BILL ANALYSIS Ó
AB 858
Page 1
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
858 (Wood) - As Amended April 21, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows community clinics to be reimbursed by Medi-Cal
for two visits in a single day, which currently is prohibited.
Specifically, this bill:
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1)Allows clinics to obtain reimbursement for two visits in the
same day when a patient has a medical visit and a mental
health or dental visit on the same day (currently dental
same-day appointments are reimbursed).
2)Allows clinics to obtain reimbursement for two visits in the
same day when a patient has had an illness or injury requiring
additional diagnosis or treatment.
3)Requires certain clinics, those that currently include the
cost of encounters with more than one health professional that
(take place on the same day at a single location) as
constituting a single visit for purposes of establishing their
prospective payment system (PPS) rate, to apply to the
Department of Health Care Services (DHCS) for an adjustment of
their PPS rate by January 1, 2017.
4)Allows a clinic that applies for an adjustment to its rate as
described in (3) to continue to bill for "all other [?]
visits" at its existing per-visit rate, subject to
reconciliation, until the rate adjustment has been approved.
FISCAL EFFECT:
1)If this bill increases access to mental health services in
Medi-Cal by incentivizing clinics to provide more mental
health visits, it could result in cost pressure to Medi-Cal to
fund additional visits, potentially in the millions of dollars
(GF/federal).
2)If 1,000 clinics submit for a recalculation of their rate, it
would take DHCS about $10 million (GF/federal) in staff time
to process the requests, likely over a period exceeding a year
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or two. The average cost to do a rate recalculation is
$10,000. Currently, clinics can submit on a voluntary basis if
the cost or scope of services they offer changes
significantly.
3)Overall, there should not be a Medi-Cal cost impact to
allowing same-day mental health visits to be separately
billed, if rates are recalculated as envisioned in this bill.
However, the recalculation could have unknown overall cost
impacts on Medi-Cal, since additional, unrelated factors may
have changed from the last PPS rate calculation.
4)Potential increased costs on a short-term basis stemming from
language that appears to allow clinics to bill at their
current rates for more than one visit in a single day, prior
to rates being recalculated to account for the inclusion of
mental health billable visits (discussed further in Staff
Comments, below). Unless this language is clarified, this
provision could have significant costs over the next two to
three years, prior to recalculations being completed. Because
of how a clinic's PPS rate is constructed, allowing clinics to
receive reimbursement for two visits in a single day prior to
the rate recalculation is essentially "double-dipping" or,
from a state perspective, paying twice.
COMMENTS:
1)Purpose. The author argues this bill will incentivize clinics
to offer more, integrated mental health services. Currently,
physicians can refer patients for a same-day mental health
visit, which provides quality patient care, but the clinic
cannot be reimbursed for separate visits. The author notes
Medi-Cal reimburses for certain dental visit to be reimbursed
when provided on the same day as a medical visit. The author
concludes that given the statistics on the connection between
physical health and mental health, we need to adopt a similar
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policy for mental health visits. This bill is sponsored by
the California Primary Care Association (CPCA).
2)Clinic Reimbursement. Because of their unique role in
providing health care to underserved communities and the
uninsured, policymakers have historically attempted to ensure
that community clinics (Federally Qualified Health Centers
(FQHC) and Rural Health Centers (RHC)) remain financially
viable. Federal law requires federally funded health
programs, including Medicaid and Children's Health Insurance
Program (CHIP), to pay clinics using a special reimbursement
structure commonly called a prospective payment system (PPS).
According to DHCS Form 3090, the Freestanding FQHC Cost Report
Form, PPS rates are a clinic-specific per-visit rate, and are
calculated by dividing costs for Medi-Cal-reimbursable
services by Medi-Cal reimbursable visits. PPS rates are also
adjusted by a growth rate to account for inflation. In
addition, clinics can request a recalculation of their PPS
rates based on a change in their scope of services. All
clinics must provide at least a defined scope of primary care
and mental health services, but may provide additional
services as well. If clinics are paid by managed care plans
in amounts less than their PPS rates, there is a
reconciliation performed to ensure clinics get paid the full
PPS rate through a wrap-around payment paid by DCHS. For
Medi-Cal, current PPS rates vary from around $80 to over $650
per visit, depending on the mix of services provided at each
clinic.
According to the Centers for Medicare and Medicaid Services
(CMS), in October 2014, Medicare also began paying FQHCs a
national visit-based PPS rate of $158.85, with some
adjustments. FQHCs also are able to bill Medicare for separate
visits when a mental health visit occurs on the same day as a
medical visit.
1)Costs for Mental Health Services May Already Be Reflected in
Base PPS Rate. Under current state law, an FQHC or RHC
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"visit" means a face-to-face encounter between a patient and
certain type of health care provider defined in state law. A
visit must be documented in order for a clinic to be
reimbursed. According to DHCS, for clinics that provide
mental health services within their approved scope of service,
mental health services are included in the all-inclusive
calculation of the PPS rate, but are not separately billable
if they constitute the second visit of the day. In that way,
the costs of mental health and other non-billable ancillary
services are built in to the rate.
2)One-Visit Rule. Under current law, clinics are limited to
reimbursement for one visit per day, unless the second visit
is dental-related. This so-called "one-visit rule" has caused
difficulty in integrating behavioral with physical health
services at clinics, since clinics contend they are either
forced to absorb the cost of a mental health visit or direct a
patient to return the next day, which often results in missed
appointments and lack of care. The one-visit rule is often
cited as the most significant impediment to providing mental
health services on the same day.
3)FQHC Payment Reform. The PPS system has been criticized as
encouraging a higher volume of services rather than rewarding
quality and efficiency, as well as limiting innovation by
restricting provider types and care delivery settings that are
reimbursable. DHCS and the California Primary Care Association
(of community clinics) have been discussing reforming the PPS
methodology for several years.
DHCS proposed to seek federal approval for a different payment
methodology for clinics beginning in 2012-13. Instead of
paying clinics per-visit PPS rates, the department proposed to
integrate all FQHC/RHC costs into managed care capitated rates
and reduce rates by a percentage. Under this proposal,
payments made to FQHCs and RHCs would be in the form of a
capitated payment to provide a broad range of services for
Medi-Cal managed care beneficiaries who have selected, or been
assigned to, their clinic. The Legislature rejected this
proposal during budget deliberations, though there appears to
be broad agreement that some payment reforms are worth
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pursuing. On April 24, 2014, DHCS proposed an alternative
payment model for urban FQHCs that provided for capitated
payments and increased flexibility. The California Primary
Care Association and DHCS are in discussion about alternative
payment models. If it were to occur, a wholesale
transformation of the way FQHCs are paid would likely obviate
the need for this bill. However, such a transformation does
not appear imminent, at least on a statewide basis.
4)Related Legislation.
a) SB 147 (Hernandez), pending in Senate Appropriations,
requires DHCS to authorize a three-year payment reform
pilot project for FQHCs using an alternative payment
methodology.
b) AB 690 (Wood), pending on the Suspense File of this
Committee, allows visits with a marriage and family
therapist to be reimbursed at PPS rates.
1)Previous Legislation. SB 260 (Steinberg) of 2007 was
substantially similar to this bill. SB 260 was vetoed by
Governor Schwarzenegger who cited concerns about the fiscal
impact of the bill.
2)Staff Comments. Allowing reimbursement for mental health
visits may encourage more of these services to be provided.
Enhancing incentives for clinics provide mental health care
has the potential to improve care.
The language allowing "all other FQHC or RHC visits" to be
billed at the existing per-visit rate until a rate adjustment
has been approved is unclear. Does this mean clinics can bill
for two visits at the existing PPS rate until the rate
adjustment is approved? If so, this would result in increased
costs to the state. This should be clarified to state
clinics can bill for two visits in a single day only after the
recalculation is performed.
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Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081