BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1863|
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                                   THIRD READING 


          Bill No:  AB 1863
          Author:   Wood (D) 
          Amended:  8/17/16 in Senate
          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. 

          Senate Floor Amendments of 8/17/16 add provisions to prevent  
          chaptering out SB 1335 (Mitchell).
          
          ANALYSIS:  

          Existing law:








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          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  








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            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  
            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.










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          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  
            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  








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            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  
            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  








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            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.) 

          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 8/17/16)

          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.








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          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
          West County Health Centers


          OPPOSITION:   (Verified8/17/16)


          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)  








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          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  
          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  








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          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,  
            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
          8/18/16 16:34:41


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