BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1863

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          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  

          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).


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          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  

          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  

          FISCAL EFFECT:  This bill has not been analyzed by a fiscal  


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          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  


             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.


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             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  
             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  


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               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.


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             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.   



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          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


          California Psychological Association


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          National Association of Social Workers, California Chapter

          Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916) 319-2097