Amended in Assembly June 10, 2016

Amended in Assembly May 25, 2016

Senate BillNo. 833


Introduced by Committee on Budget and Fiscal Review

January 7, 2016


begin deleteAn act relating to the Budget Act of 2016. end deletebegin insertAn act to amend Section 100504 of the Government Code, to amend Sections 1324.9, 120955, 120960, 130301, 130303, 130305, 130306, 130309, 130310, and 130313 of, to add Section 125281 to, to add Part 6.2 (commencing with Section 1179.80) to Division 1 of, to add Part 7.5 (commencing with Section 122450) to Division 105 of, and to repeal Sections 120965, 130307, and 130312 of, the Health and Safety Code, to amend and repeal Section 138.7 of the Labor Code, and to amend Sections 5848.5, 10752, 14009.5, 14046.7, 14105.436, 14105.45, 14105.456, 14105.86, 14131.10, 14132.56, 14154, 14301.1, and 14592 of, and to amend and add Section 14593 of, the Welfare and Institutions Code, relating to health, and making an appropriation therefor, to take effect immediately, bill related to the budget.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 833, as amended, Committee on Budget and Fiscal Review. begin deleteBudget Act of 2016. end deletebegin insertHealth.end insert

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(1) Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that took effect January 1, 2014. Among other things, PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. Existing state law establishes the California Health Benefit Exchange (the Exchange) within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans, and specifies the powers and duties of the board governing the Exchange. Existing law authorizes the board of the Exchange to adopt any necessary regulations as emergency regulations until January 1, 2017. Existing law allows the emergency regulations adopted by the board to remain in effect for 3 years, as specified.

end insert
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This bill would authorize the board to adopt any necessary regulations to implement the eligibility, enrollment, and appeals processes for the individual and small business exchanges, changes to the small business exchange, or any act in effect that amends the provisions governing the Exchange that is operative on or before December 31, 2016, as emergency regulations. The bill would instead allow the emergency regulations adopted by the board to remain in effect for 5 years, as specified.

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(2) Existing law creates the State Department of Public Health and vests it with duties, powers, functions, jurisdiction, and responsibilities with regard to the advancement of public health.

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This bill would require the department, subject to an appropriation for this purpose in the Budget Act of 2016, to award funding to local health departments, local government agencies, or on a competitive basis to community-based organizations, regional opioid prevention coalitions, or both, to support or establish programs that provide Naloxone to first responders and to at-risk opioid users through programs that serve at-risk drug users, including, but not limited to, syringe exchange and disposal programs, homeless programs, and substance use disorder treatment providers.

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(3) Existing law establishes the Long-Term Care Quality Assurance Fund in the State Treasury and requires all revenues received by the State Department of Health Care Services categorized by the department as long-term care quality assurance fees, including specified fees on certain intermediate care facilities and skilled nursing facilities, as specified, to be deposited into the fund. Existing law requires the moneys in the fund to be available, upon appropriation by the Legislature, for expenditure by the department to provide supplemental Medi-Cal reimbursement for intermediate care facility services, as specified, and to enhance federal financial participation in the Medi-Cal program or to provide additional reimbursement to, and support facility quality improvement efforts in, licensed skilled nursing facilities.

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This bill would continuously appropriate the moneys in the fund to the department, thereby making an appropriation.

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(4) Existing law requires the State Public Health Officer, to the extent that state and federal funds are appropriated, to establish and administer a program to provide drug treatments to persons infected with human immunodeficiency virus (HIV). Existing law establishes the AIDS Drug Assistance Rebate Fund, which is continuously appropriated and contains specified rebates from drug manufacturers, and authorizes expenditures from the fund for purposes of this program.

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This bill would require the State Public Health Officer, to the extent that state and federal funds are appropriated, to establish and administer a program to provide drug treatments to persons who are HIV-negative who have been prescribed preexposure prophylaxis included on the ADAP formulary for the prevention of HIV infection. The bill would authorize the State Public Health Officer, to the extent allowable under federal law and as appropriated in the annual Budget Act, to expend funding from the AIDS Drug Assistance Program Rebate Fund for this HIV infection prevention program to cover the costs of prescribed ADAP formulary medications for the prevention of HIV infection and other specified costs.

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Existing law authorizes the State Department of Public Health to subsidize certain cost-sharing requirements for persons otherwise eligible for the AIDS Drug Assistance Program (ADAP) with existing non-ADAP drug coverage by paying for prescription drugs included on the ADAP formulary within the existing ADAP operational structure, as specified. Under existing law, if the State Public Health Officer determines that it would result in a cost savings to the state, the department is authorized to subsidize, using available federal funds and moneys from the AIDS Drug Assistance Program Rebate Fund, costs associated with a health care service plan or health insurance policy and premiums to purchase or maintain health insurance coverage.

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The bill would delete the requirement that the State Public Health Officer determine that there would be a cost savings to the state before the department may subsidize the above-described costs with available federal funds and moneys from the AIDS Drug Assistance Program Rebate Fund.

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Existing law requires the department to establish and administer a payment schedule to determine the payment obligation of a person receiving drugs under the program, as specified. Existing law limits the payment obligation to the lessor of 2 times the person’s annual state income tax liability, less health insurance premium payments, or the cost of the drugs.

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This bill would delete the above-described payment obligation. The bill would also make conforming changes.

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(5) Existing law establishes the State Department of Public Health for purposes of, among other things, providing or facilitating access to certain health services and programs. Existing law requires the department to administer certain programs related to hepatitis B and hepatitis C, as specified.

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This bill would require the State Department of Public Health to, among other things, purchase and distribute certain hepatitis B and hepatitis C materials to local entities for purposes of testing and vaccination, as specified. The bill would further require the department to facilitate related training and other technical assistance relating to syringe exchanges. The bill would authorize the department to issue grants for these purposes. The bill would make these provisions subject to funding provided for these purposes.

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(6) Existing law authorizes any postsecondary higher educational institution with a medical center to establish diagnostic and treatment centers for Alzheimer’s disease, and requires the State Department of Public Health to administer grants to the postsecondary higher educational institutions that establish a center pursuant to these provisions.

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This bill would require the department to allocate funds to those centers, from funds appropriated to the department in the Budget Act of 2016, to be used for specified purposes, including to conduct targeted outreach to health professionals and to provide low-cost, accessible detection and diagnosis tools, as specified.

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(7) Existing law establishes the Office of Health Information Integrity, headed by the Director of the Office of Health Information Integrity, within the California Health and Human Services Agency and requires the office to assume statewide leadership, coordination, policy formulation, direction, and oversight responsibilities for implementation of the federal Health Insurance Portability and Accountability Act (HIPAA). Existing law requires the director to establish an advisory committee to obtain information on statewide HIPAA implementation activities, which is required to meet at a minimum 2 times per year. Existing law requires the Department of Finance to develop and annually publish prior to August 1 guidelines for state entities, as defined, to obtain additional HIPAA funding, and to report to the Legislature quarterly on HIPAA allocations, redirections, and expenditures, categorized by state entity and by project.

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This bill would revise those provisions to reflect the office’s duties regarding ongoing compliance with HIPAA. The bill would delete the provisions pertaining to the advisory committee and the Department of Finance requirements to publish guidelines and report to the Legislature.

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(8) Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law prohibits a person or public or private entity who is not a party to a claim for workers’ compensation benefits from obtaining individually identifiable information, as defined, that is obtained or maintained by the Division of Workers’ Compensation of the Department of Industrial Relations on that claim, except as specified. Existing law authorizes, until January 1, 2017, the use by the State Department of Health Care Services of individually identifiable information to seek recovery of Medi-Cal costs.

end insert
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This bill would delete that January 1, 2017, date of repeal and thereby extend the operation of this authority of the State Department of Health Care Services indefinitely.

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(9) The California Health Facilities Financing Authority Act authorizes the California Health Facilities Financing Authority (authority) to make loans from the continuously appropriated California Health Facilities Financing Authority Fund to participating health institutions for financing or refinancing the acquisition, construction, or remodeling of health facilities.

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Existing law, the Mental Health Services Act, an initiative measure enacted by the voters as Proposition 63 at the November 2, 2004, statewide general election, establishes the Mental Health Services Oversight and Accountability Commission (commission) to oversee the administration of various parts of the Mental Health Services Act. The act provides that it may be amended by the Legislature by a 2/3 vote of each house as long as the amendment is consistent with and furthers the intent of the act, and that the Legislature may also clarify procedures and terms of the act by majority vote.

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Existing law establishes the Investment in Mental Health Wellness Act of 2013. Existing law provides that funds appropriated by the Legislature to the authority for the purposes of the act be made available to selected counties or counties acting jointly, except as otherwise provided, and used to increase capacity for client assistance and services in crisis intervention, crisis stabilization, crisis residential treatment, rehabilitative mental health services, and mobile crisis support teams. Existing law requires the authority to develop and to consider specified selection criteria for awarding grants, as prescribed. Existing law provides that funds appropriated by the Legislature to the commission for the purposes of the act be allocated to selected counties, counties acting jointly, or city mental health departments, as determined by the commission through a selection process, for triage personnel to provide intensive case management and linkage to services for individuals with mental health disorders. Existing law requires the commission to consider specified selection criteria for awarding grants. Existing law prohibits funds awarded by the authority or commission from being used to supplant existing financial and resource commitments of the grantee.

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This bill would extend the application of these provisions for purposes of providing mental health services to children and youth 21 years of age and under, subject to appropriation in the 2016 Budget Act. The bill would similarly provide that funds appropriated by the Legislature to the authority for these purposes be made available to selected counties or counties acting jointly, and used to increase capacity for client assistance and crisis services, as specified. The bill would require the authority to develop and consider specified selection criteria for awarding grants, as prescribed. The bill would similarly provide that funds appropriated by the Legislature to the commission for these purposes be allocated to selected counties, counties acting jointly, or city mental health departments, as determined by the commission through a selection process, for specified purposes. The bill would require the commission to consider specified selection criteria for awarding grants. The bill would require the authority and the commission to provide prescribed reports to the fiscal and policy committees of the Legislature by January 1, 2018, and annually thereafter.

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(10) Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions.

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Existing federal law requires the state to seek adjustment or recovery from an individual’s estate for specified medical assistance, including nursing facility services, home and community-based services, and related hospital and prescription drug services, if the individual was 55 years of age or older when he or she received the medical assistance. Existing federal law allows the state, at its own option, to seek recovery for any items or services covered under the state’s Medicaid plan.

end insert
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Existing state law, with certain exceptions, requires the State Department of Health Care Services to claim against the estate of a decedent, or against any recipient of the property of that decedent by distribution or survival, an amount equal to the payments for Medi-Cal services received or the value of the property received by any recipient from the decedent by distribution or survival, whichever is less. Existing law provides for certain exemptions that restrict the department from filing a claim against a decedent’s property, including if there is a surviving spouse during his or her lifetime. Existing law requires the department, however, to make a claim upon the death of the surviving spouse, as prescribed. Existing law requires the department to waive its claim, in whole or in part, if it determines that enforcement of the claim would result in a substantial hardship, as specified. Existing law, which has been held invalid by existing case law, provides that the exemptions shall only apply to the proportionate share of the decedent’s estate or property that passes to those recipients, by survival or distribution, who qualify for the exemptions.

end insert
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This bill would instead require the department to make these claims only in specified circumstances for those health care services that the state is required to recover under federal law and would define health care services for these purposes. The bill would limit any claims against the estate of a decedent to only the real and personal property or other assets in the individual’s probate estate that the state is required to seek recovery from under federal law. The bill would delete the proportionate share provision and would delete the requirement that the department make a claim upon the death of the surviving spouse. The bill would prohibit the department from filing a claim against a decedent’s property if there is a surviving registered domestic partner. The bill would require the department, subject to federal approval, to waive its claim when the estate subject to recovery is a homestead of modest value, as defined. The bill would limit the amount of interest that is entitled to accrue on a voluntary postdeath lien, as specified. The bill would also require the department to provide a current or former member, or his or her authorized representative, upon request, with a copy of the amount of Medi-Cal expenses that would be recoverable under these provisions, as specified. The bill would apply the changes made by these provisions only to individuals who die on or after January 1, 2017.

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(11) Existing law requires the State Department of Health Care Services to establish and administer, until July 1, 2021, the Medi-Cal Electronic Health Records Incentive Program, for the purposes of providing federal incentive payments to Medi-Cal providers for the implementation and use of electronic records systems. Existing law generally prohibits General Fund moneys from being used for this purpose, except that no more than $200,000 from the General Fund may be used annually for state administrative costs associated with implementing these provisions.

end insert
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This bill would increase the amount of General Fund moneys that may be used annually for state administrative costs to no more than $425,000.

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(12) Existing law provides for a schedule of benefits under the Medi-Cal program, which includes Early and Periodic Screening, Diagnosis, and Treatment for any individual under 21 years of age, consistent with the requirements of federal law. Under existing law, to the extent required by the federal government and effective no sooner than required by the federal government, behavioral health treatment (BHT), as defined, is a covered service for individuals under 21 years of age, as specified.

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This bill would authorize the department, commencing on the effective date of the bill to March 31, 2017, inclusive, to make available to specified individuals whom the department identifies as no longer eligible for Medi-Cal solely due to the transition of BHT coverage pursuant to the above provisions, contracted services to assist the individuals with health insurance enrollment, without regard to whether federal funds are available for the contracted services.

end insert
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(13) Existing law prohibits the reimbursement to Medi-Cal pharmacy providers for legend and nonlegend drugs, as defined, from exceeding the lowest of either the estimated acquisition cost of the drug plus a professional fee for dispensing or the pharmacy’s usual and customary charge, as defined. The professional fee is statutorily set at $7.25 per dispensed prescription and at $8 for legend drugs dispensed to a beneficiary residing in a skilled nursing facility or intermediate care facility, as defined. If the State Department of Health Care Services determines that a change in the dispensing fee is necessary, existing law requires the department to establish the new dispensing fee through the state budget process and prohibits any adjustments to the dispensing fee from exceeding a specified amount. Existing law requires the estimated acquisition cost of the drug to be equal to the lowest of the average wholesale price minus 17%, the average acquisition cost, the federal upper limit, or the maximum allowable ingredient cost.

end insert
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This bill, commencing April 1, 2017, would make inoperative the prescribed amounts for the professional fees and, instead, require the department to implement a new professional dispensing fee or fees, as defined, established by the department consistent with a specified provision of federal law. The bill would require the department to adjust the professional dispensing fee through the state budget process if necessary to comply with federal Medicaid requirements. The bill would revise the definition of “federal upper limit.”

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(14) Existing law provides for a schedule of benefits under the Medi-Cal program, which includes specified outpatient services, including acupuncture to the extent federal matching funds are provided for acupuncture, subject to utilization controls. Notwithstanding this provision, existing law excludes certain optional Medi-Cal benefits, including, among others, acupuncture services, from coverage under the Medi-Cal program.

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This bill, commencing July 1, 2016, would restore acupuncture services as a covered benefit under the Medi-Cal program.

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(15) Existing law requires counties to determine Medi-Cal eligibility, and requires each county to meet specified performance standards in administering Medi-Cal eligibility. Existing law requires the department to establish and maintain a plan, known as the County Administrative Cost Control Plan, for the purpose of effectively controlling costs related to the county administration of the determination of eligibility for benefits under the Medi-Cal program within the amounts annually appropriated for that administration. Under existing law, the Legislature finds and declares that linking appropriate funding for county Medi-Cal administrative operations, including annual cost-of-doing-business adjustments, with performance standards will give counties the incentive to meet the performance standards and enable them to continue to do the work they do on behalf of the state. Existing law further provides that it is the intent of the Legislature to provide appropriate funding to the counties for the effective administration of the Medi-Cal program, and that it is the intent of the Legislature to not appropriate money for a cost-of-doing-business adjustment for specified fiscal years.

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This bill would additionally provide that it is the intent of the Legislature to not appropriate funds for the cost-of-doing-business adjustment for the 2016-17 fiscal year.

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(16) Under existing law, the Emergency Medical Air Transportation Act, a penalty of $4 is imposed upon every conviction for a violation of the Vehicle Code, or a local ordinance adopted pursuant to the Vehicle Code, other than a parking offense. Existing law requires the county or the court that imposed the fine to transfer the moneys collected pursuant to this act to the Emergency Medical Air Transportation Act Fund. Existing law requires the State Department of Health Care Services to administer the Emergency Medical Air Transportation Act Fund and to use the moneys in the fund, upon appropriation by the Legislature, to, among other things, offset the state portion of the Medi-Cal reimbursement rate for emergency medical air transportation services and augment emergency medical air transportation reimbursement payments made through the Medi-Cal program. Under existing law, the assessment of these penalties will terminate on January 1, 2018, and any moneys unexpended and unencumbered in the Emergency Medical Air Transportation Act Fund on June 30, 2019, will transfer to the General Fund. Existing law requires the department, by March 1, 2017, and in coordination with the Department of Finance, to develop a funding plan that ensures adequate reimbursement to emergency medical air transportation providers following the termination of the penalty assessments.

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This bill would instead require the department, by March 1, 2017, and in coordination with the Department of Finance, to notify the Legislature of the fiscal impact on the Medi-Cal program resulting from, and the planned reimbursement methodology for emergency medical air transportation services after, the termination of the penalty assessments.

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(17) Existing federal law establishes the Program of All-Inclusive Care for the Elderly (PACE), which provides specified services for older individuals so that they may continue living in the community. Federal law authorizes states to implement the PACE program as a Medicaid state option. Existing law authorizes the department to enter into contracts with up to 15 PACE organizations, defined as public or private nonprofit organizations, to implement the PACE program, as specified. Existing law, on and after April 1, 2015, requires the department to establish capitation rates paid to each PACE organization at no less than 95% of the fee-for-service equivalent cost, including the department’s cost of administration, that the department estimates would be payable for all services covered under the PACE organization contract if all those services were to be furnished to Medi-Cal beneficiaries under the fee-for-service program.

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This bill would require the department to develop and pay capitation rates to contracted PACE organizations, for rates implemented no earlier than January 1, 2017, in accordance with criteria specific to those organizations, based on, among other things, standardized rate methodologies for similar populations, adjustments for geographic location, and the level of care being provided. The bill would delete the requirement that contracts for implementation of the PACE program be entered into with organizations that are nonprofit.

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This bill also would authorize the department, to the extent federal financial participation is available, to seek increased federal regulatory flexibility to modernize the PACE program, as specified. Implementation of the new capitation rate methodology would be contingent on receipt of federal approval and the availability of federal financial participation. The bill would provide alternative rate capitation methodologies, depending upon whether or not the Coordinated Care Initiative is operative, as specified.

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(18) This bill would also delete or make inoperative various obsolete provisions of law and make various other technical changes.

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(19) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

end insert
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This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2016.

end delete

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

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

P11   1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 100504 of the end insertbegin insertGovernment Codeend insertbegin insert is
2amended to read:end insert

3

100504.  

(a) The board may do the following:

4(1) With respect to individual coverage made available in the
5Exchange, collect premiums and assist in the administration of
6subsidies.

7(2) Enter into contracts.

8(3) Sue and be sued.

P12   1(4) Receive and accept gifts, grants, or donations of moneys
2from any agency of the United States, any agency of the state, and
3any municipality, county, or other political subdivision of the state.

4(5) Receive and accept gifts, grants, or donations from
5individuals, associations, private foundations, and corporations,
6in compliance with the conflict of interest provisions to be adopted
7by the board at a public meeting.

8(6) Adopt rules and regulations, as necessary. Until January 1,
92017, any necessary rules and regulations may be adopted as
10emergency regulations in accordance with the Administrative
11Procedure Act (Chapter 3.5 (commencing with Section 11340) of
12Part 1 of Division 3 of Title 2).begin insert Until January 1, 2019, any
13necessary rules and regulations to implement the eligibility,
14enrollment, and appeals processes for the individual and small
15business exchanges, changes to the small business exchange, or
16any act in effect that amends this title that is operative on or before
17December 31, 2016, may be adopted as emergency regulations in
18accordance with the Administrative Procedure Act (Chapter 3.5
19(commencing with Section 11340) of Part 1 of Division 3 of Title
202).end insert
The adoption ofbegin delete these regulationsend deletebegin insert emergency regulations
21pursuant to this sectionend insert
shall be deemed to be an emergency and
22necessary for the immediate preservation of the public peace, health
23and safety, or general welfare. Notwithstanding Chapter 3.5
24(commencing with Section 11340) of Part 1 of Division 3 of Title
252, including subdivisions (e) and (h) of Section 11346.1, any
26emergency regulation adopted pursuant to this section shall be
27repealed by operation of law unless the adoption, amendment, or
28repeal of the regulation is promulgated by the board pursuant to
29Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
303 of Title 2 of the Government Code withinbegin delete threeend deletebegin insert fiveend insert years of the
31initial adoption of the emergency regulation. Notwithstanding
32subdivision (h) of Section 11346.1, until January 1, 2020, the
33Office of Administrative Law may approve more than two
34readoptions of an emergency regulation adopted pursuant to this
35section. The amendments made to this paragraph by the act adding
36this sentence shall apply to any emergency regulation adopted
37pursuant to this section prior to the effective date of the Budget
38Act of 2015.

39(7) Collaborate with the State Department of Health Care
40Services and the Managed Risk Medical Insurance Board, to the
P13   1extent possible, to allow an individual the option to remain enrolled
2with his or her carrier and provider network in the event the
3individual experiences a loss of eligibility of premium tax credits
4and becomes eligible for the Medi-Cal program or the Healthy
5Families Program, or loses eligibility for the Medi-Cal program
6or the Healthy Families Program and becomes eligible for premium
7tax credits through the Exchange.

8(8) Share information with relevant state departments, consistent
9with the confidentiality provisions in Section 1411 of the federal
10act, necessary for the administration of the Exchange.

11(9) Require carriers participating in the Exchange to make
12available to the Exchange and regularly update an electronic
13directory of contracting health care providers so that individuals
14seeking coverage through the Exchange can search by health care
15provider name to determine which health plans in the Exchange
16include that health care provider in their network. The board may
17also require a carrier to provide regularly updated information to
18the Exchange as to whether a health care provider is accepting
19new patients for a particular health plan. The Exchange may
20provide an integrated and uniform consumer directory of health
21care providers indicating which carriers the providers contract with
22and whether the providers are currently accepting new patients.
23The Exchange may also establish methods by which health care
24providers may transmit relevant information directly to the
25Exchange, rather than through a carrier.

26(10) Make available supplemental coverage for enrollees of the
27Exchange to the extent permitted by the federal act, provided that
28no General Fund money is used to pay the cost of that coverage.
29Any supplemental coverage offered in the Exchange shall be
30subject to the charge imposed under subdivision (n) of Section
31100503.

32(b) The Exchange shall only collect information from individuals
33or designees of individuals necessary to administer the Exchange
34and consistent with the federal act.

35(c) (1) The board shall have the authority to standardize
36products to be offered through the Exchange. Any products
37standardized by the board pursuant to this subdivision shall be
38discussed by the board during at least one properly noticed board
39meeting prior to the board meeting at which the board adopts the
40standardized products to be offered through the Exchange.

P14   1(2) The adoption, amendment, or repeal of a regulation by the
2board to implement this subdivision is exempt from the rulemaking
3provisions of the Administrative Procedure Act (Chapter 3.5
4(commencing with Section 11340) of Part 1 of Division 3 of Title
52).

6begin insert

begin insertSEC. 2.end insert  

end insert

begin insertPart 6.2 (commencing with Section 1179.80) is added
7to Division 1 of the end insert
begin insertHealth and Safety Codeend insertbegin insert, to read:end insert

begin insert

8 

9PART begin insert6.2.end insert  Naloxone Grant Program

10

 

11

begin insert1179.80.end insert  

(a) In order to reduce the rate of fatal overdose from
12opioid drugs including heroin and prescription opioids, the State
13Department of Public Health shall, subject to an appropriation
14for this purpose in the Budget Act of 2016, award funding to local
15health departments, local government agencies, or on a competitive
16basis to community-based organizations, regional opioid
17prevention coalitions, or both, to support or establish programs
18that provide Naloxone to first responders and to at-risk opioid
19users through programs that serve at-risk drug users, including,
20but not limited to, syringe exchange and disposal programs,
21homeless programs, and substance use disorder treatment
22providers.

23
(b) The department may award grants itself or enter into
24contracts to carry out the provisions of subdivision (a). The award
25of contracts and grants is exempt from Part 2 (commencing with
26Section 10100) of Division 2 of the Public Contract Code and is
27exempt from approval by the Department of General Services prior
28to their execution.

29
(c) Not more than 10 percent of the funds appropriated shall
30be available to the department for its administrative costs in
31implementing this section. If deemed necessary by the department,
32the department may allocate funds to other state departments to
33assist in the implementation of subdivision (a).

end insert
34begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 1324.9 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
35amended to read:end insert

36

1324.9.  

(a) The Long-Term Care Quality Assurance Fund is
37hereby created in the State Treasury.begin delete Moneys in the fund shall be
38available, upon appropriation by the Legislature, for expenditure
39byend delete
begin insert Notwithstanding Section 13340 of the Government Code,
40moneys in the fund shall be continuously appropriated, without
P15   1regard to fiscal year, toend insert
the State Department of Health Care
2Services for the purposes of this article and Article 7.6
3(commencing with Section 1324.20). Notwithstanding Section
416305.7 of the Government Code, the fund shall contain all interest
5and dividends earned on moneys in the fund.

6(b) Notwithstanding any other law, beginning August 1, 2013,
7all revenues received by the State Department of Health Care
8Services categorized by the State Department of Health Care
9Services as long-term care quality assurance fees shall be deposited
10into the Long-Term Care Quality Assurance Fund. Revenue that
11shall be deposited into this fund shall include quality assurance
12fees imposed pursuant to this article and quality assurance fees
13imposed pursuant to Article 7.6 (commencing with Section
141324.20).

15(c) Notwithstanding any other law, the Controller may use the
16funds in the Long-Term Care Quality Assurance Fund for cashflow
17loans to the General Fund as provided in Sections 16310 and 16381
18of the Government Code.

19begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 120955 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
20amended to read:end insert

21

120955.  

(a) (1)  To the extent that state and federal funds are
22appropriated in the annual Budget Act for these purposes, the
23director shall establish and may administer a program to provide
24drug treatments to persons infected with human immunodeficiency
25virus (HIV), the etiologic agent of acquired immunodeficiency
26syndromebegin delete (AIDS).end deletebegin insert (AIDS), and to persons who are HIV-negative
27who have been prescribed preexposure prophylaxis included on
28the ADAP formulary for the prevention of HIV infection. To the
29extent allowable under federal law, and as appropriated in the
30annual Budget Act, the director may expend funding from the AIDS
31Drug Assistance Program Rebate Fund for this HIV infection
32prevention program to cover the costs of prescribed ADAP
33formulary medications for the prevention of HIV infection and
34related medical copays, coinsurance, and deductibles.end insert
If the
35director makes a formal determination that, in any fiscal year,
36funds appropriated for the program will be insufficient to provide
37all of those drug treatments to existing eligible persons for the
38fiscal year and that a suspension of the implementation of the
39program is necessary, the director may suspend eligibility
40determinations and enrollment in the program for the period of
P16   1time necessary to meet the needs of existing eligible persons in
2the program.

3(2) The director, in consultation with the AIDS Drug Assistance
4Program Medical Advisory Committee, shall develop, maintain,
5and update as necessary a list of drugs to be provided under this
6program. The list shall be exempt from the requirements of the
7 Administrative Procedure Act (Chapter 3.5 (commencing with
8Section 11340), Chapter 4 (commencing with Section 11370), and
9Chapter 5 (commencing with Section 11500) of Part 1 of Division
103 of Title 2 of the Government Code), and shall not be subject to
11the review and approval of the Office of Administrative Law.

12(b) The director may grant funds to a county public health
13department through standard agreements to administer this program
14in that county. To maximize the recipients’ access to drugs covered
15by this program, the director shall urge the county health
16department in counties granted these funds to decentralize
17distribution of the drugs to the recipients.

18(c) The director shall establish a rate structure for reimbursement
19for the cost of each drug included in the program. Rates shall not
20be less than the actual cost of the drug. However, the director may
21purchase a listed drug directly from the manufacturer and negotiate
22the most favorable bulk price for that drug.

23(d) Manufacturers of the drugs on the list shall pay the
24department a rebate equal to the rebate that would be applicable
25to the drug under Section 1927(c) of the federal Social Security
26Act (42 U.S.C. Sec. 1396r-8(c)) plus an additional rebate to be
27negotiated by each manufacturer with the department, except that
28no rebates shall be paid to the department under this section on
29drugs for which the department has received a rebate under Section
301927(c) of the federal Social Security Act (42 U.S.C. Sec.
311396r-8(c)) or that have been purchased on behalf of county health
32departments or other eligible entities at discount prices made
33available under Section 256b of Title 42 of the United States Code.

34(e) The department shall submit an invoice, not less than two
35times per year, to each manufacturer for the amount of the rebate
36required by subdivision (d).

37(f) Drugs may be removed from the list for failure to pay the
38rebate required by subdivision (d), unless the department
39determines that removal of the drug from the list would cause
40substantial medical hardship to beneficiaries.

P17   1(g) The department may adopt emergency regulations to
2implement amendments to this chapter made during the 1997-98
3Regular Session, in accordance with the Administrative Procedure
4Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
5Division 3 of Title 2 of the Government Code). The initial adoption
6of emergency regulations shall be deemed to be an emergency and
7considered by the Office of Administrative Law as necessary for
8the immediate preservation of the public peace, health and safety,
9or general welfare. Emergency regulations adopted pursuant to
10this section shall remain in effect for no more than 180 days.

11(h) Reimbursement under this chapter shall not be made for any
12drugs that are available to the recipient under any other private,
13state, or federal programs, or under any other contractual or legal
14entitlements, except that the director may authorize an exemption
15from this subdivision where exemption would represent a cost
16savings to the state.

17(i) The department may also subsidize certain cost-sharing
18requirements for persons otherwise eligible for the AIDS Drug
19Assistance Program (ADAP) with existing non-ADAP drug
20coverage by paying for prescription drugs included on the ADAP
21formulary within the existing ADAP operational structure up to,
22but not exceeding, the amount of that cost-sharing obligation. This
23cost sharing may only be applied in circumstances in which the
24other payer recognizes the ADAP payment as counting toward the
25individual’s cost-sharing obligation.begin delete If the director determines that
26it would result in a cost savings to the state, theend delete
begin insert Theend insert department
27may subsidize, using available federal funds and moneys from the
28AIDS Drug Assistance Program Rebate Fund, costs associated
29with a health care service plan or health insurance policy, including
30medical copayments and deductibles for outpatient care, and
31premiums to purchase or maintain health insurance coverage.

32begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 120960 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
33amended to read:end insert

34

120960.  

(a) The department shall establish uniform standards
35of financial eligibility for the drugs under the program established
36under this chapter.

37(b) Nothing in the financial eligibility standards shall prohibit
38drugs to an otherwise eligible person whose modified adjusted
39gross income does not exceed 500 percent of the federal poverty
40level per year based on family size and household income.
P18   1However, the director may authorize drugs for persons with
2incomes higher than 500 percent of the federal poverty level per
3year based on family size and household income if the estimated
4cost of those drugs in one year is expected to exceed 20 percent
5of the person’s modified adjusted gross income.

begin delete

6(c) The department shall establish and may administer a payment
7schedule to determine the payment obligation of a person receiving
8drugs. No person shall be obligated for payment whose modified
9adjusted gross income is less than four times the federal poverty
10level based on family size and household income. The payment
11obligation shall be the lesser of the following:

12(1) Two times the person’s annual state income tax liability,
13less funds expended by the person for health insurance premiums.

14(2) The cost of drugs.

15(d) Persons who have been determined to have a payment
16obligation pursuant to subdivision (c) shall be advised by the
17department of their right to request a reconsideration of that
18determination to the department. Written notice of the right to
19request a reconsideration shall be provided to the person at the
20time that notification is given that he or she is subject to a payment
21obligation. The payment determination shall be reconsidered if
22one or more of the following apply:

23(1) The determination was based on an incorrect calculation
24made pursuant to subdivision (b).

25(2) There has been a substantial change in income since the
26previous eligibility determination that has resulted in a current
27income that is inadequate to meet the calculated payment
28obligation.

29(3) Unavoidable family or medical expenses that reduce the
30disposable income and that result in current income that is
31inadequate to meet the payment obligation.

32(4) Any other situation that imposes undue financial hardship
33on the person and would restrict his or her ability to meet the
34payment obligation.

35(e) The department may exempt a person, who has been
36determined to have a payment obligation pursuant to subdivision
37(c), from the obligation if both of the following criteria are
38satisfied:

39(1) One or more of the circumstances specified in subdivision
40(d) exist.

P19   1(2) The department has determined that the payment obligation
2will impose an undue financial hardship on the person.

3(f) If a person requests reconsideration of the payment obligation
4determination, the person shall not be obligated to make any
5payment until the department has completed the reconsideration
6request pursuant to subdivision (d). If the department denies the
7exemption, the person shall be obligated to make payments for
8drugs received while the reconsideration request is pending.

9(g)

end delete

10begin insert(c)end insert A county public health department administering this
11program pursuant to an agreement with the director pursuant to
12subdivision (b) of Section 120955 shall use no more than 5 percent
13of total payments it collects pursuant to this section to cover any
14administrative costs related to eligibility determinations, reporting
15requirements, and the collection of payments.

begin delete

16(h)

end delete

17begin insert(d)end insert A county public health department administering this
18program pursuant to subdivision (b) of Section 120955 shall
19provide all drugs added to the program pursuant to subdivision (a)
20of Section 120955 within 60 days of the action of thebegin delete director,
21subject to the repayment obligations specified in subdivision (d)
22of Section 120965.end delete
begin insert director.end insert

begin delete

23(i)

end delete

24begin insert(e)end insert For purposes of this section, the following terms shall have
25the following meanings:

26(1) “Family size” has the meaning given to that term in Section
2736B(d)(1) of the Internal Revenue Code of 1986, and shall include
28same or opposite sex married couples, registered domestic partners,
29and any tax dependents, as defined by Section 152 of the Internal
30Revenue Code of 1986, of either spouse or registered domestic
31partner.

32(2) “Federal poverty level” refers to the poverty guidelines
33updated periodically in the Federal Register by the United States
34Department of Health and Human Services under the authority of
35Section 9902(2) of Title 42 of the United States Code.

36(3) “Household income” means the sum of the applicant’s or
37recipient’s modified adjusted gross income, plus the modified
38adjusted gross income of the applicant’s or recipient’s spouse or
39registered domestic partner, and the modified adjusted gross
40 incomes of all other individuals for whom the applicant or
P20   1recipient, or the applicant’s or recipient’s spouse or registered
2domestic partner, is allowed a federal income tax deduction for
3the taxable year.

4(4) “Internal Revenue Code of 1986” means Title 26 of the
5United States Code, including all amendments enacted to that code.

6(5) “Modified adjusted gross income” has the meaning given
7to that term in Section 36B(d)(2)(B) of the Internal Revenue Code
8of 1986.

9begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 120965 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
10repealed.end insert

begin delete
11

120965.  

(a)  Effective March 15, 1991, a person determined
12eligible for benefits under this chapter shall be subject to the
13payment obligation specified in subdivision (c) of Section 120960.

14(b)  Persons who are receiving benefits under a HIV drug
15treatment subsidy program administered by the department prior
16to March 15, 1991, shall not be subject to the payment obligation
17specified in subdivision (c) of Section 120960.

18(c)  Notwithstanding subdivision (b), if any person is disenrolled
19from eligibility in a HIV drug treatment subsidy program
20administered by the department for any reason after March 15,
211991, the subsequent enrollment of that person for benefits under
22this chapter shall be in accordance with the payment obligation
23specified in subdivision (c) of Section 120960.

24(d)  Notwithstanding subdivision (b), if a drug is added pursuant
25to subdivision (a) of Section 120955, any person determined
26eligible for benefits under this chapter, regardless of the date of
27enrollment, shall be subject to the payment obligation specified in
28subdivision (c) of Section 120960 for the added drug. The payment
29obligation for any other drug shall be determined in accordance
30with subdivision (b).

end delete
31begin insert

begin insertSEC. 7.end insert  

end insert

begin insertPart 7.5 (commencing with Section 122450) is added
32to Division 105 of the end insert
begin insertHealth and Safety Codeend insertbegin insert, to read:end insert

begin insert

33 

34PART begin insert7.5.end insert  Communicable Disease Testing and
35Prevention

36

 

37

begin insert122450.end insert  

(a) Of the funds appropriated in the 2016 Budget Act
38for this purpose, the State Department of Public Health shall do
39all of the following:

P21   1
(1) Purchase and distribute hepatitis B vaccine and related
2materials to local health jurisdictions and community-based
3organizations to test and vaccinate high-risk adults.

4
(2) Purchase hepatitis C test kits and related materials to
5distribute to local health jurisdictions and community-based testing
6programs.

7
(3) Train nonmedical personnel to perform HCV and HIV testing
8waived under the federal Clinical Laboratory Improvement
9Amendments of 1998 (CLIA) (42 U.S.C. Sec. 263a) in local health
10jurisdictions and community-based settings.

11
(4) Provide technical assistance to local governments and
12community-based organizations to increase the number of syringe
13exchange and disposal programs throughout California and the
14number of jurisdictions in which syringe exchange and disposal
15programs are authorized.

16
(b) The State Department of Public Health may issue grants for
17the materials and activities provided for in subdivision (a).

end insert
18begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 125281 is added to the end insertbegin insertHealth and Safety Codeend insertbegin insert,
19to read:end insert

begin insert
20

begin insert125281.end insert  

From funds appropriated to the department in the
21Budget Act of 2016 for these purposes, the department shall
22allocate funds to the diagnostic and treatment centers for
23Alzheimer’s disease established pursuant to Section 125280 to be
24used for all of the following purposes:

25
(a) To determine the standard of care in early and accurate
26diagnosis drawing on peer-reviewed evidence, best practices,
27Medicare and Medicaid policy and reimbursement, and experience
28working with patients seeking services at a center.

29
(b) To conduct targeted outreach to health professionals through
30medical school instruction, hospital grant rounds, continuing
31education, community education, and free online resources.

32
(c) To provide low-cost, accessible detection and diagnosis
33tools that the center shall make available via open source portals
34of the postsecondary higher educational institution that established
35the center. Furthermore, the department shall post these tools on
36its Internet Web site to serve as a resource for the state.

37
(d) To endorse and disseminate low-cost, accessible detection
38and diagnosis tools for broad use by health professionals
39practicing in a variety of settings.

P22   1
(e) To address unique health disparities that exist within diverse
2populations, with special focus and attention on reaching African
3Americans, Latinos, and women.

4
(f) To evaluate the educational effectiveness and measure the
5impact of these efforts, including pretests and posttests for health
6professionals, metrics, and documented practice change.

end insert
7begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 130301 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
8amended to read:end insert

9

130301.  

The Legislature finds and declares the following:

10(a) The federal Health Insurance Portability and Accountability
11Act (Public Law 104-191), known as HIPAA, was enacted on
12August 21, 1996.

13(b) HIPAA extends health coverage benefits to workers after
14they terminate or change employment by allowing the worker to
15participate in existing group coverage plans, thereby avoiding the
16additional expense associated with obtaining individual coverage
17as well as the potential loss of coverage because of a preexisting
18health condition.

19(c) Administrative simplification is a key feature of HIPAA,
20requiring standard national identifiers for providers, employers,
21and health plans and the development of uniform standards for the
22coding and transmission of claims and health care information.
23Administration simplification is intended to promote the use of
24information technology, thereby reducing costs and increasing
25efficiency in the health care industry.

26(d) HIPAA also containsbegin delete newend delete standards for safeguarding the
27privacy and security of health information. Therefore, the
28development of policies for safeguarding the privacy and security
29of health records is a fundamental and indispensable part of HIPAA
30implementation that must accompany or precede the expansion or
31standardization of technology for recording or transmitting health
32information.

33(e) The federal Department of Health and Human Services has
34published, and continues to publish, rules pertaining to the
35 implementation of HIPAA. Following a 60-day congressional
36concurrence period, health providers and insurers have 24 months
37in which to implement these rules.

38(f) These federal rules directly apply to state and county
39departments that provide health coverage, health care, mental
40health services, and alcohol and drug treatment programs. Other
P23   1state and county departments are subject to these rules to the extent
2they use or exchange information with the departments to which
3the federal rules directly apply.

4(g) In view of the substantial changes that HIPAA will require
5in the practices of both private and public health entities and their
6business associates, the ability of California government to
7continue the delivery of vital health services will depend upon the
8implementationbegin delete ofend deletebegin insert of, and compliance with,end insert HIPAA in a manner
9that is coordinated among state departments as well as our partners
10in county government and the private health sector.

11(h) The implementation of HIPAA shall be accomplished as
12required by federal law and regulations and shall be a priority for
13state departments.

14begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 130303 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
15amended to read:end insert

16

130303.  

The office shall assume statewide leadership,
17coordination, policy formulation, direction, and oversight
18responsibilities for HIPAAbegin delete implementation.end deletebegin insert implementation and
19compliance.end insert
The office shall exercise full authority relative to state
20entities to establish policy, provide direction to state entities,
21monitor progress, and report on implementationbegin delete efforts.end deletebegin insert and
22compliance activities.end insert

23begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 130305 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
24amended to read:end insert

25

130305.  

The office shall be staffed, at a minimum, with the
26following personnel:

27(a) Legal counsel to perform activities that may include, but are
28not limited to, determining the application of federal law pertaining
29to HIPAA.

30(b) Staff with expertise in the rules promulgated by HIPAA.

begin delete

31(c) Staff to oversee the development of training curricula and
32tools and to modify the curricula and tools as required by the state’s
33ongoing HIPAA compliance effort.

end delete
begin delete

34(d) Information technology staff.

end delete
begin delete

35(e)

end delete

36begin insert(end insertbegin insertc)end insert Staff, as necessary, to coordinate and monitor the progress
37made by all state entities in HIPAAbegin delete implementation.end delete
38
begin insert implementation and compliance.end insert

begin delete

39(f) Administrative staff, as necessary.

end delete
P24   1begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 130306 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
2amended to read:end insert

3

130306.  

begin delete(a)end deletebegin deleteend deleteThe office shall perform the following functions:

begin delete

4(1)

end delete

5begin insert(end insertbegin inserta)end insert Standardizing the HIPAA implementation process used in
6all state entities, which includes the following:

begin delete

7(A)

end delete

8begin insert(end insertbegin insert1)end insert Developingbegin delete a master plan andend deletebegin insert anend insert overall state strategy for
9HIPAA implementationbegin insert and complianceend insert that includes timeframes
10within which specified activities will be completed.

begin delete

11(B)

end delete

12begin insert(end insertbegin insert2)end insert Specifying tools, such as protocols for assessment and
13reporting, and any other tools as determined by the director for
14HIPAAbegin delete implementation.end deletebegin insert implementation and compliance.end insert

begin delete

15(C)

end delete

16begin insert(end insertbegin insert3)end insert Developing uniform policies on privacy, security, and other
17matters related to HIPAA that shall be adopted and implemented
18by all state entities. In developing these policies, the office shall
19consult with representatives from the private sector, state
20government, and other public entities affected by HIPAA.

begin delete

21(D)

end delete

22begin insert(end insertbegin insert4)end insert Providing an ongoing evaluation of HIPAA implementation
23begin insert and complianceend insert in California and refining the plans, tools, and
24policies as required to effect implementation.

begin delete

25(E)

end delete

26begin insert(end insertbegin insert5)end insert Developing standards for the office to use in determining
27the extent of HIPAA compliance.

begin delete

28(2)

end delete

29begin insert(end insertbegin insertb)end insert Representing the State of California in HIPAA discussions
30with the federal Department of Health and Human Services and
31at the Workgroup for Electronic Data Interchange and other
32national and regional groups developing standards for HIPAA
33implementation, including those authorized by the federal
34Department of Health and Human Services to receive comments
35related to HIPAA.begin delete In preparing comments for submission to these
36entities, the office shall work in coordination with private and
37public entities to which the comments relate.end delete
The office may review
38and approve all comments related to HIPAA that state entities or
39representatives from the University of California, to the extent
40authorized by its Regents, propose for submission to the federal
P25   1Department of Health and Human Services or any other body or
2organization.

begin delete

3(3)

end delete

4begin insert(end insertbegin insertc)end insert Monitoring the HIPAA implementationbegin insert and complianceend insert
5 activities of state entities and requiring these entities to report on
6theirbegin delete implementationend delete activities at times specified by the director
7using a format prescribed by the director. The office shall seek the
8cooperation of counties in monitoring HIPAA implementationbegin insert and
9complianceend insert
in programs that are administered by county
10government.

begin delete

11(4)

end delete

12begin insert(end insertbegin insertd)end insert Providing state entities with technical assistance as the
13director deems necessary and appropriate to advance the state’s
14implementationbegin insert and complianceend insert of HIPAA as required by the
15schedule adopted by the federal Department of Health and Human
16Services. This assistance shall also include sharing information
17obtained by the office relating to HIPAA.

begin delete

18(5) Providing the Department of Finance with recommendations
19on HIPAA implementation expenditures, including proposals
20submitted by state entities and a recommendation on the amount
21to be appropriated for allocation by the Department of Finance to
22entities implementing HIPAA.

end delete
begin delete

23(6) Conducting a periodic assessment at least once every three
24years to determine whether staff positions established in the office
25and in other state entities to perform HIPAA compliance activities
26continue to be necessary or whether additional staff positions are
27required to complete these activities.

end delete
begin delete

28(7) Reviewing and approving contracts relating to HIPAA to
29which a state entity is a party prior to the contract’s effective date.

end delete
begin delete

30(8)

end delete

31begin insert(end insertbegin inserte)end insert Reviewing and approving all HIPAA legislationbegin insert and
32regulationsend insert
proposed by state entities, other than state control
33agencies, prior to the proposal’s review by any other entity and
34reviewing all analyses and positions, other than those prepared by
35state control agencies, on HIPAA related legislation being
36considered by either Congress or the Legislature.

begin delete

37(9)

end delete

38begin insert(end insertbegin insertf)end insert Ensuring state departments claim federal funding for those
39activities that qualify under federal funding criteria.

begin delete

40(10) Establishing a

end delete

P26   1begin insert(g)end insertbegin insertend insertbegin insertMaintaining an Internetend insert Web site that is accessible to the
2public to provide information in a consistent and accessible format
3concerning state HIPAA implementation activities, timeframes
4for completing those activities, HIPAA implementation
5requirements that have been met, and the promulgation of federal
6regulations pertaining to HIPAA implementation.begin delete The office shall
7update this Web site quarterly.end delete

begin delete

8(b) In performing these functions, the office shall coordinate its
9activities with the State Office of Privacy Protection.

end delete
10begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 130307 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
11repealed.end insert

begin delete
12

130307.  

The director shall establish an advisory committee to
13obtain information on statewide HIPAA implementation activities,
14which shall meet at a minimum of two times per year. It is the
15intent of the Legislature that the committee’s membership include
16representatives from county government, from consumers, and
17from a broad range of provider groups, such as physicians and
18surgeons, clinics, hospitals, pharmaceutical companies, health care
19service plans, disability insurers, long-term care facilities, facilities
20for the developmentally disabled, and mental health providers.
21The director shall invite key stakeholders from the federal
22government, the Judicial Council, health care advocates, nonprofit
23health care organizations, public health systems, and the private
24sector to provide information to the committee.

end delete
25begin insert

begin insertSEC. 14.end insert  

end insert

begin insertSection 130309 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
26amended to read:end insert

27

130309.  

(a) All state entities subject to HIPAA shall complete
28an assessment, in a form specified by thebegin delete office, prior to January
291, 2002,end delete
begin insert officeend insert to determine the impact of HIPAA on their
30operations.begin delete The office shall report the statewide results of the
31assessment to the appropriate policy and fiscal committees of the
32Legislature on or before May 15, 2002.end delete

33(b)  begin deleteOther end delete begin insertAll end insertstate entities shall cooperate with the office to
34determine whether they are subject to HIPAA, including, but not
35limited to, providing a completed assessment as prescribed by the
36office.

37begin insert

begin insertSEC. 15.end insert  

end insert

begin insertSection 130310 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
38amended to read:end insert

P27   1

130310.  

All state entities shall cooperate with the efforts of
2the office to monitor HIPAA implementationbegin insert and complianceend insert
3 activities and to obtain information on those activities.

4begin insert

begin insertSEC. 16.end insert  

end insert

begin insertSection 130312 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
5repealed.end insert

begin delete
6

130312.  

(a) The Department of Finance shall provide a
7complete accounting of HIPAA expenditures made by all state
8entities.

9(b) The Department of Finance, in consultation with the office,
10shall develop and annually publish prior to August 1, guidelines
11for state entities to obtain additional HIPAA funding. All funding
12requests from state entities for HIPAA implementation, including,
13but not limited to, requests for appropriations through the Budget
14Act or other legislation and requests for allocation of lump-sum
15funds from the Department of Finance, shall be reviewed and
16approved by the office prior to being submitted to the Department
17of Finance. Funding requests pertaining to information technology
18activities shall also be reviewed and approved by the Department
19of Information Technology.

20(c) The Department of Finance shall notify the office and the
21Chairperson of the Senate Committee on Budget and Fiscal Review
22and the Chairperson of the Assembly Budget Committee of each
23allocation it approves within 10 working days of the approval. The
24Department of Finance shall also report to the Legislature quarterly
25on HIPAA allocations, redirections, and expenditures, categorized
26by state entity and by project.

end delete
27begin insert

begin insertSEC. 17.end insert  

end insert

begin insertSection 130313 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
28amended to read:end insert

29

130313.  

To the extent that funds are appropriated in the annual
30Budget Act, the office shall perform the following functions in
31order to comply with HIPAA requirements:

32(a) begin deleteThe establishment and ongoing end deletebegin insertOngoing end insertsupport of
33departmental HIPAA project management offices.

34(b) The development, revision, and issuance of HIPAA
35compliance policies.

36(c) Modifications of programs in accordance with any revised
37policies.

38(d) Staff training on HIPAA compliance policies and programs.

39(e) Coordination and communication with other affected entities.

begin delete

P28   1(f) Modifications to, or replacement of, information technology
2systems.

end delete
begin insert

3
(f) Evaluate, monitor, and report on HIPAA implementation
4and compliance activities of state entities affected by HIPAA.

end insert

5(g) Consultation with appropriate stakeholders.

6begin insert

begin insertSEC. 18.end insert  

end insert

begin insertSection 138.7 of the end insertbegin insertLabor Codeend insertbegin insert, as amended by
7Section 80 of Chapter 46 of the Statutes of 2012, is amended to
8read:end insert

9

138.7.  

(a) Except as expressly permitted in subdivision (b), a
10person or public or private entity not a party to a claim for workers’
11compensation benefitsbegin delete mayend deletebegin insert shallend insert not obtain individually
12identifiable information obtained or maintained by the division on
13that claim. For purposes of this section, “individually identifiable
14information” means any data concerning an injury or claim that is
15linked to a uniquely identifiable employee, employer, claims
16administrator, or any other person or entity.

17(b) (1) (A) The administrative director, or a statistical agent
18designated by the administrative director, may use individually
19identifiable information for purposes of creating and maintaining
20the workers’ compensation information system as specified in
21Section 138.6.

22(B) The administrative director may publish the identity of
23claims administrators in the annual report disclosing the compliance
24rates of claims administrators pursuant to subdivision (d) of Section
25138.6.

26(2) (A) The State Department of Public Health may use
27individually identifiable information for purposes of establishing
28and maintaining a program on occupational health and occupational
29disease prevention as specified in Section 105175 of the Health
30and Safety Code.

31(B) (i) The State Department of Health Care Services may use
32individually identifiable information for purposes of seeking
33recovery of Medi-Cal costs incurred by the state for treatment
34provided to injured workers that should have been incurred by
35employers and insurance carriers pursuant to Article 3.5
36(commencing with Section 14124.70) of Chapter 7 of Part 3 of
37Division 9 of the Welfare and Institutions Code.

38(ii) The Department of Industrial Relations shall furnish
39individually identifiable information to the State Department of
40Health Care Services, and the State Department of Health Care
P29   1Services may furnish the information to its designated agent,
2provided that the individually identifiable information shall not
3be disclosed for use other than the purposes described in clause
4(i). The administrative director may adopt regulations solely for
5the purpose of governing access by the State Department of Health
6Care Services or its designated agents to the individually
7identifiable information as defined in subdivision (a).

8(3) (A) Individually identifiable information may be used by
9the Division of Workers’ Compensation and the Division of
10Occupational Safety and Health as necessary to carry out their
11duties. The administrative director shall adopt regulations
12governing the access to the information described in this
13subdivision by these divisions. Any regulations adopted pursuant
14to this subdivision shall set forth the specific uses for which this
15information may be obtained.

16(B) Individually identifiable information maintained in the
17workers’ compensation information system and the Division of
18Workers’ Compensation may be used by researchers employed by
19or under contract to the Commission on Health and Safety and
20Workers’ Compensation as necessary to carry out the commission’s
21research. The administrative director shall adopt regulations
22governing the access to the information described in this
23subdivision by commission researchers. These regulations shall
24set forth the specific uses for which this information may be
25obtained and include provisions guaranteeing the confidentiality
26of individually identifiable information. Individually identifiable
27information obtained under this subdivision shall not be disclosed
28to commission members. No individually identifiable information
29obtained by researchers under contract to the commission pursuant
30to this subparagraph may be disclosed to any other person or entity,
31public or private, for a use other than that research project for
32which the information was obtained. Within a reasonable period
33of time after the research for which the information was obtained
34has been completed, the data collected shall be modified in a
35manner so that the subjects cannot be identified, directly or through
36identifiers linked to the subjects.

37(4) The administrative director shall adopt regulations allowing
38reasonable access to individually identifiable information by other
39persons or public or private entities for the purpose of bona fide
40statistical research. This research shall not divulge individually
P30   1identifiable information concerning a particular employee,
2employer, claims administrator, or any other person or entity. The
3regulations adopted pursuant to this paragraph shall include
4provisions guaranteeing the confidentiality of individually
5identifiable information. Within a reasonable period of time after
6the research for which the information was obtained has been
7completed, the data collected shall be modified in a manner so that
8the subjects cannot be identified, directly or through identifiers
9linked to the subjects.

10(5) (A) This section shall not operate to exempt from disclosure
11any information that is considered to be a public record pursuant
12to the California Public Records Act (Chapter 3.5 (commencing
13with Section 6250) of Division 7 of Title 1 of the Government
14Code) contained in an individual’s file once an application for
15adjudication has been filed pursuant to Section 5501.5.

16(B) begin deleteHowever, individually end deletebegin insertIndividually end insertidentifiable information
17shall not be provided to any person or public or private entity who
18is not a party to the claim unless that person identifies himself or
19herself or that public or private entity identifies itself and states
20the reason for making the request. The administrative director may
21require the person or public or private entity making the request
22to produce information to verify that the name and address of the
23requester is valid and correct. If the purpose of the request is related
24to preemployment screening, the administrative director shall
25notify the person about whom the information is requested that
26the information was provided and shall include the following in
2712-point type:


29“IT MAY BE A VIOLATION OF FEDERAL AND STATE
30LAW TO DISCRIMINATE AGAINST A JOB APPLICANT
31BECAUSE THE APPLICANT HAS FILED A CLAIM FOR
32WORKERS’ COMPENSATION BENEFITS.”


34(C) Any residence address is confidential and shall not be
35disclosed to any person or public or private entity except to a party
36to the claim, a law enforcement agency, an office of a district
37attorney, any person for a journalistic purpose, or other
38governmental agency.

P31   1(D) begin deleteNothing in this end deletebegin insertThis end insertparagraphbegin delete shall be construed toend deletebegin insert does
2notend insert
prohibit the use of individually identifiable information for
3purposes of identifying bona fide lien claimants.

4(c) Except as provided in subdivision (b), individually
5identifiable information obtained by the division is privileged and
6is not subject to subpoena in a civil proceeding unless, after
7reasonable notice to the division and a hearing, a court determines
8that the public interest and the intent of this section will not be
9jeopardized by disclosure of the information. This section shall
10not operate to restrict access to information by any law enforcement
11agency or district attorney’s office or to limit admissibility of that
12information in a criminal proceeding.

13(d) Itbegin delete shall beend deletebegin insert isend insert unlawful for any person who has received
14individually identifiable information from the division pursuant
15to this section to provide that information to any person who is
16not entitled to it under this section.

begin delete

17(e) This section shall remain in effect only until January 1, 2017,
18and as of that date is repealed, unless a later enacted statute, that
19is enacted before January 1, 2017, deletes or extends that date.

end delete
20begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 138.7 of the end insertbegin insertLabor Codeend insertbegin insert, as amended by
21Section 81 of Chapter 46 of the Statutes of 2012, is repealed.end insert

begin delete
22

138.7.  

(a) Except as expressly permitted in subdivision (b), a
23person or public or private entity not a party to a claim for workers’
24compensation benefits may not obtain individually identifiable
25information obtained or maintained by the division on that claim.
26For purposes of this section, “individually identifiable information”
27means any data concerning an injury or claim that is linked to a
28uniquely identifiable employee, employer, claims administrator,
29or any other person or entity.

30(b) (1) (A) The administrative director, or a statistical agent
31designated by the administrative director, may use individually
32identifiable information for purposes of creating and maintaining
33the workers’ compensation information system as specified in
34Section 138.6.

35(B) The administrative director may publish the identity of
36claims administrators in the annual report disclosing the compliance
37rates of claims administrators pursuant to subdivision (d) of Section
38138.6.

39(2) The State Department of Public Health may use individually
40identifiable information for purposes of establishing and
P32   1maintaining a program on occupational health and occupational
2disease prevention as specified in Section 105175 of the Health
3and Safety Code.

4(3) (A) Individually identifiable information may be used by
5the Division of Workers’ Compensation and the Division of
6Occupational Safety and Health as necessary to carry out their
7duties. The administrative director shall adopt regulations
8governing the access to the information described in this
9subdivision by these divisions. Any regulations adopted pursuant
10to this subdivision shall set forth the specific uses for which this
11information may be obtained.

12(B) Individually identifiable information maintained in the
13workers’ compensation information system and the Division of
14Workers’ Compensation may be used by researchers employed by
15or under contract to the Commission on Health and Safety and
16Workers’ Compensation as necessary to carry out the commission’s
17research. The administrative director shall adopt regulations
18governing the access to the information described in this
19subdivision by commission researchers. These regulations shall
20set forth the specific uses for which this information may be
21obtained and include provisions guaranteeing the confidentiality
22of individually identifiable information. Individually identifiable
23information obtained under this subdivision shall not be disclosed
24to commission members. No individually identifiable information
25obtained by researchers under contract to the commission pursuant
26to this subparagraph may be disclosed to any other person or entity,
27public or private, for a use other than that research project for
28which the information was obtained. Within a reasonable period
29of time after the research for which the information was obtained
30has been completed, the data collected shall be modified in a
31manner so that the subjects cannot be identified, directly or through
32identifiers linked to the subjects.

33(4) The administrative director shall adopt regulations allowing
34reasonable access to individually identifiable information by other
35persons or public or private entities for the purpose of bona fide
36statistical research. This research shall not divulge individually
37identifiable information concerning a particular employee,
38employer, claims administrator, or any other person or entity. The
39 regulations adopted pursuant to this paragraph shall include
40provisions guaranteeing the confidentiality of individually
P33   1identifiable information. Within a reasonable period of time after
2the research for which the information was obtained has been
3completed, the data collected shall be modified in a manner so that
4the subjects cannot be identified, directly or through identifiers
5linked to the subjects.

6(5) (A) This section shall not operate to exempt from disclosure
7any information that is considered to be a public record pursuant
8to the California Public Records Act (Chapter 3.5 (commencing
9with Section 6250) of Division 7 of Title 1 of the Government
10Code) contained in an individual’s file once an application for
11adjudication has been filed pursuant to Section 5501.5.

12(B) However, individually identifiable information shall not be
13provided to any person or public or private entity who is not a
14party to the claim unless that person identifies himself or herself
15or that public or private entity identifies itself and states the reason
16for making the request. The administrative director may require
17the person or public or private entity making the request to produce
18information to verify that the name and address of the requester
19is valid and correct. If the purpose of the request is related to
20preemployment screening, the administrative director shall notify
21the person about whom the information is requested that the
22information was provided and shall include the following in
2312-point type:


25“IT MAY BE A VIOLATION OF FEDERAL AND STATE
26LAW TO DISCRIMINATE AGAINST A JOB APPLICANT
27BECAUSE THE APPLICANT HAS FILED A CLAIM FOR
28WORKERS’ COMPENSATION BENEFITS.”
29


30(C) Any residence address is confidential and shall not be
31disclosed to any person or public or private entity except to a party
32to the claim, a law enforcement agency, an office of a district
33attorney, any person for a journalistic purpose, or other
34governmental agency.

35(D) Nothing in this paragraph shall be construed to prohibit the
36use of individually identifiable information for purposes of
37identifying bona fide lien claimants.

38(c) Except as provided in subdivision (b), individually
39identifiable information obtained by the division is privileged and
40is not subject to subpoena in a civil proceeding unless, after
P34   1reasonable notice to the division and a hearing, a court determines
2that the public interest and the intent of this section will not be
3jeopardized by disclosure of the information. This section shall
4not operate to restrict access to information by any law enforcement
5agency or district attorney’s office or to limit admissibility of that
6information in a criminal proceeding.

7(d) It shall be unlawful for any person who has received
8individually identifiable information from the division pursuant
9to this section to provide that information to any person who is
10not entitled to it under this section.

11(e) This section shall become operative on January 1, 2017.

end delete
12begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 5848.5 of the end insertbegin insertWelfare and Institutions Codeend insert
13
begin insert is amended to read:end insert

14

5848.5.  

(a) The Legislature finds and declares all of the
15following:

16(1) California has realigned public community mental health
17services to counties and it is imperative that sufficient
18community-based resources be available to meet the mental health
19needs of eligible individuals.

20(2) Increasing access to effective outpatient and crisis
21stabilization services provides an opportunity to reduce costs
22associated with expensive inpatient and emergency room care and
23to better meet the needs of individuals with mental health disorders
24in the least restrictive manner possible.

25(3) Almost one-fifth of people with mental health disorders visit
26a hospital emergency room at least once per year. If an adequate
27array of crisis services is not available, it leaves an individual with
28little choice but to access an emergency room for assistance and,
29potentially, an unnecessary inpatient hospitalization.

30(4) Recent reports have called attention to a continuing problem
31of inappropriate and unnecessary utilization of hospital emergency
32rooms in California due to limited community-based services for
33individuals in psychological distress and acute psychiatric crisis.
34Hospitals report that 70 percent of people taken to emergency
35rooms for psychiatric evaluation can be stabilized and transferred
36to a less intensive level of crisis care. Law enforcement personnel
37report that their personnel need to stay with people in the
38emergency room waiting area until a placement is found, and that
39less intensive levels of care tend not to be available.

P35   1(5) Comprehensive public and private partnerships at both local
2and regional levels, including across physical health services,
3mental health, substance use disorder, law enforcement, social
4services, and related supports, are necessary to develop and
5maintain high quality, patient-centered, and cost-effective care for
6individuals with mental health disorders that facilitates their
7recovery and leads towards wellness.

8(6) The recovery of individuals with mental health disorders is
9important for all levels of government, business, and the local
10community.

11(b) This section shall be known, and may be cited, as the
12Investment in Mental Health Wellness Act of 2013. The objectives
13of this section are to do all of the following:

14(1) Expand access to early intervention and treatment services
15to improve the client experience, achieve recovery and wellness,
16and reduce costs.

17(2) Expand the continuum of services to address crisis
18intervention, crisis stabilization, and crisis residential treatment
19needs that are wellness, resiliency, and recovery oriented.

20(3) Add at least 25 mobile crisis support teams and at least 2,000
21crisis stabilization and crisis residential treatment beds to bolster
22capacity at the local level to improve access to mental health crisis
23services and address unmet mental health care needs.

24(4) Add at least 600 triage personnel to provide intensive case
25management and linkage to services for individuals with mental
26health care disorders at various points of access, such as at
27designated community-based service points, homeless shelters,
28and clinics.

29(5) Reduce unnecessary hospitalizations and inpatient days by
30appropriately utilizing community-based services and improving
31access to timely assistance.

32(6) Reduce recidivism and mitigate unnecessary expenditures
33of local law enforcement.

34(7) Provide local communities with increased financial resources
35to leverage additional public and private funding sources to achieve
36improved networks of care for individuals with mental health
37disorders.

begin insert

38
(8) Provide a complete continuum of crisis services for children
39and youth 21 years of age and under regardless of where they live
40in the state. The funds included in the 2016 Budget Act for the
P36   1purpose of developing the continuum of mental health crisis
2services for children and youth 21 years of age and under shall
3be for the following objectives:

end insert
begin insert

4
(A) Provide a continuum of crisis services for children and
5youth 21 years of age and under regardless of where they live in
6the state.

end insert
begin insert

7
(B) Provide for early intervention and treatment services to
8improve the client experience, achieve recovery and wellness, and
9reduce costs.

end insert
begin insert

10
(C) Expand the continuum of community-based services to
11address crisis intervention, crisis stabilization, and crisis
12residential treatment needs that are wellness-, resiliency-, and
13recovery-oriented.

end insert
begin insert

14
(D) Add at least 200 mobile crisis support teams.

end insert
begin insert

15
(E) Add at least 120 crisis stabilization services and beds and
16crisis residential treatment beds to increase capacity at the local
17level to improve access to mental health crisis services and address
18unmet mental health care needs.

end insert
begin insert

19
(F) Add triage personnel to provide intensive case management
20and linkage to services for individuals with mental health care
21disorders at various points of access, such as at designated
22community-based service points, homeless shelters, schools, and
23clinics.

end insert
begin insert

24
(G) Expand family respite care to help families and sustain
25caregiver health and well-being.

end insert
begin insert

26
(H) Expand family supportive training and related services
27designed to help families participate in the planning process,
28access services, and navigate programs.

end insert
begin insert

29
(I) Reduce unnecessary hospitalizations and inpatient days by
30appropriately utilizing community-based services.

end insert
begin insert

31
(J) Reduce recidivism and mitigate unnecessary expenditures
32of local law enforcement.

end insert
begin insert

33
(K) Provide local communities with increased financial
34resources to leverage additional public and private funding sources
35to achieve improved networks of care for children and youth 21
36years of age and under with mental health disorders.

end insert

37(c) Through appropriations provided in the annual Budget Act
38for this purpose, it is the intent of the Legislature to authorize the
39California Health Facilities Financing Authority, hereafter referred
40to as the authority, and the Mental Health Services Oversight and
P37   1Accountability Commission, hereafter referred to as the
2commission, to administer competitive selection processes as
3provided in this section for capital capacity and program expansion
4to increase capacity for mobile crisis support, crisis intervention,
5crisis stabilization services, crisis residential treatment, and
6specified personnel resources.

7(d) Funds appropriated by the Legislature to the authority for
8purposes of this section shall be made available to selected
9counties, or counties acting jointly. The authority may, at its
10discretion, also give consideration to private nonprofit corporations
11and public agencies in an area or region of the state if a county, or
12counties acting jointly, affirmatively supports this designation and
13collaboration in lieu of a county government directly receiving
14grant funds.

15(1) Grant awards made by the authority shall be used to expand
16local resources for the development, capital, equipment acquisition,
17and applicable program startup or expansion costs to increase
18capacity for client assistance and services in the following areas:

19(A) Crisis intervention, as authorized by Sections 14021.4,
2014680, and 14684.

21(B) Crisis stabilization, as authorized by Sections 14021.4,
2214680, and 14684.

23(C) Crisis residential treatment, as authorized by Sections
2414021.4, 14680, and 14684.

25(D) Rehabilitative mental health services, as authorized by
26Sections 14021.4, 14680, and 14684.

27(E) Mobile crisis support teams, including personnel and
28equipment, such as the purchase of vehicles.

29(2) The authority shall develop selection criteria to expand local
30 resources, including those described in paragraph (1), and processes
31for awarding grants after consulting with representatives and
32interested stakeholders from the mental health community,
33including, but not limited to, the County Behavioral Health
34Directors Association of California, service providers, consumer
35organizations, and other appropriate interests, such as health care
36providers and law enforcement, as determined by the authority.
37The authority shall ensure that grants result in cost-effective
38expansion of the number of community-based crisis resources in
39regions and communities selected for funding. The authority shall
40also take into account at least the following criteria and factors
P38   1when selecting recipients of grants and determining the amount
2of grant awards:

3(A) Description of need, including, at a minimum, a
4comprehensive description of the project, community need,
5population to be served, linkage with other public systems of health
6and mental health care, linkage with local law enforcement, social
7services, and related assistance, as applicable, and a description
8of the request for funding.

9(B) Ability to serve the target population, which includes
10individuals eligible for Medi-Cal and individuals eligible for county
11health and mental health services.

12(C) Geographic areas or regions of the state to be eligible for
13grant awards, which may include rural, suburban, and urban areas,
14and may include use of the five regional designations utilized by
15the County Behavioral Health Directors Association of California.

16(D) Level of community engagement and commitment to project
17completion.

18(E) Financial support that, in addition to a grant that may be
19awarded by the authority, will be sufficient to complete and operate
20the project for which the grant from the authority is awarded.

21(F) Ability to provide additional funding support to the project,
22including public or private funding, federal tax credits and grants,
23foundation support, and other collaborative efforts.

24(G) Memorandum of understanding among project partners, if
25applicable.

26(H) Information regarding the legal status of the collaborating
27partners, if applicable.

28(I) Ability to measure key outcomes, including improved access
29to services, health and mental health outcomes, and cost benefit
30of the project.

31(3) The authority shall determine maximum grants awards,
32which shall take into consideration the number of projects awarded
33to the grantee, as described in paragraph (1), and shall reflect
34reasonable costs for the project and geographic region. The
35authority may allocate a grant in increments contingent upon the
36phases of a project.

37(4) Funds awarded by the authority pursuant to this section may
38be used to supplement, but not to supplant, existing financial and
39resource commitments of the grantee or any other member of a
40collaborative effort that has been awarded a grant.

P39   1(5) All projects that are awarded grants by the authority shall
2be completed within a reasonable period of time, to be determined
3by the authority. Funds shall not be released by the authority until
4the applicant demonstrates project readiness to the authority’s
5satisfaction. If the authority determines that a grant recipient has
6failed to complete the project under the terms specified in awarding
7the grant, the authority may require remedies, including the return
8of all or a portion of the grant.

9(6) A grantee that receives a grant from the authority under this
10section shall commit to using that capital capacity and program
11expansion project, such as the mobile crisis team, crisis
12stabilization unit, or crisis residential treatment program, for the
13duration of the expected life of the project.

14(7) The authority may consult with a technical assistance entity,
15as described in paragraph (5) of subdivision (a) of Section 4061,
16for purposes of implementing this section.

17(8) The authority may adopt emergency regulations relating to
18the grants for the capital capacity and program expansion projects
19described in this section, including emergency regulations that
20define eligible costs and determine minimum and maximum grant
21 amounts.

22(9) The authority shall provide reports to the fiscal and policy
23committees of the Legislature on or before May 1, 2014, and on
24or before May 1, 2015, on the progress of implementation, that
25include, but are not limited to, the following:

26(A) A description of each project awarded funding.

27(B) The amount of each grant issued.

28(C) A description of other sources of funding for each project.

29(D) The total amount of grants issued.

30(E) A description of project operation and implementation,
31including who is being served.

32(10) A recipient of a grant provided pursuant to paragraph (1)
33shall adhere to all applicable laws relating to scope of practice,
34licensure, certification, staffing, and building codes.

begin insert

35
(e) Of the funds specified in paragraph (8) of subdivision (b),
36it is the intent of the Legislature to authorize the authority and the
37commission to administer competitive selection processes as
38provided in this section for capital capacity and program expansion
39to increase capacity for mobile crisis support, crisis intervention,
40crisis stabilization services, crisis residential treatment, family
P40   1respite care, family supportive training and related services, and
2triage personnel resources for children and youth 21 years of age
3and under.

end insert
begin insert

4
(f) Funds appropriated by the Legislature to the authority to
5address crisis services for children and youth 21 years of age and
6under for the purposes of this section shall be made available to
7selected counties or counties acting jointly. The authority may, at
8its discretion, also give consideration to private nonprofit
9corporations and public agencies in an area or region of the state
10if a county, or counties acting jointly, affirmatively support this
11designation and collaboration in lieu of a county government
12directly receiving grant funds.

end insert
begin insert

13
(1) Grant awards made by the authority shall be used to expand
14local resources for the development, capital, equipment acquisition,
15and applicable program startup or expansion costs to increase
16capacity for client assistance and crisis services for children and
17youth 21 years of age and under in the following areas:

end insert
begin insert

18
(A) Crisis intervention, as authorized by Sections 14021.4,
1914680, and 14684.

end insert
begin insert

20
(B) Crisis stabilization, as authorized by Sections 14021.4,
2114680, and 14684.

end insert
begin insert

22
(C) Crisis residential treatment, as authorized by Sections
2314021.4, 14680, and 14684.

end insert
begin insert

24
(D) Mobile crisis support teams, including the purchase of
25equipment and vehicles.

end insert
begin insert

26
(E) Family respite care.

end insert
begin insert

27
(2) The authority shall develop selection criteria to expand local
28resources, including those described in paragraph (1), and
29processes for awarding grants after consulting with representatives
30and interested stakeholders from the mental health community,
31including, but not limited to, county mental health directors, service
32providers, consumer organizations, and other appropriate interests,
33such as health care providers and law enforcement, as determined
34by the authority. The authority shall ensure that grants result in
35cost-effective expansion of the number of community-based crisis
36resources in regions and communities selected for funding. The
37authority shall also take into account at least the following criteria
38and factors when selecting recipients of grants and determining
39the amount of grant awards:

end insert
begin insert

P41   1
(A) Description of need, including, at a minimum, a
2comprehensive description of the project, community need,
3population to be served, linkage with other public systems of health
4and mental health care, linkage with local law enforcement, social
5services, and related assistance, as applicable, and a description
6of the request for funding.

end insert
begin insert

7
(B) Ability to serve the target population, which includes
8individuals eligible for Medi-Cal and individuals eligible for county
9health and mental health services.

end insert
begin insert

10
(C) Geographic areas or regions of the state to be eligible for
11grant awards, which may include rural, suburban, and urban
12areas, and may include use of the five regional designations utilized
13by the California Behavioral Health Directors Association.

end insert
begin insert

14
(D) Level of community engagement and commitment to project
15completion.

end insert
begin insert

16
(E) Financial support that, in addition to a grant that may be
17awarded by the authority, will be sufficient to complete and operate
18the project for which the grant from the authority is awarded.

end insert
begin insert

19
(F) Ability to provide additional funding support to the project,
20including public or private funding, federal tax credits and grants,
21foundation support, and other collaborative efforts.

end insert
begin insert

22
(G) Memorandum of understanding among project partners, if
23applicable.

end insert
begin insert

24
(H) Information regarding the legal status of the collaborating
25partners, if applicable.

end insert
begin insert

26
(I) Ability to measure key outcomes, including utilization of
27services, health and mental health outcomes, and cost benefit of
28the project.

end insert
begin insert

29
(3) The authority shall determine maximum grant awards, which
30shall take into consideration the number of projects awarded to
31the grantee, as described in paragraph (1), and shall reflect
32reasonable costs for the project, geographic region, and target
33ages. The authority may allocate a grant in increments contingent
34upon the phases of a project.

end insert
begin insert

35
(4) Funds awarded by the authority pursuant to this section
36may be used to supplement, but not to supplant, existing financial
37and resource commitments of the grantee or any other member of
38a collaborative effort that has been awarded a grant.

end insert
begin insert

39
(5) All projects that are awarded grants by the authority shall
40be completed within a reasonable period of time, to be determined
P42   1by the authority. Funds shall not be released by the authority until
2the applicant demonstrates project readiness to the authority’s
3satisfaction. If the authority determines that a grant recipient has
4failed to complete the project under the terms specified in awarding
5the grant, the authority may require remedies, including the return
6of all, or a portion, of the grant.

end insert
begin insert

7
(6) A grantee that receives a grant from the authority under this
8section shall commit to using that capital capacity and program
9expansion project, such as the mobile crisis team, crisis
10stabilization unit, family respite care, or crisis residential treatment
11program, for the duration of the expected life of the project.

end insert
begin insert

12
(7) The authority may consult with a technical assistance entity,
13as described in paragraph (5) of subdivision (a) of Section 4061,
14for the purposes of implementing this section.

end insert
begin insert

15
(8) The authority may adopt emergency regulations relating to
16the grants for the capital capacity and program expansion projects
17described in this section, including emergency regulations that
18define eligible costs and determine minimum and maximum grant
19amounts.

end insert
begin insert

20
(9) The authority shall provide reports to the fiscal and policy
21committees of the Legislature on or before January 10, 2018, and
22annually thereafter, on the progress of implementation, that
23include, but are not limited to, the following:

end insert
begin insert

24
(A) A description of each project awarded funding.

end insert
begin insert

25
(B) The amount of each grant issued.

end insert
begin insert

26
(C) A description of other sources of funding for each project.

end insert
begin insert

27
(D) The total amount of grants issued.

end insert
begin insert

28
(E) A description of project operation and implementation,
29including who is being served.

end insert
begin insert

30
(10) A recipient of a grant provided pursuant to paragraph (1)
31shall adhere to all applicable laws relating to scope of practice,
32licensure, certification, staffing, and building codes.

end insert
begin delete

33(e)

end delete

34begin insert(g)end insert Funds appropriated by the Legislature to the commission
35for purposes of this section shall be allocated for triage personnel
36to provide intensive case management and linkage to services for
37individuals with mental health disorders at various points of access.
38These funds shall be made available to selected counties, counties
39acting jointly, or city mental health departments, as determined
40by the commission through a selection process. It is the intent of
P43   1the Legislature for these funds to be allocated in an efficient manner
2to encourage early intervention and receipt of needed services for
3individuals with mental health disorders, and to assist in navigating
4the local service sector to improve efficiencies and the delivery of
5services.

6(1) Triage personnel may provide targeted case management
7services face to face, by telephone, or by telehealth with the
8individual in need of assistance or his or her significant support
9person, and may be provided anywhere in the community. These
10service activities may include, but are not limited to, the following:

11(A) Communication, coordination, and referral.

12(B) Monitoring service delivery to ensure the individual accesses
13and receives services.

14(C) Monitoring the individual’s progress.

15(D) Providing placement service assistance and service plan
16development.

17(2) The commission shall take into account at least the following
18criteria and factors when selecting recipients and determining the
19amount of grant awards for triage personnel as follows:

20(A) Description of need, including potential gaps in local service
21connections.

22(B) Description of funding request, including personnel and use
23of peer support.

24(C) Description of how triage personnel will be used to facilitate
25linkage and access to services, including objectives and anticipated
26outcomes.

27(D) Ability to obtain federal Medicaid reimbursement, when
28applicable.

29(E) Ability to administer an effective service program and the
30degree to which local agencies and service providers will support
31and collaborate with the triage personnel effort.

32(F) Geographic areas or regions of the state to be eligible for
33grant awards, which shall include rural, suburban, and urban areas,
34and may include use of the five regional designations utilized by
35the County Behavioral Health Directors Association of California.

36(3) The commission shall determine maximum grant awards,
37and shall take into consideration the level of need, population to
38be served, and related criteria, as described in paragraph (2), and
39shall reflect reasonable costs.

P44   1(4) Funds awarded by the commission for purposes of this
2section may be used to supplement, but not supplant, existing
3financial and resource commitments of the county, counties acting
4jointly, or city mental health department that received the grant.

5(5) Notwithstanding any other law, a county, counties acting
6jointly, or city mental health department that receives an award of
7funds for the purpose of supporting triage personnel pursuant to
8this subdivision is not required to provide a matching contribution
9of local funds.

10(6) Notwithstanding any other law, the commission, without
11taking any further regulatory action, may implement, interpret, or
12make specific this section by means of informational letters,
13bulletins, or similar instructions.

14(7) The commission shall provide a status report to the fiscal
15and policy committees of the Legislature on the progress of
16implementation no later than March 1, 2014.

begin insert

17
(h) Funds appropriated by the Legislature to the commission
18pursuant to paragraph (8) of subdivision (b) for the purposes of
19addressing children’s crisis services shall be allocated to support
20triage personnel and family supportive training and related
21services. These funds shall be made available to selected counties,
22counties acting jointly, or city mental health departments, as
23determined by the commission through a selection process. The
24commission may, at its discretion, also give consideration to
25private nonprofit corporations and public agencies in an area or
26region of the state if a county, or counties acting jointly,
27affirmatively supports this designation and collaboration in lieu
28of a county government directly receiving grant funds.

end insert
begin insert

29
(1) These funds may provide for a range of crisis-related
30services for a child in need of assistance, or his or her parent,
31guardian, or caregiver. These service activities may include, but
32are not limited to, the following:

end insert
begin insert

33
(A) Intensive coordination of care and services.

end insert
begin insert

34
(B) Communication, coordination, and referral.

end insert
begin insert

35
(C) Monitoring service delivery to the child or youth.

end insert
begin insert

36
(D) Monitoring the child’s progress.

end insert
begin insert

37
(E) Providing placement service assistance and service plan
38development.

end insert
begin insert

39
(F) Crisis or safety planning.

end insert
begin insert

P45   1
(2) The commission shall take into account at least the following
2criteria and factors when selecting recipients and determining the
3amount of grant awards for these funds, as follows:

end insert
begin insert

4
(A) Description of need, including potential gaps in local service
5connections.

end insert
begin insert

6
(B) Description of funding request, including personnel.

end insert
begin insert

7
(C) Description of how personnel and other services will be
8used to facilitate linkage and access to services, including
9objectives and anticipated outcomes.

end insert
begin insert

10
(D) Ability to obtain federal Medicaid reimbursement, when
11applicable.

end insert
begin insert

12
(E) Ability to provide a matching contribution of local funds.

end insert
begin insert

13
(F) Ability to administer an effective service program and the
14degree to which local agencies and service providers will support
15and collaborate with the triage personnel effort.

end insert
begin insert

16
(G) Geographic areas or regions of the state to be eligible for
17grant awards, which shall include rural, suburban, and urban
18areas, and may include use of the five regional designations utilized
19by the County Behavioral Health Directors Association of
20California.

end insert
begin insert

21
(3) The commission shall determine maximum grant awards,
22and shall take into consideration the level of need, population to
23be served, and related criteria, as described in paragraph (2), and
24shall reflect reasonable costs.

end insert
begin insert

25
(4) Funds awarded by the commission for purposes of this
26section may be used to supplement, but not supplant, existing
27financial and resource commitments of the county, counties acting
28jointly, or a city mental health department that received the grant.

end insert
begin insert

29
(5) Notwithstanding any other law, a county, counties acting
30jointly, or a city mental health department that receives an award
31of funds for the purpose of this section is not required to provide
32a matching contribution of local funds.

end insert
begin insert

33
(6) Notwithstanding any other law, the commission, without
34taking any further regulatory action, may implement, interpret, or
35make specific this section by means of informational letters,
36bulletins, or similar instructions.

end insert
begin insert

37
(7) The commission may waive requirements in this section for
38counties with a population of 100,000 or less, if the commission
39determines it is in the best interest of the state and meets the intent
40of the law.

end insert
begin insert

P46   1
(8) The commission shall provide a status report to the fiscal
2and policy committees of the Legislature on the progress of
3implementation no later than January 10, 2018, and annually
4thereafter.

end insert
5begin insert

begin insertSEC. 21.end insert  

end insert

begin insertSection 10752 of the end insertbegin insertWelfare and Institutions Codeend insert
6
begin insert is amended to read:end insert

7

10752.  

The department shall, by March 1, 2017, in coordination
8with the Department of Finance,begin delete develop a funding plan that
9ensures adequate reimbursement to emergency medical air
10transportation providers followingend delete
begin insert notify the Legislature of the
11fiscal impact on the Medi-Cal program resulting from, and the
12planned reimbursement methodology for emergency medical air
13transportation services after,end insert
the termination of penalty
14assessments pursuant to subdivision (f) of Section 76000.10 of the
15Government Code on January 1, 2018.

16begin insert

begin insertSEC. 22.end insert  

end insert

begin insertSection 14009.5 of the end insertbegin insertWelfare and Institutions Codeend insert
17
begin insert is amended to read:end insert

18

14009.5.  

(a) begin deleteNotwithstanding end deletebegin insertIt is the intent of the Legislature,
19with the amendments made to this section by the act that added
20subdivision (g), to do all of the following:end insert

begin insert

21
(1) Limit Medi-Cal estate recovery only for those services
22required to be collected under federal law.

end insert
begin insert

23
(2) Limit the definition of “estate” to include only the real and
24personal property and other assets required to be collected under
25federal law.

end insert
begin insert

26
(3) Require the State Department of Health Care Services to
27implement the option in the State Medicaid Manual to waive its
28claim, as a substantial hardship, when the estate subject to
29recovery is a homestead of modest value, subject to federal
30approval.

end insert
begin insert

31
(4) Prohibit recovery from the estate of a deceased Medi-Cal
32member who is survived by a spouse or registered domestic
33partner.

end insert
begin insert

34
(5) Ensure that Medi-Cal members can easily and timely receive
35information about how much their estate may owe Medi-Cal when
36they die.

end insert

37begin insert(b)end insertbegin insertend insertbegin insertNotwithstanding end insertany other provision of this chapter, the
38department shall claim against the estate of the decedent, or against
39any recipient of the property of that decedent bybegin delete distribution or
40survivalend delete
begin insert distribution,end insert an amount equal to the payments for the
P47   1health care services received or the value of the property received
2by any recipient from the decedent bybegin delete distribution or survival,
3whichever is less.end delete
begin insert distribution, whichever is less, only in either of
4the following circumstances:end insert

begin delete

5(b) The department may not claim in any of the following
6circumstances:

end delete
begin delete

7(1) The decedent was under 55 when services were received,
8except in the case of an individual who had been an inpatient in a
9nursing facility.

end delete
begin delete

10(2) Where there is any of the following:

end delete
begin insert

11
(1) Against the real property of a Medi-Cal member of any age
12who meets the criteria in Section 1396p(a)(1)(B) of Title 42 of the
13United States Code and who was or is an inpatient in a nursing
14facility in accordance with Section 1396p(b)(1)(A) of Title 42 of
15the United States Code.

end insert
begin insert

16
(2) (A) The decedent was 55 years of age or older when the
17individual received health care services.

end insert
begin insert

18
(B) The department shall not claim under this paragraph when
19there is any of the following:

end insert
begin delete

20(A)

end delete

21begin insert(end insertbegin inserti)end insert A surviving begin delete spouse during his or her lifetime. However, upon
22the death of a surviving spouse, the department shall make a claim
23against the estate of the surviving spouse, or against any recipient
24of property from the surviving spouse obtained by distribution or
25survival, for either the amount paid for the medical assistance
26given to the decedent or the value of any of the decedent’s property
27received by the surviving spouse through distribution or survival,
28whichever is less. Any statute of limitations that purports to limit
29the ability to recover for medical assistance granted under this
30chapter shall not apply to any claim made for reimbursement.end delete

31
begin insert spouse or surviving registered domestic partner.end insert

begin delete

32(B)

end delete

33begin insert(ii)end insert A surviving child who is underbegin delete age 21.end deletebegin insert 21 years of age.end insert

begin delete

34(C)

end delete

35begin insert(iii)end insert A surviving child who is blind orbegin delete permanently and totallyend delete
36 disabled, within the meaning of Section 1614 of the federal Social
37Security Act (42begin delete U.S.C.A.end deletebegin insert U.S.C.end insert Sec. 1382c).

begin delete

38(3) Any exemption described in paragraph (2) that restricts the
39department from filing a claim against a decedent’s property shall
40apply only to the proportionate share of the decedent’s estate or
P48   1property that passes to those recipients, by survival or distribution,
2who qualify for an exemption under paragraph (2).

end delete

3(c) (1) The department shall waive its claim, in whole or in
4part, if it determines that enforcement of the claim would result in
5substantial hardship to other dependents, heirs, or survivors of the
6individual against whose estate the claim exists.

begin insert

7
(2) In determining the existence of substantial hardship, in
8addition to other factors considered by the department consistent
9with federal law and guidance, the department shall, subject to
10federal approval, waive its claim when the estate subject to
11recovery is a homestead of modest value.

end insert
begin delete

12(2)

end delete

13begin insert(end insertbegin insert3)end insert The department shall notify individuals of the waiver
14provision and the opportunity for a hearing to establish that a
15waiver should be granted.

begin insert

16
(d) If the department proposes and accepts a voluntary postdeath
17lien, the voluntary postdeath lien shall accrue interest at the rate
18equal to the annual average rate earned on investments in the
19Surplus Money Investment Fund in the calendar year preceding
20the year in which the decedent died or simple interest at 7 percent
21per annum, whichever is lower.

end insert
begin insert

22
(e) (1) The department shall provide a current or former
23member, or his or her authorized representative designated under
24Section 14014.5, upon request, a copy of the amount of Medi-Cal
25expenses that may be recoverable under this section through the
26date of the request. The information may be requested once per
27calendar year for a fee to cover the department’s reasonable
28administrative costs, not to exceed five dollars ($5) if the current
29or former member meets either of the following descriptions:

end insert
begin insert

30
(A) An individual who is 55 years of age or older when the
31individual received health care services.

end insert
begin insert

32
(B) A permanently institutionalized individual who is an
33inpatient in a nursing facility, intermediate care facility for the
34intellectually disabled, or other medical institution.

end insert
begin insert

35
(2) The department shall permit a member to request the
36information described in paragraph (1) through the Internet, by
37telephone, by mail, or through other commonly available electronic
38means. Upon receipt of the request for information described in
39paragraph (1), the department shall work with the member to
P49   1ensure that the member submits documentation necessary to
2identify the individual and process the member’s request.

end insert
begin insert

3
(3) The department shall conspicuously post on its Internet Web
4site a description of the methods by which a request under this
5subdivision may be made, including, but not limited to, the
6department’s telephone number and any addresses that may be
7used for this purpose. The department shall also include this
8information in its pamphlet for the Medi-Cal Estate Recovery
9Program and any other notices the department distributes to
10members specifically regarding estate recovery.

end insert
begin insert

11
(4) Upon receiving a request for the information described in
12paragraph (1) and all necessary supporting documentation, the
13department shall provide the information requested within 90 days
14after receipt of the request.

end insert
begin delete

15(d)

end delete

16begin insert(end insertbegin insertf)end insert The following definitions shall govern the construction of
17this section:

18(1) “Decedent” means abegin delete beneficiaryend deletebegin insert memberend insert who has received
19health care under this chapter or Chapter 8 (commencing with
20Section 14200) and who has died leaving property to othersbegin delete either
21through distribution or survival.end delete
begin insert through distribution.end insert

22(2) “Dependents” includes, but is not limited to, immediate
23family or blood relatives of the decedent.

begin insert

24
(3) “Estate” means all real and personal property and other
25assets in the individual’s probate estate that are required to be
26subject to a claim for recovery pursuant to Section 1396p(b)(4)(A)
27of Title 42 of the United States Code.

end insert
begin insert

28
(4) “Health care services” means only those services required
29to be recovered under Section 1396p(b)(1)(B)(i) of Title 42 of the
30United States Code.

end insert
begin insert

31
(5) “Homestead of modest value” means a home whose fair
32market value is 50 percent or less of the average price of homes
33in the county where the homestead is located, as of the date of the
34decedent’s death.

end insert
begin insert

35
(g) The amendments made to this section by the act that added
36this subdivision shall apply only to individuals who die on or after
37January 1, 2017.

end insert
38begin insert

begin insertSEC. 23.end insert  

end insert

begin insertSection 14046.7 of the end insertbegin insertWelfare and Institutions Codeend insert
39
begin insert is amended to read:end insert

P50   1

14046.7.  

(a) General Fund moneys shall not be used for the
2purposes of this article.

3(b) Notwithstanding subdivision (a), no more thanbegin delete two hundred
4thousand dollars ($200,000)end delete
begin insert four hundred twenty-five thousand
5dollars ($425,000)end insert
from the General Fund may be used annually
6for state administrative costs associated with implementing this
7article.

8begin insert

begin insertSEC. 24.end insert  

end insert

begin insertSection 14105.436 of the end insertbegin insertWelfare and Institutions
9Code
end insert
begin insert is amended to read:end insert

10

14105.436.  

(a) Effective July 1, 2002, all pharmaceutical
11manufacturers shall provide to the department a state rebate, in
12addition to rebates pursuant to other provisions of state or federal
13law, for any drug products that have been added to the Medi-Cal
14list of contract drugs pursuant to Section 14105.43 or 14133.2 and
15reimbursed through the Medi-Cal outpatient fee-for-service drug
16program. The state rebate shall be negotiated as necessary between
17the department and the pharmaceutical manufacturer. The
18negotiations shall take into account offers such as rebates,
19discounts, disease management programs, and other cost savings
20offerings and shall be retroactive to July 1, 2002.

21(b) The department may use existing administrative mechanisms
22for any drug for which the department does not obtain a rebate
23pursuant to subdivision (a). The department may only use those
24mechanisms in the event that, by February 1, 2003, the
25manufacturer refuses to provide the additional rebate. This
26subdivision shall become inoperative on January 1, 2010.

27(c) For purposes of this section, “Medi-Cal utilization data”
28means the data used by the department to reimburse providers
29under all programs that qualify for federal drug rebates pursuant
30to Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
311396r-8) or that otherwise qualify for federal funds under Title
32XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et
33seq.) pursuant to the Medicaid state plan or waivers. Medi-Cal
34utilization data excludes data from covered entities identified in
35Section 256b(a)(4) of Title 42 of the United States Code in
36accordance with Sections 256b(a)(5)(A) and 1396r-8(a)(5)(C) of
37Title 42 of the United States Code, and those capitated plans that
38include a prescription drug benefit in the capitated rate and that
39have negotiated contracts for rebates or discounts with
40manufacturers.

P51   1(d) begin deleteSubdivision end deletebegin insertUpon implementation of paragraphs (4) and
2(5) of subdivision (b) of Section 14105.33 for drugs pursuant to
3this section, subdivisions (a) and end insert
(c) shall become inoperative
4begin delete when the department implements paragraphs (4) and (5) ofend deletebegin insert and
5“utilization data” shall be described pursuant toend insert
subdivision (b)
6of Section 14105.33. The department shall post on its Internet Web
7site a notice that it has implemented paragraphs (4) and (5) of
8subdivision (b) of Sectionbegin delete 14105.33.end deletebegin insert 14105.33 for drugs pursuant
9to this section.end insert

10(e) Effective July 1, 2009, all pharmaceutical manufacturers
11shall provide to the department a state rebate, in addition to rebates
12pursuant to other provisions of state or federal law, equal to an
13amount not less than 10 percent of the average manufacturer price
14based on Medi-Cal utilization data for any drug products that have
15been added to the Medi-Cal list of contract drugs pursuant to
16Section 14105.43 or 14133.2.

17(f) Pharmaceutical manufacturers shall, by January 1, 2010,
18enter into a supplemental rebate agreement for the rebate required
19in subdivisionbegin delete (d)end deletebegin insert (e)end insert for drug products added to the Medi-Cal list
20of contract drugs on or before December 31, 2009.

21(g) Effective January 1, 2010, all pharmaceutical manufacturers
22who have not entered into a supplemental rebate agreement
23pursuant to subdivisionsbegin delete (d)end deletebegin insert (e)end insert andbegin delete (e),end deletebegin insert (f)end insert shall provide to the
24department a state rebate, in addition to rebates pursuant to other
25provisions of state or federal law, equal to an amount not less than
2620 percent of the average manufacturer price based on Medi-Cal
27utilization data for any drug products that have been added to the
28Medi-Cal list of contract drugs pursuant to Section 14105.43 or
2914133.2 prior to January 1, 2010. If the pharmaceutical
30manufacturer does not enter into a supplemental rebate agreement
31by March 1, 2010, the manufacturer’s drug product shall be made
32available only through an approved treatment authorization request
33pursuant to subdivisionbegin delete (h).end deletebegin insert (i).end insert

34(h) For a drug product added to the Medi-Cal list of contract
35drugs pursuant to Section 14105.43 or 14133.2 on or after January
361, 2010, a pharmaceutical manufacturer shall provide to the
37department a state rebate pursuant to subdivisionbegin delete (d).end deletebegin insert (e).end insert If the
38pharmaceutical manufacturer does not enter into a supplemental
39rebate agreement within 60 days after the addition of the drug to
40the Medi-Cal list of contract drugs, the manufacturer shall provide
P52   1to the department a state rebate equal to not less than 20 percent
2of the average manufacturers price based on Medi-Cal utilization
3data for any drug products that have been added to the Medi-Cal
4list of contract drugs pursuant to Section 14105.43 or 14133.2. If
5the pharmaceutical manufacturer does not enter into a supplemental
6rebate agreement within 120 days after the addition of the drug to
7the Medi-Cal list of contract drugs, the pharmaceutical
8 manufacturer’s drug product shall be made available only through
9an approved treatment authorization request pursuant to subdivision
10begin delete (h).end deletebegin insert (i).end insert For supplemental rebate agreements executed more than
11120 days after the addition of the drug product to the Medi-Cal
12list of contract drugs, the state rebate shall equal an amount not
13less than 20 percent of the average manufacturers price based on
14Medi-Cal utilization data for any drug products that have been
15added to the Medi-Cal list of contract drugs pursuant to Section
1614105.43 or 14133.2.

17(i) Notwithstanding any otherbegin delete provision ofend delete law, drug products
18added to the Medi-Cal list of contract drugs pursuant to Section
1914105.43 or 14133.2 of manufacturers who do not execute an
20agreement to pay additional rebates pursuant to thisbegin delete section,end deletebegin insert sectionend insert
21 shall be available only through an approved treatment authorization
22request.

23(j) For drug products added on or before December 31, 2009,
24a beneficiary may obtain a drug product that requires a treatment
25authorization request pursuant to subdivisionbegin delete (h)end deletebegin insert (i)end insert if the
26beneficiary qualifies for continuing care status. To be eligible for
27continuing care status, a beneficiary must be taking the drug
28product and the department must have record of a reimbursed claim
29for the drug product with a date of service that is within 100 days
30prior to the date the drug product was placed on treatment
31authorization request status. A beneficiary may remain eligible for
32continuing care status, provided that a claim is submitted for the
33drug product in question at least every 100 days and the date of
34service of the claim is within 100 days of the date of service of the
35last claim submitted for the same drug product.

36(k) Changes made to the Medi-Cal list of contract drugs under
37this section shall be exempt from the requirements of the
38Administrative Procedure Act (Chapter 3.5 (commencing with
39Section 11340), Chapter 4 (commencing with Section 11370), and
40Chapter 5 (commencing with Section 11500) of Part 1 of Division
P53   13 of Title 2 of the Government Code), and shall not be subject to
2the review and approval of the Office of Administrative Law.

3begin insert

begin insertSEC. 25.end insert  

end insert

begin insertSection 14105.45 of the end insertbegin insertWelfare and Institutions Codeend insert
4
begin insert is amended to read:end insert

5

14105.45.  

(a) For purposes of this section, the following
6definitions shall apply:

7(1) “Average acquisition cost” means the average weighted cost
8determined by the department to represent the actual acquisition
9cost paid for drugs by Medi-Cal pharmacy providers, including
10those that provide specialty drugs. The average acquisition cost
11shall not be considered confidential and shall be subject to
12disclosure pursuant to the California Public Records Act (Chapter
133.5 (commencing with Section 6250) of Division 7 of Title 1 of
14the Government Code).

15(2) “Average manufacturers price” means the price reported to
16the department by the federal Centers for Medicare and Medicaid
17Services pursuant to Section 1927 of the Social Security Act (42
18U.S.C. Sec. 1396r-8).

19(3) “Average wholesale price” means the price for a drug
20product listed as the average wholesale price in the department’s
21primary price reference source.

22(4) “Estimated acquisition cost” means the department’s best
23estimate of the price generally and currently paid by providers for
24a drug product sold by a particular manufacturer or principal labeler
25in a standard package.

26(5) “Federal upper limit” means the maximum per unit
27reimbursement when established by the federal Centers for
28Medicare and Medicaidbegin delete Services and published by the department
29in Medi-Cal pharmacy provider bulletins and manuals.end delete
begin insert Services.end insert

30(6) “Generically equivalent drugs” means drug products with
31the same active chemical ingredients of the same strength and
32dosage form, and of the same generic drug name, as determined
33by the United States Adopted Names (USAN) and accepted by the
34federal Food and Drug Administration (FDA), as those drug
35products having the same chemical ingredients.

36(7) “Legend drug” means any drug whose labeling states
37“Caution: Federal law prohibits dispensing without prescription,”
38“Rx only,” or words of similar import.

P54   1(8) “Maximum allowable ingredient cost” (MAIC) means the
2maximum amount the department will reimburse Medi-Cal
3pharmacy providers for generically equivalent drugs.

4(9) “Innovator multiple source drug,” “noninnovator multiple
5source drug,” and “single source drug” have the same meaning as
6those terms are defined in Section 1396r-8(k)(7) of Title 42 of the
7United States Code.

8(10) “Nonlegend drug” means any drug whose labeling does
9not contain the statement referenced in paragraph (7).

10(11) “Pharmacy warehouse,” as defined in Section 4163 of the
11Business and Professions Code, means a physical location licensed
12as a wholesaler for prescription drugs that acts as a central
13warehouse and performs intracompany sales or transfers of those
14drugs to a group of pharmacies under common ownership and
15control.

begin insert

16
(12) “Professional dispensing fee” has the same meaning as
17that term is defined in Section 447.502 of Title 42 of the Code of
18 Federal Regulations.

end insert
begin delete

19(12)

end delete

20begin insert(13)end insert “Specialty drugs” means drugs determined by the
21department pursuant to subdivision (f) of Section 14105.3 to
22generally require special handling, complex dosing regimens,
23specialized self-administration at home by a beneficiary or
24caregiver, or specialized nursing facility services, or may include
25extended patient education, counseling, monitoring, or clinical
26support.

begin delete

27(13)

end delete

28begin insert(14)end insert “Volume weighted average” means the aggregated average
29volume for a group of legend or nonlegend drugs, weighted by
30each drug’s percentage of the group’s total volume in the Medi-Cal
31fee-for-service program during the previous six months. For
32purposes of this paragraph, volume is based on the standard billing
33unit used for the legend or nonlegend drugs.

begin delete

34(14)

end delete

35begin insert(15)end insert “Wholesaler” means a drug wholesaler that is engaged in
36wholesale distribution of prescription drugs to retail pharmacies
37in California.

begin delete

38(15)

end delete

P55   1begin insert(16)end insert “Wholesaler acquisition cost” means the price for a drug
2product listed as the wholesaler acquisition cost in the department’s
3primary price reference source.

4(b) (1) Reimbursement to Medi-Cal pharmacy providers for
5legend and nonlegend drugs shall not exceed the lowest of either
6of the following:

7(A) The estimated acquisition cost of the drug plus a professional
8
begin delete fee for dispensing.end deletebegin insert dispensing fee.end insert

9(B) The pharmacy’s usual and customary charge as defined in
10Section 14105.455.

11(2) begin deleteThe professional end deletebegin insert(A)end insertbegin insertend insertbegin insertUntil April 1, 2017, the professional
12dispensing end insert
fee shall be seven dollars and twenty-five cents ($7.25)
13per dispensedbegin delete prescription. The professionalend deletebegin insert prescription, and the
14professional dispensingend insert
fee for legend drugs dispensed to a
15beneficiary residing in a skilled nursing facility or intermediate
16care facility shall be eight dollars ($8) per dispensed prescription.
17For purposes of thisbegin delete paragraphend deletebegin insert paragraph,end insert “skilled nursing facility”
18and “intermediate care facility”begin delete shallend delete have the same meaning as
19begin insert those terms areend insert defined in Division 5 (commencing with Section
2070001) of Title 22 of the California Code of Regulations. begin delete If the
21department determines that a change in dispensing fee is necessary
22 pursuant to this section, the department shall establish the new
23dispensing fee through the budget process and implement the new
24dispensing fee pursuant to subdivision (d).end delete

begin insert

25
(B) Commencing April 1, 2017, the department shall implement
26a new professional dispensing fee or fees.

end insert
begin insert

27
(i) When establishing the new professional dispensing fee or
28fees, the department shall establish the professional dispensing
29fee or fees consistent with subsection (d) of Section 447.518 of
30Title 42 of the Code of Federal Regulations.

end insert
begin insert

31
(ii) The department shall consult with interested parties and
32appropriate stakeholders in implementing this subparagraph.

end insert
begin insert

33
(C) If the department determines that a change in the amount
34of a professional dispensing fee is necessary pursuant to this
35section in order to meet federal Medicaid requirements, the
36 department shall establish the new professional dispensing fee
37through the state budget process.

end insert

38(3) The department shall establish the estimated acquisition cost
39of legend and nonlegend drugs as follows:

P56   1(A) For single source and innovator multiple source drugs, the
2estimated acquisition cost shall be equal to the lowest of the
3average wholesale price minus 17 percent, the average acquisition
4cost, the federal upper limit, or the MAIC.

5(B) For noninnovator multiple source drugs, the estimated
6acquisition cost shall be equal to the lowest of the average
7wholesale price minus 17 percent, the average acquisition cost,
8the federal upper limit, or the MAIC.

9(C) Average wholesale price shall not be used to establish the
10estimated acquisition cost once the department has determined
11that the average acquisition cost methodology has been fully
12implemented.

13(4) For purposes of paragraph (3), the department shall establish
14a list of MAICs for generically equivalent drugs, which shall be
15published in pharmacy provider bulletins and manuals. The
16department shall establish a MAIC only when three or more
17generically equivalent drugs are available for purchase and
18dispensing by retail pharmacies in California. The department shall
19update the list of MAICs and establish additional MAICs in
20accordance with all of the following:

21(A) The department shall base the MAIC on the mean of the
22average manufacturer’s price of drugs generically equivalent to
23the particular innovator drug plus a percent markup determined
24by the department to be necessary for the MAIC to represent the
25average purchase price paid by retail pharmacies in California.

26(B) If average manufacturer prices are unavailable, the
27department shall establish the MAIC in one of the following ways:

28(i) Based on the volume weighted average of wholesaler
29acquisition costs of drugs generically equivalent to the particular
30innovator drug plus a percent markup determined by the department
31to be necessary for the MAIC to represent the average purchase
32price paid by retail pharmacies in California.

33(ii) Pursuant to a contract with a vendor for the purpose of
34surveying drug price information, collecting data, and calculating
35a proposed MAIC.

36(iii) Based on the volume weighted average acquisition cost of
37drugs generically equivalent to the particular innovator drug
38adjusted by the department to represent the average purchase price
39paid by Medi-Cal pharmacy providers.

P57   1(C) The department shall update MAICs at least every three
2months and notify Medi-Cal providers at least 30 days prior to the
3effective date of a MAIC.

4(D) The department shall establish a process for providers to
5seek a change to a specific MAIC when the providers believe the
6MAIC does not reflect current available market prices. If the
7department determines a MAIC change is warranted, the
8department may update a specific MAIC prior to notifying
9providers.

10(E) In determining the average purchase price, the department
11shall consider the provider-related costs of the products that
12include, but are not limited to, shipping, handling, storage, and
13delivery. Costs of the provider that are included in the costs of the
14dispensing shall not be used to determine the average purchase
15price.

16(5) (A) The department may establish the average acquisition
17cost in one of the following ways:

18(i) Based on the volume weighted average acquisition cost
19adjusted by the department to ensure that the average acquisition
20cost represents the average purchase price paid by retail pharmacies
21in California.

22(ii) Based on the proposed average acquisition cost as calculated
23by the vendor pursuant to subparagraph (B).

24(iii) Based on a national pricing benchmark obtained from the
25federal Centers for Medicare and Medicaid Services or on a similar
26benchmark listed in the department’s primary price reference
27source adjusted by the department to ensure that the average
28acquisition cost represents the average purchase price paid by retail
29pharmacies in California.

30(B) For the purposes of paragraph (3), the department may
31contract with a vendor for the purposes of surveying drug price
32information, collecting data from providers, wholesalers, or drug
33manufacturers, and calculating a proposed average acquisition
34cost.

35(C) (i) Medi-Cal pharmacy providers shall submit drug price
36information to the department or a vendor designated by the
37department for the purposes of establishing the average acquisition
38cost. The information submitted by pharmacy providers shall
39include, but not be limited to, invoice prices and all discounts,
40rebates, and refunds known to the provider that would apply to the
P58   1acquisition cost of the drug products purchased during the calendar
2quarter. Pharmacy warehouses shall be exempt from the survey
3process, but shall provide drug cost information upon audit by the
4department for the purposes of validating individual pharmacy
5provider acquisition costs.

6(ii) Pharmacy providers that fail to submit drug price information
7to the department or the vendor as required by this subparagraph
8shall receive notice that if they do not provide the required
9information within five working days, they shall be subject to
10suspension under subdivisions (a) and (c) of Section 14123.

11(D) (i) For new drugs or new formulations of existing drugs,
12begin delete whereend deletebegin insert ifend insert drug price information is unavailable pursuant to clause
13(i) of subparagraph (C), drug manufacturers and wholesalers shall
14submit drug price information to the department or a vendor
15designated by the department for the purposes of establishing the
16average acquisition cost. Drug price information shall include, but
17not be limited to, net unit sales of a drug product sold to retail
18pharmacies in California divided by the total number of units of
19the drug sold by the manufacturer or wholesaler in a specified
20period of time determined by the department.

21(ii) Drug products from manufacturers and wholesalers that fail
22to submit drug price information to the department or the vendor
23as required by this subparagraphbegin delete mayend deletebegin insert shallend insert not be a reimbursable
24benefit of the Medi-Cal program for those manufacturers and
25wholesalers until the department has established the average
26acquisition cost for those drug products.

27(E) Drug pricing information provided to the department or a
28vendor designated by the department for the purposes of
29establishing the average acquisition cost pursuant to this section
30shall be confidential and shall be exempt from disclosure under
31the California Public Records Act (Chapter 3.5 (commencing with
32Section 6250) of Division 7 of Title 1 of the Government Code).

33(F) Prior to the implementation of an average acquisition cost
34methodology, the department shall collect data through a survey
35of pharmacy providers for purposes of establishing a professional
36begin delete fee for dispensingend deletebegin insert dispensing fee or feesend insert in compliance with federal
37Medicaid requirements.

38(i) The department shall seek stakeholder input on the retail
39pharmacy factors and elements used for the pharmacy survey
40relative to both average acquisition costs andbegin delete dispensing costs.
P59   1Any adjustment to the dispensing fee shall not exceed the aggregate
2savings associated with the implementation of the average
3acquisition cost methodology.end delete
begin insert professional dispensing costs.end insert

4(ii) For drug products provided by pharmacy providers pursuant
5to subdivision (f) of Section 14105.3, a differential professional
6fee or payment for services to provide specialized care may be
7considered as part of the contracts established pursuant to that
8section.

9(G) When the department implements the average acquisition
10cost methodology, the department shall update the Medi-Cal claims
11processing system to reflect the average acquisition cost of drugs
12not later than 30 days after the department has established average
13acquisition cost pursuant to subparagraph (A).

14(H) Notwithstanding any otherbegin delete provision ofend delete law, if the
15department implements average acquisition cost pursuant to clause
16(i) or (ii) of subparagraph (A), the department shall update actual
17acquisition costs at least every three months and notify Medi-Cal
18providers at least 30 days prior to the effective date of any change
19in an actual acquisition cost.

20(I) The department shall establish a process for providers to
21seek a change to a specific average acquisition cost when the
22providers believe the average acquisition cost does not reflect
23current available market prices. If the department determines an
24average acquisition cost change is warranted, the department may
25update a specific average acquisition cost prior to notifying
26providers.

27(c) The director shall implement this section in a manner that
28is consistent with federal Medicaid law and regulations. The
29director shall seek any necessary federal approvals for the
30implementation of this section. This section shall be implemented
31only to the extent that federal approval is obtained.

32(d) Notwithstanding Chapter 3.5 (commencing with Section
3311340) of Part 1 of Division 3 of Title 2 of the Government Code,
34the department may implement, interpret, or make specific this
35section by means of a provider bulletin or notice, policy letter, or
36other similar instructions, without taking regulatory action.

37(e) The department may enter into contracts with a vendor for
38the purposes of implementing this section on a bid or nonbid basis.
39In order to achieve maximum cost savings, the Legislature declares
40that an expedited process for contracts under this section is
P60   1necessary. Therefore, contracts entered into to implement this
2section, and all contract amendments and change orders, shall be
3exempt from Chapter 2 (commencing with Section 10290) of Part
42 of Division 2 of the Public Contract Code.

5(f) (1) The rates provided for in this section shall be
6implemented only if the director determines that the rates will
7comply with applicable federal Medicaid requirements and that
8federal financial participation will be available.

9(2) In determining whether federal financial participation is
10available, the director shall determine whether the rates comply
11with applicable federal Medicaid requirements, including those
12set forth in Section 1396a(a)(30)(A) of Title 42 of the United States
13Code.

14(3) To the extent that the director determines that the rates do
15not comply with applicable federal Medicaid requirements or that
16federal financial participation is not available with respect to any
17rate of reimbursement described in this section, the director retains
18the discretion not to implement that rate and may revise the rate
19as necessary to comply with federal Medicaid requirements.

20(g) The director shall seek any necessary federal approvals for
21the implementation of this section.

22(h) This section shall not be construed to require the department
23to collect cost data, to conduct cost studies, or to set or adjust a
24rate of reimbursement based on cost data that has been collected.

25(i) Adjustments to pharmacy drug product payment pursuant to
26Section 14105.192 shall no longer apply when the department
27determines that the average acquisition cost methodology has been
28fully implemented and the department’s pharmacy budget reduction
29targets, consistent with payment reduction levels pursuant to
30Section 14105.192, have been met.

31(j) Prior to implementation of this section, the department shall
32provide the appropriate fiscal and policy committees of the
33Legislature with information on the department’s plan for
34implementation of the average acquisition cost methodology
35pursuant to this section.

36begin insert

begin insertSEC. 26.end insert  

end insert

begin insertSection 14105.456 of the end insertbegin insertWelfare and Institutions
37Code
end insert
begin insert is amended to read:end insert

38

14105.456.  

(a) For purposes of this section, the following
39definitions shall apply:

P61   1(1) “Generically equivalent drugs” means drug products with
2the same active chemical ingredients of the same strength, quantity,
3and dosage form, and of the same generic drug name, as determined
4by the United States Adopted Names Council (USANC) and
5accepted by the federal Food and Drug Administration (FDA), as
6those drug products having the same chemical ingredients.

7(2) “Legend drug” means any drug with a label that states
8“Caution: Federal law prohibits dispensing without prescription,”
9“Rx only,” or words of similar import.

10(3) “Medicare rate” means the rate of reimbursement established
11by the Centers for Medicare and Medicaid Services for the
12Medicare Program.

13(4) “Nonlegend drug” means any drug with a label that does
14not contain a statement referenced in paragraph (2).

15(5) “Pharmacy rate of reimbursement” means the reimbursement
16to a Medi-Cal pharmacy provider pursuant to the provisions of
17paragraphbegin delete (2)end deletebegin insert (3)end insert of subdivision (b) of Section 14105.45.

18(6) “Physician-administered drug” means any legend drug,
19nonlegend drug, or vaccine administered or dispensed to a
20beneficiary by a Medi-Cal provider other than a pharmacy provider
21and billed to the department on a fee-for-service basis.

22(7) “Volume-weighted average” means the aggregated average
23volume for generically equivalent drugs, weighted by each drug’s
24percentage of the total volume in the Medi-Cal fee-for-service
25program during the previous six months. For purposes of this
26paragraph, volume is based on the standard billing unit used for
27the generically equivalent drugs.

28(b) The department may reimburse providers for a
29physician-administered drug using either a Healthcare Common
30Procedure Coding System code or a National Drug Code.

31(c) The Healthcare Common Procedure Coding System code
32rate of reimbursement for a physician-administered drug shall be
33equal to the volume-weighted average of the pharmacy rate of
34reimbursement for generically equivalent drugs. The department
35shall publish the Healthcare Common Procedure Coding System
36code rates of reimbursement.

37(d) The National Drug Code rate of reimbursement shall equal
38the pharmacy rate of reimbursement.

P62   1(e) Notwithstanding subdivisions (c) and (d), the department
2may reimburse providers for physician-administered drugs at a
3rate not less than the Medicare rate.

4(f) Notwithstanding Chapter 3.5 (commencing with Section
511340) of Part 1 of Division 3 of Title 2 of the Government Code,
6the department may implement this section by means of a provider
7bulletin or notice, policy letter, or other similar instructions, without
8taking regulatory action.

9(g) (1) The rates provided for in this section shall be
10implemented commencing January 1, 2011, but only if the director
11determines that the rates comply with applicable federal Medicaid
12requirements and that federal financial participation will be
13available.

14(2) In assessing whether federal financial participation is
15available, the director shall determine whether the rates comply
16with the federal Medicaid requirements, including those set forth
17in Section 1396a(a)(30)(A) of Title 42 of the United States Code.
18To the extent that the director determines that a rate of
19reimbursement described in this section does not comply with the
20federal Medicaid requirements, the director retains the discretion
21not to implement that rate and may revise the rate as necessary to
22comply with the federal Medicaid requirements.

23(h) The director shall seek any necessary federal approval for
24the implementation of this section. To the extent that federal
25financial participation is not available with respect to a rate of
26reimbursement described in this section, the director retains the
27discretion not to implement that rate and may revise the rate as
28necessary to comply with the federal Medicaid requirements.

29begin insert

begin insertSEC. 27.end insert  

end insert

begin insertSection 14105.86 of the end insertbegin insertWelfare and Institutions Codeend insert
30
begin insert is amended to read:end insert

31

14105.86.  

(a) For the purposes of this section, the following
32definitions apply:

33(1) (A) “Average sales price” means the price reported to the
34federal Centers for Medicare and Medicaid Services by the
35manufacturer pursuant to Section 1847A of the federal Social
36Security Act (42 U.S.C. Sec. 1395w-3a).

37(B) “Average manufacturer price” means the price reported to
38the federal Centers for Medicare and Medicaid Services pursuant
39to Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
401396r-8).

P63   1(2) “Blood factors” means plasma protein therapies and their
2recombinant analogs. Blood factors include, but are not limited
3to, all of the following:

4(A) Coagulation factors, including:

5(i) Factor VIII, nonrecombinant.

6(ii) Factor VIII, porcine.

7(iii) Factor VIII, recombinant.

8(iv) Factor IX, nonrecombinant.

9(v) Factor IX, complex.

10(vi) Factor IX, recombinant.

11(vii) Antithrombin III.

12(viii) Anti-inhibitor factor.

13(ix) Von Willebrand factor.

14(x) Factor VIIa, recombinant.

15(B) Immune Globulin Intravenous.

16(C) Alpha-1 Proteinase Inhibitor.

17(b) The reimbursement for blood factors shall be by national
18drug code number and shall not exceed 120 percent of the average
19sales price of the last quarter reported.

20(c) The average sales price for blood factors of manufacturers
21or distributors that do not report an average sales price pursuant
22to subdivision (a) shall be identical to the average manufacturer
23price. The average sales price for new products that do not have
24a calculable average sales price or average manufacturer price
25shall be equal to a projected sales price, as reported by the
26manufacturer to the department. Manufacturers reporting a
27projected sales price for a new product shall report the first monthly
28average manufacturer price reported to the federal Centers for
29Medicare and Medicaid Services. The reporting of an average sales
30price that does not meet the requirement of this subdivision shall
31result in that blood factor no longer being considered a covered
32benefit.

33(d) The average sales price shall be reported at the national drug
34code level to the department on a quarterly basis.

35(e) (1) Effective July 1, 2008, the department shall collect a
36state rebate, in addition to rebates pursuant to other provisions of
37state or federal law, for blood factors reimbursed pursuant to this
38section by programs that qualify for federal drug rebates pursuant
39to Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
401396r-8) or otherwise qualify for federal funds under Title XIX
P64   1of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)
2pursuant to the Medicaid state plan or waivers and the programs
3authorized by Article 5 (commencing with Section 123800) of
4Chapter 3 of Part 2 of, and Article 1 (commencing with Section
5125125) of Chapter 2 of Part 5 of, Division 106 of the Health and
6Safety Code.

7(2) begin deleteParagraph (1) shall become inoperative when the department
8implements end delete
begin insertUpon implementation of end insertparagraphs (4) and (5) of
9subdivision (b) of Sectionbegin delete 14105.33.end deletebegin insert 14105.33 for blood factors
10pursuant to this section, “utilization data” used to determine the
11state rebate shall be described pursuant to subdivision (b) of
12Section 14105.33.end insert
The department shall post on its Internet Web
13site a notice that it has implemented paragraphs (4) and (5) of
14subdivision (b) of Sectionbegin delete 14105.33.end deletebegin insert 14105.33 for blood factors
15pursuant to this section.end insert

16(3) The state rebate shall be negotiated as necessary between
17the department and the manufacturer. Manufacturers who do not
18execute an agreement to pay additional rebates pursuant to this
19section shall have their blood factors available only through an
20approved treatment or service authorization request. All blood
21factors that meet the definition of a covered outpatient drug
22pursuant to Section 1927 of the federal Social Security Act (42
23U.S.C. Sec. 1396r-8) shall remain a benefit subject to the utilization
24controls provided for in this section.

25(4) In reviewing authorization requests, the department shall
26approve the lowest net cost product that meets the beneficiary’s
27medical need. The review of medical need shall take into account
28a beneficiary’s clinical history or the use of the blood factor
29pursuant to payment by another third party, or both.

30(f) A beneficiary may obtain blood factors that require a
31treatment or service authorization request pursuant to subdivision
32(e) if the beneficiary qualifies for continuing care status. To be
33eligible for continuing care status, a beneficiary must be taking
34the blood factor and the department has reimbursed a claim for
35the blood factor with a date of service that is within 100 days prior
36to the date the blood factor was placed on treatment authorization
37request status. A beneficiary may remain eligible for continuing
38care status, provided that a claim is submitted for the blood factor
39in question at least every 100 days and the date of service of the
P65   1claim is within 100 days of the date of service of the last claim
2submitted for the same blood factor.

3(g) Changes made to the list of covered blood factors under this
4or any other section shall be exempt from the requirements of the
5Administrative Procedure Act (Chapter 3.5 (commencing with
6Section 11340), Chapter 4 (commencing with Section 11370), and
7Chapter 5 (commencing with Section 11500) of Part 1 of Division
83 of Title 2 of the Government Code), and shall not be subject to
9the review and approval of the Office of Administrative Law.

10begin insert

begin insertSEC. 28.end insert  

end insert

begin insertSection 14131.10 of the end insertbegin insertWelfare and Institutions Codeend insert
11
begin insert is amended to read:end insert

12

14131.10.  

(a) Notwithstanding any other provision of this
13chapter, Chapter 8 (commencing with Section 14200), or Chapter
148.75 (commencing with Section 14591), in order to implement
15changes in the level of funding for health care services, specific
16optional benefits are excluded from coverage under the Medi-Cal
17program.

18(b) (1) The following optional benefits are excluded from
19coverage under the Medi-Cal program:

20(A) Adult dental services, except as specified in paragraph (2).

begin delete

21(B) Acupuncture services.

end delete
begin delete

22(C)

end delete

23begin insert(end insertbegin insertB)end insert Audiology services and speech therapy services.

begin delete

24(D)

end delete

25begin insert(end insertbegin insertC)end insert Chiropractic services.

begin delete

26(E)

end delete

27begin insert(end insertbegin insertD)end insert Optometric and optician services, including services
28provided by a fabricating optical laboratory.

begin delete

29(F)

end delete

30begin insert(end insertbegin insertE)end insert Podiatric services.

begin delete

31(G)

end delete

32begin insert(end insertbegin insertF)end insert Psychology services.

begin delete

33(H)

end delete

34begin insert(end insertbegin insertG)end insert Incontinence creams and washes.

35(2) (A) Medical and surgical services provided by a doctor of
36dental medicine or dental surgery, which, if provided by a
37physician, would be considered physician services, and which
38services may be provided by either a physician or a dentist in this
39state, are covered.

P66   1(B) Emergency procedures are also covered in the categories
2of service specified in subparagraph (A). The director may adopt
3regulations for any of the services specified in subparagraph (A).

4(C) Effective May 1, 2014, or the effective date of any necessary
5federal approvals as required by subdivision (f), whichever is later,
6for persons 21 years of age or older, adult dental benefits, subject
7to utilization controls, are limited to all the following medically
8necessary services:

9(i) Examinations, radiographs/photographic images, prophylaxis,
10and fluoride treatments.

11(ii) Amalgam and composite restorations.

12(iii) Stainless steel, resin, and resin window crowns.

13(iv) Anterior root canal therapy.

14(v) Complete dentures, including immediate dentures.

15(vi) Complete denture adjustments, repairs, and relines.

16(D) Services specified in this paragraph shall be included as a
17covered medical benefit under the Medi-Cal program pursuant to
18Section 14132.89.

19(3) Pregnancy-related services and services for the treatment of
20other conditions that might complicate the pregnancy are not
21excluded from coverage under this section.

22(c) The optional benefit exclusions do not apply to either of the
23following:

24(1) Beneficiaries under the Early and Periodic Screening
25Diagnosis and Treatment Program.

26(2) Beneficiaries receiving long-term care in a nursing facility
27that is both:

28(A) A skilled nursing facility or intermediate care facility as
29defined in subdivisions (c) and (d) of Section 1250 of the Health
30and Safety Code.

31(B) Licensed pursuant to subdivision (k) of Section 1250 of the
32Health and Safety Code.

33(d) This section shall only be implemented to the extent
34permitted by federal law.

35(e) Notwithstanding Chapter 3.5 (commencing with Section
3611340) of Part 1 of Division 3 of Title 2 of the Government Code,
37the department may implement the provisions of this section by
38means of all-county letters, provider bulletins, or similar
39instructions, without taking further regulatory action.

begin delete

P67   1(f) The department shall seek approval for federal financial
2participation and coverage of services specified in subparagraph
3(C) of paragraph (2) of subdivision (b) under the Medi-Cal
4program.

end delete
begin delete

5(g) This section, except as specified in subparagraph (C) of
6paragraph (2) of subdivision (b), shall be implemented on the first
7day of the month following 90 days after the operative date of this
8section.

end delete
begin insert

9
(f) This section shall be implemented only to the extent that
10federal financial participation is available and any necessary
11federal approvals have been obtained.

end insert
12begin insert

begin insertSEC. 29.end insert  

end insert

begin insertSection 14132.56 of the end insertbegin insertWelfare and Institutions Codeend insert
13
begin insert is amended to read:end insert

14

14132.56.  

(a) (1) Only to the extent required by the federal
15government and effective no sooner than required by the federal
16government, behavioral health treatment (BHT), as defined by
17Section 1374.73 of the Health and Safety Code, shall be a covered
18Medi-Cal service for individuals under 21 years of age.

19(2) It is the intent of the Legislature that, to the extent the federal
20government requires BHT to be a covered Medi-Cal service, the
21department shall seek statutory authority to implement this new
22benefit in Medi-Cal.

23(b) The department shall implement, or continue to implement,
24this section only after all of the following occurs or has occurred:

25(1) The department receives all necessary federal approvals to
26obtain federal funds for the service.

27(2) The department seeks an appropriation that would provide
28the necessary state funding estimated to be required for the
29applicable fiscal year.

30(3) The department consults with stakeholders.

31(c) The department shall develop and define eligibility criteria,
32provider participation criteria, utilization controls, and delivery
33system structure for services under this section, subject to
34limitations allowable under federal law, in consultation with
35stakeholders.

begin insert

36
(d) (1) The department, commencing on the effective date of
37the act that added this subdivision until March 31, 2017, inclusive,
38may make available to individuals described in paragraph (2)
39contracted services to assist those individuals with health insurance
P68   1enrollment, without regard to whether federal funds are available
2for the contracted services.

end insert
begin insert

3
(2) The contracted services described in paragraph (1) may be
4provided only to an individual under 21 years of age whom the
5department identifies as no longer eligible for Medi-Cal solely
6due to the transition of BHT coverage from the waiver program
7under Section 1915(c) of the federal Social Security Act to the
8Medi-Cal state plan in accordance with this section and who meets
9all of the following criteria:

end insert
begin insert

10
(A) He or she was enrolled in the home and community-based
11services waiver for persons with developmental disabilities under
12Section 1915(c) of the Social Security Act as of January 31, 2016.

end insert
begin insert

13
(B) He or she was deemed to be institutionalized in order to
14establish eligibility under the terms of the waiver.

end insert
begin insert

15
(C) He or she has not been found eligible under any other
16federally funded Medi-Cal criteria without a share of cost.

end insert
begin insert

17
(D) He or she had received a BHT service from a regional center
18for persons with developmental disabilities as provided in Chapter
195 (commencing with Section 4620) of Division 4.5.

end insert
begin delete

20(d)

end delete

21begin insert(e)end insert Notwithstanding Chapter 3.5 (commencing with Section
2211340) of Part 1 of Division 3 of Title 2 of the Government Code,
23the department, without taking any further regulatory action, shall
24implement, interpret, or make specific this section by means of
25all-county letters, plan letters, plan or provider bulletins, or similar
26instructions until regulations are adopted. The department shall
27adopt regulations by July 1, 2017, in accordance with the
28requirements of Chapter 3.5 (commencing with Section 11340) of
29Part 1 of Division 3 of Title 2 of the Government Code.
30Notwithstanding Section 10231.5 of the Government Code,
31beginning six months after the effective date of this section, the
32department shall provide semiannual status reports to the
33Legislature, in compliance with Section 9795 of the Government
34Code, until regulations have been adopted.

begin delete

35(e)

end delete

36begin insert(f)end insert For the purposes of implementing this section, the department
37may enter into exclusive or nonexclusive contracts on a bid or
38negotiated basis, including contracts for the purpose of obtaining
39subject matter expertise or other technical assistance. Contracts
40may be statewide or on a more limited geographic basis. Contracts
P69   1entered into or amended under this subdivision shall be exempt
2from Part 2 (commencing with Section 10100) of Division 2 of
3the Public Contractbegin delete Codeend deletebegin insert Code, Section 19130 of the Government
4Code,end insert
and Chapter 6 (commencing with Section 14825) of Part
55.5 of Division 3 of the Government Code, and shall be exempt
6from the review or approval of any division of the Department of
7General Services.

begin delete

8(f)

end delete

9begin insert(g)end insert The department may seek approval of any necessary state
10plan amendments or waivers to implement this section. The
11department shall make any state plan amendments or waiver
12requests public at least 30 days prior to submitting to the federal
13Centers for Medicare and Medicaid Services, and the department
14shall work with stakeholders to address the public comments in
15the state plan amendment or waiver request.

begin delete

16(g)

end delete

17begin insert(h)end insert This section shall be implemented only to the extent that
18federal financial participation is available and any necessary federal
19approvals have been obtained.

20begin insert

begin insertSEC. 30.end insert  

end insert

begin insertSection 14154 of the end insertbegin insertWelfare and Institutions Codeend insert
21
begin insert is amended to read:end insert

22

14154.  

(a) (1) The department shall establish and maintain a
23plan whereby costs for county administration of the determination
24of eligibility for benefits under this chapter will be effectively
25controlled within the amounts annually appropriated for that
26administration. The plan, to be known as the County Administrative
27Cost Control Plan, shall establish standards and performance
28criteria, including workload, productivity, and support services
29standards, to which counties shall adhere. The plan shall include
30standards for controlling eligibility determination costs that are
31incurred by performing eligibility determinations at county
32hospitals, or that are incurred due to the outstationing of any other
33eligibility function. Except as provided in Section 14154.15,
34reimbursement to a county for outstationed eligibility functions
35shall be based solely on productivity standards applied to that
36county’s welfare department office.

37(2) (A) The plan shall delineate both of the following:

38(i) The process for determining county administration base costs,
39which include salaries and benefits, support costs, and staff
40development.

P70   1(ii) The process for determining funding for caseload changes,
2cost-of-living adjustments, and program and other changes.

3(B) The annual county budget survey document utilized under
4the plan shall be constructed to enable the counties to provide
5sufficient detail to the department to support their budget requests.

6(3) The plan shall be part of a single state plan, jointly developed
7by the department and the State Department of Social Services, in
8conjunction with the counties, for administrative cost control for
9the California Work Opportunity and Responsibility to Kids
10(CalWORKs), CalFresh, and Medical Assistance (Medi-Cal)
11programs. Allocations shall be made to each county and shall be
12limited by and determined based upon the County Administrative
13Cost Control Plan. In administering the plan to control county
14administrative costs, the department shall not allocate state funds
15to cover county cost overruns that result from county failure to
16meet requirements of the plan. The department and the State
17Department of Social Services shall budget, administer, and
18allocate state funds for county administration in a uniform and
19consistent manner.

20(4) The department and county welfare departments shall
21develop procedures to ensure the data clarity, consistency, and
22reliability of information contained in the county budget survey
23document submitted by counties to the department. These
24procedures shall include the format of the county budget survey
25document and process, data submittal and its documentation, and
26the use of the county budget survey documents for the development
27of determining county administration costs. Communication
28between the department and the county welfare departments shall
29be ongoing as needed regarding the content of the county budget
30surveys and any potential issues to ensure the information is
31complete and well understood by involved parties. Any changes
32developed pursuant to this section shall be incorporated within the
33state’s annual budget process by no later than the 2011-12 fiscal
34year.

35(5) The department shall provide a clear narrative description
36along with fiscal detail in the Medi-Cal estimate package, submitted
37to the Legislature in January and May of each year, of each
38component of the county administrative funding for the Medi-Cal
39program. This shall describe how the information obtained from
P71   1the county budget survey documents was utilized and, if applicable,
2modified and the rationale for the changes.

3(6) Notwithstanding any other law, the department shall develop
4and implement, in consultation with county program and fiscal
5representatives, a new budgeting methodology for Medi-Cal county
6administrative costs that reflects the impact of PPACA
7implementation on county administrative work. The new budgeting
8methodology shall be used to reimburse counties for eligibility
9processing and case maintenance for applicants and beneficiaries.

10(A) The budgeting methodology may include, but is not limited
11to, identification of the costs of eligibility determinations for
12applicants, and the costs of eligibility redeterminations and case
13maintenance activities for recipients, for different groupings of
14cases, based on variations in time and resources needed to conduct
15eligibility determinations. The calculation of time and resources
16shall be based on the following factors: complexity of eligibility
17rules, ongoing eligibility requirements, and other factors as
18determined appropriate by the department. The development of
19the new budgeting methodology may include, but is not limited
20to, county survey of costs, time and motion studies, in-person
21observations by department staff, data reporting, and other factors
22deemed appropriate by the department.

23(B) The new budgeting methodology shall be clearly described,
24state the necessary data elements to be collected from the counties,
25and establish the timeframes for counties to provide the data to
26the state.

27(C) The new budgeting methodology developed pursuant to this
28paragraph shall be implemented no sooner than the 2015-16 fiscal
29year. The department may develop a process for counties to phase
30in the requirements of the new budgeting methodology.

31(D) The department shall provide the new budgeting
32methodology to the legislative fiscal committees by March 1 of
33the fiscal year immediately preceding the first fiscal year of
34implementation of the new budgeting methodology.

35(E) To the extent that the funding for the county budgets
36developed pursuant to the new budget methodology is not fully
37appropriated in any given fiscal year, the department, with input
38from the counties, shall identify and consider options to align
39funding and workload responsibilities.

P72   1(F) For purposes of this paragraph, “PPACA” means the federal
2Patient Protection and Affordable Care Act (Public Law 111-148),
3as amended by the federal Health Care and Education
4Reconciliation Act of 2010 (Public Law 111-152) and any
5subsequent amendments.

6(G) Notwithstanding Chapter 3.5 (commencing with Section
711340) of Part 1 of Division 3 of Title 2 of the Government Code,
8the department may implement, interpret, or make specific this
9paragraph by means of all-county letters, plan letters, plan or
10provider bulletins, or similar instructions until the time any
11necessary regulations are adopted. The department shall adopt
12regulations by July 1, 2017, in accordance with the requirements
13of Chapter 3.5 (commencing with Section 11340) of Part 1 of
14Division 3 of Title 2 of the Government Code. Beginning six
15months after the implementation of the new budgeting methodology
16pursuant to this paragraph, and notwithstanding Section 10231.5
17of the Government Code, the department shall provide a status
18report to the Legislature on a semiannual basis, in compliance with
19Section 9795 of the Government Code, until regulations have been
20adopted.

21(b) Nothing in this section, Section 15204.5, or Section 18906
22shall be construed to limit the administrative or budgetary
23responsibilities of the department in a manner that would violate
24Section 14100.1, and thereby jeopardize federal financial
25participation under the Medi-Cal program.

26(c) (1) The Legislature finds and declares that in order for
27counties to do the work that is expected of them, it is necessary
28that they receive adequate funding, including adjustments for
29reasonable annual cost-of-doing-business increases. The Legislature
30further finds and declares that linking appropriate funding for
31county Medi-Cal administrative operations, including annual
32cost-of-doing-business adjustments, with performance standards
33will give counties the incentive to meet the performance standards
34and enable them to continue to do the work they do on behalf of
35the state. It is therefore the Legislature’s intent to provide
36appropriate funding to the counties for the effective administration
37of the Medi-Cal program at the local level to ensure that counties
38can reasonably meet the purposes of the performance measures as
39contained in this section.

P73   1(2) It is the intent of the Legislature to not appropriate funds for
2the cost-of-doing-business adjustment for the 2008-09, 2009-10,
32010-11, 2011-12, 2012-13, 2014-15,begin delete and 2015-16end deletebegin insert 2015-16,
4and 2016-end insert
begin insert17end insert fiscal years.

5(d) The department is responsible for the Medi-Cal program in
6accordance with state and federal law. A county shall determine
7Medi-Cal eligibility in accordance with state and federal law. If
8in the course of its duties the department becomes aware of
9accuracy problems in any county, the department shall, within
10available resources, provide training and technical assistance as
11appropriate. Nothing in this section shall be interpreted to eliminate
12any remedy otherwise available to the department to enforce
13accurate county administration of the program. In administering
14the Medi-Cal eligibility process, each county shall meet the
15following performance standards each fiscal year:

16(1) Complete eligibility determinations as follows:

17(A) Ninety percent of the general applications without applicant
18errors and are complete shall be completed within 45 days.

19(B) Ninety percent of the applications for Medi-Cal based on
20disability shall be completed within 90 days, excluding delays by
21the state.

22(2) (A) The department shall establish best-practice guidelines
23for expedited enrollment of newborns into the Medi-Cal program,
24preferably with the goal of enrolling newborns within 10 days after
25the county is informed of the birth. The department, in consultation
26with counties and other stakeholders, shall work to develop a
27process for expediting enrollment for all newborns, including those
28born to mothers receiving CalWORKs assistance.

29(B) Upon the development and implementation of the
30best-practice guidelines and expedited processes, the department
31and the counties may develop an expedited enrollment timeframe
32for newborns that is separate from the standards for all other
33applications, to the extent that the timeframe is consistent with
34these guidelines and processes.

35(3) Perform timely annual redeterminations, as follows:

36(A) Ninety percent of the annual redetermination forms shall
37be mailed to the recipient by the anniversary date.

38(B) Ninety percent of the annual redeterminations shall be
39completed within 60 days of the recipient’s annual redetermination
40date for those redeterminations based on forms that are complete
P74   1and have been returned to the county by the recipient in a timely
2manner.

3(C) Ninety percent of those annual redeterminations where the
4redetermination form has not been returned to the county by the
5recipient shall be completed by sending a notice of action to the
6recipient within 45 days after the date the form was due to the
7county.

begin delete

8(D) If a child is determined by the county to change from no
9share of cost to a share of cost and the child meets the eligibility
10criteria for the Healthy Families Program established under Section
1112693.98 of the Insurance Code, the child shall be placed in the
12Medi-Cal-to-Healthy Families Bridge Benefits Program, and these
13cases shall be processed as follows:

14(i) Ninety percent of the families of these children shall be sent
15a notice informing them of the Healthy Families Program within
16five working days from the determination of a share of cost.

17(ii) Ninety percent of all annual redetermination forms for these
18children shall be sent to the Healthy Families Program within five
19working days from the determination of a share of cost if the parent
20has given consent to send this information to the Healthy Families
21Program.

22(iii) Ninety percent of the families of these children placed in
23the Medi-Cal-to-Healthy Families Bridge Benefits Program who
24have not consented to sending the child’s annual redetermination
25form to the Healthy Families Program shall be sent a request,
26within five working days of the determination of a share of cost,
27to consent to send the information to the Healthy Families Program.

28(E) Subparagraph (D) shall not be implemented until 60 days
29after the Medi-Cal and Joint Medi-Cal and Healthy Families
30applications and the Medi-Cal redetermination forms are revised
31to allow the parent of a child to consent to forward the child’s
32information to the Healthy Families Program.

end delete

33(e) The department shall develop procedures in collaboration
34with the counties and stakeholder groups for determining county
35review cycles, sampling methodology and procedures, and data
36reporting.

37(f) On January 1 of each year, each applicable county, as
38determined by the department, shall report to the department on
39the county’s results in meeting the performance standards specified
40in this section. The report shall be subject to verification by the
P75   1department. County reports shall be provided to the public upon
2written request.

3(g) If the department finds that a county is not in compliance
4with one or more of the standards set forth in this section, the
5county shall, within 60 days, submit a corrective action plan to the
6department for approval. The corrective action plan shall, at a
7minimum, include steps that the county shall take to improve its
8performance on the standard or standards with which the county
9is out of compliance. The plan shall establish interim benchmarks
10for improvement that shall be expected to be met by the county in
11order to avoid a sanction.

12(h) (1) If a county does not meet the performance standards for
13completing eligibility determinations and redeterminations as
14specified in this section, the department may, at its sole discretion,
15reduce the allocation of funds to that county in the following year
16by 2 percent. Any funds so reduced may be restored by the
17department if, in the determination of the department, sufficient
18improvement has been made by the county in meeting the
19performance standards during the year for which the funds were
20reduced. If the county continues not to meet the performance
21standards, the department may reduce the allocation by an
22additional 2 percent for each year thereafter in which sufficient
23improvement has not been made to meet the performance standards.

24(2) No reduction of the allocation of funds to a county shall be
25imposed pursuant to this subdivision for failure to meet
26performance standards during any period of time in which the
27cost-of-doing-business increase is suspended.

begin delete

28(i) The department shall develop procedures, in collaboration
29with the counties and stakeholders, for developing instructions for
30the performance standards established under subparagraph (D) of
31paragraph (3) of subdivision (d), no later than September 1, 2005.

32(j) No later than September 1, 2005, the department shall issue
33a revised annual redetermination form to allow a parent to indicate
34parental consent to forward the annual redetermination form to
35the Healthy Families Program if the child is determined to have a
36share of cost.

37(k) The department, in coordination with the Managed Risk
38Medical Insurance Board, shall streamline the method of providing
39the Healthy Families Program with information necessary to
40determine Healthy Families eligibility for a child who is receiving
P76   1services under the Medi-Cal-to-Healthy Families Bridge Benefits
2Program.

3(l) 

end delete

4begin insert(i)end insertbegin insertend insert Notwithstanding Chapter 3.5 (commencing with Section
511340) of Part 1 of Division 3 of Title 2 of the Government Code,
6and except as provided in subparagraph (G) of paragraph (6) of
7subdivision (a), the department shall, without taking any further
8regulatory action, implement, interpret, or make specific this
9section and any applicable federal waivers and state plan
10amendments by means of all-county letters or similar instructions.

11begin insert

begin insertSEC. 31.end insert  

end insert

begin insertSection 14301.1 of the end insertbegin insertWelfare and Institutions Codeend insertbegin insert,
12as amended by Section 28 of Chapter 37 of the Statutes of 2013,
13is amended to read:end insert

14

14301.1.  

(a) For rates established on or after August 1, 2007,
15the department shall pay capitation rates to health plans
16participating in the Medi-Cal managed care program using actuarial
17methods and may establish health-plan- and county-specific rates.
18Notwithstanding any other law, this section shall apply to any
19managed care organization, licensed under the Knox-Keene Health
20Care Service Plan Act of 1975 (Chapter 2.2 (commencing with
21Section 1340) of Division 2 of the Health and Safety Code), that
22has contracted with the department as a primary care case
23management plan pursuant to Article 2.9 (commencing with
24Section 14088) of Chapter 7 to provide services to beneficiaries
25who are HIV positive or who have been diagnosed with AIDS for
26rates established on or after July 1, 2012. The department shall
27utilize a county- and model-specific rate methodology to develop
28Medi-Cal managed care capitation rates for contracts entered into
29between the department and any entity pursuant to Article 2.7
30(commencing with Section 14087.3), Article 2.8 (commencing
31with Section 14087.5), and Article 2.91 (commencing with Section
3214089) of Chapter 7 that includes, but is not limited to, all of the
33following:

34(1) Health-plan-specific encounter and claims data.

35(2) Supplemental utilization and cost data submitted by the
36health plans.

37(3) Fee-for-service data for the underlying county of operation
38or other appropriate counties as deemed necessary by the
39department.

P77   1(4) Department of Managed Health Care financial statement
2data specific to Medi-Cal operations.

3(5) Other demographic factors, such as age, gender, or
4diagnostic-based risk adjustments, as the department deems
5appropriate.

6(b) To the extent that the department is unable to obtain
7sufficient actual plan data, it may substitute plan model, similar
8plan, or county-specific fee-for-service data.

9(c) The department shall develop rates that include
10administrative costs, and may apply different administrative costs
11with respect to separate aid code groups.

12(d) The department shall develop rates that shall include, but
13are not limited to, assumptions for underwriting, return on
14investment, risk, contingencies, changes in policy, and a detailed
15review of health plan financial statements to validate and reconcile
16costs for use in developing rates.

17(e) The department may develop rates that pay plans based on
18performance incentives, including quality indicators, access to
19care, and data submission.

20(f) The department may develop and adopt condition-specific
21payment rates for health conditions, including, but not limited to,
22childbirth delivery.

23(g) (1) Prior to finalizing Medi-Cal managed care capitation
24rates, the department shall provide health plans with information
25on how the rates were developed, including rate sheets for that
26specific health plan, and provide the plans with the opportunity to
27provide additional supplemental information.

28(2) For contracts entered into between the department and any
29entity pursuant to Article 2.8 (commencing with Section 14087.5)
30of Chapter 7, the department, by June 30 of each year, or, if the
31budget has not passed by that date, no later than five working days
32after the budget is signed, shall provide preliminary rates for the
33upcoming fiscal year.

34(h) For the purposes of developing capitation rates through
35implementation of this ratesetting methodology, Medi-Cal managed
36care health plans shall provide the department with financial and
37utilization data in a form and substance as deemed necessary by
38the department to establish rates. This data shall be considered
39proprietary and shall be exempt from disclosure as official
40information pursuant to subdivision (k) of Section 6254 of the
P78   1Government Code as contained in the California Public Records
2Act (Division 7 (commencing with Section 6250) of Title 1 of the
3Government Code).

4(i) Notwithstanding any otherbegin delete provision ofend delete law, on and after the
5effective date of the act adding this subdivision, the department
6may apply this section to the capitation rates it pays under any
7managed care health plan contract.

8(j) Notwithstanding Chapter 3.5 (commencing with Section
911340) of Part 1 of Division 3 of Title 2 of the Government Code,
10the department may set and implement managed care capitation
11rates, and interpret or make specific this section and any applicable
12federal waivers and state plan amendments by means of plan letters,
13plan or provider bulletins, or similar instructions, without taking
14regulatory action.

15(k) The department shall report, upon request, to the fiscal and
16policy committees of the respective houses of the Legislature
17regarding implementation of this section.

18(l) Prior to October 1, 2011, the risk-adjusted countywide
19capitation rate shall comprise no more than 20 percent of the total
20capitation rate paid to each Medi-Cal managed care plan.

21(m) (1) It is the intent of the Legislature to preserve the policy
22goal to support and strengthen traditional safety net providers who
23treat high volumes of uninsured and Medi-Cal patients when
24Medi-Cal enrollees are defaulted into Medi-Cal managed care
25plans.

26(2) As the department adds additional factors, such as managed
27care plan costs, to the Medi-Cal managed care plan default
28assignment algorithm, it shall consult with the Auto Assignment
29Performance Incentive Program stakeholder workgroup to develop
30cost factor disregards related to intergovernmental transfers and
31required wraparound payments that support safety net providers.

begin insert

32
(n) (1) The department shall develop and pay capitation rates
33to entities contracted pursuant to Chapter 8.75 (commencing with
34Section 14591), using actuarial methods and in a manner consistent
35with this section, except as provided in this subdivision.

end insert
begin insert

36
(2) The department may develop capitation rates using a
37standardized rate methodology across managed care plan models
38for comparable populations. The specific rate methodology applied
39to PACE organizations shall address features of PACE that
40distinguishes it from other managed care plan models.

end insert
begin insert

P79   1
(3) The department may develop statewide rates and apply
2geographic adjustments, using available data sources deemed
3appropriate by the department. Consistent with actuarial methods,
4the primary source of data used to develop rates for each PACE
5organization shall be its Medi-Cal cost and utilization data or
6other data sources as deemed necessary by the department.

end insert
begin insert

7
(4) Rates developed pursuant to this subdivision shall reflect
8the level of care associated with the specific populations served
9under the contract.

end insert
begin insert

10
(5) The rate methodology developed pursuant to this subdivision
11shall contain a mechanism to account for the costs of high-cost
12drugs and treatments.

end insert
begin insert

13
(6) Rates developed pursuant to this subdivision shall be
14actuarially certified prior to implementation.

end insert
begin insert

15
(7) The department shall consult with those entities contracted
16pursuant to Chapter 8.75 (commencing with Section 14591) in
17developing a rate methodology according to this subdivision.

end insert
begin insert

18
(8) Consistent with the requirements of federal law, the
19department shall calculate an upper payment limit for payments
20to PACE organizations. In calculating the upper payment limit,
21the department shall correct the applicable data as necessary and
22shall consider the risk of nursing home placement for the
23comparable population when estimating the level of care and risk
24of PACE participants.

end insert
begin insert

25
(9) During the first three rate years in which the methodology
26developed pursuant to this subdivision is used by the department
27to set rates for entities contracted pursuant to Chapter 8.75
28(commencing with Section 14591), the department shall pay the
29entity at a rate within the certified actuarially sound rate range
30developed with respect to that entity, to the extent consistent with
31federal requirements and subject to paragraph (11), as necessary
32to mitigate the impact to the entity during the transition to the
33methodology developed pursuant to this subdivision.

end insert
begin insert

34
(10) During the first two years in which a new PACE
35organization or existing PACE organization enters a previously
36unserved area, the department shall pay at a rate within the
37certified actuarially sound rate range developed with respect to
38that entity, to the extent consistent with federal requirements and
39subject to paragraph (11).

end insert
begin insert

P80   1
(11) This subdivision shall be implemented only to the extent
2that any necessary federal approvals are obtained and federal
3financial participation is available.

end insert
begin insert

4
(12) This subdivision shall apply for rates implemented no
5earlier than January 1, 2017.

end insert
begin delete

6(n)

end delete

7begin insert(o)end insert This section shall be inoperative if the Coordinated Care
8Initiative becomes inoperative pursuant to Section 34 ofbegin delete the act
9that added this subdivision.end delete
begin insert Chapter 37 of the Statutes of 2013.end insert

10begin insert

begin insertSEC. 32.end insert  

end insert

begin insertSection 14301.1 of the end insertbegin insertWelfare and Institutions Codeend insertbegin insert,
11as added by Section 29 of Chapter 37 of the Statutes of 2013, is
12amended to read:end insert

13

14301.1.  

(a) For rates established on or after August 1, 2007,
14the department shall pay capitation rates to health plans
15participating in the Medi-Cal managed care program using actuarial
16methods and may establish health-plan- and county-specific rates.
17The department shall utilize a county- and model-specific rate
18methodology to develop Medi-Cal managed care capitation rates
19for contracts entered into between the department and any entity
20pursuant to Article 2.7 (commencing with Section 14087.3), Article
212.8 (commencing with Section 14087.5), and Article 2.91
22(commencing with Section 14089) of Chapter 7 that includes, but
23is not limited to, all of the following:

24(1) Health-plan-specific encounter and claims data.

25(2) Supplemental utilization and cost data submitted by the
26health plans.

27(3) Fee-for-service data for the underlying county of operation
28or other appropriate counties as deemed necessary by the
29department.

30(4) Department of Managed Health Care financial statement
31data specific to Medi-Cal operations.

32(5) Other demographic factors, such as age, gender, or
33diagnostic-based risk adjustments, as the department deems
34appropriate.

35(b) To the extent that the department is unable to obtain
36sufficient actual plan data, it may substitute plan model, similar
37plan, or county-specific fee-for-service data.

38(c) The department shall develop rates that include
39administrative costs, and may apply different administrative costs
40with respect to separate aid code groups.

P81   1(d) The department shall develop rates that shall include, but
2are not limited to, assumptions for underwriting, return on
3investment, risk, contingencies, changes in policy, and a detailed
4review of health plan financial statements to validate and reconcile
5costs for use in developing rates.

6(e) The department may develop rates that pay plans based on
7performance incentives, including quality indicators, access to
8care, and data submission.

9(f) The department may develop and adopt condition-specific
10payment rates for health conditions, including, but not limited to,
11childbirth delivery.

12(g) (1) Prior to finalizing Medi-Cal managed care capitation
13rates, the department shall provide health plans with information
14on how the rates were developed, including rate sheets for that
15specific health plan, and provide the plans with the opportunity to
16provide additional supplemental information.

17(2) For contracts entered into between the department and any
18entity pursuant to Article 2.8 (commencing with Section 14087.5)
19of Chapter 7, the department, by June 30 of each year, or, if the
20budget has not passed by that date, no later than five working days
21after the budget is signed, shall provide preliminary rates for the
22upcoming fiscal year.

23(h) For the purposes of developing capitation rates through
24implementation of this ratesetting methodology, Medi-Cal managed
25care health plans shall provide the department with financial and
26utilization data in a form and substance as deemed necessary by
27the department to establish rates. This data shall be considered
28proprietary and shall be exempt from disclosure as official
29information pursuant to subdivision (k) of Section 6254 of the
30Government Code as contained in the California Public Records
31Act (Division 7 (commencing with Section 6250) of Title 1 of the
32Government Code).

33(i) The department shall report, upon request, to the fiscal and
34policy committees of the respective houses of the Legislature
35regarding implementation of this section.

36(j) Prior to October 1, 2011, the risk-adjusted countywide
37capitation rate shall comprise no more than 20 percent of the total
38capitation rate paid to each Medi-Cal managed care plan.

39(k) (1) It is the intent of the Legislature to preserve the policy
40goal to support and strengthen traditional safety net providers who
P82   1treat high volumes of uninsured and Medi-Cal patients when
2Medi-Cal enrollees are defaulted into Medi-Cal managed care
3plans.

4(2) As the department adds additional factors, such as managed
5care plan costs, to the Medi-Cal managed care plan default
6assignment algorithm, it shall consult with the Auto Assignment
7Performance Incentive Program stakeholder workgroup to develop
8cost factor disregards related to intergovernmental transfers and
9required wraparound payments that support safety net providers.

begin insert

10
(l) (1) The department shall develop and pay capitation rates
11to entities contracted pursuant to Chapter 8.75 (commencing with
12Section 14591), using actuarial methods and in a manner consistent
13with this section, except as provided in this subdivision.

end insert
begin insert

14
(2) The department may develop capitation rates using a
15standardized rate methodology across managed care plan models
16for comparable populations. The specific rate methodology applied
17to PACE organizations shall address features of PACE that
18distinguish it from other managed care plan models.

end insert
begin insert

19
(3) The department may develop statewide rates and apply
20geographic adjustments, using available data sources deemed
21appropriate by the department. Consistent with actuarial methods,
22the primary source of data used to develop rates for each PACE
23organization shall be its Medi-Cal cost and utilization data or
24other data sources as deemed necessary by the department.

end insert
begin insert

25
(4) Rates developed pursuant to this subdivision shall reflect
26the level of care associated with the specific populations served
27under the contract.

end insert
begin insert

28
(5) The rate methodology developed pursuant to this subdivision
29shall contain a mechanism to account for the costs of high-cost
30drugs and treatments.

end insert
begin insert

31
(6) Rates developed pursuant to this subdivision shall be
32actuarially certified prior to implementation.

end insert
begin insert

33
(7) The department shall consult with those entities contracted
34pursuant to Chapter 8.75 (commencing with Section 14591) in
35developing a rate methodology according to this subdivision.

end insert
begin insert

36
(8) Consistent with the requirements of federal law, the
37department shall calculate an upper payment limit for payments
38to PACE organizations. In calculating the upper payment limit,
39the department shall correct the applicable data as necessary and
40shall consider the risk of nursing home placement for the
P83   1comparable population when estimating the level of care and risk
2of PACE participants.

end insert
begin insert

3
(9) During the first three rate years in which the methodology
4developed pursuant to this subdivision is used by the department
5to set rates for entities contracted pursuant to Chapter 8.75
6(commencing with Section 14591), the department shall pay the
7entity at a rate within the certified actuarially sound rate range
8developed with respect to that entity, to the extent consistent with
9federal requirements and subject to paragraph (11), as necessary
10to mitigate the impact to the entity during the transition to the
11methodology developed pursuant to this subdivision.

end insert
begin insert

12
(10) During the first two years in which a new PACE
13organization or existing PACE organization enters a previously
14unserved area, the department shall pay at a rate within the
15certified actuarially sound rate range developed with respect to
16that entity, to the extent consistent with federal requirements and
17subject to paragraph (11).

end insert
begin insert

18
(11) This subdivision shall be implemented only to the extent
19any necessary federal approvals are obtained and federal financial
20participation is available.

end insert
begin insert

21
(12) This subdivision shall apply for rates implemented no
22earlier than January 1, 2017.

end insert
begin delete

23(l)

end delete

24begin insert(m)end insert This section shall be operative only if Section 28 ofbegin delete the act
25that added this sectionend delete
begin insert Chapter 37 of the Statutes of 2013end insert becomes
26inoperative pursuant to subdivision (n) of that Section 28.

27begin insert

begin insertSEC. 33.end insert  

end insert

begin insertSection 14592 of the end insertbegin insertWelfare and Institutions Codeend insert
28
begin insert is amended to read:end insert

29

14592.  

(a) For purposes of this chapter, “PACE organization”
30means an entity as defined in Section 460.6 of Title 42 of the Code
31of Federal Regulations.

32(b) The Director of Health Care Services shall establish the
33California Program of All-Inclusive Care for the Elderly, to provide
34community-based, risk-based, and capitated long-term care services
35as optional services under the state’s Medi-Cal State Plan and
36under contracts entered into between the federal Centers for
37Medicare and Medicaid Services, the department, and PACE
38organizations, meeting the requirements of the Balanced Budget
39Act of 1997 (Public Law 105-33) and begin delete Part 460 (commencing with
P84   1Section 460.2) of Title 42 of the Code of Federal Regulations.end delete
begin insert any
2other applicable law or regulation.end insert

3begin insert

begin insertSEC. 34.end insert  

end insert

begin insertSection 14593 of the end insertbegin insertWelfare and Institutions Codeend insert
4
begin insert is amended to read:end insert

5

14593.  

(a) (1) The department may enter into contracts with
6public or privatebegin delete nonprofitend delete organizations for implementation of
7the PACE program, and also may enter into separate contracts
8with PACE organizations, to fully implement the single state
9agency responsibilities assumed by the department in those
10contracts, Section 14132.94, and any other state requirement found
11necessary by the department to provide comprehensive
12community-based, risk-based, and capitated long-term care services
13to California’s frail elderly.

14(2) The department may enter into separate contracts as specified
15inbegin delete subdivision (a)end deletebegin insert paragraph (1)end insert with up to 15 PACE organizations.
16
begin insert This paragraph shall become inoperative upon federal approval
17of a capitation rate methodology, pursuant to subdivision (n) of
18Section 14301.1.end insert

19(b) The requirements of the PACE model, as provided for
20pursuant to Section 1894 (42 U.S.C. Sec. 1395eee) and Section
211934 (42 U.S.C. Sec. 1396u-4) of the federal Social Security Act,
22shall not be waived or modified. The requirements that shall not
23be waived or modified include all of the following:

24(1) The focus on frail elderly qualifying individuals who require
25the level of care provided in a nursing facility.

26(2) The delivery of comprehensive, integrated acute and
27long-term care services.

28(3) The interdisciplinary team approach to care management
29and service delivery.

30(4) Capitated, integrated financing that allows the provider to
31pool payments received from public and private programs and
32individuals.

33(5) The assumption by the provider of full financial risk.

34(6) The provision of a PACE benefit package for all participants,
35regardless of source of payment, that shall include all of the
36following:

37(A) All Medicare-covered items and services.

38(B) All Medicaid-covered items and services, as specified in
39the state’s Medicaid plan.

P85   1(C) Other services determined necessary by the interdisciplinary
2team to improve and maintain the participant’s overall health status.

3(c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply
4when determining the eligibility for Medi-Cal of a person receiving
5the services from an organization providing services under this
6chapter.

7(d) Provisions governing the treatment of income and resources
8of a married couple, for the purposes of determining the eligibility
9of a nursing-facility certifiable or institutionalized spouse, shall
10be established so as to qualify for federal financial participation.

11(e) (1) The department shall establish capitation rates paid to
12each PACE organization at no less than 95 percent of the
13fee-for-service equivalent cost, including the department’s cost of
14administration, that the department estimates would be payable
15for all services covered under the PACE organization contract if
16all those services were to be furnished to Medi-Cal beneficiaries
17under the fee-for-service Medi-Cal program provided for pursuant
18to Chapter 7 (commencing with Section 14000).

19(2) This subdivision shall be implemented only to the extent
20that federal financial participation is available.

begin insert

21
(3) This subdivision shall become inoperative upon federal
22approval of a capitation rate methodology, pursuant to subdivision
23(n) of Section 14301.1.

end insert

24(f) Contracts under this chapter may be on a nonbid basis and
25shall be exempt from Chapter 2 (commencing with Section 10290)
26of Part 2 of Division 2 of the Public Contract Code.

begin delete

27(g) This section shall become operative on April 1, 2015.

end delete
begin insert

28
(g) (1) Notwithstanding subdivision (b), and only to the extent
29federal financial participation is available, the department, in
30consultation with PACE organizations, shall seek increased federal
31regulatory flexibility from the federal Centers for Medicare and
32Medicaid Services to modernize the PACE program, which may
33include, but is not limited to, addressing all of the following:

end insert
begin insert

34
(A) Composition of PACE interdisciplinary teams (IDT).

end insert
begin insert

35
(B) Use of community-based physicians.

end insert
begin insert

36
(C) Marketing practices.

end insert
begin insert

37
(D) Development of a streamlined PACE waiver process.

end insert
begin insert

38
(2) This subdivision shall be operative upon federal approval
39of a capitation rate methodology pursuant to subdivision (n) of
40Section 14301.1.

end insert
begin insert

P86   1
(h) This section shall become inoperative if the Coordinated
2Care Initiative becomes inoperative pursuant to Section 34 of
3Chapter 37 of the Statutes of 2013 and shall be repealed on
4January 1 next following the date upon which it becomes
5inoperative.

end insert
6begin insert

begin insertSEC. 35.end insert  

end insert

begin insertSection 14593 is added to the end insertbegin insertWelfare and Institutions
7Code
end insert
begin insert, to read:end insert

begin insert
8

begin insert14593.end insert  

(a) (1) The department may enter into contracts with
9public or private organizations for implementation of the PACE
10program, and also may enter into separate contracts with PACE
11organizations, to fully implement the single state agency
12responsibilities assumed by the department in those contracts,
13Section 14132.94, and any other state requirement found necessary
14by the department to provide comprehensive community-based,
15risk-based, and capitated long-term care services to California's
16frail elderly.

17
(2) The department may enter into separate contracts as
18specified in paragraph (1) with up to 15 PACE organizations. This
19paragraph shall become inoperative upon federal approval of a
20capitation rate methodology pursuant to subdivision (l) of Section
2114301.1.

22
(b) The requirements of the PACE model, as provided for
23pursuant to Section 1894 (42 U.S.C. Sec. 1395eee) and Section
241934 (42 U.S.C. Sec. 1396u-4) of the federal Social Security Act,
25shall not be waived or modified. The requirements that shall not
26be waived or modified include all of the following:

27
(1) The focus on frail elderly qualifying individuals who require
28the level of care provided in a nursing facility.

29
(2) The delivery of comprehensive, integrated acute and
30long-term care services.

31
(3) The interdisciplinary team approach to care management
32and service delivery.

33
(4) Capitated, integrated financing that allows the provider to
34pool payments received from public and private programs and
35individuals.

36
(5) The assumption by the provider of full financial risk.

37
(6) The provision of a PACE benefit package for all participants,
38regardless of source of payment, that shall include all of the
39following:

40
(A) All Medicare-covered items and services.

P87   1
(B) All Medicaid-covered items and services, as specified in the
2state’s Medicaid plan.

3
(C) Other services determined necessary by the interdisciplinary
4team to improve and maintain the participant’s overall health
5status.

6
(c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply
7when determining the eligibility for Medi-Cal of a person receiving
8the services from an organization providing services under this
9chapter.

10
(d) Provisions governing the treatment of income and resources
11of a married couple, for the purposes of determining the eligibility
12of a nursing-facility certifiable or institutionalized spouse, shall
13be established so as to qualify for federal financial participation.

14
(e) (1) The department shall establish capitation rates paid to
15each PACE organization at no less than 95 percent of the
16fee-for-service equivalent cost, including the department’s cost of
17administration, that the department estimates would be payable
18for all services covered under the PACE organization contract if
19all those services were to be furnished to Medi-Cal beneficiaries
20under the fee-for-service Medi-Cal program provided for pursuant
21to Chapter 7 (commencing with Section 14000).

22
(2) This subdivision shall be implemented only to the extent that
23federal financial participation is available.

24
(3) This subdivision shall become inoperative upon federal
25approval of a capitation rate methodology pursuant to subdivision
26(l) of Section 14301.1.

27
(f) Contracts under this chapter may be on a nonbid basis and
28shall be exempt from Chapter 2 (commencing with Section 10290)
29of Part 2 of Division 2 of the Public Contract Code.

30
(g) (1) Notwithstanding subdivision (b), and only to the extent
31federal financial participation is available, the department, in
32consultation with PACE organizations, shall seek increased federal
33regulatory flexibility from the federal Centers for Medicare and
34Medicaid Services to modernize the PACE program, which may
35include, but is not limited to, addressing:

36
(A) Composition of PACE interdisciplinary teams (IDT).

37
(B) Use of community-based physicians.

38
(C) Marketing practices.

39
(D) Development of a streamlined PACE waiver process.

P88   1
(2) This subdivision shall be operative upon federal approval
2of a capitation rate methodology pursuant to subdivision (l) of
3Section 14301.1.

4
(h) This section shall become operative only if Section 28 of
5Chapter 37 of the Statutes of 2013 becomes inoperative.

end insert
6begin insert

begin insertSEC. 36.end insert  

end insert
begin insert

The amendments made to Section 14131.10 of the
7Welfare and Institutions Code by this act shall become operative
8on July 1, 2016.

end insert
9begin insert

begin insertSEC. 37.end insert  

end insert
begin insert

This act is a bill providing for appropriations related
10to the Budget Bill within the meaning of subdivision (e) of Section
1112 of Article IV of the California Constitution, has been identified
12as related to the budget in the Budget Bill, and shall take effect
13immediately.

end insert
begin delete
14

SECTION 1.  

It is the intent of the Legislature to enact statutory
15changes, relating to the Budget Act of 2016.

end delete


O

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