BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1863

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          1863 (Wood)

          As Amended  August 17, 2016

          Majority vote

          |ASSEMBLY:  |78-1  |(June 1, 2016) |SENATE: |39-0  |(August 22,      |
          |           |      |               |        |      |2016)            |
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          |           |      |               |        |      |                 |

          Original Committee Reference:  HEALTH

          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  

          The Senate amendments make this bill operative only if SB 1335  
          (Mitchell) of the current legislative session and this bill are  
          both chaptered and become effective on or before January 1,  
          2017, and this bill is chaptered last.


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          FISCAL EFFECT:  According to the Senate Appropriations  

          1)One-time costs, likely in the low millions to recalculate the  
            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 costs to the Department of  
            Health Care Services 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  
            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  


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            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.

          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.

          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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          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.

          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:  


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