BILL ANALYSIS Ó AB 1863 Page 1 Date of Hearing: March 29, 2016 ASSEMBLY COMMITTEE ON HEALTH Jim Wood, Chair AB 1863 (Wood) - As Introduced February 10, 2016 SUBJECT: Medi-Cal: federally qualified health centers: rural health centers. SUMMARY: Adds marriage and family therapists (MFTs) to the list of healthcare professionals that qualify for a face-to-face encounter with a patient at Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs) for purposes of a per-visit Medi-Cal payment under the prospective payment system (PPS). Makes conforming changes, including requiring an FQHC or an RHC that includes the costs of the services of an MFT to apply for an adjustment to its per-visit rate; that multiple encounters with an MFT on the same day constitutes a single visit; adjustment of rates; and, change in scope of service requirements. EXISTING LAW: 1)Establishes the Medi-Cal program to provide comprehensive health benefits to low-income persons administered by the Department of Health Care Services (DHCS). AB 1863 Page 2 2)Establishes a statutory structure for Medi-Cal payments being made under the PPS. These payments are for services provided by FQHCs and RHCs on a per-visit basis with rates determined prospectively. Federal law requires states to use a PPS system to pay clinics. 3)Identifies those services that may be reimbursed as services identified in federal law as covered benefits for FQHCs and RHCs. 4)Defines visit as a face to face encounter with a physicians, physician assistant, nurse practitioner, certified nurse midwife, clinical psychologist, licensed clinical social worker, visiting nurse, osteopath, podiatrist, dentist, dental hygienists, optometrist, chiropractor, comprehensive perinatal services practitioner, or adult day health care center. Authorizes other providers if identified in the state plan. 5)Allows only one visit per day to be reimbursed by Medi-Cal, except for a subsequent visit by a patient to a dental provider. FISCAL EFFECT: This bill has not been analyzed by a fiscal committee. AB 1863 Page 3 COMMENTS: 1)PURPOSE OF THIS BILL. According to the author, psychologists and licensed clinical social workers are currently employed by RHCs and FQHCs and these clinics receive reimbursement for these providers. While clinics may employ an MFT, there is not a reimbursement mechanism for these professionals, which creates a disincentive to hire MFTs. MFTs are billable and recognized providers under the Medi-Cal program but not in community settings. Within the primary care setting, up to 26% of patients have some mental health disorder. This measure brings parity throughout the Medi-Cal program and allows for the utilization of all qualified mental health providers, regardless of how or where the treatment is provided. 2)BACKGROUND. a) FQHCs and RHCs. FQHCs and RHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs and 350 RHCs in California. All FQHCs, and a majority of the RHCs, are either non-profit community clinics or government entities. Because clinics are safety net providers, their continued survival depends heavily on the stability and adequacy of revenues from the Medi-Cal program. FQHCs and RHCs are paid by Medi-Cal on a "per visit" basis in an amount equal to the clinic's cost of delivering services. Essentially, DHCS calculates the annual cost of care provided by each clinic and divides the total by the number of visits to determine a per visit rate. AB 1863 Page 4 Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers. Mental health and substance abuse services are part of the essential health care benefits under the Patient Protection and Affordable Care Act (ACA). As such they are a part of Medi-Cal. Along with the expansion of these benefits, the expansion of the Medi-Cal program overall has increased the number of beneficiaries to over 12 million, placing even greater demands on Medi-Cal providers. b) Medi-Cal Reimbursement to FQHCs and RHCs. Reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS. For Medi-Cal managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its per-visit PPS rate and the payment made by the plan. This payment is known as a "wrap around" payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate. c) Same day visits. DHCS' policy on same day visits, as stated in its in its State Plan Amendment, is that encounters with more than one health professional and/or multiple encounters with the same health professional, which take place on the same day and at a single FQHC or RHC location, constitute a single visit, except that more than one visit may be counted on the same day: i) when the clinic patient, after the first visit, suffers illness or injury requiring another diagnosis or treatment; or, ii) when the clinic patient has a face-to-face encounter with a dentist or dental hygienist and then also has a face-to-face encounter with another health professional or comprehensive perinatal services practitioner on the same AB 1863 Page 5 date. Mental health visits are treated for Medi-Cal billing purposes as a same day visit, and separate billing on the same day for a medical visits and a mental health visit is not allowed. 3)SUPPORT. The California Primary Care Association, the sponsor of this measure, and the Association of California Healthcare Districts state that as part of the implementation of the ACA, mental health and substance use disorder services were deemed an essential health benefit for Medi-Cal managed care plans. Recognizing the workforce shortage of personnel able to meet the demand for mental health services created by expanded health insurance coverage, California updated the State Plan to include MFTs as Medi-Cal mental health providers. However, existing law to allow FQHCs and RHCs to bill for the services of MFTs was not changed. The inclusion of MFTs will address a serious gap in behavioral health care access and increase cultural competency and diversity of California's workforce. The North Coast Clinics Network points out that investing in preventive behavioral health services in the primary care setting is essential in linking patients to services in a timely manner while lowering the total cost of care. 4)OPPOSITION. The National Association of Social Workers, California Chapter, believe this bill is unnecessary as there are sufficient social workers to fill the positions needed and only social workers have extensive training in providing culturally competent services to disadvantaged and impoverished communities. 5)RELATED LEGISLATION. SB 1335 (Mitchell), pending in Senate Health Committee, authorizes FQHCs and RHCs to elect to have Drug Medi-Cal and specialty mental health services to be reimbursed on a fee-for-service basis, according to the same criteria that applies to pharmacy and dental services. AB 1863 Page 6 6)PREVIOUS LEGISLATION. a) AB 858 (Wood) of 2015 included a similar provision adding MFTs to the list of healthcare professionals that could bill Medi-Cal for purposes of an FQHC or RHC visit. SB 858 and five other bills were vetoed by Governor Brown who indicated that such "bills unnecessarily codify certain existing health care benefits or require the expansion or development of new benefits and procedures in the Medi-Cal program. Taken together, these bills would require new spending at a time when there is considerable uncertainty in the funding of this program. Until the fiscal outlook for Medi-Cal is stabilized, I cannot support any of these measures." b) AB 690 (Wood) of 2015 was substantially similar to the provisions of this bill but was held in the Assembly Appropriations suspense file. c) SB 260 (Steinberg) of 2007 was substantially similar to this bill. SB 260 was vetoed by Governor Schwarzenegger who cited concerns about the fiscal impact of the bill. 7)POLICY COMMENT. Last year, the Governor vetoed AB 858 (Wood) which included similar provisions contained in this bill. The author points out that the Governor's veto message of AB 858 cited the instability of the Medi-Cal Program last year. Following the resolution of the Managed Care Organization tax this year and the renewed stability of the Medi-Cal system, the author believes that the Governor will accept the changes that are being proposed in this measure. REGISTERED SUPPORT / OPPOSITION: AB 1863 Page 7 Support California Primary Care Association (sponsor) California Association of Marriage and Family Therapists AIDS Project Los Angeles Association of California Healthcare Districts Community Clinic Association of Los Angeles County County Health Executives Association of California North Coast Clinic Network Open Door Community Health Centers Opposition California Psychological Association AB 1863 Page 8 National Association of Social Workers, California Chapter Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916) 319-2097