Amended in Assembly August 31, 2015

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 BillNo. 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, the department to contract with an independent entity to perform an evaluation of the APM pilot project, and would require that the evaluation be completed and provided to the Legislature, to the extent practicable, within 6 months of the conclusion of the APM pilot project in certain counties, as specified.

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

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

P2    1

SECTION 1.  

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 

5Article 4.1.  Payment Reform Pilot Program for Federally
6Qualified Health Centers
7

 

8

14138.1.  

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
17may include, but are not limited to, all of the following categories
18of aid:

P3    1(1) Adults.

2(2) Children.

3(3) Seniors and persons with disabilities.

4(4) The adult expansion population eligible pursuant to Section
514005.60, to the extent the department determines, in consultation
6with health plans and interested FQHCs, that sufficient data is
7available to allow for inclusion of this population in the APM pilot
8project. This paragraph shall not be construed to prohibit inclusion
9of the adult expansion population in the APM pilot project on a
10date subsequent to initial authorization pursuant to subdivision (a)
11of Section 14138.12.

12(c) “APM enrollee” means a member who is assigned by a
13principal health plan or subcontracting payer to a participating
14FQHC for primary care services and who is within one of the
15designated APM aid categories.

16(d) “APM pilot project” means the pilot project authorized by
17this article.

18(e) “APM scope of services” means the scope of services for a
19participating FQHC for which its per-visit rate was determined
20pursuant to Sectionbegin delete 14132.100.end deletebegin insert 14132.100, but only to the extent
21those services are covered pursuant to the contract between the
22department and the applicable principal health plan.end insert

23(f) “APM supplemental capitation” means an additional, APM
24aid category-specific, PMPM amount that is paid by the department
25to a principal health plan having one or more participating FQHCs
26in its provider network.

27(g) “Clinic-specific PMPM” means the monthly, per assigned
28 member, capitated amount the principal health plan or
29subcontracting payer is required to pay to the participating FQHC
30for the APM scope of services. The clinic-specific PMPM is
31exclusive of any incentive payments and shall be developed to
32reflect the amount the participating FQHC would have received
33under the prospective payment system methodology set forth in
34Section 14132.100.

35(h) “FQHC” means any community or public “federally qualified
36health center,” as defined in Section 1396d(l)(2)(B) of Title 42 of
37the United States Code and providing services as defined in Section
381396d(a)(2)(C) of Title 42 of the United States Code.

39(i) “Member” means a Medi-Cal beneficiary who is enrolled
40with a principal health plan or subcontracting payer.

P4    1(j) “Participating FQHC” means an FQHC participating in the
2APM pilot project at one or more of the FQHC’s sites.
3“Participating FQHC” also refers tobegin delete aend deletebegin insert anend insert FQHC’s site that is
4participating in the APM pilot project.

5(k) “PMPM” and “per member per month” both mean a monthly
6payment made for providing or arranging health care services for
7a member and may refer to a payment by the department to a
8principal health plan, or by a principal health plan to a
9subcontracting payer, or by a principal health plan or
10subcontracting payer to an FQHC, or from and to other entities as
11specified in this article.

12(l) “Principal health plan” means an organization or entity that
13enters into a contract with the department pursuant to Article 2.7
14(commencing with Section 14087.3), Article 2.8 (commencing
15with Section 14087.5), Article 2.81 (commencing with Section
1614087.96), Article 2.82 (commencing with Section 14087.98),
17Article 2.91 (commencing with Section 14089), or Chapter 8
18(commencing with Section 14200), to provide or arrange for the
19care of Medi-Cal beneficiaries within a county in which the APM
20pilot project is implemented.

21(m) “Subcontracting payer” means an organization or entity
22that subcontracts with a principal health plan to provide or arrange
23for the care of its members and contains one or more participating
24FQHCs in its provider network.

25(n) “Traditional encounter” means a face-to-face encounter that
26is recognized as a billable visit, as described in subdivision (g) of
27Section 14132.100.

28(o) “Traditional wrap-around payment” means the supplemental
29payments payable to an FQHC in the absence of the APM pilot
30project with respect to services provided to Medi-Cal managed
31care enrollees, which are made by the department pursuant to
32subdivision (e) of Section 14087.325 and subdivision (h) of Section
3314132.100.

34

14138.10.  

The Legislature finds and declares all of the
35following:

36(a) The federal Patient Protection and Affordable Care Act has
37made and continues to make significant progress in driving health
38care delivery system reforms that emphasize health outcomes,
39efficiency, patient satisfaction, and value.

P5    1(b) California has expanded Medi-Cal to cover more than 12
2million residents, roughly one-third of the state’s population. To
3meet the needs of the state’s growing patient population, California
4must continue to explore new strategies to expand access to high
5quality and cost-effective primary care services.

6(c) With such a large portion of the state’s population receiving
7health care services through Medi-Cal, it is imperative that
8patient-centered innovations drive Medi-Cal reforms.

9(d) Health care today is more than a face-to-face visit with a
10provider, but rather a whole-person approach, often including a
11physician, a care team of other health care providers, technology
12inside and outside of a health center, and wellness activities
13including nutrition and exercise classes, all of which are designed
14to be more easily incorporated into a patient’s daily life.

15(e) Accessible health care in a manner that fits a patient’s needs
16is important for improving patient satisfaction, building trust, and
17ultimately improving health outcomes.

18(f) In an attempt to invest up front in health care services that
19can prevent longer term avoidable high-cost services, the federal
20Patient Protection and Affordable Care Act made a significant
21investment in FQHCs.

22(g) FQHCs are essential community providers, providing high
23quality, cost-effective comprehensive primary care services to
24underserved communities.

25(h) Today FQHCs face certain restrictions because the current
26payment structure reimburses an FQHC only when there is a
27traditional encounter with a provider. Current law prohibits
28payment for both a primary care visit and mental health visit on
29the same day.

30(i) A more practical approach financially incentivizes FQHCs
31to provide the right care at the right time. Restructuring the current
32visit based, fee-for-service model with a capitated equivalent
33affords FQHCs the assurance of payment and the flexibility to
34deliver care in the most appropriate patient-centered manner.

35(j) A reformed payment methodology will enable FQHCs to
36take advantage of alternative encounters. Alternative encounters,
37such as group visits, same-day mental healthbegin delete servicesend deletebegin insert services,end insert
38 and telephone and email consultations, are effective care delivery
39methods and contribute to a patient’s overall health and well-being.

P6    1

14138.11.  

It is the intent of the Legislature to test an alternative
2payment methodology for FQHCs, as permitted by federal law,
3and to design and implement the APM to do all of the following:

4(a) Provide patient-centered care delivery options to California’s
5expansive Medi-Cal population.

6(b) Promote cost efficiencies, and improve population health
7and patient satisfaction.

8(c) Improve the capacity of FQHCs to deliver high-quality care
9to a population growing in numbers and in complexity of needs.

10(d) Transition away from a payment system that rewards volume
11with a flexible alternative that recognizes the value added when
12Medi-Cal beneficiaries are able to more easily access the care they
13need and when providers are able to deliver care in the most
14appropriate manner to patients.

15(e) Track alternative encounters at FQHCs in order to establish
16a data set from which alternative encounters may be assigned a
17value that can be used in future ratesetting.

18(f) Implement the APM where the FQHC receives at least the
19same amount of funding it would receive under the current payment
20system, and in a manner that does not disrupt patient care or
21threaten FQHC viability.

22

14138.12.  

(a) (1) The department shall authorize a payment
23reform pilot project for FQHCs using an APM in accordance with
24this article.

25(2) Implementation of the APM pilot project shall begin no
26sooner than July 1, 2016, subject to any necessary federal
27approvals.

28(3) The department shall authorize implementation of an APM
29pilot project with respect to a county for a period of up to three
30years.

31(4) At least 90 days prior to implementation of an APM pilot
32project for a participating FQHC site in a county, the department
33shall notify a principal health plan in writing of the principal health
34plan’s specific APM supplemental capitation rate for the
35participating FQHC in the county. The notification from the
36department to the principal health plan shall be based on the rates
37submitted by the department for federal approval. If the APM
38supplemental capitation rates are modified after the notification
39to a principal health plan, the department shall notify a principal
40health plan of the revised rates and, if the principal health plan
P7    1requests, adjust the implementation date of the APM pilot project
2for a participating FQHC in a county so that it occurs at least 90
3days after the revised rate notification.

4(5) At least 90 days prior to implementation of an APM pilot
5project for a participating FQHC site in a county, the department
6shall notify a principal health plan and the FQHC site in writing
7of the clinic-specific PMPM rate for the participating FQHC site
8in the county.

9(6) The APM pilot project for a participating FQHC site in a
10county shall begin no sooner than the first day of the month
11following the month in which the department received federal
12approval of the principal health plan’sbegin delete specifieend deletebegin insert specificend insert APM
13supplemental capitation rates.

14(b) The APM pilot project shall comply with federal APM
15requirements and the department shall file a state plan amendment
16and seek any federal approvals as necessary for the implementation
17of this article. Nothing in this article shall be construed to authorize
18the department to seek federal approval to affirmatively waive
19Section 1396a(bb)(6) of Title 42 of the United States Code.

20(c) Nothing in this article shall be construed to limit or eliminate
21services provided by FQHCs as covered benefits in the Medi-Cal
22program.

23

14138.13.  

(a) The department shall notify every FQHC in the
24state of the APM pilot project and shall invite any interested FQHC
25to apply for participation in the APM with respect to one or more
26of the FQHC’s sites. Consistent with federal law, the state plan
27amendment described in subdivision (b) of Section 14138.12 shall
28specify that the department and each participating FQHC
29voluntarily agrees to the APM.

30(b) (1) The department shall develop, in consultation with
31interested FQHCs and principal health plans and consistent with
32federal

33 law, the eligibility criteria to be used in evaluating applications
34from interested FQHCs for participation in the pilot project, which
35shall include, but need not be limited to, the following:

36(A) The FQHC has the demonstrated ability to collect and
37submit encounter data in a form and manner that satisfies
38department requirements.

39(B) The FQHC is in good standing with the relevant state and
40federal regulators.

P8    1(C) The FQHC has the financial and administrative capacity to
2undertake payment reform.

3(2) In addition to the criteria listed in paragraph (1), the
4department may take into consideration the number of APM
5enrollees assigned by a plan at each FQHC site as an eligibility
6requirement for FQHC participation.

7(3) In accordance with the process and criteria developed
8pursuant to paragraphs (1) and (2), the department shall approve
9or deny an interested FQHC site application for participation in
10the pilot project. The department may limit the number of
11participating FQHCs in the pilot project and the number of counties
12in which the pilot project will operate.

13(4) All principal health plans and applicable subcontracting
14payers are required to participate in the APM pilot project pursuant
15to this article to the extent that one or more contracted FQHC sites
16located in the plan’s county are selected to participate in the pilot
17project.

18(c) The APM shall be applied only with respect to a participating
19FQHC for services the FQHC provides to its APM enrollees that
20are within its APM scope of services.

21(d) Payment to the participating FQHC shall continue to be
22governed by the provisions of Sectionsbegin delete 14132.100 and 14087.325end delete
23begin insert 14087.325 and 14132.100end insert for services provided with respect to
24both of the following categories of patients:

25(1) A Medi-Cal beneficiary who receives services from any
26FQHC to which the beneficiary is not assigned for primary care
27services under the APM pilot project by a principal health plan or
28subcontracting payer.

29(2) A person who is a Medi-Cal beneficiary, but who is not a
30Medi-Cal beneficiary within a designated APM aid category.

31(e) A participating FQHC, with respect to one or more sites of
32its choosing, may opt to discontinue its participation in the pilot
33project subject to a notice requirement of no less than 120 days.

34

14138.14.  

(a) A participating FQHC shall be compensated for
35the APM scope of services provided to its APM enrollees pursuant
36to this section.

37(b) A participating FQHC shall receive from the principal health
38plan or applicable subcontracting payer reimbursement for each
39APM enrollee in the form of a clinic-specific PMPM for the
40applicable APM aid category. The department shall determine the
P9    1clinic-specific PMPM for each APM aid category taking into
2account all the following factors:

3(1) Historical utilization of FQHC services by assigned members
4in each APM aid category.

5(2) The participating FQHC’s prospective payment system rate
6and applicable adjustments relevant for the fiscal year, such as
7annual rate adjustments.

8(3) Other trend and utilization adjustments as appropriate in
9order to reflect the level of reimbursement that would have been
10received by the participating FQHCs in the absence of the APM
11pilot project.

12(c) A participating FQHC and applicable principal health plan
13or subcontracting payer may enter into arrangements in which the
14clinic-specific PMPM amount required in subdivision (b) is paid
15in more than one capitated increment, as long as the total capitation
16each month received by the participating FQHC is equivalent to
17the clinic-specific PMPM.

18(d) In cases where a subcontracting payer is involved, the
19principal health plan shall demonstrate and certify to the
20department that it has contracts or other arrangements in place that
21provide for meeting the requirements in subdivision (b) and to the
22extent that the subcontracting payer fails to comply with the
23applicable requirements in this article, the principal health plan
24shall then be responsible to ensure the participating FQHC receives
25all payments due under this article in a timely manner.

26(e) The department shall adjust the amounts in subdivision (b)
27as necessary to account for any change to the prospective payment
28system rate for participating FQHCs, including changes resulting
29from a change in the Medicare Economic Index pursuant to
30subdivision (d) of Section 14132.100, and any changes in the
31FQHC’s scope of services pursuant to subdivision (e) of Section
3214132.100.

33(f) An FQHC site participating in the APM pilot project shall
34not receive traditional wrap-around payments pursuant to Sections
3514132.100 and 14087.325 for visits within the APM scope of
36services it provides to its APM enrollees.

37

14138.15.  

(a) A principal health plan shall be compensated
38by the department for the services provided to its APM enrollees
39pursuant to this section.

P10   1(b) For each principal health plan that contains at least one
2participating FQHC in its provider network, the department shall
3determine an APM supplemental capitation amount for each APM
4aid category to be paid by the department to the principal health
5plan, which shall be expressed as a PMPM amount. This
6supplemental capitation amount will be in addition to the funding
7for the APM scope of services already contained in the principal
8health plan’s capitated rates paid by the department and shall be
9actuarially sound. The department shall determine the APM
10supplemental capitation amount for each APM aid category, taking
11into account all of the following factors:

12(1) The clinic-specific PMPM amounts for each APM aid
13category for each participating FQHC in the plan’s network.

14(2) The funding for the APM scope of services already contained
15in the principal health plan’s capitated rates.

16(3) The historical wrap-around payments paid by the department
17for participating FQHCs for assigned members in each APM aid
18category.

19(4) As applicable, the likely distribution of members among
20multiple participating FQHCs.

21(c) The principal health plan shall report to the department, in
22a form to be determined by the department in consultation with
23the principal health plan, the number of APM enrollees for each
24APM aid category in the plan each month.

25(d) The department shall pay each principal health plan its
26applicable APM supplemental capitation amount for the number
27of APM enrollees for each APM aid category reported by the
28principal health plan pursuant to subdivision (c).

29(e) The department, in consultation with the principal health
30plans, shall develop methods to verify the information reported
31pursuant to subdivision (c), and may adjust the payments made
32pursuant to subdivision (d) as appropriate to reflect the verified
33number of APM enrollees for each APM aid category.

34(f) The department shall adjust the amounts in subdivision (b)
35as necessary to account for any change to the prospective payment
36system rate for participating FQHCs, including changes resulting
37from a change in the Medicare Economic Index pursuant to
38subdivision (d) of Section 14132.100, and any changes in the
39FQHC’s scope of services pursuant to subdivision (e) of Section
4014132.100.

P11   1

14138.16.  

(a) For the duration of the APM pilot project, the
2department shall establish a risk corridor structure for the principal
3health plans relating only to the APM supplemental capitation
4payments pursuant to Section 14138.15, to the extent consistent
5withbegin delete principalsend deletebegin insert principlesend insert of actuarial soundness.

6(b) The risk sharing of the costs under this section shall be
7constructed by the department so that it is symmetrical with respect
8to risk and profit, and so that all of the following apply:

9(1) The principal health plan is fully responsible for all costs
10up to one-half of 1 percent in excess of the APM supplemental
11capitation amounts.

12(2) The principal health plan shall fully retain the revenues paid
13through the APM supplemental capitation amounts in excess of
14the costs incurred up to one-half of 1 percent below the APM
15supplemental capitation amounts.

16(3) The principal health plan and the department shall share
17equally in the responsibility for costs in excess of the APM
18supplemental capitation amounts that are greater than one-half of
191 percent but less than 1 percent above the APM supplemental
20capitation amounts.

21(4) The principal health plan and the department shall share
22equally the benefit of the revenues paid through the APM
23supplemental capitation amounts in excess of the costs incurred
24that are greater than one-half of 1 percent but less than 1 percent
25below the APM supplemental capitation amounts.

26(5) The department shall be fully responsible for all costs in
27excess of the APM supplemental capitation amounts that are more
28than 1 percent above the APM supplemental capitation amounts.

29(6) The department shall fully retain the revenues paid through
30the APM supplemental capitation amounts in excess of the costs
31incurred greater than 1 percent below the supplemental capitation
32amounts.

33(c) The department shall develop specific contract language to
34implement the requirements of this section that shall be
35incorporated into the contracts of each affected principal health
36plan.

37(d) This section shall be implemented only to the extent that
38any necessary federal approvals or waivers are obtained.

39

14138.17.  

(a) In order to ensure participating FQHCs have an
40incentive to manage visits and costs, while at the same time
P12   1exercising a reasonable amount of flexibility to deliver care in the
2most efficient and quality driven manner, for the duration of the
3APM pilot project the department shall, in accordance with this
4subdivision, establish a payment adjustment structure. The payment
5adjustment structure shall be developed with stakeholder input and
6shall meet the requirements of Section 1396a(bb)(6) of Title 42
7of the United States Code.

8(b) The payment adjustment structure shall be applicable on a
9site-specific basis.

10(c) The payment adjustment structure shall permit an aggregate
11 adjustment to the payments received when actual utilization of
12services for a participating FQHC’s site exceeds or falls below
13expectations that were reflected within the calculation of the rates
14developed pursuant to Sections 14138.14 and 14138.15. For
15purposes of this payment adjustment structure, both actual and
16expected utilization shall be expressed as the total number of
17traditional encounters that would be recognized pursuant to
18subdivision (g) of Section 14132.100 for the APM enrollees of the
19participating FQHC’s site across all APM aid categories and
20averaged on a per member per year basis.

21(d) An adjustment pursuant to this section shall occur no more
22than once per year per participating FQHC’s site during the APM
23pilot project and shall be subject to approval by the department.

24(1) An adjustment to payments in the case of higher than
25expected utilization shall be triggered when utilization exceeds
26projections by more than 5 percent for the first year, 712 percent
27for the second year, and 10 percent for the third year. If the trigger
28level is reached in a given year, the participating FQHC site shall
29receive an aggregate payment adjustment from the principal health
30plan or applicable subcontracting payer that is based upon the
31difference between its actual utilization for the year and 105 percent
32of projected utilization for the first year, the difference between
33actual utilization and 10712 percent of projected utilization for the
34second year, and the difference between actual utilization and 110
35percent of projected utilization for the third year. The payment
36adjustment in each instance shall be calculated as follows:

37(A) The actual total utilization, expressed as traditional
38encounters, for the applicable year shall be determined.

P13   1(B) The projected total utilization contained in the clinic-specific
2PMPMs for the actual APM enrollees for the applicable year shall
3be determined.

4(C) The amount in subparagraph (B) shall be adjusted to reflect
5the applicable comparison utilization for the year as follows:

6(i) Multiplied by 1.05 for year one.

7(ii) Multiplied by 1.075 for year two.

8(iii) Multiplied by 1.1 for year three.

9(D) The amount in subparagraph (C) shall be subtracted from
10the amount in subparagraph (A).

11(E) The amount in subparagraph (D) shall be multiplied by the
12per-visit rate that was determined pursuant to Section 14132.100
13for the participating FQHC site yielding the payment adjustment
14for the participating FQHC site. The payment adjustment shall be
15paid to the participating FQHC site by the principal health plan,
16or subcontracting payer, as applicable, in one aggregate payment.

17(2) (A) To incentivize care delivery in ways that may vary from
18traditional delivery of care, participating FQHCs shall have the
19flexibility to experience a lower than expected visit utilization of
20up to 30 percent of projected utilization. If an FQHC site’s actual
21utilization is at a level that is more than 30 percent lower than the
22projected utilization, the department shall review, in consultation
23with the principal health plan, or subcontracting payer, as
24applicable, the FQHC site’s relevant data to identify the cause or
25causes of the difference, including, but not limited to, its volume
26of alternative encounters. If the department is able to determine
27that all or part of the lower than expected utilization was due to
28objective factors developed by the department in consultation with
29the principal health plans and FQHCs that are related to delivery
30system transformation and enhancements, such as alternative
31encounters, the department shall allow the participating FQHC
32site to retain all or a portion of the payments attributable to the
33utilization decrease that exceeds 30 percent lower than the projected
34utilization. If the department is unable to determine that all or a
35portion of the utilization decrease in excess of 30 percent was
36related to delivery system transformation and enhancements
37according to the objective criteria developed pursuant to this
38subparagraph, the participating FQHC site shall be required to
39refund the applicable payment amount to thebegin delete participatingend deletebegin insert principalend insert
40 health plan or subcontracting payer pursuant to subparagraph (B).

P14   1(B) The total amount refunded by the participating FQHC site
2to the principal health plan or subcontracting payer shall be limited
3to an amount calculated as follows:

4(i) The actual total utilization, expressed as traditional
5encounters, for the applicable year shall be determined.

6(ii) The projected total utilization contained in the clinic-specific
7PMPMs for the actual APM enrollees for the applicable year shall
8be determined and multiplied by 70 percent.

9(iii) The amount in clause (i) shall be subtracted from the amount
10in clause (ii).

11(iv) The amount in clause (iii) shall be multiplied by the
12participating FQHC site’s per-visit rate that was determined
13pursuant to Section 14132.100, yielding the maximum amount of
14the refund to be made by the participating FQHC site. The refund
15shall be paid in one aggregate payment.

16(C) Any adjustment made pursuant to this paragraph shall be
17requested by a principal health plan, subcontracting payer, or
18FQHC, no later than 90 days after that determination by the
19department pursuant to subparagraph (A).

20

14138.18.  

(a) The department, in consultation with interested
21FQHCs and principal health plans, may modify any methodology,
22process, or provision specified in this article to the extent necessary
23to comply with federal law or to obtain any necessary federal
24approvals.

25(b) This article shall be implemented only to the extent that
26federal financial participation is available and any necessary federal
27approvals have been obtained.

28(c) In the event of a conflict between a provision in this article
29and the terms of a federally approved APM, the terms of the
30federally approved APM shall control.

31

14138.19.  

In the event of an epidemic, or similar catastrophic
32occurrence that the department determines is likely to result in at
33least a 30 percent increase in actual utilization per member per
34month within the APM scope of services for one or more APM
35aid categories at a participating FQHC site, the department may
36adjust, or require the adjustment of, payments made pursuant to
37this article as it deems necessary to account for the utilization
38increase at the affected participating FQHC site. The department
39shall make the determination described in this section upon written
40request of a participating FQHC site.

P15   1

begin delete14138.20.end delete
2begin insert14138.21.end insert  

begin insertNothing in this article shall be deemed to affect the
3amounts paid or the reimbursement methodology applicable to
4FQHCs for dental services that are provided outside the scope of
5a contract between the department and an applicable principal
6health plan that is in effect as of July 1, 2015.end insert
begin delete (a)end delete

7begin insert(a)end insert The department shall contract with an independent entity to
8perform an evaluation of the APM pilot project authorized pursuant
9to this article. To the extent practicable, the evaluation shall be
10completed and provided to the appropriate fiscal and policy
11committees of the Legislature within six months of the conclusion
12of the pilot project in those counties that are included in the initial
13pilot project implementation authorized pursuant to paragraph (2)
14of subdivision (a) of Section 14138.12. The department shall carry
15out the duty imposed pursuant to this subdivision only if there are
16sufficient private foundation or nonprofit foundation funds
17available for this purpose. A report submitted pursuant to this
18subdivision shall be submitted in compliance with Section 9795
19of the Government Code.

20(b) The evaluation by the independent entity shall assess and
21report on whether the APM pilot project produced improvements
22in access to primary care services, care quality, patient experience,
23and overall health outcomes for APM enrollees. The evaluation
24shall include existing FQHC required quality metrics and an
25assessment of how the changes in financing allowed for alternative
26types of primary care visits and alternative encounters between
27the participating FQHC and the patient and how those changes
28affected volume of same-day visits for mental and physical health
29conditions. The evaluation shall also assess whether the APM pilot
30project’s efforts to improve primary care resulted in changes to
31patient service utilization patterns, including the reduced utilization
32of avoidable high-cost services and services provided outside the
33FQHC.begin insert The evaluation shall also identify any administrative and
34financial implementation issues for FQHCs that may arise if
35subsequent legislation makes the pilot program operative statewide.end insert

36

begin delete14138.21.end delete
37begin insert14138.22.end insert  

(a) Notwithstanding Chapter 3.5 (commencing with
38Section 11340) of Part 1 of Division 3 of Title 2 of the Government
39Code, the department may implement, interpret, or make specific
40this article by means of all-county letters, plan letters, plan or
P16   1provider bulletins, or similar instructions, without taking regulatory
2action.

3(b) Beginning January 1, 2017, and notwithstanding Section
410231.5 of the Government Code, the department shall provide a
5status report to the Legislature regarding any instruction issued by
6the department pursuant to subdivision (a) on a semiannual basis
7until six months after implementation of the pilot project authorized
8pursuant to this article.

9(c) It is the intent of the Legislature, if the scope of the pilot
10project authorized by this article is extended, that the department
11adopt regulations to implement this article.

12

begin delete14138.22.end delete
13begin insert14138.23.end insert  

For purposes of implementing this article, the
14department may enter into exclusive or nonexclusive contracts on
15a bid or negotiated basis, including contracts for the purpose of
16obtaining subject matter expertise or other technical assistance.
17Any contract entered into or amended pursuant to this section shall
18be exempt from Part 2 (commencing with Section 10100) of
19Division 2 of the Public Contract Code and Chapter 6 (commencing
20with Section 14825) of Part 5.5 of Division 3 of the Government
21Code, and shall be exempt from the review or approval of any
22division of the Department of General Services.



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