Amended in Assembly June 12, 2014

Senate Bill No. 857

Introduced by Committee on Budget and Fiscal Review

January 9, 2014

begin delete An act relating to the Budget Act of 2014. end delete begin insert An act to amend Section 56.36 of the Civil Code, to amend Sections 6254 and 100504 of the Government Code, to amend Sections 1280.15, 1341.45, 1399.861, 11833.02, 11833.04, 120955, 128200, 128205, 128210, 128215, 128225, 128230, 128235, 130200, and 136030 of, to amend and renumber Sections 130201, 130202, 130203, 130204, and 130205 of, to add Sections 1347.5, 1368.05, 1374.76, 120962, 121451, 121452, and 131058 to, and to repeal and add Section 136000 of, the Health and Safety Code, to amend Sections 10965.15, 12693.70, 12739.61, and 12739.78 of, to add Sections 10112.35, 12699.15, 12699.64, 12701, 12710.2, and 12739.79 to, and to repeal Part 6.3 (commencing with Section 12695), Part 6.4 (commencing with Section 12699.50), and Part 6.5 (commencing with Section 12700) of Division 2 of, the Insurance Code, to add Section 19548.2 to the Revenue and Taxation Code, and to amend Sections 4061, 5897, 14043.38, 14132.275, 14132.277, 14154, 14165.50, 15800, 15801, 15803, 15804, and 15805 of, to amend the heading of Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of, to amend, repeal, and add Sections 15810, 15811, 15826, 15832, and 15840 of, to add Sections 14005.22, 14005.225, 14104.35, 14131.11, 14132.915, 14148.65, 14148.67, 15802.5, 15806, 15814, 15818, 15827, 15833, 15835, 15839, 15841, 15847, 15847.3, 15847.5, 15847.7, 15848, and 15848.5 to, and to add Chapter 3 (commencing with Section 15850) and Chapter 4 (commencing with Section 15870) to Part 3.3 of Division 9 of, the Welfare and Institutions Code, relating to health, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 857, as amended, Committee on Budget and Fiscal Review. begin delete Budget Act of 2014. end delete begin insert Health. end insert

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(1) Existing law establishes the Office of Health Information Integrity within the California Health and Human Services Agency to ensure the enforcement of state law mandating the confidentiality of medical information, as defined, and to impose administrative fines on providers of health care for the unauthorized use of medical information.

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This bill would transfer the duty to impose administrative fines on providers of health care for the unauthorized use of medical information to the State Department of Public Health, and would make other conforming changes.

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(2) Existing law establishes the California Health Benefit Exchange for the purpose of facilitating the enrollment of qualified individuals and small employers in qualified health plans. Existing law authorizes the board of the California Health Benefit Exchange to adopt emergency regulations until January 1, 2016. Under existing law, emergency regulations remain in effect for no more than 180 days, except as specified, and may be readopted for 2 additional 90-day periods.

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This bill would allow more than 2 readoptions of those emergency regulations until January 1, 2017, and would allow the emergency regulations adopted by the board to remain in effect for 2 years, as specified.

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(3) Existing law, as of July 1, 2012, transferred the Office of Patient Advocate from the Department of Managed Health Care to the California Health and Human Services Agency, to provide assistance to, and advocate on behalf of, individuals served by health care service plans regulated by the Department of Managed Health Care, insureds covered by health insurers regulated by the Department of Insurance, and individuals who receive or are eligible for other health care coverage in California, including coverage available through the Medi-Cal program, the California Health Benefit Exchange, the Healthy Families Program, or any other county or state health care program. The duties of the office, include, but are not limited to, compiling an annual publication, to be made available on the office’s Internet Web site, of a quality of care report card, rendering assistance to consumers regarding procedures, rights, and responsibilities related to the filing of complaints, grievances, and appeals, and coordinating and working with other government and nongovernment patient assistance programs and health care ombudsperson programs.

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This bill would revise and recast those provisions by transferring the direct consumer assistance activities that had previously been conferred on the office to the Department of Managed Health Care to be carried out in partnership with community-based consumer assistance organizations for the purposes of serving health care consumers, as provided. The bill would instead require the office, among other things, to provide assistance to, and advocate on behalf of, health care consumers, and would instead make the goal of the office to coordinate amongst, provide assistance to, and collect data from, all of the state agency consumer assistance or patient assistance programs and call centers, to better enable health care consumers to access the health care services to which they are eligible under the law. The duties of the office would include, but not be limited to, producing a baseline review and annual report to be made publically available on the office’s Internet Web site by July 1, 2015, and annually thereafter, of health care consumer or patient assistance help centers, call centers, ombudsperson, or other assistance centers operated by the Department of Managed Health Care, the State Department of Health Care Services (DHCS), the Department of Insurance, and the Exchange, and including certain minimum information, and collecting, tracking, and analyzing data on problems and complaints by, and questions from, consumers about health care coverage for the purpose of providing public information about problems faced and information needed by consumers in obtaining coverage and care. This bill would also make conforming changes.

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(4) Existing federal law requires a health insurance issuer that offers group or individual health insurance coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits to establish parity in the terms and conditions applicable to medical and mental health benefits, as specified.

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Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law requires a health care service plan contract that provides hospital, medical, or surgical coverage to provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses under the same terms and conditions applied to other medical conditions, as specified.

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This bill would require large group, small group, and individual health care service plan contracts to provide covered mental health and substance use disorder benefits in compliance with the provisions of federal law governing mental health parity no later than January 1, 2015. Because a willful violation of that requirement would be a crime, the bill would impose a state-mandated local program.

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(5) Under existing law, DHCS is responsible for licensing and certifying alcoholism and drug abuse recovery and treatment programs and facilities, including both residential and nonresidential programs. Existing law requires the department to charge a fee for the licensure or certification of these facilities and to establish fee scales using different capacity levels, categories based on measures other than program capacity, or any other category or classification that the department deems necessary or convenient to maintain an effective and equitable fee structure. Existing law requires the department to submit proposed new fees or fee changes to the Legislature for approval, as specified, and prohibits new fees or fee changes without legislative approval.

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This bill would require the department to issue a provider bulletin setting forth the approved fee structure and, on an annual basis, to publish the fee structure on the department’s Internet Web site.

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Existing law authorizes the department to implement the licensing and certification provisions for alcoholism and drug abuse recovery and treatment programs and facilities through emergency regulations.

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This bill would remove the authorization for emergency regulations and would require the department to adopt regulations through the Administrative Procedures Act. The bill would authorize the department to implement new fees or fee changes by means of provider bulletins or similar action and to supersede the existing licensing and certification fees until the department amends the regulations. The bill would also require the department to notify and consult with interested parties and appropriate stakeholders regarding new fees or fee changes.

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(6) Existing law requires the State Public Health Officer to establish, and authorizes him or her to administer, a program to provide drug treatments to persons infected with HIV, to the extent that state and federal funds are appropriated. Existing law requires the State Department of Public Health to determine a person whose adjusted gross income does not exceed $50,000 per year to be financially eligible to receive services under this program, as specified. Existing law authorizes the State Department of Public Health to subsidize certain cost-sharing requirements for persons otherwise eligible for the AIDS Drug Assistance Program (ADAP) with non-ADAP drug coverage by paying for prescription drugs included on the ADAP formulary, as specified.

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This bill would additionally authorize the department, if the director determines that it would result in a cost savings to the state, to subsidize costs associated with a health care service plan or health insurance policy, including medical copayments and deductibles for outpatient care, and premiums to purchase or maintain health insurance coverage. The bill would authorize federal funds and moneys in the AIDS Drug Assistance Program Rebate Fund to be used for these purposes. By expanding the purposes for which moneys from the continuously appropriated AIDS Drug Assistance Program Rebate Fund may be expended, the bill would make an appropriation.

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The bill would also, for purposes of determining financial eligibility for the ADAP program, require information sharing between the Franchise Tax Board and the State Department of Public Health to verify the amount of a person’s adjusted gross income.

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(7) Existing law establishes a program for the control of tuberculosis and requires the State Department of Public Health to maintain the program and administer funds made available by the state for the care of tuberculosis patients. Existing law authorizes the department to establish standards and procedures for the operation of local tuberculosis control programs and to distribute for the purpose of tuberculosis control an annual subvention to any local health department that maintains a tuberculosis control program consistent with the standards and procedures established by the department.

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This bill would require a local entity that receives funding from the state for the purposes of tuberculosis control to first allocate the moneys received for specified purposes and activities, including submitting the written treatment plan to the local health officer and for cities, counties, and cities and counties to provide counsel to nonindigent tuberculosis patients who are subject to a civil order of detention issued by a local health officer, as specified.

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(8) Existing law, the Song-Brown Health Care Workforce Training Act, establishes a state medical contract program with accredited medical schools, programs that train primary care physician’s assistants, programs that train primary care nurse practitioners and registered nurses, hospitals, and other health care delivery systems.

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Existing law establishes the California Healthcare Workforce Policy Commission, consisting of 15 members, to administer the state medical contract program, except as specified. Existing law requires the commission to identify specific areas of the state where unmet priority needs for primary care family physicians and registered nurses exist, establish standards for, among other things, family practice training programs, family practice residency programs, primary care physician’s assistants programs, and programs that train primary care nurse practitioners, and to make recommendations to the Director of the Office of Statewide Health Planning and Development with regard to the funding of specific programs. Existing law requires the director to select and contract on behalf of the state with the above-described entities for the purpose of, among other things, training medical students and residents in the specialty of family practice, subject to criteria established by the commission.

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This bill would authorize the state medical contract program to include contracts with teaching health centers, as defined. The bill would require a teaching health center that receives funds pursuant to the state medical contract program to include within its curriculum, programs or departments that recognize family medicine as a major independent specialty.

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For purposes of the provisions that implement the state medical contract program, the bill would delete references to the specialty of family practice and would refer instead to the specialties of primary care or family medicine, thereby expanding the scope of the state medical contract program to include those specialties. The bill would also require the director to select and contract on behalf of the state for the purpose of, among other things, training medical students and residents in the specialties of internal medicine, obstetrics and gynecology, pediatrics, and family medicine, subject to criteria established by the commission.

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Existing law requires the commission to review and make recommendations to the Director of the Office of Statewide Health Planning and Development concerning the funding of those programs that are submitted to the Health Professions Development Program for participation in the state medical contract program established under these provisions. Existing law requires the Chief of the Health Professions Development Program, or his or her designee, to serve as executive secretary for the commission.

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This bill would delete references to the Health Professions Development Program and would refer instead to the Healthcare Workforce Development Division. The bill would instead specify that the Deputy Director of the Healthcare Workforce Development Division, or his or her designee, serve as executive secretary for the commission.

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(9) Existing law authorizes the State Department of Public Health to perform various activities relating to the protection, preservation, and advancement of public health, including studies and demonstrations of innovative methods, and authorizes the department to, among other things, apply for and receive grants for the performance of the activity.

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This bill would authorize the State Department of Public Health to investigate, apply for, and enter into agreements to secure federal or nongovernmental funding opportunities for the purposes of advancing public health, as specified.

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(10) Existing law creates the Managed Risk Medical Insurance Board (MRMIB) and requires MRMIB to administer various programs that provide health care coverage to certain populations, including the California Major Risk Medical Insurance Program, the Access for Infants and Mothers Program, the County Health Initiative Matching Fund, and the Federal Temporary High Risk Pool.

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This bill would eliminate MRMIB as of July 1, 2014, and transfer the powers, purposes, responsibilities, and jurisdiction of MRMIB to DHCS. The bill would authorize DHCS to conduct transition activities prior to July 1, 2014, to ensure the transfer of the programs administered by MRMIB to DHCS.

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Existing law establishes the California Major Risk Medical Insurance Program (MRMIP), which is administered by MRMIB, to provide major risk medical coverage to persons who, among other things, have been rejected for coverage by at least one private health plan. Existing law authorizes MRMIB to take various actions with respect to MRMIP, including determining the eligibility of applicants. Existing law affords dissatisfied subscribers a right to appeal and requires hearings to be conducted pursuant to specified procedures. Existing law creates the Major Risk Medical Insurance Fund as a continuously appropriated fund for purposes of MRMIP and requires that specified amounts from the Cigarette and Tobacco Products Surtax Fund (Surtax Fund) be deposited in the fund.

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This bill would authorize DHCS to establish eligibility criteria for MRMIP and would authorize DHCS to implement that authority by means of plan letters, plan or provider bulletins, or similar instructions. The bill would authorize hearings regarding subscriber grievances to be conducted pursuant to specified procedures. The bill would continue the Major Risk Medical Insurance Fund in existence to be administered by DHCS for purposes of MRMIP, would eliminate the required deposits from the Surtax Fund, and instead authorize funds to be deposited in the fund from the Surtax Fund. The bill would require DHCS to, by August 1, 2014, establish a work group to develop a plan to utilize available Major Risk Medical Insurance Program Fund moneys, in order to provide subsidized health care coverage for individuals not eligible for or receiving comprehensive health care.

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Existing law establishes the Access for Infants and Mothers (AIM) Program, administered by MRMIB. Existing law transferred the infant element of AIM to the DHCS on October 1, 2013, and entitled this program the AIM-Linked Infants Program. Existing law requires that an infant be disenrolled from the program if his or her household income exceeds 300% of the federal poverty level. In order to participate in the mother element of AIM, existing law requires that the person have a household income between 200% and 250% of the federal poverty level, unless MRMIB determines that funds are adequate to serve households above 250% of the federal poverty level. Existing law authorizes MRMIB to determine subscriber contribution amount schedules and requires that the contribution not exceed 2% of the subscriber’s annual gross family income.

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This bill would transfer the mother element of AIM to DHCS and would rename the program, including the AIM-Linked Infants Program, the Medi-Cal Access Program. The bill would require a household income between 208% and 317% of the federal poverty level in order to be eligible for the mother element of the program and would require that an infant be disenrolled from the program if his or her household income exceeds 317% of the federal poverty level. The bill would also require that the subscriber contribution for mothers conform with the maintenance of effort requirements under the federal Patient Protection and Affordable Care Act.

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Existing law creates the County Health Initiative Matching Fund in the State Treasury, administered by MRMIB in collaboration with DHCS, for the purpose of providing matching state funds and local funds received by the fund through intergovernmental transfers to a county agency, a local initiative, or a county organized health system in order to provide health insurance coverage to certain children and adults in low-income households who do not qualify for health care benefits through the Healthy Families Program or Medi-Cal. Under existing law, a county, county agency, local initiative, or county organized health system that will provide an intergovernmental transfer may apply to MRMIB for funding to provide health care coverage to eligible children whose family income is at or below 300% or 400% of the federal poverty level, at the option of the applicant, or to eligible adults whose family income does not exceed 200% of the federal poverty level, provided that the children or adults do not qualify for the Heathy Families Program or the Medi-Cal program.

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This bill would transfer the powers, purposes, responsibilities, and jurisdiction of MRMIB with respect to this fund to DHCS and would prohibit DHCS from approving any additional local entities for participation in the fund. The bill would require a local entity that was participating in the fund on March 23, 2010, to continue to participate in the fund, maintaining eligibility standards, methodologies, and procedures at least as favorable as those in effect on March 23, 2010. If a county participating in the fund on March 23, 2010, elects to cease funding the nonfederal share of program expenditures, the bill would require DHCS to administer the program within that county and would require the General Fund to provide funding amounts equal to the total nonfederal share of all expenditures incurred by DHCS in that regard. The bill would continuously appropriate money in the fund, thereby making an appropriation. The bill would eliminate the provisions authorizing funding for coverage for certain low-income adults and would authorize a county, county agency, local initiative, or county organized health system that will provide an intergovernmental transfer to apply to DHCS for funding to provide health care coverage to eligible children who are not eligible for the Medi-Cal program, the Medi-Cal Access Program, or a specified targeted low-income program and whose family income is at or below 317% or 411% of the federal poverty level, at the option of the applicant. The bill would also limit the intergovernmental transfer amount to the expenditures that would be eligible for federal financial participation. The bill would require that the state be held harmless from any federal audit disallowance and interest resulting from payments made to a participating application for a disallowed claim.

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The bill would authorize DHCS to implement these MRMIB transfer provisions by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions.

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(11) Existing law requires DHCS to implement mental health services relating to the care and treatment of persons with mental disorders. Existing law requires DHCS to utilize a joint state-county decisionmaking process to determine the appropriate use of state and local resources to meet the mission and goals of the state’s mental health system. Existing law requires the department to use that process in, among other things, providing assistance to local mental health departments.

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This bill would require DHCS to also utilize this decisionmaking process to determine the appropriate use of state and local resources to meet the mission and goals with respect to substance use disorders and to provide technical assistance to local behavioral health and substance use disorder services departments.

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(12) Existing law provides that contracts awarded by various state entities, including the DHCS, for purposes of providing these services may be awarded in accordance with, or are exempt from, specified procedures governing the awarding of state contracts.

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Existing law, the Mental Health Services Act, an initiative measure enacted by the voters as Proposition 63 at the November 2, 2004, statewide general election, establishes the continuously appropriated Mental Health Services Fund to fund various county mental health programs. Existing law requires that funds be reserved, prior to making allocations from the fund, for the costs incurred by state entities, including the State Department of Public Health, in implementing the programs funded by the act, as specified. The act provides that it may be amended by the Legislature by a 2⁄3 vote of each house as long as the amendment is consistent with and furthers the intent of the act, and that the Legislature may also clarify procedures and terms of the act by majority vote.

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This bill would authorize contracts awarded by the State Department of Public Health for purposes of providing mental health services, as specified, to be awarded in accordance with, and exempt those contracts from, specified procedures governing the awarding of state contracts. The bill would also make technical changes. The bill would state the findings and declarations of the Legislature that these changes clarify procedures and terms of the act.

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(13) Existing law provides for the Medi-Cal program, which is administered by the DHCS, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law provides for the federal Medicare Program, which is a public health insurance program for persons 65 years of age and older and specified persons with disabilities who are under 65 years of age.

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This bill would exclude from reimbursement under Medi-Cal any increase in the amount charged to the Medi-Cal program for patient care or treatment that is directly related to an identifiable provider-preventable condition, as prescribed.

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(14) Under existing law, commencing January 1, 2014, an individual who is 21 years of age and older, does not have minor children eligible for Medi-Cal benefits, would be eligible for Medi-Cal benefits but for a specified 5-year bar, and who is enrolled in coverage through the Exchange with an advanced premium tax credit is eligible for Medi-Cal benefits, as prescribed. Commencing January 1, 2014, the department is also required to pay the beneficiary’s insurance premium costs and cost-sharing charges under these provisions.

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This bill would limit the premium and cost-sharing payments the department would make under those provisions to the amount necessary to pay for the 2nd lowest cost silver plan in the Exchange and would require the department to consult with various entities in the development and implementation of specified processes, procedures, and notices for purposes of those provisions. The bill would require the health care service plans and health insurers providing coverage in the Exchange to cooperate with requests from the Exchange to collaborate in the development of, and participate in the implementation of, these premium and cost-sharing payments, and would also prohibit those plans and insurers from charging or requiring an enrollee or insured to make any payments for any services subject to these payments. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.

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The bill would also, under specified federal provisions applicable to qualified pregnant woman and children, provide that a woman shall be eligible for Medi-Cal benefits if her income is less than or equal to 109% of the federal poverty level as determined, counted, and valued in accordance with federal law. The bill would also require the department to seek any state plan amendments or federal waivers necessary to provide full scope Medi-Cal benefits to pregnant women during their pregnancy and for 60 days thereafter for women whose income is over 109% of, and is up to and including 138% of, the federal poverty level. The bill would require these women to enroll in a Medi-Cal managed care plan in the counties in which one is available, to the extent permitted by state and federal law.

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The bill would, after the department determines that the California Healthcare Eligibility, Enrollment, and Retention System (CalHEERS) has been programmed for implementation of these provisions, but no sooner than January 1, 2015, require the department to implement a specified option for women eligible for Medi-Cal pregnancy-related and postpartum services who are enrolled or will be enrolled in individual health care coverage through the Exchange and also opt to enroll in Medi-Cal. The bill would, except as provided, require the department to provide specified benefits and pay the beneficiary’s insurance premium costs and the beneficiary’s cost sharing for benefits and services during the beneficiary’s period of eligibility for pregnancy-related and postpartum services under the Medi-Cal program. The bill would require the department to make these premium or cost-sharing payments to the beneficiary’s qualified health plan, as specified. The bill would require the department to consult with various entities in developing specified processes, procedures, and notices for purposes of these provisions. The would authorize the department to contract with public and private entities to implement these provisions for purposes of these provisions and would make those contract exempt from specified public contracting requirements. The bill would require health care service plans and insurers providing individual coverage in the Exchange to cooperate with requests from the Exchange to collaborate in the development of, and participate in the implementation of, these premium and cost-sharing payments for eligible Exchange enrollees and would also prohibit those plans and insurers from charging or requiring an enrollee or insured to make any payments for any services subject to these payments. Because a willful violation of that provision by a health care service plan would be a crime, this bill would impose a state-mandated local program.

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(15) Existing law authorizes the DHCS to enter into nonexclusive contracts to arrange for the administration and disbursement of funds to Medi-Cal providers or to their designated agents in consideration for services rendered and supplies furnished, as prescribed.

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This bill would, except as specified, exempt any contract amendments, modifications, or change orders to a fiscal intermediary contract entered into by the department pursuant to this authorization from certain provisions of the Public Contract Code.

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(16) Existing law requires the DHCS to screen Medi-Cal providers and designate each provider as “limited,” “moderate,” or “high” categorical risk. Existing law requires the State Department of Health Care Services to conduct a criminal background check of all providers designated as a “high” categorical risk.

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This bill would require a provider or applicant designated as a “high” categorical risk to submit to the Department of Justice fingerprint images and related information for the purpose of obtaining information as to the existence of past criminal conduct, as specified. The bill would require the Department of Justice to request specified information from the Federal Bureau of Investigation with respect to a provider’s past criminal conduct, and to review and provide this information to DHCS. The bill would require the Department of Justice to charge a fee, to be paid by the applicant or provider, sufficient to cover the cost of processing the criminal background check request.

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(17) Existing law requires DHCS to seek federal approval pursuant to a Medicare or a Medicaid demonstration project or waiver, or a combination thereof, to establish a demonstration project that enables beneficiaries dually eligible for the Medi-Cal program and the Medicare Program to receive a continuum of services that maximizes access to, and coordination of, benefits between the programs. Existing law requires, with some exceptions, DHCS to enroll dual eligible beneficiaries into a managed care plan that is selected to participate in the demonstration project unless the beneficiary makes an affirmative choice to opt out of enrollment or is already enrolled in a specified managed care organization on or before June 1, 2013. Existing law requires DHCS, for the 2013 and 2014 calendar years, to comply with certain requirements with respect to offering contracts to Medicare Advantage Dual Special Needs Plans (D-SNP plans) and the application of the above-mentioned enrollment provisions to beneficiaries in Medicare Advantage and D-SNP plans.

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This bill would, for the 2015 calendar year and the remainder of the demonstration project, authorize DHCS to offer D-SNP contracts, as defined, in non-Coordinated Care Initiative Counties to D-SNP plans. The bill would, in Coordinated Care Initiative counties, authorize DHCS to offer the contracts to D-SNP plans approved for the plans’ service areas on January 1, 2013, and only for specified beneficiaries. The bill would also make related changes to the application of the above-mentioned enrollment provisions for the 2015 calendar year and the remainder of the demonstration project.

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(18) Existing law requires DHCS to establish a list of performance measures to ensure dental health plans meet quality criteria required by DHCS. Existing law requires DHCS to post, on a quarterly basis, the list of performance measures and each plan’s performance on the DHCS Internet Web site.

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This bill would require DHCS, in consultation with stakeholders, to establish a list of performance measures to ensure the dental fee-for-service program meets quality and access criteria required by DHCS. The bill would require DHCS, commencing October 1, 2014, for the 2013 calendar year, and annually on or before October 1 for each preceding calendar year thereafter, to post the list of performance measures along with the data of the dental fee-for-service program performance on the DHCS Internet Web site. The bill would also require DHCS to annually prepare and post on its Internet Web site, as specified, a summary report of the nature and types of complaints and grievances regarding access to, and quality of, dental services, including the outcome.

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(19) Existing law requires DHCS to establish and maintain a plan, known as the County Administrative Cost Control Plan, for the purpose of effectively controlling costs related to the county administration of the determination of eligibility for benefits under the Medi-Cal program within the amounts annually appropriated for that administration.

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Under existing law, the Legislature finds and declares that linking appropriate funding for county Medi-Cal administrative operations, including annual cost-of-doing-business adjustments, with performance standards will give counties the incentive to meet the performance standards and enable them to continue to do the work they do on behalf of the state. Existing law further provides that it is the intent of the Legislature to provide appropriate funding to the counties for the effectual administration of the Medi-Cal program, except that it is the intent of the Legislature to not appropriate money for a cost-of-doing-business adjustment for specified fiscal years.

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This bill would additionally provide that it is the intent of the Legislature to not appropriate funds for the cost-of-doing-business adjustment for the 2014-15 fiscal year.

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(20) Existing law requires Medi-Cal funding to be made available for a new hospital, as defined, that is a nonprofit entity that serves the population of South Los Angeles formerly served by the Los Angeles County Martin Luther King Jr.-Harbor Hospital, as prescribed.

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This bill would modify those funding provisions for the new hospital as they relate to Medi-Cal payments for hospital services and certain supplemental payments.

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(21) Existing federal law provides for the federal Supplemental Nutrition Assistance Program, formerly the Food Stamp Program, under which nutrition assistance benefits are allocated to each state by the federal government. Existing federal law also provides for the Supplemental Nutrition Assistance Program Education (SNAP-Ed) program for purposes of nutrition education and obesity prevention grant programs.

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Existing law requires the State Department of Public Health to investigate and apply for federal funding opportunities regarding promoting healthy eating and preventing obesity, including those available under federal law, as specified. Existing law requires the department to, upon receipt of federal funding regarding healthy eating and preventing obesity, provide in-kind support and award grants to support local assistance to local governments, nonprofit organizations, and local education agencies.

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Between July 1, 2014, and October 31, 2015, inclusive, this bill would require the State Department of Public Health to convene a quarterly meeting of stakeholders to solicit input and receive feedback on nutrition education and obesity prevention, and to help minimize disruption to services in the SNAP-Ed program during a specified transition period.

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(22) This bill would require DHCS to, by August 1, 2014, work with stakeholders to develop a notice to be sent or made available to individuals enrolled in a state health care program administered by DHCS that does not provide minimum essential coverage who, as determined by DHCS, may be eligible for Medi-Cal or coverage through the California Health Benefit Exchange.

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(23) This bill would require the State Department of Public Health to report to the fiscal and appropriate policy committees of the Legislature and post on its Internet Web site various reports, including, among others, specified workload and performance metrics and updates that relate to the State Department of Public Health’s Licensing and Certification Program. The bill would require the State Department of Public Health to hold seminannual stakeholder meetings for all interested stakeholders to provide feedback on improving the program.

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(24) This bill would also reappropriate the balance of a specified appropriation made in the Budget Act of 2011 to the Mental Health Services Oversight and Accountability Commission and would make those funds available for encumbrance until June 30, 2015.

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(25) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

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This bill would make legislative findings to that effect.

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(26) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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

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This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2014.

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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:  begin delete no end delete begin insert yes end insert .

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

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begin insert SECTION 1. end insert   

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begin insert Section 56.36 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

56.36.  

(a) Any violation of the provisions of this part that
results in economic loss or personal injury to a patient is punishable
as a misdemeanor.

(b) In addition to any other remedies available at law, any
individual may bring an action against any person or entity who
has negligently released confidential information or records
concerning him or her in violation of this part, for either or both
of the following:

(1) Except as provided in subdivision (e), nominal damages of
one thousand dollars ($1,000). In order to recover under this
paragraph, it shall not be necessary that the plaintiff suffered or
was threatened with actual damages.

(2) The amount of actual damages, if any, sustained by the
patient.

(c) (1) In addition, any person or entity that negligently
discloses medical information in violation of the provisions of this
part shall also be liable, irrespective of the amount of damages
suffered by the patient as a result of that violation, for an
administrative fine or civil penalty not to exceed two thousand
five hundred dollars ($2,500) per violation.

(2) (A) Any person or entity, other than a licensed health care
professional, who knowingly and willfully obtains, discloses, or
uses medical information in violation of this part shall be liable
for an administrative fine or civil penalty not to exceed twenty-five
thousand dollars ($25,000) per violation.

(B) Any licensed health care professional, who knowingly and
willfully obtains, discloses, or uses medical information in violation
of this part shall be liable on a first violation, for an administrative
fine or civil penalty not to exceed two thousand five hundred
dollars ($2,500) per violation, or on a second violation for an
administrative fine or civil penalty not to exceed ten thousand
dollars ($10,000) per violation, or on a third and subsequent
violation for an administrative fine or civil penalty not to exceed
twenty-five thousand dollars ($25,000) per violation. Nothing in
this subdivision shall be construed to limit the liability of a health
care service plan, a contractor, or a provider of health care that is
not a licensed health care professional for any violation of this
part.

(3) (A) Any person or entity, other than a licensed health care
professional, who knowingly or willfully obtains or uses medical
information in violation of this part for the purpose of financial
gain shall be liable for an administrative fine or civil penalty not
to exceed two hundred fifty thousand dollars ($250,000) per
violation and shall also be subject to disgorgement of any proceeds
or other consideration obtained as a result of the violation.

(B) Any licensed health care professional, who knowingly and
willfully obtains, discloses, or uses medical information in violation
of this part for financial gain shall be liable on a first violation, for
an administrative fine or civil penalty not to exceed five thousand
dollars ($5,000) per violation, or on a second violation for an
administrative fine or civil penalty not to exceed twenty-five
thousand dollars ($25,000) per violation, or on a third and
subsequent violation for an administrative fine or civil penalty not
to exceed two hundred fifty thousand dollars ($250,000) per
violation and shall also be subject to disgorgement of any proceeds
or other consideration obtained as a result of the violation. Nothing
in this subdivision shall be construed to limit the liability of a
health care service plan, a contractor, or a provider of health care
that is not a licensed health care professional for any violation of
this part.

(4) Nothing in this subdivision shall be construed as authorizing
an administrative fine or civil penalty under both paragraphs (2)
and (3) for the same violation.

(5) Any person or entity who is not permitted to receive medical
information pursuant to this part and who knowingly and willfully
obtains, discloses, or uses medical information without written
authorization from the patient shall be liable for a civil penalty not
to exceed two hundred fifty thousand dollars ($250,000) per
violation.

(d) In assessing the amount of an administrative fine or civil
penalty pursuant to subdivision (c), the begin delete Office end delete begin insert State Department end insert
of begin delete Health Information Integrity, end delete begin insert Public Health, end insert licensing agency,
or certifying board or court shall consider any one or more of the
relevant circumstances presented by any of the parties to the case
including, but not limited to, the following:

(1) Whether the defendant has made a reasonable, good faith
attempt to comply with this part.

(2) The nature and seriousness of the misconduct.

(3) The harm to the patient, enrollee, or subscriber.

(4) The number of violations.

(5) The persistence of the misconduct.

(6) The length of time over which the misconduct occurred.

(7) The willfulness of the defendant’s misconduct.

(8) The defendant’s assets, liabilities, and net worth.

(e) (1) In an action brought by an individual pursuant to
subdivision (b) on or after January 1, 2013, in which the defendant
establishes the affirmative defense in paragraph (2), the court shall
award any actual damages and reasonable attorney’s fees and costs,
but may not award nominal damages for a violation of this part.

(2) The defendant is entitled to an affirmative defense if all of
the following are established, subject to the equitable
considerations in paragraph (3):

(A) The defendant is a covered entity or business associate, as
defined in Section 160.103 of Title 45 of the Code of Federal
Regulations, in effect as of January 1, 2012.

(B) The defendant has complied with any obligations to notify
all persons entitled to receive notice regarding the release of the
information or records.

(C) The release of confidential information or records was solely
to another covered entity or business associate.

(D) The release of confidential information or records was not
an incident of medical identity theft. For purposes of this
subparagraph, “medical identity theft” means the use of an
individual’s personal information, as defined in Section 1798.80,
without the individual’s knowledge or consent, to obtain medical
goods or services, or to submit false claims for medical services.

(E) The defendant took appropriate preventive actions to protect
the confidential information or records against release consistent
with the defendant’s obligations under this part or other applicable
state law and the Health Insurance Portability and Accountability
Act of 1996 (Public Law 104-191) (HIPAA) and all HIPAA
Administrative Simplification Regulations in effect on January 1,
2012, contained in Parts 160, 162, and 164 of Title 45 of the Code
of Federal Regulations and Part 2 of Title 42 of the Code of Federal
Regulations, including, but not limited to:

(i) Developing and implementing security policies and
procedures.

(ii) Designating a security official who is responsible for
developing and implementing its security policies and procedures,
including educating and training the workforce.

(iii) Encrypting the information or records, and protecting
against the release or use of the encryption key and passwords, or
transmitting the information or records in a manner designed to
provide equal or greater protections against improper disclosures.

(F) The defendant took reasonable and appropriate corrective
action after the release of the confidential information or records,
and the covered entity or business associate that received the
confidential information or records destroyed or returned the
confidential information or records in the most expedient time
possible and without unreasonable delay, consistent with any
measures necessary to determine the scope of the breach and restore
the reasonable integrity of the data system. A court may consider
this subparagraph to be established if the defendant shows in detail
that the covered entity or business associate could not destroy or
return the confidential information or records because of the
technology utilized.

(G) The covered entity or business associate that received the
confidential information or records, or any of its agents,
independent contractors, or employees, regardless of the scope of
the employee’s employment, did not retain, use, or release the
information or records.

(H) After the release of the confidential information or records,
the defendant took reasonable and appropriate action to prevent a
future similar release of confidential information or records.

(I) The defendant has not previously established an affirmative
defense pursuant to this subdivision, or the court determines, in
its discretion, that application of the affirmative defense is
compelling and consistent with the purposes of this section to
promote reasonable conduct in light of all the facts.

(3) (A) In determining whether the affirmative defense may be
established pursuant to paragraph (2), the court shall consider the
equity of the situation, including, but not limited to, (i) whether
the defendant has previously violated this part, regardless of
whether an action has previously been brought, and (ii) the nature
of the prior violation.

(B) To the extent the court allows discovery to determine
whether there has been any other violation of this part that the
court will consider in balancing the equities, the defendant shall
not provide any medical information, as defined in Section 56.05.
The court, in its discretion, may enter a protective order prohibiting
the further use of any personal information, as defined in Section
1798.80, about the individual whose medical information may
have been disclosed in a prior violation.

(4) In an action under this subdivision in which the defendant
establishes the affirmative defense pursuant to paragraph (2), a
plaintiff shall be entitled to recover reasonable attorney’s fees and
costs without regard to an award of actual or nominal damages or
the imposition of administrative fines or civil penalties.

(5) In an action brought by an individual pursuant to subdivision
(b) on or after January 1, 2013, in which the defendant establishes
the affirmative defense pursuant to paragraph (2), a defendant shall
not be liable for more than one judgment on the merits under this
subdivision for releases of confidential information or records
arising out of the same event, transaction, or occurrence.

(f) (1) The civil penalty pursuant to subdivision (c) shall be
assessed and recovered in a civil action brought in the name of the
people of the State of California in any court of competent
jurisdiction by any of the following:

(A) The Attorney General.

(B) Any district attorney.

(C) Any county counsel authorized by agreement with the
district attorney in actions involving violation of a county
ordinance.

(D) Any city attorney of a city.

(E) Any city attorney of a city and county having a population
in excess of 750,000, with the consent of the district attorney.

(F) A city prosecutor in any city having a full-time city
prosecutor or, with the consent of the district attorney, by a city
attorney in any city and county.

(G) The begin delete Director of the Office of end delete begin insert State Public end insert Health
begin delete Information Integrity end delete begin insert Officer, or his or her designee, end insert may
recommend that any person described in subparagraphs (A) to (F),
inclusive, bring a civil action under this section.

(2) If the action is brought by the Attorney General, one-half
of the penalty collected shall be paid to the treasurer of the county
in which the judgment was entered, and one-half to the General
Fund. If the action is brought by a district attorney or county
counsel, the penalty collected shall be paid to the treasurer of the
county in which the judgment was entered. Except as provided in
paragraph (3), if the action is brought by a city attorney or city
prosecutor, one-half of the penalty collected shall be paid to the
treasurer of the city in which the judgment was entered and one-half
to the treasurer of the county in which the judgment was entered.

(3) If the action is brought by a city attorney of a city and
county, the entire amount of the penalty collected shall be paid to
the treasurer of the city and county in which the judgment was
entered.

(4) Nothing in this section shall be construed as authorizing
both an administrative fine and civil penalty for the same violation.

(5) Imposition of a fine or penalty provided for in this section
shall not preclude imposition of any other sanctions or remedies
authorized by law.

(6) Administrative fines or penalties issued pursuant to Section
1280.15 of the Health and Safety Code shall offset any other
administrative fine or civil penalty imposed under this section for
the same violation.

(g) For purposes of this section, “knowing” and “willful” shall
have the same meanings as in Section 7 of the Penal Code.

(h) No person who discloses protected medical information in
accordance with the provisions of this part shall be subject to the
penalty provisions of this part.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 6254 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

6254.  

Except as provided in Sections 6254.7 and 6254.13,
begin delete nothing in end delete this chapter begin delete shall be construed to end delete begin insert does not end insert require begin insert the end insert
disclosure of begin delete records that are end delete any of the begin delete following: end delete begin insert following
records: end insert

(a) Preliminary drafts, notes, or interagency or intra-agency
memoranda that are not retained by the public agency in the
ordinary course of business, if the public interest in withholding
those records clearly outweighs the public interest in disclosure.

(b) Records pertaining to pending litigation to which the public
agency is a party, or to claims made pursuant to Division 3.6
(commencing with Section 810), until the pending litigation or
claim has been finally adjudicated or otherwise settled.

(c) Personnel, medical, or similar files, the disclosure of which
would constitute an unwarranted invasion of personal privacy.

(d) Contained in or related to any of the following:

(1) Applications filed with any state agency responsible for the
regulation or supervision of the issuance of securities or of financial
institutions, including, but not limited to, banks, savings and loan
associations, industrial loan companies, credit unions, and
insurance companies.

(2) Examination, operating, or condition reports prepared by,
on behalf of, or for the use of, any state agency referred to in
paragraph (1).

(3) Preliminary drafts, notes, or interagency or intra-agency
communications prepared by, on behalf of, or for the use of, any
state agency referred to in paragraph (1).

(4) Information received in confidence by any state agency
referred to in paragraph (1).

(e) Geological and geophysical data, plant production data, and
similar information relating to utility systems development, or
market or crop reports, that are obtained in confidence from any
person.

(f) Records of complaints to, or investigations conducted by,
or records of intelligence information or security procedures of,
the office of the Attorney General and the Department of Justice,
the Office of Emergency Services and any state or local police
agency, or any investigatory or security files compiled by any other
state or local police agency, or any investigatory or security files
compiled by any other state or local agency for correctional, law
enforcement, or licensing purposes. However, state and local law
enforcement agencies shall disclose the names and addresses of
persons involved in, or witnesses other than confidential informants
to, the incident, the description of any property involved, the date,
time, and location of the incident, all diagrams, statements of the
parties involved in the incident, the statements of all witnesses,
other than confidential informants, to the victims of an incident,
or an authorized representative thereof, an insurance carrier against
which a claim has been or might be made, and any person suffering
bodily injury or property damage or loss, as the result of the
incident caused by arson, burglary, fire, explosion, larceny,
robbery, carjacking, vandalism, vehicle theft, or a crime as defined
by subdivision (b) of Section 13951, unless the disclosure would
endanger the safety of a witness or other person involved in the
investigation, or unless disclosure would endanger the successful
completion of the investigation or a related investigation. However,
nothing in this division shall require the disclosure of that portion
of those investigative files that reflects the analysis or conclusions
of the investigating officer.

Customer lists provided to a state or local police agency by an
alarm or security company at the request of the agency shall be
construed to be records subject to this subdivision.

Notwithstanding any other provision of this subdivision, state
and local law enforcement agencies shall make public the following
information, except to the extent that disclosure of a particular
item of information would endanger the safety of a person involved
in an investigation or would endanger the successful completion
of the investigation or a related investigation:

(1) The full name and occupation of every individual arrested
by the agency, the individual’s physical description including date
of birth, color of eyes and hair, sex, height and weight, the time
and date of arrest, the time and date of booking, the location of
the arrest, the factual circumstances surrounding the arrest, the
amount of bail set, the time and manner of release or the location
where the individual is currently being held, and all charges the
individual is being held upon, including any outstanding warrants
from other jurisdictions and parole or probation holds.

(2) Subject to the restrictions imposed by Section 841.5 of the
Penal Code, the time, substance, and location of all complaints or
requests for assistance received by the agency and the time and
nature of the response thereto, including, to the extent the
information regarding crimes alleged or committed or any other
incident investigated is recorded, the time, date, and location of
occurrence, the time and date of the report, the name and age of
the victim, the factual circumstances surrounding the crime or
incident, and a general description of any injuries, property, or
weapons involved. The name of a victim of any crime defined by
Section 220, 236.1, 261, 261.5, 262, 264, 264.1, 265, 266, 266a,
266b, 266c, 266e, 266f, 266j, 267, 269, 273a, 273d, 273.5, 285,
286, 288, 288a, 288.2, 288.3 (as added by Chapter 337 of the
Statutes of 2006), 288.3 (as added by Section 6 of Proposition 83
of the November 7, 2006, statewide general election), 288.5, 288.7,
289, 422.6, 422.7, 422.75, 646.9, or 647.6 of the Penal Code may
be withheld at the victim’s request, or at the request of the victim’s
parent or guardian if the victim is a minor. When a person is the
victim of more than one crime, information disclosing that the
person is a victim of a crime defined in any of the sections of the
Penal Code set forth in this subdivision may be deleted at the
request of the victim, or the victim’s parent or guardian if the
victim is a minor, in making the report of the crime, or of any
crime or incident accompanying the crime, available to the public
in compliance with the requirements of this paragraph.

(3) Subject to the restrictions of Section 841.5 of the Penal Code
and this subdivision, the current address of every individual
arrested by the agency and the current address of the victim of a
crime, where the requester declares under penalty of perjury that
the request is made for a scholarly, journalistic, political, or
governmental purpose, or that the request is made for investigation
purposes by a licensed private investigator as described in Chapter
11.3 (commencing with Section 7512) of Division 3 of the Business
and Professions Code. However, the address of the victim of any
crime defined by Section 220, 236.1, 261, 261.5, 262, 264, 264.1,
265, 266, 266a, 266b, 266c, 266e, 266f, 266j, 267, 269, 273a,
273d, 273.5, 285, 286, 288, 288a, 288.2, 288.3 (as added by
Chapter 337 of the Statutes of 2006), 288.3 (as added by Section
6 of Proposition 83 of the November 7, 2006, statewide general
election), 288.5, 288.7, 289, 422.6, 422.7, 422.75, 646.9, or 647.6
of the Penal Code shall remain confidential. Address information
obtained pursuant to this paragraph may not be used directly or
indirectly, or furnished to another, to sell a product or service to
any individual or group of individuals, and the requester shall
execute a declaration to that effect under penalty of perjury.
Nothing in this paragraph shall be construed to prohibit or limit a
scholarly, journalistic, political, or government use of address
information obtained pursuant to this paragraph.

(g) Test questions, scoring keys, and other examination data
used to administer a licensing examination, examination for
employment, or academic examination, except as provided for in
Chapter 3 (commencing with Section 99150) of Part 65 of Division
14 of Title 3 of the Education Code.

(h) The contents of real estate appraisals or engineering or
feasibility estimates and evaluations made for or by the state or
local agency relative to the acquisition of property, or to
prospective public supply and construction contracts, until all of
the property has been acquired or all of the contract agreement
obtained. However, the law of eminent domain shall not be affected
by this provision.

(i) Information required from any taxpayer in connection with
the collection of local taxes that is received in confidence and the
disclosure of the information to other persons would result in unfair
competitive disadvantage to the person supplying the information.

(j) Library circulation records kept for the purpose of identifying
the borrower of items available in libraries, and library and museum
materials made or acquired and presented solely for reference or
exhibition purposes. The exemption in this subdivision shall not
apply to records of fines imposed on the borrowers.

(k) Records, the disclosure of which is exempted or prohibited
pursuant to federal or state law, including, but not limited to,
provisions of the Evidence Code relating to privilege.

(l) Correspondence of and to the Governor or employees of the
Governor’s office or in the custody of or maintained by the
Governor’s Legal Affairs Secretary. However, public records shall
not be transferred to the custody of the Governor’s Legal Affairs
Secretary to evade the disclosure provisions of this chapter.

(m) In the custody of or maintained by the Legislative Counsel,
except those records in the public database maintained by the
Legislative Counsel that are described in Section 10248.

(n) Statements of personal worth or personal financial data
required by a licensing agency and filed by an applicant with the
licensing agency to establish his or her personal qualification for
the license, certificate, or permit applied for.

(o) Financial data contained in applications for financing under
Division 27 (commencing with Section 44500) of the Health and
Safety Code, where an authorized officer of the California Pollution
Control Financing Authority determines that disclosure of the
financial data would be competitively injurious to the applicant
and the data is required in order to obtain guarantees from the
United States Small Business Administration. The California
Pollution Control Financing Authority shall adopt rules for review
of individual requests for confidentiality under this section and for
making available to the public those portions of an application that
are subject to disclosure under this chapter.

(p) Records of state agencies related to activities governed by
Chapter 10.3 (commencing with Section 3512), Chapter 10.5
(commencing with Section 3525), and Chapter 12 (commencing
with Section 3560) of Division 4, that reveal a state agency’s
deliberative processes, impressions, evaluations, opinions,
recommendations, meeting minutes, research, work products,
theories, or strategy, or that provide instruction, advice, or training
to employees who do not have full collective bargaining and
representation rights under these chapters. Nothing in this
subdivision shall be construed to limit the disclosure duties of a
state agency with respect to any other records relating to the
activities governed by the employee relations acts referred to in
this subdivision.

(q) (1) Records of state agencies related to activities governed
by Article 2.6 (commencing with Section 14081), Article 2.8
(commencing with Section 14087.5), and Article 2.91
(commencing with Section 14089) of Chapter 7 of Part 3 of
Division 9 of the Welfare and Institutions Code, that reveal the
special negotiator’s deliberative processes, discussions,
communications, or any other portion of the negotiations with
providers of health care services, impressions, opinions,
recommendations, meeting minutes, research, work product,
theories, or strategy, or that provide instruction, advice, or training
to employees.

(2) Except for the portion of a contract containing the rates of
payment, contracts for inpatient services entered into pursuant to
these articles, on or after April 1, 1984, shall be open to inspection
one year after they are fully executed. If a contract for inpatient
services that is entered into prior to April 1, 1984, is amended on
or after April 1, 1984, the amendment, except for any portion
containing the rates of payment, shall be open to inspection one
year after it is fully executed. If the California Medical Assistance
Commission enters into contracts with health care providers for
other than inpatient hospital services, those contracts shall be open
to inspection one year after they are fully executed.

(3) Three years after a contract or amendment is open to
inspection under this subdivision, the portion of the contract or
amendment containing the rates of payment shall be open to
inspection.

(4) Notwithstanding any other begin delete provision of end delete law, the entire
contract or amendment shall be open to inspection by the Joint
Legislative Audit Committee and the Legislative Analyst’s Office.
The committee and that office shall maintain the confidentiality
of the contracts and amendments until the time a contract or
amendment is fully open to inspection by the public.

(r) Records of Native American graves, cemeteries, and sacred
places and records of Native American places, features, and objects
described in Sections 5097.9 and 5097.993 of the Public Resources
Code maintained by, or in the possession of, the Native American
Heritage Commission, another state agency, or a local agency.

(s) A final accreditation report of the Joint Commission on
Accreditation of Hospitals that has been transmitted to the State
Department of Health Care Services pursuant to subdivision (b)
of Section 1282 of the Health and Safety Code.

(t) Records of a local hospital district, formed pursuant to
Division 23 (commencing with Section 32000) of the Health and
Safety Code, or the records of a municipal hospital, formed
pursuant to Article 7 (commencing with Section 37600) or Article
8 (commencing with Section 37650) of Chapter 5 of Part 2 of
Division 3 of Title 4 of this code, that relate to any contract with
an insurer or nonprofit hospital service plan for inpatient or
outpatient services for alternative rates pursuant to Section 10133
of the Insurance Code. However, the record shall be open to
inspection within one year after the contract is fully executed.

(u) (1) Information contained in applications for licenses to
carry firearms issued pursuant to Section 26150, 26155, 26170,
or 26215 of the Penal Code by the sheriff of a county or the chief
or other head of a municipal police department that indicates when
or where the applicant is vulnerable to attack or that concerns the
applicant’s medical or psychological history or that of members
of his or her family.

(2) The home address and telephone number of prosecutors,
public defenders, peace officers, judges, court commissioners, and
magistrates that are set forth in applications for licenses to carry
firearms issued pursuant to Section 26150, 26155, 26170, or 26215
of the Penal Code by the sheriff of a county or the chief or other
head of a municipal police department.

(3) The home address and telephone number of prosecutors,
public defenders, peace officers, judges, court commissioners, and
magistrates that are set forth in licenses to carry firearms issued
pursuant to Section 26150, 26155, 26170, or 26215 of the Penal
Code by the sheriff of a county or the chief or other head of a
municipal police department.

(v) (1) Records of the Managed Risk Medical Insurance Board
and the State Department of Health Care Services related to
activities governed by Part 6.3 (commencing with Section 12695),
Part 6.5 (commencing with Section 12700), Part 6.6 (commencing
with Section 12739.5), begin delete and end delete begin insert or end insert Part 6.7 (commencing with Section
12739.70) of Division 2 of the Insurance Code, begin delete and end delete begin insert or end insert Chapter 2
(commencing with Section begin delete 15850) end delete begin insert 15810) or Chapter 4
(commencing with Section 15870) end insert of Part 3.3 of Division 9 of the
Welfare and Institutions Code, and that reveal any of the following:

(A) The deliberative processes, discussions, communications,
or any other portion of the negotiations with entities contracting
or seeking to contract with the board or the department, entities
with which the board or the department is considering a contract,
or entities with which the board begin insert or department end insert is considering or
enters into any other arrangement under which the board or the
department provides, receives, or arranges services or
reimbursement.

(B) The impressions, opinions, recommendations, meeting
minutes, research, work product, theories, or strategy of the board
or its staff or the department or its staff, or records that provide
instructions, advice, or training to their employees.

(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to Part 6.3
(commencing with Section 12695), Part 6.5 (commencing with
Section 12700), Part 6.6 (commencing with Section 12739.5), or
Part 6.7 (commencing with Section 12739.70) of Division 2 of the
Insurance Code, or Chapter begin delete 2.2 end delete begin insert 2 end insert (commencing with Section
begin delete 15850) end delete begin insert 15810) or Chapter 4 (commencing with Section 15870) end insert of
Part 3.3 of Division 9 of the Welfare and Institutions Code, on or
after July 1, 1991, shall be open to inspection one year after their
effective dates.

(B) If a contract that is entered into prior to July 1, 1991, is
amended on or after July 1, 1991, the amendment, except for any
portion containing the rates of payment, shall be open to inspection
one year after the effective date of the amendment.

(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.

(4) Notwithstanding any other law, the entire contract or
amendments to a contract shall be open to inspection by the Joint
Legislative Audit Committee. The committee shall maintain the
confidentiality of the contracts and amendments thereto, until the
contracts or amendments to the contracts are open to inspection
pursuant to paragraph (3).

(w) (1) Records of the Managed Risk Medical Insurance Board
related to activities governed by Chapter 8 (commencing with
Section 10700) of Part 2 of Division 2 of the Insurance Code, and
that reveal the deliberative processes, discussions, communications,
or any other portion of the negotiations with health plans, or the
impressions, opinions, recommendations, meeting minutes,
research, work product, theories, or strategy of the board or its
staff, or records that provide instructions, advice, or training to
employees.

(2) Except for the portion of a contract that contains the rates
of payment, contracts for health coverage entered into pursuant to
Chapter 8 (commencing with Section 10700) of Part 2 of Division
2 of the Insurance Code, on or after January 1, 1993, shall be open
to inspection one year after they have been fully executed.

(3) Notwithstanding any other law, the entire contract or
amendments to a contract shall be open to inspection by the Joint
Legislative Audit Committee. The committee shall maintain the
confidentiality of the contracts and amendments thereto, until the
contracts or amendments to the contracts are open to inspection
pursuant to paragraph (2).

(x) Financial data contained in applications for registration, or
registration renewal, as a service contractor filed with the Director
of Consumer Affairs pursuant to Chapter 20 (commencing with
Section 9800) of Division 3 of the Business and Professions Code,
for the purpose of establishing the service contractor’s net worth,
or financial data regarding the funded accounts held in escrow for
service contracts held in force in this state by a service contractor.

(y) (1) Records of the Managed Risk Medical Insurance Board
begin insert and the State Department of Health Care Services end insert related to
activities governed by Part 6.2 (commencing with Section 12693)
or Part 6.4 (commencing with Section 12699.50) of Division 2 of
the Insurance begin insert Code or Sections 14005.26 and 14005.27 of, or
Chapter 3 (commencing with Section 15850) of Part 3.3 of Division
9 of, the Welfare and Institutions end insert Code, begin delete and that end delete begin insert if the records end insert
reveal any of the following:

(A) The deliberative processes, discussions, communications,
or any other portion of the negotiations with entities contracting
or seeking to contract with the begin delete board, end delete begin insert board or the department, end insert
entities with which the board begin insert or department end insert is considering a
contract, or entities with which the board begin insert or department end insert is
considering or enters into any other arrangement under which the
board begin insert or department end insert provides, receives, or arranges services or
reimbursement.

(B) The impressions, opinions, recommendations, meeting
minutes, research, work product, theories, or strategy of the board
or its staff, or begin insert the department or its staff, or end insert records that provide
instructions, advice, or training to employees.

(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to Part 6.2
(commencing with Section 12693) or Part 6.4 (commencing with
Section 12699.50) of Division 2 of the Insurance Code, on or after
January 1, 1998, begin insert or Sections 14005.26 and 14005.27 of, or Chapter
3 (commencing with Section 15850) of Part 3.3 of Division 9 of,
the Welfare and Institutions Code end insert shall be open to inspection one
year after their effective dates.

(B) If a contract entered into pursuant to Part 6.2 (commencing
with Section 12693) or Part 6.4 (commencing with Section
12699.50) of Division 2 of the Insurance Code begin insert or Sections
14005.26 and 14005.27 of, or Chapter 3 (commencing with Section
15850) of Part 3.3 of Division 9 of, the Welfare and Institutions
Code, end insert is amended, the amendment shall be open to inspection one
year after the effective date of the amendment.

(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.

(4) Notwithstanding any other law, the entire contract or
amendments to a contract shall be open to inspection by the Joint
Legislative Audit Committee. The committee shall maintain the
confidentiality of the contracts and amendments thereto until the
contract or amendments to a contract are open to inspection
pursuant to paragraph (2) or (3).

(5) The exemption from disclosure provided pursuant to this
subdivision for the contracts, deliberative processes, discussions,
communications, negotiations, impressions, opinions,
recommendations, meeting minutes, research, work product,
theories, or strategy of the board or its begin delete staff end delete begin insert staff, or the department
or its staff, end insert shall also apply to the contracts, deliberative processes,
discussions, communications, negotiations, impressions, opinions,
recommendations, meeting minutes, research, work product,
theories, or strategy of applicants pursuant to Part 6.4 (commencing
with Section 12699.50) of Division 2 of the Insurance begin insert Code or
Chapter 3 (commencing with Section 15850) of Part 3.3 of Division
9 of the Welfare and Institutions end insert Code.

(z) Records obtained pursuant to paragraph (2) of subdivision
(f) of Section 2891.1 of the Public Utilities Code.

(aa) A document prepared by or for a state or local agency that
assesses its vulnerability to terrorist attack or other criminal acts
intended to disrupt the public agency’s operations and that is for
distribution or consideration in a closed session.

(ab) Critical infrastructure information, as defined in Section
131(3) of Title 6 of the United States Code, that is voluntarily
submitted to the California Emergency Management Agency for
use by that office, including the identity of the person who or entity
that voluntarily submitted the information. As used in this
subdivision, “voluntarily submitted” means submitted in the
absence of the office exercising any legal authority to compel
access to or submission of critical infrastructure information. This
subdivision shall not affect the status of information in the
possession of any other state or local governmental agency.

(ac) All information provided to the Secretary of State by a
person for the purpose of registration in the Advance Health Care
Directive Registry, except that those records shall be released at
the request of a health care provider, a public guardian, or the
registrant’s legal representative.

(ad) The following records of the State Compensation Insurance
Fund:

(1) Records related to claims pursuant to Chapter 1
(commencing with Section 3200) of Division 4 of the Labor Code,
to the extent that confidential medical information or other
individually identifiable information would be disclosed.

(2) Records related to the discussions, communications, or any
other portion of the negotiations with entities contracting or seeking
to contract with the fund, and any related deliberations.

(3) Records related to the impressions, opinions,
recommendations, meeting minutes of meetings or sessions that
are lawfully closed to the public, research, work product, theories,
or strategy of the fund or its staff, on the development of rates,
contracting strategy, underwriting, or competitive strategy pursuant
to the powers granted to the fund in Chapter 4 (commencing with
Section 11770) of Part 3 of Division 2 of the Insurance Code.

(4) Records obtained to provide workers’ compensation
insurance under Chapter 4 (commencing with Section 11770) of
Part 3 of Division 2 of the Insurance Code, including, but not
limited to, any medical claims information, policyholder
information provided that nothing in this paragraph shall be
interpreted to prevent an insurance agent or broker from obtaining
proprietary information or other information authorized by law to
be obtained by the agent or broker, and information on rates,
pricing, and claims handling received from brokers.

(5) (A) Records that are trade secrets pursuant to Section
6276.44, or Article 11 (commencing with Section 1060) of Chapter
4 of Division 8 of the Evidence Code, including without limitation,
instructions, advice, or training provided by the State Compensation
Insurance Fund to its board members, officers, and employees
regarding the fund’s special investigation unit, internal audit unit,
and informational security, marketing, rating, pricing, underwriting,
claims handling, audits, and collections.

(B) Notwithstanding subparagraph (A), the portions of records
containing trade secrets shall be available for review by the Joint
Legislative Audit Committee, the Bureau of State Audits, Division
of Workers’ Compensation, and the Department of Insurance to
ensure compliance with applicable law.

(6) (A) Internal audits containing proprietary information and
the following records that are related to an internal audit:

(i) Personal papers and correspondence of any person providing
assistance to the fund when that person has requested in writing
that his or her papers and correspondence be kept private and
confidential. Those papers and correspondence shall become public
records if the written request is withdrawn, or upon order of the
fund.

(ii) Papers, correspondence, memoranda, or any substantive
information pertaining to any audit not completed or an internal
audit that contains proprietary information.

(B) Notwithstanding subparagraph (A), the portions of records
containing proprietary information, or any information specified
in subparagraph (A) shall be available for review by the Joint
Legislative Audit Committee, the Bureau of State Audits, Division
of Workers’ Compensation, and the Department of Insurance to
ensure compliance with applicable law.

(7) (A) Except as provided in subparagraph (C), contracts
entered into pursuant to Chapter 4 (commencing with Section
11770) of Part 3 of Division 2 of the Insurance Code shall be open
to inspection one year after the contract has been fully executed.

(B) If a contract entered into pursuant to Chapter 4 (commencing
with Section 11770) of Part 3 of Division 2 of the Insurance Code
is amended, the amendment shall be open to inspection one year
after the amendment has been fully executed.

(C) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.

(D) Notwithstanding any other law, the entire contract or
amendments to a contract shall be open to inspection by the Joint
Legislative Audit Committee. The committee shall maintain the
confidentiality of the contracts and amendments thereto until the
contract or amendments to a contract are open to inspection
pursuant to this paragraph.

(E) This paragraph is not intended to apply to documents related
to contracts with public entities that are not otherwise expressly
confidential as to that public entity.

(F) For purposes of this paragraph, “fully executed” means the
point in time when all of the necessary parties to the contract have
signed the contract.

This section shall not prevent any agency from opening its
records concerning the administration of the agency to public
inspection, unless disclosure is otherwise prohibited by law.

This section shall not prevent any health facility from disclosing
to a certified bargaining agent relevant financing information
pursuant to Section 8 of the National Labor Relations Act (29
U.S.C. Sec. 158).

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 100504 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

100504.  

(a) The board may do the following:

(1) With respect to individual coverage made available in the
Exchange, collect premiums and assist in the administration of
subsidies.

(2) Enter into contracts.

(3) Sue and be sued.

(4) Receive and accept gifts, grants, or donations of moneys
from any agency of the United States, any agency of the state, begin insert and end insert
any municipality, county, or other political subdivision of the state.

(5) Receive and accept gifts, grants, or donations from
individuals, associations, private foundations, begin delete or end delete begin insert and end insert corporations,
in compliance with the conflict of interest provisions to be adopted
by the board at a public meeting.

(6) Adopt rules and regulations, as necessary. Until January 1,
2016, any necessary rules and regulations may be adopted as
emergency regulations in accordance with the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2). The adoption of these regulations
shall be deemed to be an emergency and necessary for the
immediate preservation of the public peace, health and safety, or
general welfare. begin insert Notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2, including
subdivisions (e) and (h) of Section 11346.1, any emergency
regulation adopted pursuant to this section shall not be repealed
by the Office of Administrative Law until revised or repealed by
the board, except that an emergency regulation adopted pursuant
to this section shall be repealed by operation of law unless the
adoption, amendment, or repeal of the regulation is promulgated
by the board pursuant to Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code
within two years of the initial adoption of the emergency
regulation. Notwithstanding subdivision (h) of Section 11346.1,
until January 1, 2017, the Office of Administrative Law may
approve more than two readoptions of an emergency regulation
adopted pursuant to this section. end insert

(7) Collaborate with the State Department of Health Care
Services and the Managed Risk Medical Insurance Board, to the
extent possible, to allow an individual the option to remain enrolled
with his or her carrier and provider network in the event the
individual experiences a loss of eligibility of premium tax credits
and becomes eligible for the Medi-Cal program or the Healthy
Families Program, or loses eligibility for the Medi-Cal program
or the Healthy Families Program and becomes eligible for premium
tax credits through the Exchange.

(8) Share information with relevant state departments, consistent
with the confidentiality provisions in Section 1411 of the federal
act, necessary for the administration of the Exchange.

(9) Require carriers participating in the Exchange to make
available to the Exchange and regularly update an electronic
directory of contracting health care providers so that individuals
seeking coverage through the Exchange can search by health care
provider name to determine which health plans in the Exchange
include that health care provider in their network. The board may
also require a carrier to provide regularly updated information to
the Exchange as to whether a health care provider is accepting
new patients for a particular health plan. The Exchange may
provide an integrated and uniform consumer directory of health
care providers indicating which carriers the providers contract with
and whether the providers are currently accepting new patients.
The Exchange may also establish methods by which health care
providers may transmit relevant information directly to the
Exchange, rather than through a carrier.

(10) Make available supplemental coverage for enrollees of the
Exchange to the extent permitted by the federal act, provided that
no General Fund money is used to pay the cost of that coverage.
Any supplemental coverage offered in the Exchange shall be
subject to the charge imposed under subdivision (n) of Section
100503.

(b) The Exchange shall only collect information from individuals
or designees of individuals necessary to administer the Exchange
and consistent with the federal act.

(c) The board shall have the authority to standardize products
to be offered through the Exchange.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 1280.15 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

1280.15.  

(a) A clinic, health facility, home health agency, or
hospice licensed pursuant to Section 1204, 1250, 1725, or 1745
shall prevent unlawful or unauthorized access to, and use or
disclosure of, patients’ medical information, as defined in Section
56.05 of the Civil Code and consistent with Section begin delete 130203. end delete
begin insert 1280.18. end insert For purposes of this section, internal paper records,
electronic mail, or facsimile transmissions inadvertently
misdirected within the same facility or health care system within
the course of coordinating care or delivering services shall not
constitute unauthorized access to, or use or disclosure of, a patient’s
medical information. The department, after investigation, may
assess an administrative penalty for a violation of this section of
up to twenty-five thousand dollars ($25,000) per patient whose
medical information was unlawfully or without authorization
accessed, used, or disclosed, and up to seventeen thousand five
hundred dollars ($17,500) per subsequent occurrence of unlawful
or unauthorized access, use, or disclosure of that patient’s medical
information. For purposes of the investigation, the department
shall consider the clinic’s, health facility’s, agency’s, or hospice’s
history of compliance with this section and other related state and
federal statutes and regulations, the extent to which the facility
detected violations and took preventative action to immediately
correct and prevent past violations from recurring, and factors
outside its control that restricted the facility’s ability to comply
with this section. The department shall have full discretion to
consider all factors when determining the amount of an
administrative penalty pursuant to this section.

(b) (1) A clinic, health facility, home health agency, or hospice
to which subdivision (a) applies shall report any unlawful or
unauthorized access to, or use or disclosure of, a patient’s medical
information to the department no later than five business days after
the unlawful or unauthorized access, use, or disclosure has been
detected by the clinic, health facility, home health agency, or
hospice.

(2) Subject to subdivision (c), a clinic, health facility, home
health agency, or hospice shall also report any unlawful or
unauthorized access to, or use or disclosure of, a patient’s medical
information to the affected patient or the patient’s representative
at the last known address, no later than five business days after
the unlawful or unauthorized access, use, or disclosure has been
detected by the clinic, health facility, home health agency, or
hospice.

(c) (1) A clinic, health facility, home health agency, or hospice
shall delay the reporting, as required pursuant to paragraph (2) of
subdivision (b), of any unlawful or unauthorized access to, or use
or disclosure of, a patient’s medical information beyond five
business days if a law enforcement agency or official provides the
clinic, health facility, home health agency, or hospice with a written
or oral statement that compliance with the reporting requirements
of paragraph (2) of subdivision (b) would likely impede the law
enforcement agency’s investigation that relates to the unlawful or
unauthorized access to, and use or disclosure of, a patient’s medical
information and specifies a date upon which the delay shall end,
not to exceed 60 days after a written request is made, or 30 days
after an oral request is made. A law enforcement agency or official
may request an extension of a delay based upon a written
declaration that there exists a bona fide, ongoing, significant
criminal investigation of serious wrongdoing relating to the
unlawful or unauthorized access to, and use or disclosure of, a
patient’s medical information, that notification of patients will
undermine the law enforcement agency’s investigation, and that
specifies a date upon which the delay shall end, not to exceed 60
days after the end of the original delay period.

(2) If the statement of the law enforcement agency or official
is made orally, then the clinic, health facility, home health agency,
or hospice shall do both of the following:

(A) Document the oral statement, including, but not limited to,
the identity of the law enforcement agency or official making the
oral statement and the date upon which the oral statement was
made.

(B) Limit the delay in reporting the unlawful or unauthorized
access to, or use or disclosure of, the patient’s medical information
to the date specified in the oral statement, not to exceed 30 calendar
days from the date that the oral statement is made, unless a written
statement that complies with the requirements of this subdivision
is received during that time.

(3) A clinic, health facility, home health agency, or hospice
shall submit a report that is delayed pursuant to this subdivision
not later than five business days after the date designated as the
end of the delay.

(d) If a clinic, health facility, home health agency, or hospice
to which subdivision (a) applies violates subdivision (b), the
department may assess the licensee a penalty in the amount of one
hundred dollars ($100) for each day that the unlawful or
unauthorized access, use, or disclosure is not reported to the
department or the affected patient, following the initial five-day
period specified in subdivision (b). However, the total combined
penalty assessed by the department under subdivision (a) and this
subdivision shall not exceed two hundred fifty thousand dollars
($250,000) per reported event. For enforcement purposes, it shall
be presumed that the facility did not notify the affected patient if
the notification was not documented. This presumption may be
rebutted by a licensee only if the licensee demonstrates, by a
preponderance of the evidence, that the notification was made.

(e) In enforcing subdivisions (a) and (d), the department shall
take into consideration the special circumstances of small and rural
hospitals, as defined in Section 124840, and primary care clinics,
as defined in subdivision (a) of Section 1204, in order to protect
access to quality care in those hospitals and clinics. When assessing
a penalty on a skilled nursing facility or other facility subject to
Section 1423, 1424, 1424.1, or 1424.5, the department shall issue
only the higher of either a penalty for the violation of this section
or a penalty for violation of Section 1423, 1424, 1424.1, or 1424.5,
not both.

(f) All penalties collected by the department pursuant to this
section, Sections 1280.1, 1280.3, and 1280.4, shall be deposited
into the Internal Departmental Quality Improvement Account,
which is hereby created within the Special Deposit Fund under
Section 16370 of the Government Code. Upon appropriation by
the Legislature, moneys in the account shall be expended for
internal quality improvement activities in the Licensing and
Certification Program.

(g) If the licensee disputes a determination by the department
regarding a failure to prevent or failure to timely report unlawful
or unauthorized access to, or use or disclosure of, patients’ medical
information, or the imposition of a penalty under this section, the
licensee may, within 10 days of receipt of the penalty assessment,
request a hearing pursuant to Section 131071. Penalties shall be
paid when appeals have been exhausted and the penalty has been
upheld.

(h) In lieu of disputing the determination of the department
regarding a failure to prevent or failure to timely report unlawful
or unauthorized access to, or use or disclosure of, patients’ medical
information, transmit to the department 75 percent of the total
amount of the administrative penalty, for each violation, within
30 business days of receipt of the administrative penalty.

begin delete end delete begin delete

(i) Notwithstanding any other law, the department may refer
violations of this section to the Office of Health Information
Integrity for enforcement pursuant to Section 130303.

end delete begin delete end delete begin delete

(j)

end delete

begin insert (i) end insert  For purposes of this section, the following definitions shall
apply:

(1) “Reported event” means all breaches included in any single
report that is made pursuant to subdivision (b), regardless of the
number of breach events contained in the report.

(2) “Unauthorized” means the inappropriate access, review, or
viewing of patient medical information without a direct need for
medical diagnosis, treatment, or other lawful use as permitted by
the Confidentiality of Medical Information Act (Part 2.6
(commencing with Section 56) of Division 1 of the Civil Code)
or any other statute or regulation governing the lawful access, use,
or disclosure of medical information.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 1341.45 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

1341.45.  

(a) There is hereby created in the State Treasury the
Managed Care Administrative Fines and Penalties Fund.

(b) The fines and administrative penalties collected pursuant to
this chapter, on and after begin delete the operative date of this section, end delete
begin insert September 30, 2008, end insert shall be deposited into the Managed Care
Administrative Fines and Penalties Fund.

(c) The fines and administrative penalties deposited into the
Managed Care Administrative Fines and Penalties Fund shall be
transferred by the department, beginning September 1, 2009, and
annually thereafter, as follows:

(1) The first one million dollars ($1,000,000) shall be transferred
to the Medically Underserved Account for Physicians within the
Health Professions Education Fund and shall, upon appropriation
by the Legislature, be used for the purposes of the Steven M.
Thompson Physician Corps Loan Repayment Program, as specified
in Article 5 (commencing with Section 128550) or Chapter 5 of
Part 3 of Division 107 and, notwithstanding Section 128555, shall
not be used to provide funding for the Physician Volunteer
Program.

(2) Any amount over the first one million dollars ($1,000,000),
including accrued interest, in the fund shall be transferred to the
Major Risk Medical Insurance Fund begin delete created end delete begin insert continued end insert pursuant
to Section begin delete 12739 end delete begin insert 15893 end insert of the begin delete Insurance end delete begin insert Welfare and Institutions end insert
Code and shall, upon appropriation by the Legislature, be used for
the Major Risk Medical Insurance Program for the purposes
specified in Section begin delete 12739.1 end delete begin insert 15894 end insert of the begin delete Insurance end delete begin insert Welfare and
Institutions end insert Code.

(d) Notwithstanding subdivision (b) of Section 1356 and Section
1356.1, the fines and administrative penalties authorized pursuant
to this chapter shall not be used to reduce the assessments imposed
on health care service plans pursuant to Section 1356.

begin insert

(e) The amendments made to this section by the act adding this
subdivision shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 1347.5 is added to the end insert begin insert Health and Safety Code end insert begin insert ,
to read: end insert

begin insert

begin insert 1347.5. end insert   

(a) A health care service plan providing individual
coverage in the Exchange shall cooperate with requests from the
Exchange to collaborate in the development of, and participate in
the implementation of, the Medi-Cal program’s premium and
cost-sharing payments under Sections 14102 and 14148.65 of the
Welfare and Institutions Code for eligible Exchange enrollees.

(b) A health care service plan providing individual coverage in
the Exchange shall not charge, bill, ask, or require an enrollee
receiving benefits under Section 14102 or Section 14148.65 of the
Welfare and Institutions Code to make any premium or
cost-sharing payments for any services that are subject to premium
or cost-sharing payments by the State Department of Health Care
Services under Section 14102 or Section 14148.65 of the Welfare
and Institutions Code.

(c) For purposes of this section, “Exchange” means the
California Health Benefit Exchange established pursuant to Title
22 (commencing with Section 100500) of the Government Code.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 1368.05 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 1368.05. end insert   

(a) (1) By enacting this section, which was originally
enacted by Assembly Bill 922 (Chapter 552 of the Statutes of 2011),
the Legislature recognizes that, because of the enactment of federal
health care reform on March 23, 2010, and the implementation of
various provisions by January 1, 2014, and the ongoing
complexities of health care reform, it is appropriate to transfer
the direct consumer assistance activities that were newly conferred
on the Office of the Patient Advocate to the Department of
Managed Health Care, and the Legislature recognizes that these
new duties are necessary to be carried out by the department in
partnership with community-based consumer assistance
organizations for the purposes of serving California’s health care
consumers.

(2) In addition to maintaining the toll-free telephone number
for the purpose of receiving complaints regarding health care
service plans as required in Section 1368.02, the department and
its contractors shall carry out these new responsibilities, which
include assisting consumers in navigating private and public health
care coverage and assisting consumers in determining the
regulator that regulates the health care coverage of a particular
consumer. In order to further assist in implementing health care
reform, the department and its contractors shall also receive and
respond to inquiries, complaints, and requests for assistance and
education concerning health care coverage available in California.

(b) (1) The department shall annually contract with
community-based organizations in furtherance of providing
assistance to consumers as described in subdivision (a), as
authorized by and in accordance with Section 19130 of the
Government Code.

(2) These organizations shall be community-based nonprofit
consumer assistance programs that shall include in their mission
the assistance of, and duty to, health care consumers.

(3) Contracting consumer assistance organizations shall have
experience in assisting consumers in navigating the local health
care system, advising consumers regarding their health care
coverage options, assisting consumers with problems in accessing
health care services, and serving consumers with special needs,
including, but not limited to, consumers with limited-English
language proficiency, consumers requiring culturally competent
services, low-income consumers, consumers with disabilities,
consumers with low literacy rates, and consumers with multiple
health conditions, including behavioral health. The organizations
shall also have experience with, and the capacity for, collecting
and reporting data regarding the consumers they assist, including
demographic data, source of coverage, regulator, type of problem
or issue, and resolution of complaints.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 1374.76 is added to the end insert begin insert Health and Safety
Code end insert begin insert , end insert immediately following Section 1374.74 begin insert , to read: end insert

begin insert

begin insert 1374.76. end insert   

(a) No later than January 1, 2015, a large group
health care service plan contract shall provide all covered mental
health and substance use disorder benefits in compliance with the
Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008 (Public Law 110-343) and all rules,
regulations, and guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).

(b) No later than January 1, 2015, an individual or small group
health care service plan contract shall provide all covered mental
health and substance use disorder benefits in compliance with the
Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008 (Public Law 110-343), all rules,
regulations, and guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26), and
Section 1367.005.

(c) Until January 1, 2016, the director may issue guidance to
health care service plans regarding compliance with this section.
This guidance shall not be subject to the Administrative Procedure
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code). Any guidance issued
pursuant to this subdivision shall be effective only until the director
adopts regulations pursuant to the Administrative Procedure Act.
The department shall consult with the Department of Insurance
in issuing guidance under this subdivision.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 1399.861 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

1399.861.  

(a) On or before October 1, 2013, and annually
every October 1 thereafter, a health care service plan shall issue
the following notice to all subscribers enrolled in an individual
health benefit plan that is a grandfathered health plan:

New improved health insurance options are available in
California. You currently have health insurance that is not required
to follow many of the new laws. For example, your plan may not
provide preventive health services without you having to pay any
cost sharing (copayments or coinsurance). Also, your current plan
may be allowed to increase your rates based on your health status
while new plans and policies cannot. You have the option to remain
in your current plan or switch to a new plan. Under the new rules,
a health plan cannot deny your application based on any health
conditions you may have. For more information about your options,
please contact Covered California at ____, begin delete the Office of Patient
Advocate at ____, end delete your plan representative or insurance agent, or
an entity paid by Covered California to assist with health coverage
enrollment such as a navigator or an assister.

(b) Commencing October 1, 2013, a health care service plan
shall include the notice described in subdivision (a) in any renewal
material of the individual grandfathered health plan and in any
application for dependent coverage under the individual
grandfathered health plan.

(c) A health care service plan shall not advertise or market an
individual health benefit plan that is a grandfathered health plan
for purposes of enrolling a dependent of a subscriber into the plan
for policy years on or after January 1, 2014. Nothing in this
subdivision shall be construed to prohibit an individual enrolled
in an individual grandfathered health plan from adding a dependent
to that plan to the extent permitted by PPACA.

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 11833.02 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

11833.02.  

(a) The department shall charge a fee to all programs
for licensure or certification by the department, regardless of the
form of organization or ownership of the program.

(b) The department may establish fee scales using different
capacity levels, categories based on measures other than program
capacity, or any other category or classification that the department
deems necessary or convenient to maintain an effective and
equitable fee structure.

(c) Licensing and certification fees shall be evaluated annually,
taking into consideration the overall cost of the residential and
outpatient licensing and certification activities of the department,
including initial issuance, renewals, complaints, enforcement
activity, related litigation, and any other program activity relating
to licensure and certification, plus a reasonable reserve.

(d) The department shall submit any proposed new fees or fee
changes to the Legislature for approval no later than April 1 of
each year as part of the spring finance letter process. No new fees
or fee changes shall be implemented without legislative approval.

begin insert

(e) The department shall issue a provider bulletin pursuant to
subdivision (a) of Section 11833.04 setting forth the approved fee
structure. The department shall, on an annual basis, publish the
current fee structure on the department’s Internet Web site.

end insert begin delete

(e)

end delete

begin insert (f) end insert  Unless funds are specifically appropriated from the General
Fund in the annual Budget Act or other legislation to support the
division, the Licensing and Certification Division, no later than
the beginning of the 2010-11 fiscal year, shall be supported entirely
by federal funds and special funds.

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 11833.04 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

11833.04.  

(a) Notwithstanding the rulemaking provisions of
the Administrative Procedure Act, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, begin delete until emergency regulations are filed with end delete the begin delete Secretary of
State, the end delete department may implement begin delete this chapter through
all-county letters or end delete begin insert new fees or fee changes as approved by the
Legislature pursuant to subdivision (d) of Section 11833.02 by
means of provider bulletins or end insert similar instructions from the
begin delete director. end delete begin insert director without taking regulatory action. end insert The department
shall begin delete adopt emergency regulations implementing this chapter no
later than September 30, 2008, unless the department provides
written notification of a delay to the Chair of the Joint Legislative
Budget Committee prior to that date. The notification shall include
the reason for the delay, the current status of the emergency
regulations, a date by which the emergency regulations shall be
adopted, end delete begin insert notify end insert and begin delete a statement of need to continue use of
all-county letters end delete begin insert consult with interested parties and appropriate
stakeholders regarding new fees end insert or begin delete similar instructions. Under no
circumstances shall the adoption of emergency regulations be
delayed, or the use of all-county letters or similar instructions be
extended, beyond June 30, 2009. end delete begin insert fee changes made pursuant to
this chapter. end insert

begin insert

(b) (1) The department shall adopt regulations in accordance
with Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code by January 1, 2016,
to amend Section 10701 of Title 9 of Division 4 of Chapter 5.5 of
the California Code of Regulations to be consistent with this
chapter.

end insert begin delete

(b) Notwithstanding any other provision of law,

end delete

begin insert (2) end insert begin insert   end insert begin insert The authority to implement Section 11833.02 and this
section shall include end insert the begin delete adoption of regulations implementing this
chapter shall be deemed an emergency end delete begin insert authority to supersede the
licensing end insert and begin delete necessary for end delete begin insert certification fees in effect on end insert the
begin delete immediate preservation end delete begin insert operative date end insert of the begin delete public peace, health,
safety, or general welfare. end delete begin insert act that adds this paragraph and shall
continue until the department has amended Section 10701 of Title
9 of Division 4 of Chapter 5.5 of the California Code of
Regulations pursuant to paragraph (1). end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 120955 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

120955.  

(a) (1)  To the extent that state and federal funds are
appropriated in the annual Budget Act for these purposes, the
director shall establish and may administer a program to provide
drug treatments to persons infected with human immunodeficiency
virus (HIV), the etiologic agent of acquired immunodeficiency
syndrome (AIDS). If the director makes a formal determination
that, in any fiscal year, funds appropriated for the program will be
insufficient to provide all of those drug treatments to existing
eligible persons for the fiscal year and that a suspension of the
implementation of the program is necessary, the director may
suspend eligibility determinations and enrollment in the program
for the period of time necessary to meet the needs of existing
eligible persons in the program.

(2) The director, in consultation with the AIDS Drug Assistance
Program Medical Advisory Committee, shall develop, maintain,
and update as necessary a list of drugs to be provided under this
program. The list shall be exempt from the requirements of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340), Chapter 4 (commencing with Section 11370), and
Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code), and shall not be subject to
the review and approval of the Office of Administrative Law.

(b) The director may grant funds to a county public health
department through standard agreements to administer this program
in that county. To maximize the recipients’ access to drugs covered
by this program, the director shall urge the county health
department in counties granted these funds to decentralize
distribution of the drugs to the recipients.

(c) The director shall establish a rate structure for reimbursement
for the cost of each drug included in the program. Rates shall not
be less than the actual cost of the drug. However, the director may
purchase a listed drug directly from the manufacturer and negotiate
the most favorable bulk price for that drug.

(d) Manufacturers of the drugs on the list shall pay the
department a rebate equal to the rebate that would be applicable
to the drug under Section 1927(c) of the federal Social Security
Act (42 U.S.C. Sec. 1396r-8(c)) plus an additional rebate to be
negotiated by each manufacturer with the department, except that
no rebates shall be paid to the department under this section on
drugs for which the department has received a rebate under Section
1927(c) of the federal Social Security Act (42 U.S.C. Sec.
1396r-8(c)) or that have been purchased on behalf of county health
departments or other eligible entities at discount prices made
available under Section 256b of Title 42 of the United States Code.

(e) The department shall submit an invoice, not less than two
times per year, to each manufacturer for the amount of the rebate
required by subdivision (d).

(f) Drugs may be removed from the list for failure to pay the
rebate required by subdivision (d), unless the department
determines that removal of the drug from the list would cause
substantial medical hardship to beneficiaries.

(g) The department may adopt emergency regulations to
implement amendments to this chapter made during the 1997-98
Regular Session, in accordance with the Administrative Procedure
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code). The initial adoption
of emergency regulations shall be deemed to be an emergency and
considered by the Office of Administrative Law as necessary for
the immediate preservation of the public peace, health and safety,
or general welfare. Emergency regulations adopted pursuant to
this section shall remain in effect for no more than 180 days.

(h) Reimbursement under this chapter shall not be made for any
drugs that are available to the recipient under any other private,
state, or federal programs, or under any other contractual or legal
entitlements, except that the director may authorize an exemption
from this subdivision where exemption would represent a cost
savings to the state.

(i) The department may also subsidize certain cost-sharing
requirements for persons otherwise eligible for the AIDS Drug
Assistance Program (ADAP) with existing non-ADAP drug
coverage by paying for prescription drugs included on the ADAP
formulary within the existing ADAP operational structure up to,
but not exceeding, the amount of that cost-sharing obligation. This
cost sharing may only be applied in circumstances in which the
other payer recognizes the ADAP payment as counting toward the
individual’s cost-sharing obligation. begin insert If the director determines that
it would result in a cost savings to the state, the department may
subsidize, using available federal funds and moneys from the AIDS
Drug Assistance Program Rebate Fund, costs associated with a
health care service plan or health insurance policy, including
medical copayments and deductibles for outpatient care, and
premiums to purchase or maintain health insurance coverage. end insert

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 120962 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 120962. end insert   

(a) (1) For the purpose of verifying financial
eligibility pursuant to Section 120960 and the federal Ryan White
HIV/AIDS Treatment Extension Act of 2009 (42 U.S.C. 201 et
seq.), the department shall verify the accuracy of the adjusted
gross income reported on an AIDS Drug Assistance Program
application submitted by an applicant or recipient with data, if
available, from the Franchise Tax Board.

(2) Notwithstanding any other law, the department shall disclose
the name and individual taxpayer identification number (ITIN) or
social security number of an applicant for, or recipient of, services
under this chapter to the Franchise Tax Board for the purpose of
verifying the adjusted gross income of an applicant or recipient
pursuant to subdivision (b) of Section 120960.

(b) The Franchise Tax Board, upon receipt of this information,
shall inform the department of the amount of the federal adjusted
gross income as reported by the taxpayer to the Franchise Tax
Board, and the California adjusted gross income as reported by
the taxpayer to the Franchise Tax Board or as adjusted by the
Franchise Tax Board. The Franchise Tax Board shall provide the
information to the department for the most recent taxable year
that the Franchise Tax Board has information available, and shall
include the first and last name, date of birth, and the ITIN or social
security number of the taxpayer.

(c) (1) Information provided by the department pursuant to this
section shall constitute confidential public health records as
defined in Section 121035, and shall remain subject to the
confidentiality protections and restrictions on further disclosure
by the recipient under subdivisions (d) and (e) of Section 121025.

(2) To the extent possible, verification of financial eligibility
shall be done in a way to eliminate or minimize, by use of computer
programs or other electronic means, Franchise Tax Board staff
and contractors’ access to confidential public health records.

(3) Prior to accessing confidential HIV-related public health
records, Franchise Tax Board staff and contractors shall be
required to annually sign a confidentiality agreement developed
by the department that includes information related to the penalties
under Section 121025 for a breach of confidentiality and the
procedures for reporting a breach of confidentiality under
subdivision (h) of Section 121022. Those agreements shall be
reviewed annually by the department.

(4) The Franchise Tax Board shall return or destroy all
information received from the department after completing the
exchange of information.

end insert

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 121451 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 121451. end insert   

A local entity that receives funding from the state for
the purposes of this part, including, but not limited to, funding
from the state for tuberculosis control pursuant to Item
4265-111-0001 of Section 2.00 of the annual Budget Act, shall
first allocate the moneys received for the following purposes and
activities before allocating the moneys for any other purposes or
activities described in this part:

(a)  Either of the following activities if those activities are
carried out by a local detention facility:

(1)  When a person who has active tuberculosis or is reasonably
believed to have active tuberculosis is discharged or released from
a detention facility, doing both of the following:

(A)  Drafting and submitting notification to the local health
officer.

(B)  Submitting the written treatment plan that includes the
information required by Section 121362 to the local health officer.
This activity does not include drafting the written treatment plan.

(2)  When a person who has active tuberculosis or is reasonably
believed to have active tuberculosis is transferred to a local
detention facility in another jurisdiction, doing both of the
following:

(A) Drafting and submitting notification to the local health
officer and the medical officer of the local detention facility
receiving the person.

(B) Submitting the written treatment plan that includes the
information required by Section 121362 to the local health officer
and the medical officer of the local detention facility receiving the
person. This activity does not include drafting the written treatment
plan.

(b) Either of the following activities if those activities are carried
out by a local health officer or his or her designee:

(1) Receiving and reviewing for approval within 24 hours of
receipt only those treatment plans submitted by a health facility.
This activity includes all of the following:

(A) Receiving the health facility’s treatment plan.

(B) Sending a request to a health facility for medical records
and information on tuberculosis medications, dosages, and
diagnostic workup and reviewing records and information.

(C) Coordinating with the health facility on any adjustments to
the treatment plan.

(D) Sending approval to the health facility.

(2) Drafting and sending a notice to the medical officer of a
parole region, or a physician or surgeon designated by the
Department of Corrections and Rehabilitation, if there are
reasonable grounds to believe that a parolee has active
tuberculosis and ceases treatment for the disease.

(c) For cities, counties, and cities and counties to provide
counsel to nonindigent tuberculosis patients who are subject to a
civil order of detention issued by a local health officer pursuant
to Section 121365 upon request of the patient. Services provided
by counsel include representation of the tuberculosis patient at
any court review of the order of detention required by Section
121366.

end insert

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 121452 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 121452. end insert   

A local health department or local health officer that
receives funding from the state for tuberculosis control pursuant
to Item 4265-111-0001 of Section 2.00 of the annual Budget Act
for purposes of this part may use those funds to reimburse the
actual costs of carrying out the activities described in Section
121451.

end insert

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 128200 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128200.  

(a) This article shall be known and may be cited as
the Song-Brown Health Care Workforce Training Act.

(b)  begin insert (1) end insert begin insert   end insert The Legislature hereby finds and declares that
physicians engaged in family begin delete practice end delete begin insert medicine end insert are in very short
supply in California. The current emphasis placed on specialization
in medical education has resulted in a shortage of physicians trained
to provide comprehensive primary health care to families. The
Legislature hereby declares that it regards the furtherance of a
greater supply of competent family physicians to be a public
purpose of great importance and further declares the establishment
of the program pursuant to this article to be a desirable, begin delete necessary end delete
begin insert necessary, end insert and economical method of increasing the number of
family physicians to provide needed medical services to the people
of California. The Legislature further declares that it is to the
benefit of the state to assist in increasing the number of competent
family physicians graduated by colleges and universities of this
state to provide primary health care services to families within the
state.

begin delete

The

end delete

begin insert (2) end insert begin insert   end insert begin insert The end insert Legislature finds that the shortage of family physicians
can be improved by the placing of a higher priority by public and
private medical schools, hospitals, and other health care delivery
systems in this state, on the recruitment and improved training of
medical students and residents to meet the need for family
physicians. To help accomplish this goal, each medical school in
California is encouraged to organize a strong family begin delete practice end delete
begin insert medicine end insert program or department. It is the intent of the Legislature
that the programs or departments be headed by a physician who
possesses specialty certification in the field of family begin delete practice, end delete
begin insert medicine, end insert and has broad clinical experience in the field of family
begin delete practice. end delete begin insert medicine. end insert

begin delete

The

end delete

begin insert (3) end insert begin insert   end insert begin insert The end insert Legislature further finds that encouraging the training
of primary care physician’s assistants and primary care nurse
practitioners will assist in making primary health care services
more accessible to the citizenry, and will, in conjunction with the
training of family physicians, lead to an improved health care
delivery system in California.

begin delete

Community

end delete

begin insert (4) end insert begin insert   end insert begin insert Community end insert hospitals in general and rural community
hospitals in particular, as well as other health care delivery systems,
are encouraged to develop family begin delete practice end delete begin insert medicine end insert residencies in
affiliation or association with accredited medical schools, to help
meet the need for family physicians in geographical areas of the
state with recognized family primary health care needs. Utilization
of expanded resources beyond university-based teaching hospitals
should be emphasized, including facilities in rural areas wherever
possible.

begin delete

The

end delete

begin insert (5) end insert begin insert   end insert begin insert The end insert Legislature also finds and declares that nurses are in
very short supply in California. The Legislature hereby declares
that it regards the furtherance of a greater supply of nurses to be
a public purpose of great importance and further declares the
expansion of the program pursuant to this article to include nurses
to be a desirable, necessary, and economical method of increasing
the number of nurses to provide needed nursing services to the
people of California.

It

begin insert (6) end insert begin insert   end insert begin insert It end insert is the intent of the Legislature to provide for a program
designed primarily to increase the number of students and residents
receiving quality education and training in the begin delete specialty end delete begin insert primary
care specialties end insert of family begin delete practice end delete begin insert medicine, internal medicine,
obstetrics end insert and begin insert gynecology, and pediatrics and end insert as primary care
physician’s assistants, primary care nurse practitioners, and
registered nurses and to maximize the delivery of primary care
family physician services to specific areas of California where
there is a recognized unmet priority need. This program is intended
to be implemented through contracts with accredited medical
schools, begin insert teaching health centers, end insert programs that train primary care
physician’s assistants, programs that train primary care nurse
practitioners, programs that train registered nurses, hospitals, and
other health care delivery systems based on per-student or
per-resident capitation formulas. It is further intended by the
Legislature that the programs will be professionally and
administratively accountable so that the maximum
cost-effectiveness will be achieved in meeting the professional
training standards and criteria set forth in this article and Article
2 (commencing with Section 128250).

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 128205 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128205.  

As used in this article, and Article 2 (commencing
with Section 128250), the following terms mean:

(a) “Family physician” means a primary care physician who is
prepared to and renders continued comprehensive and preventative
health care services to families and who has received specialized
training in an approved family begin delete practice end delete begin insert medicine end insert residency for
three years after graduation from an accredited medical school.

begin insert

(b) “Primary care physician” means a physician who is
prepared to and renders continued comprehensive and preventative
health care services, and has received specialized training in the
areas of internal medicine, obstetrics and gynecology, or
pediatrics.

end insert begin delete

(b)

end delete

begin insert (c) end insert  “Associated” and “affiliated” mean that relationship that
exists by virtue of a formal written agreement between a hospital
or other health care delivery system and an approved medical
school begin delete which end delete begin insert that end insert pertains to the begin insert primary care or end insert family begin delete practice end delete
begin insert medicine end insert training program for which state contract funds are
sought. begin delete This definition shall include agreements that may be
entered into subsequent to October 2, 1973, as well as those
relevant agreements that are in existence prior to October 2, 1973. end delete

begin delete

(c)

end delete

begin insert (d) end insert  “Commission” means the California Healthcare Workforce
Policy Commission.

begin delete

(d)

end delete

begin insert (e) end insert  “Programs that train primary care physician’s assistants”
means a program that has been approved for the training of primary
care physician assistants pursuant to Section 3513 of the Business
and Professions Code.

begin delete

(e)

end delete

begin insert (f) end insert  “Programs that train primary care nurse practitioners” means
a program that is operated by a California school of medicine or
nursing, or that is authorized by the Regents of the University of
California or by the Trustees of the California State University, or
that is approved by the Board of Registered Nursing.

begin delete

(f)

end delete

begin insert (g) end insert  “Programs that train registered nurses” means a program
that is operated by a California school of nursing and approved by
the Board of Registered Nursing, or that is authorized by the
Regents of the University of California, the Trustees of the
California State University, or the Board of Governors of the
California Community Colleges, and that is approved by the Board
of Registered Nursing.

begin insert

(h) “Teaching health center” means a community-based
ambulatory patient care center that operates a primary care
residency program. Community-based ambulatory patient care
settings include, but are not limited to, federally qualified health
centers, community mental health centers, rural health clinics,
health centers operated by the Indian Health Service, an Indian
tribe or tribal organization, or an urban Indian organization, and
entities receiving funds under Title X of the federal Public Health
Service Act (Public Law 91-572).

end insert

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 128210 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128210.  

There is hereby created a state medical contract
program with accredited medical schools, begin insert teaching health centers, end insert
programs that train primary care physician’s assistants, programs
that train primary care nurse practitioners, programs that train
registered nurses, hospitals, and other health care delivery systems
to increase the number of students and residents receiving quality
education and training in the begin delete specialty end delete begin insert primary care specialties end insert of
family begin delete practice end delete begin insert medicine, internal medicine, obstetrics and
gynecology, and pediatrics, end insert or in nursing and to maximize the
delivery of primary care begin insert and end insert family physician services to specific
areas of California where there is a recognized unmet priority need
for those services.

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 128215 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128215.  

There is hereby created a California Healthcare
Workforce Policy Commission. The commission shall be composed
of 15 members who shall serve at the pleasure of their appointing
authorities:

(a) Nine members appointed by the Governor, as follows:

(1) One representative of the University of California medical
schools, from a nominee or nominees submitted by the University
of California.

(2) One representative of the private medical or osteopathic
schools accredited in California from individuals nominated by
each of these schools.

(3) One representative of practicing family begin insert medicine end insert physicians.

(4) One representative who is a practicing osteopathic physician
or surgeon and who is board certified in either general or family
begin delete practice. end delete begin insert medicine. end insert

(5) One representative of undergraduate medical students in a
family begin delete practice end delete begin insert medicine end insert program or residence in family begin delete practice end delete
begin insert medicine end insert training.

(6) One representative of trainees in a primary care physician’s
assistant program or a practicing physician’s assistant.

(7) One representative of trainees in a primary care nurse
practitioners program or a practicing nurse practitioner.

(8) One representative of the Office of Statewide Health
Planning and Development, from nominees submitted by the office
director.

(9) One representative of practicing registered nurses.

(b) Two consumer representatives of the public who are not
elected or appointed public officials, one appointed by the Speaker
of the Assembly and one appointed by the Chairperson of the
Senate Committee on Rules.

(c) Two representatives of practicing registered nurses, one
appointed by the Speaker of the Assembly and one appointed by
the Chairperson of the Senate Committee on Rules.

(d) Two representatives of students in a registered nurse training
program, one appointed by the Speaker of the Assembly and one
appointed by the Chairperson of the Senate Committee on Rules.

(e) The begin delete Chief end delete begin insert Deputy Director end insert of the begin delete Health Professions end delete
begin insert Healthcare Workforce end insert Development begin delete Program end delete begin insert Division end insert in the Office
of Statewide Health Planning and Development, or the begin delete chief’s end delete
begin insert deputy director’s end insert designee, shall serve as executive secretary for
the commission.

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 128225 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128225.  

The commission shall do all of the following:

(a) Identify specific areas of the state where unmet priority needs
for primary care family physicians and registered nurses exist.

(b)  begin insert (1) end insert begin insert   end insert Establish standards for begin insert primary care and end insert family
begin delete practice end delete begin insert medicine end insert training begin delete programs end delete begin insert programs, primary care end insert and
family begin delete practice end delete begin insert medicine end insert residency programs, postgraduate
osteopathic medical programs in begin insert primary care or end insert family begin delete practice, end delete
begin insert medicine, end insert and primary care physician assistants programs and
programs that train primary care nurse practitioners, including
appropriate provisions to encourage begin insert primary care physicians, end insert
family physicians, osteopathic family physicians, primary care
physician’s assistants, and primary care nurse practitioners who
receive training in accordance with this article and Article 2
(commencing with Section 128250) to provide needed services in
areas of unmet need within the state. Standards for begin insert primary care
and end insert family begin delete practice end delete begin insert medicine end insert residency programs shall provide
that all begin insert of end insert the residency programs contracted for pursuant to this
article and Article 2 (commencing with Section 128250) shall begin delete both
meet the Residency Review Committee on Family Practice’s
“Essentials” for Residency Training in end delete begin insert be approved by the
Accreditation Council for Graduate Medical Education’s Residency
Review Committee for end insert Family begin delete Practice and be approved by the
Residency Review Committee on Family Practice. end delete begin insert Medicine,
Internal Medicine, Pediatrics, or Obstetrics and Gynecology. end insert
Standards for postgraduate osteopathic medical programs in
begin insert primary care and end insert family begin delete practice, end delete begin insert medicine, end insert as approved by the
American Osteopathic Association Committee on Postdoctoral
Training for interns and residents, shall be established to meet the
requirements of this subdivision in order to ensure that those
programs are comparable to the other programs specified in this
subdivision. Every program shall include a component of training
designed for medically underserved multicultural communities,
lower socioeconomic neighborhoods, or rural communities, and
shall be organized to prepare program graduates for service in
those neighborhoods and communities. Medical schools receiving
funds under this article and Article 2 (commencing with Section
128250) shall have programs or departments that recognize family
begin delete practice end delete begin insert medicine end insert as a major independent specialty. Existence of
a written agreement of affiliation or association between a hospital
and an accredited medical school shall be regarded by the
commission as a favorable factor in considering recommendations
to the director for allocation of funds appropriated to the state
medical contract program established under this article and Article
2 (commencing with Section 128250). begin insert Teaching health centers
receiving funds under this article shall have programs or
departments that recognize family medicine as a major independent
specialty. end insert

begin insert (2) end insert begin insert   end insert For purposes of this subdivision, begin insert “primary care” and end insert
“family begin delete practice” end delete begin insert medicine” end insert includes the general practice of
medicine by osteopathic physicians.

(c) Establish standards for registered nurse training programs.
The commission may accept those standards established by the
Board of Registered Nursing.

(d) Review and make recommendations to the Director of the
Office of Statewide Health Planning and Development concerning
the funding of begin insert primary care and end insert family begin delete practice end delete begin insert medicine end insert programs
or departments and begin insert primary care and end insert family begin delete practice end delete begin insert medicine end insert
residencies and programs for the training of primary care physician
assistants and primary care nurse practitioners that are submitted
to the begin delete Health Professions end delete begin insert Healthcare Workforce end insert Development
begin delete Program end delete begin insert Division end insert for participation in the contract program
established by this article and Article 2 (commencing with Section
128250). If the commission determines that a program proposal
that has been approved for funding or that is the recipient of funds
under this article and Article 2 (commencing with Section 128250)
does not meet the standards established by the commission, it shall
submit to the Director of the Office of Statewide Health Planning
and Development and the Legislature a report detailing its
objections. The commission may request the Office of Statewide
Health Planning and Development to make advance allocations
for program development costs from amounts appropriated for the
purposes of this article and Article 2 (commencing with Section
128250).

(e) Review and make recommendations to the Director of the
Office of Statewide Health Planning and Development concerning
the funding of registered nurse training programs that are submitted
to the begin delete Health Professions end delete begin insert Healthcare Workforce end insert Development
begin delete Program end delete begin insert Division end insert for participation in the contract program
established by this article. If the commission determines that a
program proposal that has been approved for funding or that is the
recipient of funds under this article does not meet the standards
established by the commission, it shall submit to the Director of
the Office of Statewide Health Planning and Development and the
Legislature a report detailing its objections. The commission may
request the Office of Statewide Health Planning and Development
to make advance allocations for program development costs from
amounts appropriated for the purposes of this article.

(f) Establish contract criteria and single per-student and
per-resident capitation formulas that shall determine the amounts
to be transferred to institutions receiving contracts for the training
of begin insert primary care and end insert family begin delete practice end delete begin insert medicine end insert students and residents
and primary care physician’s assistants and primary care nurse
practitioners and registered nurses pursuant to this article and
Article 2 (commencing with Section 128250), except as otherwise
provided in subdivision (d). Institutions applying for or in receipt
of contracts pursuant to this article and Article 2 (commencing
with Section 128250) may appeal to the director for waiver of
these single capitation formulas. The director may grant the waiver
in exceptional cases upon a clear showing by the institution that
a waiver is essential to the institution’s ability to provide a program
of a quality comparable to those provided by institutions that have
not received waivers, taking into account the public interest in
program cost-effectiveness. Recipients of funds appropriated by
this article and Article 2 (commencing with Section 128250) shall,
as a minimum, maintain the level of expenditure for family begin delete practice end delete
begin insert medicine end insert or primary care physician’s assistant or family care nurse
practitioner training that was provided by the recipients during the
1973-74 fiscal year. Recipients of funds appropriated for registered
nurse training pursuant to this article shall, as a minimum, maintain
the level of expenditure for registered nurse training that was
provided by recipients during the 2004-05 fiscal year. Funds
appropriated under this article and Article 2 (commencing with
Section 128250) shall be used to develop new programs or to
expand existing programs, and shall not replace funds supporting
current family begin delete practice end delete begin insert medicine end insert or registered nurse training
programs. Institutions applying for or in receipt of contracts
pursuant to this article and Article 2 (commencing with Section
128250) may appeal to the director for waiver of this maintenance
of effort provision. The director may grant the waiver if he or she
determines that there is reasonable and proper cause to grant the
waiver.

(g)  begin insert (1) end insert begin insert   end insert Review and make recommendations to the Director of
the Office of Statewide Health Planning and Development
concerning the funding of special programs that may be funded
on other than a capitation rate basis. These special programs may
include the development and funding of the training of primary
health care teams of begin insert primary care and end insert family begin delete practice end delete begin insert medicine end insert
residents or begin insert primary care or end insert family physicians and primary care
physician assistants or primary care nurse practitioners or registered
nurses, undergraduate medical education programs in begin insert primary care
or end insert family begin delete practice, end delete begin insert medicine, end insert and programs that link training
programs and medically underserved communities in California
that appear likely to result in the location and retention of training
program graduates in those communities. These special programs
also may include the development phase of new begin insert primary care or end insert
family begin delete practice end delete begin insert medicine end insert residency, primary care physician assistant
programs, primary care nurse practitioner programs, or registered
nurse programs.

begin insert (2) end insert begin insert   end insert The commission shall establish standards and contract
criteria for special programs recommended under this subdivision.

(h) Review and evaluate these programs regarding compliance
with this article and Article 2 (commencing with Section 128250).
One standard for evaluation shall be the number of recipients who,
after completing the program, actually go on to serve in areas of
unmet priority for primary care begin insert or end insert family physicians in California
or registered nurses who go on to serve in areas of unmet priority
for registered nurses.

(i) Review and make recommendations to the Director of the
Office of Statewide Health Planning and Development on the
awarding of funds for the purpose of making loan assumption
payments for medical students who contractually agree to enter a
primary care specialty and practice primary care medicine for a
minimum of three consecutive years following completion of a
primary care residency training program pursuant to Article 2
(commencing with Section 128250).

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Section 128230 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128230.  

When making recommendations to the Director of the
Office of Statewide Health Planning and Development concerning
the funding of begin insert primary care and end insert family begin delete practice end delete begin insert medicine end insert programs
or departments, begin insert primary care and end insert family begin delete practice end delete begin insert medicine end insert
residencies, and programs for the training of primary care physician
assistants, primary care nurse practitioners, or registered nurses,
the commission shall give priority to programs that have
demonstrated success in the following areas:

(a) Actual placement of individuals in medically underserved
areas.

(b) Success in attracting and admitting members of minority
groups to the program.

(c) Success in attracting and admitting individuals who were
former residents of medically underserved areas.

(d) Location of the program in a medically underserved area.

(e) The degree to which the program has agreed to accept
individuals with an obligation to repay loans awarded pursuant to
the Health Professions Education Fund.

begin insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 128235 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128235.  

Pursuant to this article and Article 2 (commencing
with Section 128250), the Director of the Office of Statewide
Health Planning and Development shall do all of the following:

(a) Determine whether begin insert primary care and end insert family begin delete practice, end delete
begin insert medicine, end insert primary care begin delete physician end delete begin insert physician’s end insert assistant training
program proposals, primary care nurse practitioner training
program proposals, and registered nurse training program proposals
submitted to the California Healthcare Workforce Policy
Commission for participation in the state medical contract program
established by this article and Article 2 (commencing with Section
128250) meet the standards established by the commission.

(b) Select and contract on behalf of the state with accredited
medical schools, begin insert teaching health centers, end insert programs that train
primary care begin delete physician end delete begin insert physician’s end insert assistants, programs that train
primary care nurse practitioners, hospitals, and other health care
delivery systems for the purpose of training undergraduate medical
students and residents in the begin delete specialty end delete begin insert specialties end insert of begin insert internal
medicine, obstetrics and gynecology, pediatrics, and end insert family
begin delete practice. end delete begin insert medicine. end insert Contracts shall be awarded to those institutions
that best demonstrate the ability to provide quality education and
training and to retain students and residents in specific areas of
California where there is a recognized unmet priority need for
primary care family physicians. Contracts shall be based upon the
recommendations of the commission and in conformity with the
contract criteria and program standards established by the
commission.

(c) Select and contract on behalf of the state with programs that
train registered nurses. Contracts shall be awarded to those
institutions that best demonstrate the ability to provide quality
education and training and to retain students and residents in
specific areas of California where there is a recognized unmet
priority need for registered nurses. Contracts shall be based upon
the recommendations of the commission and in conformity with
the contract criteria and program standards established by the
commission.

(d) Terminate, upon 30 days’ written notice, the contract of any
institution whose program does not meet the standards established
by the commission or that otherwise does not maintain proper
compliance with this part, except as otherwise provided in contracts
entered into by the director pursuant to this article and Article 2
(commencing with Section 128250).

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 130200 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

130200.  

There is hereby established within the California
Health and Human Services Agency the Office of Health
Information Integrity to ensure the enforcement of state law
mandating the confidentiality of medical begin delete information and to impose
administrative fines for the unauthorized use of medical end delete
information. The Office of Health Information Integrity shall be
administered by a director who shall be appointed by the Secretary
of California Health and Human Services.

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Section 130201 of the end insert begin insert Health and Safety Code end insert begin insert is
amended and renumbered to read: end insert

begin delete 130201. end delete
begin insert 1280.16. end insert   

For purposes of begin delete this division, end delete begin insert Sections 1280.17,
1280.18, 1280.19, and 1280.20, end insert the following definitions apply:

begin insert

(a) “Department” means the State Department of Public Health.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “Director” means the begin delete Director of the Office of end delete begin insert State Public end insert
Health begin delete Information Integrity. end delete begin insert Officer. end insert

begin delete

(b)

end delete

begin insert (c) end insert  “Medical information” means the term as defined in Section
56.05 of the Civil Code.

begin delete end delete begin delete

(c) “Office” means the Office of Health Information Integrity.

end delete begin delete end delete

(d) “Provider of health care” means the term as defined in
Sections 56.05 and 56.06 of the Civil Code.

(e) “Unauthorized access” means the inappropriate review or
viewing of patient medical information without a direct need for
diagnosis, treatment, or other lawful use as permitted by the
Confidentiality of Medical Information Act (Part 2.6 (commencing
with Section 56) of Division 1 of the Civil Code) or by other
statutes or regulations governing the lawful access, use, or
disclosure of medical information.

begin insert

begin insert SEC. 25. end insert   

end insert

begin insert Section 130202 of the end insert begin insert Health and Safety Code end insert begin insert is
amended and renumbered to read: end insert

begin delete 130202. end delete
begin insert 1280.17. end insert   

(a) (1)  begin delete Upon receipt of a referral from the State
Department of Public Health, the office end delete begin insert The department end insert may assess
an administrative fine against any person or any provider of health
care, whether licensed or unlicensed, for any violation of begin insert Section
1280.18 of end insert this begin delete division end delete begin insert code or Part 2.6 (commencing with Section
56) of Division 1 of the Civil Code end insert in an amount as provided in
Section 56.36 of the Civil Code. Proceedings against any person
or entity for a violation of this section shall be held in accordance
with administrative adjudication provisions of Chapter 4.5
(commencing with Section 11400) and Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code.

(2) Paragraph (1) shall not apply to a clinic, health facility,
agency, or hospice licensed pursuant to Section 1204, 1250, 1725,
or begin delete 1745 if Senate Bill 541 of the 2007-08 Regular Session is
enacted and becomes effective on or before January 1, 2009. end delete begin insert 1745. end insert

begin delete end delete begin delete

(3) Nothing in paragraph (1) shall be construed as authorizing
the office to assess the administrative penalties described in Section
1280.15 of the Health and Safety Code.

end delete begin delete end delete

(b) The begin delete office end delete begin insert department end insert shall adopt, amend, or repeal, in
accordance with the provisions of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, begin delete such end delete rules and regulations as may be reasonable and proper
to carry out the purposes and intent of begin delete this division, end delete begin insert Sections
1280.18, 1280.19, end insert and begin insert 1280.20, and end insert to enable the authority to
exercise the powers and perform the duties conferred upon it by
begin delete this division end delete begin insert those sections end insert not inconsistent with any other
provision of law.

begin delete end delete begin delete

(c) Paragraph (3) of subdivision (a) shall only become operative
if Senate Bill 541 of the 2007-08 Regular Session is enacted and
becomes effective on or before January 1, 2009.

end delete begin delete end delete

begin insert

begin insert SEC. 26. end insert   

end insert

begin insert Section 130203 of the end insert begin insert Health and Safety Code end insert begin insert is
amended and renumbered to read: end insert

begin delete 130203. end delete
begin insert 1280.18. end insert   

(a) Every provider of health care shall establish and
implement appropriate administrative, technical, and physical
safeguards to protect the privacy of a patient’s medical information.
Every provider of health care shall reasonably safeguard
confidential medical information from any unauthorized access or
unlawful access, use, or disclosure.

(b) In exercising its duties pursuant to begin delete this division, end delete begin insert Section
1280.17, end insert the begin delete office end delete begin insert department end insert shall consider the provider’s
capability, complexity, size, and history of compliance with this
section and other related state and federal statutes and regulations,
the extent to which the provider detected violations and took steps
to immediately correct and prevent past violations from
reoccurring, and factors beyond the provider’s immediate control
that restricted the facility’s ability to comply with this section.

begin insert

(c) The department may conduct joint investigations of
individuals and health facilities for violations of this section and
Section 1280.15, respectively.

end insert

begin insert

begin insert SEC. 27. end insert   

end insert

begin insert Section 130204 of the end insert begin insert Health and Safety Code end insert begin insert is
amended and renumbered to read: end insert

begin delete 130204. end delete
begin insert 1280.19. end insert   

The Internal Health Information Integrity Quality
Improvement Account is hereby created in the State Treasury. All
administrative fines assessed by the begin delete office end delete begin insert department end insert pursuant to
Section 56.36 of the Civil Code shall be deposited in the Internal
Health Information Integrity Quality Improvement Account.
Notwithstanding Section 16305.7 of the Government Code, all
interest earned on the moneys deposited in the account shall be
retained in the account. Upon appropriation by the Legislature,
money in the account shall be used for the purpose of supporting
quality improvement activities in the begin delete office. end delete begin insert department. end insert

begin insert

begin insert SEC. 28. end insert   

end insert

begin insert Section 130205 of the end insert begin insert Health and Safety Code end insert begin insert is
amended and renumbered to read: end insert

begin delete 130205. end delete
begin insert 1280.20. end insert   

Notwithstanding any other begin delete provision of end delete law, the
director may send a recommendation for further investigation of,
or discipline for, a potential violation of begin delete this division to end delete the
licensee’s relevant licensing authority. The recommendation shall
include all documentary evidence collected by the director in
evaluating whether or not to make that recommendation. The
recommendation and accompanying evidence shall be deemed in
the nature of an investigative communication and be protected by
Section 6254 of the Government Code. The licensing authority of
the provider of health care shall review all evidence submitted by
the director and may take action for further investigation or
discipline of the licensee.

begin insert

begin insert SEC. 29. end insert   

end insert

begin insert Section 131058 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 131058. end insert   

The State Department of Public Health may
investigate, apply for, and enter into agreements to secure federal
or nongovernmental funding opportunities for the purposes of
advancing public health, subject to the provisions of Section 13326
of the Government Code for federal funding or applicable
administrative review and approval for nongovernmental funding
opportunities.

end insert

begin insert

begin insert SEC. 30. end insert   

end insert

begin insert Section 136000 of the end insert begin insert Health and Safety Code end insert begin insert is
repealed. end insert

begin delete

136000.  

(a) (1) Effective July 1, 2012, there is hereby
transferred from the Department of Managed Health Care the
Office of Patient Advocate to be established within the California
Health and Human Services Agency, to provide assistance to, and
advocate on behalf of, individuals served by health care service
plans regulated by the Department of Managed Health Care,
insureds covered by health insurers regulated by the Department
of Insurance, and individuals who receive or are eligible for other
health care coverage in California, including coverage available
through the Medi-Cal program, the California Health Benefit
Exchange, the Healthy Families Program, or any other county or
state health care program. The goal of the office shall be to help
those individuals secure the health care services to which they are
entitled or for which they are eligible under the law.
Notwithstanding any provision of this division, each regulator and
health coverage program shall retain its respective authority,
including its authority to resolve complaints, grievances, and
appeals.

(2) The office shall be headed by a patient advocate appointed
by the Governor. The patient advocate shall serve at the pleasure
of the Governor.

(3) The provisions of this division affecting insureds covered
by health insurers regulated by the Department of Insurance and
individuals who receive or are eligible for coverage available
through the Medi-Cal program, the California Health Benefit
Exchange, the Healthy Families Program, or any other county or
state health care program shall commence on January 1, 2013,
except that for the period July 1, 2012, to January 1, 2013, the
office shall continue with any duties, responsibilities, or activities
of the office authorized as of July 1, 2011, which shall continue
to be authorized.

(b) (1) The duties of the office shall include, but not be limited
to, all of the following:

(A) Developing, in consultation with the Managed Risk Medical
Insurance Board, the State Department of Health Care Services,
the California Health Benefit Exchange, the Department of
Managed Health Care, and the Department of Insurance,
educational and informational guides for consumers describing
their rights and responsibilities, and informing them on effective
ways to exercise their rights to secure health care coverage. The
guides shall be easy to read and understand and shall be made
available in English and other threshold languages, using an
appropriate literacy level, and in a culturally competent manner.
The informational guides shall be made available to the public by
the office, including being made accessible on the office’s Internet
Web site and through public outreach and educational programs.

(B) Compiling an annual publication, to be made available on
the office’s Internet Web site, of a quality of care report card,
including, but not limited to, health care service plans.

(C) Rendering assistance to consumers regarding procedures,
rights, and responsibilities related to the filing of complaints,
grievances, and appeals, including appeals of coverage denials and
information about any external appeal process.

(D) Making referrals to the appropriate state agency regarding
studies, investigations, audits, or enforcement that may be
appropriate to protect the interests of consumers.

(E) Coordinating and working with other government and
nongovernment patient assistance programs and health care
ombudsperson programs.

(2) The office shall employ necessary staff. The office may
employ or contract with experts when necessary to carry out the
functions of the office. The patient advocate shall make an annual
budget request for the office which shall be identified in the annual
Budget Act.

(3) Until January 1, 2013, the office shall have access to records
of the Department of Managed Health Care, including, but not
limited to, information related to health care service plan or health
insurer audits, surveys, and enrollee or insured grievances.

(4) The patient advocate shall annually issue a public report on
the activities of the office, and shall appear before the appropriate
policy and fiscal committees of the Senate and Assembly, if
requested, to report and make recommendations on the activities
of the office.

(5) The office shall adopt standards for the organizations with
which it contracts pursuant to this section to ensure compliance
with the privacy and confidentiality laws of this state, including,
but not limited to, the Information Practices Act of 1977 (Chapter
1(commencing with Section 1798) of Division 3 of the Civil Code).
The office shall conduct privacy trainings as necessary, and
regularly verify that the organizations have measures in place to
ensure compliance with this provision.

(c) In enacting this act, the Legislature recognizes that, because
of the enactment of federal health care reform on March 23, 2010,
and the implementation of various provisions by January 1, 2014,
it is appropriate to transfer the Office of Patient Advocate and to
confer new responsibilities on the Office of Patient Advocate,
including assisting consumers in obtaining health care coverage
and obtaining health care through health coverage that is regulated
by multiple regulators, both state and federal. The new
responsibilities include assisting consumers in navigating both
public and private health care coverage and assisting consumers
in determining which regulator regulates the health care coverage
of a particular consumer. In order to assist in implementing federal
health care reform in California, commencing January 1, 2013,
the office, in addition to the duties set forth in subdivision (b),
shall also do all of the following:

(1) Receive and respond to all inquiries, complaints, and requests
for assistance from individuals concerning health care coverage
available in California.

(2) Provide, and assist in the provision of, outreach and
education about health care coverage options as set forth in
subparagraph (A) of paragraph (1) of subdivision (b), including,
but not limited to:

(A) Information regarding applying for coverage; the cost of
coverage; and renewal in, and transitions between, health coverage
programs.

(B) Information and assistance regarding public programs, such
as Medi-Cal, the Healthy Families Program, federal veterans health
benefits, and Medicare; and private coverage, including
employer-sponsored coverage, Exchange coverage; and other
sources of care if the consumer is not eligible for coverage, such
as county services, community clinics, discounted hospital care,
or charity care.

(3) Coordinate with other state and federal agencies engaged in
outreach and education regarding the implementation of federal
health care reform.

(4) Render assistance to, and advocate on behalf of, consumers
with problems related to health care services, including care and
service problems and claims or payment problems.

(5) Refer consumers to the appropriate regulator of their health
coverage programs for filing complaints, grievances, or claims, or
for payment problems.

(d) (1) Commencing January 1, 2013, the office shall track and
analyze data on problems and complaints by, and questions from,
consumers about health care coverage for the purpose of providing
public information about problems faced and information needed
by consumers in obtaining coverage and care. The data collected
shall include demographic data, source of coverage, regulator, and
resolution of complaints, including timeliness of resolution.

(2) The Department of Managed Health Care, the State
Department of Health Care Services, the Department of Insurance,
the Managed Risk Medical Insurance Board, the California Health
Benefit Exchange, and other public coverage programs shall
provide to the office data in the aggregate concerning consumer
complaints and grievances. For the purpose of publicly reporting
information about the problems faced by consumers in obtaining
care and coverage, the office shall analyze data on consumer
complaints and grievances resolved by these agencies, including
demographic data, source of coverage, insurer or plan, resolution
of complaints and other information intended to improve health
care and coverage for consumers. The office shall develop and
provide comprehensive and timely data and analysis based on the
information provided by other agencies.

(3) The office shall collect and report data to the United States
Secretary of Health and Human Services on complaints and
consumer assistance as required to comply with requirements of
the federal Patient Protection and Affordable Care Act (Public
Law 111-148).

(e) Commencing January 1, 2013, in order to assist consumers
in understanding the impact of federal health care reform as well
as navigating and resolving questions and problems with health
care coverage and programs, the office shall ensure that either the
office or a state agency contracting with the office shall do the
following:

(1) Operate a toll-free telephone hotline number that can route
callers to the proper regulating body or public program for their
question, their health plan, or the consumer assistance program in
their area.

(2) Operate an Internet Web site, other social media, and
up-to-date communication systems to give information regarding
the consumer assistance programs.

(f) (1) The office may contract with community-based consumer
assistance organizations to assist in any or all of the duties of
subdivision (c) in accordance with Section 19130 of the
Government Code or provide grants to community-based consumer
assistance organizations for portions of these purposes.

(2) Commencing January 1, 2013, any local community-based
nonprofit consumer assistance program with which the office
contracts shall include in its mission the assistance of, and duty
to, health care consumers. Contracting consumer assistance
programs shall have experience in the following areas:

(A) Assisting consumers in navigating the local health care
system.

(B) Advising consumers regarding their health care coverage
options and helping consumers enroll in and retain health care
coverage.

(C) Assisting consumers with problems in accessing health care
services.

(D) Serving consumers with special needs, including, but not
limited to, consumers with limited-English language proficiency,
consumers requiring culturally competent services, low-income
consumers, consumers with disabilities, consumers with low
literacy rates, and consumers with multiple health conditions,
including behavioral health.

(E) Collecting and reporting data, including demographic data,
source of coverage, regulator, and resolution of complaints,
including timeliness of resolution.

(3) Commencing January 1, 2013, the office shall develop
protocols, procedures, and training modules for organizations with
which it contracts.

(4) Commencing January 1, 2013, the office shall adopt
standards for organizations with which it contracts regarding
confidentiality and conduct.

(5) Commencing January 1, 2013, the office may contract with
consumer assistance programs to develop a series of appropriate
literacy level and culturally and linguistically appropriate
educational materials in all threshold languages for consumers
regarding health care coverage options and how to resolve
problems.

(g) Commencing January 1, 2013, the office shall develop
protocols and procedures for assisting in the resolution of consumer
complaints, including both of the following:

(1) A procedure for referral of complaints and grievances to the
appropriate regulator or health coverage program for resolution
by the relevant regulator or public program.

(2) A protocol or procedure for reporting to the appropriate
regulator and health coverage program regarding complaints and
grievances relevant to that agency that the office received and was
able to resolve without further action or referral.

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

(1) “Consumer” or “individual” includes the individual or his
or her parent, guardian, conservator, or authorized representative.

(2) “Exchange” means the California Health Benefit Exchange
established pursuant to Title 22 (commencing with Section 100500)
of the Government Code.

(3) “Health care” includes behavioral health, including both
mental health and substance abuse treatment.

(4) “Health care service plan” has the same meaning as that set
forth in subdivision (f) of Section 1345. Health care service plan
includes “specialized health care service plans,” including
behavioral health plans.

(5) “Health coverage program” includes the Medi-Cal program,
Healthy Families Program, tax subsidies and premium credits
under the Exchange, the Basic Health Program, if enacted, county
health coverage programs, and the Access for Infants and Mothers
Program.

(6) “Health insurance” has the same meaning as set forth in
Section 106 of the Insurance Code.

(7) “Health insurer” means an insurer that issues policies of
health insurance.

(8) “Office” means the Office of Patient Advocate.

(9) “Threshold languages” shall have the same meaning as for
Medi-Cal managed care.

end delete

begin insert

begin insert SEC. 31. end insert   

end insert

begin insert Section 136000 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 136000. end insert   

(a) (1) The Office of Patient Advocate is hereby
established within the California Health and Human Services
Agency, to provide assistance to, and advocate on behalf of, health
care consumers. The goal of the office shall be to coordinate
amongst, provide assistance to, and collect data from, all of the
state agency consumer assistance or patient assistance programs
and call centers, to better enable health care consumers to access
the health care services to which they are eligible under the law,
including, but not limited to, commercial and Exchange coverage,
Medi-Cal, Medicare, and federal veterans health benefits.
Notwithstanding any provision of this division, each regulator and
health coverage program shall retain its respective authority,
including its authority to resolve complaints, grievances, and
appeals.

(2) The office shall be headed by a patient advocate appointed
by the Governor. The patient advocate shall serve at the pleasure
of the Governor.

(b) (1) The duties of the office shall include, but not be limited
to, all of the following:

(A) Coordinate and work in consultation with state agency and
local, nongovernment health care consumer or patient assistance
programs and health care ombudsperson programs.

(B) Produce a baseline review and annual report to be made
publically available on the office’s Internet Web site by July 1,
2015, and annually thereafter, of health care consumer or patient
assistance help centers, call centers, ombudsperson, or other
assistance centers operated by the Department of Managed Health
Care, the Department of Health Care Services, the Department of
Insurance, and the Exchange, that includes, at a minimum, all of
the following:

(i) The types of calls received and the number of calls.

(ii) The call center’s role with regard to each type of call,
question, complaint, or grievance.

(iii) The call center’s protocol for responding to requests for
assistance from health care consumers, including any performance
standards.

(iv) The protocol for referring or transferring calls outside the
jurisdiction of the call center.

(v) The call center’s methodology of tracking calls, complaints,
grievances, or inquiries.

(C) (i) Collect, track, and analyze data on problems and
complaints by, and questions from, consumers about health care
coverage for the purpose of providing public information about
problems faced and information needed by consumers in obtaining
coverage and care. The data collected shall include demographic
data, source of coverage, regulator, type of problem or issue or
comparable types of problems or issues, and resolution of
complaints, including timeliness of resolution. Notwithstanding
Section 10231.5 of the Government Code, the office shall submit
a report by July 1, 2015, and annually thereafter to the Legislature.
The report shall be submitted in compliance with Section 9795 of
the Government Code. The format may be modified annually as
needed based upon comments from the Legislature and
stakeholders.

(ii) For the purpose of publically reporting information as
required in subparagraph (B) and this subparagraph about the
problems faced by consumers in obtaining care and coverage, the
office shall analyze data on consumer complaints and grievances
resolved by the agencies listed in subdivision (c), including
demographic data, source of coverage, insurer or plan, resolution
of complaints, and other information intended to improve health
care and coverage for consumers.

(D) Make recommendations, in consultation with stakeholders,
for improvement or standardization of the health consumer
assistance functions, referral process, and data collection and
analysis.

(E) Develop model protocols, in consultation with consumer
assistance call centers and stakeholders, that may be used by call
centers for responding to and referring calls that are outside the
jurisdiction of the call center, program, or regulator.

(F) Compile an annual publication, to be made publically
available on the office’s Internet Web site, of a quality of care
report card, including, but not limited, to health care service plans,
preferred provider organizations, and medical groups.

(G) Make referrals to the appropriate state agency, whether
further or additional actions may be appropriate, to protect the
interests of consumers or patients.

(H) Assist in the development of educational and informational
guides for consumers and patients describing their rights and
responsibilities and informing them on effective ways to exercise
their rights to secure and access health care coverage, produced
by the Department of Managed Health Care, the Department of
Health Care Services, the Exchange, and the California
Department of Insurance, and to endeavor to make those materials
easy to read and understand and available in all threshold
languages, using an appropriate literacy level and in a culturally
competent manner.

(I) Coordinate with other state and federal agencies engaged
in outreach and education regarding the implementation of federal
health care reform, and to assist in these duties, may provide or
assist in the provision of grants to community-based consumer
assistance organizations for these purposes.

(J) If appropriate, refer consumers to the appropriate regulator
of their health coverage programs for filing complaints or
grievances.

(2) The office shall employ necessary staff. The office may
employ or contract with experts when necessary to carry out the
functions of the office. The patient advocate shall make an annual
budget request for the office that shall be identified in the annual
Budget Act.

(3) The patient advocate shall annually issue a public report
on the activities of the office, and shall appear before the
appropriate policy and fiscal committees of the Senate and
Assembly, if requested, to report and make recommendations on
the activities of the office.

(4) The office shall adopt standards for the organizations with
which it contracts pursuant to this section to ensure compliance
with the privacy and confidentiality laws of this state, including,
but not limited to, the Information Practices Act of 1977 (Chapter
1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division
3 of the Civil Code). The office shall conduct privacy trainings as
necessary, and regularly verify that the organizations have
measures in place to ensure compliance with this provision.

(c) The Department of Managed Health Care, the Department
of Health Care Services, the Department of Insurance, the
Exchange, and any other public health coverage programs shall
provide to the office data concerning call centers to meet the
reporting requirements in subparagraph (B) of paragraph (1) of
subdivision (b) and consumer complaints and grievances to meet
the reporting requirements in clause (i) of subparagraph (C) of
paragraph (1) of subdivision (b).

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

(1) “Consumer” or “individual” includes the individual or his
or her parent, guardian, conservator, or authorized representative.

(2) “Exchange” means the California Health Benefit Exchange
established pursuant to Title 22 (commencing with Section 100500)
of the Government Code.

(3) “Health care” includes services provided by any of the
health care coverage programs.

(4) “Health care service plan” has the same meaning as that
set forth in subdivision (f) of Section 1345. Health care service
plan includes “specialized health care service plans,” including
behavioral health plans.

(5) “Health coverage program” includes the Medi-Cal program,
Healthy Families Program, tax subsidies and premium credits
under the Exchange, the Basic Health Program, if enacted, county
health coverage programs, and the Access for Infants and Mothers
Program.

(6) “Health insurance” has the same meaning as set forth in
Section 106 of the Insurance Code.

(7) “Health insurer” means an insurer that issues policies of
health insurance.

(8) “Office” means the Office of Patient Advocate.

(9) “Threshold languages” has the same meaning as for
Medi-Cal managed care.

end insert

begin insert

begin insert SEC. 32. end insert   

end insert

begin insert Section 136030 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

136030.  

(a)  begin delete Effective July 1, 2012, in end delete begin insert In end insert addition to the
moneys received pursuant to subdivision (d), funding for the actual
and necessary expenses of the office in implementing this division
shall be provided, subject to appropriation by the Legislature, from
transfers of moneys from the Managed Care Fund and the Insurance
Fund.

(b) The share of funding from the Managed Care Fund shall be
based on the number of covered lives in the state that are covered
under plans regulated by the Department of Managed Health Care,
including covered lives under Medi-Cal managed begin delete care and the
Healthy Families Program, end delete begin insert care, end insert as determined by the Department
of Managed Health Care, in proportion to the total number of all
covered lives in the state.

(c) The share of funding to be provided from the Insurance Fund
shall be based on the number of covered lives in the state that are
covered under health insurance policies and benefit plans regulated
by the Department of Insurance, including covered lives under
Medicare supplement plans, as determined by the Department of
Insurance, in proportion to the total number of all covered lives in
the state. begin delete For the 2012-13 budget year, the apportionment shall
be effective for the period from January 1, 2013, to July 1, 2013,
consistent with paragraph (1) of subdivision (a) of Section 136000. end delete

(d) In addition to moneys received pursuant to subdivision (a),
the office may receive funding as follows:

(1) The office may apply to the United States Secretary of Health
and Human Services for federal grants.

(2) The office may begin delete apply to the United States Secretary of Health
and Human Services for a end delete begin insert seek private end insert grant begin delete under Section 2793
of the federal Public Health Service Act, as added by Section 1002
of the federal Patient Protection and Affordable Care Act (Public
Law 111-148). end delete begin insert funding from foundations or other sources. end insert

(3) To the extent permitted by federal law, the office may seek
federal financial participation for assisting beneficiaries of the
Medi-Cal program.

(e) All moneys received by the Office of Patient Advocate shall
be deposited into the fund specified in Section 136020.

begin insert

begin insert SEC. 33. end insert   

end insert

begin insert Section 10112.35 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 10112.35. end insert   

(a) An insurer providing individual coverage in the
Exchange shall cooperate with requests from the Exchange to
collaborate in the development of, and participate in the
implementation of, the Medi-Cal program’s premium and
cost-sharing payments under Sections 14102 and 14148.65 of the
Welfare and Institutions Code for eligible Exchange insureds.

(b) An insurer providing individual coverage in the Exchange
shall not charge, bill, ask, or require an insured receiving benefits
under Section 14102 or Section 14148.65 of the Welfare and
Institutions Code to make any premium or cost-sharing payments
for any services that are subject to premium or cost-sharing
payments by the State Department of Health Care Services under
Section 14102 or Section 14148.65 of the Welfare and Institutions
Code.

(c) For purposes of this section, “Exchange” means the
California Health Benefit Exchange established pursuant to Title
22 (commencing with Section 100500) of the Government Code.

end insert

begin insert

begin insert SEC. 34. end insert   

end insert

begin insert Section 10965.15 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

10965.15.  

(a) On or before October 1, 2013, and annually
every October 1 thereafter, a health insurer shall issue the following
notice to all policyholders enrolled in an individual health benefit
plan that is a grandfathered health plan:

New improved health insurance options are available in
California. You currently have health insurance that is not required
to follow many of the new laws. For example, your policy may
not provide preventive health services without you having to pay
any cost sharing (copayments or coinsurance). Also your current
policy may be allowed to increase your rates based on your health
status while new policies cannot. You have the option to remain
in your current policy or switch to a new policy. Under the new
rules, a health insurance company cannot deny your application
based on any health conditions you may have. For more
information about your options, please contact Covered California
at ____, begin delete the Office of Patient Advocate at ____, end delete your policy
representative or insurance agent, or an entity paid by Covered
California to assist with health coverage enrollment, such as a
navigator or an assister.

(b) Commencing October 1, 2013, a health insurer shall include
the notice described in subdivision (a) in any renewal material of
the individual grandfathered health plan and in any application for
dependent coverage under the individual grandfathered health
plan.

(c) A health insurer shall not advertise or market an individual
health benefit plan that is a grandfathered health plan for purposes
of enrolling a dependent of a policyholder into the plan for policy
years on or after January 1, 2014. Nothing in this subdivision shall
be construed to prohibit an individual enrolled in an individual
grandfathered health plan from adding a dependent to that plan to
the extent permitted by PPACA.

begin insert

begin insert SEC. 35. end insert   

end insert

begin insert Section 12693.70 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

12693.70.  

To be eligible to participate in the program, an
applicant shall meet all of the following requirements:

(a) Be an applicant applying on behalf of an eligible child, which
means a child who is all of the following:

(1) Less than 19 years of age. An application may be made on
behalf of a child not yet born up to three months prior to the
expected date of delivery. Coverage shall begin as soon as
administratively feasible, as determined by the board, after the
board receives notification of the birth. However, no child less
than 12 months of age shall be eligible for coverage until 90 days
after the enactment of the Budget Act of 1999.

(2) Not eligible for no-cost full-scope Medi-Cal or Medicare
coverage at the time of application.

(3) In compliance with Sections 12693.71 and 12693.72.

(4) A child who meets citizenship and immigration status
requirements that are applicable to persons participating in the
program established by Title XXI of the Social Security Act, except
as specified in Section 12693.76.

(5) A resident of the State of California pursuant to Section 244
of the Government Code; or, if not a resident pursuant to Section
244 of the Government Code, is physically present in California
and entered the state with a job commitment or to seek
employment, whether or not employed at the time of application
to or after acceptance in, the program.

(6) (A) In either of the following:

(i) In a family with an annual or monthly household income
equal to or less than 200 percent of the federal poverty level.

(ii) (I) When implemented by the board, subject to subdivision
(b) of Section 12693.765 and pursuant to this section, a child under
the age of two years who was delivered by a mother enrolled in
the Access for Infants and Mothers Program as described in Part
6.3 (commencing with Section 12695). Commencing July 1, 2007,
eligibility under this subparagraph shall not include infants during
any time they are enrolled in employer-sponsored health insurance
or are subject to an exclusion pursuant to Section 12693.71 or
12693.72, or are enrolled in the full scope of benefits under the
Medi-Cal program at no share of cost. For purposes of this clause,
any infant born to a woman whose enrollment in the Access for
Infants and Mothers Program begins after June 30, 2004, shall be
automatically enrolled in the Healthy Families Program, except
during any time on or after July 1, 2007, that the infant is enrolled
in employer-sponsored health insurance or is subject to an
exclusion pursuant to Section 12693.71 or 12693.72, or is enrolled
in the full scope of benefits under the Medi-Cal program at no
share of cost. Except as otherwise specified in this section, this
enrollment shall cover the first 12 months of the infant’s life. At
the end of the 12 months, as a condition of continued eligibility,
the applicant shall provide income information. The infant shall
be disenrolled if the gross annual household income exceeds the
income eligibility standard that was in effect in the Access for
Infants and Mothers Program at the time the infant’s mother
became eligible, or following the two-month period established
in Section 12693.981 if the infant is eligible for Medi-Cal with no
share of cost. At the end of the second year, infants shall again be
screened for program eligibility pursuant to this section, with
income eligibility evaluated pursuant to clause (i), subparagraphs
(B) and (C), and paragraph (2) of subdivision (a).

(II) Effective on October 1, 2013, or when the State Department
of Health Care Services has implemented Chapter 2 (commencing
with Section begin delete 15850) end delete begin insert 15810) end insert of Part 3.3 of Division 9 of the Welfare
and Institutions Code, whichever is later, eligibility for coverage
in the program pursuant to this clause shall terminate. The board
shall coordinate with the State Department of Health Care Services
to implement Chapter 2 (commencing with Section begin delete 15850) end delete begin insert 15810) end insert
of Part 3.3 of Division 9 of the Welfare and Institutions Code,
including transition of subscribers to the AIM-Linked Infants
Program. The State Department of Health Care Services shall
administer the AIM-Linked Infants Program, pursuant to Chapter
2 (commencing with Section begin delete 15850) end delete begin insert 15810) end insert of Part 3.3 of Division
9 of the Welfare and Institutions Code, to address the health care
needs of children formerly covered pursuant to this clause.

(B) All income over 200 percent of the federal poverty level
but less than or equal to 250 percent of the federal poverty level
shall be disregarded in calculating annual or monthly household
income.

(C) In a family with an annual or monthly household income
greater than 250 percent of the federal poverty level, any income
deduction that is applicable to a child under Medi-Cal shall be
applied in determining the annual or monthly household income.
If the income deductions reduce the annual or monthly household
income to 250 percent or less of the federal poverty level,
subparagraph (B) shall be applied.

(b) The applicant shall agree to remain in the program for six
months, unless other coverage is obtained and proof of the coverage
is provided to the program.

(c) An applicant shall enroll all of the applicant’s eligible
children in the program.

(d) In filing documentation to meet program eligibility
requirements, if the applicant’s income documentation cannot be
provided, as defined in regulations promulgated by the board, the
applicant’s signed statement as to the value or amount of income
shall be deemed to constitute verification.

(e) An applicant shall pay in full any family contributions owed
in arrears for any health, dental, or vision coverage provided by
the program within the prior 12 months.

(f) By January 2008, the board, in consultation with
stakeholders, shall implement processes by which applicants for
subscribers may certify income at the time of annual eligibility
review, including rules concerning which applicants shall be
permitted to certify income and the circumstances in which
supplemental information or documentation may be required. The
board may terminate using these processes not sooner than 90 days
after providing notification to the Chair of the Joint Legislative
Budget Committee. This notification shall articulate the specific
reasons for the termination and shall include all relevant data
elements that are applicable to document the reasons for the
termination. Upon the request of the Chair of the Joint Legislative
Budget Committee, the board shall promptly provide any additional
clarifying information regarding implementation of the processes
required by this subdivision.

begin insert

begin insert SEC. 36. end insert   

end insert

begin insert Section 12699.15 is added to the end insert begin insert Insurance Code end insert begin insert , end insert immediately following Section 12699.05 begin insert , to read: end insert

begin insert

begin insert 12699.15. end insert   

This part shall become inoperative on July 1, 2014,
except to the extent its operation is necessary to allow the State
Department of Health Care Services and other affected parties to
complete all transactions started under this part, and, as of January
1, 2016, is repealed, unless a later enacted statute, that becomes
operative on or before January 1, 2016, deletes or extends the
dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 37. end insert   

end insert

begin insert Section 12699.64 is added to the end insert begin insert Insurance Code end insert begin insert , end insert immediately following Section 12699.63 begin insert , to read: end insert

begin insert

begin insert 12699.64. end insert   

This part shall become inoperative on July 1, 2014,
except to the extent its operation is necessary to allow the State
Department of Health Care Services and other affected parties to
complete all transactions started under this part, and, as of January
1, 2016, is repealed, unless a later enacted statute, that becomes
operative on or before January 1, 2016, deletes or extends the
dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 38. end insert   

end insert

begin insert Section 12701 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 12701. end insert   

This part shall become inoperative on July 1, 2014,
except to the extent its operation is necessary to allow the State
Department of Health Care Services and other affected parties to
complete all transactions started under this part, and, as of January
1, 2016, is repealed, unless a later enacted statute, that becomes
operative on or before January 1, 2016, deletes or extends the
dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 39. end insert   

end insert

begin insert Section 12710.2 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 12710.2. end insert   

Notwithstanding any other law, the board created
pursuant to Section 12710 and renamed pursuant to Section
12710.1 shall continue until July 1, 2014, on which date it is
dissolved and the term of any board member serving at that time
ends.

end insert

begin insert

begin insert SEC. 40. end insert   

end insert

begin insert Section 12739.61 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

12739.61.  

(a)  begin delete The end delete begin insert Subject to subdivision (c), the end insert board shall
cease to provide coverage through the program on July 1, 2013,
except as required by the contract between the board and the United
States Department of Health and Human Services, and at that time
shall cease to operate the program except as required to complete
payments to, or payment reconciliations with, participating health
plans or other contractors, process appeals, or conduct other
necessary termination activities.

(b) Any permanent or probationary civil service employee who
is employed by the board and assigned to the program and whose
function ceases due to this section shall immediately be transferred
to the California Health Benefit Exchange and shall retain his or
her status, position, and rights pursuant to Section 19050.9 of the
Government Code and the State Civil Service Act (Part 2
(commencing with Section 18500) and Part 2.6 (commencing with
Section 19815) of Division 5 of Title 2 of the Government Code).

begin insert

(c) Commencing on July 1, 2014, the State Department of Health
Care Services shall complete payments to, or payment
reconciliations with, participating health plans or other
contractors, process appeals, or conduct other necessary program
termination activities.

end insert

begin insert

begin insert SEC. 41. end insert   

end insert

begin insert Section 12739.78 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

12739.78.  

(a) (1) If any statute dissolves or terminates the
board, any employee of the board who, immediately prior to the
effective date of the dissolution or termination of the board, was
assigned to the Healthy Families Program (Part 6.2 (commencing
with Section 12693)), the Access for Infants and Mothers Program
(Part 6.3 (commencing with Section 12695)), the County Health
Initiative Matching Fund (Part 6.4 (commencing with Section
12699.50)), or the Major Risk Medical Insurance Program (Part
6.5 (commencing with Section 12700)) shall be transferred to the
State Department of Health Care Services and shall retain his or
her status, position, and rights pursuant to Section 19050.9 of the
Government Code and the State Civil Service Act (Part 2
(commencing with Section 18500) and Part 2.6 (commencing with
Section 19815) of Division 5 of Title 2 of the Government Code).

(2) If employees are transferred to the State Department of
Health Care Services pursuant to this subdivision, the department
shall prepare a report on the transfer of employees, and, if
applicable, any functions transferred to the department upon
dissolution or termination of the board. The report shall, at a
minimum, describe any assignment of new activities to transferred
employees and provide workload justification for the position
authority transferred pursuant to this subdivision. The department
shall submit the report to the fiscal and relevant policy committees
of the Legislature by February 1 of the year following the year in
which employees are transferred, and shall update the report, if
necessary, by February 1 of each of the two years following
submission of the report. The report may be included with any
budget information submitted by the department to those
committees.

(b) (1) If any statute dissolves or terminates the board, any
employee of the board who, immediately prior to the effective date
of the dissolution or termination of the board, was assigned to the
Federal Temporary High Risk Pool (Part 6.6 (commencing with
Section 12739.5) and Part 6.7 (commencing with Section
12739.70)) shall be transferred to the California Health Benefit
Exchange and shall retain his or her status, position, and rights
pursuant to Section 19050.9 of the Government Code and the State
Civil Service Act (Part 2 (commencing with Section 18500) and
Part 2.6 (commencing with Section 19815) of Division 5 of Title
2 of the Government Code).

(2) This subdivision shall not apply to any employee who has
transferred to the California Health Benefit Exchange pursuant to
subdivision (b) of Section begin delete 12739.61. end delete begin insert 12739.61 or Section 12739.79. end insert

(c) If any statute dissolves or terminates the board, an
employee’s applicable reinstatement rights that would have applied
to the board shall instead apply to the State Department of Health
Care Services.

begin insert

begin insert SEC. 42. end insert   

end insert

begin insert Section 12739.79 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 12739.79. end insert   

Any permanent or probationary civil service
employee who is employed by the board and assigned to the
Federal Temporary High Risk Pool (Part 6.6 (commencing with
Section 12739.5) and Part 6.7 (commencing with Section
12739.70)) and whose function ceases due to Section 12739.61
shall immediately be transferred to the California Health Benefit
Exchange and shall retain his or her status, position, and rights
pursuant to Section 19050.9 of the Government Code and the State
Civil Service Act (Part 2 (commencing with Section 18500) and
Part 2.6 (commencing with Section 19815) of Division 5 of Title
2 of the Government Code).

end insert

begin insert

begin insert SEC. 43. end insert   

end insert

begin insert Section 19548.2 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 19548.2. end insert   

(a) Notwithstanding any other law and in accordance
with Section 120962 of the Health and Safety Code, the State
Department of Public Health shall disclose the name and individual
taxpayer identification number (ITIN) or social security number
of an applicant for, or recipient of services pursuant to Chapter
6 (commencing with Section 120950) of Part 4 of Division 105 of
the Health and Safety Code to the Franchise Tax Board for the
purpose of verifying the adjusted gross income of an applicant or
recipient.

(b) The Franchise Tax Board, upon receipt of this information,
shall inform the State Department of Public Health of the amounts
of the federal adjusted gross income as reported by the taxpayer
to the Franchise Tax Board, and the California adjusted gross
income as reported by the taxpayer to the Franchise Tax Board
or as adjusted by the Franchise Tax Board. The Franchise Tax
Board shall provide the information to the State Department of
Public Health for the most recent taxable year that the Franchise
Tax Board has information available, and shall include the first
and last name, date of birth, and the ITIN or social security number
of the taxpayer.

(c) (1) Information provided by the State Department of Public
Health pursuant to this section shall constitute confidential public
health records as defined in Section 121035 of the Health and
Safety Code, and shall remain subject to the confidentiality
protections and restrictions on further disclosure by the recipient
under subdivisions (d) and (e) of Section 121025.

(2) Prior to accessing confidential HIV-related public health
records, Franchise Tax Board staff and contractors shall be
required to annually sign a confidentiality agreement developed
by the State Department of Public Health that includes information
related to the penalties under Section 121025 of the Health and
Safety Code for a breach of confidentiality and the procedures for
reporting a breach of confidentiality under subdivision (h) of
Section 121022 of the Health and Safety Code. Those agreements
shall be reviewed annually by the State Department of Public
Health.

(3) The Franchise Tax Board shall return or destroy all
information received from the State Department of Public Health
after completing the exchange of information.

end insert

begin insert

begin insert SEC. 44. end insert   

end insert

begin insert Section 4061 of the end insert begin insert Welfare and Institutions Code end insert begin insert is
amended to read: end insert

4061.  

(a) The State Department of Health Care Services shall
utilize a joint state-county decisionmaking process to determine
the appropriate use of state and local training, technical assistance,
and regulatory resources to meet the mission and goals of the
state’s mental health begin insert and substance use disorder services end insert system.
The department shall use the decisionmaking collaborative process
required by this section in all of the following areas:

(1) Providing technical assistance to personnel of the State
Department of Health Care Services and local begin insert behavioral health, end insert
mental begin delete health end delete begin insert health, and substance use disorder services end insert
departments through direction of existing state and local mental
health begin insert and substance use disorder services end insert staff and other
resources.

(2) Analyzing mental health begin insert and substance use disorder end insert
programs, policies, and procedures.

(3) Providing forums on specific topics as they relate to the
following:

(A) Identifying current level of services.

(B) Evaluating existing needs and gaps in current services.

(C) Developing strategies for achieving statewide goals and
objectives in the provision of services for the specific area.

(D) Developing plans to accomplish the identified goals and
objectives.

(4) Providing forums on policy development and direction with
respect to mental health begin insert and substance use disorder end insert program
operations and clinical issues.

(5) Identifying and funding a statewide training and technical
assistance entity jointly governed by local begin insert behavioral health, end insert
mental begin delete health end delete begin insert health, and substance use disorder services end insert directors
and mental health begin insert and substance use disorder end insert constituency
representation, which can do all of the following:

(A) Coordinate state and local resources to support training and
technical assistance to promote quality mental health begin insert and substance
use disorder end insert programs.

(B) Coordinate training and technical assistance to ensure
efficient and effective program development.

(C) Provide essential training and technical assistance, as
determined by the state-county decisionmaking process.

(b) Local begin insert behavioral health, end insert mental begin delete health end delete begin insert health, and substance
use disorder services end insert board members shall be included in
discussions pursuant to Section 4060 when the following areas are
discussed:

(1) Training and education program recommendations.

(2) Establishment of statewide forums for all organizations and
individuals involved in mental health begin insert and substance use disorder end insert
matters to meet and discuss program and policy issues.

(3) Distribution of information between the state, local begin insert mental
health and substance use disorder end insert programs, local mental health
begin insert and substance use disorder services end insert boards, and other organizations
as appropriate.

(c) The State Department of Health Care Services and local
mental health begin insert and substance use disorder services end insert departments
may provide staff or other resources, including travel
reimbursement, for consultant and advisory services; for the
training of personnel, board members, or consumers and families
in state and local programs and in educational institutions and field
training centers approved by the department; and for the
establishment and maintenance of field training centers.

begin insert

begin insert SEC. 45. end insert   

end insert

begin insert Section 5897 of the end insert begin insert Welfare and Institutions Code end insert begin insert is
amended to read: end insert

5897.  

(a) Notwithstanding any other provision of state law,
the State Department of Health Care Services shall implement the
mental health services provided by Part 3 (commencing with
Section 5800), Part 3.6 (commencing with Section 5840), and Part
4 (commencing with Section 5850) begin delete of this division end delete through
contracts with county mental health programs or counties acting
jointly. A contract may be exclusive and may be awarded on a
geographic basis. begin delete As used herein end delete begin insert For purposes of this section, end insert a
county mental health program includes a city receiving funds
pursuant to Section 5701.5.

(b) Two or more counties acting jointly may agree to deliver or
subcontract for the delivery of begin delete such end delete begin insert those end insert mental health services.
The agreement may encompass all or any part of the mental health
services provided pursuant to these parts. Any agreement between
counties shall delineate each county’s responsibilities and fiscal
liability.

(c) The department shall implement the provisions of Part 3
(commencing with Section 5800), Part 3.2 (commencing with
Section 5830), Part 3.6 (commencing with Section 5840), and Part
4 (commencing with Section 5850) begin delete of this division end delete through the
annual county mental health services performance contract, as
specified in Chapter 2 (commencing with Section 5650) of Part begin delete 2
of Division 5. end delete begin insert 2. end insert

(d) When a county mental health program is not in compliance
with its performance contract, the department may request a plan
of correction with a specific timeline to achieve improvements.

(e) Contracts awarded by the State Department of Health Care
Services, the begin insert State Department of Public Health, the end insert California
Mental Health Planning Council, the Office of Statewide Health
Planning and Development, and the Mental Health Services
Oversight and Accountability Commission pursuant to Part 3
(commencing with Section 5800), Part 3.1 (commencing with
Section 5820), Part 3.2 (commencing with Section 5830), Part 3.6
(commencing with Section 5840), Part 3.7 (commencing with
Section 5845), Part 4 (commencing with Section 5850), and Part
4.5 (commencing with Section begin delete 5890) of this division, end delete begin insert 5890), end insert may
be awarded in the same manner in which contracts are awarded
pursuant to Section 5814 and the provisions of subdivisions (g)
and (h) of Section 5814 shall apply to begin delete such end delete begin insert those end insert contracts.

(f) For purposes of Section begin delete 5775, end delete begin insert 14712, end insert the allocation of funds
pursuant to Section 5892 which are used to provide services to
Medi-Cal beneficiaries shall be included in calculating anticipated
county matching funds and the transfer to the State Department
of Health Care Services of the anticipated county matching funds
needed for community mental health programs.

begin insert

begin insert SEC. 46. end insert   

end insert

begin insert Section 14005.22 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14005.22. end insert   

(a) A woman is eligible for Medi-Cal benefits under
Section 1396a(a)(10)(A)(i)(III) of Title 42 of the United States
Code if her income is less than or equal to 109 percent of the
federal poverty level as determined, counted, and valued in
accordance with the requirements of Section 1396a(e)(14) of Title
42 of the United States Code, as added by the federal Patient
Protection and Affordable Care Act (Public Law 111-148) and as
amended by the federal Health Care and Education Reconciliation
Act of 2010 (Public Law 111-152) and any subsequent
amendments, and she meets all other eligibility requirements.

(b) To the extent permitted by state and federal law, a woman
eligible under this section shall be required to enroll in a Medi-Cal
managed care health plan in those counties in which a Medi-Cal
managed care health plan is available.

(c) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or similar
instructions until the time regulations are adopted. The department
shall adopt regulations by July 1, 2017, in accordance with the
requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
Notwithstanding Section 10231.5 of the Government Code,
beginning six months after the effective date of this section, the
department shall provide a status report to the Legislature on a
semiannual basis, in compliance with Section 9795 of the
Government Code, until regulations have been adopted.

(d) This section shall be implemented only if and to the extent
that federal financial participation is available and any necessary
federal approvals have been obtained.

end insert

begin insert

begin insert SEC. 47. end insert   

end insert

begin insert Section 14005.225 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14005.225. end insert   

(a) The department shall seek any state plan
amendments or federal waivers necessary to provide pregnant
women whose income is over 109 percent of, and is up to and
including 138 percent of, the federal poverty level as determined,
counted, and valued in accordance with the requirements of Section
1396a(e)(14) of Title 42 of the United States Code, as added by
the federal Patient Protection and Affordable Care Act (Public
Law 111-148) and as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152) and
any subsequent amendments, with full scope Medi-Cal benefits
without a share of cost during their pregnancy and through the
end of the calendar month in which the 60th day after the end of
their pregnancy falls.

(b) To the extent permitted by state and federal law, a woman
eligible under this section shall be required to enroll in a Medi-Cal
managed care health plan in those counties in which a Medi-Cal
managed care health plan is available.

(c) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or similar
instructions until the time regulations are adopted. The department
shall adopt regulations by July 1, 2017, in accordance with the
requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
Notwithstanding Section 10231.5 of the Government Code,
beginning six months after the effective date of this section, the
department shall provide a status report to the Legislature on a
semiannual basis, in compliance with Section 9795 of the
Government Code, until regulations have been adopted.

(d) This section shall be implemented only if and to the extent
that federal financial participation is available and any necessary
federal approvals have been obtained.

end insert

begin insert

begin insert SEC. 48. end insert   

end insert

begin insert Section 14043.38 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14043.38.  

(a) Provider types are designated as “limited,”
“moderate,” or “high” categorical risk by the federal government
in Section 424.518 of Title 42 of the Code of Federal Regulations.
The department shall, at minimum, utilize the federal regulations
in determining a provider’s or applicant’s categorical risk.

begin delete end delete begin delete

(b) If the department designates a provider as a “high”
categorical risk, the department shall conduct a criminal
background check and shall require submission of a set of
fingerprints in accordance with Section 13000 of the Penal Code.
If fingerprints are required, providers and any person with a
5-percent direct or indirect ownership interest in the provider shall
be required to submit fingerprints in a manner determined by the
department within 30 days of the request.

end delete begin delete end delete begin delete

(c)

end delete

begin insert (b) end insert  In accordance with Section 455.450 of Title 42 of the Code
of Federal Regulations, the department shall designate a provider
begin insert or applicant end insert as a “high” categorical risk if any of the following
occur:

(1) The department imposes a payment suspension based on a
credible allegation of fraud, waste, or abuse.

(2) The provider begin insert or applicant end insert has an existing Medicaid
overpayment based on fraud, waste, or abuse.

(3) The provider begin insert or applicant end insert has been excluded by the federal
Office of the Inspector General or another state’s Medicaid program
within the previous 10 years.

(4) The federal Centers for Medicare and Medicaid Services
lifted a temporary moratorium within the previous six months for
the particular provider type submitting the application, the applicant
would have been prevented from enrolling based on that previous
moratorium, and the applicant applies for enrollment as a provider
at any time within six months from the date the moratorium was
lifted.

begin insert

(c) If the department designates a provider or applicant as a
“high” categorical risk, the department or its designee shall do
both of the following:

end insert begin insert

(1) Conduct a criminal background check of the provider or
applicant, and any person with a five-percent or greater direct or
indirect ownership interest in the provider or applicant.

end insert begin insert

(2) Require the provider or applicant, and any person with a
5-percent or greater direct or indirect ownership interest in the
provider or applicant, to submit a set of fingerprints within 30
days of the department’s request, in a manner determined by the
department.

end insert begin insert

(d) (1) The department shall submit to the Department of Justice
fingerprint images and related information required by the
Department of Justice of Medi-Cal providers or applicants
determined to be a “high” categorical risk pursuant to subdivision
(a), and any person with a five-percent or greater direct or indirect
ownership interest in those providers and applicants, for the
purposes of obtaining information as to the existence and content
of a record of state or federal convictions and state or federal
arrests and also information as to the existence and content of a
record of state or federal arrests for which the Department of
Justice establishes that the person is free on bail or on his or her
recognizance pending trial or appeal.

end insert begin delete

(d) (1)  This section shall become operative on

end delete

begin insert (2) end insert begin insert   end insert begin insert When end insert begin insert received, end insert the begin delete effective date end delete begin insert Department end insert of begin insert Justice
shall forward to end insert the begin delete state plan amendment necessary to implement
this section, as stated in the declaration executed by the director end delete
begin insert Federal Bureau of Investigation requests for federal summary
criminal history information received end insert pursuant to begin delete paragraph (2). end delete
begin insert this section. The Department of Justice shall review the information
returned from the Federal Bureau of Investigation and compile
and disseminate a response to the department. end insert

begin insert

(3) The Department of Justice shall provide a state or federal
level response to the department pursuant to paragraph (1) of
subdivision (p) of Section 11105 of the Penal Code.

end insert begin insert

(4) The department shall request from the Department of Justice
subsequent notification service, as provided pursuant to Section
11105.2 of the Penal Code, for persons described in paragraph
(1).

end insert begin delete

(2) Upon approval

end delete

begin insert (5) end insert begin insert   end insert begin insert The Department end insert of begin delete the state plan amendment necessary end delete
begin insert Justice shall charge a fee sufficient end insert to begin delete implement this section under
Sections 424.518, 455.434, and 455.450 of Title 42 of end delete begin insert cover end insert the
begin delete Code end delete begin insert cost end insert of begin delete Federal Regulations, end delete begin insert processing end insert the begin delete director shall
execute a declaration, to end delete begin insert request described in this section. That
fee shall end insert be begin delete retained end delete begin insert paid end insert by the begin delete director and posted on the
department’s Internet Web site, that states that this approval has
been obtained and the effective date end delete begin insert subject end insert of the begin delete state plan
amendment. The department shall transmit a copy of the declaration
to the Legislature. end delete begin insert criminal background check. end insert

begin insert

(e) For persons subject to the requirements of subdivision (a)
of Section 15660, the procedure for obtaining and submitting
fingerprints and notification by the Department of Justice of
criminal record information set forth in subdivision (c) of Section
15660 shall apply instead of the procedure set forth in subdivision
(d).

end insert

begin insert

begin insert SEC. 49. end insert   

end insert

begin insert Section 14104.35 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14104.35. end insert   

(a) Any contract amendments, modifications, or
change orders to a fiscal intermediary contract entered into by
the department for the purposes of implementing Section 14104.3
shall be exempt, except as provided in subdivision (b), from Part
2 (commencing with Section 10100) of Division 2 of the Public
Contract Code and any policies, procedures, or regulations
authorized by that part.

(b) Subdivision (a) shall not exempt the department from
establishing a competitive bid process for awarding new contracts
pursuant to Section 14104.3.

end insert

begin insert

begin insert SEC. 50. end insert   

end insert

begin insert Section 14131.11 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14131.11. end insert   

(a) Notwithstanding any other provision of this
chapter or Chapter 8 (commencing with Section 14200), any
increase in the amount charged to the Medi-Cal program for
patient care or treatment that is directly related to an identifiable
provider-preventable condition is excluded from reimbursement
under Medi-Cal, in accordance with criteria set forth in federal
and state law and the state’s Medi-Cal State Plan, except when
the provider-preventable condition existed prior to the initiation
of treatment for that patient by that provider.

(b) The exclusion from reimbursement specified in subdivision
(a) applies to the amounts charged for the care and treatment of
individuals eligible under the Medi-Cal program, both in
fee-for-service and managed care delivery systems, including
individuals dually eligible for both the Medicare and Medi-Cal
programs, individuals eligible under the California Children’s
Services Program, and individuals eligible under the Genetically
Handicapped Persons Program.

(c) Exclusion from reimbursement under Medi-Cal pursuant to
this section for increased amounts charged to Medi-Cal related
to a provider-preventable condition shall be limited to the extent
the identified provider-preventable condition would otherwise
result in an increase in payment and the state can reasonably
isolate for nonpayment the portion of the payment directly related
to treatment for, and related to, the provider-preventable condition.

(d) For health care-acquired conditions, the department may
limit application of the exclusion from reimbursement as
appropriate for specific populations, including, but not limited to,
the pediatric population, after consultation with the federal
government and stakeholders.

(e) For health care-acquired conditions, the exclusion of
reimbursement is initially limited to only those services provided
by inpatient hospitals. For other provider-preventable conditions,
the exclusion from reimbursement applies to health care services
provided by any provider. This subdivision shall not limit the
department from excluding from reimbursement those services
provided in additional care settings as determined by the
department. The department shall notify and consult with
appropriate stakeholders prior to implementing, interpreting, or
making specific this subdivision.

(f) Medi-Cal providers, in both fee-for-service and managed
care delivery systems, shall report the occurrence of any
provider-preventable condition in any individual identified in
subdivision (b) that did not exist prior to initiation of treatment
by that provider. The report shall be made to the department as
specified by the department, regardless of whether or not the
provider seeks Medi-Cal reimbursement for services to treat the
provider-preventable condition.

(g) If a provider in either a fee-for-service or managed care
delivery system receives a Medi-Cal payment or reimbursement
for any increase in costs for patient care or treatment directly
related to an identifiable provider-preventable condition that was
not present when the individual initiated treatment with that
provider, the provider shall reimburse those costs to the department
or plan.

(h) For purposes of this section, “provider-preventable
condition,” “health care-acquired condition,” and “other
provider-preventable condition” are defined as set forth in Section
447.26(b) of Title 42 of the Code of Federal Regulations.

(i) A provider is prohibited from pursuing payment or
reimbursement from a beneficiary for any increased amounts
directly related to treatment for, and related to, the
provider-preventable condition.

(j) (1) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may implement, interpret, or make specific this
section by means of plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action, until the
time regulations are adopted. Prior to issuing any letter, bulletin,
or similar instruction 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. It is the intent of the
Legislature that the department be provided temporary authority
as necessary to implement program changes until completion of
the regulatory process, which shall further address and take into
account the input of stakeholders.

(2) The department shall adopt emergency regulations pursuant
to Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code no later than January
1, 2017. The department may readopt any emergency regulation
authorized by this section that is the same as or substantially
equivalent to an emergency regulation previously adopted under
this section. The initial adoption of emergency regulations and
one readoption of emergency regulations implementing this section
shall be deemed an emergency and necessary for the immediate
preservation of the public peace, health, safety, or general welfare.

(3) Initial emergency regulations and the one readoption of
emergency regulations authorized by this section shall be exempt
from review by the Office of Administrative Law. The initial
emergency regulations and the one readoption of emergency
regulations shall be submitted to the Office of Administrative Law
for filing with the Secretary of State and each shall remain in effect
for no more than 180 days, by which time final regulations may
be adopted.

(k) The department shall seek any necessary federal approvals
for the implementation of this section.

(l) This section shall be implemented only to the extent that
federal financial participation is not jeopardized.

(m) This section shall be implemented in accordance with the
methodology set forth in the state plan in effect on July 1, 2012,
and subsequently in accordance with any future methodologies
approved by the federal Centers for Medicare and Medicaid
Services.

end insert

begin insert

begin insert SEC. 51. end insert   

end insert

begin insert Section 14132.275 of the end insert begin insert Welfare and Institutions
Code end insert begin insert , as amended by Section 13 of Chapter 37 of the Statutes of
2013, 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 noncontracting 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
begin delete section, end delete begin insert section and in Section 14132.277, end insert 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 begin delete (1) of
subdivision (l), end delete begin insert (1), end insert 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 (5) 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 begin insert Dual end insert 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.

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

begin insert

begin insert SEC. 52. end insert   

end insert

begin insert Section 14132.277 of the end insert begin insert Welfare and Institutions
Code end insert begin insert is amended to read: end insert

14132.277.  

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

begin insert

(1) “Alternate health care service plan” means a prepaid health
plan that is a nonprofit health care service plan with at least 3.5
million enrollees statewide, that owns or operates its own
pharmacies, and that provides medical services to enrollees in
specific geographic regions through an exclusive contract with a
single medical group in each specific geographic region in which
it operates to provide services to enrollees.

end insert begin insert

(2) “Cal MediConnect plan” means a health plan or other
qualified entity jointly selected by the state and CMS for
participation in the demonstration project.

end insert begin insert

(3) “CMS” means the federal Centers for Medicare and
Medicaid Services.

end insert begin delete

(1)

end delete

begin insert (4) end insert  “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 begin delete memorandum end delete begin insert Memorandum end insert of begin delete understanding
between end delete begin insert Understanding Between end insert the begin delete state and the end delete Centers for
Medicare and Medicaid Services begin insert and the State of California, end insert
Regarding begin delete A end delete begin insert a end insert Federal-State Partnership to Test a Capitated
Financial Alignment Model for Medicare-Medicaid Enrollees,
inclusive of all amendments, as authorized by Section 14132.275.

begin delete

(2)

end delete

begin insert (5) end insert  “D-SNP plan” means a Medicare Advantage begin insert Dual end insert Special
Needs Plan.

begin delete

(3)

end delete

begin insert (6) end insert  “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.

begin insert

(7) “Demonstration project” means the demonstration project
authorized by Section 14132.275.

end insert begin insert

(8) “Excluded beneficiaries” means those beneficiaries who
are not eligible to participate in the demonstration project pursuant
to subdivision (l) of Section 14132.275.

end insert begin insert

(9) “FIDE-SNP plan” means a Medicare Advantage
Fully-Integrated Dual Eligible Special Needs Plan.

end insert begin insert

(10) “Non-Coordinated Care Initiative counties” means counties
not participating in the demonstration project.

end insert

(b) For begin insert the 2014 end insert calendar begin delete year 2014, end delete begin insert year, end insert 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 begin delete the Centers end delete begin insert CMS end insert for begin delete Medicare
and Medicaid Services for end delete its D-SNP contract.

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

(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.

begin insert

(d) For the 2015 calendar year and the remainder of the
demonstration project, in Coordinated Care Initiative counties,
the department shall offer D-SNP contracts to D-SNP plans that
were approved for the D-SNP plan’s service areas as of January
1, 2013. In Coordinated Care Initiative counties, the department
shall enter into D-SNP contracts with D-SNP plans only for
excluded beneficiaries and for those beneficiaries identified in
paragraphs (2) and (5) of subdivision (g).

end insert begin insert

(e) For the 2015 calendar year and the remainder of the
demonstration project, in non-Coordinated Care Initiative counties,
the department shall offer D-SNP contracts to D-SNP plans.

end insert begin insert

(f) The director may include in a D-SNP contract offered
pursuant to subdivision (d) or (e) provisions requiring that the
D-SNP plan do the following:

end insert begin insert

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

end insert begin insert

(2) Submit to the department copies of all utilization and quality
management reports submitted to CMS.

end insert begin insert

(g) For the 2015 calender year and the remainder of the
demonstration project, in Coordinated Care Initiative counties,
the enrollment provisions of subdivision (l) of Section 14132.275
shall apply subject to the following:

end insert begin insert

(1) Beneficiaries enrolled in a FIDE-SNP plan or a Medicare
Advantage plan, other than a D-SNP plan, shall be exempt from
the enrollment provisions of subparagraph (A) of paragraph (1)
of subdivision (l) of Section 14132.275.

end insert begin insert

(2) Where the D-SNP plan is not a Cal MediConnect plan,
beneficiaries enrolled as of December 31, 2014, in a D-SNP plan
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 D-SNP plan and enroll in a demonstration site operating
pursuant to subdivision (g) of Section 14132.275. A dual eligible
beneficiary who is enrolled as of December 31, 2014, in a D-SNP
plan that is not a Cal MediConnect plan and who opts out of a
demonstration site during the course of the demonstration project
may choose to reenroll in that D-SNP plan.

end insert begin insert

(3) Where the D-SNP is a Cal MediConnect plan, beneficiaries
enrolled in a D-SNP plan who are eligible for the demonstration
project shall be subject to the enrollment provisions of
subparagraph (A) of paragraph (1) of subdivision (l) of Section
14132.275.

end insert begin insert

(4) For FIDE-SNP plans serving beneficiaries in Coordinated
Care Initiative counties, the department shall require the following
provisions:

end insert begin insert

(A) After December 31, 2014, enrollment in Los Angeles County
shall not exceed 6,000 additional beneficiaries at any point during
the term of the demonstration project. After December 31, 2014,
enrollment in the combined Riverside and San Bernardino counties
shall not exceed 1,500 additional beneficiaries at any point during
the term of the demonstration project.

end insert begin insert

(B) Any necessary data or information requirements provided
by the FIDE-SNP to ensure contract compliance.

end insert begin insert

(5) Beneficiaries enrolled in an alternate health care service
plan (AHCSP) who become dually eligible for Medicare and
Medicaid benefits while enrolled in that AHCSP may elect to enroll
in the AHCSP’s D-SNP plan subject to the following requirements:

end insert begin insert

(A) The beneficiary was a member of the AHCSP immediately
prior to becoming dually eligible for Medicare and Medicaid
benefits.

end insert begin insert

(B) Upon mutual agreement between a Cal MediConnect Plan
operated by a health authority or commission contracting with the
department and the AHCSP, the AHCSP shall take full financial
and programmatic responsibility for the long-term supports and
services of the D-SNP enrollee, including, but not limited to,
in-home supportive services, long term skilled nursing care,
community based adult services, multipurpose senior services
program services, and other Medi-Cal benefits offered in the
demonstration project.

end insert begin insert

(6) Prior to assigning a beneficiary in a Medi-Cal managed
care health plan pursuant to Section 14182.16, the department
shall determine whether the beneficiary is already a member of
the AHCSP. If so, the beneficiary shall be assigned to a Medi-Cal
managed care health plan operated by a health authority or
commission contracting with the department and subcontracting
with the AHCSP.

end insert

begin insert

begin insert SEC. 53. end insert   

end insert

begin insert Section 14132.915 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14132.915. end insert   

(a) (1) The department shall establish a list of
performance measures to ensure the dental fee-for-service program
meets quality and access criteria required by the department. The
performance measures shall be designed to evaluate utilization,
access, availability, and effectiveness of preventive care and
treatment.

(2) Prior to establishing the quality and access criteria
described in paragraph (1), the department shall consult with
stakeholders, including representatives from counties, local dental
societies, nonprofit entities, legal aid entities, and other interested
parties.

(3) The performance measures established by the department
to monitor the dental fee-for-service program for children shall
include, but not be limited to, all of the following:

(A) Overall utilization of dental services.

(B) Number of annual dental visits, preventive dental services,
dental treatment services, and examinations and oral health
evaluations.

(C) Number of applications of dental sealants.

(D) Continuity of care and overall utilization over an extended
period of time.

(E) All of the following ratios:

(i) Sealant to restoration.

(ii) Filling to preventive services.

(iii) Treatment to caries prevention.

(4) The performance measures established by the department
to monitor the dental fee-for-service program for adults shall
include, but not be limited to, all of the following:

(A) Number of annual dental visits and preventive dental
services.

(B) Treatment to caries prevention ratio.

(5) The performance measures shall be reported as aggregate
numbers and as percentages, if appropriate, using standards that
are as equivalent to those used by managed care entities as
feasible. Performance measures for the dental fee-for-service
program for children shall be reported by age groupings if
appropriate.

(b) The department shall include the initial list of performance
measures in any dental contract entered into between the
department and a fee-for-service contractor on or after enactment
of this section.

(c) To ensure that the dental health needs of Medi-Cal
beneficiaries are met, the department shall, when evaluating
performance measures for retention on, addition to, or deletion
from, the list of performance measures, consider all of the following
criteria:

(1) Annual and multiyear Medi-Cal dental fee-for-service
trended data.

(2) Other state and national dental program performance and
quality measures.

(3) Other state and national performance ratings.

(d) Commencing October 1, 2014, for the 2013 calendar year,
and annually on or before October 1 for each preceding calendar
year thereafter, the list of performance measures established by
the department along with the data of the dental fee-for-service
program performance shall be posted on the department’s Internet
Web site.

(e) The department may amend or remove performance
measures and establish additional performance measures in
accordance with all of the following:

(1) The department shall consider performance measures
established by other states, the federal government, and national
organizations developing dental program performance and quality
measures.

(2) The department shall notify a fee-for-service contractor, at
least 30 days prior to the implementation date, of any updates or
changes to performance measures. The department shall also post
these updates or changes on its Internet Web site at least 30 days
prior to implementation in order to maintain transparency to the
public.

(3) In establishing the performance measures, the department
shall consult with stakeholders, including representatives from
counties, local dental societies, nonprofit entities, legal aid entities,
and other interested parties.

(f) The department shall annually prepare a summary report of
the nature and types of complaints and grievances regarding access
to, and quality of, dental services, including the outcome.
Commencing no sooner than October 1, 2015, for the prior
calendar year, and annually thereafter, for each preceding
calendar year, this report shall be posted on the department’s
Internet Web site.

end insert

begin insert

begin insert SEC. 54. end insert   

end insert

begin insert Section 14148.65 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14148.65. end insert   

(a) (1) It is the intent of the Legislature, in adding
this section and Sections 14005.22 and 14148.67, to help prevent
premature delivery and low-birth weights, the leading cause of
infant morbidity and mortality, and to promote women’s overall
health, well-being, and financial security, while maximizing federal
funds.

(2) It is, therefore, the intent of the Legislature to maintain and
not to alter, reduce, suspend, restrict, or otherwise limit any
Medi-Cal benefits or services currently available to eligible
pregnant women receiving only pregnancy-related and postpartum
services through the Medi-Cal program to the extent those services
and benefits are not available through the beneficiary’s qualified
health plan through the Exchange.

(3) It is further the intent of the Legislature to maximize federal
funding while making no-cost health care coverage available to
pregnant women receiving only pregnancy-related and postpartum
services who opt to enroll or remain enrolled in a qualified health
plan through the Exchange. To this end, it is the intent of the
Legislature to enact an affordability and benefit program for
pregnant women within the applicable income range within the
Exchange. The intent of the Legislature is to enact a program
within the Exchange that would provide pregnant women with
no-share of cost health benefits so that pregnant women may
receive a benefit package equal to full-scope, comprehensive
benefits that are provided for Medi-Cal beneficiaries who are
pregnant. It is also the intent of the Legislature that no-cost health
coverage for pregnant women receiving only pregnancy-related
and postpartum services means Exchange qualified health plans
and providers serving beneficiaries pursuant to those plans are
prohibited from charging, billing, requesting, or requiring the
women to pay any of the costs or charges for any services covered
by the Exchange qualified health plan, or any premiums or cost
sharing during their pregnancy and postpartum coverage as
provided in paragraph (1) of subdivision (b) of Section 14148.67.
The Legislature reaffirms that Medi-Cal providers are prohibited
from charging, billing, requesting, or requiring beneficiaries to
pay for or refusing to provide Medi-Cal covered services that are
not available through an eligible woman’s Exchange qualified
health plan.

(b) After the director determines in writing that CalHEERS has
been programmed for implementation of this section, but no sooner
than January 1, 2015, the department, in coordination with the
Exchange, shall implement this section for women eligible for
Medi-Cal pregnancy-related and postpartum services who are or
will be enrolled in individual health care coverage through the
Exchange. At the applicant’s or beneficiary’s option, the
department shall allow the individual to enroll or remain enrolled
in an Exchange qualified health plan while at the same time
enrolling or remaining enrolled in the Medi-Cal program, and
shall ensure that the beneficiary receives the services and benefits
to which she is entitled as a result of her eligibility for and
enrollment in the Medi-Cal program as follows:

(1) If a beneficiary is only eligible for pregnancy-related and
postpartum services under this chapter and the beneficiary has
opted to enroll or remain enrolled in both Medi-Cal and coverage
under a qualified health plan offered under the Exchange, the
department shall pay both of the following on behalf of the
beneficiary in accordance with Section 14148.67:

(A) The beneficiary’s premium costs for Exchange coverage,
minus the beneficiary’s premium tax credit authorized by Section
36B of Title 26 of the United States Code and its implementing
regulations during the beneficiary’s period of eligibility for
pregnancy-related and postpartum services under this chapter.

(B) The beneficiary’s cost sharing for benefits and services
under the Exchange qualified health plan during the beneficiary’s
period of eligibility for pregnancy-related and postpartum services
under this chapter.

(2) The department shall provide beneficiaries who are receiving
benefits under this section with only those Medi-Cal benefits for
pregnancy-related and postpartum services that are covered under
the Medi-Cal program and, except when otherwise required by
state or federal law, that are not available through the
beneficiary’s qualified health plan. These beneficiaries shall retain
all rights and responsibilities to which they are legally entitled
under the Medi-Cal program. The beneficiaries shall have the
right to access Medi-Cal providers’ services through the Medi-Cal
program that are not contracting with the Exchange qualified
health plan as required under state or federal law, including, but
not limited to, the right to access family planning services, services
provided by Comprehensive Perinatal Services Program (CPSP)
Medi-Cal providers, perinatal specialists, certified nurse-midwife
services, and alternative and freestanding birth center services,
to the extent those services are not available through the
beneficiary’s Exchange qualified health plan, except when state
or federal law requires the right to access the service without
regard to its availability through the beneficiary’s Exchange
qualified health plan. The department shall implement its policies
and procedures on other health care coverage in a manner
consistent with this subdivision.

(3) Nothing in this section shall preclude a beneficiary from
opting to enroll or remain enrolled in Medi-Cal for
pregnancy-related and postpartum services without enrolling or
remaining enrolled in an Exchange qualified health plan or from
enrolling or remaining enrolled in an Exchange qualified health
plan without enrolling or remaining enrolled in Medi-Cal for
pregnancy-related and postpartum services.

(c) The department shall consult with the Exchange, Exchange
contracting health care service plans and health insurers, and
stakeholders, including consumer advocates, Medi-Cal providers,
counties, the State Department of Public Health, county maternal,
child, and adolescent health directors, and county CPSP
coordinators, in the development and implementation of all of the
following:

(1) Processes and procedures to inform affected applicants and
beneficiaries in a clear, consumer-friendly manner of all of their
enrollment options under the Medi-Cal program and the Exchange,
of the manner in which they may receive the benefits and services
covered through the Exchange coverage, and of the manner in
which they may receive benefits and services under this section.
This information shall be provided at the time of application and
renewal and when a beneficiary who is enrolled in the Medi-Cal
program or in an Exchange qualified health plan informs Medi-Cal
or the Exchange qualified health plan that she is pregnant.

(2) A process and procedure for applicants and beneficiaries
who are eligible for the Medi-Cal program based on pregnancy
to exercise the option to remain in or enroll in Exchange coverage
and receive Medi-Cal coverage for pregnancy-related and
postpartum services not covered by the beneficiary’s Exchange
qualified health plan and related assistance for premiums and cost
sharing as outlined in subdivision (b) or to remain in or enroll in
Medi-Cal and not enroll in Exchange coverage. The process and
all options shall be made available to women at the time of
applying to the Medi-Cal program or the Exchange and during
their enrollment in Medi-Cal or Exchange coverage, as applicable.

(3) The process for implementing other health coverage policy
and the right to access Medi-Cal providers’ services through the
Medi-Cal program that are not contracting with the Exchange
qualified health plan, including, but not limited to, family planning
services, services provided by CPSP Medi-Cal providers, perinatal
specialists, certified nurse-midwife services, and alternative and
freestanding birth center services, to the extent those services are
not available through the beneficiary’s Exchange qualified health
plan, except when state or federal law requires the right to access
the service without regard to its availability through the
beneficiary’s Exchange qualified health plan.

(4) Standardized notices and procedures to inform affected
Medi-Cal applicants and beneficiaries and affected individuals
applying for or enrolled in the Exchange of the option and the
process for eligible women to enroll or remain enrolled in
Exchange coverage and receive Medi-Cal pregnancy-related and
postpartum coverage under this section or to remain in or enroll
in Medi-Cal and not enroll in Exchange coverage.

(5) Standardized notices and procedures to inform Medi-Cal
beneficiaries receiving benefits under this section that infants born
to pregnant women receiving Medi-Cal benefits at the time of birth
are automatically eligible for the Medi-Cal program throughout
the infant’s first year of life and of the processes for enrolling their
newborns in the Medi-Cal program without an application.

(6) Provider notices to ensure that Medi-Cal providers are
aware of the Medi-Cal pregnancy program under this section for
women enrolled in the Exchange and that providers comply with
state and federal laws applicable to Medi-Cal pregnancy coverage
for women who exercise the option to remain in Exchange
coverage.

(7) Monitoring and data reporting required by subdivision (e).

(d) All notices developed under subdivision (c) shall be
accessible to persons who have limited English language
proficiency and persons with disabilities consistent with all federal
and state requirements.

(e) (1) In addition, the department shall consult with the
Exchange and Exchange contracting qualified health plans in the
development of a process for the department to make the payment
of premiums and cost sharing under this section and in the
development of a process for the department to evaluate the birth
outcomes of women who are receiving benefits under this section.

(2) (A) The department shall consult with the Exchange
regarding the inclusion of certified CPSP Medi-Cal providers in
qualified health plan provider networks. Additionally, the
department shall encourage certified CPSP Medi-Cal providers
to contract with Exchange qualified health plans in order to serve
the beneficiaries who are receiving services under this section.

(B) The department shall monitor the birth outcomes of women
who are receiving benefits under this section and the birth
outcomes of women receiving full scope and limited scope
pregnancy services under the Medi-Cal program, shall monitor
access to and the utilization of CPSP services from Medi-Cal
providers by beneficiaries receiving benefits under this section,
and shall assess if there are any differences in birth outcomes
between pregnant women receiving full scope and limited scope
services under the Medi-Cal program and women receiving benefits
under this section.

(C) To the extent possible, the department shall assess CPSP
Medi-Cal provider participation as contracted providers with
Exchange qualified health plans.

(f) (1) The department may contract with public or private
entities, or both, including the Exchange, to implement this section
and Section 14148.67. Contracts entered into under these sections
may be on a noncompetitive bid basis and are exempt from the
following:

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

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

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

(2) For contracts entered into under this subdivision, the
department shall not be required to specify the amounts
encumbered for each contract, but may allocate funds to each
contract based on the projected or actual beneficiary enrollments
to a total amount not to exceed the amount appropriated for the
program.

(g) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or similar
instructions until the time regulations are adopted. The department
shall adopt regulations by July 1, 2017, in accordance with the
requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
Notwithstanding Section 10231.5 of the Government Code,
beginning six months after the effective date of this section, the
department shall provide a status report to the Legislature on a
semiannual basis, in compliance with Section 9795 of the
Government Code, until regulations have been adopted.

(h) This section shall be implemented only if and to the extent
that federal financial participation is available and any necessary
federal approvals have been obtained.

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

(1) “Beneficiary” means a woman eligible for Medi-Cal
pregnancy-related and postpartum services.

(2) “CalHEERS” means the California Healthcare Eligibility,
Enrollment, and Retention System developed under Section 15926.

(3) “Cost sharing” means the expenditures, required by or on
behalf of the beneficiary by her qualified health plan with respect
to essential health benefits, and includes deductibles, coinsurance,
copayments, and similar charges, but excludes premiums, and
spending by an eligible beneficiary for benefits or services not
covered by the qualified health plan.

(4) “Exchange” means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.

(5) “Postpartum services” means those services and benefits
provided during a postpartum period under Section 14005.18.

end insert

begin insert

begin insert SEC. 55. end insert   

end insert

begin insert Section 14148.67 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14148.67. end insert   

(a) When implementing the premium and
cost-sharing payments required under Sections 14102 and
14148.65, the department shall make the premium and cost-sharing
payments required under those sections to the beneficiary’s
qualified health plan in conformity with the requirements of this
section.

(b) (1) The beneficiary shall not be charged, billed, asked, or
required to make any premium or cost-sharing payments to his or
her qualified health plan or service provider for any services that
are subject to premium or cost-sharing payments by the department
under Section 14102 or 14148.65.

(2) If the beneficiary makes any premium or cost-sharing
payments to his or her plan or provider for services that are subject
to premium or cost-sharing payments by the department under
Section 14102 or 14148.65, the department shall reimburse the
beneficiary for those payments. The department shall make every
reasonable effort to do both of the following:

(A) Make the reimbursement process simple and easy for
beneficiaries to use.

(B) Promptly reimburse beneficiaries under this paragraph.

(3) If, as a result of reconciliation in a tax year where the
beneficiary was eligible for covered premium payments under
Section 14102 or 14148.65, the beneficiary owes and makes a tax
payment to the federal government to return a portion of the
advanced premium tax credit to which the beneficiary was not
entitled and the beneficiary notifies the department, the department
shall reimburse the beneficiary for the amount of the tax payment
related to the tax credits for covered premium payments under
Section 14102 or 14148.65.

(4) If, as a result of reconciliation in a tax year where the
beneficiary was eligible for covered premium payments under
Section 14102 or 14148.65, the federal government owes and
makes a tax refund to the beneficiary based upon the beneficiary’s
advanced premium tax credit, the beneficiary shall reimburse the
department for the portion of the refund that is related to the tax
credits that were applied to the premium payments made by the
department.

(c) (1) Except as provided in paragraph (2), beneficiaries who
are eligible for benefits under Section 14102 or 14148.65 shall be
eligible for the premium and cost-sharing payments required under
those sections only up to the amount necessary to pay for the
second lowest silver level plan in his or her qualified health plan
pricing region, as modified by cost-sharing reductions.

(2) If a beneficiary selects or remains in a metal level plan that
is more expensive than the metal level plan amount limit required
under paragraph (1), the beneficiary may select or remain in that
plan only if he or she agrees to be responsible for paying all
applicable premium and cost-sharing charges that are in excess
of what is covered by the department. The department shall not
be responsible for paying for any premium or cost sharing that is
in excess of the metal level plan amount limit required under
paragraph (1).

(d) The department shall consult with the Exchange, Exchange
contracting health care service plans and health insurers, and
stakeholders, including consumer advocates, Medi-Cal providers,
and the counties, in the development and implementation of the
following:

(1) Processes and procedures to inform affected applicants and
beneficiaries in a clear, consumer-friendly manner of all of their
enrollment options under the Medi-Cal program and the Exchange,
of the manner in which they may receive the benefits and services
covered through the Exchange coverage, and of the manner in
which they may receive benefits and services under Section 14102.

(2) Provider notices to ensure that Medi-Cal providers are
aware of the Medi-Cal program under Section 14102 and that
providers comply with state laws applicable to Medi-Cal coverage
for individuals eligible under Section 14102.

(e) All notices developed under subdivision (d) shall be
accessible to persons with limited English language proficiency
and persons with disabilities consistent with all federal and state
requirements.

(f) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or similar
instructions until the time regulations are adopted. The department
shall adopt regulations by July 1, 2017, in accordance with the
requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
Notwithstanding Section 10231.5 of the Government Code,
beginning six months after the effective date of this section, the
department shall provide a status report to the Legislature on a
semiannual basis, in compliance with Section 9795 of the
Government Code, until regulations have been adopted.

(g) This section shall be implemented only if and to the extent
that federal financial participation is available and any necessary
federal approvals have been obtained.

end insert

begin insert

begin insert SEC. 56. end insert   

end insert

begin insert Section 14154 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14154.  

(a) (1) The department shall establish and maintain a
plan whereby costs for county administration of the determination
of eligibility for benefits under this chapter will be effectively
controlled within the amounts annually appropriated for that
administration. The plan, to be known as the County Administrative
Cost Control Plan, shall establish standards and performance
criteria, including workload, productivity, and support services
standards, to which counties shall adhere. The plan shall include
standards for controlling eligibility determination costs that are
incurred by performing eligibility determinations at county
hospitals, or that are incurred due to the outstationing of any other
eligibility function. Except as provided in Section 14154.15,
reimbursement to a county for outstationed eligibility functions
shall be based solely on productivity standards applied to that
county’s welfare department office.

(2) (A) The plan shall delineate both of the following:

(i) The process for determining county administration base costs,
which include salaries and benefits, support costs, and staff
development.

(ii) The process for determining funding for caseload changes,
cost-of-living adjustments, and program and other changes.

(B) The annual county budget survey document utilized under
the plan shall be constructed to enable the counties to provide
sufficient detail to the department to support their budget requests.

(3) The plan shall be part of a single state plan, jointly developed
by the department and the State Department of Social Services, in
conjunction with the counties, for administrative cost control for
the California Work Opportunity and Responsibility to Kids
(CalWORKs), CalFresh, and Medical Assistance (Medi-Cal)
programs. Allocations shall be made to each county and shall be
limited by and determined based upon the County Administrative
Cost Control Plan. In administering the plan to control county
administrative costs, the department shall not allocate state funds
to cover county cost overruns that result from county failure to
meet requirements of the plan. The department and the State
Department of Social Services shall budget, administer, and
allocate state funds for county administration in a uniform and
consistent manner.

(4) The department and county welfare departments shall
develop procedures to ensure the data clarity, consistency, and
reliability of information contained in the county budget survey
document submitted by counties to the department. These
procedures shall include the format of the county budget survey
document and process, data submittal and its documentation, and
the use of the county budget survey documents for the development
of determining county administration costs. Communication
between the department and the county welfare departments shall
be ongoing as needed regarding the content of the county budget
surveys and any potential issues to ensure the information is
complete and well understood by involved parties. Any changes
developed pursuant to this section shall be incorporated within the
state’s annual budget process by no later than the 2011-12 fiscal
year.

(5) The department shall provide a clear narrative description
along with fiscal detail in the Medi-Cal estimate package, submitted
to the Legislature in January and May of each year, of each
component of the county administrative funding for the Medi-Cal
program. This shall describe how the information obtained from
the county budget survey documents was utilized and, begin delete where end delete begin insert if end insert
applicable, modified and the rationale for the changes.

(6) Notwithstanding any other law, the department shall develop
and implement, in consultation with county program and fiscal
representatives, a new budgeting methodology for Medi-Cal county
administrative costs that reflects the impact of PPACA
implementation on county administrative work. The new budgeting
methodology shall be used to reimburse counties for eligibility
processing and case maintenance for applicants and beneficiaries.

(A) The budgeting methodology may include, but is not limited
to, identification of the costs of eligibility determinations for
applicants, and the costs of eligibility redeterminations and case
maintenance activities for recipients, for different groupings of
cases, based on variations in time and resources needed to conduct
eligibility determinations. The calculation of time and resources
shall be based on the following factors: complexity of eligibility
rules, ongoing eligibility requirements, and other factors as
determined appropriate by the department. The development of
the new budgeting methodology may include, but is not limited
to, county survey of costs, time and motion studies, in-person
observations by department staff, data reporting, and other factors
deemed appropriate by the department.

(B) The new budgeting methodology shall be clearly described,
state the necessary data elements to be collected from the counties,
and establish the timeframes for counties to provide the data to
the state.

(C) The new budgeting methodology developed pursuant to this
paragraph shall be implemented no sooner than the 2015-16 fiscal
year. The department may develop a process for counties to phase
in the requirements of the new budgeting methodology.

(D) The department shall provide the new budgeting
methodology to the legislative fiscal committees by March 1 of
the fiscal year immediately preceding the first fiscal year of
implementation of the new budgeting methodology.

(E) To the extent that the funding for the county budgets
developed pursuant to the new budget methodology is not fully
appropriated in any given fiscal year, the department, with input
from the counties, shall identify and consider options to align
funding and workload responsibilities.

(F) For purposes of this paragraph, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152) and any
subsequent amendments.

(G) 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
paragraph by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions until the time any
necessary regulations are adopted. The department shall adopt
regulations by July 1, 2017, in accordance with the requirements
of Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code. Beginning six
months after the implementation of the new budgeting methodology
pursuant to this paragraph, and notwithstanding Section 10231.5
of the Government Code, the department shall provide a status
report to the Legislature on a semiannual basis, in compliance with
Section 9795 of the Government Code, until regulations have been
adopted.

(b) Nothing in this section, Section 15204.5, or Section 18906
shall be construed begin delete so as end delete to limit the administrative or budgetary
responsibilities of the department in a manner that would violate
Section 14100.1, and thereby jeopardize federal financial
participation under the Medi-Cal program.

(c) (1) The Legislature finds and declares that in order for
counties to do the work that is expected of them, it is necessary
that they receive adequate funding, including adjustments for
reasonable annual cost-of-doing-business increases. The Legislature
further finds and declares that linking appropriate funding for
county Medi-Cal administrative operations, including annual
cost-of-doing-business adjustments, with performance standards
will give counties the incentive to meet the performance standards
and enable them to continue to do the work they do on behalf of
the state. It is therefore the Legislature’s intent to provide
appropriate funding to the counties for the effective administration
of the Medi-Cal program at the local level to ensure that counties
can reasonably meet the purposes of the performance measures as
contained in this section.

(2) It is the intent of the Legislature to not appropriate funds for
the cost-of-doing-business adjustment for the 2008-09, 2009-10,
2010-11, 2011-12, begin insert 2012-13, end insert and begin delete 2012-13 end delete begin insert 2014-15 end insert fiscal years.

(d) The department is responsible for the Medi-Cal program in
accordance with state and federal law. A county shall determine
Medi-Cal eligibility in accordance with state and federal law. If
in the course of its duties the department becomes aware of
accuracy problems in any county, the department shall, within
available resources, provide training and technical assistance as
appropriate. Nothing in this section shall be interpreted to eliminate
any remedy otherwise available to the department to enforce
accurate county administration of the program. In administering
the Medi-Cal eligibility process, each county shall meet the
following performance standards each fiscal year:

(1) Complete eligibility determinations as follows:

(A) Ninety percent of the general applications without applicant
errors and are complete shall be completed within 45 days.

(B) Ninety percent of the applications for Medi-Cal based on
disability shall be completed within 90 days, excluding delays by
the state.

(2) (A) The department shall establish best-practice guidelines
for expedited enrollment of newborns into the Medi-Cal program,
preferably with the goal of enrolling newborns within 10 days after
the county is informed of the birth. The department, in consultation
with counties and other stakeholders, shall work to develop a
process for expediting enrollment for all newborns, including those
born to mothers receiving CalWORKs assistance.

(B) Upon the development and implementation of the
best-practice guidelines and expedited processes, the department
and the counties may develop an expedited enrollment timeframe
for newborns that is separate from the standards for all other
applications, to the extent that the timeframe is consistent with
these guidelines and processes.

(3) Perform timely annual redeterminations, as follows:

(A) Ninety percent of the annual redetermination forms shall
be mailed to the recipient by the anniversary date.

(B) Ninety percent of the annual redeterminations shall be
completed within 60 days of the recipient’s annual redetermination
date for those redeterminations based on forms that are complete
and have been returned to the county by the recipient in a timely
manner.

(C) Ninety percent of those annual redeterminations where the
redetermination form has not been returned to the county by the
recipient shall be completed by sending a notice of action to the
recipient within 45 days after the date the form was due to the
county.

(D)  begin delete When end delete begin insert If end insert begin insert end insert a child is determined by the county to change from
no share of cost to a share of cost and the child meets the eligibility
criteria for the Healthy Families Program established under Section
12693.98 of the Insurance Code, the child shall be placed in the
Medi-Cal-to-Healthy Families Bridge Benefits Program, and these
cases shall be processed as follows:

(i) Ninety percent of the families of these children shall be sent
a notice informing them of the Healthy Families Program within
five working days from the determination of a share of cost.

(ii) Ninety percent of all annual redetermination forms for these
children shall be sent to the Healthy Families Program within five
working days from the determination of a share of cost if the parent
has given consent to send this information to the Healthy Families
Program.

(iii) Ninety percent of the families of these children placed in
the Medi-Cal-to-Healthy Families Bridge Benefits Program who
have not consented to sending the child’s annual redetermination
form to the Healthy Families Program shall be sent a request,
within five working days of the determination of a share of cost,
to consent to send the information to the Healthy Families Program.

(E) Subparagraph (D) shall not be implemented until 60 days
after the Medi-Cal and Joint Medi-Cal and Healthy Families
applications and the Medi-Cal redetermination forms are revised
to allow the parent of a child to consent to forward the child’s
information to the Healthy Families Program.

(e) The department shall develop procedures in collaboration
with the counties and stakeholder groups for determining county
review cycles, sampling methodology and procedures, and data
reporting.

(f) On January 1 of each year, each applicable county, as
determined by the department, shall report to the department on
the county’s results in meeting the performance standards specified
in this section. The report shall be subject to verification by the
department. County reports shall be provided to the public upon
written request.

(g) If the department finds that a county is not in compliance
with one or more of the standards set forth in this section, the
county 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 county shall take to improve its
performance on the standard or standards with which the county
is out of compliance. The plan shall establish interim benchmarks
for improvement that shall be expected to be met by the county in
order to avoid a sanction.

(h) (1) If a county does not meet the performance standards for
completing eligibility determinations and redeterminations as
specified in this section, the department may, at its sole discretion,
reduce the allocation of funds to that county in the following year
by 2 percent. Any funds so reduced may be restored by the
department if, in the determination of the department, sufficient
improvement has been made by the county in meeting the
performance standards during the year for which the funds were
reduced. If the county continues not to meet the performance
standards, the department may reduce the allocation by an
additional 2 percent for each year thereafter in which sufficient
improvement has not been made to meet the performance standards.

(2) No reduction of the allocation of funds to a county shall be
imposed pursuant to this subdivision for failure to meet
performance standards during any period of time in which the
cost-of-doing-business increase is suspended.

(i) The department shall develop procedures, in collaboration
with the counties and stakeholders, for developing instructions for
the performance standards established under subparagraph (D) of
paragraph (3) of subdivision (d), no later than September 1, 2005.

(j) No later than September 1, 2005, the department shall issue
a revised annual redetermination form to allow a parent to indicate
parental consent to forward the annual redetermination form to
the Healthy Families Program if the child is determined to have a
share of cost.

(k) The department, in coordination with the Managed Risk
Medical Insurance Board, shall streamline the method of providing
the Healthy Families Program with information necessary to
determine Healthy Families eligibility for a child who is receiving
services under the Medi-Cal-to-Healthy Families Bridge Benefits
Program.

(l) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
and except as provided in subparagraph (G) of paragraph (6) of
subdivision (a), the department shall, without taking any further
regulatory action, implement, interpret, or make specific this
section and any applicable federal waivers and state plan
amendments by means of all-county letters or similar instructions.

begin insert

begin insert SEC. 57. end insert   

end insert

begin insert Section 14165.50 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14165.50.  

(a) To facilitate the financial viability of a new
private nonprofit hospital that will serve the population of South
Los Angeles that was formerly served by the Los Angeles County
Martin Luther King, Jr.-Harbor Hospital, Medi-Cal funding shall,
at a minimum, be made available, as specified in this section, or
pursuant to mechanisms that provide equivalent funding under
successor or modified Medi-Cal payment systems.

(b)  begin delete (1) end delete begin delete end delete begin delete   end delete begin delete end delete begin delete (A) end delete begin delete end delete begin delete   end delete begin delete end delete begin delete Payment for end delete Medi-Cal begin delete inpatient end delete begin insert payment for end insert
hospital services provided by the new hospital, begin delete including, but not
limited to, supplemental payments, may be negotiated end delete begin insert exclusive
of any payments end insert under the begin delete selective provider contracting program,
as set forth in Article 2.6 end delete begin insert Medi-Cal Hospital Reimbursement
Improvement Act of 2013 (Article 5.230 end insert (commencing with Section
begin delete 14081). The negotiations for per diem end delete begin insert 14169.50)) or funded by
another statewide hospital fee program, and exclusive of the
supplemental end insert payments begin insert specified in subdivision (d), end insert shall include
consideration of the new hospital’s projected Medi-Cal costs for
providing the services begin delete and level of Medi-Cal reimbursement
thereof, exclusive of any supplemental payments, necessary for
the financial viability of the new hospital, and all other factors
allowable under Section 14083. end delete begin insert as set forth in this section. end insert

begin insert

(1) (A) Subject to paragraph (2) of subdivision (c), and
notwithstanding any other law, Medi-Cal payments made to the
new hospital on a fee-for-service basis, including payments made
pursuant to the methodology authorized under Section 14105.28
or successor or modified methodologies, shall provide
compensation that is, at a minimum, equal to 100 percent of the
new hospital’s projected Medi-Cal costs for each fiscal year.

end insert begin insert

(B) To the extent supplemental payments are necessary for any
fiscal year to meet the applicable minimum reimbursement level
as described in subparagraph (A), the department shall seek federal
approval, as necessary, to enable the new hospital to receive the
Medi-Cal supplemental payments.

end insert begin insert

(2) (A) To the extent permitted under federal law, the
department shall require Medi-Cal managed care plans serving
Medi-Cal beneficiaries in the County of Los Angeles to pay the
new hospital amounts determined necessary to meet compensation
levels for services provided to managed care enrollees that are no
less than the amount to which the new hospital would have received
on a fee-for-service basis pursuant to paragraph (1). The amounts
shall be determined in consultation with the new hospital, the
County of Los Angeles, and the Medi-Cal managed care plan, and
shall be subject to paragraph (2) of subdivision (c).

end insert begin insert

(B) Consistent with federal law, the capitation rates paid to
Medi-Cal managed care plans serving Medi-Cal beneficiaries in
the County of Los Angeles shall be determined to reflect the
obligations described in subparagraph (A). The increased payments
to Medi-Cal managed care plans that would be paid consistent
with actuarial certification and enrollment in the absence of this
paragraph shall not be reduced as a consequence of this
paragraph.

end insert begin insert

(C) A Medi-Cal managed care plan receiving the increased
payments described in subparagraph (B) shall not impose a fee
or retention amount, or reduce other payments to the new hospital
that would result in a direct or indirect reduction to the amounts
required to be paid under subparagraph (A).

end insert begin insert

(3) This subdivision shall not be construed to result in payments
that are less than the rates of compensation that would be payable
to the new hospital for Medi-Cal services without regard to the
requirements of paragraphs (1) and (2).

end insert begin insert

(c) If the applicable minimum reimbursement levels required
in subdivision (b) result in payments to the new hospital that are
above the levels of compensation that would have been payable
absent that requirement, and to the extent a nonfederal share is
necessary with respect to the additional compensation, the
following provisions shall apply:

end insert begin delete

(B) Notwithstanding any other provision of law,

end delete

begin insert (1) end insert begin insert   end insert begin insert (A) end insert begin insert   end insert begin insert For each fiscal year through the 2016-17 fiscal year,
General Fund amounts appropriated in the annual Budget Act for
the end insert Medi-Cal begin delete supplemental payment for debt service costs shall
be made end delete begin insert program shall fund the nonfederal share of the additional
payments end insert to the begin delete new hospital pursuant to Section 14085.5 with
respect to capital projects located at the site of end delete begin insert extent that the rates
of compensation for inpatient hospital services provided by end insert the
new hospital that begin delete previously were determined eligible under Section
14085.5 based on end delete begin insert would have been payable in end insert the begin delete debt service
costs incurred by end delete begin insert absence of end insert the begin delete County end delete begin insert requirements end insert of begin delete Los
Angeles, and if applicable, end delete begin insert subdivision (b) are less than 77 percent
of end insert the new begin delete hospital. Alternatively, the rate required end delete begin insert hospital’s
projected Medi-Cal costs. With respect end insert to begin delete be paid to end delete the begin delete new
hospital pursuant to subparagraph (A) may be increased to take
into account the amount end delete begin insert nonfederal share end insert of the begin delete supplemental end delete
begin insert additional end insert payments begin delete for debt service during the time the payments
would be due. Nothing in end delete begin insert described in paragraph (2) of subdivision
(b), however, end insert this subparagraph shall be begin delete construed to increase the
department’s obligations set forth in paragraph (2) end delete begin insert applicable only
for inpatient services provided in conjunction with the
implementation end insert of begin delete subdivision (g) of Section 14085.5. end delete begin insert Section
14182, and other mandatory managed care enrollment provisions
implemented subsequent to January 1, 2011. end insert

begin delete

(2) Notwithstanding any other provision of law, in the event the
new hospital does not enter into a contract under the selective
provider contracting program as described in paragraph (1), all of
the following shall apply:

end delete begin delete end delete begin delete

(A) Health facility planning area 935, or a successor health
facility planning area, that includes the area

end delete

begin insert (B) end insert begin insert   end insert begin insert For the 2017-18 fiscal year and each subsequent fiscal
year, General Fund amounts appropriated end insert in begin delete which end delete the begin delete new
hospital will operate, end delete begin insert annual Budget Act for the Medi-Cal program end insert
shall begin delete be opened end delete begin insert fund the nonfederal share of the additional
payments end insert to begin delete enable end delete the begin delete cost-based reimbursement methodology end delete
begin insert extent that the rates of compensation end insert for begin delete Medi-Cal end delete inpatient
hospital services begin delete set forth end delete begin insert provided by the new hospital that would
have been payable end insert in the begin insert absence of the requirements of subdivision
(b) are less than 72 percent of the new hospital’s projected end insert
Medi-Cal begin delete state plan to apply with end delete begin insert costs. With end insert respect to begin insert the
nonfederal share of the additional payments described in
paragraph (2) of subdivision (b), however, this subparagraph shall
be applicable only for inpatient end insert services provided begin delete by end delete begin insert in conjunction
with end insert the begin delete new hospital. end delete begin insert implementation of Section 14182, and other
mandatory managed care enrollment provisions implemented
subsequent to January 1, 2011. end insert

begin delete

(B)

end delete

begin insert (2) end insert   begin insert (A) end insert begin insert   end insert The begin delete department shall seek federal approval, as
necessary, to enable the new hospital to receive Medi-Cal
supplemental payments end delete begin insert remaining necessary nonfederal share of
the additional payments, after taking into account the General
Fund amounts described end insert in begin delete addition to the cost-based
reimbursement provided for in subparagraph (A). The nonfederal
share of the supplemental payments end delete begin insert paragraph (1), end insert may be funded
with public funds that are transferred to the state from the County
of Los Angeles, at the county’s election, pursuant to Section 14164.
begin insert To the extent the county elects not to fund any portion of the
remaining necessary nonfederal share, the applicable minimum
reimbursement levels required in subdivision (b) shall be reduced
accordingly. end insert

begin insert

(B) Any public funds transferred to the state for payments to
the new hospital as described in this paragraph with respect to a
fiscal period shall be expended solely for the nonfederal share of
the payments. Notwithstanding any other law, except as provided
in subdivision (m), the department shall not impose any fee or
assessment in connection with the transferred funds or the
payments provided for under this section, including, but not limited
to, reimbursement for state staffing or administrative costs.

end insert begin insert

(C) If any portion of the funds transferred pursuant to this
paragraph is not expended, or not expected to be expended, for
the specified rate amounts required in subdivision (b), the
unexpended funds shall be returned promptly to the transferring
county.

end insert begin insert

(3) This subdivision shall not be construed to reduce the
nonfederal share of payments funded by General Fund amounts
below the amounts that would be funded without regard to the
minimum payment levels required under this section.

end insert begin insert

(d) (1) In addition to payments meeting the applicable minimum
reimbursement levels described in subdivision (b), the new hospital
shall be eligible to receive supplemental payments. The
supplemental payments shall be provided annually in amounts
determined in consultation with the new hospital and the County
of Los Angeles, and subject to paragraph (3).

end insert begin insert

(2) The department shall seek federal approval, as necessary,
to enable the new hospital to receive supplemental payments that
are in addition to the applicable minimum reimbursement levels
required in subdivision (b). The supplemental payments may be
provided for under the mechanisms described in Sections 14166.12
and 14301.4 or successor or modified mechanisms, or any other
federally permissible payment mechanism. Supplemental payments
that are payable through a Medi-Cal managed care plan shall be
subject to the same requirements described in subparagraph (C)
of paragraph (2) of subdivision (b).

end insert begin insert

(3) If a nonfederal share is necessary to fund the supplemental
payments, the County of Los Angeles may voluntarily provide
public funds that are transferred to the state pursuant to Section
14164. The county may specify the type of supplemental payment
for which it is transferring funds, and any other category relevant
to the payment, including, but not limited to, fee-for-service
supplemental payment, managed care rate range payment, and
payment for services rendered to newly eligible beneficiaries as
defined in subdivision (s) of Section 17612.2.

end insert begin delete

(C) (i) 

end delete

begin insert (4) end insert begin insert   end insert Any public funds transferred to the state begin delete as described in
subparagraph (B) end delete for supplemental payments to the new hospital
begin insert as described in this subdivision end insert with respect to a fiscal period shall
be expended solely for the nonfederal share of the supplemental
begin delete payments, end delete begin insert payments as specified pursuant to paragraph (3).
Notwithstanding any other law, subdivision (o) of Section 14166.12
shall not apply, and the department shall not assess the fee
described in subdivision (d) of Section 14301.4, or any other
similar fee, end insert except begin delete for an amount that may be retained by end delete begin insert as
provided in subdivision (m). If any portion of end insert the begin delete state end delete begin insert funds
transferred pursuant to this subdivision is not expended, or not
expected to be expended, end insert for the begin delete benefit of end delete begin insert specified supplemental
payments, end insert the begin delete Medi-Cal program negotiated between end delete begin insert unexpended
funds shall be returned promptly to end insert the begin delete department and the County
of Los Angeles, limited as follows: end delete begin insert transferring county. end insert

begin delete

(I) For each fiscal year before the 2017-18 fiscal year, the
retained amount

end delete

begin insert (e) end insert begin insert   end insert begin insert Notwithstanding any other law, all payments provided for
under this section end insert shall begin delete not end delete be begin delete more than the amount end delete begin insert treated as
having been paid for purposes end insert of begin delete the nonfederal share end delete begin insert any
determination end insert of begin insert available room under end insert the begin delete reimbursement,
exclusive end delete begin insert federal upper payment limit, as specified in Part 447 end insert of
begin delete any supplemental payments, for the fiscal year to be paid pursuant
to the cost-based reimbursement methodology described in
subparagraph (A) that exceeds 77 percent of the new hospital’s
projected Medi-Cal costs. end delete begin insert Title 42 of the Code of Federal
Regulations, with respect to the applicable class of services and
class of health care provider. end insert

begin delete

(II)

end delete

begin insert (f) end insert   begin insert (1) end insert begin insert   end insert For begin delete the 2017-18 fiscal year and each subsequent fiscal
year, the retained amount shall not be more than the amount end delete
begin insert purposes of this article, “new hospital” means a health facility
that is certified under Title XVIII and Title XIX end insert of the begin delete nonfederal
share of the reimbursement, exclusive of any supplemental
payments, for the fiscal year to be paid end delete begin insert federal Social Security Act,
and is licensed end insert pursuant to begin insert Chapter 2 (commencing with Section
1250) of Division 2 of end insert the begin delete cost-based reimbursement methodology
described in subparagraph (A) that exceeds 72 percent end delete begin insert Health and
Safety Code to provide acute inpatient hospital services, and
includes all components end insert of the begin delete new hospital’s projected Medi-Cal
costs. end delete begin insert facility, with an inpatient hospital service location on the
campus of the former Los Angeles County Martin Luther King,
Jr.-Harbor Hospital. end insert

begin insert

(2) “Medi-Cal managed care plan” shall have the meaning
provided in paragraph (5) of subdivision (b) of Section 14199.1.

end insert begin delete

(ii)

end delete

begin insert (g) end insert  For purposes of this begin delete subparagraph, end delete begin insert article, end insert the new hospital’s
projected Medi-Cal costs shall be based on the cost finding
principles applied under subdivision (b) of Section 14166.4, begin insert except
that the projected costs shall not be multiplied by the federal
medical assistance percentage end insert and are not subject to the
reimbursement limitations set forth in Article 7.5 (commencing
with Section 51536) of Chapter 3 of Subdivision 1 of Division 3
of Title 22 of the California Code of Regulations. The begin delete new
hospital’s end delete projected Medi-Cal costs begin delete may take into account audit
adjustments end delete begin insert shall be determined prior end insert to begin delete allowable costs end delete begin insert the start
of each fiscal year in consultation with the new hospital, using the
best available and reasonable current estimates or projections
made with respect to the new hospital end insert for begin delete prior periods. end delete begin insert an annual
period, and shall be considered final as of the start of the fiscal
year for purposes of the minimum payment levels described in
subdivision (b). end insert

begin delete end delete begin delete

(D) Reimbursement under this paragraph shall be available to
the new hospital only if the necessary federal approval described
in subparagraph (B) is obtained. If the necessary federal approval
is not obtained, the new hospital shall be reimbursed for Medi-Cal
inpatient hospital services as set forth in paragraph (1) and the per
diem payments shall reimburse the hospital at no less than 72
percent of the hospital’s projected Medi-Cal costs for providing
the services, exclusive of any supplemental payments and the
payments described in subparagraph (B) of paragraph (1).

end delete begin delete end delete begin delete

(3)

end delete

begin insert (h) end insert  Notwithstanding any other begin delete provision of end delete law, begin delete and only to end delete the
begin delete extent federal approval is obtained, the end delete new hospital shall begin insert not end insert be
begin delete reimbursed for Medi-Cal outpatient services under end delete begin insert eligible to
receive payments pursuant to Section 14166.11. This subdivision,
however, shall not be construed to preclude end insert the begin delete cost-based
reimbursement methodology established in Section 14105.24. The
department shall seek end delete begin insert hospital from eligibility for disproportionate
share status, or from receipt of any end insert federal begin delete approval, as necessary, end delete
begin insert Medicaid disproportionate share hospital payments end insert to begin delete expand the
methodology to include outpatient services provided to end delete begin insert which it
would be entitled, pursuant to the end insert Medi-Cal begin delete beneficiaries by the
new hospital. end delete begin insert State Plan. end insert

begin delete

(c) Nothing

end delete

begin insert (i) end insert begin insert   end insert begin insert Except as specified end insert in begin insert subdivision (h), end insert this section shall begin insert not end insert
be construed to preclude the new hospital from receiving any other
payment for which it is eligible in addition to the payments
provided for by this section.

begin insert

(j) Notwithstanding any other law, for purposes of Article 12
(commencing with Section 17612.1) of Chapter 6 of Part 5, the
intergovernmental transfers described in this section as reflected
in the actual net expenditures for all operating budget units of the
County of Los Angeles Department of Health Services shall not
be reduced in any manner in the determination of total costs under
paragraph (6) of subdivision (b) of Section 17612.5, by application
of the imputed other entity intergovernmental transfer amounts or
otherwise.

end insert begin delete

(d)

end delete

begin insert (k) end insert  Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code, the department may implement this
section by means of all-facility letters, all-county letters, or similar
instructions, without taking further regulatory action. begin delete Nothing in
this end delete begin insert This end insert section shall begin insert not end insert be construed to preclude the department
from adopting regulations.

begin delete

(e)

end delete

begin insert ( end insert begin insert l end insert begin insert ) end insert  (1)  begin delete Except end delete begin insert The department shall obtain federal approvals
or waivers end insert begin insert end insert as begin delete otherwise provided herein, end delete begin insert necessary to implement end insert
this section begin insert and to obtain federal matching funds to the maximum
extent permitted by federal law. This section end insert shall be implemented
only if, and to the extent that, federal financial participation is
available and this section does not jeopardize the federal financial
participation available for any other state program.

(2) This section shall be implemented only if, and to the extent
that, begin insert any end insert necessary begin delete approval from the end delete federal begin delete Centers for Medicare
and Medicaid Services is end delete begin insert approvals are end insert obtained.

begin delete

(f)  For purposes

end delete

begin insert (m) end insert begin insert   end insert begin insert As part end insert of begin delete this article, “new hospital” means a health facility
that is certified under Title XVIII and Title XIX of the federal
Social Security Act, and is licensed pursuant end delete begin insert its voluntary
participation end insert to begin delete Chapter 2 (commencing with Section 1250) of
Division 2 of the Health and Safety Code to end delete provide begin delete acute inpatient
hospital services, and includes all components of end delete the begin delete facility, with
an inpatient hospital service location on end delete begin insert nonfederal share of
payments under this section, end insert the begin delete campus end delete begin insert County end insert of begin delete the former end delete Los
Angeles begin delete County Martin Luther King, Jr.-Harbor Hospital. end delete begin insert shall
agree to reimburse the state for the nonfederal share of state
staffing and administrative costs directly attributable to the cost
of administrating the payments and associated intergovernmental
transfers. The costs shall be documented and subject to review by
the county. end insert

begin insert

begin insert SEC. 58. end insert   

end insert

begin insert Section 15800 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15800.  

(a) (1) Commencing October 1, 2013, the State
Department of Health Care Services shall administer the
AIM-Linked Infants Program to address the health care needs of
children formerly covered pursuant to clause (ii) of subparagraph
(A) of paragraph (6) of subdivision (a) of Section 12693.70 of the
Insurance Code. The department is vested with the same powers,
purposes, responsibilities, and jurisdiction exercised by the
Managed Risk Medical Insurance Board as they relate to those
children. Nothing in this paragraph shall be construed to alter,
diminish, or supersede the authority of the Managed Risk Medical
Insurance Board to exercise the same powers, purposes,
responsibilities, and jurisdiction within the Healthy Families
Program established under Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code.

begin insert

(2) (A) Commencing on July 1, 2014, the State Department of
Health Care Services shall administer any other programs under,
and succeeds to and is vested with the same powers, purposes,
responsibilities, and jurisdiction exercised by, the Managed Risk
Medical Insurance Board.

end insert begin insert

(B) Commencing on July 1, 2014, any reference in any statute,
except for this chapter, Chapter 3 (commencing with Section
15850), and Section 12739.61 of, and Part 6.8 (commencing with
Section 12739.77) of Division 2 of, the Insurance Code, and in
any regulation, contract, or any other document, to the Managed
Risk Medical Insurance Board is deemed to instead refer to the
State Department of Health Care Services.

end insert begin delete

(2)

end delete

begin insert (3) end insert  The department may, before October 1, 2013, conduct
transition activities necessary to ensure the efficient transfer of the
program identified in begin delete subdivision (a) end delete begin insert paragraph (1) end insert and populations
served by that program.

begin insert

(4) The department may, before July 1, 2014, conduct transition
activities necessary to ensure the efficient transfer of the programs
identified in paragraph (2) and populations served by these
programs.

end insert

(b) The department shall seek any federal waivers, approvals,
and state plan amendments necessary to implement this part. This
part shall only be implemented to the extent that necessary federal
approvals are obtained and federal financial participation is
available for eligible programs and services.

begin insert

begin insert SEC. 59. end insert   

end insert

begin insert Section 15801 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15801.  

begin insert (a) end insert begin insert   end insert The terms of all regulations and orders adopted
by the Managed Risk Medical Insurance Board in effect
begin delete immediately end delete preceding begin delete October end delete begin insert July end insert 1, begin delete 2013, end delete begin insert 2014, end insert that relate to
the operation of the program and to the children transferred by the
act that added this section and are not rendered legally
unenforceable by the act that added this section shall be fully
enforceable by the State Department of Health Care Services within
the AIM-Linked Infants Program begin insert and the Medi-Cal Access
Program end insert unless and until the department adopts regulations for
the begin delete AIM-Linked Infants end delete begin insert Medi-Cal Access end insert Program. Nothing in
this begin delete section end delete begin insert subdivision end insert shall be construed to alter, diminish, or
supersede the authority of the Managed Risk Medical Insurance
Board to interpret, enforce, maintain, or amend the same
regulations for purposes of the Healthy Families Program
established under Part 6.2 (commencing with Section 12693) of
Division 2 of the Insurance Code.

begin insert

(b) All regulations and orders adopted by the Managed Risk
Medical Insurance Board that relate to the programs transferred
pursuant to paragraph (2) of subdivision (a) of Section 15800 in
effect on July 1, 2014, and not rendered legally unenforceable by
the act adding this subdivision shall remain in effect and shall be
fully enforceable unless and until readopted, amended, or repealed
by the State Department of Health Care Services, or until they
expire by their own terms.

end insert

begin insert

begin insert SEC. 60. end insert   

end insert

begin insert Section 15802.5 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 15802.5. end insert   

Effective on July 1, 2014, all permanent or
probationary civil service employees who are employed by the
Managed Risk Medical Insurance Board shall be transferred to
the State Department of Health Care Services or the California
Health Benefits Exchange as described in Section 12739.78 of the
Insurance Code, and their civil service status, position, and rights,
including return rights, shall be determined pursuant to Section
12739.78 of the Insurance Code.

end insert

begin insert

begin insert SEC. 61. end insert   

end insert

begin insert Section 15803 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15803.  

(a) To implement this part and clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70 of the Insurance Code, the State Department of Health
Care Services may contract with public or private begin delete entities, including
the Managed Risk Medical Insurance Board, which administers
the Access for Infants and Mothers Program pursuant to Part 6.3
(commencing with Section 12695) of Division 2 of the Insurance
Code. end delete begin insert entities. end insert Contracts entered into under this part may be on a
noncompetitive bid basis and begin delete shall be end delete begin insert are end insert 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.

(b) During the transition of the programs to the department, the
department shall also be exempt from the review or approval of
feasibility study reports and the requirements of Sections 4819.35
to 4819.37, inclusive, and 4920 to 4928, inclusive, of the State
Administrative Manual.

begin insert

(c) For contracts entered into under this part, the State
Department of Health Care Services shall not be required to specify
the amounts encumbered for each contract, but may allocate funds
to each contract based on the projected or actual subscriber
enrollments to a total amount not to exceed the amount
appropriated for the program including family contributions.

end insert

begin insert

begin insert SEC. 62. end insert   

end insert

begin insert Section 15804 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15804.  

On October 1, 2013, or when the State Department of
Health Care Services has implemented Chapter 2 (commencing
with Section begin delete 15850), end delete begin insert 15810), end insert whichever occurs later, the Managed
Risk Medical Insurance Board shall cease to provide coverage to
the children transferred to the AIM-Linked Infants Program,
pursuant to Section 15800.

begin insert

begin insert SEC. 63. end insert   

end insert

begin insert Section 15805 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15805.  

(a)  begin insert (1) end insert begin insert   end insert The Managed Risk Medical Insurance Board
shall provide the State Department of Health Care Services any
data, information, or record concerning the Healthy Families
Program or the Access for Infants and Mothers Program as are
necessary to implement this part and clause (ii) of subparagraph
(A) of paragraph (6) of subdivision (a) of Section 12693.70 of the
Insurance Code.

begin insert

(2) All books, documents, files, property, data, information, or
record in possession of the Managed Risk Medical Insurance
Board, except for personnel records related to staff transferred to
the California Health Benefits Exchange pursuant to Section
12739.61 or 12739.78 of the Insurance Code, shall be transferred
to the State Department of Health Care Services on July 1, 2014.

end insert begin insert

(3) Until the transition of duties from the Managed Risk Medical
Insurance Board to the State Department of Health Care Services
required under subdivision (a) of Section 15800 is complete, any
book, document, file, property, data, information, or record in the
possession of the Managed Risk Medical Insurance Board
pertaining to functions, programs, and subscribers to be
transferred to the State Department of Health Care Services
pursuant to subdivision (a) of Section 15800 shall immediately be
made available to the State Department of Health Care Services
upon request for review, inspection, and copying, including
electronic transmittal, including records otherwise not subject to
disclosure under Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code.

end insert

(b) Notwithstanding any other law, all of the following shall
apply:

(1) The term begin delete “data, end delete begin insert “book, document, file, property, data, end insert
information, or record” shall include, but is not limited to, personal
information as defined in Section 1798.3 of the Civil Code.

(2) Any begin insert book, document, file, property, end insert data, information, or
record shall be exempt from disclosure under the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of the Government Code) and any other law, to the
same extent that it was exempt from disclosure or privileged prior
to the provision of the begin insert book, document, file, property, end insert data,
information, or record to the department.

(3) The provision of any begin insert book, document, file, property, end insert data,
information, or record to the department shall not constitute a
waiver of any evidentiary privilege or exemption from disclosure.

(4) The department shall keep all begin insert books, documents, files,
property, end insert data, information, or records provided by the Managed
Risk Medical Insurance Board confidential to the full extent
permitted by law, including, but not limited to, the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of the Government Code), and consistent with the
Managed Risk Medical Insurance Board’s contractual obligations
to keep begin insert books, documents, files, property, end insert data, information, or
records confidential.

begin insert

begin insert SEC. 64. end insert   

end insert

begin insert Section 15806 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15806. end insert   

(a) A contract, lease, license, bond, or any other
agreement to which the Managed Risk Medical Insurance Board
is a party is not void or voidable by reason of the act that added
this section, but shall continue in full force and effect, with the
State Department of Health Care Services assuming all of the
rights, obligations, liabilities, and duties of the Managed Risk
Medical Insurance Board and any of its predecessors that relate
to the duties, powers, purposes, responsibilities, and jurisdiction
vested by the act that added this section in the State Department
of Health Care Services. The assumption by the State Department
of Health Care Services does not in any way affect the rights of
the parties to the contract, lease, license, or agreement.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 65. end insert   

end insert

begin insert The heading of Chapter 2 (commencing with Section
15810) of Part 3.3 of Division 9 of the end insert begin insert Welfare and Institutions
Code end insert begin insert is amended to read: end insert

 

Chapter  2. begin delete AIM-Linked Infants end delete begin insert Medi-Cal Access end insert
Program

 

begin insert

begin insert SEC. 66. end insert   

end insert

begin insert Section 15810 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15810.  

begin insert (a) end insert begin insert   end insert This chapter shall be known, and may be cited,
as the AIM-Linked Infants Program.

begin insert

(b) This section shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 67. end insert   

end insert

begin insert Section 15810 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15810. end insert   

(a) This chapter, formerly known as the AIM-Linked
Infants Program, shall be known, and may be cited, as the
Medi-Cal Access Program.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 68. end insert   

end insert

begin insert Section 15811 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15811.  

begin insert (a) end insert begin insert   end insert The definitions contained in this section govern
the construction of this chapter, unless the context requires
otherwise.

begin delete

(a)

end delete

begin insert (b) end insert  “AIM-linked infant” means any infant born to a woman
whose enrollment in the Access for Infants and Mothers Program
under Part 6.3 (commencing with Section 12695) of Division 2 of
the Insurance Code begins after June 30, 2004.

begin delete

(b)

end delete

begin insert (c) end insert  “Department” means the State Department of Health Care
Services.

begin delete

(c)

end delete

begin insert (d) end insert  “Program” means the AIM-Linked Infants Program.

begin delete

(d)

end delete

begin insert (e) end insert  “Subscriber” means an individual who is eligible for and
enrolled in the program.

begin delete

(e)

end delete

begin insert (f) end insert  “Subscriber contribution” means the cost to the subscriber
to participate in the program.

begin insert

(g) This section shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 69. end insert   

end insert

begin insert Section 15811 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15811. end insert   

(a) The definitions contained in this section govern the
construction of this chapter, unless the context requires otherwise.

(b) ”Access-linked infant” means any infant born to a woman
enrolled in either the program under this chapter or the Access
for Infants and Mothers Program under Part 6.3 (commencing
with Section 12695) of Division 2 of the Insurance Code.

(c) “Applicant” means an individual who applies for coverage
through the program.

(d) “Department” means the State Department of Health Care
Services.

(e) “Fund” means the Perinatal Insurance Fund.

(f) “Health education services relating to tobacco use” means
tobacco use prevention and education services, including, when
appropriate, tobacco use cessation services, in accordance with
protocols established by the department in coordination with the
California Tobacco Control Program of the State Department of
Public Health.

(g) “Participating health plan” means a health plan with which
the department contracts to provide health care services to
individuals eligible pursuant to Section 15832.

(h) “Program” means the Medi-Cal Access Program.

(i) “Subscriber” means an individual who is eligible for and
enrolled in the program.

(j) “Subscriber contribution” means the cost to the subscriber
to participate in the program.

(k) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 70. end insert   

end insert

begin insert Section 15814 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15814. end insert   

(a) The department, in coordination with the California
Tobacco Control Program of the State Department of Public
Health, shall develop protocols relating to health education for
tobacco use to the extent necessary to comply with paragraph (1)
of subdivision (b) of Section 30122 of the Revenue and Taxation
Code. These protocols shall include, but not be limited to, all of
the following:

(1) Referral to perinatal and related support services.

(2) Outreach services and assessment of smoking status.

(3) Individualized counseling and advocacy services.

(4) Motivational messages.

(5) Cessation services, if appropriate.

(6) Incentives to maintain a healthy lifestyle.

(7) Follow up assessment.

(8) Maintenance and relapse prevention services.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 71. end insert   

end insert

begin insert Section 15818 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15818. end insert   

(a) Each participating health plan contracting with
the department pursuant to this chapter shall provide health
education services related to tobacco use to all program
participants to the extent necessary to comply with paragraph (1)
of subdivision (b) of Section 30122 of the Revenue and Taxation
Code.

(b) The education activities required by subdivision (a) shall
include all of the following:

(1) Dissuading persons from beginning to smoke.

(2) Encouraging smoking cessation.

(3) Providing information on the health effects of tobacco use
on the user, children, and nonsmokers.

(c) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 72. end insert   

end insert

begin insert Section 15826 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15826.  

begin insert (a) end insert begin insert   end insert The department shall administer the program and
may do all of the following:

begin delete

(a)

end delete

begin insert (1) end insert  Determine eligibility criteria for the program. These criteria
shall include the requirements set forth in Section 15832.

begin delete

(b)

end delete

begin insert (2) end insert  Determine the eligibility of AIM-linked infants.

begin delete

(c)

end delete

begin insert (3) end insert  Determine when subscribers are covered and the extent and
scope of coverage.

begin delete

(d)

end delete

begin insert (4) end insert  Determine subscriber contribution amounts schedules.
Subscriber contributions shall not be greater than those applicable
on March 23, 2010, for infants enrolled pursuant to clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70 of the Insurance Code.

begin delete

(e)

end delete

begin insert (5) end insert  Provide coverage through Medi-Cal delivery systems and
contract for the administration of the program and the enrollment
of subscribers. Any contract entered into pursuant to this chapter
shall be exempt from any provision of law relating to competitive
bidding, and shall be exempt from the review or approval of any
division of the Department of General Services. The department
shall not be required to specify the amounts encumbered for each
contract, but may allocate funds to each contract based on projected
and actual subscriber enrollments in a total amount not to exceed
the amount appropriated for the program.

begin delete

(f)

end delete

begin insert (6) end insert  Authorize expenditures to pay program expenses that exceed
subscriber contributions, and to administer the program as
necessary.

begin delete

(g)

end delete

begin insert (7) end insert  Develop a promotional component of the program to make
Californians aware of the program and the opportunity that it
presents.

begin delete

(h) (1)

end delete

begin insert (8) end insert begin insert   end insert begin insert (A) end insert begin insert   end insert Issue rules and regulations as necessary to administer
the program.

begin delete

(2)

end delete

begin insert (B) end insert  During the 2011-12 to 2014-15 fiscal years, inclusive, the
adoption and readoption of regulations pursuant to this chapter
shall be deemed to be an emergency that calls for immediate action
to avoid serious harm to the public peace, health, safety, or general
welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the department is hereby exempted from
the requirement that the department describe facts showing the
need for immediate action.

begin delete

(i)

end delete

begin insert (9) end insert  Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
chapter.

begin insert

(b) This section shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 73. end insert   

end insert

begin insert Section 15826 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15826. end insert   

(a) The department shall administer the program and
may do all of the following:

(1) Determine eligibility criteria for the program. These criteria
shall include the requirements set forth in Section 15832.

(2) Determine the eligibility of applicants.

(3) Determine when subscribers are covered and the extent and
scope of coverage.

(4) Determine subscriber contribution amounts schedules,
subject to the following:

(A) Subscriber contributions for Access-linked infants shall not
be greater than those applicable on March 23, 2010, for infants
enrolled pursuant to clause (ii) of subparagraph (A) of paragraph
(6) of subdivision (a) of Section 12693.70 of the Insurance Code.

(B) Subscriber contributions for mothers shall conform with
the maintenance of effort requirements under the federal Patient
Protection and Affordable Care Act (Public Law 111-148), or any
amendment or extension of that act.

(5) Provide coverage through Medi-Cal delivery systems and
contract for the administration of the program and the enrollment
of subscribers. Any contract entered into pursuant to this chapter
shall be exempt from any provision of law relating to competitive
bidding, and shall be exempt from the review or approval of any
division of the Department of General Services. The department
shall not be required to specify the amounts encumbered for each
contract, but may allocate funds to each contract based on
projected and actual subscriber enrollments in a total amount not
to exceed the amount appropriated for the program.

(6) Authorize expenditures to pay program expenses that exceed
subscriber contributions, and to administer the program as
necessary.

(7) Develop a promotional component of the program to make
Californians aware of the program and the opportunity that it
presents.

(8) (A) Issue rules and regulations as necessary to administer
the program.

(B) During the 2011-12 to 2014-15 fiscal years, inclusive, the
adoption and readoption of regulations pursuant to this chapter
shall be deemed to be an emergency that calls for immediate action
to avoid serious harm to the public peace, health, safety, or general
welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the department is hereby exempted from
the requirement that the department describe facts showing the
need for immediate action and from review by the Office of
Administrative Law.

(9) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
chapter.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 74. end insert   

end insert

begin insert Section 15827 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15827. end insert   

(a) The department shall administer the program in a
manner that ensures that program expenditures do not exceed
amounts available in the fund.

(b) This section shall be implemented only if and to the extent
that it does not jeopardize the state’s ability to receive federal
financial participation under the federal Patient Protection and
Affordable Care Act (Public Law 111-148), or any amendment or
extension of that act.

(c) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 75. end insert   

end insert

begin insert Section 15832 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15832.  

To be eligible to participate in the program, a person
shall meet all of the following requirements:

(a) (1) Be a child under two years of age who is delivered by
a mother enrolled in the program under Part 6.3 (commencing with
Section 12695) of Division 2 of the Insurance Code. Except as
stated in this section, these infants shall be automatically enrolled
in the program.

(2) For the applicable month, not be enrolled in
employer-sponsored health care coverage, or have been enrolled
in that health care coverage in the prior three months or enrolled
in full-scope Medi-Cal without a share of cost. Exceptions may
be identified in regulations or other guidance and shall, at
minimum, include all exceptions applicable to the Healthy Families
Program on and after March 23, 2010.

(3) Be subject to subscriber contributions as determined by the
department. The subscriber contributions shall not be greater than
those applicable on March 23, 2010, for infants enrolled in the
Healthy Families Program pursuant to clause (ii) of subparagraph
(A) of paragraph (6) of subdivision (a) of Section 12693.70 of the
Insurance Code.

(b) For AIM-linked infants identified in subdivision (a), all of
the following shall apply:

(1) Enrollment shall cover the first 12 months of the infant’s
life unless he or she is eligible for Medi-Cal benefits under Section
14005.26. If the infant is eligible under Section 14005.26, he or
she shall be automatically enrolled in the Medi-Cal program on
that basis.

(2) (A) At the end of the 12 months, as a condition of continued
eligibility, the subscriber shall provide income information. The
infant shall be disenrolled from the program if the annual household
income exceeds 300 percent of the federal poverty level, or if the
infant is eligible for full-scope Medi-Cal with no share of cost.

(B) Effective January 1, 2014, when determining eligibility for
benefits under the program, income shall be determined, counted,
and valued in accordance with the requirements of Section
1397bb(b)(1)(B) of Title 42 of the United States Code as added
by the federal Patient Protection and Affordable Care Act (Public
Law 111-148) and as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152) and
any subsequent amendments.

(3) At the end of their first and second year in the program,
infants shall be screened for eligibility for the Medi-Cal program.

(c) If at any time the director determines that the eligibility
criteria established under this chapter for the program may
jeopardize the state’s ability to receive federal financial
participation under the federal Patient Protection and Affordable
Care Act (Public Law 111-148), or any amendment or extension
of that act, the director may alter the eligibility criteria to the extent
necessary for the state to receive that federal financial participation.

begin insert

(d) This section shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 76. end insert   

end insert

begin insert Section 15832 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15832. end insert   

(a) To be eligible to participate in the program, a
person shall meet all of the requirements in either paragraph (1)
or (2):

(1) (A) Be a woman who is pregnant or in her postpartum
period as specified in Section 15840 and who is a resident of the
state. A person who is a member of a federally recognized
California Indian tribe is a resident of the state for these purposes.

(B) Have a household income that is above 208 percent of the
official federal poverty level but does not exceed 317 percent of
the official federal poverty level.

(C) Agree to the payment of the complete subscriber
contribution. A federally recognized California Indian tribal
government may make the subscriber contributions on behalf of
a member of the tribe only if a contribution on behalf of members
of federally recognized California Indian tribes does not limit or
preclude federal financial participation under Title XXI of the
Social Security Act (42 U.S.C. Section 1397aa et seq.). If a
federally recognized California Indian tribal government makes
a contribution on behalf of a member of the tribe, the tribal
government shall ensure that the subscriber is made aware of all
the health care delivery options available in the county where the
member resides.

(2) (A) Be a child under two years of age who is delivered by
a mother enrolled in the program under this chapter or Part 6.3
(commencing with Section 12695) of Division 2 of the Insurance
Code. Except as stated in this section, these infants shall be
automatically enrolled in the program.

(B) For the applicable month, not be enrolled in
employer-sponsored health care coverage, or have been enrolled
in that health care coverage in the prior three months or enrolled
in full-scope Medi-Cal without a share of cost. Exceptions may be
identified in regulations or other guidance and shall, at minimum,
include all exceptions applicable to the Healthy Families Program
on and after March 23, 2010.

(C) Be subject to subscriber contributions as determined by the
department.

(3) For AIM-linked infants identified in paragraph (2), all of
the following shall apply:

(A) Enrollment in the program shall cover the first 12 months
of the infant’s life unless he or she is determined eligible for
Medi-Cal benefits under Section 14005.26. An infant shall be
screened for eligibility under Section 14005.26 immediately after
he or she is born. If the infant is eligible under Section 14005.26,
he or she shall be automatically enrolled in the Medi-Cal program
on that basis.

(B) (i) At the end of the 12 months, as a condition of continued
eligibility, the subscriber shall provide income information. The
infant shall be disenrolled from the program if the annual
household income exceeds 317 percent of the federal poverty level,
or if the infant is eligible for full-scope Medi-Cal with no share of
cost.

(ii) Effective January 1, 2014, when determining eligibility for
benefits under the program, income shall be determined, counted,
and valued in accordance with the requirements of Section
1397bb(b)(1)(B) of Title 42 of the United States Code as added by
the federal Patient Protection and Affordable Care Act (Public
Law 111-148) and as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152) and
any subsequent amendments.

(C) At the end of their first and second year in the program,
infants shall be screened for eligibility for the Medi-Cal program.

(4) If at any time the director determines that the eligibility
criteria established under this chapter for the program may
jeopardize the state’s ability to receive federal financial
participation under the federal Patient Protection and Affordable
Care Act (Public Law 111-148), or any amendment or extension
of that act, the director may alter the eligibility criteria to the
extent necessary for the state to receive that federal financial
participation.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 77. end insert   

end insert

begin insert Section 15833 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15833. end insert   

(a) A person eligible pursuant to paragraph (1) of
subdivision (a) of Section 15832 shall not be eligible to participate
in the program if, at the time of application, she is eligible for
Medi-Cal without a share of cost or for Medicare.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 78. end insert   

end insert

begin insert Section 15835 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15835. end insert   

(a) Subscribers enrolled pursuant to paragraph (1) of
subdivision (a) of Section 15832 shall not be disenrolled for failure
to pay subscriber contributions. The department may impose or
contract for collection actions to collect unpaid subscriber
contributions.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 79. end insert   

end insert

begin insert Section 15839 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15839. end insert   

(a) Services that would be covered under the program
that are provided to pregnant women who, after receiving those
services, are subsequently determined to be eligible for coverage
under this chapter may be reimbursed as determined by the
department. In no case shall services received prior to 40 days
before a woman’s date of application be eligible for
reimbursement.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 80. end insert   

end insert

begin insert Section 15840 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

15840.  

(a) At a minimum, coverage provided pursuant to this
chapter shall be provided to eligible AIM-linked infants less than
two years of age.

(b) Coverage provided pursuant to this chapter shall include, at
a minimum, those services required to be provided by health care
service plans approved by the Secretary of Health and Human
Services as a federally qualified health care service plan pursuant
to Section 417.101 of Title 42 of the Code of Federal Regulations.

(c) Medically necessary prescription drugs shall be a required
benefit in the coverage provided pursuant to this chapter.

begin insert

(d) This section shall become inoperative on July 1, 2014, and,
as of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2015, deletes or
extends the dates on which it becomes inoperative and is repealed.

end insert

begin insert

begin insert SEC. 81. end insert   

end insert

begin insert Section 15840 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15840. end insert   

(a) At a minimum, coverage provided pursuant to this
chapter shall be provided to subscribers during one pregnancy,
and until the end of the month in which the 60th day after
pregnancy occurs, and to eligible children less than two years of
age who were born of a pregnancy covered under this program
or the Access for Infants and Mothers program under Part 6.3
(commencing with Section 12695) of Division 2 of the Insurance
Code to a woman enrolled in the Access for Infants and Mothers
program.

(b) Coverage provided pursuant to this chapter shall include,
at a minimum, those services required to be provided by health
care service plans approved by the Secretary of Health and Human
Services as a federally qualified health care service plan pursuant
to Section 417.101 of Title 42 of the Code of Federal Regulations.

(c) Medically necessary prescription drugs shall be a required
benefit in the coverage provided pursuant to this chapter.

(d) To the extent required pursuant to Section 15818 to comply
with paragraph (1) of subdivision (b) of Section 30122 of the
Revenue and Taxation Code, health education services related to
tobacco use shall be a benefit in the coverage provided under this
chapter.

(e) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 82. end insert   

end insert

begin insert Section 15841 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15841. end insert   

(a) Through its courts, statutes, and under its
Constitution, California protects a woman’s right to reproductive
privacy. California reaffirms these protections and specifically its
Supreme Court decision in People v. Belous (1969) 71 Cal.2d 954,
966-68.

(b) The State Department of Health Care Services may accept
or use moneys under Title XXI of the Social Security Act (known
as the Children’s Health Insurance Program or CHIP), as
interpreted in Section 457.10 of Title 42 of the Code of Federal
Regulations, to fund services for women pursuant to Section
14007.7 and this chapter only when, during the period of coverage,
the woman is the beneficiary. The scope of services covered under
Medi-Cal and this chapter, as defined in statutes, regulations, and
state plans, is not altered by this section or the state plan
amendment submitted pursuant to this section.

(c) California’s CHIP plan and any amendments submitted and
implemented pursuant to this section shall be consistent with
subdivisions (a) and (b).

(d) This section is a declaration of existing law.

(e) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 83. end insert   

end insert

begin insert Section 15847 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15847. end insert   

(a) It shall constitute unfair competition for purposes
of Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code for an insurer,
an insurance agent or broker, or an administrator, as defined in
Section 1759 of the Insurance Code, to refer an individual
employee or employee’s dependent to the program, or arrange for
an individual employee or employee’s dependent to apply to the
program, for the purpose of separating that employee or
employee’s dependent from group health coverage provided in
connection with the employee’s employment.

(b) Any employee described in subdivision (a) shall have a
personal right of action to enforce subdivision (a).

(c) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 84. end insert   

end insert

begin insert Section 15847.3 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 15847.3. end insert   

(a) It shall constitute an unfair labor practice
contrary to public policy, and enforceable under Section 95 of the
Labor Code, for any employer to refer an individual employee or
employee’s dependent to the program, or to arrange for an
individual employee or employee’s dependent to apply to the
program, for the purpose of separating that employee or
employee’s dependent from group health coverage provided in
connection with the employee’s employment.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 85. end insert   

end insert

begin insert Section 15847.5 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 15847.5. end insert   

(a) It shall constitute an unfair labor practice
contrary to public policy and enforceable under Section 95 of the
Labor Code for any employer to change the employee-employer
share-of-cost ratio or to make any other modification of maternity
care coverage for employees or employees’ dependents that results
in the enrollment of the employees or employees’ dependents in
the program established pursuant to this chapter.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 86. end insert   

end insert

begin insert Section 15847.7 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 15847.7. end insert   

(a) For purposes of Sections 15847, 15847.3, and
15847.5, “group health coverage” includes any nonprofit hospital
service plan, health care service plan, self-insured employee
welfare benefit plan, or disability insurance providing medical or
hospital benefits.

(b) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 87. end insert   

end insert

begin insert Section 15848 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 15848. end insert   

(a) The Perinatal Insurance Fund is continued in
existence in the State Treasury under the administration of the
department.

(b) Amounts deposited in the fund shall only be used for the
purposes specified by this chapter.

(c) Notwithstanding Section 13340 of the Government Code,
the fund is hereby continuously appropriated, without regard to
fiscal years, to the department, for the purposes specified in this
chapter.

(d) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 88. end insert   

end insert

begin insert Section 15848.5 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 15848.5. end insert   

(a) The department shall authorize the expenditure
of money in the fund to cover program expenses, including program
expenses that exceed subscriber contributions.

(b) From money appropriated by the Legislature to the fund,
the department may expend sufficient funds for operating expenses
incurred in carrying out this chapter.

(c) The department shall develop and utilize all appropriate
cost containment measures to maximize the coverage offered under
the program.

(d) This section shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 89. end insert   

end insert

begin insert Chapter 3 (commencing with Section 15850) is added
to Part 3.3 of Division 9 of the end insert begin insert Welfare and Institutions Code end insert begin insert , to
read: end insert

begin insert

 

Chapter   begin insert 3. end insert County Health Initiative Matching Fund

 

begin insert 15850. end insert   

This chapter shall be known and may be cited as the
County Health Initiative Matching Fund.

begin insert 15850.1. end insert   

For purposes of this chapter, the following definitions
shall apply:

(a) “Administrative costs” means those expenses that are
described in Section 1397ee(a)(1)(D) of Title 42 of the United
States Code.

(b) “Applicant” means a county, county agency, a local
initiative, or a county organized health system.

(c) “Department” means the State Department of Health Care
Services.

(d) “Child” means a person under 19 years of age.

(e) “Comprehensive health insurance coverage” means the
coverage provided in Section 2103 of the Social Security Act (42
U.S.C. Sec. 1397cc) and shall be equivalent to the coverage
provided to state employees through the Public Employees’
Retirement System for the most recent plan year preceding the
applicable program plan year, except that the plans may provide
a mechanism for inpatient hospital care provided under the mental
health benefit through which applicants may agree to a treatment
plan in which each inpatient day may be substituted for two
residential treatment days or three day treatment program days.

(f) “County organized health system” means a health system
implemented pursuant to Article 2.8 (commencing with Section
14087.5) of Chapter 7 of Part 3 of this division and Article 1
(commencing with Section 101675) of Chapter 3 of Part 4 of
Division 101 of the Health and Safety Code.

(g) “Fund” means the County Health Initiative Matching Fund.

(h) “Local initiative” means a prepaid health plan that is
organized by, or designated by, a county government or county
governments, or organized by stakeholders, of a region designated
by the department to provide comprehensive health care to eligible
Medi-Cal beneficiaries. The entities established pursuant to
Sections 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, and
14087.96 are local initiatives.

(i) “Optional targeted low-income children group” means the
population described in Section 1905(u)(2)(B) of the Society
Security Act (42 U.S.C. Sec. 1396d(u)(2)(B)) and in Section
14005.26.

(j) “Access program” means the Medi-Cal Access Program
under Chapter 2 (commencing with Section 15810).

(k) “Health care service plan” includes Medi-Cal managed
care plans contracting with the department under Chapter 7
(commencing with Section 14000) or Chapter 8 (commencing with
Section 14200) of Part 3.

begin insert 15850.5. end insert   

(a) Notwithstanding any other law, except as provided
in subdivision (b), each applicant who was participating in the
County Health Initiative Matching Fund on March 23, 2010,
pursuant to Part 6.4 (commencing with Section 12699.50) of
Division 2 of the Insurance Code, shall participate in the program
established by this chapter, maintaining eligibility standards,
methodologies, and procedures at least as favorable to eligible
individuals as those in effect on March 23, 2010, and in a manner
that satisfies the maintenance of effort obligation established in
Section 2105(d)(3) of the Social Security Act (42 U.S.C. Sec.
1397ee(d)(3)).

(b) (1) If an applicant county participating in the County Health
Initiative Matching Fund on March 23, 2010, elects to cease
funding the nonfederal share of program expenditures made
pursuant to Section 15852, the department shall administer the
program within that applicant county consistent with subdivision
(a).

(2) Notwithstanding any other law, the state general fund shall
provide funding amounts equal to the total nonfederal share of all
expenditures incurred by the department pursuant to paragraph
(1).

(3) The nonfederal share amounts described in paragraph (2)
shall be deposited in the County Health Initiative Matching Fund
created pursuant to Section 15852, and those funds shall be used
by the department for purposes otherwise consistent with that
section.

(c) Notwithstanding any other law, as of the enactment of this
section, the department shall not approve any additional applicant
for participation under this chapter other than those applicants
participating as of March 23, 2010.

(d) This section shall only be operative to extent that federal
financial participation is not jeopardized and any necessary federal
approvals are secured.

(e) This section shall become inoperative on the date that the
maintenance of effort obligation pursuant to Section 2105(d)(3)
of the Social Security Act (42 U.S.C. Sec. 1397ee(d)(3)) is no
longer applicable to the state for purposes of this chapter.

begin insert 15852. end insert   

(a) The County Health Initiative Matching Fund is
hereby continued in existence within the State Treasury. The fund
shall accept funding, including but not limited to, funding from
intergovernmental transfers as follows:

(1) The nonfederal matching fund requirement for federal
financial participation through the State Children's Health
Insurance Program (Subchapter 21 (commencing with Section
1397aa) of Chapter 7 of Title 42 of the United States Code).

(2) Funding associated with a proposal approved pursuant to
subdivision (e) Section 15853.

(3) State general fund amounts pursuant to subdivision (b) of
Section 15850.5.

(b) Notwithstanding Section 13340 of the Government Code,
amounts deposited in the fund shall be continuously appropriated
to the department without regard to fiscal year, and shall be used
only for the purposes specified by this section.

(c) The department shall administer this fund and the provisions
of this chapter for the express purpose of allowing local or state
funds to be used to facilitate increasing the state’s ability to utilize
federal funds available to California and for costs associated with
a proposal pursuant to subdivision (e) of Section 15853 or for
costs incurred by the department pursuant to paragraph (1) of
subdivision (b) of Section 15850.5. Federal funds shall be used
prior to the expiration of their authority for programs designed
to improve and expand access for uninsured persons.

(d) The department shall be reimbursed from the fund to cover
the cost to administer the program.

begin insert 15853. end insert   

(a) (1) An applicant that will provide an
intergovernmental transfer may submit a proposal to the
department for funding for the purpose of providing comprehensive
health insurance coverage to any child who meets citizenship and
immigration status requirements that are applicable to persons
participating in the program established by Title XXI of the Social
Security Act, and whose family income is at or below 317 percent
of the federal poverty level or, at the option of the applicant, at or
below 411 percent of the federal poverty level, in specific
geographic areas, as published quarterly in the Federal Register
by the United States Department of Health and Human Services,
as determined, counted and valued in accordance with the
requirements of Section 1396a(e)(14) of Title 42 of the United
States Code, as added by the federal Patient Protection and
Affordable Care Act (Public Law 111-148) and as amended by the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152) and any subsequent amendments, and which
child meets both of the following requirements:

(A) Does not qualify for the optional targeted low-income
children group or the Access program.

(B) Does not qualify for Medi-Cal with no share of cost pursuant
to Chapter 7 (commencing with Section 14000) of Part 3.

(2) In its application, the applicant shall specify the income
level at or below 411 percent of the federal poverty level for which
it will provide coverage.

(3) The intergovernmental transfer amount is limited to the
expenditures which would be eligible for federal financial
participation.

(b) The proposal shall guarantee at least one year of
intergovernmental transfer funding by the applicant at a level that
ensures compliance with the requirements of any applicable
approved federal waiver or state plan amendment as well as the
department’s requirements for the sound operation of the proposed
project, and shall, on an annual basis, either commit to fully
funding the necessary intergovernmental amount or withdraw from
the program. The department may identify specific geographical
areas that, compared to the national level, have a higher cost of
living or housing or a greater need for additional health services,
using data obtained from the most recent federal census, the federal
Consumer Expenditure Survey, or from other sources. The proposal
may include an administrative mechanism for outreach and
eligibility.

(c) The applicant may include in its proposal reimbursement of
medical, dental, vision, or mental health services delivered to
children who are eligible under the Access program or under the
Medi-Cal program as an optional targeted low-income children
group beneficiary, if these services are part of an overall program
with the measurable goal of enrolling served children in the Access
program or the optional targeted low-income children group.

(d) If a child is determined to be eligible for benefits for the
treatment of an eligible medical condition under the California
Children’s Services Program pursuant to Article 5 (commencing
with Section 123800) of Chapter 3 of Part 2 of Division 106 of the
Health and Safety Code, the health, dental, or vision plan providing
services to the child pursuant to this chapter shall not be
responsible for the provision of, or payment for, those authorized
services for that child. The proposal from an applicant shall
contain provisions to ensure that a child whom the health, dental,
or vision plan reasonably believes would be eligible for services
under the California Children’s Services Program is referred to
that program. The California Children’s Services Program shall
provide case management and authorization of services if the child
is found to be eligible for the California Children’s Services
Program. Diagnosis and treatment services that are authorized
by the California Children’s Services Program shall be performed
by paneled providers for that program and approved special care
centers of that program and approved by the California Children’s
Services Program. All other services provided under the proposal
from the applicant shall be made available pursuant to this chapter
to a child who is eligible for services under the California
Children’s Services Program.

(e) Notwithstanding any other provision of this section, an
applicant may submit a proposal to the department for the purposes
of providing comprehensive health insurance coverage to children
whose coverage is not eligible for funding under Title XXI of the
Social Security Act (42 U.S.C. Sec. 1397aa, et seq.), or to a
combination of children whose coverage is eligible for funding
under Title XXI of the Social Security Act and children whose
coverage is not eligible for that funding. To be approved by the
department, these proposals shall comply with both of the following
requirements:

(1) Meet all applicable requirements for funding under this
chapter, except for availability of funding through Title XXI of the
Social Security Act.

(2) Provide for the administration of children’s coverage by the
department through the administrative infrastructure serving the
Medi-Cal program, and through health care service plans serving
the Medi-Cal program.

(f) Implementation of this section is conditioned on the
department obtaining necessary federal approval of these
provisions.

(g) Notwithstanding any other provision of this part, the status
of any application previously submitted to, and approved by, the
Managed Risk Medical Insurance Board pursuant to Part 6.4
(commencing with Section 12699.50) of Division 2 of the Insurance
Code shall not be altered as a result of the assumption by the
department, pursuant to this chapter, of the responsibilities
previously exercised by the Managed Risk Medical Insurance
Board.

begin insert 15854. end insert   

(a) The department, in consultation with other
appropriate parties, shall establish the criteria for evaluating an
applicant’s proposal, which shall include, but not be limited to,
the following:

(1) The extent to which the program described in the proposal
provides comprehensive coverage including health, dental, and
vision benefits.

(2) Whether the proposal includes a promotional component to
notify the public of its provision of health insurance to eligible
children.

(3) The simplicity of the proposal’s procedures for applying to
participate and for determining eligibility for participation in its
program.

(4) The extent to which the proposal provides for coordination
and conformity with benefits provided through the Medi-Cal
program.

(5) The extent to which the proposal provides for coordination
and conformity with existing Medi-Cal administrative entities in
order to prevent administrative duplication and fragmentation.

(6) The ability of the health care providers designated in the
proposal to serve the eligible population and the extent to which
the proposal includes traditional and safety net providers, as
defined by the department.

(7) The extent to which the proposal intends to work with the
school districts and county offices of education.

(8) The total amount of funds available to the applicant to
implement the program described in its proposal, and the
percentage of this amount proposed for administrative costs as
well as the cost to the state to administer the proposal.

(9) The extent to which the proposal seeks to minimize the
substitution of private employer health insurance coverage for
health benefits provided through a governmental source.

(10) The extent to which local resources may be available after
the depletion of federal funds to continue any current program
expansions for persons covered under local health care financing
programs or for expanded benefits.

(11) For the purposes of defining an applicant’s eligibility for
funding under this chapter, the following shall apply:

(A) The same income methodology shall be used for the
proposed program that is currently used for the Medi-Cal program.

(B) Only participating Medi-Cal managed care plans may be
used. However, the department may permit exceptions to this
requirement consistent with the purpose, of this chapter.

(b) The department may, in its sole discretion, approve or
disapprove projects for funding pursuant to this chapter on an
annual basis.

(c) To the extent that an applicant’s proposal pursuant to this
chapter provides for health plan or administrative services under
a contract entered into by the department or at rates negotiated
for the applicant by the department, a contract entered into by the
department or by an applicant shall be exempt from any provision
of law relating to competitive bidding, and shall be exempt from
the review or approval of any division of the Department of
General Services to the same extent as contracts entered into
pursuant to subdivision (p) of Section 14005.26. The department
and the applicant shall not be required to specify the amounts
encumbered for each contract, but may allocate funds to each
contract based on the projected or actual subscriber enrollments
to a total amount not to exceed the amount appropriated for the
project including family contributions.

begin insert 15855. end insert   

The department shall review each funding proposal
submitted by an applicant in accordance with the criteria described
in Section 15854 and based on that criteria, approve or reject the
proposal.

begin insert 15856. end insert   

(a) Upon its approval of a proposal that shall include
any allowable amount of federal funds under Title XXI of the Social
Security Act (42 U.S.C. Sec. 1397aa, et seq.), the department may
provide the applicant reimbursement in an amount equal to the
amount that the applicant will contribute to implement the program
described in its proposal, plus the appropriate and allowable
amount of federal funds. Not more than 10 percent of the County
Health Initiative Matching Fund and matching federal funds shall
be expended in any one fiscal year for administrative costs,
including the costs to the state to administer the proposal, unless
the department permits the expenditure consistent with the
availability of federal matching funds not needed for the purposes
described in paragraph (3) of subdivision (a) of Section 15862,
or unless the department determines that an expenditure for
administrative costs has no impact on available federal funding.
The department may audit the expenses incurred by the applicant
in implementing its program to ensure that the expenditures comply
with the provisions of this chapter. No reimbursement may be made
to an applicant that fails to meet its financial participation
obligation under this chapter. The state’s reasonable startup costs
and ongoing costs for administering the program shall be
reimbursed by those entities applying for funding.

(b) Any program approved pursuant to subdivision (e) of Section
15853 that requires any funding not allowable for a federal match
under Title XXI of the Social Security Act shall provide the
department with the total amount of funds needed to provide that
portion of coverage not eligible for federal matching funds,
including reasonable startup costs and ongoing costs for
administering the program.

(c) Each applicant that is provided funds under this chapter
shall submit to the department a plan to limit initial and continuing
enrollment in its program in the event the amount of moneys for
its program is insufficient to maintain health insurance coverage
for those participating in the program.

(d) (1) Notwithstanding any other provision of this chapter,
the state shall be held harmless, in accordance with paragraphs
(2) and (3), from any federal audit disallowance and interest
resulting from payments made to a participating applicant pursuant
to this section, for the disallowed claim.

(2) To the extent that a federal audit disallowance and interest
results from a claim or claims for which any participating applicant
has received reimbursement for services rendered or other
activities performed, the department shall recoup from the
participating applicant that submitted the disallowed claim,
through offsets or by a direct billing, amounts equal to the amount
of the disallowance and interest for the disallowed claim. All
subsequent claims submitted to the department applicable to any
previously disallowed service, activity, or claim may be held in
abeyance, with no payment made, until the federal disallowance
issue is resolved.

(3) Notwithstanding paragraph (2), to the extent that a federal
audit disallowance and interest results from a claim or claims for
which the participating applicant has received reimbursement for
services rendered or activities performed by an entity under
contract with, and on behalf of, the participating applicant, the
department shall be held harmless by that particular participating
applicant for 100 percent of the amount of the federal audit
disallowance and interest for the disallowed claim.

begin insert 15857. end insert   

Each health care service plan, specialized health care
service plan, and health insurer that contracts to provide health
care benefits under this chapter shall be licensed by the
Department of Managed Health Care or the Department of
Insurance, or be a Medi-Cal managed care plan.

begin insert 15858. end insert   

(a) The department shall administer the provisions of
this chapter and may do all of the following:

(1) Administer the expenditure of moneys from the fund.

(2) (A) Issue rules and regulations as necessary.

(B) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, interpret, or make specific this chapter and any
applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions until the time regulations are adopted.
Thereafter, the department shall adopt regulations in accordance
with the requirements of Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
Beginning six months after the effective date of this section, and
notwithstanding Section 10231.5 of the Government Code, the
department shall provide a status report to the Legislature pursuant
to Section 9795 of the Government Code on a semiannual basis
until regulations have been adopted.

(3) Enter into contracts.

(4)  Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
chapter.

begin insert 15859. end insert   

All expenses incurred by the department in
administering this chapter, including, but not limited to, expenses
for developing standards and processes to implement any of the
provisions of this chapter, evaluating applications, or processing
or granting appeals growing out of any of the provisions of this
chapter, shall be paid from the fund or directly by applicants,
except that the department may accept funding from a not-for-profit
group or foundation, or from a governmental entity providing
grants for health-related activities, to administer this chapter.

begin insert 15860. end insert   

Nothing in this chapter creates a right or an entitlement
to the provision of health insurance coverage or health care
benefits. Except as provided in Section 15850.5, no costs shall
accrue to the state for the provision of these services. The state
shall not be liable beyond the assets of the fund for any obligation
incurred or liabilities sustained by applicants in the operation of
the fund or of the projects authorized by this chapter.

begin insert 15861. end insert   

To the extent necessary to obtain federal financial
participation for projects approved pursuant to this chapter, the
department shall apply for one or more waivers or shall file state
plan amendments pursuant to the federal State Children’s Health
Insurance Program (Subchapter 21 (commencing with Section
1397aa) of Chapter 7 of Title 42 of the United States Code) to
allow a county agency, local initiative, or county organized health
system to apply for matching funds through the federal State
Children's Health Insurance Program (Subchapter 21 (commencing
with Section 1397aa) of Chapter 7 of Title 42 of the United States
Code) using local funds for the state matching funds.

begin insert 15862. end insert   

(a) The provisions of this chapter shall be implemented
only if all of the following conditions are met:

(1) Federal financial participation is available for this purpose.

(2) Federal participation is approved.

(3) The department determines that federal funds under Title
XXI of the Social Security Act remain available after providing
funds for all current enrollees and eligible children that are likely
to enroll in the optional targeted low-income children group and,
to the extent funded through the federal Children’s Health
Insurance Program (Subchapter 21 (commencing with Section
1397aa) of Chapter 7 of Title 42 of the United States Code), the
Medi-Cal Access program and Medi-Cal program, as determined
by a Department of Finance estimate.

(4) Funds are appropriated specifically for this purpose.

(b) The department may accept funding necessary for the
preparation of the federal waiver applications or state plan
amendments described in Section 15861 from a not-for-profit
group or foundation but only to the extent that such funding may
be eligible for federal financial participation.

begin insert 15863. end insert   

The state shall be held harmless for any federal
disallowance resulting from this chapter and any other expenses
or liabilities, including, but not limited to, the cost of processing
or granting appeals, unless the department is acting pursuant to
Section 15850.5. An applicant receiving supplemental
reimbursement pursuant to this chapter shall be liable for any
reduced federal financial participation, and any other expenses
or liabilities, including, but not limited to, the costs of processing
or granting appeals, resulting from the implementation of this
chapter with respect to that applicant. The state may recoup any
federal disallowance from the applicant for which it can be held
harmless.

begin insert 15864. end insert   

This chapter shall become operative on July 1, 2014.

end insert

begin insert

begin insert SEC. 90. end insert   

end insert

begin insert Chapter 4 (commencing with Section 15870) is added
to Part 3.3 of Division 9 of the end insert begin insert Welfare and Institutions Code end insert begin insert , to
read: end insert

begin insert

 

Chapter   begin insert 4. end insert California Major Risk Medical Insurance
Program

 

Article begin insert 1. end insert   General

 

begin insert 15870. end insert   

For the purposes of this chapter, the following terms
have the following meanings:

(a) “Applicant” means an individual who applies for major risk
medical coverage through the program.

(b) “Department” means the State Department of Health Care
Services.

(c) “Exchange” means the California Health Benefit Exchange
established pursuant to Section 100500 of the Government Code.

(d) “Fund” means the Major Risk Medical Insurance Fund,
from which the department may authorize expenditures to pay for
medically necessary services which exceed subscribers’
contributions, and for administration of the program.

(e) “Major risk medical coverage” means the payment for
medically necessary services provided by institutional and
professional providers.

(f) “Participating health plan” means either of the following
entities that contracts with the department to administer major
risk medical coverage to program subscribers:

(1) A private insurer holding a valid outstanding certificate of
authority from the Insurance Commissioner.

(2) A health care service plan as defined under subdivision (f)
of Section 1345 of the Health and Safety Code.

(g) “Plan rates” means the total monthly amount charged by
a participating health plan for a category of risk.

(h) “Program” means the California Major Risk Medical
Insurance Program.

(i) “Subscriber” means an individual who is eligible for and
receives major risk medical coverage through the program, and
includes a member of a federally recognized California Indian
tribe.

(j) “Subscriber contribution” means the portion of participating
health plan rates paid by the subscriber, or paid on behalf of the
subscriber by a federally recognized California Indian tribal
government. If a federally recognized California Indian tribal
government makes a contribution on behalf of a member of the
tribe, the tribal government shall ensure that the subscriber is
made aware of all the health plan options available in the county
where the member resides.

begin insert 15872. end insert   

The California Major Risk Medical Insurance Program
is hereby established within, and shall be administered by, the
department.

begin insert 15872.5. end insert   

This chapter shall become operative on July 1, 2014.

 

Article begin insert 2. end insert   Powers and Duties

 

begin insert 15873. end insert   

The department shall have the authority:

(a) To establish eligibility criteria, notwithstanding Section
15884, and determine the eligibility of applicants.

(b) To determine the major risk medical coverage to be provided
to program subscribers.

(c) To research and assess the needs of persons not adequately
covered by existing private and public health care delivery systems
and promote means of assuring the availability of adequate health
care services.

(d) To approve subscriber contributions, and plan rates, and
establish program contribution amounts.

(e) To provide major risk medical coverage for subscribers or
to contract with a participating health plan or plans or other
vendor to provide or administer major risk medical coverage for
subscribers.

(f) To authorize expenditures from the fund to pay program
expenses which exceed subscriber contributions.

(g) To contract for administration of the program or any portion
thereof with any public agency, including any agency of state
government, or with any private entity.

(h) (1) To issue rules and regulations to carry out the purposes
of this chapter.

(2) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking any further regulatory action, shall
implement, 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
until the time regulations are adopted. Thereafter, the department
shall adopt regulations in accordance with the requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code. Beginning six months after
the effective date of this section, and notwithstanding Section
10231.5 of the Government Code, the department shall provide a
status report to the Legislature pursuant to Section 9795 of the
Government Code on a semiannual basis until regulations have
been adopted.

(i) To authorize expenditures from the fund or from other moneys
appropriated in the annual Budget Act for purposes relating to
Section 10127.16 of the Insurance Code, and Section 1373.622 of
the Health and Safety Code.

(j) To exercise all powers reasonably necessary to carry out
the powers and responsibilities expressly granted or imposed upon
it under this chapter.

begin insert 15876. end insert   

Plan rates for major risk medical benefits approved
for the program shall not be excessive, inadequate, or unfairly
discriminatory, but shall be adequate to pay anticipated costs of
claims or services and administration.

 

Article begin insert 3. end insert   Policies Issued by the Department

 

begin insert 15878. end insert   

The department may place a lien on compensation or
benefits recovered or recoverable by a subscriber from any party
or parties responsible for the compensation or benefits for which
benefits have been provided under a policy issued under this article
or Article 4 (commencing with Section 15881).

begin insert 15879. end insert   

Except as provided in Article 3.5 (commencing with
Section 14124.70) of Chapter 7 of Part 3, benefits received under
this article or Article 4 (commencing with Section 15881) are in
excess of and secondary to, any other form of health benefits
coverage.

begin insert 15880. end insert   

Benefits under this article or Article 4 (commencing
with Section 15881) shall be subject to required subscriber
copayments and deductibles as the department may authorize. Any
authorized copayments shall not exceed 25 percent and any
authorized deductible shall not exceed an annual household
deductible amount of five hundred dollars ($500). However, health
plans not utilizing a deductible may be authorized to charge an
office visit copayment of up to twenty-five dollars ($25). If the
department contracts with participating health plans pursuant to
Article 4 (commencing with Section 15881), copayments or
deductibles shall be authorized in a manner consistent with the
basic method of operation of the participating health plans. The
aggregate amount of deductible and copayments payable annually
under this section shall not exceed two thousand five hundred
dollars ($2,500) for an individual and four thousand dollars
($4,000) for a family.

 

Article begin insert 4. end insert   Participating Health Plans

 

begin insert 15881. end insert   

The department shall provide coverage through
participating health plans and may contract for the processing of
applications, the enrollment of subscribers, and activities necessary
to administer the program. A contract entered into pursuant to
this chapter shall be exempt from any provision of law relating to
competitive bidding, and shall be exempt from the review or
approval of any division of the Department of General Services.
The department shall not be required to specify the amounts
encumbered for each contract but may allocate funds to each
contract based on projected and actual subscriber enrollments in
a total amount not to exceed revenue available for the program.

begin insert 15882. end insert   

The department may provide or purchase stop-loss
coverage under which the program and participating health plans
share the risk for health plan expenses which exceed plan rates.

begin insert 15883. end insert   

The department shall withdraw its approval of any
participating health benefits plan for noncompliance with program
standards, nonpayment of claims, or other good cause shown.
Approval shall not be withdrawn except after reasonable notice
to the health plan, program subscribers enrolled in the plan,
physicians or organizations of physicians offering services through
the plan, and all interested parties.

 

Article begin insert 5. end insert   Subscriber Eligibility and Enrollment

 

begin insert 15884. end insert   

(a) Each resident of the state meeting the eligibility
criteria of this section and who is unable to secure adequate private
health coverage is eligible to apply for major risk medical coverage
through the program. For these purposes, “resident” includes a
member of a federally recognized California Indian tribe.

(b) To be eligible for enrollment in the program, an applicant
shall have been rejected for health care coverage by at least one
private health plan. An applicant shall be deemed to have been
rejected if the only private health coverage that the applicant could
secure would do one of the following:

(1) Impose substantial waivers that the department determines
would leave a subscriber without adequate coverage for medically
necessary services.

(2) Afford limited coverage that the department determines
would leave the subscriber without adequate coverage for
medically necessary services.

(3) Afford coverage only at an excessive price, which the
department determines is significantly above standard average
individual coverage rates.

(c) Rejection for policies or certificates of specified disease or
policies or certificates of hospital confinement indemnity, as
described in Section 10198.61 of the Insurance Code, shall not be
deemed to be rejection for the purposes of eligibility for enrollment.

(d) The department may permit dependents of eligible
subscribers to enroll in major risk medical coverage through the
program if the department determines the enrollment can be
carried out in an actuarially and administratively sound manner.

(e) Notwithstanding the provisions of this section, the
department shall prescribe a period of time during which a resident
is ineligible to apply for major risk medical coverage through the
program if the resident either voluntarily disenrolls from, or was
terminated for nonpayment of the premium from, a private health
plan after enrolling in that private health plan pursuant to either
Section 10127.16 of the Insurance Code, and Section 1373.622 of
the Health and Safety Code.

begin insert 15884.5. end insert   

(a) It shall constitute unfair competition for purposes
of Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code for an insurer,
an insurance agent or broker, or an administrator, as defined in
Section 1759 of the Insurance Code, to refer an individual
employee, or his or her dependents, to the program, or arrange
for an individual employee, or his or her dependents, to apply to
the program, for the purpose of separating that employee, or his
or her dependents, from group health coverage provided in
connection with the employees employment.

(b) It shall constitute an unfair labor practice contrary to public
policy and enforceable under Section 95 of the Labor Code for
any employer to refer an individual employee, or his or her
dependents, to the program, or to arrange for an individual
employee, or his or her dependents, to apply to the program, for
the purpose of separating that employee, or his or her dependents,
from group health coverage provided in connection with the
employee’s employment.

(c) As used in this section, “group health coverage” includes
any nonprofit hospital service plan, health care service plan,
self-insured employee welfare benefit plan, or disability insurance
providing medical or hospital benefits.

begin insert 15885. end insert   

The department may permit the exclusion of coverage
or benefits for charges or expenses incurred by a subscriber during
the first six months of enrollment in the program for any condition
for which, during the six months immediately preceding enrollment
in the program medical advice, diagnosis, care, or treatment was
recommended or received as to the condition during that period.

However, the exclusion from coverage of this section shall be
waived to the extent to which the subscriber was covered under
any creditable coverage, as defined in Section 10900 of the
Insurance Code, that was terminated, provided the subscriber has
applied for enrollment in the program not later than 63 days
following termination of the prior coverage, or within 180 days
of termination of coverage if the subscriber lost his or her previous
creditable coverage because the subscriber’s employment ended,
the availability of health coverage offered through employment or
sponsored by an employer terminated, or an employer’s
contribution toward health coverage terminated. The exclusion
from coverage of this section shall also be waived as to any
condition of a subscriber previously receiving coverage under a
plan of another state similar to the program established by this
chapter if the subscriber was eligible for benefits under that
other-state coverage for the condition. The department may
establish alternative mechanisms applicable to enrollment in
participating health plans. These mechanisms may include, but
are not limited to, a postenrollment waiting period.

begin insert 15885.5. end insert   

Where more than one participating health plan is
offered, the department shall make available to applicants eligible
to enroll in the program sufficient information to make an informed
choice among the various types of participating health plans. Each
applicant shall be issued an appropriate document setting forth
or summarizing the services to which an enrollee is entitled,
procedures for obtaining major risk medical coverage, a list of
contracting health plans and providers, and a summary of
grievance procedures.

begin insert 15886. end insert   

After the applicant notifies the department in writing
of his or her choice of participating health plan, the department
shall assist the applicant in enrolling as a subscriber and securing
major risk medical coverage for the subscriber and any dependents.

begin insert 15886.5. end insert   

A subscriber may request a change in coverage based
upon a change in the family status of any dependent, by filing an
application within 30 days after the occurrence of the change in
family status, or at other times and under conditions as may be
prescribed by the department.

begin insert 15887. end insert   

Health coverage secured through the program shall
permit a covered dependent of a subscriber to elect to continue
the same coverage upon the death of the subscriber, or upon the
subscriber becoming eligible for Medicare Part A and Part B.

begin insert 15887.5. end insert   

A transfer of enrollment from one participating health
plan to another may be made by a subscriber at times and under
conditions as may be prescribed by the department.

begin insert 15888. end insert   

If a subscriber is dissatisfied with any action or failure
to act which has occurred in connection with a participating plan’s
coverage, the subscriber shall have the right to appeal to the
department and shall be accorded an opportunity for a fair
hearing. Hearings may be conducted, insofar as practicable,
pursuant to the provisions of Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code.

begin insert 15888.5. end insert   

Subscribers and their dependents who become eligible
for Medicare Part A and Part B, excluding those on Medicare
solely because of end-stage renal disease, shall not be enrolled,
or continue to be enrolled, in major risk medical coverage afforded
by this chapter.

 

Article begin insert 6. end insert   Plan Rates and Compensation from the Fund

 

begin insert 15890. end insert   

Upon enrollment as a subscriber in the program, the
subscriber shall be responsible for payment of the subscriber
contribution. Termination of coverage by a participating health
plan for nonpayment of the subscriber contribution shall be
governed by the same laws and regulations by which the
participating health plan is regulated as to all its subscribers and
enrollees.

begin insert 15890.5. end insert   

Each health plan contracting with the department
pursuant to Article 4 (commencing with Section 15881) shall
submit annually to the department rates which it estimates are
sufficient to cover the cost of providing major risk medical
coverage to its subscribers. The rates shall be submitted on the
basis of categories of risk which shall be established by the
department.

begin insert 15891. end insert   

(a) The department shall establish program
contribution amounts for each category of risk for each
participating health plan. The program contribution amounts shall
be based on the average amount of subsidy funds required for the
program as a whole. To determine the average amount of subsidy
funds required, the department shall calculate a loss ratio,
including all medical costs, administration fees, and risk payments,
for the program in the prior calendar year. The loss ratio shall be
calculated using 125 percent of the standard average individual
rates for comparable coverage as the denominator, and all medical
costs, administration fees, and risk payments as the numerator.
The average amount of subsidy funds required is calculated by
subtracting 100 percent from the program loss ratio. For purposes
of calculating the program loss ratio, no participating health plan’s
loss ratio shall be less than 100 percent and participating health
plans with fewer than 1,000 program members shall be excluded
from the calculation.

Subscriber contributions shall be established to encourage
members to select those health plans requiring subsidy funds at
or below the program average subsidy. Subscriber contribution
amounts shall be established so that no subscriber receives a
subsidy greater than the program average subsidy, except that:

(1) In all areas of the state, at least one plan shall be available
to program participants at an average subscriber contribution of
125 percent of the standard average individual rates for
comparable coverage.

(2) No subscriber contribution shall be increased by more than
10 percent above 125 percent of the standard average individual
rates for comparable coverage.

(3) Subscriber contributions for participating health plans
joining the program after January 1, 1997, shall be established
at 125 percent of the standard average individual rates for
comparable coverage for the first two benefit years the plan
participates in the program.

(b) The department shall pay program contribution amounts to
participating health plans from the Major Risk Medical Insurance
Fund.

(c) Commencing January 1, 2013, in addition to the amount of
subsidy funds required pursuant to subdivision (a), the department
may further subsidize subscriber contributions so that the amount
paid by each subscriber is below 125 percent of the standard
average individual risk rate for comparable coverage but no less
than 100 percent of the standard average individual risk rate for
comparable coverage. For purposes of calculating premiums for
the following products, any reference to, or use of, subscriber
contributions, premiums, average premiums, or amounts paid by
subscribers in the program shall be construed to mean subscriber
contributions as described in subdivision (a) without application
of the additional subsidies permitted by this subdivision:

(1) Standard benefit plans pursuant to Section 10127.16 of the
Insurance Code and Section 1373.622 of the Health and Safety
Code.

(2) Health benefit plans and health care service plan contracts
for federally eligible defined individuals pursuant to Sections
10901.3 and 10901.9 of the Insurance Code and Sections 1399.805
and 1399.811 of the Health and Safety Code.

(3) Conversion coverage pursuant to Section 12682.1 of the
Insurance Code and Section 1373.6 of the Health and Safety Code.

begin insert 15891.5. end insert   

A participating health plan may charge subscriber
contributions under this article that do not exceed the difference
between its plan rate for the category of risk and the program
contribution amount for the category of risk.

 

Article begin insert 7. end insert   Major Risk Medical Insurance Fund

 

begin insert 15893. end insert   

(a) There is hereby continued in existence in the State
Treasury a special fund known as the Major Risk Medical
Insurance Fund that is, notwithstanding Section 13340 of the
Government Code, continuously appropriated to the department
for the purposes specified in Section 15894, Section 10127.16 of
the Insurance Code, and Section 1373.622 of the Health and Safety
Code.

(b) Funds may be deposited in the Major Risk Medical Insurance
Fund from one or more of the following accounts in the Cigarette
and Tobacco Products Surtax Fund:

(1) The Hospital Services Account.

(2) The Physician Services Account.

(3) The Unallocated Account.

begin insert 15893.5. end insert   

Notwithstanding Section 15893, funds placed in the
Major Risk Medical Insurance Fund pursuant to Section 1341.45
of the Health and Safety Code shall not be continuously
appropriated.

begin insert 15894. end insert   

Except as provided in Section 15894.5, the department
shall authorize the expenditure of money in the fund to cover
program expenses, including program expenses that exceed
subscriber contributions, and to cover expenses relating to Section
10127.16 of the Insurance Code, or to Section 1373.622 of the
Health and Safety Code. The department shall determine the
amount of funds expended for each of these purposes, taking into
consideration the requirements of this chapter, Section 10127.16
of the Insurance Code, and Section 1373.622 of the Health and
Safety Code.

begin insert 15894.5. end insert   

From money appropriated by the Legislature to the
fund, the department may expend sufficient funds to carry out the
purposes of this chapter and of Section 10127.16 of the Insurance
Code, and Section 1373.622 of the Health and Safety Code.

However, the state shall not be liable beyond the assets of the
fund for any obligations incurred, or liabilities sustained, in the
operation of the California Major Risk Medical Insurance Program
or for the expenditures described in Section 10127.16 of the
Insurance Code, and Section 1373.622 of the Health and Safety
Code.

begin insert 15895. end insert   

Any moneys remaining in the fund at the end of any
fiscal year may be carried forward to the next succeeding fiscal
year.

begin insert 15895.5. end insert   

The department shall establish a reserve which is
sufficient to prudently operate the program.

end insert

begin insert

begin insert SEC. 91. end insert   

end insert begin insert

The balances of the funds for the appropriations
provided by Item 4560-001-3085 of Section 2.00 of the Budget Act
of 2011, as added by Chapter 33 of the Statutes of 2011, payable
from the Mental Health Services Fund, are hereby reappropriated
and, notwithstanding any other law, shall be available for
encumbrance until June 30, 2015.

end insert

begin insert

begin insert SEC. 92. end insert   

end insert begin insert

Between July 1, 2014, and October 31, 2015,
inclusive, the State Department of Public Health shall convene a
quarterly meeting of stakeholders, including, but not limited to,
community organizations, food banks, nonprofit organizations,
program contractors, and counties, to solicit input and receive
feedback on the development, integration, and evaluation of
nutrition education and obesity prevention programs, and to help
minimize any disruption to services in the Supplemental Nutrition
Assistance Program Education (SNAP-Ed) program during the
transition of work from contracted vendors to the civil service.

end insert

begin insert

begin insert SEC. 93. end insert   

end insert begin insert

By August 1, 2014, the State Department of Health
Care Services shall establish a work group composed of
stakeholders, including health care providers, county
representatives, labor, health plans and insurance representatives,
consumer advocates, immigrant policy advocates, and employers
of low-wage workers to develop a plan to utilize available Major
Risk Medical Insurance Fund moneys, including moneys in the
Managed Care Administrative Fines and Penalties Fund
transferred pursuant to paragraph (2) of subdivision (c) of Section
1341.45 of the Health and Safety Code, and any other available
funds in the Cigarette and Tobacco Products Surtax Fund, in order
to provide subsidized health care coverage for individuals not
eligible for or receiving comprehensive health care.

end insert

begin insert

begin insert SEC. 94. end insert   

end insert begin insert

By August 1, 2014, the State Department of Health
Care Services shall work with stakeholders, including consumer
advocates, county representatives, and health care providers, to
develop a notice to be sent or made available to individuals who
both (1) are enrolled in a state health care program administered
by the State Department of Health Care Services that does not
provide minimum essential coverage and (2) have been determined,
by the State Department of Health Care Services, to potentially
be eligible for Medi-Cal or coverage through California Health
Benefit Exchange. The notice shall inform the enrollees that they
may qualify for Medi-Cal or comprehensive coverage through
Covered California. The notice shall also include information
about the open enrollment period for the California Health Benefit
Exchange and shall indicate that there is continuous enrollment
for the Medi-Cal program. The notice may be made available
through means that include, but not limited to, health care provider
offices and postings on Internet Web sites.

end insert

begin insert

begin insert SEC. 95. end insert   

end insert begin insert

(a) Beginning October 2014, the State Department
of Public Health shall, on a quarterly basis, report to the fiscal
and appropriate policy committees of the Legislature and post on
its Internet Web Site all of the following:

end insert begin insert

(1) Beginning with 2011-12 by fiscal year and by quarter for
the budget year, workload and performance metrics related to the
volume, timeliness of initiation, timeliness of completion, and
disposition of all of the following:

end insert begin insert

(A) Investigations of complaints related to paraprofessionals
certified by the State Department of Public Health.

end insert begin insert

(B) Investigations of complaints and entity-reported incidents
related to long-term care facilities licensed or certified by the State
Department of Public Health, including the number of complaint
investigations initiated within 10 days and the number of complaint
investigations prioritized as involving immediate jeopardy initiated
within 24 hours.

end insert begin insert

(C) State relicensing and federal recertification surveys.

end insert begin insert

(2) Information on Licensing and Certification Program vacancy
rates and hiring by position classification, including any positions
established administratively.

end insert begin insert

(3) By October 2016, the State Department of Public Health
shall begin reporting workload and performance metrics related
to the volume, timeliness of initiation, timeliness of completion,
and disposition of complaints for all facility types.

end insert begin insert

(b) Beginning August 2014, the State Department of Public
Health shall hold semiannual meetings for all interested
stakeholders to provide feedback on improving the Licensing and
Certification Program to ensure that Californians receive the
highest quality of medical care in health facilities. Once they are
available under subdivision (a), the State Department of Public
Health shall present the quarterly workload and performance
metrics at these meetings.

end insert begin insert

(c) The State Department of Public Health shall report to the
fiscal and appropriate policy committees of the Legislature and
post on its Internet Web site, all of the following:

end insert begin insert

(1) By October 2014, the status and use of the $1.4 million
appropriated in the 2014-15 fiscal year from the Internal
Departmental Quality Improvement Account for the Licensing and
Certification Program Evaluation and the outcomes from this
effort. The State Department of Public Health shall report on the
status of the fund thereafter in the Licensing and Certification
Estimate.

end insert begin insert

(2) By October 2014, and in the Licensing and Certification
Program November Licensing and Certification Estimate, for the
2015-16 fiscal year an update on the State Department of Public
Health’s efforts to evaluate and reform the Licensing and
Certification Program timekeeping systems and estimate
methodology.

end insert begin insert

(3) By October 2014, and annually thereafter in the Licensing
and Certification Program Estimate, an update on the Los Angeles
County contract and Licensing and Certification’s oversight of
this contract.

end insert begin insert

(4) By December 1, 2014, an assessment of the possibilities of
using professional position classifications other than Health
Facility Evaluator Nurses to perform licensing and certification
survey or complaint workload.

end insert begin insert

(d) Any reports required to be submitted to the fiscal and
appropriate policy committees of the Legislature pursuant to this
section shall be submitted notwithstanding Section 10231.5 of the
Government Code.

end insert

begin insert

begin insert SEC. 96. end insert   

end insert begin insert

The Legislature finds and declares that Section 45
of this act clarifies procedures and terms of the Mental Health
Services Act within the meaning of Section 18 of the Mental Health
Services Act.

end insert

begin insert

begin insert SEC. 97. end insert   

end insert begin insert

The Legislature finds and declares all of the
following:

end insert begin insert

(a) During the 2009-10 Regular Session of the Legislature, the
Legislature enacted Assembly Bill 2599 (Chapter 267 of the
Statutes of 2011), which, among other things, recognizes the
importance of facilitating the success of a new, nonprofit hospital
to serve the population of South Los Angeles that was formerly
served by the Los Angeles County Martin Luther King, Jr.-Harbor
Hospital.

end insert begin insert

(b) It remains the intent of the Legislature that adequate and
predictable funding in support of the new hospital be provided
through current Medi-Cal funding or equivalent funding under
successor or modified Medi-Cal payment systems, for purposes
related to meeting the health care needs of the population formerly
served by the Los Angeles County Martin Luther King, Jr.-Harbor
Hospital.

end insert begin insert

(c) It is the intent of the Legislature that the State Department
of Health Care Services, the County of Los Angeles, and the new,
nonprofit hospital operating on the site of the former Los Angeles
County Martin Luther King, Jr.-Harbor Hospital campus shall
annually determine the best means to provide funding to the new
hospital in a manner that will be federally approved.

end insert begin insert

(d) It is the intent of the Legislature that funding to the new
hospital will be claimed and provided in a manner that maximizes
federal Medicaid funding to the state by considering the overall
aggregate impact on funding with respect to Medi-Cal hospital
providers in the state.

end insert

begin insert

begin insert SEC. 98. end insert   

end insert

begin insert Through its courts, statutes, and under its
Constitution, California protects a woman’s right to reproductive
privacy. The Legislature hereby reaffirms these protections and
specifically the California Supreme Court decisions in People v.
Belous (1969) 71 Cal.2d 954, Committee To Defend Reproductive
Rights v. Myers (1981) 29 Cal.3d 252, and American Academy of
Pediatrics v. Lungren (1997) 16 Cal. 4th 307. It is the intent of
the Legislature that this act not be interpreted to limit a woman’s
rights under the California Constitution and these California
Supreme Court decisions. end insert

begin insert

begin insert SEC. 99. end insert   

end insert begin insert

The Legislature finds and declares that Section 2 of
this act, which amends Section 6254 of the Government Code,
imposes a limitation on the public’s right of access to the meetings
of public bodies or the writings of public officials and agencies
within the meaning of Section 3 of Article I of the California
Constitution. Pursuant to that constitutional provision, the
Legislature makes the following findings to demonstrate the interest
protected by this limitation and the need for protecting that
interest:

end insert begin insert

In order to protect the confidentiality of certain negotiations,
negotiated rates, and privileged work product, it is necessary that
this act limit the public’s right of access to that information.

end insert

begin insert

begin insert SEC. 100. end insert   

end insert begin insert

No reimbursement is required by this act pursuant
to Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin insert

begin insert SEC. 101. 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 2014.

end delete