BILL NUMBER: SB 870 ENROLLED
BILL TEXT
PASSED THE SENATE JUNE 15, 2014
PASSED THE ASSEMBLY JUNE 15, 2014
AMENDED IN ASSEMBLY JUNE 13, 2014
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 9, 2014
An act to amend Section 1374.34 of, to add Chapter 13.6
(commencing with Section 121287) to Part 4 of Division 105 of, and to
add and repeal Section 128225.5 of, the Health and Safety Code, to
amend Sections 14105.33, 14105.436, and 14105.86 of, to amend,
repeal, and add Section 14593 of, and to add Sections 14087.9730 and
14132.56 to, the Welfare and Institutions Code, relating to health,
and making an appropriation therefor, to take effect immediately,
bill related to the budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 870, Committee on Budget and Fiscal Review. Health.
(1) Existing law makes provisions for programs relating to
treatment of persons with human immunodeficiency virus (HIV) and the
acquired immunodeficiency syndrome (AIDS). Under existing law, the
Office of AIDS, in the State Department of Public Health, is the lead
agency within the state responsible for coordinating state programs,
services, and activities relating to HIV and AIDS and AIDS-related
conditions.
This bill would authorize the department to implement up to 4
demonstration projects that may operate for a period of up to 2 years
to allow for innovative, evidence-based approaches to provide
outreach, HIV and Hepatitis C screenings, and linkage to, and
retention in, quality health care for the most vulnerable and
underserved individuals with a high risk for HIV infection. The bill
would require, upon appropriation in the annual Budget Act, the
department to award funding, on a competitive basis, to a
community-based organization or local health jurisdiction to operate
a demonstration project, as specified. The bill would require the
department, at the conclusion of the demonstration projects, to
review the effectiveness of each demonstration project and determine
whether the demonstration project model can be implemented on a
statewide basis.
(2) 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.
Existing law establishes the California Healthcare Workforce
Policy Commission to, among other things, identify specific areas of
the state where unmet priority needs for primary care family
physicians and registered nurses exist and to make recommendations to
the Director 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
accredited medical schools and the other 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.
This bill would require, only until January 1, 2018, the director
to select and contract on behalf of the state with accredited primary
care or family medicine residency programs for the purpose of
providing grants to support newly created residency positions, and
would require the commission to review and make recommendations to
the director concerning the provision of those grants. These
provisions would be operative only if funds are appropriated for
these purposes in the Budget Act of 2014.
(3) Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services.
The Medi-Cal program is, in part, governed and funded by federal
Medicaid Program provisions. Under existing law, one of the methods
by which Medi-Cal services are provided is pursuant to contracts with
various types of managed care plans.
This bill would require the department to establish a 3-year pilot
program in the County of Los Angeles that enables school districts
to allow students enrolled in Medi-Cal managed care plans the ability
to receive vision care services at the school site through the use
of a mobile vision service provider. The bill would generally require
the Medi-Cal managed care plans in the County of Los Angeles to, in
consultation with the department, jointly identify and develop
standards and participation criteria that the participating mobile
vision service provider would be required to meet in order to be
deemed qualified to participate in the pilot program. The bill would
authorize the Director of Health Care Services to extend the pilot
program to Medi-Cal managed care plans in other counties and
applicable local jurisdictions, as specified.
Existing law provides for a schedule of benefits under the
Medi-Cal program, which includes Early and Periodic Screening,
Diagnosis, and Treatment for any individual under 21 years of age,
consistent with the requirements of federal law.
This bill would provide, only to the extent required by the
federal government and effective no sooner than required by the
federal government, that behavioral health treatment (BHT), as
defined, is a covered service for individuals under 21 years of age,
as specified. The bill would require that the department only
implement these provisions, or continue to implement these
provisions, if the department receives all necessary federal
approvals to obtain federal funds for the service, the department
seeks an appropriation that would provide the necessary state funding
estimated to be required for the applicable fiscal year, and the
department consults with stakeholders. The bill would state that it
is the intent of the Legislature, to the extent the federal
government requires BHT to be a covered Medi-Cal service, that the
department seek statutory authority to implement this new benefit.
Existing law also includes in the schedule of benefits for
Medi-Cal prescribed drugs subject to the Medi-Cal list of contract
drugs. Existing law authorizes the department to enter into contracts
with manufacturers of single-source and multiple-source drugs, on a
bid or nonbid basis, for drugs from each major therapeutic category.
Existing law requires these contracts to provide for a state rebate
to be remitted to the department quarterly. Existing law also
requires pharmaceutical manufacturers to provide to the department a
state rebate for any drug products that have been added to the
Medi-Cal list of contract drugs related to drugs used to treat AIDS
and cancer. Existing law requires that the utilization data to
determine these rebates exclude data from specified entities and
capitated plans. Existing law also requires the department to collect
a state rebate for blood factors reimbursed by specified programs.
This bill would make those data exclusions inoperative when the
department takes specified actions, and would, commencing July 1,
2014, specify that utilization data used to determine the rebates
include data from all health plans with specified exceptions. The
bill would require the department to develop coverage policies, in
consultation with clinical experts, Medi-Cal managed care plans, and
other stakeholders, for prescription drugs that the department
reimburses managed care plans through separate capitated rate
payments or other supplemental payments.
Existing federal law establishes the Program of All-Inclusive Care
for the Elderly (PACE), which provides specified services for older
individuals so that they may continue living in the community.
Federal law authorizes states to implement the PACE program as a
Medicaid state option. Existing law authorizes the department to
enter into contracts with up to 15 PACE organizations, as defined, to
implement the PACE program, as specified. Existing law requires the
department to establish capitation rates paid to each PACE
organization at no less than 90% of the fee-for-service equivalent
cost, including the department's cost of administration, that the
department estimates would be payable for all services covered under
the PACE organization contract if all those services were to be
furnished to Medi-Cal beneficiaries under the fee-for-service
program.
This bill would instead require, on and after April 1, 2015, that
the department establish capitation rates paid to each PACE
organization at no less than 95% of that amount.
(4) Existing law, the Knox-Keene Health Care Service Plan Act of
1975 (Knox-Keene Act), 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 Knox-Keene Act a crime. Existing
law establishes the Independent Medical Review System to make
determinations when a health care service that is eligible for
coverage has been denied, modified, or delayed by a decision of the
plan, or by one of its contracting providers, in whole or in part due
to a finding that the service is not medically necessary. Existing
law requires the Director of the Department of Managed Health Care to
review individual cases submitted for independent medical review to
determine whether any enforcement actions, including penalties, may
be appropriate.
This bill would prohibit the director from taking an enforcement
action against a plan if the plan provides prescription drugs to a
Medi-Cal beneficiary pursuant to State Department of Health Care
Services guidelines.
(5) This bill would state the intent of the Legislature that the
State Department of Health Care Services continue to monitor access
to and utilization of Medi-Cal services in the fee-for-service and
managed care settings during the 2014-15 fiscal year, as specified
and would require the department to use this information to evaluate
current reimbursement levels for Medi-Cal providers and to make
recommendations for targeted changes to the extent the department
finds those changes appropriate.
(6) Item 4300-101-0001 of the Budget Act of 2009, as added by
Chapter 1 of the 3rd Extraordinary Session, appropriated $24,553,000
to the State Department of Developmental Services for the support of
the department, payable from the General Fund. Item 4300-101-0001 of
the Budget Act of 2010, as added by Chapter 712 of the Statutes of
2010, appropriated $24,391,000 to the department for its support,
payable from the General Fund.
This bill would reappropriate the balances of those amounts to the
department, subject to specified purposes, and would provide that
those funds would be available for liquidation until June 30, 2015.
The bill also would, for the 2014-15 fiscal year, appropriate
$3,200,000 from the Major Risk Medical Insurance Fund to the State
Department of Health Care Services for allocation to health benefit
plans that meet specified requirements.
This bill would, for the 2014-15 fiscal year, appropriate
$3,750,000 from the Major Risk Medical Insurance Fund to the State
Department of Health Care Services for purposes of electronic health
records technical assistance in accordance with the State Medicaid
Health Information Technology Plan, as specified.
(7) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1374.34 of the Health and Safety Code is
amended to read:
1374.34. (a) Upon receiving the decision adopted by the director
pursuant to Section 1374.33 that a disputed health care service is
medically necessary, the plan shall promptly implement the decision.
In the case of reimbursement for services already rendered, the plan
shall reimburse the provider or enrollee, whichever applies, within
five working days. In the case of services not yet rendered, the plan
shall authorize the services within five working days of receipt of
the written decision from the director, or sooner if appropriate for
the nature of the enrollee's medical condition, and shall inform the
enrollee and provider of the authorization in accordance with the
requirements of paragraph (3) of subdivision (h) of Section 1367.01.
(b) A plan shall not engage in any conduct that has the effect of
prolonging the independent review process. The engaging in that
conduct or the failure of the plan to promptly implement the decision
is a violation of this chapter and, in addition to any other fines,
penalties, and other remedies available to the director under this
chapter, the plan shall be subject to an administrative penalty of
not less than five thousand dollars ($5,000) for each day that the
decision is not implemented. The administrative penalties shall be
paid to the Managed Care Administrative Fines and Penalties Fund and
shall be used for the purposes specified in Section 1341.45.
(c) The director shall require the plan to promptly reimburse the
enrollee for any reasonable costs associated with those services when
the director finds that the disputed health care services were a
covered benefit under the terms and conditions of the health care
service plan contract, and the services are found by the independent
medical review organization to have been medically necessary pursuant
to Section 1374.33, and either the enrollee's decision to secure the
services outside of the plan provider network was reasonable under
the emergency or urgent medical circumstances, or the health care
service plan contract does not require or provide prior authorization
before the health care services are provided to the enrollee.
(d) In addition to requiring plan compliance regarding
subdivisions (a), (b), and (c) the director shall review individual
cases submitted for independent medical review to determine whether
any enforcement actions, including penalties, may be appropriate. In
particular, where substantial harm, as defined in Section 3428 of the
Civil Code, to an enrollee has already occurred because of the
decision of a plan, or one of its contracting providers, to delay,
deny, or modify covered health care services that an independent
medical review determines to be medically necessary pursuant to
Section 1374.33, the director shall impose penalties.
(e) Pursuant to Section 1368.04, the director shall perform an
annual audit of independent medical review cases for the dual
purposes of education and the opportunity to determine if any
investigative or enforcement actions should be undertaken by the
department, particularly if a plan repeatedly fails to act promptly
and reasonably to resolve grievances associated with a delay, denial,
or modification of medically necessary health care services when the
obligation of the plan to provide those health care services to
enrollees or subscribers is reasonably clear.
(f) A plan's provision of prescription drugs to a Medi-Cal
beneficiary pursuant to paragraph (5) of subdivision (b) of Section
14105.33 of the Welfare and Institutions Code and in accordance with
the State Department of Health Care Services coverage policies shall
not be a ground for an enforcement action. Nothing in this article is
intended to limit a plan's responsibility to provide medically
necessary health care services pursuant to this chapter.
SEC. 2. Chapter 13.6 (commencing with Section 121287) is added to
Part 4 of Division 105 of the Health and Safety Code, to read:
CHAPTER 13.6. PUBLIC HEALTH DEMONSTRATION PROJECTS
121287. (a) There are hereby established public health
demonstration projects to allow for innovative, evidence-based
approaches to provide outreach, HIV and hepatitis C screenings, and
linkage to, and retention in, quality health care for the most
vulnerable and underserved individuals with a high risk for HIV
infection.
(b) The demonstration projects may operate for a period of up to
two years. The department shall implement up to four demonstration
projects. The demonstration projects shall be designed to be capable
of replication and expansion on a statewide basis.
(c) After conclusion of the demonstration projects, the department
shall review the effectiveness of each demonstration project and
make a determination of whether the demonstration project model can
be implemented on a statewide basis.
121288. Upon an appropriation for this purpose in the annual
Budget Act, the department shall award funding, on a competitive
basis, to a community-based organization or local health jurisdiction
to operate a demonstration project pursuant to this chapter. The
department shall determine the funding levels of each demonstration
project based on scope and geographic area. An applicant shall
demonstrate each of the following qualifications:
(a) Leadership on access to HIV care and testing issues and
experience addressing the needs of highly marginalized populations in
accessing medical and HIV care and support.
(b) Experience with the target population or relationships with
community-based organizations or nongovernmental organizations, or
both, that demonstrate expertise, history, and credibility working
successfully in engaging the target population.
(c) Experience working with nontraditional collaborators who work
within and beyond the field of HIV/AIDS education and outreach,
including areas of reproductive health, housing, immigration, and
mental health.
(d) Strong relationships with community-based HIV health care
providers that have the trust of the targeted populations.
(e) Strong relationships with the state and local health
departments.
(f) Capacity to coordinate a communitywide planning phase
involving multiple community collaborators.
(g) Experience implementing evidence-based programs or generating
innovative strategies, or both, with at least preliminary evidence of
program effectiveness.
(h) Administrative systems and accountability mechanisms for grant
management.
(i) Capacity to participate in evaluation activities.
(j) Strong communication systems that are in place to participate
in public relations activities.
121289. Each demonstration project shall prepare and disseminate
information regarding best practices for, and the lessons learned
regarding, providing outreach and education to the most vulnerable
and underserved individuals with a high risk for HIV infection for
use by providers, the Office of AIDS, State Department of Public
Health, federal departments and agencies, including the Department of
Health and Human Services, and other national HIV/AIDS groups.
SEC. 3. Section 128225.5 is added to the Health and Safety Code,
to read:
128225.5. (a) The commission shall review and make
recommendations to the Director of the Office of Statewide Health
Planning and Development concerning the provision of grants pursuant
to this section. In making recommendations, the commission shall give
priority to residency programs that demonstrate all of the
following:
(1) That the grant will be used to support new primary care
physician slots.
(2) That priority in filling the position shall be given to
physicians who have graduated from a California-based medical school.
(3) That the new primary care physician residency positions have
been, or will be, approved by the Accreditation Council for Graduate
Medical Education prior to the first distribution of grant funds.
(b) The director shall do both of the following:
(1) Determine whether the residency programs recommended by the
commission meet the standards established by this section.
(2) Select and contract on behalf of the state with accredited
primary care or family medicine residency programs for the purpose of
providing grants for the support of newly created residency
positions.
(c) This section does not apply to funding appropriated in the
annual Budget Act for the Song-Brown Health Care Workforce Training
Act (Article 1 (commencing with Section 128200)).
(d) This section shall be operative only if funds are appropriated
in the Budget Act of 2014 for the purposes described in this
section.
(e) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
SEC. 4. Section 14087.9730 is added to the Welfare and
Institutions Code, immediately following Section 14087.9725, to read:
14087.9730. (a) In an effort to determine whether children's
access to, and utilization of, vision care services can be increased
by providing vision care services at schools, the department shall
establish a pilot program in the County of Los Angeles that enables
school districts to allow students enrolled in Medi-Cal managed care
plans to receive vision care services at the schoolsite through the
use of a mobile vision service provider. The vision care services
available under this pilot program are limited to vision examinations
and providing eyeglasses.
(b) The Medi-Cal managed care plans in the County of Los Angeles
shall jointly identify and develop standards and participation
criteria that the participating mobile vision service provider shall
meet in order to be deemed qualified to participate in the pilot
program, in consultation with the department and consistent with any
applicable federal requirements governing Medicaid managed care
contracts. In the event the Medi-Cal managed care plans have not
developed standards and participation criteria by January 1, 2015, or
by the scheduled start date of the pilot program if later, the
department shall determine the standards and participating criteria
for purposes of this pilot program.
(c) This section shall not be construed to preclude Los Angeles
County school district students not enrolled in Medi-Cal managed care
from accessing vision care services from a mobile vision service
provider participating in this pilot program.
(d) Under the pilot program, if a school district in the County of
Los Angeles enters into a written memorandum of understanding with a
mobile vision care service provider allowing the provider to offer
the vision care services described in this section to students, all
of the following shall apply:
(1) The two Medi-Cal managed care plans in the County of Los
Angeles shall contract with one or more mobile vision care service
providers that meets the standards and participation criteria
developed pursuant to subdivision (b) for the delivery of those
vision care services to any student enrolled in the Medi-Cal managed
care plan who chooses to receive his or her vision care services from
the provider at that schoolsite. This contracting requirement is
contingent upon agreement between each of the two Medi-Cal managed
care plans in the County of Los Angeles and a mobile vision care
service provider with respect to reimbursement rates applicable to
the services under this pilot.
(2) Neither this pilot program nor the Medi-Cal managed care plan
shall require that a Medi-Cal beneficiary receive the vision care
services described in this section through a mobile vision care
provider onsite at the school.
(3) Prior to a Medi-Cal beneficiary receiving mobile vision care
services at the schoolsite, the parents, guardians, or legal
representative of the student shall consent in writing to the
Medi-Cal beneficiary receiving the services through a mobile vision
care provider onsite at the school.
(e) An optometrist or ophthalmologist prescribing glasses to a
Medi-Cal managed care beneficiary as part of services provided at a
schoolsite by a mobile vision care service provider pursuant to this
pilot program shall be enrolled in the Medi-Cal program as an
Ordering/Referring/Prescribing provider. For any other purposes under
the pilot program, the licensed health professional shall satisfy
all requirements for enrollment as a provider in the Medi-Cal
program.
(f) (1) The Medi-Cal managed care plan shall compensate the mobile
vision services provider for the cost of the vision examination,
dispensing of the lenses, and eyeglass frames.
(2) Ophthalmic eyeglasses lenses prescribed by optometrists or
ophthalmologists for a Medi-Cal managed care plan enrollee as part of
the services provided at a schoolsite by a mobile vision services
provider shall be fabricated through optical laboratories the
department contracts with pursuant to subdivision (b) of Section
14105.3.
(g) (1) The department shall annually adjust capitation rates for
the Medi-Cal managed care plans operating in the County of Los
Angeles as necessary to account for projected changes in the costs
and utilization of the services provided pursuant to this section by
mobile vision service providers.
(2) Capitation rate adjustments pursuant to this section shall be
actuarially based and developed using projections of contingent
events including targeted populations who will receive these
services, and shall otherwise be in accordance with requirements
necessary to secure federal financial participation.
(3) Capitation rate adjustments pursuant to this section shall be
limited to those related to vision examinations, dispensing of
lenses, and eyeglass frames. The fabrication of optical lenses
pursuant to this section shall be paid on a fee-for-service basis in
accordance with the department's applicable contract under
subdivision (b) of Section 14105.3.
(h) The pilot program shall last three years, starting no sooner
than January 1, 2015, and concluding December 31, 2017, or three
years from the start date of the pilot if later. The department shall
evaluate the impact of the pilot program on access to, and
utilization of, vision care services by children by monitoring the
managed care plan utilization data for vision services, as well as
the lens fabrication data.
(i) The department may terminate the pilot program at any time
with 90 days advance notice to the Medi-Cal managed care plans for
reasons that include, but are not limited to, any of the following:
(1) The department determines that the pilot program is resulting
in a lower level of access to, or use of, vision care services for
children under the participating health plans.
(2) The department determines that the pilot program is resulting
in fraud, waste, or abuse of Medi-Cal funds.
(3) The department determines there is a lack of funding for the
vision care services provided in the pilot program.
(j) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may 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.
(k) The department shall obtain any federal approvals necessary to
implement this section and to obtain federal matching funds to the
maximum extent permitted by federal law.
( l ) This section shall be implemented only if and to
the extent all federal approvals are obtained and federal financial
participation is available.
(m) This section shall be implemented only to the extent an annual
appropriation is made available to the department each fiscal year
for the specific purpose of implementing this section.
(n) If the department determines, pursuant to subdivision (h),
that the pilot program is having a positive impact on access and
utilization and that additional funds are available, the director may
extend the pilot program described in this section to Medi-Cal
managed care plans in other counties and applicable local
jurisdictions. Any extension shall be implemented only to the extent
that any additional and necessary federal approvals are obtained, and
if sufficient funds are made available to participating plans for
this purpose. The department may accept funding from private
foundations in order to implement an extension under this subdivision
to the extent that federal financial participation is available.
(o) The department shall post on its Internet Web site a notice
that has terminated or expanded the pilot program, including
identification of the geographic locations, and shall notify
appropriate fiscal and policy committees of both houses of the
Legislature.
SEC. 5. Section 14105.33 of the Welfare and Institutions Code is
amended to read:
14105.33. (a) The department may enter into contracts with
manufacturers of single-source and multiple-source drugs, on a bid or
nonbid basis, for drugs from each major therapeutic category, and
shall maintain a list of those drugs for which contracts have been
executed.
(b) (1) Contracts executed pursuant to this section shall be for
the manufacturer's best price, as defined in Section 14105.31, which
shall be specified in the contract, and subject to agreed-upon price
escalators, as defined in that section. The contracts shall provide
for a state rebate, as defined in Section 14105.31, to be remitted to
the department quarterly. The department shall submit an invoice to
each manufacturer for the state rebate, including supporting
utilization data from the department's prescription drug paid claims
tapes within 30 days of receipt of the federal Centers for Medicare
and Medicaid Services' file of manufacturer rebate information. In
lieu of paying the entire invoiced amount, a manufacturer may contest
the invoiced amount pursuant to procedures established by the
federal Centers for Medicare and Medicaid Services' Medicaid Drug
Rebate Program Releases or regulations by mailing a notice, that
shall set forth its grounds for contesting the invoiced amount, to
the department within 38 days of the department's mailing of the
state invoice and supporting utilization data. For purposes of state
accounting practices only, the contested balance shall not be
considered an accounts receivable amount until final resolution of
the dispute pursuant to procedures established by the federal Centers
for Medicare and Medicaid Services' Medicaid Drug Rebate Program
Releases or regulations that results in a finding of an underpayment
by the manufacturer. Manufacturers may request, and the department
shall timely provide, at cost, Medi-Cal provider level drug
utilization data, and other Medi-Cal utilization data necessary to
resolve a contested department-invoiced rebate amount.
(2) The department shall provide for an annual audit of
utilization data used to calculate the state rebate to verify the
accuracy of that data. The findings of the audit shall be documented
in a written audit report to be made available to manufacturers
within 90 days of receipt of the report from the auditor. Any
manufacturer may receive a copy of the audit report upon written
request. Contracts between the department and manufacturers shall
provide for any equalization payment adjustments determined necessary
pursuant to an audit.
(3) (A) Utilization data used to determine the state rebate shall
exclude data from both of the following:
(i) Health maintenance organizations, as defined in Section 300e
(a) of Title 42 of the United States Code, including those
organizations that contract under Section 1396b(m) of Title 42 of the
United States Code.
(ii) Capitated plans that include a prescription drug benefit in
the capitated rate, and that have negotiated contracts for rebates or
discounts with manufacturers.
(B) This paragraph shall become inoperative on July 1, 2014.
(4) Commencing July 1, 2014, utilization data used to determine
the state rebate shall include data from all programs, including, but
not limited to, fee-for-service Medi-Cal, and utilization data, as
limited in paragraph (5), from health plans contracting with the
department to provide services to beneficiaries pursuant to this
chapter, Chapter 8 (commencing with Section 14200), or Chapter 8.75
(commencing with Section 14591), that qualify for federal drug
rebates pursuant to Section 1927 of the federal Social Security Act
(42 U.S.C. Sec. 1396r-8) or that otherwise qualify for federal funds
under Title XIX of the federal Social Security Act (42 U.S.C. Sec.
1396 et seq.) pursuant to the Medicaid state plan or waivers.
(5) Health plan utilization data shall be limited to those drugs
for which a health plan is authorizing a prescription drug described
in subparagraph (A), and pursuant to the coverage policies
established in subparagraph (B):
(A) A prescription drug for which the department reimburses the
health plan through a separate capitated payment or other
supplemental payment. Payment shall not be withheld for decisions
determined pursuant to Section 1374.34 of the Health and Safety Code.
(B) The department shall develop coverage policies, consistent
with the criteria set forth in paragraph (1) of subdivision (c) of
Section 14105.39 and in consultation with clinical experts, Medi-Cal
managed care plans, and other stakeholders, for prescription drugs
described in subparagraph (A). These coverage policies shall apply to
the entire Medi-Cal program, including fee-for-service and Medi-Cal
managed care, through the Medi-Cal List of Contract Drugs or through
provider bulletins, all plan letters, or similar instructions.
Coverage policies developed pursuant to this section shall be revised
on a semiannual basis or upon approval by the Food and Drug
Administration of a new drug subject to subparagraph (A). For the
purposes of this section, "coverage policies" include, but are not
limited to, clinical guidelines and treatment and utilization
policies.
(6) For prescription drugs not subject to the requirements of
paragraph (5), utilization data used to determine the state rebate
shall include all data from health plans, except for health
maintenance organizations, as defined in Section 300e(a) of Title 42
of the United States Code, including those organizations that
contract pursuant to Section 1396b(m) of Title 42 of the United
States Code.
(7) 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 paragraph (5) 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 October 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.
(c) In order that Medi-Cal beneficiaries may have access to a
comprehensive range of therapeutic agents, the department shall
ensure that there is representation on the list of contract drugs in
all major therapeutic categories. Except as provided in subdivision
(a) of Section 14105.35, the department shall not be required to
contract with all manufacturers who negotiate for a contract in a
particular category. The department shall ensure that there is
sufficient representation of single-source and multiple-source drugs,
as appropriate, in each major therapeutic category.
(d) The department shall select the therapeutic categories to be
included on the list of contract drugs, and the order in which it
seeks contracts for those categories. The department may establish
different contracting schedules for single-source and multiple-source
drugs within a given therapeutic category.
(e) (1) In order to fully implement subdivision (d), the
department shall, to the extent necessary, negotiate or renegotiate
contracts to ensure there are as many single-source drugs within each
therapeutic category or subcategory as the department determines
necessary to meet the health needs of the Medi-Cal population. The
department may determine in selected therapeutic categories or
subcategories that no single-source drugs are necessary because there
are currently sufficient multiple-source drugs in the therapeutic
category or subcategory on the list of contract drugs to meet the
health needs of the Medi-Cal population. However, in no event shall a
beneficiary be denied continued use of a drug which is part of a
prescribed therapy in effect as of September 2, 1992, until the
prescribed therapy is no longer prescribed.
(2) In the development of decisions by the department on the
required number of single-source drugs in a therapeutic category or
subcategory, and the relative therapeutic merits of each drug in a
therapeutic category or subcategory, the department shall consult
with the Medi-Cal Contract Drug Advisory Committee. The committee
members shall communicate their comments and recommendations to the
department within 30 business days of a request for consultation, and
shall disclose any associations with pharmaceutical manufacturers or
any remuneration from pharmaceutical manufacturers.
(f) In order to achieve maximum cost savings, the Legislature
declares that an expedited process for contracts under this section
is necessary. Therefore, contracts entered into on a nonbid basis
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(g) In no event shall a beneficiary be denied continued use of a
drug that is part of a prescribed therapy in effect as of September
2, 1992, until the prescribed therapy is no longer prescribed.
(h) Contracts executed pursuant to this section shall be
confidential and shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(i) The department shall provide individual notice to Medi-Cal
beneficiaries at least 60 calendar days prior to the effective date
of the deletion or suspension of any drug from the list of contract
drugs. The notice shall include a description of the
beneficiary's right to a fair
hearing and shall encourage the beneficiary to consult a physician to
determine if an appropriate substitute medication is available from
Medi-Cal.
(j) In carrying out the provisions of this section, the department
may contract either directly, or through the fiscal intermediary,
for pharmacy consultant staff necessary to initially accomplish the
treatment authorization request reviews.
(k) (1) Manufacturers shall calculate and pay interest on late or
unpaid rebates. The interest shall not apply to any prior period
adjustments of unit rebate amounts or department utilization
adjustments.
(2) For state rebate payments, manufacturers shall calculate and
pay interest on late or unpaid rebates for quarters that begin on or
after the effective date of the act that added this subdivision.
(3) Following final resolution of any dispute pursuant to
procedures established by the federal Centers for Medicare and
Medicaid Services' Medicaid Drug Rebate Program Releases or
regulations regarding the amount of a rebate, any underpayment by a
manufacturer shall be paid with interest calculated pursuant to
subdivisions (m) and (n), and any overpayment, together with interest
at the rate calculated pursuant to subdivisions (m) and (n), shall
be credited by the department against future rebates due.
( l ) Interest pursuant to subdivision (k) shall begin
accruing 38 calendar days from the date of mailing of the invoice,
including supporting utilization data sent to the manufacturer.
Interest shall continue to accrue until the date of mailing of the
manufacturer's payment.
(m) Except as specified in subdivision (n), interest rates and
calculations pursuant to subdivision (k) for Medicaid rebates and
state rebates shall be identical and shall be determined by the
federal Centers for Medicare and Medicaid Services' Medicaid Drug
Rebate Program Releases or regulations.
(n) If the date of mailing of a state rebate payment is 69 days or
more from the date of mailing of the invoice, including supporting
utilization data sent to the manufacturer, the interest rate and
calculations pursuant to subdivision (k) shall be as specified in
subdivision (m), however the interest rate shall be increased by 10
percentage points. This subdivision shall apply to payments for
amounts invoiced for any quarters that begin on or after the
effective date of the act that added this subdivision.
(o) If the rebate payment is not received, the department shall
send overdue notices to the manufacturer at 38, 68, and 98 days after
the date of mailing of the invoice, and supporting utilization data.
If the department has not received a rebate payment, including
interest, within 180 days of the date of mailing of the invoice,
including supporting utilization data, the manufacturer's contract
with the department shall be deemed to be in default and the contract
may be terminated in accordance with the terms of the contract. For
all other manufacturers, if the department has not received a rebate
payment, including interest, within 180 days of the date of mailing
of the invoice, including supporting utilization data, all of the
drug products of those manufacturers shall be made available only
through prior authorization effective 270 days after the date of
mailing of the invoice, including utilization data sent to
manufacturers.
(p) If the manufacturer provides payment or evidence of payment to
the department at least 40 days prior to the proposed date the drug
is to be made available only through prior authorization pursuant to
subdivision (o), the department shall terminate its actions to place
the manufacturers' drug products on prior authorization.
(q) The department shall direct the state's fiscal intermediary to
remove prior authorization requirements imposed pursuant to
subdivision (o) and notify providers within 60 days after payment by
the manufacturer of the rebate, including interest. If a contract was
in place at the time the manufacturers' drugs were placed on prior
authorization, removal of prior authorization requirements shall be
contingent upon good faith negotiations and a signed contract with
the department.
(r) A beneficiary may obtain drugs placed on prior authorization
pursuant to subdivision (o) if the beneficiary qualifies for
continuing care status. To be eligible for continuing care status, a
beneficiary must be taking the drug when its manufacturer is placed
on prior authorization status. Additionally, the department shall
have received a claim for the drug with a date of service that is
within 100 days prior to the date the manufacturer was placed on
prior authorization.
(s) A beneficiary may remain eligible for continuing care status,
provided that a claim is submitted for the drug in question at least
every 100 days and the date of service of the claim is within 100
days of the date of service of the last claim submitted for the same
drug.
(t) Drugs covered pursuant to Sections 14105.43 and 14133.2 shall
not be subject to prior authorization pursuant to subdivision (o),
and any other drug may be exempted from prior authorization by the
department if the director determines that an essential need exists
for that drug, and there are no other drugs currently available
without prior authorization that meet that need.
(u) It is the intent of the Legislature in enacting subdivisions
(k) to (t), inclusive, that the department and manufacturers shall
cooperate and make every effort to resolve rebate payment disputes
within 90 days of notification by the manufacturer to the department
of a dispute in the calculation of rebate payments.
SEC. 6. Section 14105.436 of the Welfare and Institutions Code is
amended to read:
14105.436. (a) Effective July 1, 2002, all pharmaceutical
manufacturers shall provide to the department a state rebate, in
addition to rebates pursuant to other provisions of state or federal
law, for any drug products that have been added to the Medi-Cal list
of contract drugs pursuant to Section 14105.43 or 14133.2 and
reimbursed through the Medi-Cal outpatient fee-for-service drug
program. The state rebate shall be negotiated as necessary between
the department and the pharmaceutical manufacturer. The negotiations
shall take into account offers such as rebates, discounts, disease
management programs, and other cost savings offerings and shall be
retroactive to July 1, 2002.
(b) The department may use existing administrative mechanisms for
any drug for which the department does not obtain a rebate pursuant
to subdivision (a). The department may only use those mechanisms in
the event that, by February 1, 2003, the manufacturer refuses to
provide the additional rebate. This subdivision shall become
inoperative on January 1, 2010.
(c) For purposes of this section, "Medi-Cal utilization data"
means the data used by the department to reimburse providers under
all programs that qualify for federal drug rebates pursuant to
Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
1396r-8) or that otherwise qualify for federal funds under Title XIX
of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)
pursuant to the Medicaid state plan or waivers. Medi-Cal utilization
data excludes data from covered entities identified in Section 256b
(a)(4) of Title 42 of the United States Code in accordance with
Sections 256b(a)(5)(A) and 1396r-8(a)(5)(C) of Title 42 of the United
States Code, and those capitated plans that include a prescription
drug benefit in the capitated rate and that have negotiated contracts
for rebates or discounts with manufacturers.
(d) Subdivision (c) shall become inoperative when the department
implements paragraphs (4) and (5) of subdivision (b) of Section
14105.33. The department shall post on its Internet Web site a notice
that it has implemented paragraphs (4) and (5) of subdivision (b) of
Section 14105.33.
(e) Effective July 1, 2009, all pharmaceutical manufacturers shall
provide to the department a state rebate, in addition to rebates
pursuant to other provisions of state or federal law, equal to an
amount not less than 10 percent of the average manufacturer price
based on Medi-Cal utilization data for any drug products that have
been added to the Medi-Cal list of contract drugs pursuant to Section
14105.43 or 14133.2.
(f) Pharmaceutical manufacturers shall, by January 1, 2010, enter
into a supplemental rebate agreement for the rebate required in
subdivision (d) for drug products added to the Medi-Cal list of
contract drugs on or before December 31, 2009.
(g) Effective January 1, 2010, all pharmaceutical manufacturers
who have not entered into a supplemental rebate agreement pursuant to
subdivisions (d) and (e), shall provide to the department a state
rebate, in addition to rebates pursuant to other provisions of state
or federal law, equal to an amount not less than 20 percent of the
average manufacturer price based on Medi-Cal utilization data for any
drug products that have been added to the Medi-Cal list of contract
drugs pursuant to Section 14105.43 or 14133.2 prior to January 1,
2010. If the pharmaceutical manufacturer does not enter into a
supplemental rebate agreement by March 1, 2010, the manufacturer's
drug product shall be made available only through an approved
treatment authorization request pursuant to subdivision (h).
(h) For a drug product added to the Medi-Cal list of contract
drugs pursuant to Section 14105.43 or 14133.2 on or after January 1,
2010, a pharmaceutical manufacturer shall provide to the department a
state rebate pursuant to subdivision (d). If the pharmaceutical
manufacturer does not enter into a supplemental rebate agreement
within 60 days after the addition of the drug to the Medi-Cal list of
contract drugs, the manufacturer shall provide to the department a
state rebate equal to not less than 20 percent of the average
manufacturers price based on Medi-Cal utilization data for any drug
products that have been added to the Medi-Cal list of contract drugs
pursuant to Section 14105.43 or 14133.2. If the pharmaceutical
manufacturer does not enter into a supplemental rebate agreement
within 120 days after the addition of the drug to the Medi-Cal list
of contract drugs, the pharmaceutical manufacturer's drug product
shall be made available only through an approved treatment
authorization request pursuant to subdivision (h). For supplemental
rebate agreements executed more than 120 days after the addition of
the drug product to the Medi-Cal list of contract drugs, the state
rebate shall equal an amount not less than 20 percent of the average
manufacturers price based on Medi-Cal utilization data for any drug
products that have been added to the Medi-Cal list of contract drugs
pursuant to Section 14105.43 or 14133.2.
(i) Notwithstanding any other provision of law, drug products
added to the Medi-Cal list of contract drugs pursuant to Section
14105.43 or 14133.2 of manufacturers who do not execute an agreement
to pay additional rebates pursuant to this section, shall be
available only through an approved treatment authorization request.
(j) For drug products added on or before December 31, 2009, a
beneficiary may obtain a drug product that requires a treatment
authorization request pursuant to subdivision (h) if the beneficiary
qualifies for continuing care status. To be eligible for continuing
care status, a beneficiary must be taking the drug product and the
department must have record of a reimbursed claim for the drug
product with a date of service that is within 100 days prior to the
date the drug product was placed on treatment authorization request
status. A beneficiary may remain eligible for continuing care status,
provided that a claim is submitted for the drug product in question
at least every 100 days and the date of service of the claim is
within 100 days of the date of service of the last claim submitted
for the same drug product.
(k) Changes made to the Medi-Cal list of contract drugs under this
section 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.
SEC. 7. Section 14105.86 of the Welfare and Institutions Code is
amended to read:
14105.86. (a) For the purposes of this section, the following
definitions apply:
(1) (A) "Average sales price" means the price reported to the
federal Centers for Medicare and Medicaid Services by the
manufacturer pursuant to Section 1847A of the federal Social Security
Act (42 U.S.C. Sec. 1395w-3a).
(B) "Average manufacturer price" means the price reported to the
federal Centers for Medicare and Medicaid Services pursuant to
Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
1396r-8).
(2) "Blood factors" means plasma protein therapies and their
recombinant analogs. Blood factors include, but are not limited to,
all of the following:
(A) Coagulation factors, including:
(i) Factor VIII, nonrecombinant.
(ii) Factor VIII, porcine.
(iii) Factor VIII, recombinant.
(iv) Factor IX, nonrecombinant.
(v) Factor IX, complex.
(vi) Factor IX, recombinant.
(vii) Antithrombin III.
(viii) Anti-inhibitor factor.
(ix) Von Willebrand factor.
(x) Factor VIIa, recombinant.
(B) Immune Globulin Intravenous.
(C) Alpha-1 Proteinase Inhibitor.
(b) The reimbursement for blood factors shall be by national drug
code number and shall not exceed 120 percent of the average sales
price of the last quarter reported.
(c) The average sales price for blood factors of manufacturers or
distributors that do not report an average sales price pursuant to
subdivision (a) shall be identical to the average manufacturer price.
The average sales price for new products that do not have a
calculable average sales price or average manufacturer price shall be
equal to a projected sales price, as reported by the manufacturer to
the department. Manufacturers reporting a projected sales price for
a new product shall report the first monthly average manufacturer
price reported to the federal Centers for Medicare and Medicaid
Services. The reporting of an average sales price that does not meet
the requirement of this subdivision shall result in that blood factor
no longer being considered a covered benefit.
(d) The average sales price shall be reported at the national drug
code level to the department on a quarterly basis.
(e) (1) Effective July 1, 2008, the department shall collect a
state rebate, in addition to rebates pursuant to other provisions of
state or federal law, for blood factors reimbursed pursuant to this
section by programs that qualify for federal drug rebates pursuant to
Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
1396r-8) or otherwise qualify for federal funds under Title XIX of
the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)
pursuant to the Medicaid state plan or waivers and the programs
authorized by Article 5 (commencing with Section 123800) of Chapter 3
of Part 2 of, and Article 1 (commencing with Section 125125) of
Chapter 2 of Part 5 of, Division 106 of the Health and Safety Code.
(2) Paragraph (1) shall become inoperative when the department
implements paragraphs (4) and (5) of subdivision (b) of Section
14105.33. The department shall post on its Internet Web site a notice
that it has implemented paragraphs (4) and (5) of subdivision (b) of
Section 14105.33.
(3) The state rebate shall be negotiated as necessary between the
department and the manufacturer. Manufacturers who do not execute an
agreement to pay additional rebates pursuant to this section shall
have their blood factors available only through an approved treatment
or service authorization request. All blood factors that meet the
definition of a covered outpatient drug pursuant to Section 1927 of
the federal Social Security Act (42 U.S.C. Sec. 1396r-8) shall remain
a benefit subject to the utilization controls provided for in this
section.
(4) In reviewing authorization requests, the department shall
approve the lowest net cost product that meets the beneficiary's
medical need. The review of medical need shall take into account a
beneficiary's clinical history or the use of the blood factor
pursuant to payment by another third party, or both.
(f) A beneficiary may obtain blood factors that require a
treatment or service authorization request pursuant to subdivision
(e) if the beneficiary qualifies for continuing care status. To be
eligible for continuing care status, a beneficiary must be taking the
blood factor and the department has reimbursed a claim for the blood
factor with a date of service that is within 100 days prior to the
date the blood factor was placed on treatment authorization request
status. A beneficiary may remain eligible for continuing care status,
provided that a claim is submitted for the blood factor in question
at least every 100 days and the date of service of the claim is
within 100 days of the date of service of the last claim submitted
for the same blood factor.
(g) Changes made to the list of covered blood factors under this
or any other section 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.
SEC. 8. Section 14132.56 is added to the Welfare and Institutions
Code, to read:
14132.56. (a) (1) Only to the extent required by the federal
government and effective no sooner than required by the federal
government, behavioral health treatment (BHT), as defined by Section
1374.73 of the Health and Safety Code, shall be a covered Medi-Cal
service for individuals under 21 years of age.
(2) It is the intent of the Legislature that, to the extent the
federal government requires BHT to be a covered Medi-Cal service, the
department shall seek statutory authority to implement this new
benefit in Medi-Cal.
(b) The department shall implement, or continue to implement, this
section only after all of the following occurs or has occurred:
(1) The department receives all necessary federal approvals to
obtain federal funds for the service.
(2) The department seeks an appropriation that would provide the
necessary state funding estimated to be required for the applicable
fiscal year.
(3) The department consults with stakeholders.
(c) The department shall develop and define eligibility criteria,
provider participation criteria, utilization controls, and delivery
system structure for services under this section, subject to
limitations allowable under federal law, in consultation with
stakeholders.
(d) 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 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
semiannual status reports to the Legislature, in compliance with
Section 9795 of the Government Code, until regulations have been
adopted.
(e) For the purposes of implementing this section, the department
may enter into exclusive or nonexclusive contracts on a bid or
negotiated basis, including contracts for the purpose of obtaining
subject matter expertise or other technical assistance. Contracts may
be statewide or on a more limited geographic basis. Contracts
entered into or amended under this subdivision shall be exempt from
Part 2 (commencing with Section 10100) of Division 2 of the Public
Contract Code and Chapter 6 (commencing with Section 14825) of Part
5.5 of Division 3 of the Government Code, and shall be exempt from
the review or approval of any division of the Department of General
Services.
(f) The department may seek approval of any necessary state plan
amendments or waivers to implement this section. The department shall
make any state plan amendments or waiver requests public at least 30
days prior to submitting to the federal Centers for Medicare and
Medicaid Services, and the department shall work with stakeholders to
address the public comments in the state plan amendment or waiver
request.
(g) This section shall be implemented only to the extent that
federal financial participation is available and any necessary
federal approvals have been obtained.
SEC. 9. Section 14593 of the Welfare and Institutions Code is
amended to read:
14593. (a) (1) The department may enter into contracts with
public or private nonprofit organizations for implementation of the
PACE program, and also may enter into separate contracts with PACE
organizations, to fully implement the single state agency
responsibilities assumed by the department in those contracts,
Section 14132.94, and any other state requirement found necessary by
the department to provide comprehensive community-based, risk-based,
and capitated long-term care services to California's frail elderly.
(2) The department may enter into separate contracts as specified
in subdivision (a) with up to 15 PACE organizations.
(b) The requirements of the PACE model, as provided for pursuant
to Section 1894 (42 U.S.C. Sec. 1395eee) and Section 1934 (42 U.S.C.
Sec. 1396u-4) of the federal Social Security Act, shall not be waived
or modified. The requirements that shall not be waived or modified
include all of the following:
(1) The focus on frail elderly qualifying individuals who require
the level of care provided in a nursing facility.
(2) The delivery of comprehensive, integrated acute and long-term
care services.
(3) The interdisciplinary team approach to care management and
service delivery.
(4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals.
(5) The assumption by the provider of full financial risk.
(6) The provision of a PACE benefit package for all participants,
regardless of source of payment, that shall include all of the
following:
(A) All Medicare-covered items and services.
(B) All Medicaid-covered items and services, as specified in the
state's Medicaid plan.
(C) Other services determined necessary by the interdisciplinary
team to improve and maintain the participant's overall health status.
(c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply when
determining the eligibility for Medi-Cal of a person receiving the
services from an organization providing services under this chapter.
(d) Provisions governing the treatment of income and resources of
a married couple, for the purposes of determining the eligibility of
a nursing-facility certifiable or institutionalized spouse, shall be
established so as to qualify for federal financial participation.
(e) (1) The department shall establish capitation rates paid to
each PACE organization at no less than 90 percent of the
fee-for-service equivalent cost, including the department's cost of
administration, that the department estimates would be payable for
all services covered under the PACE organization contract if all
those services were to be furnished to Medi-Cal beneficiaries under
the fee-for-service Medi-Cal program provided for pursuant to Chapter
7 (commencing with Section 14000).
(2) This subdivision shall be implemented only to the extent that
federal financial participation is available.
(f) Contracts under this chapter may be on a nonbid basis and
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(g) This section shall remain in effect only until April 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before April 1, 2015, deletes or extends that date.
SEC. 10. Section 14593 is added to the Welfare and Institutions
Code, to read:
14593. (a) (1) The department may enter into contracts with
public or private nonprofit organizations for implementation of the
PACE program, and also may enter into separate contracts with PACE
organizations, to fully implement the single state agency
responsibilities assumed by the department in those contracts,
Section 14132.94, and any other state requirement found necessary by
the department to provide comprehensive community-based, risk-based,
and capitated long-term care services to California's frail elderly.
(2) The department may enter into separate contracts as specified
in subdivision (a) with up to 15 PACE organizations.
(b) The requirements of the PACE model, as provided for pursuant
to Section 1894 (42 U.S.C. Sec. 1395eee) and Section 1934 (42 U.S.C.
Sec. 1396u-4) of the federal Social Security Act, shall not be waived
or modified. The requirements that shall not be waived or modified
include all of the following:
(1) The focus on frail elderly qualifying individuals who require
the level of care provided in a nursing facility.
(2) The delivery of comprehensive, integrated acute and long-term
care services.
(3) The interdisciplinary team approach to care management and
service delivery.
(4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals.
(5) The assumption by the provider of full financial risk.
(6) The provision of a PACE benefit package for all participants,
regardless of source of payment, that shall include all of the
following:
(A) All Medicare-covered items and services.
(B) All Medicaid-covered items and services, as specified in the
state's Medicaid plan.
(C) Other services determined necessary by the interdisciplinary
team to improve and maintain the participant's overall health status.
(c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply when
determining the eligibility for Medi-Cal of a person receiving the
services from an organization providing services under this chapter.
(d) Provisions governing the
treatment of income and resources of a married couple, for the
purposes of determining the eligibility of a nursing-facility
certifiable or institutionalized spouse, shall be established so as
to qualify for federal financial participation.
(e) (1) The department shall establish capitation rates paid to
each PACE organization at no less than 95 percent of the
fee-for-service equivalent cost, including the department's cost of
administration, that the department estimates would be payable for
all services covered under the PACE organization contract if all
those services were to be furnished to Medi-Cal beneficiaries under
the fee-for-service Medi-Cal program provided for pursuant to Chapter
7 (commencing with Section 14000).
(2) This subdivision shall be implemented only to the extent that
federal financial participation is available.
(f) Contracts under this chapter may be on a nonbid basis and
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(g) This section shall become operative on April 1, 2015.
SEC. 11. (a) With regard to Section 4 of this act, the Legislature
finds and declares all of the following:
(1) The County of Los Angeles has the largest number of school
districts in the state and a correspondingly large Medi-Cal
population with a lower than statewide average on utilization of
Medi-Cal vision services.
(2) The state contracts with two managed care health plans in the
County of Los Angeles, which results in the delivery of Medi-Cal
services to approximately 76 percent of the over 2.3 million Medi-Cal
beneficiaries in that county.
(3) These 2.3 million beneficiaries are 24 percent of the state's
total number of Medi-Cal beneficiaries. Approximately one-half are
under 21 years of age.
(b) It is therefore the intent of the Legislature, in an effort to
determine whether children's access to, and utilization of, vision
care services can be increased by providing vision care services at
schools, that the State Department of Health Care Services establish
a pilot program in the County of Los Angeles that enables school
districts to allow students enrolled in Medi-Cal managed care plans
to receive vision care services at the schoolsite through the use of
a mobile vision service provider. It is the intent of the Legislature
that the vision care services available under this pilot be limited
to vision examinations and providing eyeglasses.
SEC. 12. It is the intent of the Legislature that the State
Department of Health Care Services shall continue to monitor access
to and utilization of Medi-Cal services in the fee-for-service and
managed care settings during the 2014-15 fiscal year, in conjunction
with the department's federally approved plan to monitor health care
access for Medi-Cal beneficiaries and any other methods deemed
appropriate by the director. The department shall use this
information to evaluate current reimbursement levels for Medi-Cal
providers and to make recommendations for targeted changes to the
reductions in reimbursement levels made pursuant to Chapter 3 of the
Statutes of 2011 to the extent the department finds those changes
appropriate.
SEC. 13. The balances of the reappropriations provided by Item
4300-490 of Section 2.00 of the Budget Act of 2013, as added by
Chapters 20 and 354 of the Statutes of 2013, payable from the General
Fund (Item 4300-101-0001, Budget Act of 2009 (Ch. 1, 2009-10 3rd Ex.
Sess., as revised by Ch. 1, 2009-10 4th Ex. Sess.) and Item
4300-101-0001, Budget Act of 2010 (Ch. 712, Stats. 2010)), are hereby
reappropriated for the purposes of, and subject to that Item
4300-490, and, notwithstanding any other law, shall be available for
liquidation until June 30, 2015.
SEC. 14. (a) For the 2014-15 fiscal year, the sum of three million
two hundred thousand dollars ($3,200,000) is hereby appropriated
from the Major Risk Medical Insurance Fund to the State Department of
Health Care Services for allocation to health benefit plans that
meet all of the following requirements:
(1) The health benefit plan has a valid exemption letter from the
Internal Revenue Service pursuant to Section 501(c)(9) of the
Internal Revenue Code.
(2) The health benefit plan is a multiemployer plan, as defined in
Section 3(37) of the federal Employee Retirement Income Security Act
of 1974 (29 U.S.C. Sec. 1002(37)(A)).
(3) The health benefit plan is funded by contributions made by
agricultural employers, as defined in subdivision (c) of the Section
1140.4 of the Labor Code, where 85 percent or more of the plan's
eligible participants are agricultural employees, as defined in
subdivision (b) of Section 1140.4 of the Labor Code, for work
performed and covered under a collective bargaining agreement.
(b) On or before September 1, 2014, the State Department of Health
Care Services shall pay the funds allocated pursuant to this section
to the health plan that meets the criteria set forth in this
section. The funds shall be used to provide health care coverage for
agricultural employees and dependents.
(c) The payment set forth in subdivision (b) shall not require the
State Department of Health Care Services to contract with the
recipient of the funds nor shall the payment of funds be subject to
the requirements of Part 2 (commencing with Section 10100) of
Division 2 of the Public Contract Code.
SEC. 15. For the 2014-15 fiscal year, the sum of three million
seven hundred fifty thousand dollars ($3,750,000) is hereby
appropriated from the Major Risk Medical Insurance Fund to the State
Department of Health Care Services for purposes of electronic health
records technical assistance in accordance with the State Medicaid
Health Information Technology Plan as specified in Section 14046.1 of
the Welfare and Institutions Code.
SEC. 16. 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.