SB 147, as amended, Hernandez. Federally qualified health centers.
Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law provides that federally qualified health center (FQHC) services, as described, are covered benefits under the Medi-Cal program, to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. “Visit” is defined as a face-to-face encounter between a patient of an FQHC and specified health care professionals. Existing federal law authorizes a state plan to provide for payment in any fiscal year to an FQHC for specified services in an amount that is determined under an alternative payment methodology (APM) if it is agreed to by the state and the FQHC and results in a payment to the FQHC of an amount that is at least equal to the amount otherwise required to be paid to the FQHC.
This bill would require the department to authorizebegin delete a 3-yearend deletebegin insert anend insert APM pilot project, to commence no sooner than July 1, 2016, for FQHCs that agree to participate.begin insert The bill would require the department to authorize implementation of an APM pilot project with respect to a county for a period of up to end insertbegin insert3 years.end insert The bill would require the department to determine an APM supplemental capitation amount for each APM aid category to be paid
by the department to eachbegin delete principleend deletebegin insert principalend insert health plan that contains at least one participating FQHC in its provider network, as specified.begin delete Under the APM pilot project, participating FQHCs would receive a per member per month wrap-cap payment for each of its APM enrollees, as specified. The bill would require each principal health plan to pay a participating FQHC that is in the plan provider network the wrap-cap amounts, as determined, for each APM enrollee of that FQHC.end delete The bill would require, except as specified, that an evaluation of the APM pilot project be completed by an independent entity within 6 months of the conclusion of the APM pilot project, and would require the independent entity to report the findings to the department
and the Legislature.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Article 4.1 (commencing with Section 14138.1)
2is added to Chapter 7 of Part 3 of Division 9 of the Welfare and
3Institutions Code, to read:
4
For purposes of this article, the following definitions
9apply:
10(a) “Alternative payment methodology” (APM) has the same
11meaning as specified in Section 1396a(bb)(6) of Title 42 of the
12United States Code.
13(b) “APM aid category” means a Medi-Cal category of aid
14designated by the department. For all its APM enrollees in an APM
15aid category, a participating FQHC site shall receive compensation
16as described under the APM pilot project. The APM aid categories
P3 1may include, but are not limited to, all of the following categories
2of aid:
3(1) Adults.
4(2) Children.
5(3) Seniors and persons with disabilities.
6(4) The adult expansion population eligible pursuant to Section
7begin delete 14005.60.end deletebegin insert 14005.60, to the extent the department determines, in
8consultation with health plans and interested FQHCs, that
9sufficient data is available to allow for inclusion of this population
10in the APM pilot project. This paragraph shall not be construed
11to prohibit inclusion of the adult expansion population in the APM
12pilot project on a date subsequent to initial authorization pursuant
13to subdivision (a) of Section 14138.12.end insert
14(c) “APM enrollee” means a member who is assigned by a
15principal health plan orbegin delete secondaryend deletebegin insert subcontractingend insert payer to a
16participating FQHC for primary care services and who is within
17one of the designated APM aid categories.
18(d) “APM enrollee true-up” means the process by which
19payments are adjusted to reflect changes in the number of APM
20enrollees, by APM aid category, for participating FQHCs.
21(e)
end delete
22begin insert(end insertbegin insertd)end insert “APM pilot project” means the pilot project authorized by
23this article.
24(f)
end delete
25begin insert(e)end insert “APM scope of services” means the scope of services for a
26
participating FQHC for which its per-visit rate was determined
27pursuant to Section 14132.100.
28(g)
end delete
29begin insert(f)end insert “APM supplemental capitation” means an additional, APM
30aid category-specific, PMPM amount that is paid by the department
31to a principal health plan having one or more participating FQHCs
32in its provider network.
33(h) “Base payment” means the amount paid by a principal health
34plan and any secondary payer, as applicable, to an FQHC for
35patient services in the APM scope of services with respect to APM
36enrollees of the FQHC pursuant to its contract, exclusive of any
37incentive payments.
Base payments do not include traditional
38wrap-around payments or wrap-cap payment amounts.
39(g) “Clinic-specific PMPM” means the monthly, per assigned
40member, capitated amount the principal health plan or
P4 1subcontracting payer is required to pay to the participating FQHC
2for the APM scope of services. The clinic-specific PMPM is
3exclusive of any incentive payments and shall be developed to
4reflect the amount the participating FQHC would have received
5under the prospective payment system methodology set forth in
6Section 14132.100.
7(i)
end delete
8begin insert(end insertbegin inserth)end insert “FQHC” means any community or public “federally qualified
9health center,” as defined in Section 1396d(l)(2)(B) of Title 42 of
10the United States Code and providing services as defined in Section
111396d(a)(2)(C) of Title 42 of the United States Code.
12(j)
end delete
13begin insert(i)end insert “Member” means a Medi-Cal beneficiary who is enrolled
14with a principal health plan orbegin delete secondaryend deletebegin insert subcontractingend insert payer.
15(k)
end delete
16begin insert(j)end insert “Participating FQHC” meansbegin delete aend deletebegin insert anend insert FQHC participating in
17the APM pilot project at one or more of the FQHC’s sites.
18begin insert “Participating FQHC” also refers to a FQHC’s site that is
19participating in the APM pilot project.end insert
20(l)
end delete
21begin insert(k)end insert “PMPM” and “per member per month” both mean a monthly
22payment made for providing or arranging health care services for
23a member and may refer to a payment by the department to a
24principal health plan, or by a principal health plan to abegin delete secondaryend delete
25begin insert subcontractingend insert payer, or by a principal health plan orbegin delete secondaryend delete
26begin insert subcontractingend insert payer to an FQHC, or from and to other entities as
27specified in this article.
28(m)
end delete
29begin insert(l)end insert “Principal health plan” means an organization or entity that
30enters into a contract with the department pursuant to Article 2.7
31(commencing with Section 14087.3), Article 2.8 (commencing
32with Section 14087.5), Article 2.81 (commencing with Section
3314087.96), Article 2.82 (commencing with Section 14087.98),
34Article 2.91 (commencing with Section 14089), or Chapter 8
35(commencing with Section 14200), to provide or arrange for the
36care of Medi-Cal beneficiaries within a county in which the APM
37pilot project is implemented.
38(n) “Secondary
end delete
39begin insert(m)end insertbegin insert end insertbegin insert“Subcontractingend insert payer” means an organization or entity
40that subcontracts with a principal health plan to provide or arrange
P5 1for the care of its members and contains one or more participating
2FQHCs in its provider network.
3(n) “Traditional encounter” means a face-to-face encounter
4that is recognized as a billable visit, as described in subdivision
5(g) of Section 14132.100.
6(o) “Traditional wrap-around payment” means the supplemental
7payments payable to an FQHC in the absence of the APM pilot
8project with respect to services provided to
Medi-Cal managed
9care enrollees, which are made by the department pursuant to
10subdivision (e) of Section 14087.325 and subdivision (h) of Section
1114132.100.
12(p) “Wrap-cap” means a prospective PMPM amount that is
13determined by APM aid category for each participating FQHC
14site, and is paid monthly by a principal health plan or secondary
15payer to the participating FQHC with respect to its APM enrollees
16in each APM aid category in lieu of a traditional wraparound
17payment.
The Legislature finds and declares all of the
19following:
20(a) The federalbegin insert Patient Protection andend insert Affordable Care Act has
21made and continues to make significant progress in driving health
22care delivery system reforms that emphasize health outcomes,
23efficiency, patientbegin delete satisfactionend deletebegin insert satisfaction,end insert and value.
24(b) California has expanded Medi-Cal to cover more
than 12
25million residents, roughly one-third of the state’s population. To
26meet the needs of the state’s growing patient population, California
27must continue to explore new strategies to expand access to high
28quality and cost-effective primary care services.
29(c) With such a large portion of the state’s population receiving
30
health care services through Medi-Cal, it is imperative that
31patient-centered innovations drive Medi-Cal reforms.
32(d) Health care today is more than a face-to-face visit with a
33provider, but rather a whole-person approach, often including a
34physician, a care team of other health care providers, technology
35inside and outside of a health center, and wellness activities
36including nutrition and exercise classes, all of which are designed
37to be more easily incorporated into a patient’s daily life.
38(e) Accessible health care in a manner that fits a patient’s needs
39is important for improving patient satisfaction, building trust, and
40ultimately improving health outcomes.
P6 1(f) In an attempt to invest up front in health
care services that
2can prevent longer term avoidable high-cost services, thebegin insert federal
3Patient Protection andend insert Affordable Care Act made a significant
4investment in FQHCs.
5(g) FQHCs are essential community providers, providing high
6quality, cost-effective comprehensive primary care services to
7underserved communities.
8(h) Today FQHCs facebegin delete restrictions, however,end deletebegin insert certain restrictionsend insert
9 because the current payment structure reimburses an FQHC only
10when there is abegin delete face-to-face visitend deletebegin inserttraditional encounterend insert with a
11provider. Current law prohibits payment forbegin insert bothend insert a primary care
12visit and mental health visit on the samebegin delete day, a restriction that begin insert day.end insert
13inhibits coordination and efficiency.end delete
14(i) A more practical approach financially incentivizes FQHCs
15to provide the right care at the right time. Restructuring the current
16visit based, fee-for-service model with a capitated equivalent
17affords FQHCs the assurance of payment and the flexibility to
18deliver
care in the most appropriate patient-centered manner.
19(j) A reformed payment methodology will enable FQHCs to
20take advantage of alternativebegin delete touches. Alternative touches, such begin insert
encounters. Alternative encounters, such as group visits,end insert
21asend delete
22 same-day mental health services andbegin delete phoneend deletebegin insert telephoneend insert and email
23consultations, are effective care delivery methods and contribute
24to a patient’s overall health and well-being.
It is the intent of the Legislature to test an alternative
26payment methodology for FQHCs, as permitted by federal law,
27and to design and implement the APM to do all of the following:
28(a) Provide patient-centered care delivery options to California’s
29expansive Medi-Cal population.
30(b) Promote cost efficiencies, and improve population health
31and patient satisfaction.
32(c) Improve the capacity of FQHCs to deliver high-quality care
33to a population growing in numbers and in complexity of needs.
34(d) Transition away from a payment system that rewards volume
35with a flexible alternative that recognizes the value added when
36Medi-Cal beneficiaries are able to more easily access the care they
37need and when providers are able to deliver care in the most
38appropriate manner to patients.
P7 1(e) Track alternativebegin delete touchesend deletebegin insert encountersend insert at FQHCs in order to
2establish a data set from which alternativebegin delete touchesend deletebegin insert encountersend insert may
3be assigned a value that can be used in future ratesetting.
4(f) Implement the APM where the FQHC receives at least the
5same amount of funding it would receive under the current payment
6system, and in a manner that does not disrupt patient care or
7threaten FQHC viability.
(a) begin insert(1)end insertbegin insert end insert The department shall authorize abegin delete three-yearend delete
9 payment reform pilot project for FQHCs using an APM in
10accordance with this article.begin delete Implementationend delete
11begin insert(2)end insertbegin insert end insertbegin insertImplementationend insert of the APM pilot project shall begin no
12sooner than July 1, 2016, subject tobegin insert any necessaryend insert federalbegin delete approval.end delete
13begin insert approvals.end insert
14(3) The department shall authorize implementation of an APM
15pilot project with respect to a county for a period of up to three
16years.
17(4) At least 90 days prior to implementation of an APM pilot
18project
for a participating FQHC site in a county, the department
19shall notify a principal health plan in writing of the principal
20health plan’s specific APM supplemental capitation rate and
21clinic-specific PMPM rates for the participating FQHC in the
22county. The notification from the department to the principal health
23plan shall be based on the rates submitted by the department for
24final approval. If the APM supplemental capitation rates or
25clinic-specific PMPM rates are modified after the notification to
26a principal health plan, the department shall notify a principal
27health plan of the revised rates and, if either the principal health
28plan or participating FQHC requests, adjust the implementation
29date of the APM pilot project for a participating FQHC in a county
30so that it occurs at least 90 days after the revised rate notification.
31(5) The
APM pilot project for a participating FQHC site in a
32county shall begin no sooner than the first day of the month
33following the month in which the department received federal
34approval of the rates.
35(b) The APM pilot project shall comply with federal APM
36requirements and the department shall file a state plan amendment
37begin insert and seek any federal approvalsend insert as necessary for the implementation
38of this article.begin insert end insertbegin insertNothing in this article shall be construed to authorize
39the department to seek federal approval to affirmatively waive
40Section 1396a(bb)(6) of Title 42 of the United States Code.end insert
P8 1(c) Nothing in this article shall be construed to limit or eliminate
2services provided by FQHCs as covered benefits in the Medi-Cal
3program.
(a) begin deleteTo implement this article, the end deletebegin insertThe end insertdepartment
5shall notify every FQHCbegin insert in the stateend insert of the APM pilot project and
6shall invite any interested FQHC tobegin delete notify the department that the begin insert apply for participation in the APMend insert
7FQHC agrees to participateend delete
8 with respect to one or more of the FQHC’s sites. Consistent
with
9federal law, the state plan amendment described in subdivision (b)
10of Section 14138.12 shall specify that the department andbegin insert eachend insert
11 participatingbegin delete FQHCs agreeend deletebegin insert FQHC voluntarily agreesend insert to the APM.
12(b) (1) (A) The department shall develop the following, in
13consultation with interested FQHCs and principal health plans
14and consistent with federal law:
15(B) The selection process that interested FQHCs may apply for
16participation in the pilot project, which shall include, but need not
17be limited to, the following:
18(i) The FQHC has the demonstrated ability to collect and submit
19encounter data in a form and manner that satisfies department
20requirements.
21(ii) The FQHC is in good standing with the relevant state and
22federal regulators.
23(iii) The FQHC has the financial and administrative capacity
24to undertake payment reform.
25(2) In accordance with the process and criteria developed
26pursuant to paragraph (1), the department shall approve or deny
27an interested FQHC site application for participation in the pilot
28project. The department may limit the number of participating
29FQHCs in the pilot project and the number of counties in which
30the pilot project will operate.
31(3) All principal health plans and applicable subcontracting
32payers are required to participate in the APM pilot project
33pursuant to this article to the extent that one or more contracted
34FQHC sites located in the plan’s county are selected to participate
35in the pilot project.
36(b)
end delete
37begin insert(end insertbegin insertc)end insert The APM shall be applied only with respect to a participating
38FQHC for services the FQHC provides to its APM enrollees that
39are within its APM scope of services.
40(c)
end delete
P9 1begin insert(end insertbegin insertd)end insert Payment to the participating FQHC shall continue to be
2governed
by the provisions of Sections 14132.100 and 14087.325
3for services provided with respect to both of the following
4categories of patients:
5(1) A Medi-Cal beneficiary who receives services from any
6FQHC to which the beneficiary is not assigned for primary care
7services under the APM pilot project by a principal health plan or
8begin delete secondaryend deletebegin insert subcontractingend insert payer.
9(2) A person who is a Medi-Cal beneficiary, but who is not a
10Medi-Cal beneficiary within a designated APM aid category.
11(d)
end delete
12begin insert(e)end insert (1) A participating FQHC, with respect to one or more sites
13of its choosing, may opt to discontinue its participation in the pilot
14project subject to a notice requirement of no less thanbegin delete 30 days and begin insert 120
15no greater than 45 days, as established by the department.end delete
16days.end insert
17(2) A principal health plan may opt to discontinue its
18participation in the pilot project, subject to a notice requirement
19of no less thanbegin delete 30 days and no greater than 45 days, as established begin insert
120 days
20by the department, if subdivision (f) of Section 14138.14end delete
21if Section 14138.16end insert is amended at any time while the pilot project
22is in effect. The department shall place a provision in a plan’s
23contract giving the plan the ability to discontinue its participation
24in the APM pilot project pursuant to this paragraph.
(a) A participating FQHC shall be compensated for
26the APM scope of services provided to its APM enrollees pursuant
27to this section.
28(b) (1) A participating FQHC shall, in addition to its base
29payment, and any applicable incentive payment, receive a PMPM
30wrap-cap payment for each of its APM enrollees as described in
31subdivision (c). The department shall determine the wrap-cap
32amount specific to each participating FQHC, and for each APM
33aid category. For this purpose, the department shall, in consultation
34with each participating
FQHC and health plan, use the best
35available data for a recent agreed-upon time period that reflects
36the audit and reconciliation payment adjustments for the
37participating FQHC, which may be composite data from different
38or multiple periods. The determinations shall, at a minimum, take
39into account the following factors:
P10 1(A) An estimation of the amount of traditional wrap-around
2payments that would have been paid to the participating FQHC
3with respect to APM enrollees for the APM scope of services in
4the absence of the APM pilot project. For each APM aid category,
5the estimation shall be no less than the participating FQHC’s
6historical utilization for assigned members for a 12-month period
7reflected in the data being used, multiplied by its prospective
8payment system rate, as determined pursuant to Section 14132.100,
9less any payments for the APM scope of services, exclusive of
10incentive payments, that were received from principal health plans
11
and any secondary payers for the relevant period for assigned
12members, and shall be calculated on a PMPM basis.
13(B) An estimation of service utilization for each APM aid
14category in the absence of the APM pilot project, including
15estimates of the utilization of services to be provided, and
16utilization and types of services not previously provided, reflected
17or identifiable in the prior period data.
18(2) The wrap-cap payments shall not be decreased for the first
19three years of the APM pilot project, unless agreed to by the
20department and the applicable participating FQHC.
21(c) Notwithstanding any other law, each principal health plan
22shall pay a participating FQHC that is in the plan provider network
23the wrap-cap amounts
determined in subdivision (b) for each APM
24enrollee of that FQHC, or, in cases where a secondary payer is
25involved, provide the necessary amounts to the secondary payer
26and require that secondary payer to make the required wrap-cap
27payments to the FQHC. The principal health plan, secondary payer,
28as applicable, and the participating FQHC may choose the manner
29in which the wrap-cap payments are made, provided the resulting
30payment is equal to the full amount of the wrap-cap payments to
31which the participating FQHC is entitled, taking into account,
32among others, changes in the number of APM enrollees within the
33APM aid categories. In cases where a secondary payer is involved,
34the principal health plan shall demonstrate and certify to the
35department that it has contracts or other arrangements in place that
36provide for meeting the requirements herein and to the extent that
37the secondary payer fails to comply with the applicable
38requirements in this article, the principal health plan shall then be
39responsible to
ensure the participating FQHC receives all payments
40due under this article in a timely manner.
P11 1(d) The department shall adjust the amounts in subdivision (b)
2
at least annually for any change to the prospective payment system
3rate for participating FQHCs, including changes resulting from a
4change in the Medicare Economic Index pursuant to subdivision
5(d) of Section 14132.100, and any changes in the FQHC’s scope
6of services pursuant to subdivision (e) of Section 14132.100.
7(e) An FQHC site participating in the APM pilot project shall
8not receive traditional wrap-around payments pursuant to Sections
914132.100 and 14087.325 for visits
within the APM scope of
10services it provides to its APM enrollees.
(a) A principal health plan shall be compensated
12by the department for the services provided to its APM enrollees
13pursuant to this section.
14(b) (1) For each principal health plan that contains at least one
15participating FQHC in its provider network, the department shall
16determine an APM supplemental capitation amount for each APM
17aid category to be paid by the department to the principal health
18plan, which shall be expressed as a PMPM amount. The APM
19supplemental capitation amount shall be a weighted average of
20the aggregate wrap-cap amounts determined in subdivision (b) of
21Section 14138.14, that at a minimum takes into account an
22estimation of the distribution of APM enrollees among the
23participating FQHCs for each APM
aid category.
24(2) The APM supplemental capitation amounts shall not be
25decreased for the first three years of the APM pilot project, unless
26agreed to by the department and the principal health plan.
27(c) The total APM supplemental capitation amounts paid to
28principal health plans shall be adjusted by the department as
29necessary to take into account adjustments to the number of APM
30enrollees by APM aid category no later than the 10th day of each
31month.
32(d) The department shall adjust the amounts in subdivision (b)
33at least annually for any change to the prospective payment system
34rate for participating FQHCs, including changes resulting from a
35change in the Medicare Economic Index pursuant to subdivision
36(d) of Section 14132.100, and any changes in the FQHC’s scope
37of services pursuant to subdivision (e) of Section
14132.100.
During the duration of the APM pilot project, the
39department shall establish a risk corridor structure for the principal
P12 1health plans relating to the payment requirement of Section
214138.15, designed within the following parameters:
3(a) (1) The principal health plan is fully responsible for the
4total aggregate costs of the wrap-cap payments for all APM aid
5categories to participating FQHCs in its network in excess of the
6total aggregate APM supplemental capitation amount for all APM
7aid categories up to one-half of 1 percent.
8(2) The principal health plan shall fully retain the aggregate
9APM supplemental capitation amount in excess of the total
10aggregate costs of the wrap-cap
payments for all APM aid
11categories incurred up to one-half of 1 percent.
12(b) (1) The principal health plan and the department shall share
13responsibility for the total aggregate costs of the wrap-cap
14payments for all APM aid categories to participating FQHCs in
15the principal health plan’s network that are between one-half of 1
16percent above and up to one percent above the total aggregate
17APM supplemental capitation amount for all APM aid categories.
18(2) The principal health plan and the department shall share the
19benefit of the aggregate APM supplemental capitation amount in
20excess of the total aggregate costs of the wrap-cap payments for
21all APM aid categories incurred that are between one-half of 1
22percent and up to one percent below the total aggregate APM
23supplemental capitation amount.
24(c) (1) The department shall be fully responsible for the total
25aggregate costs of the wrap-cap payments for all APM aid
26categories to participating FQHCs in the principal health plan’s
27network that are more than one percent in excess of the principal
28health plan’s total aggregate APM supplemental capitation amount
29for all APM aid categories.
30(2) The department shall fully retain the aggregate APM
31supplemental capitation amount in excess of the total aggregate
32costs of the wrap-cap payments for all APM aid categories to
33participating FQHCs in the principal health plan’s network that
34are greater than one percent below the total aggregate APM
35supplemental capitation amount.
(a) A participating FQHC shall be compensated
37for the APM scope of services provided to its APM enrollees
38pursuant to this section.
39(b) A participating FQHC shall receive from the principal health
40plan or applicable subcontracting payer reimbursement for each
P13 1APM enrollee in the form of a clinic-specific PMPM for the
2applicable APM aid category. The department shall determine the
3clinic-specific PMPM for each APM aid category taking into
4account all the following factors:
5(1) Historical utilization of FQHC services by assigned members
6in each APM aid category.
7(2) The participating FQHC’s prospective payment
system rate
8and applicable adjustments relevant for the fiscal year, such as
9annual rate adjustments.
10(3) Other trend and utilization adjustments as appropriate in
11order to reflect the level of reimbursement that would have been
12received by the participating FQHCs in the absence of the APM
13pilot project.
14(c) A participating FQHC and applicable principal health plan
15or subcontracting payer may enter into arrangements in which
16the clinic-specific PMPM amount required in subdivision (b) is
17paid in more than one capitated increment, as long as the total
18capitation each month received by the participating FQHC is
19equivalent to the clinic-specific PMPM.
20(d) In cases where a subcontracting payer is involved, the
21principal health plan shall demonstrate and certify to the
22department that it has contracts or other arrangements
in place
23that provide for meeting the requirements in subdivision (b) and
24to the extent that the subcontracting payer fails to comply with the
25applicable requirements in this article, the principal health plan
26shall then be responsible to ensure the participating FQHC
27receives all payments due under this article in a timely manner.
28(e) The department shall adjust the amounts in subdivision (b)
29as necessary to account for any change to the prospective payment
30system rate for participating FQHCs, including changes resulting
31from a change in the Medicare Economic Index pursuant to
32subdivision (d) of Section 14132.100, and any changes in the
33FQHC’s scope of services pursuant to subdivision (e) of Section
3414132.100.
35(f) An FQHC site participating in the APM pilot project shall
36not receive traditional wrap-around payments pursuant to Sections
3714132.100 and 14087.325 for visits within
the APM scope of
38services it provides to its APM enrollees.
(a) A principal health plan shall be compensated
2by the department for the services provided to its APM enrollees
3pursuant to this section.
4(b) For each principal health plan that contains at least one
5participating FQHC in its provider network, the department shall
6determine an APM supplemental capitation amount for each APM
7aid category to be paid by the department to the principal health
8plan, which shall be expressed as a PMPM amount. This
9supplemental capitation amount will be in addition to the funding
10for the APM scope of services already contained in the principal
11health plan’s capitated rates paid by the department and shall be
12actuarially sound. The department shall determine the APM
13supplemental capitation amount for each APM
aid category, taking
14into account all of the following factors:
15(1) The clinic-specific PMPM amounts for each APM aid
16category for each participating FQHC in the plan’s network.
17(2) The funding for the APM scope of services already contained
18in the principal health plan’s capitated rates.
19(3) The historical wrap-around payments paid by the department
20for participating FQHCs for assigned members in each APM aid
21category.
22(4) As applicable, the likely distribution of members among
23multiple participating FQHCs.
24(c) The principal health plan shall report to the department, in
25a form to be determined by the department in consultation with
26the principal health plan, the number of APM enrollees
for each
27APM aid category in the plan each month.
28(d) The department shall pay each principal health plan its
29applicable APM supplemental capitation amount for the number
30of APM enrollees for each APM aid category reported by the
31principal health plan pursuant to subdivision (c).
32(e) The department, in consultation with the principal health
33plans, shall develop methods to verify the information reported
34pursuant to subdivision (c), and may adjust the payments made
35pursuant to subdivision (d) as appropriate to reflect the verified
36number of APM enrollees for each APM aid category.
37(f) The department shall adjust the amounts in subdivision (b)
38as necessary to account for any change to the prospective payment
39system rate for participating FQHCs, including changes resulting
40from a change in the Medicare Economic Index
pursuant to
P15 1subdivision (d) of Section 14132.100, and any changes in the
2FQHC’s scope of services pursuant to subdivision (e) of Section
314132.100.
(a) For the duration of the APM pilot project, the
5department shall establish a risk corridor structure for the
6principal health plans relating only to the APM supplemental
7capitation payments pursuant to Section 14138.15, to the extent
8consistent with principals of actuarial soundness.
9(b) The risk sharing of the costs under this section shall be
10constructed by the department so that it is symmetrical with respect
11to risk and profit, and so that all of the following apply:
12(1) The
principal health plan is fully responsible for all costs
13in excess of the APM supplemental capitation amounts up to
14one-half of one percent.
15(2) The principal health plan shall fully retain the revenues paid
16through the APM supplemental capitation amounts in excess of
17the costs incurred up to one-half of 1 percent below the APM
18supplemental capitation amounts.
19(3) The principal health plan and the department shall share
20equally in the responsibility for costs in excess of the APM
21supplemental capitation amounts that are greater than one-half
22of 1 percent but less than 1 percent above the APM supplemental
23capitation amounts.
24(4) The principal health plan and the department shall share
25equally the benefit of the revenues paid through the APM
26supplemental capitation amounts in excess of the costs incurred
27that are greater than one-half of 1 percent but less than 1 percent
28below the APM supplemental capitation amounts.
29(5) The department shall be fully responsible for all costs in
30excess of the APM supplemental capitation amounts that are more
31than 1 percent above the APM supplemental capitation amounts.
32(6) The department shall fully retain the revenues paid through
33the APM supplemental capitation amounts in excess of the costs
34incurred greater than 1
percent below the supplemental capitation
35amounts.
36(c) The department shall develop specific contract language to
37implement the requirements of this section that shall be
38incorporated into the contracts of each affected principal health
39plan.
P16 1(d) This section shall be implemented only to the extent that any
2necessary federal approvals or waivers are obtained.
(a) In order to ensure participating FQHCs have an
4incentive to manage visits and costs, while at the same time
5exercising a reasonable amount of flexibility to deliver care in the
6most efficient and quality driven manner,begin delete duringend deletebegin insert forend insert the duration
7of the APM pilot project the department shall, in accordance with
8this subdivision, establish abegin delete rateend deletebegin insert paymentend insert adjustment structure.
9Thebegin delete rateend deletebegin insert
paymentend insert adjustment structure shall be developed with
10stakeholder input and shall meet the requirements of Section
11begin delete 1396a(bb)(6)(B)end deletebegin insert 1396a(bb)(6)end insert of Title 42 of the United States
12Code.
13(b) Thebegin delete rateend deletebegin insert paymentend insert adjustment structure shall be applicable
14on a site-specific basis.
15(c) Thebegin delete rateend deletebegin insert
paymentend insert adjustment structure shall permit an
16aggregate adjustment to thebegin delete wrap-capend deletebegin insert
payments receivedend insert when
17actual utilization of services for a participating FQHC’s site
18exceeds or falls below expectations that were reflected within the
19calculation of the rates developed pursuant to Sections 14138.14
20and 14138.15. For purposes of thisbegin delete rateend deletebegin insert paymentend insert adjustment
21structure, both actual and expected utilization shall be expressed
22as the total number ofbegin delete visitsend deletebegin insert traditional encountersend insert that would be
23recognized pursuant to subdivision (g) of Section 14132.100 for
24the APM enrollees of the participating FQHC’s site across
all APM
25aid categories and averaged on a per member per year basis.
26(d) An adjustment pursuant to this section shall occur no more
27than once per year per participating FQHC’s site duringbegin delete the three the APM pilot project and shall be subject to approval by
28years ofend delete
29the department.
30(1) An adjustment tobegin delete the wrap-capend delete payments in the case of
31higher than expected utilization shall be triggered when utilization
32exceeds projections by more than 5 percent for the first year, 71⁄2
33 percent for the second year, and 10 percent for the third year.
If
34the trigger level isbegin delete reached, the affected FQHC’send deletebegin insert reached in a
35given year, the participating FQHCend insert site shall receive an aggregate
36payment adjustmentbegin insert from the principal health plan or applicable
37subcontracting payerend insert that is based upon the difference between
38its actual utilization for the year and 105 percent of projected
39utilization for the first year, the difference between actual
40utilization and 1071⁄2 percent of projected utilization for the second
P17 1year, and the difference between actual utilization and 110 percent
2of projected utilization for the third year.
The payment adjustment
3in each instance shall be calculated as follows:
4(A) The difference in the applicable utilization levels shall be
5multiplied by
the per-visit rate that was determined pursuant to
6Section 14132.100 for the participating FQHC’s site.
7(B) The total number of member months for the APM enrollees
8of the participating FQHC’s site for the year shall be divided by
912.
10(C) The amount in subparagraph (A) shall be multiplied by the
11amount in subparagraph (B), yielding the aggregate wrap-cap
12payment adjustment for the participating FQHC’s site. The rate
13adjustment shall be paid to the participating FQHC site by the
14principal health plan, or secondary payer as applicable, in one
15aggregate payment.
16(2) (A) To incentivize care delivery in ways that may vary from
17traditional delivery of care, participating FQHCs shall have the
18flexibility to experience a lower than expected visit utilization of
19up to 30 percent of projected utilization.
If an FQHC site’s actual
20utilization is at a level that is more than 30 percent lower than the
21projected utilization, the principal health plan, or secondary payer
22as applicable, shall review the FQHC site’s relevant data to identify
23the cause or causes of the difference. If the principal health plan
24or secondary payer determines that the lower than expected
25utilization was due to factors unrelated to delivery system
26transformation and enhancements, it may require the FQHC’s site
27to refund a portion of the wrap-cap payments.
28(B) The total amount refunded by the participating FQHC’s site
29to the principal health plan or secondary payer shall be limited to
30an amount calculated as follows:
31(i) The difference between the participating FQHC site’s actual
32utilization and 70 percent of the projected utilization shall be
33multiplied by the site’s per-visit rate that was determined pursuant
34
to Section 14132.100.
35(ii) The total number of member months for the APM enrollees
36of the participating FQHC’s site for the year shall be divided by
3712.
38(iii) The amount in clause (i) shall be multiplied by the amount
39in clause (ii), yielding the maximum amount of the refund to be
P18 1made by the participating FQHC’s site. The refund shall be paid
2in one aggregate payment.
3(A) The actual total utilization, expressed as traditional
4encounters, for the applicable year shall be determined.
5(B) The projected total utilization contained in the clinic-specific
6PMPMs for the actual APM enrollees for the applicable year shall
7be determined.
8(C) The amount in subparagraph (B) shall be adjusted to reflect
9the applicable comparison utilization for the year as follows:
10(i) Multiplied by 1.05 for year one.
end insertbegin insert11(ii) Multiplied by 1.075 for year two.
end insertbegin insert12(ii) Multiplied by 1.1 for year three.
end insertbegin insert
13(D) The amount in subparagraph (C) shall be subtracted from
14the amount in subparagraph (A).
15(E) The amount in subparagraph (D) shall be multiplied by the
16per-visit rate that was
determined pursuant to Section 14132.100
17for the participating FQHC yielding the payment adjustment for
18the participating FQHC site. The payment adjustment shall be
19paid to the participating FQHC site by the principal health plan,
20or subcontracting payer, as applicable, in one aggregate payment.
21(2) (A) To incentivize care delivery in ways that may vary from
22traditional delivery of care, participating FQHCs shall have the
23flexibility to experience a lower than expected visit utilization of
24up to 30 percent of projected utilization. If an FQHC site’s actual
25utilization is at a level that is more than 30 percent lower than the
26projected utilization, the department shall review, in consultation
27with the principal health plan, or subcontracting payer, as
28applicable, the FQHC site’s relevant data to identify the cause or
29
causes of the difference, including, but not limited to, its volume
30of alternative encounters. If the department is able to determine
31that all or part of the lower than expected utilization was due to
32objective factors developed by the department in consultation with
33the principal health plans and FQHCs that are related to delivery
34system transformation and enhancements, such as alternative
35encounters, the department shall allow the participating FQHC
36site to retain all or a portion of the payments attributable to the
37utilization decrease that exceeds 30 percent lower than the
38projected utilization. If the department is unable to determine that
39all or a portion of the utilization decrease in excess of 30 percent
40was related to delivery system transformation and enhancements
P19 1according to the objective criteria developed pursuant to this
2subparagraph, the participating FQHC site shall be required to
3refund the applicable payment amount to the participating health
4plan or subcontracting payer pursuant to
subparagraph (B).
5(B) The total amount refunded by the participating FQHC’s
6site to the principal health plan or subcontracting payer shall be
7limited to an amount calculated as follows:
8(i) The actual total utilization, expressed as traditional
9encounters, for the applicable year shall be determined.
10(ii) The projected total utilization contained in the clinic-specific
11PMPMs for the actual APM enrollees for the applicable year shall
12be determined and multiplied by 70 percent.
13(iii) The amount in clause (i) shall be subtracted from the
14
amount in clause (ii).
15(iv) The amount in clause (i) shall be multiplied by the
16participating FQHC site’s per visit rate that was determined
17pursuant to Section 14132.100, yielding the maximum amount of
18the refund to be made by the participating FQHC site. The refund
19shall be paid in one aggregate payment.
20(C) Any adjustment made pursuant to this paragraph shall be
21requested by a principal health plan,begin delete secondaryend deletebegin insert
subcontractingend insert
22 payer, or FQHC, no later than 90 days afterbegin delete the last day of the begin insert that determination
23fiscal year for which the adjustment is sought.end delete
24by the department pursuant to subparagraph (A).end insert
The department, in consultation with FQHCs and
26principal health plans interested in participating in the APM pilot
27project, may modify the adjustment process or methodology
28specified in Sections 14138.14, 14138.15, 14138.16, and 14138.17
29to the extent necessary to comply with federal law and obtain
30federal approval of necessary amendments to the Medi-Cal state
31plan.
A participating FQHC or principal health plan or
33the department may request an APM enrollee true-up to assure the
34total amount of the APM supplemental capitation or wrap-cap
35payments, as applicable, are adjusted to accurately reflect the
36number of applicable APM enrollees.
(a) The department, in consultation with interested
38FQHCs and principal health plans, may modify any methodology
39or process specified in this article to the extent necessary to comply
40with federal law or to obtain any necessary federal approvals.
P20 1(b) This article shall be implemented only to the extent that
2federal financial participation is available and any necessary
3federal approvals have been obtained.
4(c) In the event of a conflict between a provision in this article
5and the terms of a federally approved APM, the terms of the
6federally approved APM shall control.
In the event of an epidemic, or similar catastrophic
8occurrence that the department determines is likely to result in at
9least a 40 percent increase in actual utilization per member per
10month within the APM scope of services for one or more APM aid
11categories at a participating FQHC site, the department may
12adjust, or require the adjustment of, payments made pursuant to
13this article as it deems necessary to account for the utilization
14increase at the affected participating FQHC site.
(a) (1) Within six months of the conclusion of pilot
16project, an evaluation shall be completed by an independent entity.
17This independent entity shall report its findings to the department
18and the Legislature. The evaluation shall be contingent on the
19availability of nonstate General Fund moneys for thisbegin delete purpose.end delete
20begin insert purpose, and the availability of private foundation or nonprofit
21foundation money for this purpose.end insert
22(2) A report submitted pursuant to this subdivision shall be
23submitted in
compliance with Section 9795 of the Government
24Code.
25(b) The evaluation shall assess whether the APM pilot project
26produced improvements in access to primary care services, care
27quality, patient experience, and overall health outcomes for APM
28enrollees. The evaluation shall include existing FQHC required
29quality metrics and an assessment of how the changes in financing
30allowed for alternative types of primary care visits and alternative
31begin delete touchesend deletebegin insert encountersend insert between the participating FQHC and the
32begin delete patient.end deletebegin insert patient and how
those changes affected volume of same-day
33visits for mental and physical health conditions.end insert The evaluation
34shall also assess whether the APM pilot project’s efforts to improve
35primary care resulted in changes to patient service utilization
36patterns, including the reduced utilization of avoidable high-cost
37begin delete services.end deletebegin insert services and services provided outside the FQHC.end insert
Notwithstanding Chapter 3.5 (commencing with
39Section 11340) of Part 1 of Division 3 of Title 2 of the Government
40Code, the department may implement, interpret, or make specific
P21 1this article by means of all-county letters, plan letters, plan or
2provider bulletins, or similar instructions, without taking
3regulatory action.
For purposes of implementing this article, the
5department may enter into exclusive or nonexclusive contracts on
6a bid or negotiated basis, including contracts for the purpose of
7obtaining subject matter expertise or other technical assistance.
8Any contract entered into or amended pursuant to this section
9shall be exempt from Part 2 (commencing with Section 10100) of
10Division 2 of the Public Contract Code and Chapter 6
11(commencing with Section 14825) of Part 5.5 of Division 3 of the
12Government Code, and shall be exempt from the review or
13approval of any division of the Department of General Services.
O
96