BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1863 (Wood) - Medi-Cal:  federally qualified health centers:   
          rural health centers
          
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          |Version: May 27, 2016           |Policy Vote: HEALTH 9 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  AB 1863 would add marriage and family therapists  
          (MFTs) to the list of health care providers that qualify for  
          face-to-face encounter payments from the Medi-Cal program to  
          federally qualified health centers and rural health clinics.


          Fiscal  
          Impact:  
           One-time costs, likely in the low millions to recalculate the  
            prospective payment system (PPS) rate for clinics that are  
            providing marriage and family therapist services or wish to  
            add those services (General Fund and federal funds). The bill  
            requires clinics that are currently including marriage and  
            family therapist services in the costs used to calculate their  
            PPS rate to seek a recalculation of the rate to allow the  
            clinic to bill for face-to-face visits. The process for  
            recalculating a PPS rate requires a detailed review of  
            utilization and expenditures by clinics. For example, assuming  
            that the cost of performing such a review is about $10,000 and  
            that 500 clinics seek a recalculation, the administrative  







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            costs to the Department of Health Care Services would be about  
            $5 million.

           No significant increase in costs is expected for MFT services  
            currently being provided in eligible clinics. Under the  
            current system for calculating the PPS rate paid by Medi-Cal  
            to federally qualified health centers and rural health  
            clinics, the total amount of eligible services (including  
            mental health services) provided to Medi-Cal beneficiaries is  
            divided by the number of eligible face-to-face visits (e.g. a  
            visit with a physician or clinical psychologist). Because the  
            bill requires a recalculation of the PPS to account for the  
            fact that MFTs would be eligible for face-to-face billing  
            before a clinic can bill for such an encounter, the Medi-Cal  
            program is not expected to pay more for services currently  
            being provided. (In other words, a clinic employing MFTs would  
            be able to bill for more face-to-face encounters, but the PPS  
            rate would be lower to account for those visits.)

           Unknown potential increase in Medi-Cal paid visits to eligible  
            clinics. Under current law, a Medi-Cal beneficiary who visits  
            a federally qualified health center or rural health clinic  
            must be seen by certain types of providers (not including  
            MFTs) in order for the clinic to bill Medi-Cal for the visit.  
            In theory, the bill could allow clinics to bill Medi-Cal for  
            more overall visits, because it may be easier to hire MFTs  
            than other practitioners, such as physicians or psychologists.  
            However, under current practice, clinics can already qualify a  
            patient visit by having the patient see seven categories of  
            health care providers. The actual impact on overall  
            visitations to qualifying clinics may be small, given that  
            clinics can already use a variety of practitioners to qualify  
            the patient visit for payment from Medi-Cal.


          Background:  Under current law, the Medi-Cal program provides health care  
          coverage for certain low income and disabled individuals.

          In the Medi-Cal fee-for-service system, federally qualified  
          health centers and rural health clinics are paid a per-visit  
          payment known as the prospective payment system (PPS). The PPS  
          rate is based on a baseline rate that reflects a federally  
          qualified health center's costs to provide services to in  
          1999-2000, adjusted for inflation. Those costs include the costs  








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          of eligible face-to-face visits (e.g. with a physician) and  
          other services provided to Medi-Cal beneficiaries that are not  
          eligible for billing as a face-to-face visit (e.g. visits with a  
          registered nurse). When a Medi-Cal beneficiary in the managed  
          care system receives care from a federally qualified health  
          center, the managed care plan makes a per-visit payment to the  
          center. Because the rates paid by managed care plans are  
          significantly below the PPS rate, the state makes a supplemental  
          "wrap-around" payment to the federally qualified health center  
          to bring the total payment up to the PPS rate.

          Under current law, clinics may bill Medi-Cal for face-to-face  
          visits with several categories of health professionals,  
          including physicians, nurse practitioners, clinical social  
          workers, and others. Clinics cannot bill for face-to-face visits  
          with MFTs. However, the cost to provide services to Medi-Cal  
          beneficiaries by MFTs can be included in the calculation of the  
          PPS rate. (MFTs were added as eligible providers of psychology  
          services in the Medi-Cal program beginning in 2014.)




          Proposed Law:  
           AB 1863 would add marriage and family therapists (MFTs) to the  
          list of health care providers that qualify for face-to-face  
          encounter payments from the Medi-Cal program to federally  
          qualified health centers and rural health clinics.
          The bill would require a federally qualified health center or a  
          rural health clinic that currently includes the cost of MFT  
          services in its PPS rate to seek a recalculation of the PPS rate  
          by the Department of Health Care Services. Once the rate  
          adjustment has been approved, the bill would authorize an  
          eligible clinic to bill for those services as a separate visit.


          The bill would require a federally qualified health center or a  
          rural health clinic that does not currently provide services by  
          MFTs that wants to add such services to do so by making a change  
          in scope of service (which requires a recalculation of the PPS  
          rate).











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          Related  
          Legislation:  
           AB 1335 (Mitchell) authorizes federally qualified health  
            centers and rural health clinics to receive reimbursement for  
            services county specialty mental health plans and through the  
            Drug Medi-Cal program. That bill is pending in the Assembly.
           AB 858 (Wood, 2015) was substantially similar to this bill.  
            That bill was vetoed by Governor Brown.


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