BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 1863

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          1863 (Wood)

          As Amended  May 27, 2016

          Majority vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Health          |18-0 |Wood, Maienschein,    |                    |
          |                |     |Bonilla, Burke,       |                    |
          |                |     |Campos, Chiu,         |                    |
          |                |     |Dababneh, Gomez,      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger HernŠndez,      |                    |
          |                |     |Lackey, Olsen,        |                    |
          |                |     |Patterson,            |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Ridley-Thomas,        |                    |
          |                |     |Rodriguez, Santiago,  |                    |
          |                |     |Steinorth, Thurmond,  |                    |
          |                |     |Waldron               |                    |
          |                |     |                      |                    |
          |Appropriations  |19-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |


                                                                    AB 1863

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          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger HernŠndez,      |                    |
          |                |     |Holden, Jones,        |                    |
          |                |     |Obernolte, Quirk,     |                    |
          |                |     |Santiago, Wagner,     |                    |
          |                |     |Weber, Wood           |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |

          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 that  
          chooses to bill these services as a separate visit, 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  

          FISCAL EFFECT: According to the Assembly Appropriations  

          1)One-time costs, potentially in the millions, to recalculate  
            the PPS rate for clinics that are providing MFT services or  
            wish to add those services (GF/federal).  The bill requires  
            clinics that currently include marriage and family therapist  
            services in the costs used to calculate their PPS rate to seek  


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            a recalculation of the rate to allow the clinic to bill for  
            visits.  Recalculating a PPS rate requires a detailed review  
            of utilization and expenditures by clinics.  For example,  
            assuming the cost per review is about $10,000 and 500 clinics  
            seek a recalculation, the administrative costs to the  
            Department of Health Care Services (DHCS) would be about $5  

          2)No significant increase in costs is expected for the current  
            level of MFT services in eligible clinics.  A clinic employing  
            MFTs may be able to bill for more face-to-face encounters, but  
            the PPS rate will be adjusted to account for those visits such  
            that there is no projected net cost impact.

          3)On the other hand, if this bill increases access to mental  
            health services in Medi-Cal by increasing the ability of  
            clinics to employ qualified mental health professionals where  
            the supply previously was constrained, it could result in  
            unknown cost pressure to Medi-Cal to fund additional visits.   
            There are nearly 40,000 licensed MFTs in the state, as  
            compared to 22,000 LCSWs and 21,000 psychologists, suggesting  
            increased flexibility to hire MFTs could lead to better access  
            to mental health visits.  

          COMMENTS:  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.


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          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.

          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.

          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.


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          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:  1) when the  
          clinic patient, after the first visit, suffers illness or injury  
          requiring another diagnosis or treatment; or, 2) 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 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.

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