BILL ANALYSIS Ó
AB 1568
Page 1
Date of Hearing: April 26, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 1568
(Bonta and Atkins) - As Amended April 11, 2016
SUBJECT: Medi-Cal: demonstration project.
SUMMARY: Enacts the Medi-Cal 2020 Demonstration Project Act
(Medi-Cal 2020/Demonstration Project), administered by the
Department of Health Care Services (DHCS) which implements the
Special Terms and Conditions (STCs) approved by the federal
Centers for Medicare and Medicaid Services (CMS). Specifies the
four components of the Demonstration Project, as follows:
Global Payment Program (GPP), Public Hospital Redesign and
Incentives in Medi-Cal (PRIME), Whole Person Care (WPC) and
Dental Transformation Initiative (DTI). Contains an urgency
clause to ensure that the provisions of this bill go into
immediate effect upon enactment. Specifically, this bill:
Access Assessment
1)Requires DHCS to amend its contract with the external quality
review organization (EQRO) currently under contract with DHCS
and approved by CMS to complete an access assessment within 90
days of the effective date of this bill.
2)Requires the assessment to do all of the following:
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a) Evaluate primary, core specialty, and facility access to
care for managed care beneficiaries based on current health
plan network adequacy requirements, as specified;
b) Consider State Fair Hearing and Independent Medical
Review decisions, and grievances, and appeals or complaints
data; and,
c) Report on the number of providers accepting new
beneficiaries.
3)Requires DHCS to establish an advisory committee to provide
input into the structure of the access assessment. Requires
the EQRO to work with DHCS to establish the advisory
committee, as specified.
4)Requires the advisory committee to include one or more
representatives of the following stakeholders: consumer
advocacy organizations, provider associations, health plans
and health plan associations, and legislative staff.
Specifies functions of the advisory committee.
5)Requires the EQRO to produce and establish an initial draft
and a final access assessment report that includes a
comparison of health plan network adequacy compliance across
different lines of business. Requires DHCS to post the
initial draft for a 30-day public comment period, as
specified, and to be posted no later than 10 months after CMS
approves the assessment design. Requires DHCS to submit the
final access assessment report to CMS no later than 90 days
after the initial draft report is posted for public comment.
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6)Requires the assessment to do all of the following:
a) Measure health plan compliance with network adequacy
requirements, as specified;
b) Review encounter data, including data from subcapitated
plans;
c) Review compliance with network adequacy requirements, as
specified;
d) Review and report applicable network adequacy
requirements of the proposed or final Notice of Proposed
Rulemaking, as specified;
e) Determine health plan compliance with network adequacy,
as specified; and,
f) Measure managed care plan compliance with network
adequacy requirements, as specified, accounting for
geographic differences, previously approved alternate
network access standards, access to in-network providers
and out-of-network providers, the entire network of
providers available to beneficiaries, and other modalities
used for accessing care, including telemedicine.
General Provisions
1)Requires the STCs to prevail in the event of a conflict with
this bill.
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2)Authorizes DHCS to implement, interpret, or make specific this
bill or the STCs through all-county letters, plan letters,
provider bulletins, or other actions without regulatory
action. Requires DHCS to inform specified committees of the
Legislature when this action is taken.
3)Exempts contracts entered into by DHCS for purposes of this
bill from the Public Contract Code and approval by Department
of General Services (DGS).
4)Requires DHCS to seek any federal approval to implement this
bill and conduct any study or activity required under the
STCs. Implements this bill only if necessary federal
approvals and federal financial participation (FFP) are
available.
5)Authorizes the Director of DHCS to modify any process or
methodology if necessary to comply with federal law or the
STCs if the modification is consistent with the goals of the
demonstration project. Requires, if the modification would
not be consistent with the goals of this bill or would alter
the level of support for affected participating entities, the
Director to execute a declaration stating that this
determination has been made. Specifies posting and
notification requirements for the declaration.
6)Provides that in the event of a determination that the amount
of FFP available under the demonstration project is reduced
due to the application of penalties set forth in the STCs, the
enforcement of the demonstration project's budget neutrality
limit or other similar, occurrence, DHCS is required to
develop the methodology by which payments under the
demonstration project are to be reduced, as specified.
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7)Authorizes DHCS to develop potential successor payment
methodologies that could continue to support entities
participating in the demonstration project, as specified.
Requires DHCS to consult with entities participating in the
payment methodologies in developing successor payment
methodology. Authorizes an extension of the payment
methodologies through demonstration year 16 or to subsequent
time periods, as specified.
8)Authorizes DHCS to claim FFP for expenditures associated with
the designated state health programs (DSHP), as specified.
9)Appropriates an amount from General Fund (GF) equal to the FFP
to the Health Care Deposit Fund, as specified.
Global Payment Program
1)Requires DHCS to implement the GPP to support participating
public health care systems (systems) that provide health care
services for the uninsured. States that GPP systems receive
global payments based on the health care they provide to the
uninsured, in lieu of traditional disproportionate share
hospital (DSH) payments and safety net care pool payments
(SNCP), as specified.
2)Requires systems to receive GPP payments calculated using an
innovative value-based point methodology that incorporates
measures of value for the patient in conjunction with the
recognition of costs. Requires a system, to receive the full
amount of GPP payments, to provide a threshold level of
services measured through a point methodology, as specified,
and based on the GPP system's historical volume, cost, and mix
of services. Specifies that this payment methodology is
intended to support GPP systems that continue to provide
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services to the uninsured, while incentivizing the GPP systems
to shift the overall delivery of services for the uninsured to
provide more cost-effective, higher value care.
3)Requires DHCS to implement and oversee the GPP pursuant to the
STCs, to maximize the amount of FFP available to participating
systems.
4)Defines a GPP system as a public health care system consisting
of a designated public hospital (DPH), but excluding hospitals
operated by the University of California (UC), and its
affiliated and contracted providers. Authorizes multiple DPHs
operated by a single legal entity to belong to the same GPP
system, as specified.
5)Requires DHCS to determine the GPP's aggregate annual limit,
which is the maximum amount of funding available under the GPP
and which is the sum components of the following:
a) A portion of the federal disproportionate share
allotment shall be included as a component of the aggregate
annual limit for each GPP program year, as specified; and,
b) The aggregate annual limit amount shall also include the
amount authorized under the demonstration project for the
uncompensated care component of the GPP, as specified.
6)Requires DHCS to do the following:
a) Develop a methodology for valuing health care services
and activities provided to the uninsured that achieves the
goals of the GPP. Requires the points assigned to a
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particular service or activity to be the same across all
GPP systems. Specifies when points may be increased or
decreased;
b) For each GPP system, perform a baseline analysis for
each GPP system's historical volume, cost and mix of
services to the uninsured to establish an annual threshold
for the GPP;
c) Determine a pro rata allocation percentage for each GPP
system, as specified;
d) Determine an annual budget the GPP system will receive
if it achieves its threshold;
e) Specifies the formula for the GPP system's annual
budget;
f) Adjust and recalculate each GPP systems' annual
threshold and annual budget if there is a change in the
aggregate annual limit;
g) Specify a reporting schedule for GPP systems to submit
an interim yearend report and a final reconciliation
report, as specified;
h) Claim FFP for GPP payments using intergovernmental
transfers (IGTs), as specified; and,
i) Conduct or arrange for two evaluations of the GPP.
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7)Specifies the calculation of the GPP funding payable to each
GPP system, including a methodology to redistribute unearned
GPP subject to fund availability and the STCs.
8)Specifies the manner and timeframes of payments to GPP
systems, but no payment can be delayed beyond 21 days after
all the necessary IGTs have been made.
9)States that the GPP provides a source of funding to support
health care activities and services available to the
uninsured, and not to be construed to constitute or offer
health care coverage for individuals receiving services.
Provides that the GPP payments are not paid on behalf of
specific individuals and allows GPP systems to determine the
scope, type and extent of available services, consistent with
the STCs.
10)Requires the nonfederal share of any payments under the GPP
to consist of voluntary IGT of funds provided by DPH or
affiliated governmental agencies or entities, as specified.
Requires DHCS, if FFP is not available or results in
recoupment of payments already made, to return any IGT to the
transferring entities, as specified.
11)Establishes the GPP Special Fund (Fund) to consist of moneys
that a DPH or affiliated governmental agency or entity elects
to transfer to DHCS for deposit into the Fund as a condition
of participation in the GPP. Provides that moneys derived
from these IGTs must be used as a source of the nonfederal
share of GPP payments. Specifies distribution of the Fund.
12)Provides that as a condition of participation in the GPP,
each DPH or affiliated governmental entity agrees to provide
IGT of funds necessary to meet the nonfederal share
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obligation, as specified. Considers IGT of funds to be
voluntary and prohibits the use of the GF monies to fund the
nonfederal share of any GPP payment.
13)Specifies how DHCS should determine the IGT amount for each
GPP system, including the initial transfer amount that is
calculated partly with the use of a GPP system-specific IGT
factor for each GPP system, as specified.
14)Authorizes DHCS to initiate audits of GPP systems' data
submissions and reports, and to request supporting
documentation. Requires DHCS audits to be conducted within 22
months of the ends of the applicable GPP program year to allow
for the appropriate finalization of payments to the
participating GPP system, but subject to recoupment if it is
later determined that FFP is not available for any portion of
the applicable systems.
Public Hospital Redesign and Incentives in Medi-Cal
1)Requires participating PRIME entities to earn incentive
payments by undertaking projects set forth in the STCs, for
which there are required project metrics and targets.
Specifies a minimum number of required projects for each DPH
system.
2)Requires DHCS to provide participating PRIME entities the
opportunity to earn the maximum amount of funds authorized for
the PRIME program under the demonstration project. Under the
demonstration project, funding is available for the DPH
systems and the district and municipal public hospitals (DMPH)
through two separate pools. Authorizes up to $1.4 billion
annually for the DPH systems pool, and up to $200 million is
authorized annually for the DMPH pool, during the first three
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years of the demonstration project, with reductions to those
amounts in the fourth and fifth years.
3)Requires PRIME payments to be incentive payments, and not
payments for services otherwise reimbursable under the
Medi-Cal, nor direct reimbursement for expenditures incurred
by participating PRIME entities in implementing reforms.
Prohibits PRIME incentive payments from offsetting payment
amounts otherwise payable by the Medi-Cal program, or to and
by Medi-Cal managed care plans for services provided to
Medi-Cal beneficiaries, or otherwise supplant provider
payments payable to PRIME entities.
4)Requires, within 30 days following federal approval of the
protocols setting forth the PRIME projects, metrics, and
funding mechanics, each participating PRIME entity to submit a
five-year PRIME project plan containing the specific elements
required in the STCs. Requires DHCS to review all five-year
PRIME project plans and take action within 60 days to approve
or disapprove each five-year PRIME project plan.
5)Authorizes PRIME entities to modify projects or metrics in
their five-year PRIME project plan, to the extent authorized
under the demonstration project and approved by DHCS.
6)Requires each PRIME entity to submit reports to DHCS twice a
year demonstrating progress toward required metric targets.
Provides that the submission of project reports constitutes a
request for payment.
7)Establishes the Public Hospital Investment, Improvement, and
Incentive Fund which is continuously appropriated.
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8)Establishes requirements for the disbursement timeframe for
PRIME payments, incentive payments and aggregate annual
amounts, as specified.
9)Requires DHCS to conduct, or arrange an evaluation of the
PRIME program.
10)Provides that the PRIME incentive payments are intended to
support DPHs to change care and delivery and strengthen those
systems' ability to participate under an alternative payment
methodology (APM). Requires DHCS to issue an all-plan letter
to Medi-Cal managed care plans that will promote and encourage
positive system transformation.
11)Requires DPH to contract with at least one Medi-Cal managed
care plan in the service area where they operate using an APM
methodology by January 1, 2018.
Whole Person Care
1)Requires DHCS to establish and operate a WPC pilot program to
allow for the development of WPC pilots focused on target
populations of high-risk, high-utilizing Medi-Cal
beneficiaries in local geographic areas. Specifies the
overarching goal of the WPC as the coordination of health,
behavioral health, and social services, in a patient-centered
manner to improve beneficiary health and well-being through
more efficient and effective use of resources.
2)States that the WPC pilot provides an option to a county, a
city and county, a health or hospital authority, or a
consortium of any of the above entities serving a county or
region consisting of more than one county, to receive support
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to integrate care for particularly vulnerable Medi-Cal
beneficiaries who have been identified as high users of
multiple systems and who continue to have or are at-risk of
poor health outcomes. Specifies that through collaboration,
pilot entities will identify common beneficiaries, share data
between systems, coordinate care in real time, and evaluate
individual and population progress in order to meet the goal
of providing comprehensive coordinated care for the
beneficiary resulting in better health outcomes.
3)Requires the WPC pilots to include specific strategies to
increase integration among local government agencies, health
plans, providers, and other entities that serve high-risk,
high-utilizing care for the most vulnerable Medi-Cal
beneficiaries; reduce inappropriate inpatient and emergency
room utilization; improve data collection and sharing among
local entities; improve outcomes for the WPC target
populations; and, may include other strategies to increase
access to housing and supportive services.
4)Requires DHCS to approve WPC pilots through the process
outlined in the STCs.
5)States that receipt of WPC services is voluntary, and
individuals receiving these services may opt out at any time.
6)Defines a WPC lead entity as the entity designated to
coordinate the WPC pilot and be the single point of contact
for DHCS. Authorizes a lead entity to be a county, city and
county, a health or hospital authority, a DPH, a district and
municipal public hospital or an agency or department of those
entities, or a consortium of any of such entities. Specifies
requirements for the lead entity, including operating the WPC
pilot, conducting ongoing monitoring of WPC participating
entities, arranging for the required reporting, ensuring an
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appropriate financial structure is in place, and identifying
and securing a permissible source of the nonfederal share of
WPC pilot payments.
7)Requires the WPC to include, at a minimum, all of the
following entities as participating entities in addition to
the lead entity.
a) At least one Medi-Cal managed care plan operating in
geographic area of the WPC pilot to work in partnership
with the WPC lead entity when implementing the pilot
specific to Medi-Cal managed care beneficiaries;
b) Health services agency or department for the geographic
region where the WPC pilot operates, or any other public
entity operating in that capacity for the county or city
and city and county;
c) Local entities, agencies or departments responsible for
specialty mental health services for the geographic region
where the WPC pilot operates;
d) At least one other public agency or department, which
may include, but is not limited to, county alcohol and
substance use disorder programs, human services agencies,
public health departments, criminal justice or probation
entities, and housing authorities, regardless of how many
of these fall under the same agency head within the
geographic area where the WPC pilot operates; and,
e) At least two other community partners serving the target
population within the applicable geographic area.
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8)Requires DHCS to enter into a pilot agreement with each WPC
lead entity approved to participate in the WPC pilot program.
Specifies requirements for the pilot agreement including the
amount of funding that would be available to the WPC pilot and
conditions for payments.
9)Permits the sharing of health information, records, and other
data with and among WPC lead entities and WPC participating
entities to the extent necessary for the activities and
purposes, as specified.
10)Authorizes WPC pilots to target the focus of their pilot on
individuals at risk or are experiencing homelessness who have
a demonstrated medical need for housing or supportive
services. States that WPC participating entities may include
local housing authorities, local continuum of care programs,
community-based organizations, and others servicing the
homeless population as entities collaborating and
participating in the WPC pilot. Specifies housing
interventions to include: a) tenancy-based care management
services, as specified; and, b) countywide housing pools
(housing pool), as specified.
11)Authorizes WPC participating entities to include
contributions to a housing pool that will directly provide
needed support for medically necessary housing services, with
the goal of improving access to housing and reducing churn in
the Medi-Cal population.
12)Authorizes the housing pool to be funded through WPC pilot
payments or direct contributions from community entities.
Requires state and local government and community entity
contributions to the housing pool to be separate from FFP
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funds, and may be allocated to fund support for long-term
housing, including rental housing subsidies. Allows the
housing pool to leverage local resources to increase access to
subsidize housing units. Allows the housing pool to also
incorporate or reinvest a portion of the savings from the
reduced utilization of health care services in the housing
pool. As applicable to an approved WPC pilot agreement, WPC
investments in housing units or housing subsidies, including
any payment for room and board shall not be eligible for FFP.
Specifies that "room and board" does not include those
housing-related activities or services recognized as
reimbursable under CMS policy.
13)Specifies requirements for payments to WPC pilots, the pilot
application and selection criteria, and carry over of
remaining funds.
14)Requires an evaluation of the WPC pilot.
Dental Transformation Initiative
1)Requires DHCS to implement the DTI in accordance with the STCs
to improve the oral health care for Medi-Cal children through
age 20.
2)States that the DTI is intended to improve the oral health
care of Medi-Cal children with a particular focus on
increasing the statewide proportion of qualifying children
enrolled in the Medi-Cal Dental Program who receive a
preventive dental service by 10 percentage points over a five
year period.
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3)Establishes four domains within the DTI including Preventive
Services, Caries Risk Assessment, Continuity of Care, and
Local Dental Pilot Projects, as follows:
a) Increase Preventive Services Utilization for Children:
Aim is to increase the statewide proportion of qualifying
children enrolled in Medi-Cal who receive a preventive
dental service in a given year. The statewide goal is to
increase the utilization among children by at least 10
percentage points by the end of the demonstration.
b) Caries Risk Assessment and Disease Management Pilot:
initially, this will only be available in select pilot
counties, designated by DHCS. Requires participating
service office locations to elect to be approved by DHCS to
participate in this domain of the DTI program. Permits, to
the extent DHCS determines the pilots to be successful,
DHCS to seek to implement this domain on a statewide basis
and subject to the availability of funding under the DTI
Pool as available for this purpose, as specified.
c) Increase Continuity of Care: requires a DTI incentive
payment to be paid to eligible service office locations who
have maintained continuity of care through providing
examinations for their enrolled child beneficiaries under
21 years of age, as specified in the STCs. Requires DHCS
to begin this effort in select counties and seek to
implement on a statewide basis if the pilot is determined
to be successful and subject to the availability of funding
under the DTI Pool.
d) Local Dental Pilot Projects (LDPPs): requires LDPPs to
address one or more of the three domains identified in
paragraph 3) above through alternative LDPPs, as authorized
by DHCS pursuant to the STCs, as specified.
4)Permits incentive payments to be made available within each
domain under the DTI to qualified providers who meet the
requirements of the domain. Permits providers in either the
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dental fee-for-service (FFS) or dental managed care Medi-Cal
delivery systems to participate in the DTI.
5)Requires the DTI to be funded at a maximum of $148 million
annually, and for five years totaling a maximum of $740
million, except as provided in the STCs. Permits, when DTI
funds in a given program year are not expended, those
remaining program funds to be available for DTI payments in
subsequent years.
6)Permits DHCS to earn additional demonstration authority, up to
a maximum of $10 million, to be added to the DTI Pool for use
in paying incentives to qualifying providers under DTI, as
indicated in the STCs.
7)Requires DHCS to make DTI incentive payments directly to
eligible contracted service office locations. Requires
incentive payments to be issued to the service office location
based on the services rendered at the location and that
service office location's compliance with the criteria
enumerated in the STCs. Permits DHCS to provide DTI incentive
payments to eligible service office locations on a semiannual
or annual basis.
8)Specifies that dental managed care provider service office
locations are eligible for DTI incentive payments, as
specified in the STCs, and specifies that these payments are
to be considered separate from payment received from a dental
managed care plan. Prohibits the incentive payments from
being considered a direct reimbursement for dental services
under the Medi-Cal state plan.
9)Requires DHCS to disburse DTI incentive payments to eligible
service office locations that did not previously participate
in Medi-Cal prior to the demonstration and that render
preventive dental services during the demonstration to the
extent the service office location meets or exceeds the goals
specified by DHCS in accordance with the STCs.
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10)Specifies that safety net clinics are eligible for DTI
incentive payments specified in the STCs. Requires
participating safety net clinics to be responsible for
submitting data in a manner specified by DHCS for receipt of
DTI incentive payments. Requires each safety net clinic
office location to be considered a dental service office
location for purposes of specified domains outlined in the
STCs.
11)Requires service office locations to submit all data in a
manner acceptable to the DHCS within one year from the date of
service or by January 31 for the preceding year that the
service was rendered to be eligible for DTI incentive payments
associated with that timeframe.
12)Requires DHCS to conduct, or arrange to have conducted, the
evaluation of the DTI as required by the STCs.
EXISTING LAW:
1)Establishes the Medi-Cal program, which is administered by
DHCS and under which qualified low-income persons receive
health care benefits.
2)Establishes a Medicaid Section 1115 demonstration project
under the Medi-Cal program until October 31, 2015 known as
California's Bridge to Reform, to implement specified
objectives, including better care coordination for Seniors and
Persons with Disabilities (SPDs) and maximization of
opportunities to reduce the number of uninsured individuals.
3)Provides for payments under the state's Bridge to Reform
waiver to DPHs (UC and county hospitals), and for federal DSH,
payments to private hospitals (referred to as "DSH replacement
payments") and nondesignated public hospitals (NDPHs) through
October 1, 2015. These provisions:
a) Make DPHs eligible for cost-based FFS Medicaid funding
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using county certified public expenditures (CPEs) as the
federal match, instead of state GF. DPHs put up the
nonfederal share of Medi-Cal FFS payments used to draw down
federal Medicaid matching funds, and receive cost-based
reimbursement, using CPEs to draw down federal Medicaid
matching funds;
b) Provide DSH payments to DPHs, using county CPEs and
county IGTs to draw down federal DSH funds;
c) Provide DSH payments to eligible non-designated public
hospitals (NDPH are primarily district hospitals) meeting
DSH eligibility criteria, using the GF to draw down federal
DSH funds;
d) Provide for "DSH replacement payments" to private
hospitals meeting DSH eligibility criteria, using non-DSH
Medicaid funds and state GF as the fund source;
e) Make DPHs eligible for payments from the federally
funded SNCP for uncompensated care; and,
f) Make DPHs eligible for payments from the federally
funded delivery system reform incentive pool (DSRIP), based
on the DPH's progress toward and achievement of milestones
and metrics established in its DSRIP proposal, funded by
federal funds and IGTs.
4)Authorizes DHCS to request one or more temporary waiver
extensions to continue the operation of, and the authorities
provided under, the Bridge to Reform. Requires DHCS to extend
and apply the existing hospital payment methodologies and
allocations on a state fiscal year, annual, partial year, or
other basis, to the extent permitted under any approved
temporary waiver extension, an approved subsequent waiver, or
as otherwise permitted under federal Medicaid law.
5)Requires the Department of Managed Health Care (DMHC) to
develop and adopt regulations to ensure that health plan
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enrollees have access to health care services in a timely
manner, and requires DMHC to develop indicators of timeliness
and consider the following:
a) Waiting times for appointments with physicians and
specialists;
b) Timeliness of care in an episode of illness, including
timeliness to referrals; and,
c) Waiting time to speak to a physician, registered nurse
or other qualified health professional.
6)Requires contracts between health plans and health care
providers to assure compliance with the timely access
standards developed by DMHC. Requires the contracts to
require reporting by health care providers to health plans and
by health plans to DMHC to ensure compliance with the
standards.
7)Requires health plans to report annually to DMHC on compliance
with the timely access standards.
8)Requires DHCS to conduct annual medical audits of each
Medi-Cal managed care plan unless the Director of DHCS
determines there is good cause for additional reviews.
Requires the reviews to use the standards and criteria
established pursuant to the Knox-Keene Health Care Services
Act of 1975, or Insurance Code, as appropriate.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, this bill is
needed to provide the statutory framework for implementation
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of Medi-Cal 2020. While the STCs outline the programmatic and
financing elements of Medi-Cal 2020, state law changes are
required, particularly related to hospital financing. This
bill is needed to continue existing Medi-Cal FFS payments to
DPHs, to change how federal DSH funds are provided to DPHs
consistent with the STCs under the GPP, to continue DSH
payments to private and DMPHs, to implement the expanded
provisions of PRIME, to appropriate funds for the
waiver-related provisions, and to codify the provisions of the
STCs establishing the DTI and the access assessments. In
addition, this bill would grant flexibility to DHCS to
implement Medi-Cal 2020 without using the regular contracting
and regulatory processes due to waiver timelines, and would
require notification to the Legislature regarding
waiver-related activities.
2)BACKGROUND.
a) Medicaid Waivers. Under a Medicaid waiver, the federal
government waives certain Medicaid requirements to give
states the flexibility to operate their Medicaid programs
(Medi-Cal in California) and allow states to test new
approaches and demonstration projects to improve care.
Section 1115 of the Social Security Act authorizes the
federal government to grant Medicaid waivers.
To obtain a waiver, a state negotiates with CMS about which
Medicaid provisions might be waived, what innovations the
state is proposing, and how the state plans to achieve
budget neutrality (a requirement that waivers cannot cost
the federal government more with the waiver than without
the waiver). The negotiations are memorialized in the STCs
which constitute a contract between CMS and the state. In
addition, the state adopts authorizing legislation to
implement the waiver.
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b) History of California's Recent Medicaid Waivers. Apart
from the Medi-Cal 2020 Waiver, California has negotiated
two other waivers with CMS - the 2005 Medi-Cal Waiver and
the 2010 Bridge to Reform Waiver. The 2005 waiver
delineated the methods for hospitals to be paid for care to
Medi-Cal and uninsured patients. It established a SNCP for
public hospitals which subsidized uncompensated care costs
for uninsured individuals. The 2005 Waiver also provided
federal funds to expand coverage to childless adults under
a Coverage Initiative project which has provided financial
support to 10 counties.
The 2010 Bridge to Reform Waiver was a five-year
demonstration of health care reform initiatives that was
projected to provide an additional $10 billion in federal
funds over the lifetime of the waiver. The major
components of the Bridge to Reform Waiver include:
i) Establishing Low-Income Health Programs (LIHP) which
allow counties to draw down federal matching dollars to
provide coverage to childless adults if they meet certain
requirements;
ii) Requiring mandatory enrollment of SPDs on Medi-Cal
into Medi-Cal managed care plans;
iii) Requiring DHCS to establish organized health care
delivery pilot models for children with special health
care needs who are eligible for both California
Children's Services and Medi-Cal; and,
iv) Continuing the SNCP to provide funding for public
hospitals, a DSRIP, state health care programs, as well
as the Health Care Coverage Initiative. The 2010 waiver
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also implemented a global payment demonstration project
for hospitals.
3)MEDI-CAL 2020 WAIVER. On December 30, 2015, DHCS received CMS
approval of Medi-Cal 2020. This five year, $6.2 billion
waiver begins January 1, 2016, and ends December 31, 2020.
The details of Medi-Cal 2020 are in the more than 300 page
STCs and related attachments agreed to by the state and CMS.
Funding by waiver program component is as follows:
PRIME $3.732 billion
Global Payment Program$236 million* and **
Dental Transformation Initiative$375 million
Designated State Health Programs$375 million
Whole Person Care $1.5 billion
---------------------------------------------------------------
---------------
Total $6.21 billion
* GPP does not include the DSH component of funding. DSH
funding over the five years of the waiver is projected to be
$10.830 billion total funds ($5.915 billion federal funds).
** For GPP, initial federal funding only accounts for the
first year of the GPP as funding in subsequent years is based
on a study on DPH uncompensated care.
In addition to the program areas and federal funding under
Medi-Cal 2020, the federal government waives specified federal
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Medicaid provisions, including the following:
a) Freedom of Choice: to enable California to require
participants to receive benefits through certain providers
and to permit California to require that individuals
receive benefits through managed care providers who could
not otherwise be required to enroll in managed care. No
waiver of freedom of choice is authorized for family
planning providers;
b) DSH requirements: to exempt California from making DSH
payments, in accordance with federal Medicaid law to a
hospital which qualifies as a DSH during any year for which
the Public Health Care System with which the DSH is
affiliated with receives payment pursuant to the GPP;
c) Statewideness:
i) To enable California to operate the demonstration on
a county-by-county basis and to provide Medi-Cal managed
care plans only in certain geographic areas;
ii) To enable California to provide Drug Medi-Cal
Organized Delivery System (DMC-ODS) services to
individuals on a geographically limited basis;
iii) To enable California to authorize WPC pilots and to
provide WPC services to individuals on a geographically
limited basis; and,
iv) To enable the state to authorize DTI program pilots
and to provide DTI services to individuals on a
geographically limited basis.
d) Amount, Duration, and Scope of Services and
Comparability:
i) To enable California to provide different benefits
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for low-income pregnant women between 109% up to and
including 138% of the federal poverty level (FPL), as
compared to other pregnant women in the same eligibility
group;
ii) To enable California to authorize WPC pilots which
may make available certain services, supports, or
interventions to certain high-risk, vulnerable
populations targeted under an approved WPC pilot program
that are not otherwise available to all beneficiaries in
the same eligibility group;
iii) To enable California to provide certain services,
supports and other interventions to eligible individuals
with substance use disorders under the DMC-ODS program
that are not otherwise available to all beneficiaries in
the same eligibility group;
iv) To enable California to provide certain services,
supports and other interventions to eligible individuals
under the DTI program that are not otherwise available to
all beneficiaries in the same eligibility group.
4)DSH. Medicaid DSH payments are federally required Medicaid
payments that states make to hospitals that serve a high
proportion of Medicaid and other low-income patients. DSH
payments supplement regular Medicaid payments for hospital
services and are intended to improve the financial stability
of safety-net hospitals by offsetting uncompensated care costs
for Medicaid and uninsured patients. Each state's annual DSH
allotment is calculated by federal law. DSH payments are
limited by annual federal DSH allotments to each state.
Because hospitals were anticipated to have reduced
uncompensated care as a result of the federal Patient
Protection and Affordable Care Act (ACA), the ACA reduced
federal DSH funds. Beginning in federal fiscal year (FY)
2014, the ACA proposed to dramatically decrease the amount of
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funding that will be provided under DSH, based on the premise
that the ACA coverage expansions will result in fewer
individuals receiving uncompensated care. Under the ACA, the
federal Secretary of the Department of Health and Human
Services is required to develop a methodology that will reduce
the DSH payments by $14.1 billion during the period of 2014 to
2019, pursuant to a schedule set out in the ACA. These
reductions increase over time, and by 2019 represent an
approximate 50% reduction over baseline projections. These
reductions have been delayed multiple times and are currently
scheduled to begin in FY 2018. California anticipates
receiving $1.2 billion in federal DSH funds in 2015-16.
Under this bill, and consistent with the previous legislation
implementing the 2010 waiver, DHCS will "run the DSH list" to
determine which hospitals are eligible for federal DSH funds.
In FY 2014-15, the threshold for DSH eligibility is a 40.3%
Medi-Cal utilization rate (MUR) or higher, or a low-income
utilization rate (LIUR), (county indigent, charity care and
Medi-Cal) of 25% (the 25% LIUR is in statute and applies each
year while the MUR varies year-to-year). In FY 2014-15, there
were 140 hospitals that were DSH-eligible, plus three UC
hospitals (one at UCSF and two at UCLA) that were made
DSH-eligible by statute implementing the waiver. Under
existing law dating back to 1994-95, the state had a "rake
off" of DSH funds to achieve budget savings. The current rake
off amount in statute is $85 million, but the "rake off" was
suspended in the legislation implementing the 2005 and 2010
waivers, and continues to be suspended in this bill.
Private hospitals that are DSH-eligible do not receive DSH
funds. instead, they receive "virtual DSH" (also referred to
as "DSH replacement payments") which is the same amount of
funding they would have received from DSH funds, except the
additional funds are funded by state GFs and "regular" federal
Medicaid matching funds (instead of being funded from the
capped federal DSH allotment). DMPHs receive DSH funds, with
the state GF providing the matching funds used to draw down
federal funds. These requirements apply in the previous
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waiver and continue in this bill.
Under Medi-Cal 2020, the five UC DPHs will continue to receive
DSH funds as they did in the prior waiver, using CPEs to draw
down the funds for costs below 100% of their costs, and IGTs
to drawn down DSH funds for their amounts between 100-175% of
their costs. Consistent with the previous waiver, this bill
makes UCLA and UCSF hospitals DSH-eligible who would not
otherwise be DSH eligible. The amount of DSH funds UC is
eligible to receive under this bill systemwide is capped at
between 26.2% and 21.8% after amounts for DMPHs are made,
depending upon the state fiscal year. DHCS is required to
consult with UC prior to making interim and final DSH
payments, and to make any adjustments to the payment
distributions requested by UC so long as the aggregate net
effect of the adjustments is zero.
County DPHs will now longer receive DSH funds as they did in
the prior waiver. Instead, county DPHs will receive DSH funds
under the new GPP, described in 5) below.
5)GPP. The GPP is a new feature of Medi-Cal 2020. Under GPP, a
statewide pool of funding for the remaining uninsured would be
established by combining federal DSH funding (which is limited
to a hospital under federal law) for county DPHs and some
level of federal SNCP funding (a funding component of the
previous waiver for the uninsured). Under the GPP, each
individual public hospital system would receive a "global
budget" for the remaining uninsured from the overall GPP pool
based on annual threshold amount determined through baseline
analysis of historical/projected volume/cost/mix of services
to the uninsured. The GPP would integrate and reform Medicaid
DSH and SNCP funding by moving away from a cost-based payment
methodology restricted to mostly hospital settings to a more
"risk-based" and/or "bundled" payment structure.
GPP would encourage public hospital systems to provide greater
primary and preventive services, as well as alternative
modalities such as phone visits, group visits, telemedicine,
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and other electronic consultations with the goal of improving
the health of the remaining uninsured through coordination of
care. DHCS would establish individual public hospital "global
budgets" for remaining uninsured for each DPH from the overall
pool based on annual threshold amount determined through
baseline analysis of historical/projected volume/cost/mix of
services to the uninsured. Achievement of threshold service
targets would be done on a "points" system with a base level
of points required for each system to earn their full global
budget. The threshold amounts for each public health care
system will initially be constructed using the volume and cost
of services occurring in participating providers, and will use
the most recent complete state fiscal year data. Funding
would be claimed on a quarterly basis, with the DPHs providing
the necessary IGTs for the non-federal share. Partial funding
would be available based on partial achievement of the
"points" target. Funding for the GPP is expected to decline
over the duration of the waiver due to the scheduled reduction
in federal DSH funds, and the amount of funding for the prior
SNCP is unknown after the initial year and will be determined
based on an assessment of DPH uninsured costs.
As a condition of participation in the GPP, each DPH or
affiliated governmental agency or entity must agree to provide
IGTs necessary to meet the nonfederal share obligation. This
bill establishes different IGT transfer amounts for each DPH
under a methodology agreed to by the DPHs. The reason for the
different IGT transfer amounts is to take into account
hospital systems with high Medi-Cal losses. The GPP is for
the uninsured and it allows for care in non-hospital setting.
However, because the points are only for the uninsured and DSH
is also intended for Medi-Cal, it disadvantages DPHs that have
substantial Medi-Cal hospital losses. The second reason for
the different IGFT transfer amounts is the single standardized
point system used in the GPP is regardless of cost variation
among DPHs, and it results in a disadvantage to DPH systems in
higher cost areas as DPHs in lower-cost areas could meet their
threshold by providing relatively fewer services than would
otherwise be required.
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6)PRIME. PRIME is a continuation and expansion on the DSRIP
from the 2010 waiver aimed to improve the care delivery in
public hospital systems. PRIME participating entities consist
of DPHs and DMPHs. DMPHs did not receive funds from DSRIP
under the 2010 waiver. There are 21 DPHs operating 17 health
and hospital systems, with one system comprised of four
hospitals in Los Angeles. DPHs are located in mostly urban
areas in northern, central and southern California. These
hospitals range in size from approximately 160 to 600 beds.
DPHs are similar in that they are academic teaching centers
providing a broad range of inpatient and outpatient services
including specialty care. More than 50% of patients served
across these health and hospital systems are Medi-Cal
beneficiaries or uninsured. DPHs provide 30% of all
hospital-based care to the Medi-Cal population in the state
and operate more than half of the state's level one trauma
centers and more than two-thirds of its burn centers.
There are 40 DMPHs spanning 19 counties across California.
DMPHs are heterogeneous, varying significantly in size (from
approximately three to 500 beds) and in the range of services
provided.
PRIME entities can earn incentive payments based on the
achievement of specified benchmarks across various metrics.
In addition, PRIME requires the achievement of set targets in
three domains (Outpatient Delivery System Transformation,
Targeted High-Risk or High Cost, Populations, Resource
Utilization Efficiency) for moving toward APMs for DPHs over
the course of the Waiver. DPHs must participate in all three
domains, while DMPHs must participate in only one domain.
Within the first two domains, DPHs are required to participate
in certain elements (for example, integration of physical and
behavioral health, ambulatory care redesign for primary care
and specialty care). The non-federal share of funding for
PRIME will be provided by DPHs/DMPHs through IGTs. Reporting
and payments will be made on a semi-annual basis, and PRIME
entities can achieve partial payment for partial achievement.
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Annual federal funding available by waiver demonstration year
(DY) for DPH and DMPHs is shown below:
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DPHs DMPHs
DY 11 (Jan 2016 - June 2016) $700 million $100
million
DY 12 (July 2016 - June 2017) $700 million $100
million
DY 13 (July 2017 - June 2018) $700 million $100
million
DY 14 (July 2018 - June 2019) $630 million $90
million
DY 15 (July 2019 - June 2020) $535.5 million$76.5
million
------------------------------------------------------------
--------------------
Five Year Total $3.2
billion$466.6 million
A goal of the waiver is to move participating DPH PRIME
providers toward a value-based payment structure when
receiving payments for managed care beneficiaries. A new
feature in Medi-Cal 2020 is the establishment of APM targets
for DPHs in the aggregate that, if not met, result in
financial penalties. The waiver establishes four ways for
payments to be counted towards the APM thresholds, and the
target percentages are based on the number of Medi-Cal managed
care beneficiaries assigned to DPHs where all of, or a portion
of, their care is paid for under a contracted APM:
a) 50% by January 2018 (DY 13);
b) 55% by January 2019 (DY 14);
c) 60% by end of waiver (DY 15)
Five percent of DPH PRIME funding at risk in DY14 (July
2018-June 2019) and DY15 (July 2019-June 2020) is tied to the
achievement of the APM targets. The APM targets do not apply
to DMPHs.
7)DTI. The DTI is a new feature of Medi-Cal 2020. It is funded
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at $750 million total funds ($375 million in federal funds)
generated from Designated State Health Programs. Of this
amount, $10 million in total funds is contingent upon the
state meeting statewide metrics. DTI consists of four domain
areas as follows:
a) Domain 1: Increase Preventive Services Utilization for
Children. The goal of this domain is to increase statewide
proportion of children ages through 20 years of age and
enrolled in Medi-Cal who receive a preventive dental
service by 10 percentage points over a five-year period.
Incentive payments will be made annually to providers for
utilization and provider participation and will be used to
determine the subsequent year's threshold. Semi-annual
incentive payments will be made to dental provider service
locations that provide preventative services to an
increased number of Medi-Cal children, as compared to the
DHCS-determined baseline. Incentive payments will be made
to the service office locations for rendered preventive
services once they have met the DHCS-established goal; and,
b) Domain 2: Caries Risk Assessment and Disease
Management. The goal of this domain is to diagnose early
childhood caries (cavities) by utilizing CRA to treat
caries as a chronic disease for children ages six and
under. The CRA would be a model that proactively prevents
and mitigates oral disease through the delivery of
preventative services in lieu of more invasive and costly
procedures (restorative services). Children will have
treatment plans prescribed based on caries risk level.
DHCS will use a baseline year with statewide data for the
most recent state fiscal year preceding implementation of
the domain. DHCS will track and report the following
measures:
i) Number of, and percentage change in, restorative
services;
ii) Number of, and percentage change in, preventive
dental services;
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iii) Utilization of CRA dental procedure codes and
reduction of caries risk levels (not available in the
baseline year prior to the waiver implementation);
iv) Change in use of emergency rooms for dental-related
reasons among the targeted children for this domain; and,
v) Change in number and proportion of children
receiving dental surgery under general anesthesia.
Dentists must opt-in by completing a DHCS recognized
training program, and incentive payments will be made to
providers for successful completion of caries treatment
plan and improvement in "elevated risk" levels. Treatment
plans and associated procedures will be carried out as
follows, over a 12 month period:
i) "High risk" children will be authorized four visits;
ii) "Moderate risk" children will be authorized three
visits; and,
iii) "Low risk" children will be authorized to two
visits.
c) Domain 3: Increase Continuity of Care. The goal of
this domain is to increase continuity of care for
beneficiaries ages 20 and under for 2, 3, 4, 5, and 6
continuous periods. DHCS will establish a baseline year,
based on data from the most recent complete state fiscal
year using claims data to determine the number of
beneficiaries who received an examination each year from
the same service office location for 2, 3, 4, 5, and 6 year
continuous periods. Incentive payments will be available
to service office locations that provide examinations to an
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enrolled Medi-Cal child for 2, 3, 4, 5, and 6 continuous
periods. The incentive payment will be an annual flat
payment for providing continuity of care to the
beneficiary.
d) Domain 4: LDPPs. LDPPS will address 1 or more of the 3
domains through alternative programs, potentially using
strategies focused on rural areas including local case
management initiatives and education partnerships. DHCS
will solicit proposals once at the beginning of the
demonstration and will review, approve, and make payments
for LDPPs in accordance with the requirements stipulated in
the Medi-Cal 2020 Waiver. A maximum of 15 LDPPs will be
approved. The specific strategies, target populations,
payment methodologies, and participating entities will be
proposed by the entity submitting the application for
participation and included in the submission to DHCS. Each
pilot application must designate a responsible county,
Tribe, Indian Health Program, UC, or CSU campus as the
entity that will coordinate the pilot.
8)WPC. WPC is a new feature of Medi-Cal 2020. WPC is essentially
a grant program over the five years of the waiver. The
overarching goal of the WPC pilots is the coordination of
health, behavioral health, and social services, as applicable,
in a patient-centered manner with the goals of improving
beneficiary health and well-being through more efficient and
effective use of resources. WPC pilots will provide an option
to participating entities to receive support to integrate care
for beneficiaries who are high-risk and high-utilizers of
multiple systems and continue to have poor health outcomes.
WPC pilots will include collaboration between two or more
public entities (e.g. county mental health plans and local
housing authorities); at least one Medi-Cal managed care
health plan, and other community entities with the goal of
improving health outcomes for the WPC population. Program
strategies would include increasing integration, data sharing
and coordination among county agencies, health plans,
providers, and other entities within the participating county
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or counties that serve high-risk, high-utilizing
beneficiaries, and develop an infrastructure that will reduce
inappropriate emergency and inpatient utilization, increase
coordination and appropriate access to care and increase
collaboration and integration among the entities participating
in the WPC Pilots over the long term.
The WPC target populations, include, but are not limited to the
following individuals:
a) With repeated incidents of avoidable emergency use,
hospital admissions, or nursing facility placement;
b) With two or more chronic conditions;
c) With mental health and/or substance use disorders;
d) Who are currently experiencing homelessness; and/or,
e) Who are at risk of homelessness, including individuals
who will experience homelessness upon release from
institutions (e.g. hospital, skilled nursing facility,
rehabilitation facility, incarceration, etc.)
To test interventions that achieve these improved health
outcomes and cost savings, WPC Pilots may focus on Medi-Cal
beneficiaries with a demonstrated medical need for housing and
supportive services. These Pilots would ensure that the
entities collaborating and participating in the Pilot would
include local housing authorities, community-based
organizations, and others serving the homeless population.
WPC pilots with a focus on housing may include interventions
such as tenancy-based care management services and county
housing pools.
Up to $300 million in federal funding is available annually
for WPC. No single WPC pilot will be awarded more than 30% of
total available funding unless additional funds are available
after all initial awards are made. The non-federal share of
funds used to draw down federal funding is through IGTs.
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The STCs establish an early implementation schedule for WPC.
DHCS is required to publish a WPC pilot application process,
detailed timeliness and selection criteria by April 1, 2016,
or within 90 days following CMS approval of WPC Pilot
attachments, whichever is later. WPC lead entities must submit
WPC Pilot applications to DHCS by May 15, 2016, or 45 days
after DHCS issues the WPC Pilot application process (whichever
is later). DHCS must complete its review of the application
within 60 days of submission, and will respond to the WPC
Pilot Lead Entity in writing with any questions, concerns or
problems identified. Within 30 days after submission of final
responses to questions about the application, DHCS will take
action on the application and promptly notify the applicant
and CMS of that decision.
9)DSHPs. This bill permits DHCS to claim FFP for expenditures
associated with DSHPs identified in the STCs. The state was
able to draw down federal funds in the previous waivers to
offset GF expenditures. Any FFP claimed is required to be
used to offset applicable GF expenditures. DSHP funds will be
used to fund DTI FFP, not to exceed $375 million over five
years. The DSHPs in the waiver are as follows:
a) California Children Services (CCS);
b) Genetically Handicapped Persons Program;
c) Medically Indigent Adult Long Term Care;
d) Breast & Cervical Cancer Treatment Program;
e) AIDS Drug Assistance Program;
f) Department of Developmental Services;
g) Prostate Cancer Treatment Program;
h) Song Brown Health Care Workforce Training Program;
i) Steven M. Thompson Physician Corp Loan Repayment
Program; and,
j) Mental Health Loan Assumption Program
10)WAIVER REQUIRED REPORTS, ASSESSMENTS AND ANALYSES. The 2020
Waiver also contains several independent analyses of the
Medi-Cal program and evaluations of the Waiver programs,
including: a) Medi-Cal Managed Care Access Assessment; b)
Uncompensated Care Assessments for California hospitals (one
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due in 2016 and one due one in 2017); c) GPP; d) PRIME; f) WPC
evaluation; g) DTI; and, h) CCS Report on CCS pilots.
This bill requires DHCS to conduct or arrange to have conducted
any study, report, assessment, evaluation or other similar
demonstration project activity required under the STCs, and
grants DHCS expedited contracting authority by allowing DHCS
to enter into exclusive or nonexclusive contracts or amend
existing contracts on a bid or negotiated basis, and by
exempting these contracts from specified provisions of the
Public Contract Code and DGS review. This bill codifies the
one of the evaluations (the Medi-Cal Managed Care Access
Assessment).
Two foundations are funding the 2016 uncompensated care
assessment, which is due May 15, 2016, and is focused on DPHs.
This report is significant in that it will be used by CMS to
determine the appropriate level of Uncompensated Care Pool
funding of those providers in years two through five of the
demonstration (this pool of funding and DSH are the two fund
sources for the GPP). This report will review the impact of
the uncompensated care pool on those providers who participate
in the uncompensated care pool with respect to: uncompensated
care provided; Medicaid provider payment rates; Medicaid
beneficiary access; and, the role of managed care plans in
managing care. CMS will provide a formal determination of the
funding levels for demonstration years two through five within
60 days of receipt of the complete report.
11)THE NEXT WAIVER POST-MEDI-CAL 2020. The funding in this
waiver is reduced from the 2010 waiver. DHCS and the public
hospitals both report CMS' desire to standardize waivers
across the states and CMS' view that waiver funding should be
reduced and/or eliminated due to the coverage expansions
enacted by the federal ACA. The most recent waiver was
approved the day before the expiration of the prior waiver,
which, because it occurred when the Legislature was not in
session, necessitated legislation (SB 36 (Hernandez and De
Leon), Chapter 759, Statutes of 2015) allowing DHCS to
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continue the operation of, and the authorities provided under
the prior waiver. This bill contains language similar to SB
36 allowing DHCS to extend the hospital methodologies payment
in this waiver consistent with federal requirements and after
consultation with affected entities. In addition, this bill
contains language authorizing DHCS to work to develop
successor payment methodologies that would continue to support
entities participating in Medi-Cal 2020 following its
expiration that further the goals of this bill and the STCs.
12)SUPPORT. The California Hospital Association supports the
Medi-Cal 2020 Demonstration, including PRIME, GPP, DTI, and
the WPC Pilots. The California Association of Public
Hospitals and Health Systems states that the PRIME, WPC pilot,
and GPP components of this bill, along with other efforts in
the Medi-Cal 2020 Waiver can improve the state's health care
services and as a result, the health of the Medi-Cal and the
remaining uninsured populations in California.
The Association of California Healthcare Districts supports all
elements of the Waiver, especially PRIME. Medi-Cal 2020 is
the first time that DMPHs will participate in PRIME. District
hospitals will begin transformation work, improve outcomes,
and increase efficiencies over the next five years of the
waiver. Almost all of the DMPHs submitted PRIME application
earlier this month that focus on at least one project in the
three project domains: Domain1: outpatient delivery system
transformation and prevention; Domain 2: targeted high-risk
or high-cost populations; and, Domain 3: resource utilization
efficiency. District hospitals will only receive federal
funding if they meet specific established performance goals.
By 2020, PRIME will result in the widespread adoption and
sustainability of system transformations that will ensure
district hospitals deliver high-quality care to Medi-Cal
beneficiaries.
The California State Association of Counties (CSAC) states that
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the WPC Pilots will test new care innovations and leverage
lessons learned to improve outcomes; contain costs; and more
effectively coordinate care beyond traditional health
services. Additionally, CSAC contends that PRIME will result
in the wide-spread adoption and sustainability of system
transformations that will ensure public hospitals deliver
high-quality care to millions of Medi-Cal beneficiaries.
Finally, CSAC contends that the GPP is intended to promote the
delivery of more cost-effective and higher-value care to the
uninsured. CSAC concludes that the Medi-Cal 2020 Waiver
renewal is a strong and ambitious blueprint for building on
the success of the Medi-Cal program and its continued
transformation.
The County of San Bernardino states that the Medi-Cal 2020
Waiver will leverage California's coverage expansion with
significant payment reforms and delivery system improvements
for public health care systems. Contra Costa County states
that the Medi-Cal 2020 Waiver challenges and supports the
public health care systems' efforts to become models of
integrated care that are high value, high quality,
patient-centered, efficient and equitable, with great patient
experience and a demonstrated ability to improve health care
and the health status of populations. The Ventura Board of
Supervisors states that this renewed waiver will enable public
health care systems to more effectively provide high quality,
accessible care to the millions of patients they serve.
13)SUPPORT WITH AMENDMENTS. Western Center on Law & Poverty
(WCLP) writes in support and requests amendments on the
following: a) that the access assessment include a geographic
assessment of the network that examines how far patients have
to go to access core specialists and what transportation
assistance and support the plans provide to get patients to
remote providers, and an amendment to report languages spoken
by the provider's office; b) to require DHCS to issue a final
proposed point system for the GPP to stakeholder for comments
before finalizing it; c) to clarify that GPP systems may
determine the scope, type and extent to which services are
available to the extent they are consistent with the STCs but
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also to require that a patient's services needs are met; d) to
make mandatory (instead of optional) the WPC strategies of
increasing access to housing and supportive services for
serving the homeless population; and, e) to include a
requirement to share such guidance issued by DHCS with
stakeholders prior to issuing it and provide a chance for
input.
14)CLARIFICATION. The California Medical Association,
California Hospital Association, California Academy of Family
Physicians, Service Employees International Union - United
Healthcare Workers West, Children Now, Planned Parenthood
Affiliates of California, Medical Oncology Association of
Southern California, Inc., Osteopathic Physicians and Surgeons
of California (the "organizations") request additional
clarification regarding this bill's requirement for an
independent assessment of access to care and states that the
assessment should be conducted by the appropriate independent
entity and should examine the appropriate data points to
produce meaningful and actionable policy changes for the
Legislature and Governor to consider. These organizations set
forth a number of recommendations for this independent
assessment including: requiring the Bureau of State Audits to
conduct the independent assessment; examining access to
essential health benefits; examining access to specialty
health; examining access to skilled nursing facilities; and,
including an examination of payments to downstream providers.
15)RELATED LEGISLATION. SB 815 (Hernández and De Leon) is
identical to this bill. SB 815 is scheduled to be heard in
Senate Health Committee on April 27, 2016.
16)PREVIOUS LEGISLATION
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a) SB 36 authorizes DHCS to request one or more temporary
waiver extensions to continue the operation of, and the
authorities provided under, the current "California Bridge
to Reform Demonstration," the state's Section 1115 Medicaid
waiver. Requires DHCS to extend and apply the existing
hospital payment methodologies and allocations on a state
fiscal year, annual, partial year, or other basis, to the
extent permitted under any approved temporary waiver
extension, an approved subsequent waiver, or as otherwise
permitted under federal Medicaid law.
b) AB 1066 (John A. Pérez), Chapter 86, Statutes of 2011,
makes further statutory changes to implement the Bridge to
Reform for funding DPHs. AB 1066 continued under the 2010
waiver the FFS cost-based reimbursement for DPHs, with
those hospitals providing the required federal match using
their own funds through CPEs. In addition, AB 1066
establishes under the waiver a new distribution methodology
for DSH and SNCP funds to DPHs, as specified.
c) AB 342 (John A. Pérez), Chapter 723, Statutes of 2010,
enacts the LIHP to provide health care benefits to
uninsured adults up to 200% of the FPL, at county option
through a Medi-Cal waiver demonstration project.
d) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
implemented provisions of the 2010 Section 1115 waiver
including establishing DSRIP, consisting of IGTs from
counties or other specified governmental entities, to be
matched with federal funds and to be used for investment,
improvement and incentive payments for DPHs and the
affiliated governmental entities (counties and UC);
authorizes DHCS to require the mandatory enrollment of SPDs
in a Medi-Cal managed care plan commencing on the later of
either June 1, 2011, or obtaining federal approval; and,
requires DHCS to implement pilot projects to provide
coordinated care to children in the CCS and to persons who
are dually eligible for Medi-Cal and Medicare.
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e) SB 1100 (Perata), Chapter 560, Statutes of 2005, enacts
the statutory framework for implementing a five-year waiver
of federal Medicaid requirements that provides federal
Medicaid funding under the terms of the waiver to pay DPHs,
private, and district hospitals for services provided to
Medi-Cal and uninsured patients.
17)POLICY ISSUES.
a) Need for urgency bill. This bill contains an urgency
clause. DHCS has indicated it would like to have this bill
enacted by June 2016 as several aspects of the work DHCS is
required to conduct under the Medi-Cal 2020 waiver cannot
be started or fully implemented without legislative
authority. For example, the waiver-required access
assessment must be conducted by the DHCS EQRO. A contract
amendment with this entity is needed, and this bill
contains the authority for DHCS to move forward on this
assessment. In addition, DHCS requires other contracting
resources for other evaluations and technical assistance,
which cannot occur until DHCS has the legislative
authority, and a delay in the department's ability to
contract impedes and delays DHCS' ability to implement the
various components of the waiver. Finally, DHCS indicates
that, although it believes the waiver extension legislation
from last year provided DHCS the ability to make payments
under GPP and PRIME, it is possible that that
interpretation could be challenged and without this payment
authority, DPH would have severe cash flow issues.
b) Contracting obligation on DPHs. Under the PRIME
provisions of the STCs and this bill, DPHs are required to
contract with at least one Medi-Cal managed care plan in
the service area where the plan operates using an APM
methodology by January 1, 2018. If a DPH system is unable
to meet the requirement and can demonstrate that it has
made a good faith effort to contract with a Medi-Cal
managed care plan in the service area that it operates in
or a gap in contracting period occurs, DHCS has the
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discretion to waive this requirement.
One of the issues faced by patients in Medi-Cal managed care
plans is UC hospitals do not always contract with Medi-Cal
managed care plans, or they limit their contracting to
tertiary services or to letters of agreement for individual
patients. The contracting obligation in this bill and the
STCs is narrow in that the requirement that DPHs contract
only applies to one plan, and is limited to the service
area where they operate. However, this narrow waiver
requirement effectively means UC hospitals in urban
locations (UC hospitals are in San Diego, Irvine, San
Francisco, Sacramento, and Los Angeles) may not be
accessible to patients enrolled in the other Medi-Cal plan
in two-plan model counties, or to beneficiaries in rural or
inland Medi-Cal managed care plans. Medi-Cal 2020 provides
a benefit to UC hospitals in that it continues to make two
of their hospitals (UCSF and UCLA) DSH-eligible who would
not otherwise be DSH eligible, as shown below:
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DSH Medicaid DSH Low-Income
Utilization Rate Utilization Rate
Minimum DSH Eligibility 40.3%* 25%
UCLA/Ronald Reagan 20.8% 10.8%
UCLA/Santa Monica 12.8% 13%
UCSF 26% 16.1%
*For 2014-15
In addition, Medi-Cal 2020 enables UC to receive cost-based
reimbursement in FFS Medi-Cal, and by making federal
funding available for quality improvement through PRIME.
However, UC also puts up the state match (through CPEs and
IGTs) to draw down federal Medicaid funds, which saves the
state GF, and UC argues it has sicker patient population
because of the specialized services it provides, and UC
uses its hospital to help support its medical schools due
to insufficient state support. Should the requirement that
DPHs contracting requirement with Medi-Cal managed care
plans be applied more broadly beyond one Medi-Cal managed
care plan in that plan's area to include the other Medi-Cal
managed care plan in the county and Medi-Cal managed care
plans serving patients in inland and rural areas who use UC
hospitals for specialized care?
REGISTERED SUPPORT / OPPOSITION:
Support
Antelope Valley Hospital
Association of California Healthcare Districts
Bear Valley Community Healthcare District
California Association of Public Hospitals and Health Systems
California Hospital Association
California Primary Care Association
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California State Association of Counties
Coalinga Regional Medical Center
Contra Costa County
County Health Executives Association of California
County of San Bernardino
District Hospital Leadership Forum
El Camino Hospital
Hazel Hawkins Memorial Hospital
Kern Valley Healthcare District
Mammoth Hospital
Marin General Hospital
Mayers Memorial Hospital
Northern Inyo Hospital
Palo Verde Hospital
Palomar Health
Pioneers Memorial Healthcare District
Plumas District Hospital
Salinas Valley Memorial Healthcare System
San Bernardino Mountains Community Hospital District
San Gorgonio Memorial Hospital
San Joaquin General Hospital
Santa Clara County Board of Supervisors
SEIU California
Seneca Healthcare District
Sierra View Medical Center
Tahoe Forest Hospital District
Tri-City Medical Center
University of California
Urban Counties of California
Ventura County Board of Supervisors
Washington Hospital Healthcare System
Opposition
None on file.
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Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916) 319-2097