Amended in Senate April 6, 2015

Senate Bill No. 610

Introduced by Senator Pan

February 27, 2015

An act to amend Sections 14087.325 and 14132.100 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

SB 610, as amended, Pan. Medi-Cal: federally qualified health centers and rural health clinics: managed care contracts.

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. Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, 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.

Existing law authorizes an FQHC or RHC to apply for an adjustment to its per-visit rate, based on a change in the scope of services provided, as prescribed. Existing law establishes alternative ratesetting procedures with respect to a new entity that first qualifies as an FQHC or RHC in the year 2001 or later, a newly licensed facility at a new location added to an existing FQHC or RHC or an existing FQHC or RHC that is relocated. Two of the procedures are referred to as comparability approaches, based on the rates of 3 similarly situated FQHCs and RHCs. The 3rd procedure requires, at a new entity’s one-time election, that the department establish the reimbursement rate, calculated on a per-visit basis, that equals 100% of the projected allowable costs to the FQHC or RHC of furnishing services during its first 12 months of operation as an FQHC or RHC.

This bill would require the department to finalize a new rate within 90 days after an FQHC’s or RHC’s submission of a scope-of-service rate change. With respect to a new FQHC or RHC that has elected for the department to establish its reimbursement rate based on projected allowable costs as described above, this bill would require the department to finalize that rate within 90 days after the submission of the actual cost report from the first full 12 months of operation, as specified.

This bill would revise the department’s responsibilities with respect to a new entity or a relocated FQHC or RHC that selects either of the comparability approaches. The bill would require the department to review the comparable facilities to determine if any of them do not meet the comparability threshold and, if so, to notify the new entity, and request a supplemental submission, as prescribed. begin insert The bill would require the department to conduct an initial review of a scope-of-service rate change request within 30 days after submission by the FQHC or RHC, and notify the FQHC or RHC by the 31st day after submission if the department determines that additional information is necessary, as prescribed. end insert The bill would require the department to finalize begin delete a new entity’s end delete begin insert the FQHC’s or RHC’s end insert rate within 90 days after receiving a submission the department determines to be begin delete comparable. end delete begin insert complete. end insert

This bill would require the department to correct erroneous payments at least quarterly to reprocess past claims and ensure all claims are reimbursed at the appropriate finalized new rate.

Existing law requires the department to administer a program to ensure that total payments to FQHCs and RHCs operating as managed care subcontractors comply with applicable federal law regarding payment for services provided by FQHCs and RHCs. Under the department’s program, existing law requires FQHCs and RHCs subcontracting with specified managed care plans to seek supplemental reimbursement from the department through a per visit fee-for-service billing system. To be reimbursed under these provisions, existing law requires each FQHC and RHC to submit to the department for approval a rate differential based on the FQHC’s or RHC’s reasonable cost or the prospective payment rate. Within 6 months of the end of the FQHC’s or RHC’s fiscal year, existing law requires, to the extent feasible, the department to perform an annual reconciliation to reasonable cost, and make payments to, or obtain recovery from, the FQHC or RHC.

This bill would impose various requirements on the department regarding the reconciliation process described above. The bill would require the department to complete the final reconciliation review and pay to the center or clinic any remaining amount owed within 15 months of the last date of the fiscal year for which the department is conducting the review.

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.  

Section 14087.325 of the Welfare and Institutions
Code is amended to read:

14087.325.  

(a) The department shall require, as a condition
of obtaining a contract with the department, that any local initiative,
as defined in Section 53810 of Title 22 of the California Code of
Regulations, offer a subcontract to any entity defined in Section
1396d(l)(2)(B) of Title 42 of the United States Code providing
services as defined in Section 1396d(a)(2)(C) of Title 42 of the
United States Code and operating in the service area covered by
the local initiative’s contract with the department. These entities
are also known as federally qualified health centers.

(b) Except as otherwise provided in this section, managed care
subcontracts offered to a federally qualified health center or a rural
health clinic, as defined in Section 1396d(l)(1) of Title 42 of the
United States Code, by a local initiative, county organized health
system, as defined in Section 12693.05 of the Insurance Code,
commercial plan, as defined in Section 53810 of Title 22 of the
California Code of Regulations, or a health plan contracting with
a geographic managed care program, as defined in subdivision (g)
of Section 53902 of Title 22 of the California Code of Regulations,
shall be on the same terms and conditions offered to other
subcontractors providing a similar scope of service. Any
beneficiary, subscriber, or enrollee of a program or plan who
affirmatively selects, or is assigned by default to, a federally
qualified health center or rural health clinic under the terms of a
contract between a plan, government program, or any subcontractor
of a plan or program, and a federally qualified health center or
rural health clinic, shall be assigned directly to the federally
qualified health center or rural health clinic, and not to any
individual provider performing services on behalf of the federally
qualified health center or rural health clinic.

(c) The department shall provide incentives in the competitive
application process described in paragraph (1) of subdivision (b)
of Section 53800 of Title 22 of the California Code of Regulations,
to encourage potential commercial plans as defined in Section
53810 of Title 22 of the California Code of Regulations to offer
subcontracts to these federally qualified health centers.

(d) Reimbursement to federally qualified health centers and
rural health centers for services provided pursuant to a subcontract
with a local initiative, a commercial plan, geographic managed
care program health plan, or a county organized health system,
shall be paid in a manner that is not less than the level and amount
of payment that the plan would make for the same scope of services
if the services were furnished by a provider that is not a federally
qualified health center or rural health clinic.

(e) (1) The department shall administer a program to ensure
that total payments to federally qualified health centers and rural
health clinics operating as managed care subcontractors pursuant
to subdivision (d) comply with applicable federal law pursuant to
Sections 1902(bb) and 1903(m)(2)(A)(ix) of the Social Security
Act (42 U.S.C. Secs. 1396a(bb) and 1396b(m)(2)(A)(ix)). Under
the department’s program, federally qualified health centers and
rural health clinics subcontracting with local initiatives, commercial
plans, county organized health systems, and geographic managed
care program health plans shall seek supplemental reimbursement
from the department through a per visit fee-for-service billing
system utilizing the state’s Medi-Cal fee-for-service claims
processing system contractor. To carry out this per visit payment
process, each federally qualified health system and rural health
clinic shall submit to the department for approval a rate differential
calculated to reflect the amount necessary to reimburse the federally
qualified health center or rural health clinic for the difference
between the payment the center or clinic received from the
managed care health plan and either the interim rate established
by the department based on the center’s or clinic’s reasonable cost
or the center’s or clinic’s prospective payment rate. The department
shall adjust the computed rate differential as it deems necessary
to minimize the difference between the center’s or clinic’s revenue
from the plan and the center’s or clinic’s cost-based reimbursement
or the center’s or clinic’s prospective payment rate.

(2) In addition, to the extent feasible, within six months of the
end of the center’s or clinic’s fiscal year, the department shall
perform an annual reconciliation to reasonable cost, and make
payments to, or obtain a recovery from, the center or clinic.
Reconciliation shall be based upon the reconciliation filing
submitted to the department by the center or clinic. The department
shall perform an initial review of the reconciliation filing within
30 days of receipt. If the department determines during the initial
review that a payment is owed to the center or clinic, the
department shall pay to the center or clinic at least 80 percent of
the amount owed within 30 days of completion of the initial review
or in any event within 60 days of receipt of the reconciliation filing.
The department shall complete the final reconciliation review and
shall pay to the center or clinic the remaining amount owed within
15 months of the last date of the fiscal year for which the
department is conducting the review.

(f) In calculating the capitation rates to be paid to local
initiatives, commercial plans, geographic managed care program
health plans, and county organized health systems, the department
shall not include the additional dollar amount applicable to
cost-based reimbursement that would otherwise be paid, absent
cost-based reimbursement, to federally qualified health centers
and rural health clinics in the Medi-Cal fee-for-service program.

(g) On or before September 30, 2002, the director shall conduct
a study of the actual and projected impact of the transition from a
cost-based reimbursement system to a prospective payment system
for federally qualified health centers and rural health clinics. In
conducting the study, the director shall evaluate the extent to which
the prospective payment system stimulates expansion of services,
including new facilities to expand capacity of the centers, and the
extent to which actual and estimated prospective payment rates of
federally qualified health centers and rural health clinics for the
first five years of the prospective payment system are reflective
of the cost of providing services to Medi-Cal beneficiaries. Clinics
may submit cost reporting information to the department to provide
data for the study.

(h) The department shall approve all contracts between federally
qualified health centers or rural health clinics and any local
initiative, commercial plan, geographic managed care program
health plan, or county organized health system in order to ensure
compliance with this section.

(i) This section shall not preclude the department from
establishing pilot programs pursuant to Section 14087.329.

SEC. 2.  

Section 14132.100 of the Welfare and Institutions
Code is amended to read:

14132.100.  

(a) The federally qualified health center services
described in Section 1396d(a)(2)(C) of Title 42 of the United States
Code are covered benefits.

(b) The rural health clinic services described in Section
1396d(a)(2)(B) of Title 42 of the United States Code are covered
benefits.

(c) Federally qualified health center services and rural health
clinic services shall be reimbursed on a per-visit basis in
accordance with the definition of “visit” set forth in subdivision
(g).

(d) Effective October 1, 2004, and on each October 1, thereafter,
until no longer required by federal law, federally qualified health
center (FQHC) and rural health clinic (RHC) per-visit rates shall
be increased by the Medicare Economic Index applicable to
primary care services in the manner provided for in Section
1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to
January 1, 2004, FQHC and RHC per-visit rates shall be adjusted
by the Medicare Economic Index in accordance with the
methodology set forth in the state plan in effect on October 1,
2001.

(e) (1) An FQHC or RHC may apply for an adjustment to its
per-visit rate based on a change in the scope of services provided
by the FQHC or RHC. Rate changes based on a change in the
scope of services provided by an FQHC or RHC shall be evaluated
in accordance with Medicare reasonable cost principles, as set
forth in Part 413 (commencing with Section 413.1) of Title 42 of
the Code of Federal Regulations, or its successor.

(2) Subject to the conditions set forth in subparagraphs (A) to
(D), inclusive, of paragraph (3), a change in scope of service means
any of the following:

(A) The addition of a new FQHC or RHC service that is not
incorporated in the baseline prospective payment system (PPS)
rate, or a deletion of an FQHC or RHC service that is incorporated
in the baseline PPS rate.

(B) A change in service due to amended regulatory requirements
or rules.

(C) A change in service resulting from relocating or remodeling
an FQHC or RHC.

(D) A change in types of services due to a change in applicable
technology and medical practice utilized by the center or clinic.

(E) An increase in service intensity attributable to changes in
the types of patients served, including, but not limited to,
populations with HIV or AIDS, or other chronic diseases, or
homeless, elderly, migrant, or other special populations.

(F) Any changes in any of the services described in subdivision
(a) or (b), or in the provider mix of an FQHC or RHC or one of
its sites.

(G) Changes in operating costs attributable to capital
expenditures associated with a modification of the scope of any
of the services described in subdivision (a) or (b), including new
or expanded service facilities, regulatory compliance, or changes
in technology or medical practices at the center or clinic.

(H) Indirect medical education adjustments and a direct graduate
medical education payment that reflects the costs of providing
teaching services to interns and residents.

(I) Any changes in the scope of a project approved by the federal
Health Resources and Service Administration (HRSA).

(3) No change in costs shall, in and of itself, be considered a
scope-of-service change unless all of the following apply:

(A) The increase or decrease in cost is attributable to an increase
or decrease in the scope of services defined in subdivisions (a) and
(b), as applicable.

(B) The cost is allowable under Medicare reasonable cost
principles set forth in Part 413 (commencing with Section 413) of
Subchapter B of Chapter 4 of Title 42 of the Code of Federal
Regulations, or its successor.

(C) The change in the scope of services is a change in the type,
intensity, duration, or amount of services, or any combination
thereof.

(D) The net change in the FQHC’s or RHC’s rate equals or
exceeds 1.75 percent for the affected FQHC or RHC site. For
FQHCs and RHCs that filed consolidated cost reports for multiple
sites to establish the initial prospective payment reimbursement
rate, the 1.75-percent threshold shall be applied to the average
per-visit rate of all sites for the purposes of calculating the cost
associated with a scope-of-service change. “Net change” means
the per-visit rate change attributable to the cumulative effect of all
increases and decreases for a particular fiscal year.

(4) An FQHC or RHC may submit requests for scope-of-service
changes once per fiscal year, only within 90 days following the
beginning of the FQHC’s or RHC’s fiscal year. Any approved
increase or decrease in the provider’s rate shall be retroactive to
the beginning of the FQHC’s or RHC’s fiscal year in which the
request is submitted.

(5) An FQHC or RHC shall submit a scope-of-service rate
change request within 90 days after the beginning of any FQHC
or RHC fiscal year occurring after the effective date of this section,
if, during the FQHC’s or RHC’s prior fiscal year, the FQHC or
RHC experienced a decrease in the scope of services provided that
the FQHC or RHC either knew or should have known would have
resulted in a significantly lower per-visit rate. If an FQHC or RHC
discontinues providing onsite pharmacy or dental services, it shall
submit a scope-of-service rate change request within 90 days after
the beginning of the following fiscal year. The rate change shall
be effective as provided for in paragraph (4). As used in this
paragraph, “significantly lower” means an average per-visit rate
decrease in excess of 2.5 percent.

begin delete

(6) The department shall finalize a new rate within 90 days after
the submission by an FQHC or RHC of a scope-of-service rate
change request and shall update the provider master file within 10
business days of finalizing the rate.

end delete begin insert

(6) (A) The department shall conduct an initial review of a
scope-of-service rate change request within 30 days after
submission by an FQHC or RHC.

end insert begin insert

(B)  If the department determines that additional information
is necessary to finalize a new rate, the department shall notify the
FQHC or RHC, no later than the 31st day after submission. The
notification shall state the reason or reasons the submitted
information is insufficient and shall request submission of
supplemental information from the FQHC or RHC.

end insert begin insert

(C) Within 90 days after receiving a submission that it
determines to be complete, the department shall finalize the
FQHC’s or RHC’s rate and shall update the provider master file
within 10 business days.

end insert

(7) Notwithstanding paragraph (4), if the approved
scope-of-service change or changes were initially implemented
on or after the first day of an FQHC’s or RHC’s fiscal year ending
in calendar year 2001, but before the adoption and issuance of
written instructions for applying for a scope-of-service change,
the adjusted reimbursement rate for that scope-of-service change
shall be made retroactive to the date the scope-of-service change
was initially implemented. Scope-of-service changes under this
paragraph shall be required to be submitted within the later of 150
days after the adoption and issuance of the written instructions by
the department, or 150 days after the end of the FQHC’s or RHC’s
fiscal year ending in 2003.

(8) All references in this subdivision to “fiscal year” shall be
construed to be references to the fiscal year of the individual FQHC
or RHC, as the case may be.

(f) (1) An FQHC or RHC may request a supplemental payment
if extraordinary circumstances beyond the control of the FQHC
or RHC occur after December 31, 2001, and PPS payments are
insufficient due to these extraordinary circumstances. Supplemental
payments arising from extraordinary circumstances under this
subdivision shall be solely and exclusively within the discretion
of the department and shall not be subject to subdivision (l). These
supplemental payments shall be determined separately from the
scope-of-service adjustments described in subdivision (e).
Extraordinary circumstances include, but are not limited to, acts
of nature, changes in applicable requirements in the Health and
Safety Code, changes in applicable licensure requirements, and
changes in applicable rules or regulations. Mere inflation of costs
alone, absent extraordinary circumstances, shall not be grounds
for supplemental payment. If an FQHC’s or RHC’s PPS rate is
sufficient to cover its overall costs, including those associated with
the extraordinary circumstances, then a supplemental payment is
not warranted.

(2) The department shall accept requests for supplemental
payment at any time throughout the prospective payment rate year.

(3) Requests for supplemental payments shall be submitted in
writing to the department and shall set forth the reasons for the
request. Each request shall be accompanied by sufficient
documentation to enable the department to act upon the request.
Documentation shall include the data necessary to demonstrate
that the circumstances for which supplemental payment is requested
meet the requirements set forth in this section. Documentation
shall include all of the following:

(A) A presentation of data to demonstrate reasons for the
FQHC’s or RHC’s request for a supplemental payment.

(B) Documentation showing the cost implications. The cost
impact shall be material and significant, two hundred thousand
dollars ($200,000) or 1 percent of a facility’s total costs, whichever
is less.

(4) A request shall be submitted for each affected year.

(5) Amounts granted for supplemental payment requests shall
be paid as lump-sum amounts for those years and not as revised
PPS rates, and shall be repaid by the FQHC or RHC to the extent
that it is not expended for the specified purposes.

(6) The department shall notify the provider of the department’s
discretionary decision in writing.

(g) (1) An FQHC or RHC “visit” means a face-to-face
encounter between an FQHC or RHC patient and a physician,
physician assistant, nurse practitioner, certified nurse-midwife,
clinical psychologist, licensed clinical social worker, or a visiting
nurse. For purposes of this section, “physician” shall be interpreted
in a manner consistent with the Centers for Medicare and Medicaid
Services’ Medicare Rural Health Clinic and Federally Qualified
Health Center Manual (Publication 27), or its successor, only to
the extent that it defines the professionals whose services are
reimbursable on a per-visit basis and not as to the types of services
that these professionals may render during these visits and shall
include a physician and surgeon, podiatrist, dentist, optometrist,
and chiropractor. A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a comprehensive perinatal
services practitioner, as defined in Section 51179.1 of Title 22 of
the California Code of Regulations, providing comprehensive
perinatal services, a four-hour day of attendance at an adult day
health care center, and any other provider identified in the state
plan’s definition of an FQHC or RHC visit.

(2) (A) A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a dental hygienist or a
dental hygienist in alternative practice.

(B) Notwithstanding subdivision (e), an FQHC or RHC that
currently includes the cost of the services of a dental hygienist in
alternative practice for the purposes of establishing its FQHC or
RHC rate shall apply for an adjustment to its per-visit rate, and,
after the rate adjustment has been approved by the department,
shall bill these services as a separate visit. However, multiple
encounters with dental professionals that take place on the same
day shall constitute a single visit. The department shall develop
the appropriate forms to determine which FQHC’s or RHC rates
shall be adjusted and to facilitate the calculation of the adjusted
rates. An FQHC’s or RHC’s application for, or the department’s
approval of, a rate adjustment pursuant to this subparagraph shall
not constitute a change in scope of service within the meaning of
subdivision (e). An FQHC or RHC that applies for an adjustment
to its rate pursuant to this subparagraph may continue to bill for
all other FQHC or RHC visits at its existing per-visit rate, subject
to reconciliation, until the rate adjustment for visits between an
FQHC or RHC patient and a dental hygienist or a dental hygienist
in alternative practice has been approved. Any approved increase
or decrease in the provider’s rate shall be made within six months
after the date of receipt of the department’s rate adjustment forms
pursuant to this subparagraph and shall be retroactive to the
beginning of the fiscal year in which the FQHC or RHC submits
the request, but in no case shall the effective date be earlier than
January 1, 2008.

(C) An FQHC or RHC that does not provide dental hygienist
or dental hygienist in alternative practice services, and later elects
to add these services, shall process the addition of these services
as a change in scope of service pursuant to subdivision (e).

(h) If FQHC or RHC services are partially reimbursed by a
third-party payer, such as a managed care entity (as defined in
Section 1396u-2(a)(1)(B) of Title 42 of the United States Code),
the Medicare Program, or the Child Health and Disability
Prevention (CHDP) program, the department shall reimburse an
FQHC or RHC for the difference between its per-visit PPS rate
and receipts from other plans or programs on a contract-by-contract
basis and not in the aggregate, and may not include managed care
financial incentive payments that are required by federal law to
be excluded from the calculation.

(i) (1) An entity that first qualifies as an FQHC or RHC in the
year 2001 or later, a newly licensed facility at a new location added
to an existing FQHC or RHC, and any entity that is an existing
FQHC or RHC that is relocated to a new site shall each have its
reimbursement rate established in accordance with one of the
following methods, as selected by the FQHC or RHC:

(A) The rate may be calculated on a per-visit basis in an amount
that is equal to the average of the per-visit rates of three comparable
FQHCs or RHCs located in the same or adjacent area with a similar
caseload.

(B) In the absence of three comparable FQHCs or RHCs with
a similar caseload, the rate may be calculated on a per-visit basis
in an amount that is equal to the average of the per-visit rates of
three comparable FQHCs or RHCs located in the same or an
adjacent service area, or in a reasonably similar geographic area
with respect to relevant social, health care, and economic
characteristics.

(C) At a new entity’s one-time election, the department shall
establish a reimbursement rate, calculated on a per-visit basis, that
is equal to 100 percent of the projected allowable costs to the
FQHC or RHC of furnishing FQHC or RHC services during the
first 12 months of operation as an FQHC or RHC. After the first
12-month period, the projected per-visit rate shall be increased by
the Medicare Economic Index then in effect. The projected
allowable costs for the first 12 months shall be cost settled and the
prospective payment reimbursement rate shall be adjusted based
on actual and allowable cost per visit. The department shall finalize
a new rate within 90 days after the submission of the actual cost
report from the first full 12 months of operation and shall update
the department provider master file within 10 business days of
finalizing the rate.

(D) The department may adopt any further and additional
methods of setting reimbursement rates for newly qualified FQHCs
or RHCs as are consistent with Section 1396a(bb)(4) of Title 42
of the United States Code.

(2) (A) In order for an FQHC or RHC to establish the
comparability of its caseload, the department shall require that the
FQHC or RHC submit its most recent annual utilization report as
submitted to the Office of Statewide Health Planning and
Development, unless the FQHC or RHC was not required to file
an annual utilization report. FQHCs or RHCs that have experienced
changes in their services or caseload subsequent to the filing of
the annual utilization report may submit to the department a
completed report in the format applicable to the prior calendar
year. FQHCs or RHCs that have not previously submitted an annual
utilization report shall submit to the department a completed report
in the format applicable to the prior calendar year. The FQHC or
RHC shall not be required to submit the annual utilization report
for the comparable FQHCs or RHCs to the department, but shall
be required to identify the comparable FQHCs or RHCs. This
paragraph shall apply only to a facility that selects the
comparability approach described in subparagraph (A) or (B) of
paragraph (1).

(B) The department shall conduct an initial review of the three
FQHCs or RHCs for the purpose of determining comparability
within 30 days of submission by the new entity. If the department
determines one or more of the submitted centers or clinics do not
meet the comparability threshold, the department shall notify the
new entity no later than the 31st day after submission.

(C) The notification shall state the reason or reasons for the
finding of noncomparability and shall request a supplemental
submission from the new entity. The request shall clearly state
whether the new entity shall submit data from one, two, or three
FQHCs or RHCs to meet the comparability threshold. Once the
new entity submits its supplemental information, the initial review
process described in subparagraph (B) shall apply.

(D) Within 90 days after receiving a submission determined by
the department to be comparable, the department shall finalize the
new entity’s rate and shall update the provider master file within
10 business days.

(3) The rate for any newly qualified entity set forth under this
subdivision shall be effective retroactively to the later of the date
that the entity was first qualified by the applicable federal agency
as an FQHC or RHC, the date a new facility at a new location was
added to an existing FQHC or RHC, or the date on which an
existing FQHC or RHC was relocated to a new site. The FQHC
or RHC shall be permitted to continue billing for Medi-Cal covered
benefits on a fee-for-service basis until it is informed of its
enrollment as an FQHC or RHC, and the department shall reconcile
the difference between the fee-for-service payments and the
FQHC’s or RHC’s prospective payment rate at that time.

(j) Visits occurring at an intermittent clinic site, as defined in
subdivision (h) of Section 1206 of the Health and Safety Code, of
an existing FQHC or RHC, or in a mobile unit as defined by
paragraph (2) of subdivision (b) of Section 1765.105 of the Health
and Safety Code, shall be billed by and reimbursed at the same
rate as the FQHC or RHC establishing the intermittent clinic site
or the mobile unit, subject to the right of the FQHC or RHC to
request a scope-of-service adjustment to the rate.

(k) An FQHC or RHC may elect to have pharmacy or dental
services reimbursed on a fee-for-service basis, utilizing the current
fee schedules established for those services. These costs shall be
adjusted out of the FQHC’s or RHC’s clinic base rate as
scope-of-service changes. An FQHC or RHC that reverses its
election under this subdivision shall revert to its prior rate, subject
to an increase to account for all MEI increases occurring during
the intervening time period, and subject to any increase or decrease
associated with applicable scope-of-services adjustments as
provided in subdivision (e).

(l) FQHCs and RHCs may appeal a grievance or complaint
concerning ratesetting, scope-of-service changes, and settlement
of cost report audits, in the manner prescribed by Section 14171.
The rights and remedies provided under this subdivision are
cumulative to the rights and remedies available under all other
provisions of law of this state.

(m) The department shall, by no later than March 30, 2008,
promptly seek all necessary federal approvals in order to implement
this section, including any amendments to the state plan. To the
extent that any element or requirement of this section is not
approved, the department shall submit a request to the federal
Centers for Medicare and Medicaid Services for any waivers that
would be necessary to implement this section.

(n) The department shall implement this section only to the
extent that federal financial participation is obtained.

(o) The department shall correct erroneous payments at least
quarterly to reprocess past claims and ensure all claims are
reimbursed at the finalized new rate determined pursuant to either
subdivision (e) or (i).