Amended in Assembly July 14, 2015

Amended in Senate April 28, 2015

Amended in Senate April 6, 2015

Senate BillNo. 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: 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 withinbegin delete 90 daysend deletebegin insert 1 yearend insert 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 withinbegin delete 90 daysend deletebegin insert 1 yearend insert 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. 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. The bill would require the department to finalize the FQHC’s or RHC’s rate withinbegin delete 90 daysend deletebegin insert 1 yearend insert after receiving a submission the department determines to be complete.

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 begin delete15 months ofend deletebegin insert 18 months afterend insert 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:

P3    1

SECTION 1.  

Section 14087.325 of the Welfare and Institutions
2Code
is amended to read:

3

14087.325.  

(a) The department shall require, as a condition
4of obtaining a contract with the department, that any local initiative,
5as defined in Section 53810 of Title 22 of the California Code of
6Regulations, offer a subcontract to any entity defined in Section
71396d(l)(2)(B) of Title 42 of the United States Code providing
8services as defined in Section 1396d(a)(2)(C) of Title 42 of the
9United States Code and operating in the service area covered by
10the local initiative’s contract with the department. These entities
11are also known as federally qualified health centers.

12(b) Except as otherwise provided in this section, managed care
13subcontracts offered to a federally qualified health center or a rural
14health clinic, as defined in Section 1396d(l)(1) of Title 42 of the
15United States Code, by a local initiative, county organized health
16system, as defined in Section 12693.05 of the Insurance Code,
17commercial plan, as defined in Section 53810 of Title 22 of the
18California Code of Regulations, or a health plan contracting with
19a geographic managed care program, as defined in subdivision (g)
20of Section 53902 of Title 22 of the California Code of Regulations,
21shall be on the same terms and conditions offered to other
22subcontractors providing a similar scope of service. Any
23beneficiary, subscriber, or enrollee of a program or plan who
24affirmatively selects, or is assigned by default to, a federally
25qualified health center or rural health clinic under the terms of a
P4    1contract between a plan, government program, or any subcontractor
2of a plan or program, and a federally qualified health center or
3rural health clinic, shall be assigned directly to the federally
4qualified health center or rural health clinic, and not to any
5 individual provider performing services on behalf of the federally
6qualified health center or rural health clinic.

7(c) The department shall provide incentives in the competitive
8application process described in paragraph (1) of subdivision (b)
9of Section 53800 of Title 22 of the California Code of Regulations,
10to encourage potential commercial plans as defined in Section
1153810 of Title 22 of the California Code of Regulations to offer
12subcontracts to these federally qualified health centers.

13(d) Reimbursement to federally qualified health centers and
14rural health centers for services provided pursuant to a subcontract
15with a local initiative, a commercial plan, geographic managed
16care program health plan, or a county organized health system,
17shall be paid in a manner that is not less than the level and amount
18of payment that the plan would make for the same scope of services
19if the services were furnished by a provider that is not a federally
20qualified health center or rural health clinic.

21(e) begin delete(1)end deletebegin deleteend deleteThe department shall administer a program to ensure
22that total payments to federally qualified health centers and rural
23health clinics operating as managed care subcontractors pursuant
24to subdivision (d) comply with applicable federal law pursuant to
25Sections 1902(bb) and 1903(m)(2)(A)(ix) of the Social Security
26Act (42 U.S.C. Secs. 1396a(bb) and 1396b(m)(2)(A)(ix)). Under
27the department’s program, federally qualified health centers and
28rural health clinics subcontracting with local initiatives, commercial
29plans, county organized health systems, and geographic managed
30care program health plans shall seek supplemental reimbursement
31from the department through a per visit fee-for-service billing
32system utilizing the state’s Medi-Cal fee-for-service claims
33processing system contractor. To carry out this per visit payment
34process, each federally qualified health system and rural health
35clinic shall submit to the department for approval a rate differential
36calculated to reflect the amount necessary to reimburse the federally
37qualified health center or rural health clinic for the difference
38between the payment the center or clinic received from the
39managed care health plan and either the interim rate established
40by the department based on the center’s or clinic’s reasonable cost
P5    1or the center’s or clinic’s prospective payment rate. The department
2shall adjust the computed rate differential as it deems necessary
3to minimize the difference between the center’s or clinic’s revenue
4from the plan and the center’s or clinic’s cost-based reimbursement
5or the center’s or clinic’s prospective payment rate.

begin delete

6(A)

end delete

7begin insert(1)end insert In addition, the department shall perform an annual
8reconciliation to reasonable cost, and make payments to, or obtain
9a recovery from, the center or clinic.

begin delete

10(B)

end delete

11begin insert(2)end insert The department shall perform an initial review of the
12reconciliation filing within 30 daysbegin delete ofend deletebegin insert afterend insert receipt. If the
13department determines during the initial review that a payment is
14owed to the center or clinic, the department shall pay to the center
15or clinic at least 80 percent of the amount owed within 30 daysbegin delete ofend delete
16begin insert afterend insert completion of the initial review or in any event within 60
17daysbegin delete ofend deletebegin insert afterend insert receipt of the reconciliation filing.

begin delete

18(C)

end delete

19begin insert(3)end insert The department shall complete the final reconciliation review
20and shall pay to the center or clinic the remaining amount owed
21withinbegin delete 15 months ofend deletebegin insert 18 months afterend insert the last date of the fiscal year
22for which the department is conducting the review.

23(f) In calculating the capitation rates to be paid to local
24initiatives, commercial plans, geographic managed care program
25health plans, and county organized health systems, the department
26shall not include the additional dollar amount applicable to
27cost-based reimbursement that would otherwise be paid, absent
28cost-based reimbursement, to federally qualified health centers
29and rural health clinics in the Medi-Cal fee-for-service program.

30(g) On or before September 30, 2002, the director shall conduct
31a study of the actual and projected impact of the transition from a
32cost-based reimbursement system to a prospective payment system
33for federally qualified health centers and rural health clinics. In
34conducting the study, the director shall evaluate the extent to which
35the prospective payment system stimulates expansion of services,
36including new facilities to expand capacity of the centers, and the
37extent to which actual and estimated prospective payment rates of
38federally qualified health centers and rural health clinics for the
39first five years of the prospective payment system are reflective
40of the cost of providing services to Medi-Cal beneficiaries. Clinics
P6    1may submit cost reporting information to the department to provide
2data for the study.

3(h) The department shall approve all contracts between federally
4qualified health centers or rural health clinics and any local
5initiative, commercial plan, geographic managed care program
6health plan, or county organized health system in order to ensure
7compliance with this section.

8(i) This section shall not preclude the department from
9establishing pilot programs pursuant to Section 14087.329.

10

SEC. 2.  

Section 14132.100 of the Welfare and Institutions
11Code
is amended to read:

12

14132.100.  

(a) The federally qualified health center services
13described in Section 1396d(a)(2)(C) of Title 42 of the United States
14Code are covered benefits.

15(b) The rural health clinic services described in Section
161396d(a)(2)(B) of Title 42 of the United States Code are covered
17benefits.

18(c) Federally qualified health center services and rural health
19clinic services shall be reimbursed on a per-visit basis in
20accordance with the definition of “visit” set forth in subdivision
21(g).

22(d) Effective October 1, 2004, and on each Octoberbegin delete 1,end deletebegin insert 1end insert
23 thereafter, until no longer required by federal law, federally
24qualified health center (FQHC) and rural health clinic (RHC)
25per-visit rates shall be increased by the Medicare Economic Index
26applicable to primary care services in the manner provided for in
27Section 1396a(bb)(3)(A) of Title 42 of the United States Code.
28Prior to January 1, 2004, FQHC and RHC per-visit rates shall be
29adjusted by the Medicare Economic Index in accordance with the
30methodology set forth in the state plan in effect on October 1,
312001.

32(e) (1) An FQHC or RHC may apply for an adjustment to its
33per-visit rate based on a change in the scope of services provided
34by the FQHC or RHC. Rate changes based on a change in the
35scope of services provided by an FQHC or RHC shall be evaluated
36in accordance with Medicare reasonable cost principles, as set
37forth in Part 413 (commencing with Section 413.1) of Title 42 of
38the Code of Federal Regulations, or its successor.

P7    1(2) Subject to the conditions set forth in subparagraphs (A) to
2(D), inclusive, of paragraph (3), a change in scope of service means
3any of the following:

4(A) The addition of a new FQHC or RHC service that is not
5incorporated in the baseline prospective payment system (PPS)
6rate, or a deletion of an FQHC or RHC service that is incorporated
7in the baseline PPS rate.

8(B) A change in service due to amended regulatory requirements
9or rules.

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

12(D) A change in types of services due to a change in applicable
13technology and medical practice utilized by the center or clinic.

14(E) An increase in service intensity attributable to changes in
15the types of patients served, including, but not limited to,
16populations with HIV or AIDS, or other chronic diseases, or
17homeless, elderly, migrant, or other special populations.

18(F) Any changes in any of the services described in subdivision
19(a) or (b), or in the provider mix of an FQHC or RHC or one of
20its sites.

21(G) Changes in operating costs attributable to capital
22expenditures associated with a modification of the scope of any
23of the services described in subdivision (a) or (b), including new
24or expanded service facilities, regulatory compliance, or changes
25in technology or medical practices at the center or clinic.

26(H) Indirect medical education adjustments and a direct graduate
27medical education payment that reflects the costs of providing
28teaching services to interns and residents.

29(I) Any changes in the scope of a project approved by the federal
30Health Resources and Service Administration (HRSA).

31(3) No change in costs shall, in and of itself, be considered a
32scope-of-service change unless all of the following apply:

33(A) The increase or decrease in cost is attributable to an increase
34or decrease in the scope of services defined in subdivisions (a) and
35(b), as applicable.

36(B) The cost is allowable under Medicare reasonable cost
37principles set forth in Part 413 (commencing with Section 413) of
38Subchapter B of Chapter 4 of Title 42 of the Code of Federal
39Regulations, or its successor.

P8    1(C) The change in the scope of services is a change in the type,
2intensity, duration, or amount of services, or any combination
3thereof.

4(D) The net change in the FQHC’s or RHC’s rate equals or
5exceeds 1.75 percent for the affected FQHC or RHC site. For
6FQHCs and RHCs that filed consolidated cost reports for multiple
7sites to establish the initial prospective payment reimbursement
8rate, the 1.75-percent threshold shall be applied to the average
9per-visit rate of all sites for the purposes of calculating the cost
10associated with a scope-of-service change. “Net change” means
11the per-visit rate change attributable to the cumulative effect of all
12increases and decreases for a particular fiscal year.

13(4) An FQHC or RHC may submit requests for scope-of-service
14changes once per fiscal year, only within 90 days following the
15beginning of the FQHC’s or RHC’s fiscal year. Any approved
16increase or decrease in the provider’s rate shall be retroactive to
17the beginning of the FQHC’s or RHC’s fiscal year in which the
18request is submitted.

19(5) An FQHC or RHC shall submit a scope-of-service rate
20change request within 90 days after the beginning of any FQHC
21or RHC fiscal year occurring after the effective date of this section,
22if, during the FQHC’s or RHC’s prior fiscal year, the FQHC or
23RHC experienced a decrease in the scope of services provided that
24the FQHC or RHC either knew or should have known would have
25resulted in a significantly lower per-visit rate. If an FQHC or RHC
26discontinues providing onsite pharmacy or dental services, it shall
27submit a scope-of-service rate change request within 90 days after
28the beginning of the following fiscal year. The rate change shall
29be effective as provided for in paragraph (4). As used in this
30paragraph, “significantly lower” means an average per-visit rate
31decrease in excess of 2.5 percent.

32(6) (A) The department shall conduct an initial review of a
33scope-of-service rate change request within 30 days after
34submission by an FQHC or RHC.

35(B)  If the department determines that additional information is
36necessary to finalize a new rate, the department shall notify the
37FQHC or RHC, no later than the 31st day after submission. The
38notification shall state the reason or reasons the submitted
39information is insufficient and shall request submission of
40supplemental information from the FQHC or RHC.

P9    1(C) Withinbegin delete 90 daysend deletebegin insert one yearend insert after receiving a submission that
2it determines to be complete, the department shall finalize the
3FQHC’s or RHC’s rate and shall update the provider master file
4within 10 business days.

5(7) Notwithstanding paragraph (4), if the approved
6scope-of-service change or changes were initially implemented
7on or after the first day of an FQHC’s or RHC’s fiscal year ending
8in calendar year 2001, but before the adoption and issuance of
9written instructions for applying for a scope-of-service change,
10the adjusted reimbursement rate for that scope-of-service change
11shall be made retroactive to the date the scope-of-service change
12was initially implemented. Scope-of-service changes under this
13paragraph shall be required to be submitted within the later of 150
14days after the adoption and issuance of the written instructions by
15the department, or 150 days after the end of the FQHC’s or RHC’s
16fiscal year ending in 2003.

17(8) All references in this subdivision to “fiscal year” shall be
18construed to be references to the fiscal year of the individual FQHC
19or RHC, as the case may be.

20(f) (1) An FQHC or RHC may request a supplemental payment
21if extraordinary circumstances beyond the control of the FQHC
22or RHC occur after December 31, 2001, and PPS payments are
23insufficient due to these extraordinary circumstances. Supplemental
24payments arising from extraordinary circumstances under this
25subdivision shall be solely and exclusively within the discretion
26of the department and shall not be subject to subdivision (l). These
27supplemental payments shall be determined separately from the
28scope-of-service adjustments described in subdivision (e).
29Extraordinary circumstances include, but are not limited to, acts
30of nature, changes in applicable requirements in the Health and
31Safety Code, changes in applicable licensure requirements, and
32changes in applicable rules or regulations. Mere inflation of costs
33alone, absent extraordinary circumstances, shall not be grounds
34for supplemental payment. If an FQHC’s or RHC’s PPS rate is
35sufficient to cover its overall costs, including those associated with
36the extraordinary circumstances, then a supplemental payment is
37not warranted.

38(2) The department shall accept requests for supplemental
39payment at any time throughout the prospective payment rate year.

P10   1(3) Requests for supplemental payments shall be submitted in
2writing to the department and shall set forth the reasons for the
3request. Each request shall be accompanied by sufficient
4documentation to enable the department to act upon the request.
5Documentation shall include the data necessary to demonstrate
6that the circumstances for which supplemental payment is requested
7meet the requirements set forth in this section. Documentation
8shall include all of the following:

9(A) A presentation of data to demonstrate reasons for the
10FQHC’s or RHC’s request for a supplemental payment.

11(B) Documentation showing the cost implications. The cost
12impact shall be material and significant, two hundred thousand
13dollars ($200,000) or 1 percent of a facility’s total costs, whichever
14is less.

15(4) A request shall be submitted for each affected year.

16(5) Amounts granted for supplemental payment requests shall
17be paid as lump-sum amounts for those years and not as revised
18PPS rates, and shall be repaid by the FQHC or RHC to the extent
19that it is not expended for the specified purposes.

20(6) The department shall notify the provider of the department’s
21discretionary decision in writing.

22(g) (1) An FQHC or RHC “visit” means a face-to-face
23encounter between an FQHC or RHC patient and a physician,
24physician assistant, nurse practitioner, certified nurse-midwife,
25clinical psychologist, licensed clinical social worker, or a visiting
26nurse. For purposes of this section, “physician” shall be interpreted
27in a manner consistent with thebegin insert federalend insert Centers for Medicare and
28Medicaid Services’ Medicare Rural Health Clinic and Federally
29Qualified Health Center Manual (Publication 27), or its successor,
30only to the extent that it defines the professionals whose services
31are reimbursable on a per-visit basis and not as to the types of
32services that these professionals may render during these visits
33and shall include a physician and surgeon, podiatrist, dentist,
34optometrist, and chiropractor. A visit shall also include a
35face-to-face encounter between an FQHC or RHC patient and a
36comprehensive perinatal services practitioner, as defined in Section
3751179.1 of Title 22 of the California Code of Regulations,
38providing comprehensive perinatal services, a four-hour day of
39attendance at an adult day health care center, and any other provider
40identified in the state plan’s definition of an FQHC or RHC visit.

P11   1(2) (A) A visit shall also include a face-to-face encounter
2between an FQHC or RHC patient and a dental hygienist or a
3dental hygienist in alternative practice.

4(B) Notwithstanding subdivision (e), an FQHC or RHC that
5currently includes the cost of the services of a dental hygienist in
6alternative practice for the purposes of establishing its FQHC or
7RHC rate shall apply for an adjustment to its per-visit rate, and,
8after the rate adjustment has been approved by the department,
9shall bill these services as a separate visit. However, multiple
10encounters with dental professionals that take place on the same
11day shall constitute a single visit. The department shall develop
12the appropriate forms to determine which FQHC’s orbegin delete RHCend deletebegin insert RHC’send insert
13 rates shall be adjusted and to facilitate the calculation of the
14adjusted rates. An FQHC’s or RHC’s application for, or the
15department’s approval of, a rate adjustment pursuant to this
16subparagraph shall not constitute a change in scope of service
17within the meaning of subdivision (e). An FQHC or RHC that
18applies for an adjustment to its rate pursuant to this subparagraph
19may continue to bill for all other FQHC or RHC visits at its existing
20per-visit rate, subject to reconciliation, until the rate adjustment
21for visits between an FQHC or RHC patient and a dental hygienist
22or a dental hygienist in alternative practice has been approved.
23Any approved increase or decrease in the provider’s rate shall be
24made within six months after the date of receipt of the department’s
25rate adjustment forms pursuant to this subparagraph and shall be
26retroactive to the beginning of the fiscal year in which the FQHC
27or RHC submits the request, but in no case shall the effective date
28be earlier than January 1, 2008.

29(C) An FQHC or RHC that does not provide dental hygienist
30or dental hygienist in alternative practice services, and later elects
31to add these services, shall process the addition of these services
32as a change in scope of service pursuant to subdivision (e).

33(h) If FQHC or RHC services are partially reimbursed by a
34third-party payer, such as a managed care entity (as defined in
35Section 1396u-2(a)(1)(B) of Title 42 of the United States Code),
36the Medicare Program, or the Child Health and Disability
37Prevention (CHDP) program, the department shall reimburse an
38FQHC or RHC for the difference between its per-visit PPS rate
39and receipts from other plans or programs on a contract-by-contract
40basis and not in the aggregate, and may not include managed care
P12   1financial incentive payments that are required by federal law to
2be excluded from the calculation.

3(i) (1) An entity that first qualifies as an FQHC or RHC in the
4year 2001 or later, a newly licensed facility at a new location added
5to an existing FQHC or RHC, and any entity that is an existing
6FQHC or RHC that is relocated to a new site shall each have its
7reimbursement rate established in accordance with one of the
8following methods, as selected by the FQHC or RHC:

9(A) The rate may be calculated on a per-visit basis in an amount
10that is equal to the average of the per-visit rates of three comparable
11FQHCs or RHCs located in the same or adjacent area with a similar
12caseload.

13(B) In the absence of three comparable FQHCs or RHCs with
14a similar caseload, the rate may be calculated on a per-visit basis
15in an amount that is equal to the average of the per-visit rates of
16three comparable FQHCs or RHCs located in the same or an
17adjacent service area, or in a reasonably similar geographic area
18with respect to relevant social, health care, and economic
19characteristics.

20(C) At a new entity’s one-time election, the department shall
21establish a reimbursement rate, calculated on a per-visit basis, that
22is equal to 100 percent of the projected allowable costs to the
23FQHC or RHC of furnishing FQHC or RHC services during the
24first 12 months of operation as an FQHC or RHC. After the first
2512-month period, the projected per-visit rate shall be increased by
26the Medicare Economic Indexbegin insert (MEI)end insert then in effect. The projected
27allowable costs for the first 12 months shall be cost settled and the
28prospective payment reimbursement rate shall be adjusted based
29on actual and allowable cost per visit. The department shall finalize
30a new rate withinbegin delete 90 daysend deletebegin insert one yearend insert after the submission of the
31actual cost report from the first full 12 months of operation and
32shall update the department provider master file within 10 business
33daysbegin delete ofend deletebegin insert afterend insert finalizing the rate.

34(D) The department may adopt any further and additional
35methods of setting reimbursement rates for newly qualified FQHCs
36or RHCs as are consistent with Section 1396a(bb)(4) of Title 42
37of the United States Code.

38(2) (A) In order for an FQHC or RHC to establish the
39comparability of its caseload, the department shall require that the
40FQHC or RHC submit its most recent annual utilization report as
P13   1submitted to the Office of Statewide Health Planning and
2Development, unless the FQHC or RHC was not required to file
3an annual utilization report. FQHCs or RHCs that have experienced
4changes in their services or caseload subsequent to the filing of
5the annual utilization report may submit to the department a
6completed report in the format applicable to the prior calendar
7year. FQHCs or RHCs that have not previously submitted an annual
8utilization report shall submit to the department a completed report
9in the format applicable to the prior calendar year. The FQHC or
10RHC shall not be required to submit the annual utilization report
11for the comparable FQHCs or RHCs to the department, but shall
12be required to identify the comparable FQHCs or RHCs. This
13paragraph shall apply only to a facility that selects the
14comparability approach described in subparagraph (A) or (B) of
15paragraph (1).

16(B) The department shall conduct an initial review of the three
17FQHCs or RHCs for the purpose of determining comparability
18within 30 daysbegin delete ofend deletebegin insert afterend insert submission by the new entity. If the
19department determines one or more of the submitted centers or
20clinics do not meet the comparability threshold, the department
21shall notify the new entity no later than the 31st day after
22submission.

23(C) The notification shall state the reason or reasons for the
24finding of noncomparability and shall request a supplemental
25submission from the new entity. The request shall clearly state
26whether the new entity shall submit data from one, two, or three
27FQHCs or RHCs to meet the comparability threshold. Once the
28new entity submits its supplemental information, the initial review
29process described in subparagraph (B) shall apply.

30(D) Withinbegin delete 90 daysend deletebegin insert one yearend insert after receiving a submission
31determined by the department to be comparable, the department
32shall finalize the new entity’s rate and shall update the provider
33master file within 10 business days.

34(3) The rate for any newly qualified entity set forth under this
35subdivision shall be effective retroactively to the later of the date
36that the entity was first qualified by the applicable federal agency
37as an FQHC or RHC, the date a new facility at a new location was
38added to an existing FQHC or RHC, or the date on which an
39existing FQHC or RHC was relocated to a new site. The FQHC
40or RHC shall be permitted to continue billing for Medi-Cal covered
P14   1benefits on a fee-for-service basis until it is informed of its
2enrollment as an FQHC or RHC, and the department shall reconcile
3the difference between the fee-for-service payments and the
4FQHC’s or RHC’s prospective payment rate at that time.

5(j) Visits occurring at an intermittent clinic site, as defined in
6subdivision (h) of Section 1206 of the Health and Safety Code, of
7an existing FQHC or RHC, or in a mobile unit as defined by
8paragraph (2) of subdivision (b) of Section 1765.105 of the Health
9and Safety Code, shall be billed by and reimbursed at the same
10rate as the FQHC or RHC establishing the intermittent clinic site
11or the mobile unit, subject to the right of the FQHC or RHC to
12request a scope-of-service adjustment to the rate.

13(k) An FQHC or RHC may elect to have pharmacy or dental
14services reimbursed on a fee-for-service basis, utilizing the current
15fee schedules established for those services. These costs shall be
16adjusted out of the FQHC’s or RHC’s clinic base rate as
17scope-of-service changes. An FQHC or RHC that reverses its
18election under this subdivision shall revert to its prior rate, subject
19to an increase to account for all MEI increases occurring during
20the intervening time period, and subject to any increase or decrease
21associated with applicable scope-of-services adjustments as
22provided in subdivision (e).

23(l) FQHCs and RHCs may appeal a grievance or complaint
24concerning ratesetting, scope-of-service changes, and settlement
25of cost report audits, in the manner prescribed by Section 14171.
26The rights and remedies provided under this subdivision are
27cumulative to the rights and remedies available under all other
28provisions of law of this state.

29(m) The department shall, by no later than March 30, 2008,
30promptly seek all necessary federal approvals in order to implement
31this section, including any amendments to the state plan. To the
32extent that any element or requirement of this section is not
33approved, the department shall submit a request to the federal
34Centers for Medicare and Medicaid Services for any waivers that
35would be necessary to implement this section.

36(n) The department shall implement this section only to the
37extent that federal financial participation is obtained.

38(o) The department shall correct erroneous payments at least
39 quarterly to reprocess past claims and ensure all claims are
P15   1reimbursed at the finalized new rate determined pursuant to either
2subdivision (e) or (i).



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