Amended in Senate April 11, 2016

Senate BillNo. 815


Introduced by Senators Hernandez and De León

January 4, 2016


An act to addbegin insert Section 14086.5 to, and to addend insert Article 5.5 (commencing with Section 14184) to Chapter 7 of Part 3 of Division 9begin delete ofend deletebegin insert of,end insert the Welfare and Institutions Code, relating to Medi-Cal,begin insert making an appropriation therefor,end insert and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 815, as amended, Hernandez. Medi-Cal: demonstration project.

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 and services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law provides for a demonstrationbegin delete projectend deletebegin insert project, known as California’s “Bridge to Reform” Medicaid demonstration project,end insert under the Medi-Cal program until October 31, 2015, to implement specified objectives, including better care coordination for seniors and persons with disabilities and maximization of opportunities to reduce the number of uninsured individuals.

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Existing law establishes the Medi-Cal Hospital/Uninsured Care Demonstration Project Act, which revises hospital supplemental payment methodologies under the Medi-Cal program in order to maximize the use of federal funds consistent with federal Medicaid law and to stabilize the distribution of funding for hospitals that provide care to Medi-Cal beneficiaries and uninsured patients. This act provides for funding, in supplementation of Medi-Cal reimbursement, to various hospitals, including designated public hospitals, nondesignated public hospitals, and private hospitals, as defined, in accordance with certain provisions relating to disproportionate share hospitals.

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Existing law establishes both of the following continuously appropriated funds to be expended by the department:

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(1) The Demonstration Disproportionate Share Hospital Fund, which consists of federal funds claimed and received by the department as federal financial participation with respect to certified public expenditures.

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(2) The Public Hospital Investment, Improvement, and Incentive Fund, which consists of moneys that a county, other political subdivision of the state, or other governmental entity in the state elects to transfer to the department for use as the nonfederal share of investment, improvement, and incentive payments to participating designated public hospitals, nondesignated public hospitals, and the governmental entities with which they are affiliated, that provide intergovernmental transfers for deposit into the fund.

end insert
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Existing law requires the department to seek a subsequent demonstration project to implement specified objectives, including maximizing federal Medicaid funding for county public hospitals health systems and components that maintain a comparable level of support for delivery system reform in the county public hospital health systems as was provided under California’s “Bridge to Reform” Medicaid demonstration project.

end insert

This bill wouldbegin delete require the State Department of Health Care Services to implement a waiver or demonstration project authorized under a specified federal waiver that, among other things, includes a delivery system transformation and alignment incentive program for designated public hospital systems and district municipal hospitals. The bill would require the department to consult with interested stakeholders and the Legislature in implementing this waiver or demonstration project.end deletebegin insert establish the Medi-Cal 2020 Demonstration Project Act, under which the department is required to implement specified components of the subsequent demonstration project, referred to as California’s Medi-Cal 2020 demonstration project, consistent with the Special Terms and Conditions approved by the federal Centers for Medicare and Medicaid Services.end insert

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The bill would distinguish which payment methodologies and requirements under the Medi-Cal Hospital/Uninsured Care Demonstration Project Act apply to the Medi-Cal 2020 Demonstration Project Act. The bill would, in this regard, retain the continuously appropriated Demonstration Disproportionate Share Hospital Fund, which will continue to consist of all federal funds received by the department as federal financial participation with respect to certified public expenditures, and would require moneys in this fund to be continuously appropriated, thereby making an appropriation, to the department for disbursement to eligible designated public hospitals. The bill would provide for a reconciliation process for disproportionate share hospital payment allocations and safety net care pool payment allocations that were paid to certain designated public hospitals, as specified.

end insert
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The bill would require the department to implement the Global Payment Program (GPP), under which GPP systems, as defined, would be eligible to receive global payments that are calculated using a value-based point methodology, to be developed by the department, based on the health care they provide to the uninsured. The bill would provide that these global payments payable to GPP systems are in lieu of the traditional disproportionate share hospital payments and the safety net care pool payments previously made available under the Medi-Cal Hospital/Uninsured Care Demonstration Project Act. The bill would establish the Global Payment Program Special Fund in the State Treasury, which would consist of moneys that a designated public hospital or affiliated governmental agency or entity elects to transfer to the department for deposit into the fund as a condition of participation in the program. The bill would provide that these funds shall be continuously appropriated, thereby making an appropriation, to the department to be used as the nonfederal share of global payment program payments authorized under California’s Medi-Cal 2020 demonstration project.

end insert
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The bill would require the department to establish and operate the Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program, under which participating PRIME entities, as defined, would be eligible to earn incentive payments by undertaking specified projects set forth in the Special Terms and Conditions, for which there are required project metrics and targets. The bill would require the department to provide participating PRIME entities the opportunity to earn the maximum amount of funds authorized for the PRIME program under the demonstration project. The bill would retain the continuously appropriated Public Hospital Investment, Improvement, and Incentive Fund for purposes of making PRIME payments to participating PRIME entities. The Public Hospital Investment, Improvement, and Incentive Fund would consist of moneys that a designated public hospital, or affiliated governmental agency or entity, or a district and municipal hospital, or affiliated governmental agency or entity, elects to transfer to the department for deposit into the fund. The bill would provide that these funds are continuously appropriated, thereby making an appropriation, to the department to be used as the nonfederal share of PRIME program payments authorized under California’s Medi-Cal 2020 demonstration project.

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The bill would require the department to establish and operate the Whole Person Care pilot program, under which counties, Medi-Cal managed care plans, and community providers that elect to participate in the pilot program are provided an opportunity to establish a new model for integrated care delivery that incorporates health care needs, behavioral needs, and social support, including housing and other supportive services, for the state’s most high-risk, high-utilizing populations. The bill would establish Whole Person Care Pilot Special Fund in the State Treasury, which would consist of moneys that a participating governmental agency or entity elects to transfer to the department as a condition of participation in the pilot program. The bill would provide that these funds shall be continuously appropriated, thereby making an appropriation, to the department to be used to fund the nonfederal share of any payments of Whole Person Care pilot payments authorized under California’s Medi-Cal 2020 demonstration project.

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The bill would require the department to implement the Dental Transformation Initiative (DTI), under which DTI incentive payments, as defined, within specified domain categories would be made available to qualified providers who meet achievements within one or more of the project domains. The bill would provide that providers in either the dental fee-for-service or dental managed care Medi-Cal delivery systems would be eligible to participate in the DTI.

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The bill would require the department to conduct, or arrange to have conducted, any study, report, assessment, evaluation, or other similar demonstration project activity required under the Special Terms and Conditions. The bill, in this regard, would require the department to amend its contract with its external quality review organization to complete an access assessment to, among other things, evaluate primary, core specialty, and facility access to care for managed care beneficiaries, as specified. The bill would require the department to establish an advisory committee to provide input into the structure of the access assessment, which would be comprised of specified stakeholders, including representatives from consumer advocacy organizations.

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The bill would provide that these provisions shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. The bill would require the department to seek any federal approvals it deems necessary to implement these provisions during the course of the demonstration term.

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The bill would authorize the department to implement the Medi-Cal 2020 Demonstration Project Act by means of all-county letters, provider bulletins, or other similar instructions without taking regulatory action.

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This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete
P5    1

SECTION 1.  

Article 5.5 (commencing with Section 14184) is
2added to Chapter 7 of Part 3 of Division 9 of the Welfare and
3Institutions Code
, to read:

4 

5Article 5.5.  Renewal of Health Care Coordination,
6Improvement, and Long-Term Cost Containment Waiver or
7Demonstration Project
8

 

9

14184.  

(a) The department shall implement a waiver or a
10demonstration project authorized under Section 1115 of the federal
11Social Security Act that includes all of the following:

12(1) A global payment program for services to the uninsured in
13designated public hospital systems that converts existing
14disproportionate share hospital funding and safety net care pool
15uncompensated care funding to a system focused on value and
16improved care delivery.

17(2) Delivery system transformation and alignment incentive
18program for designated public hospital systems and district
P6    1municipal hospitals, which shall be known as Public Hospital
2Redesign and Incentives in Medi-Cal (PRIME).

3(3) A dental transformation incentive program.

4(4) A whole person care pilot program, which would be a
5voluntary, county-based program to target providing more
6integrated care for high-risk, vulnerable populations.

7(5) An independent assessment of access to care and network
8adequacy for Medi-Cal managed care beneficiaries.

9(6) An independent study of uncompensated care and hospital
10financing.

11(b) In implementing this waiver or demonstration project, the
12department shall consult with interested stakeholders and the
13Legislature.

end delete
14begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 14086.5 is added to the end insertbegin insertWelfare and
15Institutions Code
end insert
begin insert, to read:end insert

begin insert
16

begin insert14086.5.end insert  

(a) Within 90 days of the effective date of the act that
17added this section, the department shall amend its contract with
18the external quality review organization (EQRO) currently under
19contract with the department and approved by the federal Centers
20for Medicare and Medicaid Services to complete an access
21assessment. This one-time assessment is intended to do all of the
22following:

23
(1) Evaluate primary, core specialty, and facility access to care
24for managed care beneficiaries based on the current health plan
25network adequacy requirements set forth in the Knox-Keene Health
26Care Service Plan Act of 1975 (Chapter 2.2 (commencing with
27Section 1340) of Division 2 of the Health and Safety Code) and
28Medicaid managed care contracts, as applicable.

29
(2) Consider State Fair Hearing and Independent Medical
30Review (IMR) decisions, and grievances and appeals or complaints
31data.

32
(3) Report on the number of providers accepting new
33beneficiaries.

34
(b) The department shall submit to the federal Centers for
35Medicare and Medicaid Services for approval the access
36assessment design no later than 180 days after approval by the
37federal Centers for Medicare and Medicaid Services of the EQRO
38contract amendment.

39
(c) The department shall establish an advisory committee that
40will provide input into the structure of the access assessment. The
P7    1EQRO shall work with the department to establish the advisory
2committee, which will provide input into the assessment structure,
3including network adequacy requirements and metrics, that should
4be considered.

5
(d) The advisory committee shall include one or more
6representatives of each of the following stakeholders to ensure
7diverse and robust input into the assessment structure and feedback
8on the initial draft access assessment report:

9
(1) Consumer advocacy organizations.

10
(2) Provider associations.

11
(3) Health plans and health plan associations.

12
(4) Legislative staff.

13
(e) The advisory committee shall do all of the following:

14
(1) Begin to convene within 60 days of approval by the federal
15Centers for Medicare and Medicaid Services of the EQRO contract
16amendment.

17
(2) Participate in a minimum of two meetings, including an
18entrance and exit event, with all events and meetings open to the
19public.

20
(3) Provide all of the following:

21
(A) Feedback on the access assessment structure.

22
(B) An initial draft access assessment report.

23
(C) Recommendations that shall be made available on the
24department’s Internet Web site.

25
(f) The EQRO shall produce and publish an initial draft and a
26final access assessment report that includes a comparison of health
27plan network adequacy compliance across different lines of
28business. The report shall include recommendations in response
29to any systemic network adequacy issues, if identified. The initial
30draft and final report shall describe the state’s current compliance
31with the access and network adequacy standards set forth in the
32Medicaid Managed Care proposed rule (80 FR 31097) or the
33finalized Part 438 of Title 42 of the Code of Federal Regulations,
34if published prior to submission of the assessment design to the
35federal Centers for Medicare and Medicaid Services.

36
(g) The access assessment shall do all of the following:

37
(1) Measure health plan compliance with network adequacy
38requirements as set forth in the Knox-Keene Health Care Service
39Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
40of Division 2 of the Health and Safety Code) and Medicaid
P8    1managed care contracts, as applicable. The assessment shall
2consider State Fair Hearing and IMR decisions, and grievances
3and appeals or complaints data, and any other factors as selected
4with input from the Advisory Committee.

5
(2) Review encounter data, including a review of data from
6subcapitated plans.

7
(3) Measure health plan compliance with timely access
8requirements, as set forth in the Knox-Keene Health Care Service
9Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
10of Division 2 of the Health and Safety Code) and Medicaid
11managed care contracts using a sample of provider-level data on
12the soonest appointment availability.

13
(4) Review compliance with network adequacy requirements
14for managed care plans, and other lines of business for primary
15and core specialty care areas and facility access, as set forth in
16the Knox-Keene Health Care Service Plan Act of 1975 (Chapter
172.2 (commencing with Section 1340) of Division 2 of the Health
18and Safety Code) and Medicaid managed care contracts, as
19applicable, across the entire health plan network.

20
(5) Applicable network adequacy requirements of the proposed
21or final Notice of Proposed Rulemaking, as determined under the
22approved access assessment design, that are not already required
23under the Knox-Keene Health Care Service Plan Act of 1975
24(Chapter 2.2 (commencing with Section 1340) of Division 2 of the
25Health and Safety Code) shall be reviewed and reported on against
26a metric range as identified by the department and approved by
27the federal Centers for Medicare and Medicaid Services in the
28access assessment design.

29
(6) Determine health plan compliance with network adequacy
30through reviewing information or data from a one-year period
31using validated network data and utilize it for the time period
32following conclusion of the preassessment stakeholder process but
33no sooner than the second half of the 2016 calendar year in order
34to ensure use of the highest quality data source available.

35
(7) Measure managed care plan compliance with network
36adequacy requirements within the department and managed care
37plan contract service areas using the Knox-Keene Health Care
38Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
391340) of Division 2 of the Health and Safety Code) and network
P9    1adequacy standards within Medicaid managed care contracts,
2accounting for each of the following:

3
(A) Geographic differences, including provider shortages at
4the local, state, and national levels, as applicable.

5
(B) Previously approved alternate network access standards,
6as provided for under the Knox-Keene Health Care Service Plan
7Act of 1975 (Chapter 2.2 (commencing with Section 1340) of
8 Division 2 of the Health and Safety Code) and Medicaid managed
9care contracts.

10
(C) Access to in-network providers and out-of-network providers
11separately, presented and evaluated separately, when determining
12overall access to care.

13
(D) The entire network of providers available to beneficiaries
14as the state contractor plan level.

15
(E) Other modalities used for accessing care, including
16telemedicine.

17
(h) The department shall post the initial draft report for a 30-day
18public comment period after it has incorporated the feedback from
19the advisory committee. The initial draft report shall be posted for
20public comment no later than 10 months after the federal Centers
21for Medicare and Medicaid Services approves the assessment
22design.

23
(i) The department shall also make publicly available the
24feedback from the advisory committee at the same time it posts the
25initial draft of the report.

26
(j) The department shall submit the final access assessment
27report to the federal Centers for Medicare and Medicaid Services
28no later than 90 days after the initial draft report is posted for
29public comment.

end insert
30begin insert

begin insertSEC. 2.end insert  

end insert

begin insertArticle 5.5 (commencing with Section 14184) is added
31to Chapter 7 of Part 3 of Division 9 of the end insert
begin insertWelfare and Institutions
32Code
end insert
begin insert, to read:end insert

begin insert

33 

34Article begin insert5.5.end insert  Medi-Cal 2020 Demonstration Project Act
35

 

36

begin insert14184.end insert  

(a) This article shall be known, and may be cited, as
37the Medi-Cal 2020 Demonstration Project Act.

38
(b) The Legislature finds and declares all of the following:

39
(1) The implementation of the federal Patient Protection and
40Affordable Care Act (Public Law 111-148) and California’s
P10   1“Bridge to Reform” Medicaid demonstration project have led to
2the expansion of Medi-Cal coverage to more than 13 million
3beneficiaries, driving health care delivery system reforms that
4support expanded access to care, as well as higher quality,
5efficiency, and beneficiary satisfaction.

6
(2) California’s “Medi-Cal 2020” Medicaid demonstration
7project, No. 11-W-00193/9, expands on these achievements by
8continuing to focus on expanded health care system capacity, better
9coordinated care, and aligned incentives within the Medi-Cal
10program in order to improve health outcomes for Medi-Cal
11beneficiaries, while simultaneously containing health care costs.

12
(3) Public safety net providers, including designated public
13hospitals and nondesignated public hospitals, which are also
14known as district and municipal public hospitals, play an essential
15role in the Medi-Cal program, providing high-quality care to a
16disproportionate number of low-income Medi-Cal and uninsured
17populations in the state. Because Medi-Cal covers approximately
18one third of the state’s population, the strength of these essential
19health care systems and hospitals is of critical importance to the
20health and welfare of the people of California.

21
(4) As a component of the “Medi-Cal 2020” demonstration
22project, the Global Payment Program provides an opportunity to
23test an alternative payment model for the remaining uninsured
24that rewards value and supports providing care at the appropriate
25place and time, aligning incentives to enhance primary and
26preventive services for California’s remaining uninsured seeking
27care in participating public health care systems.

28
(5) As a component of the “Medi-Cal 2020” demonstration
29project, the Public Hospital Redesign and Incentives in Medi-Cal
30(PRIME) program seeks to improve health outcomes for patients
31served by participating entities by building on the delivery system
32transformation work from the “Bridge to Reform” demonstration
33project. Using evidence-based quality improvement methods, the
34PRIME program is intended to be ambitious in scope in order to
35accelerate transformation in care delivery and maximize value for
36patients, providers, and payers. The PRIME program also seeks
37to strengthen the ability of designated public hospitals to
38successfully perform under risk-based alternative payment models
39(APMs) in the long term.

P11   1
(6) As a component of the “Medi-Cal 2020” demonstration
2project, the Whole Person Care pilot program creates an
3opportunity for counties, Medi-Cal managed care plans, and
4community providers to establish a new model for integrated care
5delivery that incorporates health care needs, behavioral health,
6and social support for the state’s most vulnerable, high-user
7populations. The Whole Person Care pilot program encourages
8coordination among local partners to address the root causes of
9poor health outcomes, including immediate health needs and other
10factors, such as housing and recidivism, that impact a beneficiary’s
11health status.

12
(7) As a component of the “Medi-Cal 2020” demonstration
13 project, the Dental Transformation Initiative creates innovative
14opportunities for the Medi-Cal Dental Program to improve access
15to dental care, continuity of care, and increase the utilization of
16preventive services aimed at reducing preventable dental
17conditions for Medi-Cal beneficiaries identified within the project.

18
(c) The implementation of the “Medi-Cal 2020” demonstration
19project, as set forth in this article, will support all of the following
20goals:

21
(1) Improving access to health care and health care quality for
22California’s Medi-Cal and uninsured populations.

23
(2) Promoting value and improving health outcomes for
24low-income populations.

25
(3) Supporting whole person care by better integrating physical
26health, behavioral health, and social support services for high-risk,
27high-utilizing Medi-Cal beneficiaries.

28
(4) Improving the capacity of public safety net providers that
29provide high-quality care to a disproportionate number of
30low-income patients with complex health needs in the state.

31
(5) Transitioning from a cost-based reimbursement system
32toward a reimbursement structure that incentivizes quality and
33value by financially rewarding alternatives models of care that
34support providers’ ability to deliver care in the most appropriate
35and cost-effective manner to patients.

36

begin insert14184.10.end insert  

For purposes of this article, the following definitions
37shall apply:

38
(a) “Demonstration project” means the California Medi-Cal
392020 Demonstration, Number 11-W-00193/9, as approved by the
40federal Centers for Medicare and Medicaid Services, effective for
P12   1the period from December 30, 2015, to December 31, 2020,
2inclusive, and any applicable extension period.

3
(b) “Demonstration term” means the entire period during which
4the demonstration project is in effect, as approved by the federal
5Centers for Medicare and Medicaid Services, including any
6 applicable extension period.

7
(c) “Demonstration year” means the demonstration year as
8 identified in the Special Terms and Conditions that corresponds
9to a specific period of time as set forth in paragraphs (1) to (6),
10inclusive. Individual programs under the demonstration project
11may be operated on program years that differ from the
12demonstration years identified in paragraphs (1) to (6), inclusive.

13
(1) Demonstration year 11 corresponds to the period of January
141, 2016, to June 30, 2016, inclusive.

15
(2) Demonstration year 12 corresponds to the period of July 1,
162016, to June 30, 2017, inclusive.

17
(3) Demonstration year 13 corresponds to the period of July 1,
182017, to June 30, 2018, inclusive.

19
(4) Demonstration year 14 corresponds to the period of July 1,
202018, to June 30, 2019, inclusive.

21
(5) Demonstration year 15 corresponds to the period of July 1,
222019, to June 30, 2020, inclusive.

23
(6) Demonstration year 16 corresponds to the period of July 1,
242020, to December 31, 2020, inclusive.

25
(d) “Dental Transformation Initiative” or “DTI” means the
26waiver program intended to improve oral health services for
27children, as authorized under the Special Terms and Conditions
28and described in Section 14184.70.

29
(e) “Designated state health program” shall have the same
30meaning as set forth in the Special Terms and Conditions.

31
(f) (1) “Designated public hospital” means any one of the
32following hospitals, and any successor or differently named
33hospital, which is operated by a county, a city and county, the
34University of California, or special hospital authority described
35in Chapter 5 (commencing with Section 101850) or Chapter 5.5
36(commencing with Section 101852) of Part 4 of Division 101 of
37the Health and Safety Code, or any additional public hospital, to
38the extent identified as a “designated public hospital” in the
39Special Terms and Conditions. Unless otherwise provided for in
40law, in the Medi-Cal State Plan, or in the Special Terms and
P13   1Conditions, all references in law to a designated public hospital
2as defined in subdivision (d) of Section 14166.1 shall be deemed
3to refer to a hospital described in this section effective as of
4January 1, 2016, except as provided in paragraph (2):

5
(A) UC Davis Medical Center.

6
(B) UC Irvine Medical Center.

7
(C) UC San Diego Medical Center.

8
(D) UC San Francisco Medical Center.

9
(E) UCLA Medical Center.

10
(F) Santa Monica/UCLA Medical Center, also known as the
11Santa Monica-UCLA Medical Center and Orthopaedic Hospital.

12
(G) LA County Health System Hospitals:

13
(i) LA County Harbor/UCLA Medical Center.

14
(ii) LA County Olive View UCLA Medical Center.

15
(iii) LA County Rancho Los Amigos National Rehabilitation
16Center.

17
(iv) LA County University of Southern California Medical
18Center.

19
(H) Alameda Health System Hospitals including the following:

20
(i) Highland Hospital, including the Fairmont and John George
21Psychiatric facilities.

22
(ii) Alameda Hospital

23
(iii) San Leandro Hospital

24
(I) Arrowhead Regional Medical Center.

25
(J) Contra Costa Regional Medical Center.

26
(K) Kern Medical Center.

27
(L) Natividad Medical Center.

28
(M) Riverside University Health System-Medical Center.

29
(N) San Francisco General Hospital.

30
(O) San Joaquin General Hospital.

31
(P) San Mateo Medical Center.

32
(Q) Santa Clara Valley Medical Center.

33
(R) Ventura County Medical Center.

34
(2) For purposes of the following reimbursement methodologies,
35the hospitals identified in clauses (ii) and (iii) of subparagraph
36(H) of paragraph (1) shall be deemed to be a designated public
37hospital as of the following effective dates:

38
(A) For purposes of the fee-for-service payment methodologies
39established and implemented under Section 14166.4, the effective
P14   1date shall be the date described in paragraph (3) of subdivision
2(a) of Section 14184.30.

3
(B) For purposes of Article 5.230 (commencing with Section
414169.50), the effective date shall be January 1, 2017.

5
(g) “Disproportionate share hospital provisions of the Medi-Cal
6State Plan” means those applicable provisions contained in
7Attachment 4.19-A of the California Medicaid state plan, approved
8by the federal Centers for Medicare and Medicaid Services, that
9implement the payment adjustment program for disproportionate
10share hospitals.

11
(h) “Federal disproportionate share hospital allotment” means
12the amount specified for California under Section 1396r-4(f) of
13Title 42 of the United States Code for a federal fiscal year.

14
(i) “Federal medical assistance percentage” means the federal
15medical assistance percentage applicable for federal financial
16participation purposes for medical services under the Medi-Cal
17State Plan pursuant to Section 1396b(a)(1) of Title 42 of the United
18States Code.

19
(j) “Global Payment Program” or “GPP” means the payment
20program authorized under the demonstration project and described
21in Section 14184.40 that assists participating public health care
22systems that provide health care for the uninsured and that
23promotes the delivery of more cost-effective, higher-value health
24care services and activities.

25
(k) “Nondesignated public hospital” means a public hospital
26as that term is defined in paragraph (25) of subdivision (a) of
27Section 14105.98, excluding designated public hospitals.

28
(l) “Nonfederal share percentage” means the difference between
29100 percent and the federal medical assistance percentage.

30
(m) “PRIME” means the Public Hospital Redesign and
31 Incentives in Medi-Cal program authorized under the
32demonstration project and described in Section 14184.50.

33
(n) “Total computable disproportionate share hospital
34allotment” means the federal disproportionate share hospital
35allotment for a federal fiscal year, divided by the applicable federal
36medical assistance percentage with respect to that same federal
37fiscal year.

38
(o) “Special Terms and Conditions” means those terms and
39conditions issued by the federal Centers for Medicare and
40Medicaid Services, including all attachments to those terms and
P15   1conditions and any subsequent amendments approved by the
2federal Centers for Medicare and Medicaid Services, that apply
3to the demonstration project.

4
(p) “Uninsured” means an individual for whom there is no
5source of third party coverage for the health care services the
6 individual receives, as determined pursuant to the Special Terms
7and Conditions.

8
(q) “Whole Person Care pilot program” means a local
9collaboration among local governmental agencies, Medi-Cal
10managed care plans, health care and behavioral health providers,
11or other community organizations, as applicable, that are approved
12by the department to implement strategies to serve one or more
13identified target populations, pursuant to Section 14184.60 and
14the Special Terms and Conditions.

15

begin insert14184.20.end insert  

(a) Consistent with federal law, the Special Terms
16and Conditions, and this article, the department shall implement
17the Medi-Cal 2020 demonstration project, including, but not limited
18to, all of the following components:

19
(1) The Global Payment Program, as described in Section
2014184.40.

21
(2) The Public Hospital Redesign and Incentives in Medi-Cal
22(PRIME) program, as described in Section 14184.50.

23
(3) The Whole Person Care pilot program, as described in
24Section 14184.60.

25
(4) The Dental Transformation Initiative, as described in Section
2614184.70.

27
(b) In the event of a conflict between any provision of this article
28and the Special Terms and Conditions, the Special Terms and
29Conditions shall control.

30
(c) The department, as appropriate, shall consult with the
31designated public hospitals, district and municipal public hospitals,
32and other local governmental agencies with regard to the
33implementation of the components of the demonstration project
34described in subdivision (a) in which they will participate,
35including, but not limited to, the issuance of guidance pursuant to
36subdivision (d).

37
(d) Notwithstanding Chapter 3.5 (commencing with Section
3811340) of Part 1 of Division 3 of Title 2 of the Government Code,
39the department may implement, interpret, or make specific this
40article or the Special Terms and Conditions, in whole or in part,
P16   1by means of all-county letters, plan letters, provider bulletins, or
2other similar instructions, without taking regulatory action. The
3department shall provide notification to the Joint Legislative
4Budget Committee and to the Senate Committees on
5Appropriations, Budget and Fiscal Review, and Health, and the
6Assembly Committees on Appropriations, Budget, and Health
7within 10 business days after the above-described action is taken.
8The department shall make use of appropriate processes to ensure
9that affected stakeholders are timely informed of, and have access
10to, applicable guidance issued pursuant to this authority, and that
11such guidance remains publicly available until all payments related
12to the applicable demonstration component are finalized.

13
(e) For purposes of implementing this article or the Special
14Terms and Conditions, the department may enter into exclusive
15or nonexclusive contracts, or amend existing contracts, on a bid
16or negotiated basis. Contracts entered into or amended pursuant
17to this subdivision shall be exempt from Chapter 6 (commencing
18with Section 14825) of Part 5.5 of Division 3 of Title 2 of the
19Government Code and Part 2 (commencing with Section 10100)
20of Division 2 of the Public Contract Code, and shall be exempt
21from the review or approval of any division of the Department of
22General Services.

23
(f) The department shall conduct, or arrange to have conducted,
24any study, report, assessment, evaluation, or other similar
25demonstration project activity required under the Special Terms
26and Conditions.

27
(g) During the course of the demonstration term, the department
28shall seek any federal approvals it deems necessary to implement
29the demonstration project and this article. This shall include, but
30is not limited to, approval of any amendment, addition, or technical
31correction to the Special Terms and Conditions, and any associated
32state plan amendment, as deemed necessary. This article shall be
33implemented only to the extent that any necessary federal approvals
34are obtained and federal financial participation is available and
35is not otherwise jeopardized.

36
(h) The director may modify any process or methodology
37specified in this article to the extent necessary to comply with
38federal law or the Special Terms and Conditions of the
39demonstration project, but only if the modification is consistent
40with the goals set forth in this article for the demonstration project
P17   1and its individual components. If the director, after consulting
2with those entities participating in the applicable demonstration
3project component and that would be affected by that modification,
4determines that the potential modification would not be consistent
5with the goals set forth in this article or would significantly alter
6the relative level of support for affected participating entities, the
7 director shall execute a declaration stating that this determination
8has been made. The director shall retain the declaration and
9provide a copy, within five working days of the execution of the
10declaration, to the fiscal and appropriate policy committees of the
11Legislature, and shall work with the affected participating entities
12and the Legislature to make the necessary changes. The director
13shall post the declaration on the department’s Internet Web site
14and the director shall send the declaration to the Secretary of State
15and the Legislative Counsel.

16
(i) In the event of a determination that the amount of federal
17financial participation available under the demonstration project
18is reduced due to the application of penalties set forth in the Special
19Terms and Conditions, the enforcement of the demonstration
20project’s budget neutrality limit, or other similar occurrence, the
21department shall develop the methodology by which payments
22under the demonstration project shall be reduced, in consultation
23with the potentially affected participating entities and consistent
24with the standards and process specified in subdivision (h). To the
25extent feasible, those reductions shall protect the ability to claim
26the full amount of the total computable disproportionate share
27allotment through the Global Payment Program.

28
(j) During the course of the demonstration term, the department
29may work to develop potential successor payment methodologies
30that could continue to support entities participating in the
31demonstration project following the expiration of the demonstration
32term and that further the goals set forth in this article and in the
33Special Terms and Conditions. The department shall consult with
34the entities participating in the payment methodologies under the
35demonstration project, affected stakeholders, and the Legislature
36in the development of any potential successor payment
37methodologies pursuant to this subdivision.

38
(k) The department may seek to extend the payment
39methodologies described in this article through demonstration
40year 16 or to subsequent time periods by way of amendment or
P18   1extension of the demonstration project, amendment to the Medi-Cal
2State Plan, or any combination thereof, consistent with the
3applicable federal requirements. This subdivision shall only be
4implemented after consultation with the entities participating in
5or affected by those methodologies, and only to the extent that any
6necessary federal approvals are obtained and federal financial
7participation is available and is not otherwise jeopardized.

8
(l) (1) Notwithstanding any other law, and to the extent
9authorized by the Special Terms and Conditions, the department
10may claim federal financial participation for expenditures
11associated with the designated state health programs identified in
12the Special Terms and Conditions for use solely by the department
13as specified in this subdivision.

14
(2) Any federal financial participation claimed pursuant to
15paragraph (1) shall be used to offset applicable General Fund
16expenditures. These amounts are hereby appropriated to the
17department and shall be available for transfer to the General Fund
18for this purpose.

19
(3) An amount of General Fund moneys equal to the federal
20financial participation that may be claimed pursuant to paragraph
21(1) is hereby appropriated to the Health Care Deposit Fund for
22use by the department.

23

begin insert14184.30.end insert  

The following payment methodologies and
24requirements implemented pursuant to Article 5.2 (commencing
25with Section 14166) shall be applicable as set forth in this section.

26
(a) (1) For purposes of Section 14166.4, the references to
27“project year” and “successor demonstration year” shall include
28references to the demonstration term, as defined under this article,
29and to any extensions of the prior federal Medicaid demonstration
30project entitled “California Bridge to Reform Demonstration
31(Waiver No. 11-W-00193/9).”

32
(2) The fee-for-service payment methodologies established and
33implemented under Section 14166.4 shall continue to apply with
34respect to designated public hospitals approved under the Medi-Cal
35State Plan.

36
(3) For the hospitals identified in clauses (ii) and (iii) of
37subparagraph (H) of paragraph (1) of subdivision (f) of Section
3814184.10, the department shall seek any necessary federal
39approvals to apply the fee-for-service payment methodologies
40established and implemented under Section 14166.4 to these
P19   1identified hospitals commencing no earlier than the 2016-17 state
2fiscal year. This paragraph shall be implemented only to the extent
3that any necessary federal approvals are obtained and federal
4financial participation is available and not otherwise jeopardized.
5Prior to the effective date of any necessary federal approval
6obtained pursuant to this paragraph, these identified hospitals
7shall continue to be considered nondesignated public hospitals
8for purposes of the fee-for-service methodology authorized
9pursuant to Section 14105.28 and the applicable provisions of the
10Medi-Cal State Plan.

11
(4) The department shall continue to make reimbursement
12available to qualifying hospitals that meet the eligibility
13requirements for participation in the supplemental reimbursement
14program for hospital facility construction, renovation, or
15replacement pursuant to Section 14085.5 and the applicable
16provisions of the Medi-Cal State Plan. The department shall
17continue to make inpatient hospital payments for services that
18were historically excluded from a hospital’s contract under the
19Selective Provider Contracting Program established under Article
202.6 (commencing with Section 14081) in accordance with the
21applicable provisions of the Medi-Cal State Plan. These payments
22shall not duplicate or supplant any other payments made under
23this article.

24
(b) During the 2015-16 state fiscal year, and subsequent state
25fiscal years that commence during the demonstration term, payment
26adjustments to disproportionate share hospitals shall not be made
27pursuant to Section 14105.98, except as otherwise provided in this
28article. Payment adjustments to disproportionate share hospitals
29shall be made solely in accordance with this article.

30
(1) Except as otherwise provided in this article, the department
31shall continue to make all eligibility determinations and perform
32all payment adjustment amount computations under the
33disproportionate share hospital payment adjustment program
34pursuant to Section 14105.98 and pursuant to the disproportionate
35share hospital provisions of the Medi-Cal State Plan. For purposes
36of these determinations and computations, which include those
37made pursuant to Sections 14166.11 and 14166.16, all of the
38following shall apply:

39
(A) The federal Medicaid DSH reductions pursuant to Section
401396r-4(f)(7) of Title 42 of the United States Code shall be
P20   1reflected as appropriate, including, but not limited to, as set forth
2in subparagraph (B) of paragraph (2) of subdivision (am) of
3Section 14105.98.

4
(B) Services that were rendered under the Low Income Health
5Program authorized pursuant to Part 3.6 (commencing with
6Section 15909) shall be included.

7
(2) (A) Notwithstanding Section 14105.98, the federal
8disproportionate share hospital allotment specified for California
9under Section 1396r-4(f) of Title 42 of the United States Code for
10each of federal fiscal years 2016 to 2021, inclusive, shall be
11aligned with the state fiscal year in which the applicable federal
12fiscal year commences, and shall be distributed solely for the
13following purposes:

14
(i) As disproportionate share hospital payments under the
15methodology set forth in applicable disproportionate share hospital
16provisions of the Medi-Cal State Plan, which, to the extent
17permitted under federal law and the Special Terms and Conditions,
18shall be limited to the following hospitals:

19
(I) Eligible hospitals, as determined pursuant to Section
2014105.98 for each state fiscal year in which the particular federal
21fiscal year commences, that meet the definition of a public hospital,
22as specified in paragraph (25) of subdivision (a) of Section
2314105.98, and that are not participating as GPP systems under
24the Global Payment Program.

25
(II) Hospitals that are licensed to the University of California,
26which meet the requirements set forth in Section 1396r-4(d) of
27Title 42 of the United States Code.

28
(ii) As a funding component for payments under the Global
29Payment Program, as described in subparagraph (A) of paragraph
30(1) of subdivision (c) of Section 14184.40 and the Special Terms
31and Conditions.

32
(B) The distribution of the federal disproportionate share
33hospital allotment to hospitals described in this paragraph shall
34satisfy the state’s payment obligations, if any, with respect to those
35hospitals under Section 1396r-4 of Title 42 of the United States
36Code.

37
(3) (A) During the 2015-16 state fiscal year and subsequent
38state fiscal years that commence during the demonstration term,
39a public entity shall not be obligated to make any
40intergovernmental transfer pursuant to Section 14163, and all
P21   1transfer amount determinations for those state fiscal years shall
2be suspended. However, intergovernmental transfers shall be made
3with respect to the disproportionate share hospital payment
4adjustments made in accordance with clause (ii) of subparagraph
5(B) of paragraph (6), as applicable.

6
(B) During the 2015-16 state fiscal year and subsequent state
7fiscal years that commence during the demonstration term, transfer
8amounts from the Medi-Cal Inpatient Payment Adjustment Fund
9to the Health Care Deposit Fund, as described in paragraph (2)
10of subdivision (d) of Section 14163, are hereby reduced to zero.
11Unless otherwise specified in this article or the applicable
12provisions of Article 5.2 (commencing with Section 14166), this
13subparagraph shall be disregarded for purposes of the calculations
14made under Section 14105.98 during the 2015-16 state fiscal year
15and subsequent state fiscal years that commence during the
16demonstration term.

17
(4) (A) During the state fiscal years for which the Global
18Payment Program under Section 14184.40 is in effect, designated
19public hospitals that are participating GPP systems shall not be
20eligible to receive disproportionate share hospital payments
21pursuant to otherwise applicable disproportionate share hospital
22provisions of the Medi-Cal State Plan.

23
(B) Eligible hospitals described in clause (i) of subparagraph
24(A) of paragraph (2) that are nondesignated public hospitals shall
25continue to receive disproportionate share hospital payment
26adjustments as set forth in Section 14166.16.

27
(C) Hospitals described in clause (i) of subparagraph (A) of
28paragraph (2) that are licensed to the University of California
29shall receive disproportionate share hospital payments as follows:

30
(i) Subject to clause (iii), each hospital licensed to the University
31of California may draw and receive federal Medicaid funding from
32the applicable federal disproportionate share hospital allotment
33on the amount of certified public expenditures for the hospital’s
34expenditures that are eligible for federal financial participation
35as reported in accordance with Section 14166.8 and the applicable
36disproportionate share hospital provisions of the Medi-Cal State
37Plan.

38
(ii) Subject to clause (iii) and to the extent the hospital meets
39the requirement in Section 1396r-4(b)(1)(A) of Title 42 of the
40United States Code regarding the Medicaid inpatient utilization
P22   1rate or Section 1396r-4(b)(1)(B) of Title 42 of the United States
2Code regarding the low-income utilization rate, each hospital
3shall receive intergovernmental transfer-funded direct
4disproportionate share hospital payments as provided for under
5the applicable disproportionate share hospital provisions of the
6Medi-Cal State Plan. The total amount of these payments to the
7hospital, consisting of the federal and nonfederal components,
8shall in no case exceed that amount equal to 75 percent of the
9hospital’s uncompensated Medi-Cal and uninsured costs of hospital
10services as reported in accordance with Section 14166.8.

11
(iii) Unless the provisions of subparagraph (D) apply, the
12aggregate amount of the federal disproportionate share hospital
13allotment with respect to payments for an applicable state fiscal
14year to hospitals licensed to the University of California shall be
15limited to an amount calculated as follows:

16
(I) The maximum amount of federal disproportionate share
17hospital allotment for the state fiscal year, less the amounts of
18federal disproportionate share hospital allotment associated with
19payments to nondesignated public hospitals under subparagraph
20(B) and other payments, if any, required to be made from the
21federal disproportionate share hospital allotment, shall be
22determined.

23
(II) For the 2015-16 state fiscal year, the amount determined
24in subclause (I) shall be multiplied by 26.296 percent, resulting
25in the maximum amount of the federal disproportionate share
26hospital allotment available as disproportionate share hospital
27payments for the state fiscal year to hospitals that are licensed to
28the University of California.

29
(III) For the 2016-17 state fiscal year, the amount determined
30in subclause (I) shall be multiplied by 24.053 percent, resulting
31in the maximum amount of the federal disproportionate share
32hospital allotment available as disproportionate share hospital
33payments for the state fiscal year to hospitals that are licensed to
34the University of California.

35
(IV) For the 2017-18 state fiscal year, the amount determined
36in subclause (I) shall be multiplied by 23.150 percent, resulting
37in the maximum amount of the federal disproportionate share
38hospital allotment available as disproportionate share hospital
39payments for the state fiscal year to hospitals that are licensed to
40the University of California.

P23   1
(V) For each of the 2018-19 and 2019-20 state fiscal years,
2the amount determined in subclause (I) shall be multiplied by
321.896 percent, resulting in the maximum amount of the federal
4disproportionate share hospital allotment available as
5disproportionate share hospital payments for the state fiscal year
6to hospitals that are licensed to the University of California.

7
(VI) To the extent the limitations set forth in this clause result
8in payment reductions for the applicable year, such reductions
9will be applied pro rata, subject to clause (vii).

10
(iv) Each hospital licensed to the University of California shall
11receive quarterly interim payments of its disproportionate share
12hospital allocation during the applicable state fiscal year. The
13determinations set forth in clauses (i) to (iii), inclusive, shall be
14made on an interim basis prior to the start of each state fiscal year,
15except that the determinations for the 2015-16 state fiscal year
16shall be made as soon as practicable. The department shall use
17the same cost and statistical data used in determining the interim
18payments for Medi-Cal inpatient hospital services under Section
1914166.4, and available payments and uncompensated and
20uninsured cost data, including data from the Medi-Cal paid claims
21file and the hospital’s books and records, for the corresponding
22period, to the extent permitted under the Medi-Cal state plan.

23
(v) No later than April 1 following the end of the relevant
24reporting period for the applicable state fiscal year, the department
25shall undertake an interim reconciliation of payments based on
26Medi-Cal, Medicare, and other cost, payment, discharge, and
27statistical data submitted by the hospital for the applicable state
28fiscal year, and shall adjust payments to the hospital accordingly.

29
(vi) Except as otherwise provided in this article, each hospital
30licensed to the University of California shall receive
31disproportionate share hospital payments subject to final audits
32of all applicable Medi-Cal, Medicare, and other cost, payment,
33discharge, and statistical data submitted by the hospital for the
34applicable state fiscal year.

35
(vii) Prior to the interim and final distributions of payments
36pursuant to clauses (iv) through (vi), inclusive, the department
37shall consult with the University of California, and implement any
38adjustments to the payment distributions for the hospitals as
39requested by the University of California, so long as the aggregate
P24   1net effect of the requested adjustments for the affected hospitals
2is zero.

3
(D) With respect to any state fiscal year commencing during
4the demonstration term for which the Global Payment Program
5is not in effect, designated public hospitals that are eligible
6hospitals as determined pursuant to Section 14105.98, and
7hospitals described in clause (i) of subparagraph (A) of paragraph
8(2) that are licensed to the University of California, shall claim
9disproportionate share hospital payments in accordance with the
10applicable disproportionate share hospital provisions of the
11Medi-Cal State Plan. The allocation of federal Medicaid funding
12from the applicable federal disproportionate share hospital
13allotment shall be made in accordance with the methodology set
14forth in Section 14166.61.

15
(5) For each applicable state fiscal year during the
16demonstration term, eligible hospitals, as determined pursuant to
17Section 14105.98, which are nonpublic hospitals,
18 nonpublic-converted hospitals, and converted hospitals, as those
19terms are defined in paragraphs (26), (27), and (28), respectively,
20of subdivision (a) of Section 14105.98, shall continue to receive
21Medi-Cal disproportionate share hospital replacement payment
22adjustments pursuant to Section 14166.11 and other provisions of
23this article and applicable provisions of the Medi-Cal State Plan.
24The payment adjustments so provided shall satisfy the state’s
25payment obligations, if any, with respect to those hospitals under
26Section 1396r-4 of Title 42 of the United States Code. The
27provisions of subdivision (j) of Section 14166.11 shall continue to
28apply with respect to the 2015-16 state fiscal year and subsequent
29state fiscal years commencing during the demonstration term.
30Except as may otherwise be required by federal law, the federal
31share of these payments shall not be claimed from the federal
32disproportionate share hospital allotment.

33
(6) The nonfederal share of disproportionate share hospital
34payments and disproportionate share hospital replacement payment
35adjustments described in paragraphs (4) and (5) shall be derived
36from the following sources:

37
(A) With respect to the payments described in subparagraph
38(B) of paragraph (4) that are made to nondesignated public
39hospitals, the nonfederal share shall consist solely of state General
40Fund appropriations.

P25   1
(B) With respect to the payments described in subparagraph
2(C) or (D), as applicable, of paragraph (4) that are made to
3designated public hospitals, the nonfederal share shall consist of
4both of the following:

5
(i) Certified public expenditures incurred by the hospitals for
6hospital expenditures eligible for federal financial participation
7as reported in accordance with Section 14166.8.

8
(ii) Intergovernmental transfer amounts for direct
9disproportionate share hospital payments provided for under
10subparagraph (C) or (D) of paragraph (4) and the applicable
11disproportionate share hospital provisions of the Medi-Cal state
12plan. A transfer amount shall be determined for each hospital that
13is eligible for these payments, equal to the nonfederal share of the
14payment amount established for the hospital. The transfer amount
15determined shall be paid by the hospital, or the public entity with
16which the hospital is affiliated, and deposited into the Medi-Cal
17Inpatient Payment Adjustment Fund established pursuant to
18subdivision (b) of Section 14163, as permitted under Section 433.51
19of Title 42 of the Code of Federal Regulations or any other
20applicable federal Medicaid laws.

21
(C) With respect to the payments described in paragraph (5),
22the nonfederal share shall consist of state General Fund
23appropriations.

24
(7) The Demonstration Disproportionate Share Hospital Fund
25established in the State Treasury pursuant to subdivision (d) of
26Section 14166.9 shall be retained during the demonstration term.
27All federal funds received by the department with respect to the
28certified public expenditures claimed pursuant to subparagraph
29(C), and, as applicable in subparagraph (D), of paragraph (4)
30shall be transferred to the fund and disbursed to the eligible
31designated public hospitals pursuant to those applicable provisions.
32Notwithstanding Section 13340 of the Government Code, moneys
33deposited in the fund shall be continuously appropriated, without
34regard to fiscal year, to the department solely for the purposes
35specified in this article.

36
(c) (1) Disproportionate share hospital payment allocations
37under Sections 14166.3 and 14166.61, and safety net care pool
38payment allocations under Section 14166.71, that were paid to
39designated public hospitals with respect to the period July 1, 2015,
40through October 31, 2015, or for subsequent periods pursuant to
P26   1Section 14166.253, shall be reconciled to amounts payable to the
2hospitals under this article as set forth in this subdivision.

3
(2) The disproportionate share hospital payments and safety
4net care pool payments described in paragraph (1) that were paid
5to a designated public hospital participating in a GPP system
6under Section 14184.40 shall be deemed to be interim payments
7under the Global Payment Program for GPP program year
82015-16, and will be reconciled to and offset against the interim
9payment amount due to the GPP system under subparagraph (B)
10of paragraph (4) of subdivision (d) of Section 14184.40, consistent
11with the Special Terms and Conditions.

12
(3) The disproportionate share hospital payments described in
13paragraph (1) that were paid to designated public hospitals
14licensed to the University of California shall be reconciled to and
15offset against the disproportionate share hospital payments payable
16to the hospitals under subparagraph (C) of paragraph (4) of
17subdivision (b) for the 2015-16 state fiscal year.

18
(4) The safety net care pool payments described in paragraph
19(1) that were paid to designated public hospitals licensed to the
20University of California shall be recouped and included as
21available funding under the Global Payment Program for the
222015-16 GPP program year described in subparagraph (B) of
23paragraph (1) of subdivision (c) of Section 14184.40.

24
(d) During the 2015-16 state fiscal year, and subsequent state
25fiscal years that commence during the demonstration term, costs
26shall continue to be determined and reported for designated public
27hospitals in accordance with Sections 14166.8 and 14166.24,
28except as follows:

29
(1) (A) The provisions of subdivision (c) of Section 14166.8
30shall not apply.

31
(B) Notwithstanding subparagraph (A), the department may
32require the reporting of any data the department deems necessary
33to satisfy reporting requirements pursuant to the Special Terms
34and Conditions.

35
(2) The provisions of Sections 14166.221 and 15916 shall not
36apply with respect to any costs reported for the demonstration
37term pursuant to Section 14166.8.

38
(e) (1) Notwithstanding subdivision (h) of Section 14166.61
39and subdivision (c) of Section 14166.71, the disproportionate share
40hospital allocation and safety net care pool payment determinations
P27   1 and payments for the 2013-14 and 2014-15 state fiscal years shall
2be deemed final as of the April 30 that is 22 months following the
3close of the respective state fiscal year, to the extent permitted
4under federal law and subject to recoupment pursuant to
5subdivision (f) if it is later determined that federal financial
6participation is not available for any portion of the applicable
7payments.

8
(2) The determinations and payments shall be finalized using
9the best available data, including unaudited data, and reasonable
10current estimates and projections submitted by the designated
11public hospitals. The department shall accept all appropriate
12revisions to the data, estimates, and projections previously
13submitted, including revised cost reports, for purposes of this
14subdivision, to the extent these revisions are submitted in a timely
15manner as determined by the department.

16
(f) Upon receipt of a notice of disallowance or deferral from
17the federal government related to the certified public expenditures
18or intergovernmental transfers of a designated public hospital or
19governmental entity with which it is affiliated for disproportionate
20share hospital payments or safety net care pool payments claimed
21and distributed pursuant to Section 14166.61 or 14166.71, for the
222013-14 or 2014-15 state fiscal year, the department shall
23promptly notify the designated public hospitals and proceed as
24follows:

25
(1) To the extent there are additional certified public
26expenditures for the applicable state fiscal year for which federal
27funds have not been received, but for which federal funds could
28have been received had additional federal funds been available,
29including any subsequently allowable expenditures for designated
30state health programs, the department shall first respond to the
31deferral or disallowance by substituting the additional certified
32public expenditures or allowable expenditures for those deferred
33or disallowed, consistent with the claiming optimization priorities
34set forth in Section 14166.9, in consultation with the designated
35public hospitals, but only to the extent that any necessary federal
36approvals are obtained or these actions are otherwise permitted
37by federal law.

38
(2) The department shall consult with the designated public
39hospitals and proceed in accordance with paragraphs (2) and (3)
40of subdivision (d) of Section 14166.24.

P28   1
(3) If the department elects to appeal pursuant to paragraph
2(3) of subdivision (d) of Section 14166.24, the department shall
3not implement any recoupment of payments from the affected
4designated public hospitals, until a final disposition has been made
5regarding the deferral or disallowance, including the conclusion
6of applicable administrative and judicial review, if any.

7
(4) (A) Upon final disposition of the federal deferral or
8disallowance, the department shall determine the resulting
9aggregate repayment amount of federal funds for each affected
10state fiscal year.

11
(B) The department shall determine the ratio of the aggregate
12repayment amount to the total amount of the federal share of
13payments finalized and distributed pursuant to Sections 14166.61
14and 14166.71 and subdivision (e) for each affected state fiscal
15year, expressed as a percentage.

16
(5) Notwithstanding paragraph (1) of subdivision (d) of Section
1714166.24, the responsibility for repayment of the federal portion
18of any deferral of disallowance for each affected year shall be
19determined as follows:

20
(A) The provisions of subdivision (g) of Section 15916 shall be
21applied to determine the department’s repayment responsibility
22amount with respect to any deferral or disallowance related to
23safety net care pool payments, which shall be in addition to
24amounts determined under subparagraph (E).

25
(B) Using the most recent data for the applicable fiscal year,
26and reflecting modifications to the applicable initial DSH claiming
27ability and initial SNCP claiming ability for individual hospitals
28resulting from the deferral or disallowance, the department shall
29perform the calculations and determinations for each designated
30public hospital as set forth in Sections 14166.61 and 14166.71.
31For this purpose, the calculations and determinations shall assume
32no reduction in the available federal disproportionate share
33hospital allotment or in the amount of available safety net care
34pool payments as a result of the deferral or disallowance.

35
(C) For each designated public hospital, the revised
36determinations of disproportionate share hospital and safety net
37care pool payment amounts under subparagraph (B) shall be
38combined and compared to the combined disproportionate share
39hospital and safety net care pool payment amounts determined
40and received by the hospital pursuant to subdivision (e). For this
P29   1purpose and purposes of subparagraph (D), the applicable data
2for designated public hospitals described in subparagraph (G) of
3paragraph (1) of subdivision (f) of Section 14184.10 shall be
4combined, and the applicable data for designated public hospitals
5described in subparagraphs (E) and (F) of paragraph (1) of
6subdivision (f) of Section 14184.10 shall be combined.

7
(D) (i) Subject to subparagraph (E), the repayment of the
8federal portion of the deferral of disallowance, less the
9department’s responsibility amount for safety net care pool
10payments, if any, determined in subparagraph (A), shall be first
11allocated among each of those designated public hospitals for
12which the combined revised disproportionate share hospital and
13safety net care pool payments as determined in subparagraph (B)
14are less than the combined disproportionate share hospital and
15safety net care pool payment amounts determined and received
16pursuant to subdivision (e). Repayment shall be allocated under
17this initial stage among these hospitals pro rata on the basis of
18each hospital’s relative reduction as reflected in the revised
19calculations performed under subparagraph (B), but in no case
20shall the allocation to a hospital exceed the limit in clause (iii).
21Repayment amounts that are not allocated due to this limitation
22shall be allocated pursuant to clause (ii).

23
(ii) Subject to subparagraph (E), any repayment amounts that
24were unallocated to hospitals due to the limitation in clause (iii)
25shall be allocated in a second stage among each of the remaining
26designated public hospitals that has not reached its applicable
27repayment limit, including the hospitals that were not subject to
28the allocations under clause (i), based pro rata on the amounts
29determined and received by the hospital pursuant to subdivision
30(e), except that no repayment amount for a hospital shall exceed
31the limitation under clause (iii). The pro rata allocation process
32will be repeated in subsequent stages with respect to any repayment
33amounts that cannot be allocated in a prior stage to hospitals due
34to the limitation under clause (iii), until the entire federal
35repayment amount has been allocated among the hospitals.

36
(iii) The repayment amount allocated to a designated public
37hospital pursuant to this subparagraph shall not exceed an amount
38equal to the percentage of the combined payments determined and
39received by the hospital pursuant to subdivision (e) that is twice
40the percentage computed in subparagraph (B) of paragraph (4).

P30   1
(E) Notwithstanding any other law, if the affiliated governmental
2entity for the designated public hospital is a county subject to the
3provisions of Article 12 (commencing with Section 17612.1) of
4Chapter 6 of Part 5, the department, in consultation with the
5affected designated public hospital, and the Department of Finance,
6shall determine how to account for whether any repayment amount
7determined for the designated public hospital pursuant to
8subparagraph (D) for the 2013-14 and 2014-15 state fiscal years
9would otherwise have affected, if at all, the applicable county’s
10redirection obligation for the applicable state fiscal year pursuant
11to paragraphs (4) and (5) of subdivision (a) of Section 17612.3
12and shall determine what adjustments, if any, are necessary to
13either the repayment amount or the applicable county’s redirection
14obligation. For purposes of this subparagraph, the provisions of
15 subdivision (f) of Section 17612.2 and paragraph (7) of subdivision
16(e) of Section 101853 of the Health and Safety Code shall apply.

17
(g) The provisions of Article 5.2 (commencing with Section
1814166) shall remain in effect until all payments authorized
19pursuant to that article have been paid, finalized, and settled, and
20to the extent its provisions are retained for purposes of this article.

21

begin insert14184.40.end insert  

(a) (1) The department shall implement the Global
22Payment Program authorized under the demonstration project to
23support participating public health care systems that provide health
24care services for the uninsured. Under the Global Payment
25Program, GPP systems receive global payments based on the
26health care they provide to the uninsured, in lieu of traditional
27disproportionate share hospital payments and safety net care pool
28payments previously made available pursuant to Article 5.2
29(commencing with Section 14166).

30
(2) The Global Payment Program is intended to streamline
31funding sources for care for California’s remaining uninsured
32population, creating a value-based mechanism to increase
33incentives to provide primary and preventive care services and
34other high-value services. The Global Payment Program supports
35GPP systems for their key role providing and promoting effective,
36higher value services to California’s remaining uninsured.
37Promoting more cost-effective and higher value care means that
38the payment structure rewards the provision of care in more
39appropriate venues for patients, and will support structural
P31   1changes to the care delivery system that will improve the options
2for treating both Medi-Cal and uninsured patients.

3
(3) Under the Global Payment Program, GPP systems will
4receive Global Payment Program payments calculated using an
5innovative value-based point methodology that incorporates
6measures of value for the patient in conjunction with the
7recognition of costs. To receive the full amount of Global Payment
8Program payments, a GPP system shall provide a threshold level
9of services, as measured in the point methodology described in
10 paragraph (2) of subdivision (c), and based on the GPP system’s
11historical volume, cost, and mix of services. This payment
12methodology is intended to support GPP systems that continue to
13provide services to the uninsured, while incentivizing the GPP
14systems to shift the overall delivery of services for the uninsured
15to provide more cost-effective, higher value care.

16
(4) The department shall implement and oversee the operation
17of the Global Payment Program in accordance with the Special
18Terms and Conditions and the requirements of this section, to
19maximize the amount of federal financial participation available
20to participating GPP systems.

21
(b) For purposes of this section, the following definitions shall
22apply:

23
(1) “GPP system” means a public health care system that
24consists of a designated public hospital, as defined in subdivision
25(f) of Section 14184.10 but excluding the hospitals operated by
26the University of California, and its affiliated and contracted
27providers. Multiple designated public hospitals operated by a
28single legal entity may belong to the same GPP system, to the
29extent set forth in the Special Terms and Conditions.

30
(2) “GPP program year” means a state fiscal year beginning
31on July 1 and ending on June 30 during which the Global Payment
32Program is authorized under the demonstration project, beginning
33with state fiscal year 2015-16, and, as applicable, each state fiscal
34year thereafter through 2019-20, and any years or partial years
35during which the Global Payment Program is authorized under
36an extension or successor to the demonstration.

37
(c) (1) For each GPP program year, the department shall
38determine the Global Payment Program’s aggregate annual limit,
39which is the maximum amount of funding available under the
40demonstration project for the Global Payment Program and which
P32   1is the sum of the components described in subparagraphs (A) and
2(B). To the extent feasible, the aggregate annual limit shall be
3determined and made available by the department prior to the
4implementation of a GPP program year, and shall be updated and
5adjusted as necessary to reflect changes or adjustments to the
6amount of funding available for the Global Payment Program.

7
(A) A portion of the federal disproportionate share allotment
8specified for California under Section 1396r-4(f) of Title 42 of the
9United States Code shall be included as a component of the
10aggregate annual limit for each GPP program year. The amount
11of this portion shall equal the state’s total computable
12disproportionate share allotment reduced by the maximum amount
13of funding projected for payments pursuant to subparagraphs (B)
14and (C) of paragraph (4) of subdivision (b) of Section 14184.30
15to disproportionate share hospitals that are not participating in
16the Global Payment Program. For purposes of this determination,
17the federal disproportionate share allotment shall be aligned with
18the GPP program year in which the applicable federal fiscal year
19commences.

20
(B) The aggregate annual limit shall also include the amount
21authorized under the demonstration project for the uncompensated
22care component of the Global Payment Program for the applicable
23GPP program year, as determined pursuant to the Special Terms
24and Conditions.

25
(2) The department shall develop a methodology for valuing
26health care services and activities provided to the uninsured that
27achieves the goals of the Global Payment Program, including
28those values set forth in subdivision (a) and as expressed in the
29Special Terms and Conditions. The points assigned to a particular
30service or activity shall be the same across all GPP systems. Points
31for specific services or activities may be increased or decreased
32over time as the Global Payment Program progresses, to
33incentivize appropriate changes in the mix of services provided to
34the uninsured. To the extent necessary, the department shall obtain
35federal approval for the methodology and any applicable changes
36to the methodology.

37
(3) For each GPP system, the department shall perform a
38baseline analysis of the GPP system’s historical volume, cost, and
39mix of services to the uninsured to establish an annual threshold
40for purposes of the Global Payment Program. The annual threshold
P33   1shall be measured in points established through the methodology
2developed pursuant to paragraph (2), and as set forth in the Special
3Terms and Conditions.

4
(4) The department shall determine a pro rata allocation
5percentage for each GPP system by dividing the GPP system’s
6annual threshold determined in paragraph (3) by the sum of all
7GPP systems’ thresholds.

8
(5) For each GPP system, the department shall determine an
9annual budget the GPP system will receive if it achieves its
10threshold. A GPP system’s annual budget shall equal the allocation
11percentage determined in paragraph (4) for the GPP system,
12multiplied by the Global Payment Program’s aggregate annual
13limit determined in paragraph (1).

14
(6) In the event of a change in the aggregate annual limit, the
15department shall adjust and recalculate each GPP system’s annual
16threshold and annual budget in proportion to changes in the
17aggregate annual limit calculated in paragraph (1) in accordance
18with the Special Terms and Conditions.

19
(d) The amount of Global Payment Program funding payable
20to a GPP system for a GPP program year shall be calculated as
21follows, subject to the Special Terms and Conditions:

22
(1) The full amount of a GPP system’s annual budget shall be
23payable to the GPP system if the services it provided to the
24uninsured during the GPP program year, as measured and scored
25using the point methodology described under paragraph (2) of
26subdivision (c), meets or exceeds its threshold for a given year.
27For GPP systems that do not achieve their threshold, the amount
28payable to the GPP system shall equal its annual budget reduced
29by the proportion by which it fell short of its threshold.

30
(2) The department shall develop a methodology to redistribute
31unearned Global Payment Program funds for a given GPP
32program year to those GPP systems that exceeded their respective
33threshold for that same year. To the extent sufficient funds are
34 available for all qualifying GPP systems, the GPP system’s
35redistributed amount shall equal the GPP system’s annual budget
36multiplied by the percentage by which the GPP system exceeded
37its threshold, and any remaining amounts of unearned funds will
38remain undistributed. If sufficient funds are unavailable to make
39all these payments to qualifying GPP systems, the amounts of these
40additional payments will be reduced for all qualifying GPP systems
P34   1by the same proportion, so that the full amount of unearned Global
2Payment Program funds are redistributed. Redistributed payment
3amounts calculated pursuant to this paragraph shall be added to
4the amounts payable to a GPP system calculated pursuant to
5paragraph (1).

6
(3) The department shall specify a reporting schedule for
7participating GPP systems to submit an interim yearend report
8and a final reconciliation report for each GPP program year. The
9interim yearend report and the final reconciliation report shall
10identify the services the GPP system provided to the uninsured
11during the GPP program year, the associated point calculation,
12and the amount of payments earned by the GPP system prior to
13any redistribution. The method and format of the reporting shall
14be established by the department, consistent with the approved
15Special Terms and Conditions.

16
(4) Payments shall be made in the manner and within the
17timeframes as follows, except if one or more GPP systems fail to
18provide the intergovernmental transfer amount determined
19pursuant to subdivision (g) by the date specified in this paragraph,
20the timeframe for the associated payments shall be extended to the
21extent necessary to allow the department to timely process the
22payments. In no event, however, shall payment be delayed beyond
2321 days after all the necessary intergovernmental transfers have
24been made.

25
(A) Except as provided in subparagraph (B), for each of the
26first three quarters of a GPP program year the department shall
27notify GPP systems of their payment amounts and
28intergovernmental transfer amounts and make a quarterly interim
29payment equal to 25 percent of each GPP system’s annual global
30budget to the GPP system.

31
(i) For quarters ending September 30, the payment amount and
32intergovernmental transfer amount notice shall be sent by
33September 15, intergovernmental transfers shall be due by
34September 22, and payments shall be made by October 15.

35
(ii) For quarters ending December 31, the payment amount and
36intergovernmental transfer amount notice shall be sent by
37December 15, intergovernmental transfers shall be due by
38December 22, and payments shall be made by January 15.

39
(iii) For quarters ending March 31, the payment amount and
40intergovernmental transfer amount notice shall be sent by March
P35   115, intergovernmental transfers shall be due by March 22, and
2payments shall be made by April 15.

3
(B) For the 2015-16 GPP program year, the department shall
4make the quarterly interim payments described in subdivision (a)
5in a single interim payment for the first three quarters as soon as
6practicable following approval of the Global Payment Program
7protocols as part of the Special Terms and Conditions and receipt
8of the associated intergovernmental transfers. The amount of this
9interim payment that is otherwise payable to a GPP system shall
10be reduced by the payments described in paragraph (2) of
11subdivision (c) of Section 14184.30 that were received by a
12designated public hospital affiliated with the GPP system.

13
(C) By September 15 following the end of each GPP program
14year, the department shall determine and notify each GPP system
15of the amount the GPP system earned for the GPP program year
16pursuant to paragraph (1) based on its interim yearend report,
17the amount of additional interim payments necessary to bring the
18GPP system’s aggregate interim payments for the GPP program
19year to that amount, and the transfer amounts calculated pursuant
20to subdivision (g). If the GPP system has earned less than 75
21percent of its annual budget, no additional interim payment will
22be made for the GPP program year. Intergovernmental transfer
23amounts shall be due by September 22 following the end of the
24GPP program year, and interim payments shall be made by
25October 15 following the end of each GPP program year. All
26interim payments shall be subject to reconciliation after the
27submission of the final reconciliation report.

28
(D) By June 30 following the end of each GPP program year,
29the department shall review the final reconciliation reports and
30determine and notify each GPP system of the final amounts earned
31by the GPP system for the GPP program year pursuant to
32paragraph (1), as well as the redistribution amounts, if any,
33pursuant to paragraph (2), the amount of the payment adjustments
34or recoupments necessary to reconcile interim payments to those
35amounts, and the transfer amount pursuant to subdivision (g).
36Intergovernmental transfer amounts shall be due by July 14
37following the notification, and final reconciliation payments for
38the GPP program year shall be made no later than August 15
39following such notification.

P36   1
(e) The Global Payment Program provides a source of funding
2for GPP systems to support their ability to make health care
3activities and services available to the uninsured, and shall not be
4construed to constitute or offer health care coverage for individuals
5receiving services. Global Payment Program payments are not
6paid on behalf of specific individuals, and participating GPP
7 systems may determine the scope, type, and extent to which services
8are available, to the extent consistent with the Special Terms and
9Conditions. The operation of the Global Payment Program shall
10not be construed to decrease, expand, or otherwise alter the scope
11of a county’s obligations to the medically indigent pursuant to
12Part 5 (commencing with Section 17000) of Division 9.

13
(f) The nonfederal share of any payments under the Global
14Payment Program shall consist of voluntary intergovernmental
15transfers of funds provided by designated public hospitals or
16affiliated governmental agencies or entities, in accordance with
17this section.

18
(1) The Global Payment Program Special Fund is hereby
19established in the State Treasury. Notwithstanding Section 13340
20of the Government Code, moneys deposited in the Global Payment
21Program Special Fund shall be continuously appropriated, without
22 regard to fiscal years, to the department for the purposes specified
23in this section. All funds derived pursuant to this section shall be
24deposited in the State Treasury to the credit of the Global Payment
25Program Special Fund.

26
(2) The Global Payment Program Special Fund shall consist
27of moneys that a designated public hospital or affiliated
28governmental agency or entity elects to transfer to the department
29for deposit into the fund as a condition of participation in the
30Global Payment Program, to the extent permitted under Section
31433.51 of Title 42 of the Code of Federal Regulations, the Special
32Terms and Conditions, and any other applicable federal Medicaid
33laws. Except as otherwise provided in paragraph (3), moneys
34derived from these intergovernmental transfers in the Global
35Payment Program Special Fund shall be used as the source for
36the nonfederal share of Global Payment Program payments
37authorized under the demonstration project. Any intergovernmental
38transfer of funds provided for purposes of the Global Payment
39Program shall be made as specified in this section. Upon providing
40any intergovernmental transfer of funds, each transferring entity
P37   1shall certify that the transferred funds qualify for federal financial
2participation pursuant to applicable federal Medicaid laws and
3the Special Terms and Conditions, and in the form and manner as
4required by the department.

5
(3) The department shall claim federal financial participation
6for GPP payments using moneys derived from intergovernmental
7transfers made pursuant to this section, and deposited in the Global
8Payment Program Special Fund to the full extent permitted by
9law. The moneys disbursed from the fund, and all associated
10federal financial participation, shall be distributed only to GPP
11systems and the governmental agencies or entities to which they
12are affiliated, as applicable. In the event federal financial
13participation is not available with respect to a payment under this
14section and either is not obtained, or results in a recoupment of
15payments already made, the department shall return any
16intergovernmental transfer of funds amounts associated with the
17payment for which federal financial participation is not available
18to the applicable transferring entities within 14 days from the date
19of the associated recoupment.

20
(4) As a condition of participation in the Global Payment
21Program, each designated public hospital or affiliated
22governmental agency or entity, agrees to provide
23intergovernmental transfer of funds necessary to meet the
24nonfederal share obligation as calculated under subdivision (g)
25for Global Payment Program payments made pursuant to this
26section and the Special Terms and Conditions. Any
27intergovernmental transfer of funds made pursuant to this section
28shall be considered voluntary for purposes of all federal laws. No
29state General Fund moneys shall be used to fund the nonfederal
30share of any global payment program payment.

31
(g) For each scheduled quarterly interim payment, interim
32yearend payment, and final reconciliation payment pursuant to
33subdivision (d), the department shall determine the
34intergovernmental transfer amount for each GPP system as
35follows:

36
(1) The department shall determine the amount of the quarterly
37interim payment, interim yearend payment, or final reconciliation
38payment, as applicable, that is payable to each GPP system
39pursuant to subdivision (d). For purposes of these determinations,
P38   1the redistributed amounts described in paragraph (2) of subdivision
2(d) shall be disregarded.

3
(2) The department shall determine the aggregate amount of
4intergovernmental transfers necessary to fund the nonfederal share
5of the quarterly interim payment, interim yearend payment, or
6final reconciliation payment, as applicable, identified in paragraph
7(1) for all the GPP systems.

8
(3) With respect to each quarterly interim payment, interim
9yearend payment, or final yearend reconciliation payment, as
10applicable, an initial transfer amount shall be determined for each
11GPP system, calculated as the amount for the GPP system
12determined in paragraph (1), multiplied by the nonfederal share
13percentage, as defined in Section 14184.10, and multiplied by the
14applicable GPP system-specific IGT factor as follows:

15
(A) Los Angeles County Health System: 1.100.

16
(B) Alameda Health System: 1.137.

17
(C) Arrowhead Regional Medical Center: 0.923.

18
(D) Contra Costa Regional Medical Center: 0.502.

19
(E) Kern Medical Center: 0.581.

20
(F) Natividad Medical Center: 1.183.

21
(G) Riverside University Health System-Medical Center: 0.720.

22
(H) San Francisco General Hospital: 0.507.

23
(I) San Joaquin General Hospital: 0.803.

24
(J) San Mateo Medical Center: 1.325.

25
(K) Santa Clara Valley Medical Center: 0.706.

26
(L) Ventura County Medical Center: 1.401.

27
(4) The initial transfer amount for each GPP system determined
28 under paragraph (3) shall be further adjusted as follows to ensure
29that sufficient intergovernmental transfers are available to make
30payments to all GPP systems:

31
(A) With respect to each quarterly interim payment, interim
32yearend payment, or final reconciliation payment, as applicable,
33the initial transfer amounts for all GPP systems determined under
34paragraph (3) shall be added together.

35
(B) The sum of the initial transfer amounts in subparagraph
36(A) shall be subtracted from the aggregate amount of
37intergovernmental transfers necessary to fund the payments as
38determined in paragraph (2). The resulting positive or negative
39amount shall be the aggregate positive or negative
40intergovernmental transfer adjustment.

P39   1
(C) Each GPP system-specific IGT factor, as specified in
2subparagraphs (A) to (L), inclusive, of paragraph (3) shall be
3subtracted from 2.000, yielding an IGT adjustment factor for each
4GPP system.

5
(D) The IGT adjustment factor calculated in subparagraph (C)
6for each GPP system shall be multiplied by the positive or negative
7amount in subparagraph (B), and multiplied by the allocation
8percentage determined for the GPP system in paragraph (4) of
9subdivision (c), yielding the amount to be added or subtracted
10from the initial transfer amount determined in paragraph (3) for
11the applicable GPP system.

12
(E) The transfer amount to be paid by each GPP system with
13respect to the applicable quarterly interim payment, interim
14yearend payment, or final reconciliation payment, shall equal the
15initial transfer amount determined in paragraph (3) as adjusted
16by the amount determined in subparagraph (D).

17
(5) Upon the determination of the redistributed amounts
18described in paragraph (2) of subdivision (d) for the final
19reconciliation payment, the department shall, with respect to each
20GPP system that exceeded its respective threshold, determine the
21associated intergovernmental transfer amount equal to the
22nonfederal share that is necessary to draw down the additional
23payment, and shall include this amount in the GPP system’s
24transfer amount.

25
(h) The department may initiate audits of GPP systems’ data
26submissions and reports, and may request supporting
27documentation. Any audits conducted by the department shall be
28complete within 22 months of the end of the applicable GPP
29program year to allow for the appropriate finalization of payments
30to the participating GPP system, but subject to recoupment if it is
31later determined that federal financial participation is not available
32for any portion of the applicable payments.

33
(i) If the department determines, during the course of the
34demonstration term and in consultation with participating GPP
35systems, that the Global Payment Program should be terminated
36for subsequent years, the department shall terminate the Global
37Payment Program by notifying the federal Centers for Medicare
38and Medicaid Services in accordance with the timeframes specified
39in the Special Terms and Conditions. In the event of this type of
40termination, the department shall issue a declaration terminating
P40   1the Global Payment Program and shall work with the federal
2Centers for Medicare and Medicaid Services to finalize all
3remaining payments under the Global Payment Program.
4Subsequent to the effective date for any termination accomplished
5pursuant to this subdivision, the designated public hospitals that
6participated in the Global Payment Program shall claim and
7receive disproportionate share hospital payments, if eligible, as
8described in subparagraph (D) of paragraph (4) of subdivision
9(b) of Section 14184.30, but only to the extent that any necessary
10federal approvals are obtained and federal financial participation
11is available and not otherwise jeopardized.

12
(j) The department shall conduct, or arrange for, the two
13evaluations of the Global Payment Program methodology required
14pursuant to the Special Terms and Conditions.

15

begin insert14184.50.end insert  

(a) (1) The department shall establish and operate
16the Public Hospital Redesign and Incentives in Medi-Cal (PRIME)
17program to build upon the foundational delivery system
18transformation work, expansion of coverage, and increased access
19to coordinated primary care achieved through the prior
20California’s “Bridge to Reform” Medicaid demonstration project.
21The activities supported by the PRIME program are designed to
22accelerate efforts by participating PRIME entities to change care
23delivery to maximize health care value and strengthen their ability
24to successfully perform under risk-based alternative payment
25models in the long term and consistent with the demonstration’s
26goals. Participating PRIME entities consist of two types of entities:
27designated public hospital systems and district and municipal
28public hospitals.

29
(2) Participating PRIME entities shall be eligible to earn
30incentive payments by undertaking projects set forth in the Special
31Terms and Conditions, for which there are required project metrics
32and targets. Additionally, a minimum number of required projects
33is specified for each designated public hospital system.

34
(3) The department shall provide participating PRIME entities
35the opportunity to earn the maximum amount of funds authorized
36for the PRIME program under the demonstration project. Under
37the demonstration project, funding is available for the designated
38public hospital systems and the district and municipal public
39hospitals through two separate pools. Subject to the Special Terms
40and Conditions, up to one billion four hundred million dollars
P41   1($1,400,000,000) is authorized annually for the designated public
2hospital systems pool, and up to two hundred million dollars
3($200,000,000) is authorized annually for the district and
4municipal public hospitals pool, during the first three years of the
5demonstration project, with reductions to these amounts in the
6fourth and fifth years.

7
(4) PRIME payments shall be incentive payments, and are not
8payments for services otherwise reimbursable under the Medi-Cal
9program, nor direct reimbursement for expenditures incurred by
10participating PRIME entities in implementing reforms. PRIME
11incentive payments shall not offset payment amounts otherwise
12payable by the Medi-Cal program, or to and by Medi-Cal managed
13care plans for services provided to Medi-Cal beneficiaries, or
14otherwise supplant provider payments payable to PRIME entities.

15
(b) For purposes of this section, the following definitions shall
16apply:

17
(1) “Alternative payment methodology” or “APM” means a
18payment made from a Medi-Cal managed care plan to a designated
19public hospital system for services covered for a beneficiary
20assigned to a designated public hospital system that meets the
21conditions set forth in the Special Terms and Conditions and
22approved by the department, as applicable.

23
(2) “Designated public hospital system” means a designated
24public hospital, as listed in the Special Terms and Conditions, and
25its affiliated governmental providers and contracted governmental
26and nongovernmental entities that constitute a system with an
27approved project plan under the PRIME program. A single
28designated public hospital system may include multiple designated
29public hospitals under common government ownership.

30
(3) “District and municipal public hospitals” means those
31nondesignated public hospitals, as listed in the Special Terms and
32Conditions, that have an approved project plan under the PRIME
33program.

34
(4) “Participating PRIME entity” means a designated public
35hospital system or district and municipal public hospital
36participating in the PRIME program.

37
(5) “PRIME program year” means the state fiscal year
38beginning on July 1 and ending on June 30 during which the
39PRIME program is authorized, which includes the 2015-16 state
40fiscal year, and, as applicable, each state fiscal year thereafter
P42   1through the 2019-20 state fiscal year, and any years or partial
2years during which the PRIME program is authorized under an
3extension or successor to the demonstration.

4
(c) (1) Within 30 days following federal approval of the
5protocols setting forth the PRIME projects, metrics, and funding
6mechanics, each participating PRIME entity shall submit a
7five-year PRIME project plan containing the specific elements
8required in the Special Terms and Conditions. The department
9shall review all five-year PRIME project plans and take action
10within 60 days to approve or disapprove each five-year PRIME
11project plan.

12
(2) Participating PRIME entities may modify projects or metrics
13in their five-year PRIME project plan, to the extent authorized
14under the demonstration project and approved by the department.

15
(d) (1) Each participating PRIME entity shall submit reports
16to the department twice a year demonstrating progress toward
17required metric targets. A standardized report form shall be
18developed jointly by the department and participating PRIME
19entities for this purpose. The mid-year report shall be due March
2031 of each PRIME program year, except that, for the 2015-16
21project year only, the submission of an acceptable five-year PRIME
22project plan in accordance with the Special Terms and Conditions
23shall constitute the submission of the mid-year report. The yearend
24report shall be due September 30 following each PRIME program
25year.

26
(2) The submission of the project reports pursuant to paragraph
27(1) shall constitute a request for payment. Amounts payable to the
28participating PRIME entity shall be determined based on the
29achievement of the metric targets included in the mid-year report
30and yearend report, as applicable.

31
(3) Within 14 days following the submission of the mid-year
32and yearend reports, the department shall confirm the amounts
33payable to participating PRIME entities and shall issue requests
34to each participating PRIME entity for the intergovernmental
35transfer amounts necessary to draw down the federal funding for
36the applicable PRIME incentive payment to that entity.

37
(A) Any intergovernmental transfers provided for purposes of
38this section shall be deposited in the Public Hospital Investment,
39Improvement, and Incentive Fund established pursuant to Section
P43   114182.4 and retained pursuant to paragraph (1) of subdivision
2(f).

3
(B) Participating PRIME entities or their affiliated governmental
4agencies or entities shall make the intergovernmental transfer to
5the department within seven days of receiving the department’s
6request. In the event federal approval for a payment is not
7obtained, the department shall return the intergovernmental
8transfer funds to the transferring entity within 14 days.

9
(C) PRIME payments to a participating PRIME entity shall be
10conditioned upon the department’s receipt of the intergovernmental
11transfer amount from the applicable entity. If the intergovernmental
12transfer is made within the appropriate timeframe, the incentive
13payment shall be disbursed in accordance with paragraph (4),
14otherwise the payment shall be disbursed within 14 days of when
15the intergovernmental transfer is provided.

16
(4) Subject to paragraph (3), and except with respect to the
172015-16 project year, amounts payable based on the mid-year
18reports shall be paid no later than April 30, and amounts payable
19based on the yearend report shall be paid no later than October
2031. In the event of insufficient or misreported data, these payment
21deadlines may be extended up to 60 days to allow time for the
22reports to be adequately corrected for approval for payment. If
23corrected data is not submitted to enable payment to be made
24within the extended timeframe, the participating entity will not
25receive PRIME payment for the period in question. For the
262015-16 project year only, 25 percent of the annual allocation for
27the participating PRIME entity shall be payable within 14 days
28following the approval of the five-year PRIME project plan. The
29remaining 75 percent of the participating PRIME entity’s annual
30allocation shall be available following the 2015-16 year end
31report, subject to the requirements in paragraph (2) of subdivision
32(e).

33
(5) The department shall draw down the federal funding and
34pay both the nonfederal and federal shares of the incentive payment
35to the participating PRIME entity, to the extent federal financial
36participation is available.

37
(e) The amount of PRIME incentive payments payable to a
38participating PRIME entity shall be determined as follows:

39
(1) The department shall allocate the full amount of annual
40funding authorized under the PRIME project pools across all
P44   1domains, projects, and metrics undertaken in the manner set forth
2in the Special Terms and Conditions. Separate allocations shall
3be determined for the designated public hospital system pool and
4the district and municipal hospital pool. The allocations shall
5determine the aggregate annual amount of funding that may be
6earned for each domain, project, and metric for all participating
7PRIME entities within the appropriate pool.

8
(A) The department shall allocate the aggregate annual amounts
9determined for each project and metric under the designated public
10hospital system pool among participating designated public
11hospital systems through an allocation methodology that takes
12into account available system-specific data, primarily based on
13the unique number of Medi-Cal beneficiaries treated, consistent
14with the Special Terms and Conditions. For the 2015−16 project
15year only, the approval of the five-year PRIME project plans for
16designated public hospital systems will be considered an
17 appropriate metric target and will equal up to 25 percent of a
18designated public hospital system’s annual allocation for that
19year.

20
(B) The department shall allocate the aggregate annual amounts
21determined for each project and metric under the district and
22municipal public hospital system pool among participating district
23and municipal public hospital systems through an allocation
24methodology that takes into account available system-specific data
25that includes Medi-Cal and uninsured care, the number of projects
26being undertaken, and a baseline floor funding amount, consistent
27with the Special Terms and Conditions. For the 2015-16 project
28year only, the approval of the five-year PRIME project plans for
29district and municipal public hospital systems will be considered
30an appropriate metric target and will equal up to 25 percent of a
31district and municipal public hospital system’s annual allocation
32for that year.

33
(2) Amounts payable to each participating PRIME entity shall
34be determined using the methodology described in the Special
35Terms and Conditions, based on the participating PRIME entity’s
36progress toward and achievement of the established metrics and
37targets, as reflected in the mid-year and yearend reports submitted
38pursuant to paragraph (1) of subdivision (d).

P45   1
(A) Each participating PRIME entity shall be individually
2responsible for progress toward and achievement of project specific
3metric targets during the reporting period.

4
(B) The amounts allocated pursuant to subparagraphs (A) and
5(B) of paragraph (1) shall represent the amounts the designated
6public hospital system or district and municipal public hospital,
7as applicable, may earn through achievement of a designated
8project metric target for the applicable year, prior to any
9redistribution.

10
(C) Participating PRIME entities shall earn reduced payment
11for partial achievement at both the mid-year and yearend reports,
12as described in the Special Terms and Conditions.

13
(3) If, at the end of a project year, a project metric target is not
14fully met by a participating PRIME entity and that entity is not
15able to fully claim funds that otherwise would have been earned
16for meeting the metric target, participating PRIME entities shall
17have the opportunity to earn unclaimed funds under the
18redistribution methodology established under the Special Terms
19and Conditions. Amounts earned by a participating PRIME entity
20through redistribution shall be payable in addition to the amounts
21earned pursuant to paragraph (2).

22
(f) The nonfederal share of payments under the PRIME program
23shall consist of voluntary intergovernmental transfers of funds
24provided by designated public hospitals or affiliated governmental
25agencies or entities, or district and municipal public hospitals or
26affiliated governmental agencies or entities, in accordance with
27this section.

28
(1) The Public Hospital Investment, Improvement, and Incentive
29Fund, established in the State Treasury pursuant to Section
3014182.4, shall be retained during the demonstration term for
31purposes of making PRIME payments to participating PRIME
32entities. Notwithstanding 13340 of the Government Code, moneys
33deposited in the Public Hospital Investment, Improvement, and
34Incentive Fund shall be continuously appropriated, without regard
35to fiscal years, to the department for the purposes specified in this
36section. All funds derived pursuant to this section shall be deposited
37in the State Treasury to the credit of the Public Hospital
38Investment, Improvement, and Incentive Fund.

39
(2) The Public Hospital Investment, Improvement, and Incentive
40Fund shall consist of moneys that a designated public hospital, or
P46   1affiliated governmental agency or entity, or a district and municipal
2hospital-affiliated governmental agency or entity, elects to transfer
3to the department for deposit into the fund as a condition of
4participation in the PRIME program, to the extent permitted under
5Section 433.51 of Title 42 of the Code of Federal Regulations, the
6Special Terms and Conditions, and any other applicable federal
7Medicaid laws. Except as provided in paragraph (3), moneys
8derived from these intergovernmental transfers in the Public
9Hospital Investment, Improvement, and Incentive Fund shall be
10used as the nonfederal share of PRIME program payments
11authorized under the demonstration project. Any intergovernmental
12transfer of funds provided for purposes of the PRIME program
13shall be made as specified in this section. Upon providing any
14intergovernmental transfer of funds, each transferring entity shall
15certify that the transferred funds qualify for federal financial
16participation pursuant to applicable federal Medicaid laws and
17the Special Terms and Conditions, and in the form and manner as
18required by the department.

19
(3) The department shall claim federal financial participation
20for PRIME incentive payments using moneys derived from
21intergovernmental transfers made pursuant to this section and
22deposited in the Public Hospital Investment, Improvement, and
23Incentive Fund to the full extent permitted by law. The moneys
24disbursed from the fund, and all associated federal financial
25participation, shall be distributed only to participating PRIME
26entities and the governmental agencies or entities to which they
27are affiliated, as applicable. Except in those limited instances
28specifically authorized in the Special Terms and Conditions, no
29moneys derived from intergovernmental transfers on behalf of
30district and municipal public hospitals, including any associated
31federal financial participation, shall be used to fund PRIME
32payments to designated public hospital systems, and likewise, no
33moneys derived from intergovernmental transfers provided by
34designated public hospitals or their affiliated governmental
35agencies or entities, including any associated federal financial
36participation, shall be used to fund PRIME payments to district
37and municipal public hospitals. In the event federal financial
38participation is not available with respect to a payment under this
39section that results in a recoupment of funds from one or more
40participating PRIME entities, the department shall return any
P47   1intergovernmental transfer fund amounts associated with the
2payment for which federal financial participation is not available
3to the applicable transferring entities within 14 days from the date
4of the associated recoupment.

5
(4) This section shall not be construed to require a designated
6public hospital, a nondesignated public hospital, or any affiliated
7governmental agency or entity to participate in the PRIME
8program. As a condition of participation in the PRIME program,
9each designated public hospital, or affiliated governmental agency
10or entity, and each district and municipal hospital-affiliated
11governmental agency or entity agrees to provide intergovernmental
12transfers of funds necessary to meet the nonfederal share obligation
13for any PRIME payments made pursuant to this section and the
14Special Terms and Conditions. Any intergovernmental transfers
15made pursuant to this section shall be considered voluntary for
16purposes of all federal laws.

17
(g) The department shall conduct, or arrange to have conducted,
18the evaluation of the PRIME program required by the Special
19Terms and Conditions.

20
(h) (1) PRIME incentive payments are intended to support
21designated public hospital systems in their efforts to change care
22delivery and strengthen those systems’ ability to participate under
23an alternate payment methodology (APM). APMs shift some level
24of risk to participating designated public hospital systems through
25capitation and other risk-sharing agreements. Contracts entered
26into, issued, or renewed on or after the effective date of the Special
27Terms and Conditions between managed care plans and
28participating designated public hospital systems shall include
29language requiring the designated public hospital system to report
30on metrics to meet quality benchmark goals and to ensure improved
31patient outcomes, consistent with the Special Terms and
32Conditions.

33
(2) In order to promote and increase the level of value-based
34payments made to designated public hospital systems during the
35course of the demonstration term, the department shall issue an
36all-plan letter to Medi-Cal managed care plans that will promote
37and encourage positive system transformation. The department
38shall issue an activities plan supporting designated public hospital
39system efforts to meet those aggregate APM targets and
40requirements as provided in the Special Terms and Conditions.

P48   1
(3) Designated public hospital systems shall contract with at
2least one Medi-Cal managed care plan in the service area where
3they operate using an APM methodology by January 1, 2018. If a
4designated public hospital system is unable to meet the requirement
5and can demonstrate that it has made a good faith effort to contract
6with a Medi-Cal managed care plan in the service area that it
7operates in or a gap in contracting period occurs, the department
8has the discretion to waive this requirement.

9
(4) Designated public hospital systems and Medi-Cal managed
10care plans shall seek to strengthen their data and information
11sharing for purposes of identifying and treating applicable
12beneficiaries, including the timely sharing and reporting of
13beneficiary data, assessment, and treatment information. Consistent
14with the Special Terms and Conditions and the goals of the
15demonstration project, and notwithstanding any other state law,
16the department shall provide guidelines, state-level infrastructure,
17and other mechanisms to support this data and information
18sharing.

19

begin insert14184.60.end insert  

(a) (1) The department shall establish and operate
20the Whole Person Care pilot program as authorized under the
21demonstration project to allow for the development of WPC pilots
22focused on target populations of high-risk, high-utilizing Medi-Cal
23beneficiaries in local geographic areas. The overarching goal of
24the program is the coordination of health, behavioral health, and
25social services, as applicable, in a patient-centered manner to
26improve beneficiary health and well-being through more efficient
27and effective use of resources.

28
(2) The Whole Person Care (WPC) pilots shall provide an option
29to a county, a city and county, a health or hospital authority, or a
30consortium of any of the above entities serving a county or region
31consisting of more than one county, to receive support to integrate
32care for particularly vulnerable Medi-Cal beneficiaries who have
33been identified as high users of multiple systems and who continue
34to have or are at-risk of poor health outcomes. Through
35collaborative leadership and systematic coordination among public
36and private entities, pilot entities will identify common
37beneficiaries, share data between systems, coordinate care in real
38time, and evaluate individual and population progress in order to
39meet the goal of providing comprehensive coordinated care for
40the beneficiary resulting in better health outcomes.

P49   1
(3) Investments in the localized pilots will build and strengthen
2relationships and systems infrastructure and will improve
3collaboration among WPC lead entities and WPC participating
4entities. The results of the WPC pilots will provide learnings for
5potential future local efforts beyond the term of the demonstration.

6
(4) WPC pilots shall include specific strategies to increase
7integration among local governmental agencies, health plans,
8providers, and other entities that serve high-risk, high-utilizing
9beneficiaries; increase coordination and appropriate access to
10care for the most vulnerable Medi-Cal beneficiaries; reduce
11inappropriate inpatient and emergency room utilization; improve
12data collection and sharing among local entities; improve health
13outcomes for the WPC target population; and may include other
14strategies to increase access to housing and supportive services.

15
(5) WPC pilots shall be approved by the department through
16the process outlined in the Special Terms and Conditions.

17
(6) Receipt of whole person care services is voluntary.
18Individuals receiving these services shall agree to participate in
19the WPC pilot, and may opt out at any time.

20
(b) For purposes of this section, the following definitions shall
21apply:

22
(1) “Medi-Cal managed care plan” means an organization or
23entity that enters into a contract with the department pursuant to
24Article 2.7 (commencing with Section 14087.3), Article 2.8
25(commencing with Section 14087.5), Article 2.81 (commencing
26with Section 14087.96), Article 2.91 (commencing with Section
2714089), or Chapter 8 (commencing with Section 14200).

28
(2) “WPC community partner” means an entity or organization
29identified as participating in the WPC pilot that has significant
30experience serving the target population within the pilot’s
31geographic area, including physician groups, community clinics,
32hospitals, and community-based organizations.

33
(3) “WPC lead entity” means the entity designated for a WPC
34pilot to coordinate the Whole Person Care pilot and to be the
35single point of contact for the department. WPC lead entities may
36be a county, a city and county, a health or hospital authority, a
37designated public hospital, a district and municipal public hospital,
38or an agency or department thereof, or a consortium of any of
39these entities.

P50   1
(4) “WPC participating entity” means those entities identified
2as participating in the WPC pilot, other than the WPC lead entity,
3including other local governmental entities, agencies within local
4governmental entities, Medi-Cal managed care plans, and WPC
5community partners.

6
(5) “WPC target population” means the population or
7populations identified by a WPC pilot through a collaborative
8data approach across partnering entities that identifies common
9Medi-Cal high-risk, high-utilizing beneficiaries who frequently
10access urgent and emergency services, including across multiple
11systems. At the discretion of the WPC lead entity, and in
12accordance with guidance as may be issued by the department
13during the application process and approved by the department,
14the WPC target population may include individuals who are not
15Medi-Cal patients, subject to the funding restrictions in the Special
16Terms and Conditions regarding the availability of federal
17financial participation for services provided to these individuals.

18
(c) (1) WPC pilots shall have flexibility to develop financial
19and administrative arrangements to encourage collaboration with
20regard to pilot activities, subject to the Special Terms and
21Conditions, the provisions of any WPC pilot agreements with the
22department, and the applicable provisions of state and federal
23law, and any other guidance issued by the department.

24
(2) The WPC lead entity shall be responsible for operating the
25WPC pilot, conducting ongoing monitoring of WPC participating
26entities, arranging for the required reporting, ensuring an
27appropriate financial structure is in place, and identifying and
28securing a permissible source of the nonfederal share for WPC
29pilot payments.

30
(3) Each WPC pilot shall include, at a minimum, all of the
31following entities as WPC participating entities in addition to the
32WPC lead entity. If a WPC lead entity cannot reach an agreement
33with a required participant, the WPC lead entity may request an
34exception to this requirement from the department.

35
(A) At least one Medi-Cal managed care plan operating in the
36geographic area of the WPC pilot to work in partnership with the
37WPC lead entity when implementing the pilot specific to Medi-Cal
38 managed care beneficiaries.

39
(B) The health services agency or agencies or department or
40departments for the geographic region where the WPC pilot
P51   1operates, or any other public entity operating in that capacity for
2the county or city and county.

3
(C) The local entities, agencies, or departments responsible for
4specialty mental health services for the geographic area where
5the WPC pilot operates.

6
(D) At least one other public agency or department, which may
7include, but is not limited to, county alcohol and substance use
8disorder programs, human services agencies, public health
9departments, criminal justice or probation entities, and housing
10authorities, regardless of how many of these fall under the same
11agency head within the geographic area where the WPC pilot
12operates.

13
(E) At least two other community partners serving the target
14population within the applicable geographic area.

15
(4) The department shall enter into a pilot agreement with each
16WPC lead entity approved for participation in the WPC pilot
17program. The information and terms of the approved WPC pilot
18application shall become the pilot agreement between the
19department and the WPC lead entity submitting the application
20and shall set forth, at a minimum, the amount of funding that will
21be available to the WPC pilot and the conditions under which
22payments will be made, how payments may vary or under which
23the pilot program may be terminated or restricted. The pilot
24agreement shall include a data sharing agreement that is sufficient
25in scope for purposes of the WPC pilot, and an agreement
26regarding the provision of the nonfederal share. The pilot
27agreement shall specify reporting of universal and variant metrics
28that shall be reported by the pilot on a timeline specified by the
29department and projected performance on them. The pilot
30agreement may include additional components and requirements
31as issued by the department during the application process.
32Modifications to the WPC pilot activities and deliverables may be
33made on an annual basis in furtherance of WPC pilot objectives,
34to incorporate learnings from the operation of the WPC pilot as
35approved by the department.

36
(5) Notwithstanding any other law, including, but not limited
37to, Section 5328 of this code, and Sections 11812 and 11845.5 of
38the Health and Safety Code, the sharing of health information,
39records, and other data with and among WPC lead entities and
40WPC participating entities shall be permitted to the extent
P52   1necessary for the activities and purposes set forth in this section.
2This provision shall also apply to the sharing of health information,
3records, and other data with and among prospective WPC lead
4entities and WPC participating entities in the process of identifying
5a proposed target population and preparing an application for a
6WPC pilot.

7
(d) WPC pilots may target the focus of their pilot on individuals
8at risk of or are experiencing homelessness who have a
9demonstrated medical need for housing or supportive services. In
10these instances, WPC participating entities may include local
11housing authorities, local continuum of care (CoCs) programs,
12community-based organizations, and others serving the homeless
13population as entities collaborating and participating in the WPC
14pilot. These housing interventions may include the following:

15
(1) Tenancy-based care management services. For purposes of
16this section, “tenancy-based care management services” means
17supports to assist the target population in locating and maintaining
18medically necessary housing. These services may include the
19following:

20
(A) Individual housing transition services, such as individual
21outreach and assessments.

22
(B) Individual housing and tenancy-sustaining services,
23including tenant and landlord education and tenant coaching.

24
(C) Housing-related collaborative activities, such as services
25that support collaborative efforts across public agencies and the
26private sector that assist WPC participating entities in identifying
27and securing housing for the target population.

28
(2) Countywide housing pools.

29
(A) WPC participating entities may include contributions to a
30countywide housing pool (housing pool) that will directly provide
31needed support for medically necessary housing services, with the
32goal of improving access to housing and reducing churn in the
33Medi-Cal population.

34
(B) The housing pool may be funded through WPC pilot
35payments or direct contributions from community entities. State
36or local government and community entity contributions to the
37housing pool shall be separate from federal financial participation
38funds, and may be allocated to fund support for long-term housing,
39including rental housing subsidies. The housing pool may leverage
40local resources to increase access to subsidized housing units. The
P53   1housing pool may also incorporate a financing component to
2reallocate or reinvest a portion of the savings from the reduced
3utilization of health care services into the housing pool. As
4applicable to an approved WPC pilot agreement, WPC investments
5in housing units or housing subsidies, including any payment for
6room and board, shall not eligible for federal financial
7participation. For purposes of this section, “room and board”
8does not include those housing-related activities or services
9recognized as reimbursable under federal Centers for Medicare
10and Medicaid Services policy.

11
(e) (1) Payments to WPC pilots shall be disbursed twice a year
12to the WPC lead entity following the submission of the reports
13required pursuant to subdivision (f), to the extent all applicable
14requirements are met. The amount of funding for each WPC pilot
15and the timing of the payments shall be specified by the department
16upon the department approving a WPC application, consistent
17with the Special Terms and Conditions. During the 2016 calendar
18year only, payments shall be available for the planning,
19development, and submission of a successful WPC pilot
20application, including the submission of deliverables as set forth
21in the WPC pilot application and the WPC pilot annual report, to
22the extent authorized under the demonstration project and
23approved by the department.

24
(2) The department shall issue a WPC pilot application and
25selection criteria consistent with the Special Terms and Conditions,
26under which applicants shall demonstrate the ability to meet the
27goals of the WPC pilots as outlined in this section and the Special
28Terms and Conditions. The department shall approve applicants
29that meet the WPC pilot selection criteria established by the
30department, and shall allocate available funding to those approved
31WPC pilots up to the full amount of federal financial participation
32authorized under the demonstration project for WPC pilots during
33each calendar year from 2016 to 2020, inclusive, to the extent
34there are sufficient numbers of applications that meet the
35applicable criteria. In the event that otherwise unallocated federal
36financial participation is available after the initial award of WPC
37pilots, the department may solicit applications for the remaining
38 available funds from WPC lead entities of approved WPC pilots
39or from additional applicants, including applicants not approved
40during the initial application process.

P54   1
(3) In the event a WPC pilot does not receive its full annual
2payment amount, the WPC lead entity may request that the
3remaining funds be carried forward into the following calendar
4year, or may amend the scope of the WPC pilot, including, services,
5activities, or enrollment, for which this unallocated funding may
6be made available, subject to the Special Terms and Conditions
7and approval by the department. If the department denies a WPC
8lead entity request to carry forward unused funds and funds are
9not disbursed in this manner, the department may make the
10unexpended funds available for other WPC pilots or additional
11applicants not approved during the initial application process, to
12the extent authorized in the Special Terms and Conditions.

13
(4) Payments to the WPC pilot are intended to support
14infrastructure to integrate services among local entities that serve
15the WPC target population, to support the availability of services
16not otherwise covered or directly reimbursed by Medi-Cal to
17improve care for the WPC target population, and to foster other
18strategies to improve integration, reduce unnecessary utilization
19of health care services, and improve health outcomes. WPC pilot
20payments shall not be considered direct reimbursement for
21expenditures incurred by WPC lead entities or WPC participating
22entities in implementing these strategies or reforms. WPC pilot
23payments shall not be considered payments for services otherwise
24reimbursable under the Medi-Cal program, and shall not offset
25or otherwise supplant payment amounts otherwise payable by the
26Medi-Cal program, including payments to and by Medi-Cal
27managed care plans, for Medi-Cal covered services.

28
(5) WPC pilots are not intended as, and shall not be construed
29to constitute, health care coverage for individuals receiving
30services, and WPC pilots may determine the scope, type, and extent
31to which services are available, to the extent consistent with the
32Special Terms and Conditions. For purposes of the WPC pilots,
33WPC lead entities shall be exempt from the provisions of Chapter
342.2 (commencing with Section 1340) of Division 2 of the Health
35and Safety Code, and shall not be considered Medi-Cal managed
36care health plans subject to the requirements applicable to the
37two-plan model and geographic managed care plans, as contained
38in Article 2.7 (commencing with Section 14087.3), Article 2.81
39(commencing with Section 14087.96), and Article 2.91
40(commencing with Section 14089) of Chapter 7 of Part 3 and the
P55   1corresponding regulations, and shall not be considered prepaid
2health plans, as defined in Section 14251.

3
(f) WPC lead entities shall submit mid-year and annual reports
4to the department, in accordance with the schedules and guidelines
5established by the department and consistent with the Special
6Terms and Conditions. No later than 60 days after submission,
7the department shall determine the extent to which pilot
8requirements were met and the associated interim or annual
9payment due to the WPC pilot.

10
(g) The department, in collaboration with WPC lead entities,
11shall facilitate learning collaboratives to allow WPC pilots to
12share information and lessons learned from the operation of the
13WPC pilots, best practices with regard to specific beneficiary
14populations, and strategies for improving coordination and data
15sharing among WPC pilot entities.

16
(h) The nonfederal share of any payments under the WPC pilot
17program shall consist of voluntary intergovernmental transfers of
18funds provided by participating governmental agencies or entities,
19in accordance with this section and the terms of the pilot
20agreement.

21
(1) The Whole Person Care Pilot Special Fund is hereby
22established in the State Treasury. Notwithstanding 13340 of the
23Government Code, moneys deposited in the Whole Person Care
24Pilot Special Fund pursuant to this section shall be continuously
25appropriated, without regard to fiscal years, to the department
26for the purposes specified in this section. All funds derived pursuant
27to this section shall be deposited in the State Treasury to the credit
28of the Whole Person Care Pilot Special Fund.

29
(2) The Whole Person Care Pilot Special Fund shall consist of
30moneys that a participating governmental agency or entity elects
31to transfer to the department into the fund as a condition of
32participation in the WPC pilot program, to the extent permitted
33under Section 433.51 of Title 42 of the Code of Federal
34Regulations, the Special Terms and Conditions, and any other
35applicable federal Medicaid laws. Except as provided in paragraph
36(3), moneys derived from these intergovernmental transfers in the
37Whole Person Care Pilot Special Fund shall be used as the
38nonfederal share of Whole Person Care pilot payments authorized
39under the demonstration project. Any intergovernmental transfer
40of funds provided for purposes of the WPC pilot program shall be
P56   1made as specified in this section. Upon providing any
2intergovernmental transfer of funds, each transferring entity shall
3certify that the transferred funds qualify for federal financial
4participation pursuant to applicable federal Medicaid laws and
5the Special Terms and Conditions, and in the form and manner as
6required by the department.

7
(3) The department shall claim federal financial participation
8for WPC pilot payments using moneys derived from
9intergovernmental transfers made pursuant to this section and
10deposited in the Whole Person Care Pilot Special Fund to the full
11extent permitted by law. The moneys disbursed from the fund, and
12all associated federal financial participation, shall be distributed
13to WPC lead entities in accordance with paragraph (1) of
14subdivision (e). In the event federal financial participation is not
15available with respect to a payment under this section that results
16in a recoupment of funds from one or more WPC lead entities, the
17department shall return any intergovernmental transfer fund
18amounts associated with the payment for which federal financial
19participation is not available to the applicable transferring entities
20within 14 days from the date of the associated recoupment.

21
(4) This section shall not be construed to require any local
22governmental agency or entity, or any other provider, plan, or
23similar entity, to participate in the WPC pilot program. As a
24condition of participation in the WPC pilot program, participating
25governmental agencies or entities agree to provide
26intergovernmental transfers of funds necessary to meet the
27nonfederal share obligation for any Whole Person Care Pilot
28Program payment made pursuant to this section and the Special
29Terms and Conditions. Any intergovernmental transfer of funds
30made pursuant to this section shall be considered voluntary for
31purposes of all federal law. No state General Fund moneys shall
32be used to fund the nonfederal share of any WPC pilot program
33payment.

34
(i) The department shall conduct, or arrange to have conducted,
35the evaluations of the WPC pilot program required by the Special
36Terms and Conditions.

37

begin insert14184.70.end insert  

(a) (1) The department shall implement the Dental
38Transformation Initiative, or DTI, in accordance with the Special
39Terms and Conditions, with the goal of improving the oral health
40care for Medi-Cal children 0 to 20, inclusive, years of age.

P57   1
(2) The DTI is intended to improve the oral health care for
2Medi-Cal children with a particular focus on increasing the
3statewide proportion of qualifying children enrolled in the
4Medi-Cal Dental Program who receive a preventive dental service
5by 10 percentage points over a five-year period.

6
(3) The DTI includes the following four domains as outlined in
7the Special Terms and Conditions:

8
(A) Preventive Services.

9
(B) Caries Risk Assessment.

10
(C) Continuity of Care.

11
(D) Local Dental Pilot Projects.

12
(4) Under the DTI, incentive payments within each domain will
13be available to qualified providers who meet the requirements of
14the domain.

15
(b) For purposes of this section, the following definitions shall
16apply:

17
(1) “DTI incentive payment” means a payment made to a
18eligible contracted service office location pursuant to the DTI
19component of the Special Terms and Conditions.

20
(2) “DTI pool” means the funding available under the Special
21Terms and Conditions for the purposes of the DTI program, as
22described in paragraph (1) of subdivision (c).

23
(3) “DTI program year” means a calendar year beginning on
24January 1 and ending on December 31 during which the DTI
25component is authorized under the Special Terms and Conditions,
26beginning with the 2016 calendar year, and, as applicable, each
27calendar year thereafter through 2020, and any years or partial
28years during which the DTI is authorized under an extension or
29successor to the demonstration project.

30
(4) “Safety net clinics” means centers or clinics that provide
31services defined under subdivision (a) or (b) of Section 14132.100
32that are eligible for DTI incentive payments in accordance with
33the Special Terms and Conditions. DTI incentive payments received
34by safety net clinics shall be considered separate and apart from
35 either the Prospective Payment System reimbursement for federally
36qualified health centers or rural health centers, or Memorandum
37of Agreement reimbursement for Tribal Health Centers. Each
38safety net clinic office location shall be considered a dental service
39office location for purposes of the domains authorized by the
40Special Terms and Conditions.

P58   1
(5) “Service office location” means the business, or pay-to
2address, in which the provider, which may be an individual,
3partnership, group, association, corporation, institution, or entity
4that provides dental services, renders dental services. This may
5include a provider that participates in either the dental
6fee-for-service or dental managed care Medi-Cal delivery systems.

7
(c) (1) The DTI shall be funded at a maximum of one hundred
8forty-eight million dollars ($148,000,000) annually, and for five
9years totaling a maximum of seven hundred forty million dollars
10($740,000,000), except as provided in the Special Terms and
11Conditions. To the extent any of the funds associated with the DTI
12are not fully expended in a given DTI program year, those
13remaining prior DTI program year funds may be available for
14DTI payments in subsequent years, notwithstanding the annual
15limits stated in the Special Terms and Conditions. The department
16may earn additional demonstration authority, up to a maximum
17of ten million dollars ($10,000,000), to be added to the DTI Pool
18for use in paying incentives to qualifying providers under DTI by
19achieving higher performance improvement, as indicated in the
20Special Terms and Conditions.

21
(2) Providers in either the dental fee-for-service or dental
22managed care Medi-Cal delivery systems are permitted to
23participate in the DTI. The department shall make DTI incentive
24payments directly to eligible contracted service office locations.
25 Incentive payments shall be issued to the service office location
26based on the services rendered at the location and that service
27office location’s compliance with the criteria enumerated in the
28Special Terms and Conditions.

29
(3) Incentive payments from the DTI Pool are intended to
30support and reward eligible service office locations for
31achievements within one or more of the project domains. The
32incentive payments shall not be considered as a direct
33reimbursement for dental services under the Medi-Cal state plan.

34
(A) The department may provide DTI incentive payments to
35eligible service office locations on a semiannual or annual basis,
36or in a manner otherwise consistent with the Special Terms and
37Conditions.

38
(B) The department shall disburse DTI incentive payments to
39eligible service office locations that did not previously participate
40in Medi-Cal prior to the demonstration and that render preventive
P59   1dental services during the demonstration to the extent the service
2office location meets or exceeds the goals specified by the
3department in accordance with the Special Terms and Conditions.

4
(C) Safety net clinics are eligible for DTI incentive payments
5specified in the Special Terms and Conditions. Participating safety
6net clinics shall be responsible for submitting data in a manner
7specified by the department for receipt of DTI incentive payments.
8Each safety net clinic office location shall be considered a dental
9service office location for purposes of specified domains outlined
10in the Special Terms and Conditions.

11
(D) Dental managed care provider service office locations are
12eligible for DTI incentive payments, as specified in the Special
13Terms and Conditions, and these payments shall be considered
14separate from payment received from a dental managed care plan.

15
(E) Service office locations shall submit all data in a manner
16acceptable to the department within one year from the date of
17service or by January 31 for the preceding year that the service
18was rendered, whichever occurs sooner, to be eligible for DTI
19incentive payments associated with that timeframe.

20
(d) The domains of the DTI are as follows:

21
(1) Increase Preventive Services Utilization for Children: this
22domain aims to increase the statewide proportion of qualifying
23children enrolled in Medi-Cal who receive a preventive dental
24service in a given year. The statewide goal is to increase the
25utilization among children enrolled in the dental fee-for-service
26and dental managed care delivery systems by at least 10 percentage
27points by the end of the demonstration.

28
(2) Caries Risk Assessment and Disease Management Pilot:

29
(A) This domain will initially only be available to participating
30service office locations in select pilot counties, designated by the
31department, as specified in the Special Terms and Conditions.
32Participating service office locations shall elect to be approved
33by the department to participate in this domain of the DTI program.
34To the extent the department determines the pilots to be successful,
35the department may seek to implement this domain on a statewide
36basis and subject to the availability of funding under the DTI Pool
37is available for this purpose.

38
(B) Medi-Cal dentists voluntarily participating in this pilot shall
39be eligible to receive DTI incentive payments for implementing
40preidentified treatment plans for children based upon that child
P60   1beneficiary’s risk level as determined by the service office location
2via a caries risk assessment, which shall include motivational
3interviewing and use of antimicrobials, as indicated. The
4department shall identify the criteria and preidentified treatment
5plans to correspond with the varying degrees of caries risk, low,
6moderate, and high, while the rendering provider will develop and
7implement the appropriate treatment plan based on the needs of
8the beneficiary.

9
(C) The department shall identify and select pilot counties
10through an analysis of counties with a high percentage of
11restorative services, a low percentage of preventive services, and
12indication of likely participation by enrolled service office
13locations.

14
(3) Increase continuity of care: A DTI incentive payment shall
15be paid to eligible service office locations who have maintained
16continuity of care through providing examinations for their
17enrolled child beneficiaries under 21 years of age, as specified in
18the Special Terms and Conditions. The department shall begin
19this effort in select counties and shall seek to implement on a
20statewide basis if the pilot is determined to be successful and
21subject to the availability of funding under the DTI Pool. If
22successful, the department shall consider an expansion no sooner
23than nine months following the end of the second DTI program
24year.

25
(4) Local dental pilot projects (LDPPs): LDPPs shall address
26one or more of the three domains identified in paragraph (1), (2),
27or (3) through alternative local dental pilot projects, as authorized
28by the department pursuant to the Special Terms and Conditions.

29
(A) The department shall require local pilots to have
30broad-based provider and community support and collaboration,
31including engagement with tribes and Indian health programs,
32with DTI incentive payments available to the pilot based on goals
33and metrics that contribute to the overall goals of the domains
34described in paragraphs (1), (2), and (3).

35
(B) The department shall solicit proposals at the beginning of
36the demonstration and shall review, approve, and make DTI
37incentive payments to approved LDPPs in accordance with the
38Special Terms and Conditions.

P61   1
(C) A maximum of 15 LDPPs shall be approved and no more
2than 25 percent of the total funding in the DTI pool shall be used
3for LDPPs.

4
(e) The department shall conduct, or arrange to have conducted,
5the evaluation of the DTI as required by the Special Terms and
6Conditions.

end insert
7

begin deleteSEC. 2.end delete
8
begin insertSEC. 3.end insert  

This act is an urgency statute necessary for the
9immediate preservation of the public peace, health, or safety within
10the meaning of Article IV of the Constitution and shall go into
11immediate effect. The facts constituting the necessity are:

12In order to make changes to state-funded health care programs
13at the earliest possible time, it is necessary that this act take effect
14immediately.



O

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