Amended in Senate April 28, 2015

Senate Bill No. 586

Introduced by Senator Hernandez

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(Coauthors: Assembly Members Alejo, Bonta and Chávez)

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February 26, 2015

An act to amend Section 14094.3 of, and to add Section 14094.24 to, the Welfare and Institutions Code, relating to children’s services.

LEGISLATIVE COUNSEL’S DIGEST

SB 586, as amended, Hernandez. Children’s services.

The California Children’s Services Program (CCS program) is a statewide program providing medically necessary services required by physically handicapped children whose parents are unable to pay for those services. The State Department of Health Care Services administers the CCS program. Counties, based on population size, are also charged with administering the program, either independently or jointly with the department. The services covered by the CCS program include expert diagnosis, medical treatment, surgical treatment, hospital care, physical therapy, occupational therapy, special treatment, materials, and the supply of appliances and their upkeep, maintenance, and transportation. Funding for the program comes from county, state, and federal sources. In order to be eligible for the CCS program, an applicant must be under 21 years of age, have or be suspected of having a condition covered by the program, and meet certain financial eligibility standards established by the department.

Existing law prohibits services covered by the California Children’s Services program (CCS) from being incorporated into a Medi-Cal managed care contract entered into after August 1, 1994, until January 1, 2016, except with respect to contracts entered into for county organized health systems in specified counties.

This bill would exempt KIDS contracts, described below, from that prohibition, and would delete the January 1, 2016 time limit.

This bill would require the department, no later than January 1, 2018, to contract with one or more Kids Integrated Delivery System (KIDS) begin delete plans end delete begin insert networks end insert , as defined, for the purpose of coordinating and managing the provision of Medi-Cal and CCS program services to eligible children, to ensure access to cost-effective quality care. The bill would define “eligible child” and other relevant terms in this regard. The bill would establish criteria the department would be required to consider in selecting a KIDS begin delete plan end delete begin insert network end insert and eligibility standards, as well as the qualifications and exclusions required for KIDS begin delete plan end delete begin insert network end insert contracts. The KIDS begin delete plan end delete begin insert network end insert would be required to coordinate, integrate, and provide or arrange for the full range of Medi-Cal and CCS services.

This bill would require the department to seek all necessary federal approvals to ensure federal financial participation for expenditures under begin delete the bill end delete begin insert these provisions, end insert and would prohibit implementation of begin delete the bill end delete begin insert these provisions end insert until federal financial participation is obtained. The bill would additionally authorize the department to seek federal approval to require all eligible children to enroll in an available KIDS begin delete plan end delete begin insert network end insert for the length of their CCS eligibility plus 6 months, and if the child remains eligible for Medi-Cal, for up to 12 months following termination of CCS eligibility.

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.  

The Legislature finds and declares all of the
following:

(a) The California Children’s Services (CCS) program is the
nation’s oldest Title V Maternal and Child Health Services Block
Grant program.

(b) The CCS program has provided critical access to specialized
medical care for California’s most complex and fragile pediatric
patients since 1927.

(c) The strong standards and credentialing created under the
CCS program ensure that eligible children obtain care from
experienced providers with appropriate pediatric-specific expertise.

(d) CCS providers form a regional backbone for all specialty
pediatric care in California, benefiting children of every income
level and insurance status.

(e) Over the past 20 years, coordinated and integrated health
care delivery models have been shown to improve delivery of
health care, reduce costs, and improve outcomes.

(f) As California expanded the reach of integrated delivery
systems in Medi-Cal, CCS services were often excluded from
managed care arrangements in recognition of the specialty nature
of CCS services and the complicated health status of enrolled
children.

(g) Accordingly, it is the intent of the Legislature to modernize
the CCS program, through development of specialized integrated
delivery systems focused on the unique needs of CCS-eligible
children, to accomplish the following:

(1) Improve coordination and integration of services to meet
the needs of the whole child, not just address the CCS-eligible
condition.

(2) Retain CCS program standards to maintain access to
high-quality specialty care for eligible children.

(3) Support active participation by parents and families, who
are frequently the primary caregivers for CCS-eligible children.

(4)  begin delete Established end delete begin insert Establish end insert specialized programs to manage and
coordinate the care of CCS-enrolled children.

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(5) Ensure that children with CCS-eligible conditions receive
care in the most appropriate, least restrictive setting.

end insert begin insert

(6) Maintain existing patient-provider relationships, whenever
possible.

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(h) It is further the intent of the Legislature to protect the unique
access to pediatric specialty services provided by CCS while
promoting modern organized delivery systems to meet the medical
care needs of eligible children.

SEC. 2.  

Section 14094.24 is added to the Welfare and
Institutions Code, to read:

14094.24.  

(a) The following definitions shall apply for
purposes of this section:

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(1) “Children’s hospital” means a hospital identified in Sections
10727 and 10728.

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(1) “CCS tertiary hospital” means a hospital that is designated
as a tertiary hospital pursuant to the Standards for Tertiary
Hospitals set forth in the California Children’s Services Manual
of Procedures.

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(2) “Kids Integrated Delivery System (KIDS)” means begin delete an entity
selected end delete begin insert a network approved end insert by the department to coordinate and
manage the provision of Medi-Cal and CCS services for eligible
children, on a county or regional basis, consistent with managed
care principles, techniques, and practices, to ensure access to
cost-effective, quality care for enrolled children. begin delete A KIDS plan may
include either of the following organizational models: end delete

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(A) An entity coordinated through a children’s hospital with a
shared governance structure comprised of providers who are held
jointly accountable for achieving measured quality improvements
and reductions in the rate of spending growth for Medi-Cal services
for enrolled children.

(B) An entity coordinated by a CCS-approved provider with a
shared governance structure comprised of providers, including
participation by at least one children’s hospital, who are held jointly
accountable for achieving measured quality improvements and
reductions in the rate of spending growth for Medi-Cal services
for enrolled children.

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(3) “Eligible child” means either of the following:

(A) A minor child under 21 years of age, who is eligible for
both Medi-Cal and the California Children’s Services Program
(Article 5 (commencing with Section 123800) of Chapter 3 of Part
2 of Division 106 of the Health and Safety Code), excluding those
children eligible under the program for neonatal intensive care
services.

(B) An individual up to 26 years of age, if the individual was
previously treated for a CCS-eligible condition in the 12 months
prior to his or her 21st birthday, is eligible for full-scope Medi-Cal
services, and voluntarily chooses to remain in a KIDS begin delete plan end delete begin insert network end insert
that accepts individuals up to age 26 pursuant to its contract with
the department.

(4) “Enrollee” means an eligible child enrolled in a KIDS begin delete plan end delete
begin insert network end insert and who receives Medi-Cal and CCS services through
the KIDS begin delete plan. end delete begin insert network. end insert

(b) Consistent with Sections 14093.05 and 14093.06 and the
requirements of this chapter, no later than January 1, 2018, in
counties or regions where there is no demonstration project
pursuant to Section 14094.3, the department shall select and enter
into contracts with one or more KIDS begin delete plans, end delete begin insert networks, end insert to provide
comprehensive health care services to eligible children. In begin delete the
selection process, the department shall give special consideration
to entities that meet all of the following criteria: end delete begin insert order to contract
with the department pursuant to this section, a KIDS network shall
meet all of the following criteria: end insert

(1)  begin delete Demonstrates end delete begin insert Demonstrate end insert experience in effectively serving
eligible children and providing services in compliance with CCS
program standards and requirements.

(2)  begin delete Includes end delete begin insert Include end insert in the KIDS begin delete plan end delete begin insert network end insert a sufficient
number of CCS-paneled providers, including board-certified
pediatricians, CCS-approved special care centers, and other
providers who have been providing services to eligible children
in the proposed KIDS begin delete plan end delete begin insert network end insert service area to ensure
continuity of care, timely access to quality services, and the least
disruption to existing patient-provider relationships.

(3)  begin delete Develops end delete begin insert Develop end insert the KIDS begin delete plan end delete begin insert network end insert through a local
collaborative stakeholder process that includes, but is not limited
to, families of eligible children, local consumer advocates, CCS
providers, and staff of the CCS program in the county or counties
in the proposed KIDS begin delete plan end delete begin insert network end insert service area.

(4)  begin delete Incorporates end delete begin insert Incorporate end insert specific strategies to actively
engage families as partners in decisions affecting the health care
and well-being of children enrolled in the KIDS begin delete plan. end delete begin insert network. end insert

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(5) Be anchored by a hospital that is designated as a CCS
tertiary hospital, or by a CCS provider in partnership with a CCS
tertiary hospital.

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(c) A KIDS begin delete plan end delete begin insert network end insert shall do all of the following:

(1) Contract with the department to coordinate, integrate, and
provide or arrange for the full range of Medi-Cal and CCS services
to eligible children enrolled in the KIDS begin delete plan end delete begin insert network end insert pursuant to
this subdivision.

(A) A KIDS begin delete plan end delete begin insert network end insert contract shall exclude, at a minimum,
specialty mental health services provided by county mental health
plans and neonatal intensive care services. A KIDS contract may
exclude other Medi-Cal services, as determined by the department,
including, but not limited to, long-term care, transplantation, and
dental services.

(B) Benefits of the medical therapy program may be provided
or coordinated by a KIDS begin delete plan, end delete begin insert network, end insert in collaboration and
consultation with the designated county CCS agency or agencies
in the KIDS begin delete plan end delete begin insert network end insert service area.

(2) Operate under a contract with the department that satisfies
the requirements of this chapter, including Sections 14093.05 and
14093.06.

(3) Provide services to enrollees through a team-based,
patient-centered health home model, ensure that enrolled children
receive services in the most appropriate and least restrictive setting,
and adopt effective strategies to manage and coordinate care and
services for enrolled children.

(4) Report and comply with quality measures, including, but
not limited to, Medi-Cal Healthcare Effectiveness Data and
Information Set (HEDIS) measures appropriate for enrolled
children, the national Pediatric Quality Measurement System
(PQMS) for children’s hospitals, and other quality measures
developed by the department in consultation with stakeholders.

(5) Participate in a nationally recognized pediatric patient safety
organization.

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(6) Comply with readiness criteria, network adequacy standards,
and other appropriate standards applicable to Medi-Cal managed
care plans, as determined by the department in consultation with
stakeholders, and any terms of the federal approvals obtained by
the department.

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(7)

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begin insert (6) end insert  Establish and maintain a family advisory council composed
of families of eligible children and convene the advisory council
at least quarterly.

(d) (1) Contracts with KIDS begin delete plans end delete begin insert networks end insert may include
opportunities to share in the risk of providing services to KIDS
enrollees, pursuant to an agreement between the department and
the KIDS begin delete plan. end delete begin insert network. end insert Any shared savings that result from the
implementation of these arrangements shall be reinvested in
services provided to children enrolled in the KIDS begin delete plan. end delete begin insert network. end insert

(2) The department shall not enter into risk-sharing arrangements
with a KIDS begin delete plan end delete begin insert network end insert for specific covered services unless the
KIDS plan is responsible for the management and authorization
of those services.

(3) Payments to a KIDS begin delete plan end delete begin insert network end insert that agrees to accept
risk-sharing shall be actuarially sound.

(e) Eligibility for enrollment in a KIDS begin delete plan end delete begin insert network end insert shall be
determined in accordance with all of the following:

(1) Children shall be deemed eligible for enrollment in a KIDS
begin delete plan end delete begin insert network end insert based on eligibility for the CCS program pursuant
to Section 14005.26, except as provided by paragraph (2).

(2) A child receiving neonatal intensive care unit (NICU)
services shall not be eligible for enrollment until the child is
discharged from the NICU and meets the other requirements of
this subdivision.

(3) (A) To the extent that the department obtains federal
approval to require eligible children to enroll in an available KIDS
begin delete plan end delete begin insert network end insert in order to receive Medi-Cal and CCS services,
eligible children shall be enrolled on a mandatory basis pursuant
to this section and the provisions of this chapter applicable to
Medi-Cal managed care plan enrollments.

(B) Enrollment in a KIDS begin delete plan end delete begin insert network end insert shall be, at a minimum,
for the period of a child’s CCS eligibility plus an additional six
months, provided that the child remains eligible for Medi-Cal.
KIDS begin delete plan end delete begin insert network end insert enrollees who continue to remain eligible for
Medi-Cal may remain in the KIDS begin delete plan end delete begin insert network end insert for up to 12
months following the termination of CCS eligibility if the KIDS
program and the parent, guardian or person responsible for care
of the child agree that it is in the best interests of the child.

(C) Pursuant to this section, and subject to necessary federal
approvals, if a KIDS begin delete plan end delete begin insert network end insert becomes newly available in a
service area, begin delete or if a child becomes newly eligible for a KIDS plan,
the child shall be enrolled in the available KIDS plan. The end delete begin insert the end insert
department shall determine, in consultation with counties, KIDS
begin delete plans, end delete begin insert networks, end insert local KIDS family advisory councils, and existing
Medi-Cal managed care plans in the service begin delete area and end delete begin insert area, end insert the
timing and process for enrollment in KIDS begin delete plans end delete begin insert networks end insert to ensure
a smooth transition for eligible children.

(D) If there is more than one KIDS begin delete plan end delete begin insert network end insert in the county
or region in which the child lives, the parent, guardian, or person
responsible for the care of the eligible child may select the KIDS
begin delete plan end delete begin insert network end insert in which the child will be enrolled. If the family does
not select a KIDS plan, the child shall be assigned to a KIDS begin delete plan end delete
begin insert network end insert in a manner that ensures the least disruption in existing
patient-provider relationships.

(E) Upon enrollment of an eligible child in a KIDS begin delete plan, end delete
begin insert network, end insert the parent, guardian, or person responsible for the care
of the child shall be informed that the child may choose to continue
an established patient-provider relationship if his or her treating
provider is a primary care provider or clinic contracting with the
KIDS, has the available capacity, and agrees to continue to treat
that eligible child. KIDS begin delete plans end delete begin insert networks end insert shall comply with the
continuity of care requirements in Section 1373.96 of the Health
and Safety Code.

(4) Within 30 days of notice that a child is no longer eligible
for a KIDS begin delete plan end delete begin insert network end insert pursuant to this section, a child who
continues to be eligible for Medi-Cal shall be enrolled in the
Medi-Cal delivery system in the county in which he or she resides.
The department shall ensure that families receive information about
the Medi-Cal delivery systems available in their county and the
process for enrolling in and selecting among the available options.
Children disenrolling from a KIDS begin delete plan end delete begin insert network end insert because they are
no longer eligible shall be enrolled in county Medi-Cal delivery
systems as follows:

(A) If there is a Medi-Cal managed care plan in the county of
the child’s residence, the child shall be enrolled in the managed
care plan. In counties where there is more than one Medi-Cal
managed care plan, if the family does not choose a plan for the
child within 30 days of notice of disenrollment from the KIDS,
the child shall be enrolled into the Medi-Cal managed care health
plan that contains his or her primary care provider. If the primary
care provider participates in more than one managed care health
plan in the county, the child shall be assigned to one of the health
plans containing his or her primary care provider in accordance
with the assignment process applicable in the county.

(B) In a county that is not a managed care county, children no
longer eligible for the KIDS begin delete plan end delete begin insert network end insert shall be provided
services under the Medi-Cal fee-for-service delivery system.

(5) The department shall instruct KIDS begin delete plans, end delete begin insert networks, end insert
counties, and managed care plans, by means of all-county and
all-plan letters or similar instruction, as to the processes to be used
to enroll and disenroll children in KIDS begin delete plans end delete begin insert networks end insert and to
reenroll eligible children in local Medi-Cal coverage options, to
ensure each child experiences a smooth transition among coverage
types with no gap in coverage or care.

(6) A child who is enrolled in a KIDS begin delete plan end delete begin insert network end insert shall retain
all rights to CCS program appeals and fair hearings of denials of
medical eligibility or of service begin delete authorizations. end delete begin insert authorizations, as
well as all due process and fair hearing rights under the Medi-Cal
program. end insert

(f) The department shall seek all necessary federal approvals to
ensure federal financial participation in expenditures under this
section. This section shall not be implemented until necessary
federal approvals have been obtained.

(g) The department may seek federal approval to require all
eligible children to enroll in an available KIDS begin delete plan end delete begin insert network end insert during
the length of their eligibility for CCS plus an additional six months,
and, if the child remains eligible for Medi-Cal, to voluntarily
remain in the KIDS for up to 12 months following termination of
CCS eligibility.

SEC. 3.  

Section 14094.3 of the Welfare and Institutions Code
is amended to read:

14094.3.  

(a) Notwithstanding this article or Section 14093.05
or 14094.1, CCS covered services shall not be incorporated into
any Medi-Cal managed care contract entered into after August 1,
1994, pursuant to Article 2.7 (commencing with Section 14087.3),
Article 2.8 (commencing with Section 14087.5), Article 2.9
(commencing with Section 14088), Article 2.91 (commencing
with Section 14089), Article 2.95 (commencing with Section
14092); or either Article 2 (commencing with Section 14200), or
Article 7 (commencing with Section 14490) of Chapter 8, except
for either or both of the following:

(1)  Contracts entered into for county organized health systems
or Regional Health Authority in the Counties of San Mateo, Santa
Barbara, Solano, Yolo, Marin, and Napa.

(2) Contracts entered into pursuant to Section 14094.24.

(b) Notwithstanding any other provision of this chapter,
providers serving children under the CCS program who are enrolled
with a Medi-Cal managed care contractor but who are not enrolled
in a pilot project pursuant to subdivision (c) shall continue to
submit billing for CCS covered services on a fee-for-service basis
until CCS covered services are incorporated into the Medi-Cal
managed care contracts described in subdivision (a).

(c) (1) The department may authorize a pilot project in Solano
County in which reimbursement for conditions eligible under the
CCS program may be reimbursed on a capitated basis pursuant to
Section 14093.05, and provided all CCS program’s guidelines,
standards, and regulations are adhered to, and CCS program’s case
management is utilized.

(2) During the time period described in subdivision (a), the
department may approve, implement, and evaluate limited pilot
projects under the CCS program to test alternative managed care
models tailored to the special health care needs of children under
the CCS program. The pilot projects may include, but need not be
limited to, coverage of different geographic areas, focusing on
certain subpopulations, and the employment of different payment
and incentive models. Pilot project proposals from CCS
program-approved providers shall be given preference. All pilot
projects shall utilize CCS program-approved standards and
providers pursuant to Section 14094.1.

(d) For purposes of this section, CCS covered services include
all program benefits administered by the program specified in
Section 123840 of the Health and Safety Code regardless of the
funding source.

(e) Nothing in this section shall be construed to exclude or
restrict CCS eligible children from enrollment with a managed
care contractor, or from receiving from the managed care contractor
with which they are enrolled primary and other health care
unrelated to the treatment of the CCS eligible condition.