Amended in Assembly August 24, 2015

Amended in Senate June 1, 2015

Amended in Senate April 6, 2015

Senate Bill No. 447

Introduced by Senator Allen

February 25, 2015

An act to begin insert add Section 1222.1 to the Health and Safety Code, and to end insert amend begin delete Section 14132.01 end delete begin insert Sections 14043.17 and 24005 end insert of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

SB 447, as amended, Allen. Medi-Cal: clinics: begin delete drugs and supplies. end delete begin insert enrollment applications. end insert

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.

The Medi-Cal begin delete program, pursuant to a federal waiver, end delete begin insert program end insert administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Program, to provide comprehensive clinical family planning services to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those begin delete services pursuant to the waiver. Existing law requires reimbursement for drugs and supplies covered under the Medi-Cal program and Family PACT Program by a licensed community clinic or free clinic, or an intermittent clinic, to be the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of the drugs or products as provided to retail pharmacies under the Medi-Cal program. Existing law sets the costs for drugs and supplies covered under those programs at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law also sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or less days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription. end delete begin insert services. end insert

begin delete

This bill would revise this reimbursement formula and would instead require the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply, to be calculated not less than annually, and the Medi-Cal reimbursement rate. The bill would remove the cap on reimbursement that is based on the net cost of drugs or supplies when provided by retail pharmacies under the Medi-Cal program.

end delete begin insert

Existing law requires the State Department of Health Care Services to approve the application of an affiliate clinic, as defined, for enrollment into the Family PACT Program within 30 days of receiving the application, as specified. Existing law also requires the State Department of Public Health to implement a process that allows an applicant for licensure as a primary care clinic, as defined, to submit an application for review of the clinic’s qualifications for enrollment and certification in the Medi-Cal program, and, among others, the Family PACT Program. Existing law requires the State Department of Health Care Services, within 30 days after receiving confirmation of certification for enrollment of an affiliate clinic in the Medi-Cal program, to enroll the clinic in the Medi-Cal program retroactive to the date of certification.

end insert begin insert

This bill would eliminate the requirement that the State Department of Health Care Services approve an application for enrollment into the Family PACT Program, and would instead require a primary care clinic or an affiliate clinic that is seeking to enroll in the program to submit an application to the State Department of Public Health. The bill would require a clinic not enrolled in the Medi-Cal program to submit a consolidated application for enrollment in both the Medi-Cal program and the Family PACT program, and would require a clinic already enrolled in the Medi-Cal program to submit an application for enrollment in the Family PACT Program. The bill would require the State Department of Public Health to review that application to certify the clinic for enrollment in those programs, as applicable, and to notify the State Department of Health Care Services of that certification within 15 days after it is granted. The bill would require the State Department of Health Care Services to enroll the clinic in those programs within 15 days after receiving notification from the State Department of Public Health, as specified. The bill would require the State Department of Public Health to develop consolidated application forms, 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:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1222.1 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 1222.1. end insert   

(a) (1) As part of the application for licensure either
as a primary care clinic, as described in subdivision (a) of Section
1204, or as an affiliate clinic, as described in Section 1218.1, the
department shall accept a consolidated application for enrollment
in both the Medi-Cal program and the Family PACT Program
that is submitted by a clinic pursuant to subparagraph (A) of
paragraph (1) of subdivision (t) of Section 24005 of the Welfare
and Institutions Code. The department shall review the clinic’s
qualifications for enrollment in both the Medi-Cal program and
the Family PACT Program, and, if approved, shall transmit its
certification for enrollment in both programs to the State
Department of Health Care Services within 15 calendar days of
the date approval is granted.

(2) The department shall accept an application for enrollment
in both the Medi-Cal program and the Family PACT Program, or
for enrollment in the Family PACT Program, from a licensed
primary care clinic, as described in subdivision (a) of Section
1204, or from a licensed affiliate clinic, as described in Section
1218.1. The department shall review the clinic’s qualifications for
enrollment in the Medi-Cal program and the Family PACT
Program, as applicable, and, if approved, shall transmit its
certification for enrollment in those programs to the State
Department of Health Care Services within 15 calendar days of
the date approval is granted.

(b) If a clinic submits an initial application for enrollment in
both the Medi-Cal program and the Family PACT Program
pursuant to paragraph (1) or (2) of subdivision (a), the department
shall apply the same certification date to its approval for
enrollment in both programs.

(c) No later than June 30, 2016, the department shall develop
a consolidated Medi-Cal program and Family PACT Program
initial application form, and a Family PACT Program initial
application form for a clinic already enrolled in the Medi-Cal
program, subject to all of the following:

(1) The department shall not require an applicant for enrollment
in the Family PACT Program to disclose any additional
information beyond what was required of a community clinic for
enrollment in the Family PACT Program as of December 31, 2014.

(2) The department shall not require an applicant to attend a
provider orientation if the applicant is owned by a nonprofit
corporation that owns at least one other primary care clinic that
has held an active enrollment in the Family PACT Program for
the immediately preceding five years, and during that period has
had no demonstrated history of a repeated or uncorrected violation
of this chapter or any regulation adopted after the enactment of
this chapter that poses an immediate jeopardy to a patient, as that
term is defined in subdivision (f) of Section 1218.1.

(d) Nothing in this section shall be construed to modify the
requirement that the department issue a license to an affiliate clinic
within 30 days of receipt of a completed application, as set forth
in subdivision (d) of Section 1218.1.

(e) A subsequent change to information reported on the initial
application described in this section shall be reported to the
centralized application unit of the department within 35 calendar
days. The department shall review the clinic’s changes, and, if
approved, shall transmit its approval to the State Department of
Health Care Services within 15 calendar days after approval is
granted. A provider that reports a change under this section other
than a change of ownership shall not be required to reenroll in
either the Medi-Cal program or the Family PACT Program.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 14043.17 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14043.17.  

(a) Notwithstanding any other law, within begin delete 30 end delete begin insert 15 end insert
calendar days of receiving confirmation of certification for
enrollment as a Medi-Cal provider for begin insert a primary care clinic, as
described in subdivision (a) of Section 1204 of the Health and
Safety Code, or end insert an affiliate primary care clinic that is licensed
pursuant to Section 1218.1 of the Health and Safety Code, the
department shall provide written notice to the applicant informing
the applicant that its Medi-Cal enrollment is approved.

(b) The department shall enroll the begin delete affiliate end delete primary care clinic
begin insert or the affiliate clinic end insert retroactive to the date of certification.

(c) This section shall not be construed to limit the department’s
authority pursuant to Section 14043.37, 14043.4, or 14043.7 to
conduct background checks, preenrollment inspections, or
unannounced visits.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 24005 of the end insert begin insert Welfare and Institutions Code end insert begin insert is
amended to read: end insert

24005.  

(a) This section shall apply to the Family Planning,
Access, Care, and Treatment begin insert (Family PACT) end insert Program identified
in subdivision (aa) of Section 14132 and this program.

(b) Only licensed medical personnel with family planning skills,
knowledge, and competency may provide the full range of family
planning medical services covered in this program.

(c) Medi-Cal enrolled providers, as determined by the
department, shall be eligible to provide family planning services
under the program when these services are within their scope of
practice and licensure. Those clinical providers electing to
participate in the program and approved by the department shall
provide the full scope of family planning education, counseling,
and medical services specified for the program, either directly or
by referral, consistent with standards of care issued by the
department.

(d) The department shall require providers to enter into clinical
agreements with the department to ensure compliance with
standards and requirements to maintain the fiscal integrity of the
program. Provider applicants, providers, and persons with an
ownership or control interest, as defined in federal Medicaid
regulations, shall be required to submit to the department their
social security numbers to the full extent allowed under federal
law. All state and federal statutes and regulations pertaining to the
audit or examination of Medi-Cal providers shall apply to this
program.

(e) Clinical provider agreements shall be signed by the provider
under penalty of perjury. The department may screen applicants
at the initial application and at any reapplication pursuant to
requirements developed by the department to determine provider
suitability for the program.

(f) The department may complete a background check on clinical
provider applicants for the purpose of verifying the accuracy of
information provided to the department for purposes of enrolling
in the program and in order to prevent fraud and abuse. The
background check may include, but not be limited to, unannounced
onsite inspection prior to enrollment, review of business records,
and data searches. If discrepancies are found to exist during the
preenrollment period, the department may conduct additional
inspections prior to enrollment. Failure to remediate significant
discrepancies as prescribed by the director may result in denial of
the application for enrollment. Providers that do not provide
services consistent with the standards of care or that do not comply
with the department’s rules related to the fiscal integrity of the
program may be disenrolled as a provider from the program at the
sole discretion of the department.

(g) The department shall not enroll any applicant who, within
the previous 10 years:

(1) Has been convicted of any felony or misdemeanor that
involves fraud or abuse in any government program, that relates
to neglect or abuse of a patient in connection with the delivery of
a health care item or service, or that is in connection with the
interference with, or obstruction of, any investigation into health
care related fraud or abuse.

(2) Has been found liable for fraud or abuse in any civil
proceeding, or that has entered into a settlement in lieu of
conviction for fraud or abuse in any government program.

(h) In addition, the department may deny enrollment to any
applicant that, at the time of application, is under investigation by
the department or any local, state, or federal government law
enforcement agency for fraud or abuse. The department shall not
deny enrollment to an otherwise qualified applicant whose felony
or misdemeanor charges did not result in a conviction solely on
the basis of the prior charges. If it is discovered that a provider is
under investigation by the department or any local, state, or federal
government law enforcement agency for fraud or abuse, that
provider shall be subject to immediate disenrollment from the
program.

(i) (1) The program shall disenroll as a program provider any
individual who, or any entity that, has a license, certificate, or other
approval to provide health care, which is revoked or suspended
by a federal, California, or other state’s licensing, certification, or
other approval authority, has otherwise lost that license, certificate,
or approval, or has surrendered that license, certificate, or approval
while a disciplinary hearing on the license, certificate, or approval
was pending. The disenrollment shall be effective on the date the
license, certificate, or approval is revoked, lost, or surrendered.

(2) A provider shall be subject to disenrollment if the provider
submits claims for payment for the services, goods, supplies, or
merchandise provided, directly or indirectly, to a program
beneficiary, by an individual or entity that has been previously
suspended, excluded, or otherwise made ineligible to receive,
directly or indirectly, reimbursement from the program or from
the Medi-Cal program and the individual has previously been listed
on either the Suspended and Ineligible Provider List, which is
published by the department, to identify suspended and otherwise
ineligible providers or any list published by the federal Office of
the Inspector General regarding the suspension or exclusion of
individuals or entities from the federal Medicare and Medicaid
programs, to identify suspended, excluded, or otherwise ineligible
providers.

(3) The department shall deactivate, immediately and without
prior notice, the provider numbers used by a provider to obtain
reimbursement from the program when warrants or documents
mailed to a provider’s mailing address, its pay to address, or its
service address, if any, are returned by the United States Postal
Service as not deliverable or when a provider has not submitted a
claim for reimbursement from the program for one year. Prior to
taking this action, the department shall use due diligence in
attempting to contact the provider at its last known telephone
number and to ascertain if the return by the United States Postal
Service is by mistake and shall use due diligence in attempting to
contact the provider by telephone or in writing to ascertain whether
the provider wishes to continue to participate in the Medi-Cal
program. If deactivation pursuant to this section occurs, the
provider shall meet the requirements for reapplication as specified
in regulation.

(4) For purposes of this subdivision:

(A) “Mailing address” means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive general program
correspondence.

(B) “Pay to address” means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive warrants.

(C) “Service address” means the address that the provider has
identified to the department in its application for enrollment as the
address at which the provider will provide services to program
beneficiaries.

(j) Subject to Article 4 (commencing with Section 19130) of
Chapter 5 of Part 2 of Division 5 of Title 2 of the Government
Code, the department may enter into contracts to secure consultant
services or information technology including, but not limited to,
software, data, or analytical techniques or methodologies for the
purpose of fraud or abuse detection and prevention. Contracts
under this section shall be exempt from the Public Contract Code.

(k)  begin delete Enrolled end delete begin insert Except as provided in Section 1222.1 of the Health
and Safety Code, enrolled end insert providers shall attend specific orientation
approved by the department in comprehensive family planning
services. Enrolled providers who insert IUDs or contraceptive
implants shall have received prior clinical training specific to these
procedures.

(l) Upon receipt of reliable evidence that would be admissible
under the administrative adjudication provisions of Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code, of fraud or willful misrepresentation
by a provider under the program or commencement of a suspension
under Section 14123, the department may do any of the following:

(1) Collect any State-Only Family Planning program or Family
Planning, Access, Care, and Treatment Program overpayment
identified through an audit or examination, or any portion thereof
from any provider. Notwithstanding Section 100171 of the Health
and Safety Code, a provider may appeal the collection of
overpayments under this section pursuant to procedures established
in Article 5.3 (commencing with Section 14170) of Chapter 7 of
Part 3 of Division 9. Overpayments collected under this section
shall not be returned to the provider during the pendency of any
appeal and may be offset to satisfy audit or appeal findings, if the
findings are against the provider. Overpayments shall be returned
to a provider with interest if findings are in favor of the provider.

(2) Withhold payment for any goods or services, or any portion
thereof, from any State-Only Family Planning program or Family
Planning, Access, Care, and Treatment Program provider. The
department shall notify the provider within five days of any
withholding of payment under this section. The notice shall do all
of the following:

(A) State that payments are being withheld in accordance with
this paragraph and that the withholding is for a temporary period
and will not continue after it is determined that the evidence of
fraud or willful misrepresentation is insufficient or when legal
proceedings relating to the alleged fraud or willful
misrepresentation are completed.

(B) Cite the circumstances under which the withholding of the
payments will be terminated.

(C) Specify, when appropriate, the type or types of claimed
payments being withheld.

(D) Inform the provider of the right to submit written evidence
that is evidence that would be admissible under the administrative
adjudication provisions of Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code,
for consideration by the department.

(3) Notwithstanding Section 100171 of the Health and Safety
Code, a provider may appeal a withholding of payment under this
section pursuant to Section 14043.65. Payments withheld under
this section shall not be returned to the provider during the
pendency of any appeal and may be offset to satisfy audit or appeal
findings.

(m) As used in this section:

(1) “Abuse” means either of the following:

(A) Practices that are inconsistent with sound fiscal or business
practices and result in unnecessary cost to the Medicaid program,
the Medicare program, the Medi-Cal program, including the Family
Planning, Access, Care, and Treatment Program, identified in
subdivision (aa) of Section 14132, another state’s Medicaid
program, or the State-Only Family Planning program, or other
health care programs operated, or financed in whole or in part, by
the federal government or any state or local agency in this state or
any other state.

(B) Practices that are inconsistent with sound medical practices
and result in reimbursement, by any of the programs referred to
in subparagraph (A) or other health care programs operated, or
financed in whole or in part, by the federal government or any
state or local agency in this state or any other state, for services
that are unnecessary or for substandard items or services that fail
to meet professionally recognized standards for health care.

(2) “Fraud” means an intentional deception or misrepresentation
made by a person with the knowledge that the deception could
result in some unauthorized benefit to himself or herself or some
other person. It includes any act that constitutes fraud under
applicable federal or state law.

(3) “Provider” means any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents of any
partnership, group, association, corporation, institution, or entity,
that provides services, goods, supplies, or merchandise, directly
or indirectly, to a beneficiary and that has been enrolled in the
program.

(4) “Convicted” means any of the following:

(A) A judgment of conviction has been entered against an
individual or entity by a federal, state, or local court, regardless
of whether there is a post-trial motion or an appeal pending or the
judgment of conviction or other record relating to the criminal
conduct has been expunged or otherwise removed.

(B) A federal, state, or local court has made a finding of guilt
against an individual or entity.

(C) A federal, state, or local court has accepted a plea of guilty
or nolo contendere by an individual or entity.

(D) An individual or entity has entered into participation in a
first offender, deferred adjudication, or other program or
arrangement where judgment of conviction has been withheld.

(5) “Professionally recognized standards of health care” means
statewide or national standards of care, whether in writing or not,
that professional peers of the individual or entity whose provision
of care is an issue, recognize as applying to those peers practicing
or providing care within a state. When the United States
Department of Health and Human Services has declared a treatment
modality not to be safe and effective, practitioners that employ
that treatment modality shall be deemed not to meet professionally
recognized standards of health care. This definition shall not be
construed to mean that all other treatments meet professionally
recognized standards of care.

(6) “Unnecessary or substandard items or services” means those
that are either of the following:

(A) Substantially in excess of the provider’s usual charges or
costs for the items or services.

(B) Furnished, or caused to be furnished, to patients, whether
or not covered by Medicare, Medicaid, or any of the state health
care programs to which the definitions of applicant and provider
apply, and which are substantially in excess of the patient’s needs,
or of a quality that fails to meet professionally recognized standards
of health care. The department’s determination that the items or
services furnished were excessive or of unacceptable quality shall
be made on the basis of information, including sanction reports,
from the following sources:

(i) The professional review organization for the area served by
the individual or entity.

(ii) State or local licensing or certification authorities.

(iii) Fiscal agents or contractors, or private insurance companies.

(iv) State or local professional societies.

(v) Any other sources deemed appropriate by the department.

(7) “Enrolled or enrollment in the program” means authorized
under any and all processes by the department or its agents or
contractors to receive, directly or indirectly, reimbursement for
the provision of services, goods, supplies, or merchandise to a
program beneficiary.

(n) In lieu of, or in addition to, the imposition of any other
sanctions available, including the imposition of a civil penalty
under Sections 14123.2 or 14171.6, the program may impose on
providers any or all of the penalties pursuant to Section 14123.25,
in accordance with the provisions of that section. In addition,
program providers shall be subject to the penalties contained in
Section 14107.

(o) (1) Notwithstanding any other provision of law, every
primary supplier of pharmaceuticals, medical equipment, or
supplies shall maintain accounting records to demonstrate the
manufacture, assembly, purchase, or acquisition and subsequent
sale, of any pharmaceuticals, medical equipment, or supplies, to
providers. Accounting records shall include, but not be limited to,
inventory records, general ledgers, financial statements, purchase
and sales journals, and invoices, prescription records, bills of
lading, and delivery records.

(2) For purposes of this subdivision, the term “primary supplier”
means any manufacturer, principal labeler, assembler, wholesaler,
or retailer.

(3) Accounting records maintained pursuant to paragraph (1)
shall be subject to audit or examination by the department or its
agents. The audit or examination may include, but is not limited
to, verification of what was claimed by the provider. These
accounting records shall be maintained for three years from the
date of sale or the date of service.

(p) Each provider of health care services rendered to any
program beneficiary shall keep and maintain records of each service
rendered, the beneficiary to whom rendered, the date, and such
additional information as the department may by regulation require.
Records required to be kept and maintained pursuant to this
subdivision shall be retained by the provider for a period of three
years from the date the service was rendered.

(q) A program provider applicant or a program provider shall
furnish information or copies of records and documentation
requested by the department. Failure to comply with the
department’s request shall be grounds for denial of the application
or automatic disenrollment of the provider.

(r) A program provider may assign signature authority for
transmission of claims to a billing agent subject to Sections 14040,
14040.1, and 14040.5.

(s) Moneys payable or rights existing under this division shall
be subject to any claim, lien, or offset of the State of California,
and any claim of the United States of America made pursuant to
federal statute, but shall not otherwise be subject to enforcement
of a money judgment or other legal process, and no transfer or
assignment, at law or in equity, of any right of a provider of health
care to any payment shall be enforceable against the state, a fiscal
intermediary, or carrier.

begin delete

(t) (1) Notwithstanding any other law, within 30 calendar days
of receiving a complete application for enrollment into the Family
PACT Program from an affiliate primary care clinic licensed under
Section 1218.1 of the Health and Safety Code, the department shall
do one of the following:

(A) Approve the provider’s Family PACT Program application,
provided the applicant meets the Family PACT Program provider
enrollment requirements set forth in this section.

(B) If the provider is an enrolled Medi-Cal provider in good
standing, notify the applicant in writing of any discrepancies in
the Family PACT Program enrollment application. The applicant
shall have 30 days from the date of written notice to correct any
identified discrepancies. Upon receipt of all requested corrections,
the department shall approve the application within 30 calendar
days.

(C) If the provider is not an enrolled Medi-Cal provider in good
standing, the department shall not proceed with the actions
described in this subdivision until the department receives
confirmation of good standing and enrollment as a Medi-Cal
provider.

(2) The effective date of enrollment into the Family PACT
Program shall be the later of the date the department receives
confirmation of enrollment as a Medi-Cal provider, or the date the
applicant meets all Family PACT Program provider enrollment
requirements set forth in this section.

end delete begin insert

(t) (1) (A) Notwithstanding any other law, a primary care
clinic, as described in subdivision (a) of Section 1204 of the Health
and Safety Code, or an affiliate clinic, as described in Section
1218.1 of the Health and Safety Code, that is seeking to enroll as
a provider in both the Medi-Cal program and the Family PACT
Program, shall submit one consolidated application for enrollment
in both the Medi-Cal program and the Family PACT Program to
the State Department of Public Health, using the forms described
in Section 1222.1 of the Health and Safety Code. The effective date
of enrollment for a clinic enrolling in both programs at the same
time shall be the date the State Department of Public Health
certifies the clinic for enrollment in those programs.

end insert begin insert

(B) A primary care clinic, as described in subdivision (a) of
Section 1204 of the Health and Safety Code, or an affiliate clinic,
as described in Section 1218.1 of the Health and Safety Code, that
is enrolled in the Medi-Cal program and that is seeking to enroll
as a provider in the Family PACT Program, shall submit an
application for enrollment in the Family PACT Program to the
State Department of Public Health using the forms described in
Section 1222.1 of the Health and Safety Code. The effective date
of enrollment in the Family PACT program for a clinic that was
enrolled in the Medi-Cal program at the time it applied to the
Family PACT Program shall be the date the State Department of
Public Health certifies the clinic for enrollment in the Family
PACT Program.

end insert begin insert

(2) Within 15 calendar days of receiving notification from the
State Department of Public Health that a clinic described in
subparagraph (A) or (B) of paragraph (1) is certified for
enrollment, the department shall enroll the clinic in the Family
PACT Program.

end insert begin insert

(3) A subsequent change to information reported on the initial
enrollment application described in this subdivision shall be
reported to the State Department of Public Health in a manner
determined by the State Department of Public Health within 35
calendar days. Within 15 calendar days of receiving notification
from the State Department of Public Health that a clinic’s reported
changes are approved, the department shall update the clinic’s
provider master file for the Medi-Cal program and the Family
PACT Program enrollments, as applicable. A provider described
in this subdivision that reports a change other than a change of
ownership shall not be required to reenroll in either the Medi-Cal
program or the Family PACT Program.

end insert

(u) Providers, or the enrolling entity, shall make available to all
applicants and beneficiaries prior to, or concurrent with,
enrollment, information on the manner in which to apply for
insurance affordability programs, in a manner determined by the
State Department of Health Care Services. The information
provided shall include the manner in which applications can be
submitted for insurance affordability programs, information about
the open enrollment periods for the California Health Benefit
Exchange, and the continuous enrollment aspect of the Medi-Cal
program.

begin delete

  

SECTION 1.  

Section 14132.01 of the Welfare and Institutions
Code is amended to read:

14132.01.  

(a) Notwithstanding any other law, a community
clinic or free clinic licensed pursuant to subdivision (a) of Section
1204 of the Health and Safety Code or an intermittent clinic
operating pursuant to subdivision (h) of Section 1206 of the Health
and Safety Code, that has a valid license pursuant to Article 13
(commencing with Section 4180) of Chapter 9 of Division 2 of
the Business and Professions Code shall bill and be reimbursed,
as described in this section, for drugs and supplies covered under
the Medi-Cal program and Family PACT Waiver Program.

(b) (1) A clinic described in subdivision (a) shall bill the
Medi-Cal program and Family PACT Waiver Program for drugs
and supplies covered under those programs at the lesser of cost or
the clinic’s usual charge made to the general public.

(2) For purposes of this section, “cost” means an aggregate
amount equivalent to the sum of the actual acquisition cost of a
drug or supply plus a clinic dispensing fee. The actual acquisition
cost of a drug or supply shall be calculated not less than annually.
The clinic dispensing fee shall be the difference between the actual
acquisition cost of a drug or supply and the Medi-Cal
reimbursement rate.

(c) Reimbursement shall be at the lesser of the amount billed
or the Medi-Cal reimbursement rate.

(d) A clinic described in subdivision (a) that furnishes services
free of charge, or at a nominal charge, as defined in subsection (a)
of Section 413.13 of Title 42 of the Code of Federal Regulations,
or that can demonstrate to the department, upon request, that it
serves primarily low-income patients, and its customary practice
is to charge patients on the basis of their ability to pay, shall not
be subject to reimbursement reductions based on its usual charge
to the general public.

(e) Federally qualified health centers and rural health clinics
that are clinics as described in subdivision (a) may bill and be
reimbursed as described in this section, upon electing to be
reimbursed for pharmaceutical goods and services delivered
through their dispensaries on a fee-for-service basis, as permitted
by subdivision (k) of Section 14132.100.

(f) A clinic that otherwise meets the qualifications set forth in
subdivision (a), that is eligible to, but that has elected not to, utilize
drugs purchased under the 340B Discount Drug Program for its
Medi-Cal patients, shall provide notification to the Health
Resources and Services Administration’s Office of Pharmacy
Affairs that it is utilizing non-340B drugs for its Medi-Cal patients
in the manner and to the extent required by federal law.

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