Amended in Assembly August 17, 2015

Amended in Assembly July 8, 2015

Amended in Senate April 21, 2015

Amended in Senate April 7, 2015

Senate Bill No. 147

Introduced by Senator Hernandez

January 28, 2015

An act to add Article 4.1 (commencing with Section 14138.1) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

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 authorize an APM pilot project, to commence no sooner than July 1, 2016, for FQHCs that agree to participate. 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 3 years. 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 each principal health plan that contains at least one participating FQHC in its provider network, as specified. The bill would require, except as specified, begin delete that end delete begin insert the department to contract with an independent entity to perform end insert an evaluation of the APM pilot begin delete project be completed by an independent entity end delete begin insert project, and would require that the evaluation be completed and provided to the Legislature, to the extent practicable, end insert within 6 months of the conclusion of the APM pilot begin delete project, and would require the independent entity to report the findings to the department and the Legislature. end delete begin insert project in certain counties, as specified. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 4.1 (commencing with Section 14138.1)
is added to Chapter 7 of Part 3 of Division 9 of the Welfare and
Institutions Code, to read:

 

Article 4.1.  Payment Reform Pilot Program for Federally
Qualified Health Centers

 

14138.1.  

For purposes of this article, the following definitions
apply:

(a) “Alternative payment methodology” (APM) has the same
meaning as specified in Section 1396a(bb)(6) of Title 42 of the
United States Code.

(b) “APM aid category” means a Medi-Cal category of aid
designated by the department. For all its APM enrollees in an APM
aid category, a participating FQHC site shall receive compensation
as described under the APM pilot project. The APM aid categories
may include, but are not limited to, all of the following categories
of aid:

(1) Adults.

(2) Children.

(3) Seniors and persons with disabilities.

(4) The adult expansion population eligible pursuant to Section
14005.60, to the extent the department determines, in consultation
with health plans and interested FQHCs, that sufficient data is
available to allow for inclusion of this population in the APM pilot
project. This paragraph shall not be construed to prohibit inclusion
of the adult expansion population in the APM pilot project on a
date subsequent to initial authorization pursuant to subdivision (a)
of Section 14138.12.

(c) “APM enrollee” means a member who is assigned by a
principal health plan or subcontracting payer to a participating
FQHC for primary care services and who is within one of the
designated APM aid categories.

(d) “APM pilot project” means the pilot project authorized by
this article.

(e) “APM scope of services” means the scope of services for a
participating FQHC for which its per-visit rate was determined
pursuant to Section 14132.100.

(f) “APM supplemental capitation” means an additional, APM
aid category-specific, PMPM amount that is paid by the department
to a principal health plan having one or more participating FQHCs
in its provider network.

(g) “Clinic-specific PMPM” means the monthly, per assigned
member, capitated amount the principal health plan or
subcontracting payer is required to pay to the participating FQHC
for the APM scope of services. The clinic-specific PMPM is
exclusive of any incentive payments and shall be developed to
reflect the amount the participating FQHC would have received
under the prospective payment system methodology set forth in
Section 14132.100.

(h) “FQHC” means any community or public “federally qualified
health center,” as defined in Section 1396d(l)(2)(B) of Title 42 of
the United States Code and providing services as defined in Section
1396d(a)(2)(C) of Title 42 of the United States Code.

(i) “Member” means a Medi-Cal beneficiary who is enrolled
with a principal health plan or subcontracting payer.

(j) “Participating FQHC” means an FQHC participating in the
APM pilot project at one or more of the FQHC’s sites.
“Participating FQHC” also refers to a FQHC’s site that is
participating in the APM pilot project.

(k) “PMPM” and “per member per month” both mean a monthly
payment made for providing or arranging health care services for
a member and may refer to a payment by the department to a
principal health plan, or by a principal health plan to a
subcontracting payer, or by a principal health plan or
subcontracting payer to an FQHC, or from and to other entities as
specified in this article.

(l) “Principal health plan” means an organization or entity that
enters into a contract with the department pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing
with Section 14087.5), Article 2.81 (commencing with Section
14087.96), Article 2.82 (commencing with Section 14087.98),
Article 2.91 (commencing with Section 14089), or Chapter 8
(commencing with Section 14200), to provide or arrange for the
care of Medi-Cal beneficiaries within a county in which the APM
pilot project is implemented.

(m) “Subcontracting payer” means an organization or entity
that subcontracts with a principal health plan to provide or arrange
for the care of its members and contains one or more participating
FQHCs in its provider network.

(n) “Traditional encounter” means a face-to-face encounter that
is recognized as a billable visit, as described in subdivision (g) of
Section 14132.100.

(o) “Traditional wrap-around payment” means the supplemental
payments payable to an FQHC in the absence of the APM pilot
project with respect to services provided to Medi-Cal managed
care enrollees, which are made by the department pursuant to
subdivision (e) of Section 14087.325 and subdivision (h) of Section
14132.100.

14138.10.  

The Legislature finds and declares all of the
following:

(a) The federal Patient Protection and Affordable Care Act has
made and continues to make significant progress in driving health
care delivery system reforms that emphasize health outcomes,
efficiency, patient satisfaction, and value.

(b) California has expanded Medi-Cal to cover more than 12
million residents, roughly one-third of the state’s population. To
meet the needs of the state’s growing patient population, California
must continue to explore new strategies to expand access to high
quality and cost-effective primary care services.

(c) With such a large portion of the state’s population receiving
health care services through Medi-Cal, it is imperative that
patient-centered innovations drive Medi-Cal reforms.

(d) Health care today is more than a face-to-face visit with a
provider, but rather a whole-person approach, often including a
physician, a care team of other health care providers, technology
inside and outside of a health center, and wellness activities
including nutrition and exercise classes, all of which are designed
to be more easily incorporated into a patient’s daily life.

(e) Accessible health care in a manner that fits a patient’s needs
is important for improving patient satisfaction, building trust, and
ultimately improving health outcomes.

(f) In an attempt to invest up front in health care services that
can prevent longer term avoidable high-cost services, the federal
Patient Protection and Affordable Care Act made a significant
investment in FQHCs.

(g) FQHCs are essential community providers, providing high
quality, cost-effective comprehensive primary care services to
underserved communities.

(h) Today FQHCs face certain restrictions because the current
payment structure reimburses an FQHC only when there is a
traditional encounter with a provider. Current law prohibits
payment for both a primary care visit and mental health visit on
the same day.

(i) A more practical approach financially incentivizes FQHCs
to provide the right care at the right time. Restructuring the current
visit based, fee-for-service model with a capitated equivalent
affords FQHCs the assurance of payment and the flexibility to
deliver care in the most appropriate patient-centered manner.

(j) A reformed payment methodology will enable FQHCs to
take advantage of alternative encounters. Alternative encounters,
such as group visits, same-day mental health services and telephone
and email consultations, are effective care delivery methods and
contribute to a patient’s overall health and well-being.

14138.11.  

It is the intent of the Legislature to test an alternative
payment methodology for FQHCs, as permitted by federal law,
and to design and implement the APM to do all of the following:

(a) Provide patient-centered care delivery options to California’s
expansive Medi-Cal population.

(b) Promote cost efficiencies, and improve population health
and patient satisfaction.

(c) Improve the capacity of FQHCs to deliver high-quality care
to a population growing in numbers and in complexity of needs.

(d) Transition away from a payment system that rewards volume
with a flexible alternative that recognizes the value added when
Medi-Cal beneficiaries are able to more easily access the care they
need and when providers are able to deliver care in the most
appropriate manner to patients.

(e) Track alternative encounters at FQHCs in order to establish
a data set from which alternative encounters may be assigned a
value that can be used in future ratesetting.

(f) Implement the APM where the FQHC receives at least the
same amount of funding it would receive under the current payment
system, and in a manner that does not disrupt patient care or
threaten FQHC viability.

14138.12.  

(a) (1) The department shall authorize a payment
reform pilot project for FQHCs using an APM in accordance with
this article.

(2) Implementation of the APM pilot project shall begin no
sooner than July 1, 2016, subject to any necessary federal
approvals.

(3) The department shall authorize implementation of an APM
pilot project with respect to a county for a period of up to three
years.

(4) At least 90 days prior to implementation of an APM pilot
project for a participating FQHC site in a county, the department
shall notify a principal health plan in writing of the principal health
plan’s specific APM supplemental capitation rate begin delete and
clinic-specific PMPM rates end delete for the participating FQHC in the
county. The notification from the department to the principal health
plan shall be based on the rates submitted by the department for
begin delete final end delete begin insert federal end insert approval. If the APM supplemental capitation rates
begin delete or clinic-specific PMPM rates end delete are modified after the notification
to a principal health plan, the department shall notify a principal
health plan of the revised rates and, if begin delete either end delete the principal health
plan begin delete or participating FQHC end delete requests, adjust the implementation
date of the APM pilot project for a participating FQHC in a county
so that it occurs at least 90 days after the revised rate notification.

begin insert

(5) At least 90 days prior to implementation of an APM pilot
project for a participating FQHC site in a county, the department
shall notify a principal health plan and the FQHC site in writing
of the clinic-specific PMPM rate for the participating FQHC site
in the county.

end insert begin delete

(5)

end delete

begin insert (6) end insert  The APM pilot project for a participating FQHC site in a
county shall begin no sooner than the first day of the month
following the month in which the department received federal
approval of the begin delete rates. end delete begin insert principal health plan’s specifie APM
supplemental capitation rates. end insert

(b) The APM pilot project shall comply with federal APM
requirements and the department shall file a state plan amendment
and seek any federal approvals as necessary for the implementation
of this article. Nothing in this article shall be construed to authorize
the department to seek federal approval to affirmatively waive
Section 1396a(bb)(6) of Title 42 of the United States Code.

(c) Nothing in this article shall be construed to limit or eliminate
services provided by FQHCs as covered benefits in the Medi-Cal
program.

14138.13.  

(a) The department shall notify every FQHC in the
state of the APM pilot project and shall invite any interested FQHC
to apply for participation in the APM with respect to one or more
of the FQHC’s sites. Consistent with federal law, the state plan
amendment described in subdivision (b) of Section 14138.12 shall
specify that the department and each participating FQHC
voluntarily agrees to the APM.

(b) (1)  begin delete (A) end delete begin delete   end delete The department shall begin delete develop the following, end delete
begin insert develop, end insert in consultation with interested FQHCs and principal health
plans and consistent with federal begin delete law: end delete

begin delete (B) end delete begin delete   end delete begin delete The selection process that end delete begin insert law, the eligibility criteria to be
used in evaluating applications from end insert interested FQHCs begin delete may apply end delete
for participation in the pilot project, which shall include, but need
not be limited to, the following:

begin delete

(i)

end delete

begin insert (A) end insert  The FQHC has the demonstrated ability to collect and submit
encounter data in a form and manner that satisfies department
requirements.

begin delete

(ii)

end delete

begin insert (B) end insert  The FQHC is in good standing with the relevant state and
federal regulators.

begin delete

(iii) 

end delete

begin insert (C) end insert begin insert   end insert The FQHC has the financial and administrative capacity
to undertake payment reform.

begin insert

(2) In addition to the criteria listed in paragraph (1), the
department may take into consideration the number of APM
enrollees assigned by a plan at each FQHC site as an eligibility
requirement for FQHC participation.

end insert begin delete

(2)

end delete

begin insert (3) end insert  In accordance with the process and criteria developed
pursuant to begin delete paragraph (1), end delete begin insert paragraphs (1) and (2), end insert the department
shall approve or deny an interested FQHC site application for
participation in the pilot project. The department may limit the
number of participating FQHCs in the pilot project and the number
of counties in which the pilot project will operate.

begin delete

(3)

end delete

begin insert (4) end insert  All principal health plans and applicable subcontracting
payers are required to participate in the APM pilot project pursuant
to this article to the extent that one or more contracted FQHC sites
located in the plan’s county are selected to participate in the pilot
project.

(c) The APM shall be applied only with respect to a participating
FQHC for services the FQHC provides to its APM enrollees that
are within its APM scope of services.

(d) Payment to the participating FQHC shall continue to be
governed by the provisions of Sections 14132.100 and 14087.325
for services provided with respect to both of the following
categories of patients:

(1) A Medi-Cal beneficiary who receives services from any
FQHC to which the beneficiary is not assigned for primary care
services under the APM pilot project by a principal health plan or
subcontracting payer.

(2) A person who is a Medi-Cal beneficiary, but who is not a
Medi-Cal beneficiary within a designated APM aid category.

(e)  begin delete (1) end delete begin delete   end delete A participating FQHC, with respect to one or more sites
of its choosing, may opt to discontinue its participation in the pilot
project subject to a notice requirement of no less than 120 days.

begin delete

(2) A principal health plan may opt to discontinue its
participation in the pilot project, subject to a notice requirement
of no less than 120 days if Section 14138.16 is amended at any
time while the pilot project is in effect. The department shall place
a provision in a plan’s contract giving the plan the ability to
discontinue its participation in the APM pilot project pursuant to
this paragraph.

end delete

14138.14.  

(a) A participating FQHC shall be compensated for
the APM scope of services provided to its APM enrollees pursuant
to this section.

(b) A participating FQHC shall receive from the principal health
plan or applicable subcontracting payer reimbursement for each
APM enrollee in the form of a clinic-specific PMPM for the
applicable APM aid category. The department shall determine the
clinic-specific PMPM for each APM aid category taking into
account all the following factors:

(1) Historical utilization of FQHC services by assigned members
in each APM aid category.

(2) The participating FQHC’s prospective payment system rate
and applicable adjustments relevant for the fiscal year, such as
annual rate adjustments.

(3) Other trend and utilization adjustments as appropriate in
order to reflect the level of reimbursement that would have been
received by the participating FQHCs in the absence of the APM
pilot project.

(c) A participating FQHC and applicable principal health plan
or subcontracting payer may enter into arrangements in which the
clinic-specific PMPM amount required in subdivision (b) is paid
in more than one capitated increment, as long as the total capitation
each month received by the participating FQHC is equivalent to
the clinic-specific PMPM.

(d) In cases where a subcontracting payer is involved, the
principal health plan shall demonstrate and certify to the
department that it has contracts or other arrangements in place that
provide for meeting the requirements in subdivision (b) and to the
extent that the subcontracting payer fails to comply with the
applicable requirements in this article, the principal health plan
shall then be responsible to ensure the participating FQHC receives
all payments due under this article in a timely manner.

(e) The department shall adjust the amounts in subdivision (b)
as necessary to account for any change to the prospective payment
system rate for participating FQHCs, including changes resulting
from a change in the Medicare Economic Index pursuant to
subdivision (d) of Section 14132.100, and any changes in the
FQHC’s scope of services pursuant to subdivision (e) of Section
14132.100.

(f) An FQHC site participating in the APM pilot project shall
not receive traditional wrap-around payments pursuant to Sections
14132.100 and 14087.325 for visits within the APM scope of
services it provides to its APM enrollees.

14138.15.  

(a) A principal health plan shall be compensated
by the department for the services provided to its APM enrollees
pursuant to this section.

(b) For each principal health plan that contains at least one
participating FQHC in its provider network, the department shall
determine an APM supplemental capitation amount for each APM
aid category to be paid by the department to the principal health
plan, which shall be expressed as a PMPM amount. This
supplemental capitation amount will be in addition to the funding
for the APM scope of services already contained in the principal
health plan’s capitated rates paid by the department and shall be
actuarially sound. The department shall determine the APM
supplemental capitation amount for each APM aid category, taking
into account all of the following factors:

(1) The clinic-specific PMPM amounts for each APM aid
category for each participating FQHC in the plan’s network.

(2) The funding for the APM scope of services already contained
in the principal health plan’s capitated rates.

(3) The historical wrap-around payments paid by the department
for participating FQHCs for assigned members in each APM aid
category.

(4) As applicable, the likely distribution of members among
multiple participating FQHCs.

(c) The principal health plan shall report to the department, in
a form to be determined by the department in consultation with
the principal health plan, the number of APM enrollees for each
APM aid category in the plan each month.

(d) The department shall pay each principal health plan its
applicable APM supplemental capitation amount for the number
of APM enrollees for each APM aid category reported by the
principal health plan pursuant to subdivision (c).

(e) The department, in consultation with the principal health
plans, shall develop methods to verify the information reported
pursuant to subdivision (c), and may adjust the payments made
pursuant to subdivision (d) as appropriate to reflect the verified
number of APM enrollees for each APM aid category.

(f) The department shall adjust the amounts in subdivision (b)
as necessary to account for any change to the prospective payment
system rate for participating FQHCs, including changes resulting
from a change in the Medicare Economic Index pursuant to
subdivision (d) of Section 14132.100, and any changes in the
FQHC’s scope of services pursuant to subdivision (e) of Section
14132.100.

14138.16.  

(a) For the duration of the APM pilot project, the
department shall establish a risk corridor structure for the principal
health plans relating only to the APM supplemental capitation
payments pursuant to Section 14138.15, to the extent consistent
with principals of actuarial soundness.

(b) The risk sharing of the costs under this section shall be
constructed by the department so that it is symmetrical with respect
to risk and profit, and so that all of the following apply:

(1) The principal health plan is fully responsible for all costs
begin insert up to one-half of 1 percent end insert in excess of the APM supplemental
capitation begin delete amounts up to one-half of one percent. end delete begin insert amounts. end insert

(2) The principal health plan shall fully retain the revenues paid
through the APM supplemental capitation amounts in excess of
the costs incurred up to one-half of 1 percent below the APM
supplemental capitation amounts.

(3) The principal health plan and the department shall share
equally in the responsibility for costs in excess of the APM
supplemental capitation amounts that are greater than one-half of
1 percent but less than 1 percent above the APM supplemental
capitation amounts.

(4) The principal health plan and the department shall share
equally the benefit of the revenues paid through the APM
supplemental capitation amounts in excess of the costs incurred
that are greater than one-half of 1 percent but less than 1 percent
below the APM supplemental capitation amounts.

(5) The department shall be fully responsible for all costs in
excess of the APM supplemental capitation amounts that are more
than 1 percent above the APM supplemental capitation amounts.

(6) The department shall fully retain the revenues paid through
the APM supplemental capitation amounts in excess of the costs
incurred greater than 1 percent below the supplemental capitation
amounts.

(c) The department shall develop specific contract language to
implement the requirements of this section that shall be
incorporated into the contracts of each affected principal health
plan.

(d) This section shall be implemented only to the extent that
any necessary federal approvals or waivers are obtained.

14138.17.  

(a) In order to ensure participating FQHCs have an
incentive to manage visits and costs, while at the same time
exercising a reasonable amount of flexibility to deliver care in the
most efficient and quality driven manner, for the duration of the
APM pilot project the department shall, in accordance with this
subdivision, establish a payment adjustment structure. The payment
adjustment structure shall be developed with stakeholder input and
shall meet the requirements of Section 1396a(bb)(6) of Title 42
of the United States Code.

(b) The payment adjustment structure shall be applicable on a
site-specific basis.

(c) The payment adjustment structure shall permit an aggregate
adjustment to the payments received when actual utilization of
services for a participating FQHC’s site exceeds or falls below
expectations that were reflected within the calculation of the rates
developed pursuant to Sections 14138.14 and 14138.15. For
purposes of this payment adjustment structure, both actual and
expected utilization shall be expressed as the total number of
traditional encounters that would be recognized pursuant to
subdivision (g) of Section 14132.100 for the APM enrollees of the
participating FQHC’s site across all APM aid categories and
averaged on a per member per year basis.

(d) An adjustment pursuant to this section shall occur no more
than once per year per participating FQHC’s site during the APM
pilot project and shall be subject to approval by the department.

(1) An adjustment to payments in the case of higher than
expected utilization shall be triggered when utilization exceeds
projections by more than 5 percent for the first year, 71⁄2 percent
for the second year, and 10 percent for the third year. If the trigger
level is reached in a given year, the participating FQHC site shall
receive an aggregate payment adjustment from the principal health
plan or applicable subcontracting payer that is based upon the
difference between its actual utilization for the year and 105 percent
of projected utilization for the first year, the difference between
actual utilization and 1071⁄2 percent of projected utilization for the
second year, and the difference between actual utilization and 110
percent of projected utilization for the third year. The payment
adjustment in each instance shall be calculated as follows:

(A) The actual total utilization, expressed as traditional
encounters, for the applicable year shall be determined.

(B) The projected total utilization contained in the clinic-specific
PMPMs for the actual APM enrollees for the applicable year shall
be determined.

(C) The amount in subparagraph (B) shall be adjusted to reflect
the applicable comparison utilization for the year as follows:

(i) Multiplied by 1.05 for year one.

(ii) Multiplied by 1.075 for year two.

begin delete

(ii)

end delete

begin insert (iii) end insert  Multiplied by 1.1 for year three.

(D) The amount in subparagraph (C) shall be subtracted from
the amount in subparagraph (A).

(E) The amount in subparagraph (D) shall be multiplied by the
per-visit rate that was determined pursuant to Section 14132.100
for the participating FQHC begin insert site end insert yielding the payment adjustment
for the participating FQHC site. The payment adjustment shall be
paid to the participating FQHC site by the principal health plan,
or subcontracting payer, as applicable, in one aggregate payment.

(2) (A) To incentivize care delivery in ways that may vary from
traditional delivery of care, participating FQHCs shall have the
flexibility to experience a lower than expected visit utilization of
up to 30 percent of projected utilization. If an FQHC site’s actual
utilization is at a level that is more than 30 percent lower than the
projected utilization, the department shall review, in consultation
with the principal health plan, or subcontracting payer, as
applicable, the FQHC site’s relevant data to identify the cause or
causes of the difference, including, but not limited to, its volume
of alternative encounters. If the department is able to determine
that all or part of the lower than expected utilization was due to
objective factors developed by the department in consultation with
the principal health plans and FQHCs that are related to delivery
system transformation and enhancements, such as alternative
encounters, the department shall allow the participating FQHC
site to retain all or a portion of the payments attributable to the
utilization decrease that exceeds 30 percent lower than the projected
utilization. If the department is unable to determine that all or a
portion of the utilization decrease in excess of 30 percent was
related to delivery system transformation and enhancements
according to the objective criteria developed pursuant to this
subparagraph, the participating FQHC site shall be required to
refund the applicable payment amount to the participating health
plan or subcontracting payer pursuant to subparagraph (B).

(B) The total amount refunded by the participating begin delete FQHC’s end delete
begin insert FQHC end insert site to the principal health plan or subcontracting payer
shall be limited to an amount calculated as follows:

(i) The actual total utilization, expressed as traditional
encounters, for the applicable year shall be determined.

(ii) The projected total utilization contained in the clinic-specific
PMPMs for the actual APM enrollees for the applicable year shall
be determined and multiplied by 70 percent.

(iii) The amount in clause (i) shall be subtracted from the amount
in clause (ii).

(iv) The amount in clause begin delete (i) end delete begin insert (iii) end insert shall be multiplied by the
participating FQHC site’s per visit rate that was determined
pursuant to Section 14132.100, yielding the maximum amount of
the refund to be made by the participating FQHC site. The refund
shall be paid in one aggregate payment.

(C) Any adjustment made pursuant to this paragraph shall be
requested by a principal health plan, subcontracting payer, or
FQHC, no later than 90 days after that determination by the
department pursuant to subparagraph (A).

14138.18.  

(a) The department, in consultation with interested
FQHCs and principal health plans, may modify any begin delete methodology
or process end delete begin insert methodology, process, or provision end insert specified in this
article to the extent necessary to comply with federal law or to
obtain any necessary federal approvals.

(b) This article shall be implemented only to the extent that
federal financial participation is available and any necessary federal
approvals have been obtained.

(c) In the event of a conflict between a provision in this article
and the terms of a federally approved APM, the terms of the
federally approved APM shall control.

14138.19.  

In the event of an epidemic, or similar catastrophic
occurrence that the department determines is likely to result in at
least a begin delete 40 end delete begin insert 30 end insert percent increase in actual utilization per member per
month within the APM scope of services for one or more APM
aid categories at a participating FQHC site, the department may
adjust, or require the adjustment of, payments made pursuant to
this article as it deems necessary to account for the utilization
increase at the affected participating FQHC site. begin insert end insert begin insert The department
shall make the determination described in this section upon written
request of a participating FQHC site. end insert

begin delete

14138.20.  

(a) (1) Within six months of the conclusion of pilot
project, an evaluation shall be completed by an independent entity.
This independent entity shall report its findings to the department
and the Legislature. The evaluation shall be contingent on the
availability of nonstate General Fund moneys for this purpose, and
the availability of private foundation or nonprofit foundation money
for this purpose.

(2) A report submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government
Code.

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begin insert 14138.20. end insert   

end insert begin insert

(a) The department shall contract with an
independent entity to perform an evaluation of the APM pilot
project authorized pursuant to this article. To the extent
practicable, the evaluation shall be completed and provided to the
appropriate fiscal and policy committees of the Legislature within
six months of the conclusion of the pilot project in those counties
that are included in the initial pilot project implementation
authorized pursuant to paragraph (2) of subdivision (a) of Section
14138.12. The department shall carry out the duty imposed
pursuant to this subdivision only if there are sufficient private
foundation or nonprofit foundation funds available for this purpose.
A report submitted pursuant to this subdivision shall be submitted
in compliance with Section 9795 of the Government Code.

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(b) The evaluation begin delete shall assess end delete begin insert by the independent entity shall
assess and report on end insert whether the APM pilot project produced
improvements in access to primary care services, care quality,
patient experience, and overall health outcomes for APM enrollees.
The evaluation shall include existing FQHC required quality
metrics and an assessment of how the changes in financing allowed
for alternative types of primary care visits and alternative
encounters between the participating FQHC and the patient and
how those changes affected volume of same-day visits for mental
and physical health conditions. The evaluation shall also assess
whether the APM pilot project’s efforts to improve primary care
resulted in changes to patient service utilization patterns, including
the reduced utilization of avoidable high-cost services and services
provided outside the FQHC.

14138.21.  

begin insert (a) end insert begin insert   end insert Notwithstanding Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, the department may implement, interpret, or
make specific this article by means of all-county letters, plan letters,
plan or provider bulletins, or similar instructions, without taking
regulatory action.

begin insert

(b) Beginning January 1, 2017, and notwithstanding Section
10231.5 of the Government Code, the department shall provide a
status report to the Legislature regarding any instruction issued
by the department pursuant to subdivision (a) on a semiannual
basis until six months after implementation of the pilot project
authorized pursuant to this article.

end insert begin insert

(c) It is the intent of the Legislature, if the scope of the pilot
project authorized by this article is extended, that the department
adopt regulations to implement this article.

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14138.22.  

For purposes of implementing this article, the
department may enter into exclusive or nonexclusive contracts on
a bid or negotiated basis, including contracts for the purpose of
obtaining subject matter expertise or other technical assistance.
Any contract entered into or amended pursuant to this section shall
be exempt from Part 2 (commencing with Section 10100) of
Division 2 of the Public Contract Code and Chapter 6 (commencing
with Section 14825) of Part 5.5 of Division 3 of the Government
Code, and shall be exempt from the review or approval of any
division of the Department of General Services.