in subparagraph (B) of paragraph (1) shall only be in
place for a period of 24 months starting with the first month in
which mandatory coverage of all Medi-Cal long-term services and
supports pursuant to Section 14186.2 has occurred.

(4) The risk sharing of the costs of the individuals and services
under this subdivision shall be constructed by the department so
that it is symmetrical with respect to risk and profit, and so that
all of the following apply:

(A) The managed care health plan is fully responsible for all
costs in excess of the capitated rate of the plan up to 1 percent.

(B) The managed care health plan shall fully retain the revenues
paid through the capitated rate in excess of the costs incurred up
to 1 percent.

(C) The managed care health plan and the department shall
share responsibility for costs in excess of the capitated rate of the
plan that are greater than 1 percent above the rate but less than
2.5 percent above the rate.

(D) The managed care health plan and the department shall
share the benefit of revenues in excess of the costs incurred that
are greater than 1 percent below the capitated rate of the plan but
less than 2.5 percent below the capitated rate of the plan.

(E) The department shall be fully responsible for all costs in
excess of the capitated rate of the plan that are more than 2.5
percent above the capitated rate of the plan.

(F) The department shall fully retain the revenues paid through
the capitated rate in excess of the costs incurred greater than 2.5
percent below the capitated rate of the plan.

(c) The department shall develop specific contractual language
implementing the requirements of this section and corresponding
details that shall be incorporated into the managed care health
plan’s contract.

(d) This section shall be implemented only to the extent that any
necessary federal approvals or waivers are obtained.

end insert

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 14183.6 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14183.6.  

begin insert (a) end insert begin insert   end insert The department shall enter into an interagency
agreement with the Department of Managed Health Care to have
the Department of Managed Health Care, on behalf of the
department, conduct financial audits, medical surveys, and a review
of the provider networks of the managed care health plans
participating in the demonstration project and the Medi-Cal
managed care expansion into rural counties, and to provide
consumer assistance to beneficiaries affected by the provisions of
Sections 14182.16 and 14182.17. The interagency agreement shall
be updated, as necessary, on an annual basis in order to maintain
functional clarity regarding the roles and responsibilities of these
core activities. The department shall not delegate its authority
under this division as the single state Medicaid agency to the
Department of Managed Health Care.

begin insert

(b) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 14183.6 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14183.6. end insert   

(a) The department shall enter into an interagency
agreement with the Department of Managed Health Care to have
the Department of Managed Health Care, on behalf of the
department, conduct financial audits, medical surveys, and a
review of the provider networks of the managed care health plans
participating in the demonstration project and the Medi-Cal
managed care expansion into rural counties. The interagency
agreement shall be updated, as necessary, on an annual basis in
order to maintain functional clarity regarding the roles and
responsibilities of these core activities. The department shall not
delegate its authority under this division as the single state
Medicaid agency to the Department of Managed Health Care.

(b) This section shall be operative only if Section 19 of the act
that added this section becomes inoperative pursuant to subdivision
(b) of that Section 19.

end insert

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Section 14186 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14186.  

(a) It is the intent of the Legislature that long-term
services and supports (LTSS) be covered through managed care
health plans in begin delete counties participating in the demonstration project
authorized under Section 14132.275 end delete begin insert Coordinated Care Initiative
counties end insert .

(b) It is further the intent of the Legislature that all of the
following occur:

(1) Persons receiving health care services through Medi-Cal
receive these services through a coordinated health care system
that reduces the unnecessary use of emergency and hospital
services.

(2) Coordinated health care services, including medical,
long-term services and supports, and enhanced care management
be covered through Medi-Cal managed care health plans in order
to eliminate system inefficiencies and align incentives with positive
health care outcomes.

(3) Managed care health plans shall, in coordination with LTSS
care management providers, develop and expand care coordination
practices in consultation with counties, nursing facilities, area
agencies on aging, and other home- and community-based
providers, and share best practices. Unless the consumer objects,
managed care health plans may establish care coordination teams
as needed. If the consumer is an IHSS recipient, his or her
participation and the participation of his or her provider shall be
subject to the consumer’s consent. These care coordination teams
shall include the consumer, and his or her authorized representative,
health plan, county social services agency, Community-Based
Adult Services (CBAS) case manager for CBAS clients,
Multipurpose Senior Services Program (MSSP) case manager for
MSSP clients, and, if an IHSS recipient, may include others.

(4) To the extent possible, for Medi-Cal beneficiaries also
enrolled in the Medicare Program, that the department work with
the federal government to coordinate financing and incentives and
permit managed care health plans to coordinate health care
provided under both health care systems.

(5) The health care choices made by Medi-Cal beneficiaries be
considered with regard to all of the following:

(A) Receiving care in a home- and community-based setting to
maintain independence and quality of life.

(B) Selecting their health care providers in the managed care
plan network.

(C) Controlling care planning, decisionmaking, and coordination
with their health care providers.

(D) Gaining access to services that are culturally, linguistically,
and operationally sensitive to meet their needs or limitations and
that improve their health outcomes, enhance independence, and
promote living in home- and community-based settings.

(E) Self-directing their care by being able to hire, fire, and
supervise their IHSS provider.

(F) Being assured by the department and coordinating
departments of their oversight of the quality of these coordinated
health care services.

(6) (A) Counties continue to perform functions necessary for
the administration of the IHSS program, including conducting
assessments and determining authorized hours for recipients,
pursuant to Article 7 (commencing with Section 12300) of Chapter
3. County agency assessments shall be shared with care
coordination teams, when applicable. The county agency thereafter
may receive and consider additional input from the care
coordination team.

(B) Managed care health plans may authorize personal care
services and related domestic services in addition to the hours
authorized under Article 7 (commencing with Section 12300) of
Chapter 3, which managed care health plans shall be responsible
for paying at no share of cost to the county. The department, in
consultation with the State Department of Social Services, shall
develop policies and procedures for these additional benefits, which
managed care health plans may authorize. The grievance process
for these benefits shall be the same process as used for other
benefits authorized by managed care health plans, and shall comply
with Section 14450, and Sections 1368 and 1368.1 of the Health
and Safety Code.

(7)  begin insert (A) end insert begin insert   end insert Effective January 1, 2015, or 19 months after
commencement of beneficiary enrollment begin delete in the demonstration
project authorized pursuant to Section 14132.275 end delete begin insert into managed
care pursuant to Sections 14182 and 14182.16 end insert , whichever is later,
MSSP services shall transition from a federal waiver pursuant to
Section 1915(c) under the federal Social Security Act (42 U.S.C.
Sec. 1396n et seq.) to a benefit administered and allocated by
managed care health plans begin insert in Coordinated Care Initiative counties end insert .

begin delete

It

end delete

begin insert (B) end insert begin insert   end insert begin insert Notwithstanding Chapter 8 (commencing with Section 9560)
of Division 8.5, it end insert is also the intent of the Legislature that the
provisions of this article begin delete and the demonstration project pursuant
to Section 14132.275 end delete shall apply to dual eligible and Medi-Cal-only
beneficiaries enrolled in MSSP. It is the further intent of the
Legislature that managed care health plans shall work in
collaboration with MSSP providers to begin development of an
integrated, person-centered care management and care coordination
model that works within the context of managed care, and explore
which portions of the MSSP program model may be adapted to
managed care while maintaining the integrity and efficacy of the
MSSP model.

(8) In lieu of providing nursing facility services, managed care
health plans may authorize home- and community-based services
plan benefits, as defined in subdivision begin delete (c) end delete begin insert (d) end insert of Section 14186.1,
which managed care health plans shall be responsible for paying
at no share of cost to the county.

begin insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 14186.1 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14186.1.  

For purposes of this article, the following definitions
shall apply unless otherwise specified:

begin insert

(a) “Coordinated Care Initiative counties” shall have the same
meaning as that term is defined in paragraph (1) of subdivision
(b) of Section 14182.16.

end insert begin delete

(a)

end delete

begin insert ( end insert begin insert b) end insert  “Home- and community-based services” means services
provided pursuant to paragraphs (1), (2), and (3) of subdivision
begin delete (b) end delete begin insert (c) end insert .

begin delete

(b)

end delete

begin insert ( end insert begin insert c) end insert  “Long-term services and supports” or “LTSS” means all of
the following:

(1) In-home supportive services (IHSS) provided pursuant to
Article 7 (commencing with Section 12300) of Chapter 3, and
Sections 14132.95, 14132.952, and 14132.956.

(2) Community-Based Adult Services (CBAS).

(3) Multipurpose Senior Services Program (MSSP) services
include those services approved under a federal home- and
community-based services waiver or, beginning January 1, 2015,
begin insert or after 19 months, end insert equivalent services.

(4) Skilled nursing facility services and subacute care services
established under subdivision (c) of Section 14132, including those
services described in Sections 51511 and 51511.5 of Title 22 of
the California Code of Regulations, regardless of whether the
service is included in the basic daily rate or billed separately, and
any leave of absence or bed hold provided consistent with Section
72520 of Title 22 of the California Code of Regulations or the
state plan.

However, services provided by any category of intermediate
care facility for the developmentally disabled shall not be
considered long-term services and supports.

begin delete

(c)

end delete

begin insert ( end insert begin insert d) end insert  “Home- and community-based services (HCBS) plan
benefits” may include in-home and out-of-home respite, nutritional
assessment, counseling, and supplements, minor home or
environmental adaptations, habilitation, and other services that
may be deemed necessary by the managed care health plan,
including its care coordination team. The department, in
consultation with stakeholders, may determine whether health
plans shall be required to include these benefits in their scope of
service, and may establish guidelines for the scope, duration, and
intensity of these benefits. The grievance process for these benefits
shall be the same process as used for other benefits authorized by
managed care health plans, and shall comply with Section 14450,
and Sections 1368 and 1368.1 of the Health and Safety Code.

begin delete

(d)

end delete

begin insert ( end insert begin insert e) end insert  “Managed care health plan” means an individual,
organization, or entity that enters into a contract with the
department pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.8 (commencing with Section 14087.5), Article
2.81 (commencing with Section 14087.96), or Article 2.91
(commencing with Section 14089), of this chapter, or Chapter 8
(commencing with Section 14200). For the purposes of this article,
“managed care health plan” shall not include an individual,
organization, or entity that enters into a contract with the
department to provide services pursuant to Chapter 8.75
(commencing with Section 14591) or the Senior Care Action
Network.

begin delete

(e)

end delete

begin insert ( end insert begin insert f) end insert  “Other health coverage” means health coverage providing
the same full or partial benefits as the Medi-Cal program, health
coverage under another state or federal medical care program
except for the Medicare Program (Title XVIII of the federal Social
Security Act (42 U.S.C. Sec. 1395 et seq.)), or health coverage
under a contractual or legal entitlement, including, but not limited
to, a private group or indemnification insurance program.

begin delete

(f)

end delete

begin insert ( end insert begin insert g) end insert  “Recipient” means a Medi-Cal beneficiary eligible for IHSS
provided pursuant to Article 7 (commencing with Section 12300)
of Chapter 3, and Sections 14132.95, 14132.952, and 14132.956.

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 14186.11 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , immediately following Section 14186.1, to read: end insert

begin insert

begin insert 14186.11. end insert   

Section 14186.17 shall apply to the provision of
CBAS, MSSP, skilled nursing facility, and IHSS services in
Coordinated Care Initiative counties as set forth in this article.

end insert

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Section 14186.2 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14186.2.  

(a) (1) Not sooner than March 1, 2013, all Medi-Cal
long-term services and supports (LTSS) described in subdivision
begin delete (b) end delete begin insert (c) end insert of Section 14186.1 shall be services that are covered under
managed care health plan contracts and shall be available only
through managed care health plans to beneficiaries residing in begin delete counties participating in the demonstration project authorized under
Section 14132.275 end delete begin insert Coordinated Care Initiative counties end insert , except
for the exemptions provided for in subdivision (c). The director
shall consult with the Legislature, CMS, and stakeholders when
determining the implementation date for this section. The
department shall pay managed care health plans using a capitation
ratesetting methodology that pays for all Medi-Cal benefits and
services, including all LTSS, covered under the managed care
health plan contract. In order to receive any LTSS through
Medi-Cal, Medi-Cal beneficiaries shall mandatorily enroll in a
managed care health plan for the provision of Medi-Cal benefits.

(2) HCBS plan benefits may be covered services that are
provided under managed care health plan contracts for beneficiaries
residing in begin delete counties participating in the demonstration authorized
under Section 14132.275 end delete begin insert Coordinated Care Initiative counties end insert ,
except for the exemptions provided for in subdivision (c).

(3) Beneficiaries who are not mandatorily enrolled in a managed
care health plan pursuant to paragraph (15) of subdivision (b) of
Section 14182 shall not be required to receive LTSS through a
managed care health plan.

(4) The transition of the provision of LTSS through managed
care health plans shall occur after the department obtains any
federal approvals through necessary federal waivers or
amendments, or state plan amendments.

(5) Counties where LTSS are not covered through managed
care health plans shall not be subject to this article.

(6) Beneficiaries residing in counties not participating in the
dual eligible demonstration project pursuant to Section 14132.275
shall not be subject to this article.

(b) (1) The provisions of this article shall be applicable to a
Medi-Cal beneficiary enrolled in a managed care health plan in a
county where this article is effective.

(2) At the director’s sole discretion, in consultation with
coordinating departments and stakeholders, the department may
determine and implement a phased-in enrollment approach that
may include the addition of Medi-Cal long-term services and
supports in a beneficiary’s Medi-Cal managed care benefits
immediately upon implementation of this article in a specific
county, over a 12-month period, or other phased approach, but no
sooner than March 1, 2013.

(c) (1) The provisions of this article shall not apply to any of
the following individuals:

(A) Medi-Cal beneficiaries who meet any of the following and
shall, therefore, continue to receive any medically necessary
Medi-Cal benefits, including LTSS, through fee-for-service
Medi-Cal:

(i) Except in counties with county organized health systems
operating pursuant to Article 2.8 (commencing with Section
14087.5), have other health coverage.

(ii) Receive services through any state foster care program
including the program described in Article 5 (commencing with
Section 11400) Chapter 2, unless the beneficiary is already
receiving services through a managed care health plan.

(iii) Are not eligible for enrollment in managed care health plans
for medically necessary reasons determined by the department.

(iv) Reside in one of the Veterans’ Homes of California, as
described in Chapter 1 (commencing with Section 1010) of
Division 5 of the Military and Veterans Code.

(B) Persons enrolled in the Program of All-Inclusive Care for
the Elderly (PACE) pursuant to Chapter 8.75 (commencing with
Section 14591), or a managed care organization licensed under
the Knox-Keene Health Care Service Plan Act of 1975 (Chapter
2.2 (commencing with Section 1340) of Division 2 of the Health
and Safety Code) that has previously contracted with the
department as a primary care case management plan pursuant to
Article 2.9 (commencing with Section 14088) of Chapter 7 to
provide services to beneficiaries who are HIV positive or who
have been diagnosed with AIDS.

(C) Persons who are under 21 years of age.

(D) Other specific categories of beneficiaries specified by the
department based on extraordinary medical needs of specific patient
groups or to meet federal requirements, in consultation with
stakeholders.

(2) Beneficiaries who have been diagnosed with HIV/AIDS are
not exempt from mandatory enrollment, but may opt out of
managed care enrollment at the beginning of any month.

begin insert

(d) If the LTSS portion of the Coordinated Care Initiative pilot
is implemented, the provisions of Section 14186.35 shall apply.

end insert

begin insert

begin insert SEC. 25. end insert   

end insert

begin insert Section 14186.3 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14186.3.  

(a) (1) No sooner than July 1, 2012,
Community-Based Adult Services (CBAS) shall be a Medi-Cal
benefit covered under every managed care health plan contract
and available only through managed care health plans. Medi-Cal
beneficiaries who are eligible for CBAS shall enroll in a managed
care health plan in order to receive those services, except for
beneficiaries exempt under subdivision (c) of Section 14186.2 or
in counties or geographic regions where Medi-Cal benefits are not
covered through managed care health plans. Notwithstanding
subdivision (a) of Section 14186.2 and pursuant to the provisions
of an approved federal waiver or plan amendment, the provision
of CBAS as a Medi-Cal benefit through a managed care health
plan shall not be limited to begin insert Coordinated Care Initiative end insert counties begin delete participating in the demonstration project authorized under Section
14132.275 end delete .

(2) Managed care health plans shall determine a member’s
medical need for CBAS using the assessment tool and eligibility
criteria established pursuant to the provisions of an approved
federal waiver or amendments and shall approve the number of
days of attendance and monitor treatment plans of their members.
Managed care health plans shall reauthorize CBAS in compliance
with criteria established pursuant to the provisions of the approved
federal waiver or amendment requirements.

(b) (1) Beginning in the 2012 calendar year, managed care
health plans shall collaborate with MSSP providers to begin
development of an integrated, person-centered care management
and care coordination model and explore how the MSSP program
model may be adapted to managed care while maintaining the
efficacy of the MSSP model. The California Department of Aging
and the department shall work with the MSSP site association and
managed care health plans to develop a template contract to be
used by managed care health plans contracting with MSSP sites
in begin delete counties where the demonstration project pursuant to Section
14132.275 is implemented end delete begin insert Coordinated Care Initiative counties end insert .

(2) Notwithstanding the implementation date authorized in
paragraph (1) of subdivision (a) of Section 14186.2, beginning no
sooner than June 1, 2013, or on the date that any necessary federal
approvals or waivers are obtained, whichever is later, and
begin delete concluding end delete begin insert effective end insert January 1, 2015, or 19 months after
commencement of beneficiary enrollment begin delete in the demonstration
project authorized pursuant to Section 14132.275, or on the date
that any necessary federal approvals or waivers are obtained end delete begin insert into
managed care pursuant to Sections 14182 and 14182.16 end insert , whichever
is later:

(A) Multipurpose Senior Services Program (MSSP) services
shall be a Medi-Cal benefit available only through managed care
health plans, except for beneficiaries exempt under subdivision
(c) of Section 14186.2 begin insert in Coordinated Care Initiative counties end insert .

(B) Managed care health plans shall contract with all county
and nonprofit organizations that are designated providers of MSSP
services for the provision of MSSP case management and waiver
services. These contracts shall provide for all of the following:

(i) Managed care health plans shall allocate to the MSSP
providers the same level of funding they would have otherwise
received under their MSSP contract with the California Department
of Aging.

(ii) MSSP providers shall continue to meet all existing federal
waiver standards and program requirements, which include
maintaining the contracted service levels.

(iii) Managed care plans and MSSP providers shall share
confidential beneficiary data with one another, as necessary to
implement the provisions of this section.

(C) The California Department of Aging shall continue to
contract with all designated MSSP sites, including those in the
counties participating in the demonstration project, and perform
MSSP waiver oversight and monitoring.

(D) The California Department of Aging and the department,
in consultation with MSSP providers, managed care health plans,
and stakeholders, shall develop service fee structures, services,
and person-centered care coordination models that shall be effective
June 2013, for the provision of care coordination and home- and
community-based services to beneficiaries who are enrolled in
managed care health plans but not enrolled in MSSP, and who
may have care coordination and service needs that are similar to
MSSP participants. The service fees for MSSP providers and MSSP
services for any additional beneficiaries and additional services
for existing MSSP beneficiaries shall be based upon, and consistent
with, the rates and services delivered in MSSP.

(3) In the 2014 calendar year, the provisions of paragraph (2)
shall continue. In addition, managed care health plans shall work
in collaboration with MSSP providers to begin development of an
integrated, person-centered care management and care coordination
model that works within the context of managed care and explore
which portions of the MSSP program model may be adapted to
managed care while maintaining the integrity and efficacy of the
MSSP model.

(4) (A) Effective January 1, 2015, or 19 months after the
commencement of beneficiary enrollment begin delete in the demonstration
project authorized pursuant to Section 14132.275 end delete begin insert into managed
care pursuant to Sections 14182 and 14182.16 end insert , or on the date that
any necessary federal approvals or waivers are obtained, whichever
is later, MSSP services in begin delete counties where the demonstration project
authorized under Section 14132.275 is implemented end delete begin insert Coordinated
Care Initiative counties end insert shall transition from a federal waiver
pursuant to Section 1915(c) under the federal Social Security Act
(42 U.S.C. Sec. 1396n et seq.) to a benefit administered and
allocated by managed care health plans.

(B) No later than January 1, 2014, the department, in
consultation with the California Department of Aging and the
Department of Managed Health Care, and with stakeholder input,
shall submit a transition plan to the Legislature to describe how
subparagraph (A) shall be implemented. The plan shall incorporate
the principles of the MSSP in the managed care benefit, and shall
include provisions to ensure seamless transitions and continuity
of care. Managed care health plans shall, in partnership with local
MSSP providers, conduct a local stakeholder process to develop
recommendations that the department shall consider when
developing the transition plan.

(C) No later than 90 days prior to implementation of
subparagraph (A), the department, in consultation with the
California Department of Aging and the Department of Managed
Health Care, and with stakeholder input, shall submit a transition
plan to the Legislature that includes steps to address concerns, if
any, raised by stakeholders subsequent to the plan developed
pursuant to subparagraph (B).

(c) (1) Not sooner than March 1, 2013, or on the date that any
necessary federal approvals or waivers are obtained, whichever is
later, nursing facility services and subacute facility services shall
be Medi-Cal benefits available only through managed care health
plans.

(2) Managed care health plans shall authorize utilization of
nursing facility services or subacute facility services for their
members when medically necessary. The managed care health
plan shall maintain the standards for determining levels of care
and authorization of services for both Medicare and Medi-Cal
services that are consistent with policies established by the federal
Centers for Medicare and Medicaid Services and consistent with
the criteria for authorization of Medi-Cal services specified in
Section 51003 of Title 22 of the California Code of Regulations,
which includes utilization of the “Manual of Criteria for Medi-Cal
Authorization,” published by the department in January 1982, last
revised April 11, 2011.

(3) The managed care health plan shall maintain continuity of
care for beneficiaries by recognizing any prior treatment
authorization made by the department for not less than six months
following enrollment of a beneficiary into the health plan.

(4) When a managed care health plan has authorized services
in a facility and there is a change in the beneficiary’s condition
under which the facility determines that the facility may no longer
meet the needs of the beneficiary, the beneficiary’s health has
improved sufficiently so the resident no longer needs the services
provided by the facility, or the health or safety of individuals in
the facility is endangered by the beneficiary, the managed care
health plan shall arrange and coordinate a discharge of the
beneficiary and continue to pay the facility the applicable rate until
the beneficiary is successfully discharged and transitioned into an
appropriate setting.

(5) The managed care health plan shall pay providers, including
institutional providers, in accordance with the prompt payment
provisions contained in each health plan’s contracts with the
department, including the ability to accept and pay electronic
claims.

begin insert

begin insert SEC. 26. end insert   

end insert

begin insert Section 14186.36 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14186.36.  

(a) It is the intent of the Legislature that a universal
assessment process for LTSS be developed and tested. The initial
uses of this tool may inform future decisions about whether to
amend existing law regarding the assessment processes that
currently apply to LTSS programs, including IHSS.

(b) (1) In addition to the activities set forth in paragraph (9) of
subdivision (a) of Section 14186.35, county agencies shall continue
IHSS assessment and authorization processes, including making
final determinations of IHSS hours pursuant to Article 7
(commencing with Section 12300) of Chapter 3 and regulations
promulgated by the State Department of Social Services.

(2) No sooner than January 1, 2015, for the counties and
beneficiary categories specified in subdivision (e), counties shall
also utilize the universal assessment tool, as described in
subdivision (c), if one is available and upon completion of the
stakeholder process, system design and testing, and county training
described in subdivisions (c) and (e), for the provision of IHSS
services. This paragraph shall only apply to beneficiaries who
consent to the use of the universal assessment process. The
managed care health plans shall be required to cover IHSS services
based on the results of the universal assessment process specified
in this section.

(c) (1) No later than June 1, 2013, the department, the State
Department of Social Services, and the California Department of
Aging shall establish a stakeholder workgroup to develop the
universal assessment process, including a universal assessment
tool, for home- and community-based services, as defined in
subdivision begin delete (a) end delete begin insert (b) end insert of Section 14186.1. The stakeholder workgroup
shall include, but not be limited to, consumers of IHSS and other
home- and community-based services and their authorized
representatives, managed care health plans, counties, IHSS, MSSP,
and CBAS providers, and legislative staff. The universal
assessment process shall be used for all home- and
community-based services, including IHSS. In developing the
process, the workgroup shall build upon the IHSS uniform
assessment process and hourly task guidelines, the MSSP
assessment process, and other appropriate home- and
community-based assessment tools.

(2) (A) In developing the universal assessment process, the
departments described in paragraph (1) shall develop a universal
assessment tool that will inform the universal assessment process
and facilitate the development of plans of care based on the
individual needs of the consumer. The workgroup shall consider
issues including, but not limited to, the following:

(i) The roles and responsibilities of the health plans, counties,
and home- and community-based services providers administering
the assessment.

(ii) The criteria for reassessment.

(iii) How the results of new assessments would be used for the
oversight and quality monitoring of home- and community-based
services providers.

(iv) How the appeals process would be affected by the
assessment.

(v) The ability to automate and exchange data and information
between home- and community-based services providers.

(vi) How the universal assessment process would incorporate
person-centered principles and protections.

(vii) How the universal assessment process would meet the
legislative intent of this article and the goals of the demonstration
project pursuant to Section 14132.275.

(viii) The qualifications for, and how to provide guidance to,
the individuals conducting the assessments.

(B) The workgroup shall also consider how this assessment may
be used to assess the need for nursing facility care and divert
individuals from nursing facility care to home- and
community-based services.

(d) No later than March 1, 2014, the department, the State
Department of Social Services, and the California Department of
Aging shall report to the Legislature on the stakeholder
workgroup’s progress in developing the universal assessment
process, and shall identify the counties and beneficiary categories
for which the universal assessment process may be implemented
pursuant to subdivision (e).

(e) (1)   No sooner than January 1, 2015, upon completion of the
design and development of a new universal assessment tool,
managed care health plans, counties, and other home- and
community-based services providers may test the use of the tool
for a specific and limited number of beneficiaries who receive or
are potentially eligible to receive home- and community-based
services pursuant to this article in no fewer than two, and no more
than four, of the counties where the provisions of this article are
implemented, if the following conditions have been met:

(A) The department has obtained any federal approvals through
necessary federal waivers or amendments, or state plan
amendments, whichever is later.

(B) The system used to calculate the results of the tool has been
tested.

(C) Any entity responsible for using the tool has been trained
in its usage.

(2) To the extent the universal assessment tool or universal
assessment process results in changes to the authorization process
and provision of IHSS services, those changes shall be automated
in the Case Management Information and Payroll System.

(3) The department shall develop materials to inform consumers
of the option to participate in the universal assessment tool testing
phase pursuant to this paragraph.

(f) The department, the State Department of Social Services,
and the California Department of Aging shall implement a
rapid-cycle quality improvement system to monitor the
implementation of the universal assessment process, identify
significant changes in assessment results, and make modifications
to the universal assessment process to more closely meet the
legislative intent of this article and the goals of the demonstration
project pursuant to Section 14132.275.

(g) Until existing law relating to the IHSS assessment process
pursuant to Article 7 (commencing with Section 12300) of Chapter
3 is amended, beneficiaries shall have the option to request an
additional assessment using the previous assessment process for
those home- and community-based services and to receive services
according to the results of the additional assessment.

(h) No later than nine months after the implementation of the
universal assessment process, the department, the State Department
of Social Services, and the California Department of Aging, in
consultation with stakeholders, shall report to the Legislature on
the results of the initial use of the universal assessment process,
and may identify proposed additional beneficiary categories or
counties for expanded use of this process and any necessary
changes to provide statutory authority for the continued use of the
universal assessment process. These departments shall report
annually thereafter to the Legislature on the status and results of
the universal assessment process.

(i)  begin delete The provisions of this end delete begin insert This end insert section shall remain operative
only until July 1, 2017.

begin insert

begin insert SEC. 27. end insert   

end insert

begin insert Section 14186.4 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14186.4.  

(a) This article shall be implemented only to the
extent that all necessary federal approvals and waivers have been
obtained and only if and to the extent that federal financial
participation is available.

begin delete

(b) Notwithstanding any other law, the director, after consulting
with the Director of Finance, stakeholders, and the Legislature,
retains the discretion to forgo the provision of services in the
manner specified in this article in its entirety, or partially, if and
to the extent that the director determines that the quality of care
for managed care beneficiaries, efficiency, or cost-effectiveness
of the program would be jeopardized. In the event the director
discontinues the provision of services in the manner specified in
this article, contracts implemented pursuant to this article shall
accordingly be modified or terminated, to suspend new enrollment
or disenroll beneficiaries in an orderly manner that provides for
continuity of care and the safety of beneficiaries.

(c)

end delete

begin insert ( end insert begin insert b) end insert  To implement this article, the department may contract with
public or private entities. Contracts, or amendments to current
contracts, entered into under this article may be on a
noncompetitive bid basis and shall be exempt from all of the
following:

(1) Part 2 (commencing with Section 10100) of Division 2 of
the Public Contract Code and any policies, procedures, or
regulations authorized by that part.

(2) Article 4 (commencing with Section 19130) of Chapter 5
of Part 2 of Division 5 of Title 2 of the Government Code.

(3) Review or approval of contracts by the Department of
General Services.

(4) Review or approval of feasibility study reports and the
requirements of Sections 4819.35 to 4819.37, inclusive, and
Sections 4920 to 4928, inclusive, of the State Administrative
Manual.

begin delete

(d)

end delete

begin insert ( end insert begin insert c) end insert  Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the State Department of Health Care Services and State Department
of Social Services may implement, interpret, or make specific this
section by means of all-county letters, plan letters, plan or provider
bulletins, or similar instructions, without taking regulatory action.
Prior to issuing any letter or similar instrument authorized pursuant
to this section, the departments shall notify and consult with
stakeholders, including beneficiaries, providers, and advocates.

begin delete

(e)

end delete

begin insert ( end insert begin insert d) end insert  Beginning July 1, 2012, the department shall provide the
fiscal and appropriate policy committees of the Legislature with
a copy of any report submitted to CMS that is required under an
approved federal waiver or waiver amendments or any state plan
amendment for any LTSS.

begin delete

(f)

end delete

begin insert ( end insert begin insert e) end insert  The department shall enter into an interagency agreement
with the Department of Managed Health Care to perform some or
all of the department’s oversight and readiness review activities
specified in this article. These activities may include providing
consumer assistance to beneficiaries affected by this article, and
conducting financial audits, medical surveys, and a review of the
provider networks of the managed care health plans participating
in this article. The interagency agreement shall be updated, as
necessary, on an annual basis in order to maintain functional clarity
regarding the roles and responsibilities of the Department of
Managed Health Care and the department. The department shall
not delegate its authority as the single state Medicaid agency under
this article to the Department of Managed Health Care.

begin delete

(g)

end delete

begin insert ( end insert begin insert f) end insert  (1) Beginning with the May Revision to the 2013-14
Governor’s Budget, and annually thereafter, the department shall
report to the Legislature on the enrollment status, quality measures,
and state costs of the actions taken pursuant to this article.

(2) (A) By January 1, 2013, or as soon thereafter as practicable,
the department shall develop, in consultation with CMS and
stakeholders, quality and fiscal measures for managed care health
plans to reflect the short- and long-term results of the
implementation of this article. The department shall also develop
quality thresholds and milestones for these measures. The
department shall update these measures periodically to reflect
changes in this program due to implementation factors and the
structure and design of the benefits and services being coordinated
by the health plans.

(B) The department shall require managed care health plans to
submit Medicare and Medi-Cal data to determine the results of
these measures. If the department finds that a health plan is not in
compliance with one or more of the measures set forth in this
section, the health plan shall, within 60 days, submit a corrective
action plan to the department for approval. The corrective action
plan shall, at a minimum, include steps that the health plan shall
take to improve its performance based on the standard or standards
with which the health plan is out of compliance. The corrective
action plan shall establish interim benchmarks for improvement
that shall be expected to be met by the health plan in order to avoid
a sanction pursuant to Section 14304. Nothing in this paragraph
is intended to limit the application of Section 14304.

(C) The department shall publish the results of these measures,
including via posting on the department’s Internet Web site, on a
quarterly basis.

begin insert

begin insert SEC. 28. end insert   

end insert

begin insert Section 14301.1 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14301.1.  

(a) For rates established on or after August 1, 2007,
the department shall pay capitation rates to health plans
participating in the Medi-Cal managed care program using actuarial
methods and may establish health-plan- and county-specific rates.
Notwithstanding any other law, this section shall apply to any
managed care organization, licensed under the Knox-Keene Health
Care Service Plan Act of 1975 (Chapter 2.2 (commencing with
Section 1340) of Division 2 of the Health and Safety Code), that
has contracted with the department as a primary care case
management plan pursuant to Article 2.9 (commencing with
Section 14088) of Chapter 7 to provide services to beneficiaries
who are HIV positive or who have been diagnosed with AIDS for
rates established on or after July 1, 2012. The department shall
utilize a county- and model-specific rate methodology to develop
Medi-Cal managed care capitation rates for contracts entered into
between the department and any entity pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing
with Section 14087.5), and Article 2.91 (commencing with Section
14089) of Chapter 7 that includes, but is not limited to, all of the
following:

(1) Health-plan-specific encounter and claims data.

(2) Supplemental utilization and cost data submitted by the
health plans.

(3) Fee-for-service data for the underlying county of operation
or other appropriate counties as deemed necessary by the
department.

(4) Department of Managed Health Care financial statement
data specific to Medi-Cal operations.

(5) Other demographic factors, such as age, gender, or
diagnostic-based risk adjustments, as the department deems
appropriate.

(b) To the extent that the department is unable to obtain
sufficient actual plan data, it may substitute plan model, similar
plan, or county-specific fee-for-service data.

(c) The department shall develop rates that include
administrative costs, and may apply different administrative costs
with respect to separate aid code groups.

(d) The department shall develop rates that shall include, but
are not limited to, assumptions for underwriting, return on
investment, risk, contingencies, changes in policy, and a detailed
review of health plan financial statements to validate and reconcile
costs for use in developing rates.

(e) The department may develop rates that pay plans based on
performance incentives, including quality indicators, access to
care, and data submission.

(f) The department may develop and adopt condition-specific
payment rates for health conditions, including, but not limited to,
childbirth delivery.

(g) (1) Prior to finalizing Medi-Cal managed care capitation
rates, the department shall provide health plans with information
on how the rates were developed, including rate sheets for that
specific health plan, and provide the plans with the opportunity to
provide additional supplemental information.

(2) For contracts entered into between the department and any
entity pursuant to Article 2.8 (commencing with Section 14087.5)
of Chapter 7, the department, by June 30 of each year, or, if the
budget has not passed by that date, no later than five working days
after the budget is signed, shall provide preliminary rates for the
upcoming fiscal year.

(h) For the purposes of developing capitation rates through
implementation of this ratesetting methodology, Medi-Cal managed
care health plans shall provide the department with financial and
utilization data in a form and substance as deemed necessary by
the department to establish rates. This data shall be considered
proprietary and shall be exempt from disclosure as official
information pursuant to subdivision (k) of Section 6254 of the
Government Code as contained in the California Public Records
Act (Division 7 (commencing with Section 6250) of Title 1 of the
Government Code).

(i) Notwithstanding any other provision of law, on and after the
effective date of the act adding this subdivision, the department
may apply this section to the capitation rates it pays under any
managed care health plan contract.

(j) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may set and implement managed care capitation
rates, and interpret or make specific this section and any applicable
federal waivers and state plan amendments by means of plan letters,
plan or provider bulletins, or similar instructions, without taking
regulatory action.

(k) The department shall report, upon request, to the fiscal and
policy committees of the respective houses of the Legislature
regarding implementation of this section.

(l) Prior to October 1, 2011, the risk-adjusted countywide
capitation rate shall comprise no more than 20 percent of the total
capitation rate paid to each Medi-Cal managed care plan.

(m) (1) It is the intent of the Legislature to preserve the policy
goal to support and strengthen traditional safety net providers who
treat high volumes of uninsured and Medi-Cal patients when
Medi-Cal enrollees are defaulted into Medi-Cal managed care
plans.

(2) As the department adds additional factors, such as managed
care plan costs, to the Medi-Cal managed care plan default
assignment algorithm, it shall consult with the Auto Assignment
Performance Incentive Program stakeholder workgroup to develop
cost factor disregards related to intergovernmental transfers and
required wraparound payments that support safety net providers.

begin insert

(n) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of the act
that added this subdivision.

end insert

begin insert

begin insert SEC. 29. end insert   

end insert

begin insert Section 14301.1 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14301.1. end insert   

(a) For rates established on or after August 1, 2007,
the department shall pay capitation rates to health plans
participating in the Medi-Cal managed care program using
actuarial methods and may establish health-plan- and
county-specific rates. The department shall utilize a county- and
model-specific rate methodology to develop Medi-Cal managed
care capitation rates for contracts entered into between the
department and any entity pursuant to Article 2.7 (commencing
with Section 14087.3), Article 2.8 (commencing with Section
14087.5), and Article 2.91 (commencing with Section 14089) of
Chapter 7 that includes, but is not limited to, all of the following:

(1) Health-plan-specific encounter and claims data.

(2) Supplemental utilization and cost data submitted by the
health plans.

(3) Fee-for-service data for the underlying county of operation
or other appropriate counties as deemed necessary by the
department.

(4) Department of Managed Health Care financial statement
data specific to Medi-Cal operations.

(5) Other demographic factors, such as age, gender, or
diagnostic-based risk adjustments, as the department deems
appropriate.

(b) To the extent that the department is unable to obtain
sufficient actual plan data, it may substitute plan model, similar
plan, or county-specific fee-for-service data.

(c) The department shall develop rates that include
administrative costs, and may apply different administrative costs
with respect to separate aid code groups.

(d) The department shall develop rates that shall include, but
are not limited to, assumptions for underwriting, return on
investment, risk, contingencies, changes in policy, and a detailed
review of health plan financial statements to validate and reconcile
costs for use in developing rates.

(e) The department may develop rates that pay plans based on
performance incentives, including quality indicators, access to
care, and data submission.

(f) The department may develop and adopt condition-specific
payment rates for health conditions, including, but not limited to,
childbirth delivery.

(g) (1) Prior to finalizing Medi-Cal managed care capitation
rates, the department shall provide health plans with information
on how the rates were developed, including rate sheets for that
specific health plan, and provide the plans with the opportunity
to provide additional supplemental information.

(2) For contracts entered into between the department and any
entity pursuant to Article 2.8 (commencing with Section 14087.5)
of Chapter 7, the department, by June 30 of each year, or, if the
budget has not passed by that date, no later than five working days
after the budget is signed, shall provide preliminary rates for the
upcoming fiscal year.

(h) For the purposes of developing capitation rates through
implementation of this ratesetting methodology, Medi-Cal managed
care health plans shall provide the department with financial and
utilization data in a form and substance as deemed necessary by
the department to establish rates. This data shall be considered
proprietary and shall be exempt from disclosure as official
information pursuant to subdivision (k) of Section 6254 of the
Government Code as contained in the California Public Records
Act (Division 7 (commencing with Section 6250) of Title 1 of the
Government Code).

(i) The department shall report, upon request, to the fiscal and
policy committees of the respective houses of the Legislature
regarding implementation of this section.

(j) Prior to October 1, 2011, the risk-adjusted countywide
capitation rate shall comprise no more than 20 percent of the total
capitation rate paid to each Medi-Cal managed care plan.

(k) (1) It is the intent of the Legislature to preserve the policy
goal to support and strengthen traditional safety net providers
who treat high volumes of uninsured and Medi-Cal patients when
Medi-Cal enrollees are defaulted into Medi-Cal managed care
plans.

(2) As the department adds additional factors, such as managed
care plan costs, to the Medi-Cal managed care plan default
assignment algorithm, it shall consult with the Auto Assignment
Performance Incentive Program stakeholder workgroup to develop
cost factor disregards related to intergovernmental transfers and
required wraparound payments that support safety net providers.

(l) This section shall be operative only if Section 28 of the act
that added this section becomes inoperative pursuant to subdivision
(n) of that Section 28.

end insert

begin insert

begin insert SEC. 30. end insert   

end insert

begin insert Section 10 of Chapter 33 of the Statutes of 2012 is
repealed. end insert

begin delete

SEC. 10.  

(a) In the event the department has not received, by
February 1, 2013, federal approval, or notification indicating
pending approval, of a mutual ratesetting process, shared federal
savings, and a six-month enrollment period in the demonstration
project pursuant to paragraph (2) of subdivision (l) of Section
14132.275, effective March 1, 2013, Sections 14132.275, 14182.16,
and 14182.17, and Article 5.7 (commencing with Section 14186)
of Chapter 7 shall become inoperative. The director shall execute
a declaration of these facts and post it on the department’s Internet
Web site.

(b) For purposes of this section, “shared federal savings” means
a methodology that meets the conditions of paragraphs (1) and (2),
or paragraph (3).

(1) The state and CMS share in the combined savings for
Medicare and Medi-Cal, as estimated in the Budget Act of 2012
for the 2012-13, 2013-14, 2014-15, and 2015-16 fiscal years.

(2) Federal approval for the provisions of paragraphs (2) and
(3) of subdivision (l) of Section 14132.275 regarding the
requirement that, upon enrollment in a demonstration site, specified
beneficiaries shall remain enrolled on a mandatory basis for six
months from the date of initial enrollment.

(3) An alternate methodology that, in the determination of the
Director of Finance, in consultation with the Director of Health
Care Services and the Joint Legislative Budget Committee, will
result in the same level of ongoing savings, as estimated in the
Budget Act of 2012 for the 2012-13, 2013-14, 2014-15, and
2015-16 fiscal years.

end delete

begin insert

begin insert SEC. 31. end insert   

end insert

begin insert Section 15 of Chapter 45 of the Statutes of 2012 is
repealed. end insert

begin delete

SEC. 15.  

(a) In the event the department has not received, by
February 1, 2013, federal approval, or notification indicating
pending approval, of a mutual ratesetting process, shared federal
savings, and a six-month enrollment period in the demonstration
project pursuant to Section 14132.275 of the Welfare and
Institutions Code, effective March 1, 2013, this act shall become
inoperative, the amendments made to the sections amended by this
act shall be inoperative, and the sections added by this act shall be
inoperative. The director shall execute a declaration attesting to
these facts and post it on the department’s Internet Web site.

(b) For purposes of this section, “shared federal savings” means
a methodology that meets the conditions of paragraphs (1) and (2),
or paragraph (3).

(1) The state and the federal Centers for Medicare and Medicaid
Services share in the combined savings for Medicare and Medi-Cal,
as estimated in the Budget Act of 2012 for the 2012-13, 2013-14,
2014-15, and 2015-16 fiscal years.

(2) Federal approval for the provisions of Section 14132.275
of the Welfare and Institutions Code regarding the requirement
that, upon enrollment in a demonstration site, specified
beneficiaries shall remain enrolled on a mandatory basis for six
months from the date of initial enrollment.

(3) An alternate methodology that, in the determination of the
Director of Finance, in consultation with the Director of Health
Care Services and the Joint Legislative Budget Committee, will
result in the same level of ongoing savings, as estimated in the
Budget Act of 2012 for the 2012-13, 2013-14, 2014-15, and
2015-16 fiscal years.

end delete

begin insert

begin insert SEC. 32. end insert   

end insert

begin insert Section 16 of Chapter 45 of the Statutes of 2012 is
repealed. end insert

begin delete

SEC. 16.  

In the event that the conditions set forth in Section
10 of Assembly Bill 1468 or Senate Bill 1008 of the 2011-12
Regular Session of the Legislature are not met as described and
the provisions of law set forth in Section 10 of those bills become
inoperative, Sections 6531.5 and Title 23 (commencing with
Section 110000) of the Government Code and Sections 12300.5,
12300.6, 12300.7, and 12302.6 of the Welfare and Institutions
Code as added by this act shall become inoperative as of March
1, 2013.

end delete

begin insert

begin insert SEC. 33. end insert   

end insert

begin insert Section 17 of Chapter 45 of the Statutes of 2012, as
amended by Section 45 of Chapter 439 of the Statutes of 2012, is
repealed. end insert

begin delete

Sec. 17.  

In the event the director decides to entirely forego the
provision of services as specified in Section 14186.4 of the Welfare
and Institutions Code, Section 6531.5 and Title 23 (commencing
with Section 110000) of the Government Code and Sections
12300.5, 12300.6, and 12300.7 of the Welfare and Institutions
Code as added by this act shall cease to be implemented except as
follows:

(a) For an agreement that has been negotiated and approved by
the Statewide Authority, the Statewide Authority shall continue
to retain its authority pursuant to Section 6531.5 and Title 23
(commencing with Section 110000) of the Government Code and
Sections 12300.5, 12300.6, 12300.7, and 12302.6 of the Welfare
and Institutions Code as added by this act, and remain the employer
of record for all individual providers covered by the agreement
until the agreement expires or is subject to renegotiation, whereby
the authority of the Statewide Authority shall terminate and the
county shall be the employer of record in accordance with Section
12302.25 of the Welfare and Institutions Code and may establish
an employer of record pursuant to Section 12301.6 of the Welfare
and Institutions Code.

(b) For an agreement that has been assumed by the Statewide
Authority that was negotiated and approved by a predecessor
agency, the Statewide Authority shall cease being the employer
of record and the county shall be reestablished as the employer of
record for purposes of bargaining and in accordance with Section
12302.25 of the Welfare and Institutions Code, and may establish
an employer of record pursuant to Section 12301.6 of the Welfare
and Institutions Code.

end delete

begin insert

begin insert SEC. 34. end insert   

end insert begin insert

(a) At least 30 days prior to enrollment of
beneficiaries into the Coordinated Care Initiative, the Director of
Finance shall estimate the amount of net General Fund savings
obtained from the implementation of the Coordinated Care
Initiative. This estimate shall take into account any net savings to
the General Fund achieved through the tax imposed pursuant to
Article 5 (commencing with Section 6174) of Chapter 2 of Part 1
of Division 2 of the Revenue and Taxation Code Article 5
(commencing with Section 6174).

end insert begin insert

(b) (1) By January 10 for each fiscal year after implementation
of the Coordinated Care Initiative, for as long as the Coordinated
Care Initiative remains operative, the Director of Finance shall
estimate the amount of net General Fund savings obtained from
the implementation of the Coordinated Care Initiative.

end insert begin insert

(2) Savings shall be determined under this subdivision by
comparing the estimated costs of the Coordinated Care Initiative,
as approved by the federal government, and the estimated costs
of the program if the Coordinated Care Initiative were not
operative. The determination shall also include any net savings to
the General Fund achieved through the tax imposed pursuant to
Article 5 (commencing with Section 6174) of Chapter 2 of Part 1
of Division 2 of the Revenue and Taxation Code.

end insert begin insert

(3) The estimates prepared by the Director of Finance, in
consultation with the Director of Health Care Services, shall be
provided to the Legislature.

end insert begin insert

(c) (1) Notwithstanding any other law, if, at least 30 days prior
to enrollment of beneficiaries into the Coordinated Care Initiative,
the Director of Finance estimates pursuant to subdivision (a) that
the Coordinated Care Initiative will not generate net General Fund
Savings, then the activities to implement the Coordinated Care
Initiative shall be suspended immediately and the Coordinated
Care Initiative shall become inoperative July 1, 2014.

end insert begin insert

(2) If the Coordinated Care Initiative becomes inoperative
pursuant to this subdivision, the Director of Health Care Services
shall provide any necessary notifications to any affected entities.

end insert begin insert

(3) For purposes of this subdivision and subdivision (d) only,
“Coordinated Care Initiative” means all of the following statutes
and any amendments to the following:

end insert begin insert

(A) Sections 14132.275, 14183.6, and 14301.1 of the Welfare
and Institutions Code, as amended by this act.

end insert begin insert

(B) Sections 14132.276, 14132.277, 14182.16, 14182.17,
14182.18, and 14301.2 of the Welfare and Institutions Code.

end insert begin insert

(C) Article 5.7 (commencing with Section 14186) of Chapter 7
of Part 3 of Division 9 of the Welfare and Institutions Code.

end insert begin insert

(D) Title 23 (commencing with Section 110000) of the
Government Code.

end insert begin insert

(E) Section 6531.5 of the Government Code.

end insert begin insert

(F) Section 6253.2 of the Government Code, as amended by
this act.

end insert begin insert

(G) Sections 12300.5, 12300.6, 12300.7, 12302.6, 12306.15,
12330, 14186.35, and 14186.36 of the Welfare and Institutions
Code.

end insert begin insert

(H) Sections 10101.1, 12306, and 12306.1 of the Welfare and
Institutions Code, as amended by this act.

end insert begin insert

(I) The amendments made to Sections 12302.21 and 12302.25
of the Welfare and Institutions Code, as made by Chapter 439 of
the Statutes of 2012.

end insert begin insert

(d) (1) Notwithstanding any other law, and beginning in 2015,
if the Director of Finance estimates pursuant to subdivision (b)
that the Coordinated Care Initiative will not generate net General
Fund savings, the Coordinated Care Initiative shall become
inoperative January 1 of the following calendar year, except as
follows:

end insert begin insert

(A) Section 12306.15 of the Welfare and Institutions Code shall
become inoperative as of July 1 of that same calendar year.

end insert begin insert

(B) For any agreement that has been negotiated and approved
by the Statewide Authority, the Statewide Authority shall continue
to retain its authority pursuant to Section 6531.5 and Title 23
(commencing with Section 110000) of the Government Code and
Sections 12300.5, 12300.6, 12300.7, and 12302.6 of the Welfare
and Institutions Code, and shall remain the employer of record
for all individual providers covered by the agreement until the
agreement expires or is subject to renegotiation, whereby the
authority of the Statewide Authority shall terminate and the county
shall be the employer of record in accordance with Section
12302.25 of the Welfare and Institutions Code and may establish
an employer of record pursuant to Section 12301.6 of the Welfare
and Institutions Code.

end insert begin insert

(C) For an agreement that has been assumed by the Statewide
Authority that was negotiated and approved by a predecessor
agency, the Statewide Authority shall cease being the employer of
record and the county shall be reestablished as the employer of
record for purposes of bargaining and in accordance with Section
12302.25 of the Welfare and Institutions Code, and may establish
an employer of record pursuant to Section 12301.6 of the Welfare
and Institutions Code.

end insert begin insert

(2) If the Coordinated Care Initiative becomes inoperative
pursuant to this subdivision, the Director of Health Care Services
shall provide any necessary notifications to any affected entities.

end insert

begin insert

begin insert SEC. 35. end insert   

end insert begin insert

For the purpose of the Coordinated Care Initiative,
the amount of five hundred thousand dollars ($500,000) is hereby
appropriated from the General Fund to the State Department of
Health Care Services for purposes of notifying dual eligible
beneficiaries and providers regarding the provisions of this Act,
and shall be available for encumbrance and expenditure until June
30, 2014.

end insert

begin insert

begin insert SEC. 36. end insert   

end insert begin insert

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.

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2013.

end delete