BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 147|
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UNFINISHED BUSINESS
Bill No: SB 147
Author: Hernandez (D)
Amended: 8/31/15
Vote: 21
SENATE HEALTH COMMITTEE: 9-0, 4/15/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE FLOOR: 40-0, 6/1/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner,
Stone, Vidak, Wieckowski, Wolk
ASSEMBLY FLOOR: 80-0, 9/2/15 - See last page for vote
SUBJECT: Federally qualified health centers
SOURCE: California Association of Public Hospitals
California Primary Care Association
L.A. Care Health Plan
DIGEST: This bill requires the Department of Health Care
Services (DHCS) to authorize a three-year payment reform pilot
project for federally qualified health centers (FQHCs) using an
alternative payment methodology (APM) authorized under federal
Medicaid law. This bill requires an FQHC participating in the
pilot to receive a per member per month (PMPM) payment for each
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of its APM enrollees from a Medi-Cal managed care health plan,
instead of the wrap around payment FQHCs currently receive from
DHCS.
Assembly Amendments delete the prohibition against Medi-Cal rate
reductions for health plans and FQHCs; clarify the duration of
the pilot program as three years in each county; require DHCS to
develop eligibility criteria for evaluating FQHC applications
for participation in the pilot project; allow DHCS to adjust
payments to FQHCs in the event of an epidemic, or similar
catastrophic occurrence that is likely to result in at least a
30 percent increase in actual utilization at a participating
FQHC site; and provide DHCS with additional flexibility in
implementing the provisions of this bill.
ANALYSIS:
Existing law:
1) Establishes the Medi-Cal program as California's Medicaid
program, administered by DHCS, which provides comprehensive
health care coverage for low-income individuals. FQHC
services are covered benefits under the Medi-Cal program.
2) Requires FQHCs to be reimbursed on a per-visit basis.
Defines a "visit" as a face-to-face encounter between an FQHC
patient and specified health care providers.
3) Authorizes, under federal Medicaid law, states to provide
for payment to an FQHC in an amount which is determined under
an APM that is:
a) Agreed to by the state and the FQHC; and,
b) Results in payment to the FQHC of an amount which is
at least equal to the amount otherwise required to be paid
to the FQHC.
This bill:
1) Requires DHCS to authorize a payment reform pilot project
for FQHCs using an APM, beginning no sooner than July 1,
2016, subject to any necessary federal approvals. Requires
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DHCS to authorize implementation of the
pilot project in a county for a period of up to three years.
2) Requires the APM pilot project to comply with federal APM
requirements, and requires DHCS to file a state plan
amendment as necessary for the implementation of this bill.
3) Requires DHCS to determine the FQHC-specific per member PMPM
for each APM aid category, taking into account all specified
factors.
4) Requires DHCS to determine an APM supplemental capitation
amount for each APM aid category to be paid by DHCS to each
Medi-Cal principal health plan (expressed as a PMPM amount)
that contains at least one participating FQHC in its provider
network.
5) Requires each participating FQHC to receive from the
principal health plan or applicable subcontracting payer
reimbursement a clinic-specific PMPM payment for the
applicable APM aid category (the APM aid categories are
adults, children, seniors and persons with disabilities and
the adult expansion category if sufficient data is
available). This PMPM payment would be in lieu of the
traditional wrap-around payment made by DHCS to the FQHC.
6) Requires DHCS to adjust the FQHC payment amounts 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 and any changes in the FQHC's scope of services.
7) Requires DHCS to establish a risk corridor structure for
principal health plans relating to the APM supplemental
capitation payments pursuant that limits the profit and loss
that could be incurred or gained by a plan participating in
the pilot.
8) Requires DHCS to establish a payment adjustment structure
that permits an aggregate adjustment to the PMPM payments
received when actual utilization of services for a
participating FQHC site exceeds or falls below expectations
that were reflected within the calculation of the rates.
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9) Permits DHCS, in consultation with interested FQHCs and
principal health plans, to modify any methodology, process,
or provision specified in this bill to the extent necessary
to comply with federal law or to obtain any necessary federal
approvals.
10)Requires DHCS to contract with an independent entity to
perform an evaluation of the APM pilot project, which would
assess and report on whether the APM pilot project produced
improvements in access to primary care services, care
quality, patient experience, and overall health outcomes for
APM enrollees.
11)Allow DHCS to use provider bulletins instead of regulations
in implementing this bill, and allow DHCS to 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
Comments
1)Author's statement. According to the author, "[T]he APM pilot
project established by this bill would require DHCS to
establish a three-year health reform pilot project that would
dramatically alter the way FQHCs deliver primary care and are
reimbursed by Medi-Cal. In participating counties, this bill
would replace the existing per visit Medi-Cal payment
methodology with a capitated system through Medi-Cal managed
care plans using the APM option authorized under federal law.
The capitated payment would provide greater flexibility in
health care delivery for the FQHC by enabling the FQHC to
provide different types of health care services without having
to meet the per visit billing requirement to generate Medi-Cal
revenue. For example, an FQHC could use the capitation payment
to provide a patient with different services on the same day
(an FQHC cannot bill separately for a primary care visit and a
mental health care appointment that occur on the same day
under current DHCS policy), or to provide health care services
through different means (such as phone consultation and email
consultation) or through different providers types (such as
dieticians)."
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2)Current Medi-Cal Reimbursement to FQHCs. Federal Medicaid
payment to FQHCs are governed by state (Medi-Cal in
California) and federal law. In December 2000, Congress
required states to change their FQHC payment methodology from
a retrospective to a prospective payment system (PPS). Under
PPS, State Medicaid agencies are required to pay centers their
PPS per-visit rate (or an APM, discussed below) for each
face-to-face encounter between a Medicaid beneficiary and one
of the FQHC's billable providers for a covered service.
3)For Medi-Cal managed care plan patients, DHCS is required to
reimburse an FQHC for the difference between its per-visit PPS
rate and the payment made by the plan. This payment is known
as a "wrap around" payment. The Medi-Cal managed care
wrap-around rate was established to comply with federal and
state regulation requirement to reimburse a provider for the
difference between their PPS rate and their Medi-Cal managed
care reimbursement. This bill calls for a pilot program using
an APM where FQHCs would receive PMPM payments from the health
plan, and would no longer receive a "wrap around" payment from
DHCS.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee:
1)Likely costs of $450,000 per year for one to two years to
develop the pilot project and apply for federal approval of
the pilot project (GF/federal/potential private funds).
2)One-time costs of $150,000 to $300,000 to prepare an
evaluation of the pilot project (private funds). At least one
foundation has expressed an expectation in writing that they
will continue to provide financial support to the state for
this APM effort, including for an evaluation and technical
assistance to clinics.
3)Although DHCS intends the pilot be cost-neutral, there is the
potential for unknown costs or savings for Medi-Cal health
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care services provided by participating clinics. Because the
opportunity for both costs and savings exists, on balance,
there is not likely to be a significant net cost to changing
the payment methodology for participating clinics.
Implementation of an APM has the potential to change patterns
of health care services utilization and health care practice
at clinics. This bill outlines "risk corridors" that limit
the fiscal risk and benefit for clinics and plans. Certain
scenarios may result in DHCS making additional payments, or
retaining additional savings, from what is projected. Since
the projected costs based on the APM are supposed to equate to
what DHCS would pay using traditional per-visit methodology,
differences from this projection mean additional costs or
savings as compared to the status quo. It is difficult or
impossible to quantify these effects. Over the long term, it
is hopeful that the new methodology would result in either
cost savings from increased efficiency, or, more likely based
on how clinic's rates are currently constructed, a higher
level of service for the same costs.
SUPPORT: (Verified8/30/15)
California Association of Public Hospitals (co-source)
California Primary Care Association (co-source)
L.A. Care Health Plan (co-source)
AltaMed Health Services Corporation
American Federation of State, County and Municipal Employees,
AFL-CIO
Arroyo Vista Family Health Center
California Association of Physician Groups
Clinica Monsenor Oscar A. Romero
Community Clinic Association of Los Angeles County
National Association of Social Workers - California Chapter
Northeast Valley Health Corporation
OPPOSITION: (Verified8/30/15)
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None received
ARGUMENTS IN SUPPORT: This bill is jointly sponsored by the
California Primary Care Association, the California Association
of Public Hospitals and Health Systems and L.A. Care Health
Plan. The sponsors argue the APM pilot project established by
this bill will enable FQHCs to deliver care differently by
converting the per visit rate FQHCs receive to a capitation
payment. Under the proposal, the capitated payment would afford
the FQHC with greater flexibility in health care delivery as
they no longer will have to meet the face-to-face per visit
billing requirements. Under the pilot, an FQHC could use the
monthly capitation payment to provide health care services in
new ways, such as phone consultation or to answer patient
questions via email. In addition, the FQHC could provide mental
health and physical health services on the same day, thus better
integrating behavioral health and primary care. FQHCs could also
utilize a more diverse array of qualified professionals, such as
dieticians, clinical pharmacists, dieticians, community health
workers, and nurses, to improve care management and provide
team-based care.
ASSEMBLY FLOOR: 80-0, 9/2/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by:Scott Bain / HEALTH /
9/2/15 18:10:52
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