BILL ANALYSIS Ó
AB 1568
Page 1
ASSEMBLY THIRD READING
AB
1568 (Bonta and Atkins)
As Amended May 3, 2016
2/3 vote. Urgency
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Health |17-0 |Wood, Maienschein, | |
| | |Bonilla, Burke, | |
| | |Campos, Chiu, Gomez, | |
| | |Roger Hernández, | |
| | |Lackey, Nazarian, | |
| | |Patterson, | |
| | | | |
| | | | |
| | |Ridley-Thomas, | |
| | |Rodriguez, Santiago, | |
| | |Steinorth, Thurmond, | |
| | |Waldron | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
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| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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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:
a) Evaluate primary, core specialty, and facility access to
care for managed care beneficiaries based on current health
plan network adequacy requirements, as specified;
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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.
6)Requires the assessment to do all of the following:
a) Measure health plan compliance with network adequacy
requirements, as specified;
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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.
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.
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3)Exempts contracts entered into by DHCS for purposes of this
bill from the Public Contract Code and approval by Department
of General Services.
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.
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
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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, 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
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.
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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
particular service or activity to be the same across all
GPP systems. Specifies when points may be increased or
decreased;
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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.
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.
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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
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.
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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
years of the demonstration project, with reductions to those
amounts in the fourth and fifth years.
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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.
8)Establishes requirements for the disbursement timeframe for
PRIME payments, incentive payments and aggregate annual
amounts, as specified.
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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
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,
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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
appropriate financial structure is in place, and identifying
and securing a permissible source of the nonfederal share of
WPC pilot payments.
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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.
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
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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
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
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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% points over a five year
period.
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
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dental service in a given year. The statewide goal is to
increase the utilization among children by at least 10%
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
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
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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.
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
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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.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)DHCS has requested administrative resources through an April
2016 Spring Finance Letter totaling $33.6 million for waiver
implementation over its five-year lifetime, $14 million of
which is for contract costs. DHCS requests $10.8 million in
2016-17. Funding will pay for staff and contract costs for
implementation, monitoring, oversight, evaluation and
assessment, technical assistance, program development, and
related activities (General Fund/federal).
2)Federal matching funds available by waiver program component
are as follows:
PRIME $3.73 billion
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Global Payment Program $236 million*
Dental Transformation Initiative $375 million
Designated State Health Programs $375 million
Whole Person Care $1.5 billion
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Total $6.21 billion
GPP does not include the federal DSH component of funding.
Federal DSH funding over the five-year life of the waiver is
projected to be about $5.8 billion. In addition, only the
first year of federal funding for GPP is shown here. Funding
in subsequent years is based on a study on DPH uncompensated
care.
COMMENTS: According to the author, this bill is needed to
provide the statutory framework for implementation 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
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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.
Analysis Prepared by:
Rosielyn Pulmano / HEALTH / (916) 319-2097 FN:
0003273