BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 610 (Pan) - Medi-Cal: federally qualified health centers:
rural health clinics: managed care contracts
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|Version: April 28, 2015 |Policy Vote: HEALTH 8 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 610 would modify existing timelines and establish
new timelines relating to the process for setting rates and
making payments to Federally Qualified Health Centers (FQHCs)
and Rural Health Clinics (RHCs) through the Medi-Cal program.
Fiscal
Impact:
Increased administrative costs, likely in the millions, to
comply with the new or accelerated deadlines in the bill
(General Fund and federal funds). The bill would require the
Department of Health Care Services to complete its review of a
proposed change in scope of service or determine a final rate
SB 610 (Pan) Page 1 of
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for a FQHC or RHC much faster than is current practice.
Unknown changes in the timing of payments made to FQHCs or
RHCs due to changes in the processes and deadlines for making
reconciliation payments or correcting erroneous payments
(General Fund and federal funds). The bill creates new
timelines or accelerates existing timelines under which the
Department must make certain payments to FQHCs and RHCs. By
accelerating payments to FQHCs and RHCs, the state will likely
incur Medi-Cal costs sooner than would otherwise occur. The
Medi-Cal program is budgeted on a cash basis (meaning that the
state budget reflects costs as payments are made). To the
extent that the bill results in payments being made earlier,
to some extent the bill will result in shifting of costs
between budget years. The bill is not anticipated to increase
overall Medi-Cal costs for payments to FQHCs or RHCs.
Background: Under current law, the Medi-Cal program provides health care
coverage for certain low income and disabled individuals.
In the Medi-Cal fee-for-service system, FQHCs and RHCs are paid
a per-visit payment known as the prospective payment system
(PPS). The PPS rate is based on a baseline rate that reflects a
FQHC's or RHC's costs to provide services in 1999-2000, adjusted
for inflation. When a Medi-Cal beneficiary in the managed care
system receives care from a FQHC or RHC, the managed care plan
makes a per-visit payment to the center. Because the rates paid
by managed care plans are significantly below the PPS rate, the
state makes a supplemental "wrap-around" payment to the FQHC or
RHC to bring the total payment up to the PPS rate.
Proposed Law:
SB 610 would modify existing timelines and establish new
timelines relating to the process for setting rates and making
payments to Federally Qualified Health Centers (FQHCs) and Rural
Health Clinics (RHCs) through the Medi-Cal program.
Specific provisions of the bill would:
Require the Department of Health Care Services to determine
whether a request for a change in scope of service by a FQHC
SB 610 (Pan) Page 2 of
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or RHC is complete within 30 days and finalize the review of
the request within 90 days of determining that the proposal is
complete. (Current law does not impose a deadline on the
Department. Under current practice, the Department has 90 days
to review the request, if the Department finds the proposal is
incomplete, the deadline is extended for another 90 days);
Require the Department to finalize a new rate based on cost
(for a new FQHC or RHC) within 90 days of submittal of the
actual cost report from the first 12 months of operation.
(Current law does not set a deadline for finalizing the new
rate. Under current practice, the Department determines an
interim rate [80% of cost] within four weeks and may take up
to three years to establish the final rate.);
Require the Department to determine whether a request to
establish a new rate based on comparable clinics (for a new
FQHC or RHC) is complete within 30 days and finalize a new
rate based on comparable clinics within 90 days of determining
the request is complete. (Under current practice there is no
deadline.);
Require the Department to make a reconciliation payment (if
necessary) of at least 80% of the estimated amount owed to a
FQHC or RHC within 60 days of receiving a reconciliation
filing and to complete the final reconciliation review and pay
the remaining amount within 15 months. (Under current
practice, the Department provides an interim payment of 60% of
the estimated amount due within five to six months and makes a
final payment within 3 years);
Require the Department to correct erroneous payments
quarterly, including making payments for reprocessed claims
due to the establishment of a new rate for a new FQHC or RHC
or if there has been an approved scope of service change.
(Under current practice there is no deadline for making
erroneous payments).
Related
Legislation: SB 147 (Hernandez) would require the Department of
Health Care Services to authorize a three-year pilot project,
under which federally qualified health centers would receive
capitated monthly payments from Medi-Cal managed care plans in
lieu of wrap-around payments from Medi-Cal for individual
visits. That bill is on this committee's Suspense File.
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Staff
Comments: As noted above, the changes in the bill will change
the timing of payments made by the state to FQHCs and RHCs. The
changes are not anticipated to change the total amounts of the
payments.
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