California Legislature—2015–16 Regular Session

Assembly BillNo. 1863


Introduced by Assembly Member Wood

February 10, 2016


An act to amend Section 14132.100 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

AB 1863, as introduced, Wood. Medi-Cal: federally qualified health centers: rural health centers.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program, to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. “Visit” is defined as a face-to-face encounter between a patient of an FQHC or RHC and specified health care professionals. Existing law allows an FQHC or RHC to apply for an adjustment to its per-visit rate based on a change in the scope of services it provides.

This bill would include a marriage and family therapist within those health care professionals covered under that definition. The bill would require an FQHC or RHC that currently includes the cost of services of a marriage and family therapist for the purposes of establishing its FQHC or RHC rate to apply to the department for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, would require the FQHC or RHC to bill these services as a separate visit, as specified. The bill would require an FQHC or RHC that does not provide the services of a marriage and family therapist, and later elects to add these services, to process the addition of these services as a change in scope of service.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 14132.100 of the Welfare and Institutions
2Code
is amended to read:

3

14132.100.  

(a) The federally qualified health center services
4described in Section 1396d(a)(2)(C) of Title 42 of the United States
5Code are covered benefits.

6(b) The rural health clinic services described in Section
71396d(a)(2)(B) of Title 42 of the United States Code are covered
8benefits.

9(c) Federally qualified health center services and rural health
10clinic services shall be reimbursed on a per-visit basis in
11accordance with the definition of “visit” set forth in subdivision
12(g).

13(d) Effective October 1, 2004, and on each October 1, thereafter,
14until no longer required by federal law, federally qualified health
15center (FQHC) and rural health clinic (RHC) per-visit rates shall
16be increased by the Medicare Economic Index applicable to
17primary care services in the manner provided for in Section
181396a(bb)(3)(A) of Title 42 of the United States Code. Prior to
19January 1, 2004, FQHC and RHC per-visit rates shall be adjusted
20by the Medicare Economic Index in accordance with the
21methodology set forth in the state plan in effect on October 1,
222001.

23(e) (1) An FQHC or RHC may apply for an adjustment to its
24per-visit rate based on a change in the scope of services provided
25by the FQHC or RHC. Rate changes based on a change in the
26scope of services provided by an FQHC or RHC shall be evaluated
27in accordance with Medicare reasonable cost principles, as set
28forth in Part 413 (commencing with Section 413.1) of Title 42 of
29the Code of Federal Regulations, or its successor.

P3    1(2) Subject to the conditions set forth in subparagraphs (A) to
2(D), inclusive, of paragraph (3), a change in scope of service means
3any of the following:

4(A) The addition of a new FQHC or RHC service that is not
5incorporated in the baseline prospective payment system (PPS)
6rate, or a deletion of an FQHC or RHC service that is incorporated
7in the baseline PPS rate.

8(B) A change in service due to amended regulatory requirements
9or rules.

10(C) A change in service resulting from relocating or remodeling
11an FQHC or RHC.

12(D) A change in types of services due to a change in applicable
13technology and medical practice utilized by the center or clinic.

14(E) An increase in service intensity attributable to changes in
15the types of patients served, including, but not limited to,
16populations with HIV or AIDS, or other chronic diseases, or
17homeless, elderly, migrant, or other special populations.

18(F) Any changes in any of the services described in subdivision
19(a) or (b), or in the provider mix of an FQHC or RHC or one of
20its sites.

21(G) Changes in operating costs attributable to capital
22expenditures associated with a modification of the scope of any
23of the services described in subdivision (a) or (b), including new
24or expanded service facilities, regulatory compliance, or changes
25in technology or medical practices at the center or clinic.

26(H) Indirect medical education adjustments and a direct graduate
27medical education payment that reflects the costs of providing
28teaching services to interns and residents.

29(I) Any changes in the scope of a project approved by the federal
30Health Resources andbegin delete Serviceend deletebegin insert Servicesend insert Administration (HRSA).

31(3) No change in costs shall, in and of itself, be considered a
32scope-of-service change unless all of the following apply:

33(A) The increase or decrease in cost is attributable to an increase
34or decrease in the scope of services defined in subdivisions (a) and
35(b), as applicable.

36(B) The cost is allowable under Medicare reasonable cost
37principles set forth in Part 413 (commencing with Section 413) of
38Subchapter B of Chapter 4 of Title 42 of the Code of Federal
39Regulations, or its successor.

P4    1(C) The change in the scope of services is a change in the type,
2intensity, duration, or amount of services, or any combination
3thereof.

4(D) The net change in the FQHC’s or RHC’s rate equals or
5exceeds 1.75 percent for the affected FQHC or RHC site. For
6FQHCs and RHCs that filed consolidated cost reports for multiple
7sites to establish the initial prospective payment reimbursement
8rate, the 1.75-percent threshold shall be applied to the average
9per-visit rate of all sites for the purposes of calculating the cost
10associated with a scope-of-service change. “Net change” means
11the per-visit rate change attributable to the cumulative effect of all
12increases and decreases for a particular fiscal year.

13(4) An FQHC or RHC may submit requests for scope-of-service
14changes once per fiscal year, only within 90 days following the
15beginning of the FQHC’s or RHC’s fiscal year. Any approved
16increase or decrease in the provider’s rate shall be retroactive to
17the beginning of the FQHC’s or RHC’s fiscal year in which the
18request is submitted.

19(5) An FQHC or RHC shall submit a scope-of-service rate
20change request within 90 days of the beginning of any FQHC or
21RHC fiscal year occurring after the effective date of this section,
22if, during the FQHC’s or RHC’s prior fiscal year, the FQHC or
23RHC experienced a decrease in the scope of services provided that
24the FQHC or RHC either knew or should have known would have
25resulted in a significantly lower per-visit rate. If an FQHC or RHC
26discontinues providing onsite pharmacy or dental services, it shall
27submit a scope-of-service rate change request within 90 days of
28the beginning of the following fiscal year. The rate change shall
29be effective as provided for in paragraph (4). As used in this
30paragraph, “significantly lower” means an average per-visit rate
31decrease in excess of 2.5 percent.

32(6) Notwithstanding paragraph (4), if the approved
33scope-of-service change or changes were initially implemented
34on or after the first day of an FQHC’s or RHC’s fiscal year ending
35in calendar year 2001, but before the adoption and issuance of
36written instructions for applying for a scope-of-service change,
37the adjusted reimbursement rate for that scope-of-service change
38shall be made retroactive to the date the scope-of-service change
39was initially implemented. Scope-of-service changes under this
40paragraph shall be required to be submitted within the later of 150
P5    1days after the adoption and issuance of the written instructions by
2the department, or 150 days after the end of the FQHC’s or RHC’s
3fiscal year ending in 2003.

4(7) All references in this subdivision to “fiscal year” shall be
5construed to be references to the fiscal year of the individual FQHC
6or RHC, as the case may be.

7(f) (1) An FQHC or RHC may request a supplemental payment
8if extraordinary circumstances beyond the control of the FQHC
9or RHC occur after December 31, 2001, and PPS payments are
10insufficient due to these extraordinary circumstances. Supplemental
11payments arising from extraordinary circumstances under this
12subdivision shall be solely and exclusively within the discretion
13of the department and shall not be subject to subdivision (l). These
14supplemental payments shall be determined separately from the
15scope-of-service adjustments described in subdivision (e).
16Extraordinary circumstances include, but are not limited to, acts
17of nature, changes in applicable requirements in the Health and
18Safety Code, changes in applicable licensure requirements, and
19changes in applicable rules or regulations. Mere inflation of costs
20 alone, absent extraordinary circumstances, shall not be grounds
21for supplemental payment. If an FQHC’s or RHC’s PPS rate is
22sufficient to cover its overall costs, including those associated with
23the extraordinary circumstances, then a supplemental payment is
24not warranted.

25(2) The department shall accept requests for supplemental
26payment at any time throughout the prospective payment rate year.

27(3) Requests for supplemental payments shall be submitted in
28writing to the department and shall set forth the reasons for the
29request. Each request shall be accompanied by sufficient
30documentation to enable the department to act upon the request.
31Documentation shall include the data necessary to demonstrate
32that the circumstances for which supplemental payment is requested
33meet the requirements set forth in this section. Documentation
34shall include all of the following:

35(A) A presentation of data to demonstrate reasons for the
36FQHC’s or RHC’s request for a supplemental payment.

37(B) Documentation showing the cost implications. The cost
38impact shall be material and significant, two hundred thousand
39dollars ($200,000) or 1 percent of a facility’s total costs, whichever
40is less.

P6    1(4) A request shall be submitted for each affected year.

2(5) Amounts granted for supplemental payment requests shall
3be paid as lump-sum amounts for those years and not as revised
4PPS rates, and shall be repaid by the FQHC or RHC to the extent
5that it is not expended for the specified purposes.

6(6) The department shall notify the provider of the department’s
7discretionary decision in writing.

8(g) (1) An FQHC or RHC “visit” means a face-to-face
9encounter between an FQHC or RHC patient and a physician,
10physician assistant, nurse practitioner, certified nurse-midwife,
11clinical psychologist, licensed clinical social worker, or a visiting
12nurse. For purposes of this section, “physician” shall be interpreted
13in a manner consistent with the Centers for Medicare and Medicaid
14Services’ Medicare Rural Health Clinic and Federally Qualified
15Health Center Manual (Publication 27), or its successor, only to
16the extent that it defines the professionals whose services are
17reimbursable on a per-visit basis and not as to the types of services
18that these professionals may render during these visits and shall
19include a physician and surgeon,begin insert osteopath,end insert podiatrist, dentist,
20optometrist, and chiropractor. A visit shall also include a
21face-to-face encounter between an FQHC or RHC patient and a
22comprehensive perinatalbegin delete servicesend delete practitioner, as defined in Section
23begin delete 51179.1end deletebegin insert 51179.7end insert of Title 22 of the California Code of Regulations,
24providing comprehensive perinatal services, a four-hour day of
25attendance at an adult day health care center, and any other provider
26identified in the state plan’s definition of an FQHC or RHC visit.

27(2) (A) A visit shall also include a face-to-face encounter
28between an FQHC or RHC patient and a dentalbegin delete hygienist orend delete
29begin insert hygienist,end insert a dental hygienist in alternativebegin delete practice.end deletebegin insert practice, or a
30marriage and family therapist.end insert

31(B) Notwithstanding subdivision (e), an FQHC or RHC that
32currently includes the cost of the services of a dental hygienist in
33alternativebegin delete practiceend deletebegin insert practice, or a marriage and family therapistend insert
34 for the purposes of establishing its FQHC or RHC rate shall apply
35for an adjustment to its per-visit rate, and, after the rate adjustment
36has been approved by the department, shall bill these services as
37a separate visit. However, multiple encounters with dental
38professionalsbegin insert or marriage and family therapistsend insert that take place on
39the same day shall constitute a single visit. The department shall
40develop the appropriate forms to determine which FQHC’s orbegin delete RHCend delete
P7    1begin insert RHC’send insert rates shall be adjusted and to facilitate the calculation of
2the adjusted rates. An FQHC’s or RHC’s application for, or the
3department’s approval of, a rate adjustment pursuant to this
4subparagraph shall not constitute a change in scope of service
5within the meaning of subdivision (e). An FQHC or RHC that
6applies for an adjustment to its rate pursuant to this subparagraph
7may continue to bill for all other FQHC or RHC visits at its existing
8per-visit rate, subject to reconciliation, until the rate adjustment
9for visits between an FQHC or RHC patient and a dentalbegin delete hygienist
10orend delete
begin insert hygienist,end insert a dental hygienist in alternativebegin delete practiceend deletebegin insert practice, or
11a marriage and family therapistend insert
has been approved. Any approved
12increase or decrease in the provider’s rate shall be made within
13six months after the date of receipt of the department’s rate
14adjustment forms pursuant to this subparagraph and shall be
15retroactive to the beginning of the fiscal year in which the FQHC
16or RHC submits the request, but in no case shall the effective date
17be earlier than January 1, 2008.

18(C) An FQHC or RHC that does not provide dentalbegin delete hygienist
19orend delete
begin insert hygienist,end insert dental hygienist in alternativebegin delete practiceend deletebegin insert practice, or
20marriage and family therapistend insert
services, and later elects to add these
21services, shall process the addition of these services as a change
22in scope of service pursuant to subdivision (e).

23(h) If FQHC or RHC services are partially reimbursed by a
24third-party payer, such as a managed care entity (as defined in
25Section 1396u-2(a)(1)(B) of Title 42 of the United States Code),
26the Medicare Program, or the Child Health and Disability
27 Prevention (CHDP) program, the department shall reimburse an
28FQHC or RHC for the difference between its per-visit PPS rate
29and receipts from other plans or programs on a contract-by-contract
30basis and not in the aggregate, and may not include managed care
31financial incentive payments that are required by federal law to
32be excluded from the calculation.

33(i) (1) An entity that first qualifies as an FQHC or RHC in the
34year 2001 or later, a newly licensed facility at a new location added
35to an existing FQHC or RHC, and any entity that is an existing
36FQHC or RHC that is relocated to a new site shall each have its
37reimbursement rate established in accordance with one of the
38following methods, as selected by the FQHC or RHC:

39(A) The rate may be calculated on a per-visit basis in an amount
40that is equal to the average of the per-visit rates of three comparable
P8    1FQHCs or RHCs located in the same or adjacent area with a similar
2caseload.

3(B) In the absence of three comparable FQHCs or RHCs with
4a similar caseload, the rate may be calculated on a per-visit basis
5in an amount that is equal to the average of the per-visit rates of
6three comparable FQHCs or RHCs located in the same or an
7adjacent service area, or in a reasonably similar geographic area
8with respect to relevant social, health care, and economic
9characteristics.

10(C) At a new entity’s one-time election, the department shall
11establish a reimbursement rate, calculated on a per-visit basis, that
12is equal to 100 percent of the projected allowable costs to the
13FQHC or RHC of furnishing FQHC or RHC services during the
14first 12 months of operation as an FQHC or RHC. After the first
1512-month period, the projected per-visit rate shall be increased by
16the Medicare Economic Index then in effect. The projected
17allowable costs for the first 12 months shall be cost settled and the
18prospective payment reimbursement rate shall be adjusted based
19on actual and allowable cost per visit.

20(D) The department may adopt any further and additional
21methods of setting reimbursement rates for newly qualified FQHCs
22or RHCs as are consistent with Section 1396a(bb)(4) of Title 42
23of the United States Code.

24(2) In order for an FQHC or RHC to establish the comparability
25of its caseload for purposes of subparagraph (A) or (B) of paragraph
26(1), the department shall require that the FQHC or RHC submit
27its most recent annual utilization report as submitted to the Office
28of Statewide Health Planning and Development, unless the FQHC
29or RHC was not required to file an annual utilization report. FQHCs
30or RHCs that have experienced changes in their services or
31caseload subsequent to the filing of the annual utilization report
32may submit to the department a completed report in the format
33applicable to the prior calendar year. FQHCs or RHCs that have
34not previously submitted an annual utilization report shall submit
35to the department a completed report in the format applicable to
36the prior calendar year. The FQHC or RHC shall not be required
37to submit the annual utilization report for the comparable FQHCs
38or RHCs to the department, but shall be required to identify the
39comparable FQHCs or RHCs.

P9    1(3) The rate for any newly qualified entity set forth under this
2subdivision shall be effective retroactively to the later of the date
3that the entity was first qualified by the applicable federal agency
4as an FQHC or RHC, the date a new facility at a new location was
5added to an existing FQHC or RHC, or the date on which an
6existing FQHC or RHC was relocated to a new site. The FQHC
7or RHC shall be permitted to continue billing for Medi-Cal covered
8 benefits on a fee-for-service basisbegin insert under its existing provider
9numberend insert
until it is informed of itsbegin delete enrollment as anend delete FQHC orbegin delete RHC,end delete
10begin insert RHC enrollment approval,end insert and the department shall reconcile the
11difference between the fee-for-service payments and the FQHC’s
12or RHC’s prospective payment rate at that time.

13(j) Visits occurring at an intermittent clinic site, as defined in
14subdivision (h) of Section 1206 of the Health and Safety Code, of
15an existing FQHC or RHC, or in a mobile unit as defined by
16paragraph (2) of subdivision (b) of Section 1765.105 of the Health
17and Safety Code, shall be billed by and reimbursed at the same
18rate as the FQHC or RHC establishing the intermittent clinic site
19or the mobile unit, subject to the right of the FQHC or RHC to
20request a scope-of-service adjustment to the rate.

21(k) An FQHC or RHC may elect to have pharmacy or dental
22services reimbursed on a fee-for-service basis, utilizing the current
23fee schedules established for those services. These costs shall be
24adjusted out of the FQHC’s or RHC’s clinic base rate as
25scope-of-service changes. An FQHC or RHC that reverses its
26election under this subdivision shall revert to its prior rate, subject
27to an increase to account for allbegin delete MEIend deletebegin insert Medicare Economic Indexend insert
28 increases occurring during the intervening time period, and subject
29to any increase or decrease associated with applicable
30begin delete scope-of-servicesend deletebegin insert scope-of-serviceend insert adjustments as provided in
31subdivision (e).

32(l) FQHCs and RHCs may appeal a grievance or complaint
33concerning ratesetting, scope-of-service changes, and settlement
34of cost report audits, in the manner prescribed by Section 14171.
35The rights and remedies provided under this subdivision are
36cumulative to the rights and remedies available under all other
37provisions of law of this state.

38(m) The department shall,begin delete byend delete no later than March 30, 2008,
39promptly seek all necessary federal approvals in order to implement
40this section, including any amendments to the state plan. To the
P10   1extent that any element or requirement of this section is not
2approved, the department shall submit a request to the federal
3Centers for Medicare and Medicaid Services for any waivers that
4would be necessary to implement this section.

5(n) The department shall implement this section only to the
6extent that federal financial participation is obtained.



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