BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1863| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1863 Author: Wood (D) Amended: 5/27/16 in Assembly Vote: 21 SENATE HEALTH COMMITTEE: 9-0, 6/22/16 AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen ASSEMBLY FLOOR: 78-1, 6/1/16 - See last page for vote SUBJECT: Medi-Cal: federally qualified health centers: rural health centers SOURCE: California Primary Care Association California Association of Marriage and Family Therapists DIGEST: This bill adds marriage and family therapists to the list of healthcare professionals that qualify for a face-to-face encounter with a patient at Federally Qualified Health Centers or Rural Health Clinics for purposes of a per-visit Medi-Cal payment under the prospective payment system. ANALYSIS: Existing law: AB 1863 Page 2 1)Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), which provides comprehensive health care coverage for low-income individuals. Federally Qualified Health Center (FQHC) and Rural Health Clinic (RHC) services are covered benefits under the Medi-Cal program. 2)Requires FQHCs and RHCs to be reimbursed on a per-visit basis. Defines a "visit" as a face-to-face encounter between an FQHC or RHC patient and the following health care providers: a physician, physician assistant, nurse practitioner, certified nurse midwife, clinical psychologist, licensed clinical social worker, visiting nurse, podiatrist, dentist, optometrist, chiropractor, comprehensive perinatal services practitioner providing comprehensive perinatal services, a four-hour day of attendance at an Adult Day Health Care Center; and, any other provider identified in the state plan's definition of an FQHC or RHC visit. The reimbursement structure for FQHCs and RHCs is known as the prospective payment system (PPS). 3)Requires FQHC and RHC per-visit rates to be increased by the Medicare Economic Index (MEI) applicable to primary care services in the manner provided for in federal law. 4)Permits FQHC or RHC to apply for an adjustment to its per-visit rate based on a change in the scope of services provided by the FQHC or RHC. Requires rate changes based on a change in the scope of services provided by an FQHC or RHC to be evaluated in accordance with Medicare reasonable cost principles. This bill: 1)Adds marriage and family therapists (MFTs) to the list of health care professionals that qualify for a face-to-face encounter with a patient at FQHCs or RHCs for purposes of a per-visit Medi-Cal payment under the PPS. 2)Requires, if an FQHC or RHC that currently includes the cost of the services of a MFT for the purposes of establishing its FQHC or RHC rate and chooses to bill these services as a separate visit, the FQHC or RHC to apply for an adjustment to its per-visit PPS rate. Requires the FQHC or RHC, after the rate adjustment has been approved by DHCS, to bill these AB 1863 Page 3 services as a separate visit. 3)Permits an FQHC or RHC that applies for an adjustment to its PPS rate to continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a MFT has been approved. 4)Requires any approved increase or decrease in the provider's PPS rate to be made within six months after the date of receipt of DHCS' rate adjustment forms and to be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case the effective date be earlier than January 1, 2008. 5)Requires an FQHC or RHC that does not provide MFT services, and later elects to add these services and to bill for these services as a separate visit to process the addition of these services as a change in scope of service. 6)Requires multiple encounters with MFTs that take place on the same day to constitute a single visit. 7)Modifies existing law FQHC and RHC dental hygienist in alterative practice provisions when the FQHC and RHC currently includes the cost of the services of a dental hygienist in alternative practice in its FQHC or RHC rate by requiring the FQHC or RHC to apply for an adjustment to its per-visit rate if the FQHC or RHC chooses to bill these services as a separate visit. 8)Modifies existing law FQHC and RHC provisions that require an FQHC or RHC that does not provide dental hygienist in alternative practice services, and later elects to add these services to process the addition of those services as a change in scope of service if the FQHC and RHC bills these services as a separate visit. Comments 1)Author's statement. According to the author, as part of California's implementation of the Affordable Care Act (ACA), mental health and substance abuse disorder services were AB 1863 Page 4 deemed an essential health benefit for Medi-Cal managed care plans. Along with the expansion of behavioral health benefits for Medi-Cal beneficiaries, there has been an extensive enrollment expansion as well. Within the primary care setting, up to 26% of patients have some mental health disorder. One in seven Californians are served by community clinics and health centers (CCHCs) and behavioral health services are available onsite at CCHCs in 50 of California's 58 counties. It is essential we maximize availability to qualified mental health providers and assure access is offered in key areas served primarily by rural health clinics and FQHCs. As of February 2012, there were 31,865 licensed MFTs in California, and 19,009 LCSW and 16,228 licensed psychologists. Adding MFTs to the list of PPS billable providers will solve existing gaps in workforce capacity by providing clinics with an adequate source of funding for their employment, which will also help meet the demand for mental health services, particularly in rural communities. 2)Background on FQHCs and RHCs. FQHCs and RHCs are federal designated clinics that are required to serve medically underserved populations that provide primary care services. FQHCs and RHCs provided over 10.5 million Medi-Cal visits in 2013. Demand for Medi-Cal services is expected to increase due to the expansion of Medi-Cal eligibility as a result of the Medicaid expansion and the enrollment simplification provisions of the federal ACA. Medi-Cal 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. Each FQHC and RHC has a specific PPS Medi-Cal rate for each face-to-face encounter, irrespective of the reason for the visit. 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. FQHCs and RHCs are both reimbursed under the PPS system. The average ($178.14) and median ($157.24) PPS rate paid to an FQHC and RHC in 2014-15 is considerably higher than the most AB 1863 Page 5 common primary care visit reimbursement rates in Medi-Cal, but it also includes additional services not included in a primary care visit. The rationale for the enhanced reimbursement is to ensure that FQHCs and RHCs do not use federal grant funds intended for uninsured and special needs populations to back-fill for potentially below-cost Medicare or Medi-Cal rates. Because FQHCs are required to receive an MEI adjustment to their rates under federal law, and because of their role in providing primary care access to the Medi-Cal population, FQHCs have been exempted from the Medi-Cal rate reductions enacted in prior budget years. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: 1)One-time costs, likely in the low millions to recalculate the PPS rate for clinics that are providing MFT 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 costs to DHCS would be about $5 million. 2)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 AB 1863 Page 6 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.) 3)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. SUPPORT: (Verified 8/9/16) California Primary Care Association (co-source) California Association of Marriage and Family Therapists (co-source) AIDS Project Los Angeles Arroyo Vista Family Health Center Association of California Healthcare Districts Borrego Health Clinicas De Salud Del Pueblo Coalition of Orange County Community Health Centers Community Clinic Association of Los Angeles County Community Health Partnership County Behavioral Health Directors Assoc. County Health Executives Association of California County of Santa Clara Family Health Centers of San Diego Golden Valley Health Center Health Alliance of Northern CA La Maestra Community Health Centers Northeast Valley Health Corporation Omni Family Health Operation Samahan San Joaquin County Westside Family Health Center AB 1863 Page 7 West County Health Centers OPPOSITION: (Verified8/9/16) California Psychological Association Department of Finance National Association of Social Workers, California Chapter ARGUMENTS IN SUPPORT: This bill is sponsored by CaliforniaHealth+ Advocates (CH+A is also known as the California Primary Care Association (CPCA)), which writes that this bill will allow MFTs working in FQHCs to become billable providers in Medi-Cal. CPCA writes, as part of California's implementation of the ACA, mental health and substance use disorder services were deemed an essential health benefit for Medi-Cal managed care health plans. Recognizing the workforce shortage of personnel able to meet the demand for mental health services created by expanded insurance coverage, DHCS updated the Medicaid State Plan to include MFTs as Medi-Cal mental health providers. However, the State did not update FQHC statute to allow FQHCs and RHCs to include MFTs as Medi-Cal billable providers. CPCA writes that this bill will also lower the total cost of care because these patients will be seeking preventive, primary care services, in order to address their behavioral health needs before they end up in crisis and access care through much more expensive and less ineffective avenues such as an emergency room. The County Behavioral Health Directors Associations (CBHDA) writes in support that the ACA expanded mental health and substance use disorders and has resulted in a major expansion in the number of Medi-Cal beneficiaries. CBHDA writes that it is appropriate to maximize access to qualified mental health providers and assure access is available in key areas primarily served by RHCs and FQHCs. CBHDA concludes that adding MFTs to the list of PPS billable providers will reduce existing gaps in workforce capacity by providing clinics with an adequate source of funding for their professionals and will help meet the demand for mental health services. ARGUMENTS IN OPPOSITION: The National Association of Social Workers-California Chapter (NASW-CA) writes in opposition that AB 1863 Page 8 this bill is unnecessary as there are sufficient numbers of unemployed social workers that can fill these positions and California schools of social work graduate approximately 10,000 bachelors and master's degree social workers each year, and there are another 13,000 in the pipeline to receive their full license. In addition, NASW-CA maintains these clinics serve a population that is very diverse and in poverty, and that while both MFT's and social workers have mental health training, only social workers have extensive training in providing culturally competent services to these disadvantaged and impoverished communities. NASW-CA states a social worker is trained to view clients from the person-in-the-environment/whole person perspective, as opposed to simply focusing on the pathology of a mental illness. Finally, NASW-CA argues this bill could be very costly for each FQHC to recalculate their PPS rate and it believes this bill is costly, unnecessary and ill-timed as a recently enacted law contains a pilot program for a different payment methodology for FQHCs. The California Psychological Association writes in opposition that the long history of non-competitive salaries and potentially remote work locations would seem to necessitate this bill. However, there has been movement by the psychology profession, resulting in increases of psychologists in these settings. The move towards integrated health care model makes psychologists poised to be the best trained clinicians to work with a team of interdisciplinary clinicians in FQHCs and RHCs. The Department of Finance is opposed to this measure, arguing this bill is unnecessary and will result in unknown but potentially significant General Fund costs in the Medi-Cal program. ASSEMBLY FLOOR: 78-1, 6/1/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, AB 1863 Page 9 Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NOES: Harper NO VOTE RECORDED: Gallagher Prepared by:Scott Bain / HEALTH / (916) 651-4111 8/15/16 19:36:08 **** END ****