BILL NUMBER: SB 833 CHAPTERED
BILL TEXT
CHAPTER 30
FILED WITH SECRETARY OF STATE JUNE 27, 2016
APPROVED BY GOVERNOR JUNE 27, 2016
PASSED THE SENATE JUNE 15, 2016
PASSED THE ASSEMBLY JUNE 15, 2016
AMENDED IN ASSEMBLY JUNE 10, 2016
AMENDED IN ASSEMBLY MAY 25, 2016
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 7, 2016
An 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.
LEGISLATIVE COUNSEL'S DIGEST
SB 833, Committee on Budget and Fiscal Review. Health.
(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.
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.
(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.
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.
(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.
This bill would continuously appropriate the moneys in the fund to
the department, thereby making an appropriation.
(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.
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.
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.
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.
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.
This bill would delete the above-described payment obligation. The
bill would also make conforming changes.
(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.
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.
(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.
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.
(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.
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.
(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.
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.
(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.
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.
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.
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.
(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.
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.
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.
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.
(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.
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.
(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.
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.
(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.
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."
(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.
This bill, commencing July 1, 2016, would restore acupuncture
services as a covered benefit under the Medi-Cal program.
(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.
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.
(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.
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.
(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.
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.
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.
(18) This bill would also delete or make inoperative various
obsolete provisions of law and make various other technical changes.
(19) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 100504 of the Government Code is amended to
read:
100504. (a) The board may do the following:
(1) With respect to individual coverage made available in the
Exchange, collect premiums and assist in the administration of
subsidies.
(2) Enter into contracts.
(3) Sue and be sued.
(4) Receive and accept gifts, grants, or donations of moneys from
any agency of the United States, any agency of the state, and any
municipality, county, or other political subdivision of the state.
(5) Receive and accept gifts, grants, or donations from
individuals, associations, private foundations, and corporations, in
compliance with the conflict of interest provisions to be adopted by
the board at a public meeting.
(6) Adopt rules and regulations, as necessary. Until January 1,
2017, any necessary rules and regulations may be adopted as emergency
regulations in accordance with the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2). Until January 1, 2019, any necessary rules and
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 this
title that is operative on or before December 31, 2016, may be
adopted as emergency regulations in accordance with the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2). The adoption of emergency
regulations pursuant to this section shall be deemed to be an
emergency and necessary for the immediate preservation of the public
peace, health and safety, or general welfare. Notwithstanding Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2, including subdivisions (e) and (h) of Section 11346.1, any
emergency regulation adopted pursuant to this section shall be
repealed by operation of law unless the adoption, amendment, or
repeal of the regulation is promulgated by the board pursuant to
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code within five years of the initial
adoption of the emergency regulation. Notwithstanding subdivision (h)
of Section 11346.1, until January 1, 2020, the Office of
Administrative Law may approve more than two readoptions of an
emergency regulation adopted pursuant to this section. The amendments
made to this paragraph by the act adding this sentence shall apply
to any emergency regulation adopted pursuant to this section prior to
the effective date of the Budget Act of 2015.
(7) Collaborate with the State Department of Health Care Services
and the Managed Risk Medical Insurance Board, to the extent possible,
to allow an individual the option to remain enrolled with his or her
carrier and provider network in the event the individual experiences
a loss of eligibility of premium tax credits and becomes eligible
for the Medi-Cal program or the Healthy Families Program, or loses
eligibility for the Medi-Cal program or the Healthy Families Program
and becomes eligible for premium tax credits through the Exchange.
(8) Share information with relevant state departments, consistent
with the confidentiality provisions in Section 1411 of the federal
act, necessary for the administration of the Exchange.
(9) Require carriers participating in the Exchange to make
available to the Exchange and regularly update an electronic
directory of contracting health care providers so that individuals
seeking coverage through the Exchange can search by health care
provider name to determine which health plans in the Exchange include
that health care provider in their network. The board may also
require a carrier to provide regularly updated information to the
Exchange as to whether a health care provider is accepting new
patients for a particular health plan. The Exchange may provide an
integrated and uniform consumer directory of health care providers
indicating which carriers the providers contract with and whether the
providers are currently accepting new patients. The Exchange may
also establish methods by which health care providers may transmit
relevant information directly to the Exchange, rather than through a
carrier.
(10) Make available supplemental coverage for enrollees of the
Exchange to the extent permitted by the federal act, provided that no
General Fund money is used to pay the cost of that coverage. Any
supplemental coverage offered in the Exchange shall be subject to the
charge imposed under subdivision (n) of Section 100503.
(b) The Exchange shall only collect information from individuals
or designees of individuals necessary to administer the Exchange and
consistent with the federal act.
(c) (1) The board shall have the authority to standardize products
to be offered through the Exchange. Any products standardized by the
board pursuant to this subdivision shall be discussed by the board
during at least one properly noticed board meeting prior to the board
meeting at which the board adopts the standardized products to be
offered through the Exchange.
(2) The adoption, amendment, or repeal of a regulation by the
board to implement this subdivision is exempt from the rulemaking
provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2).
SEC. 2. Part 6.2 (commencing with Section 1179.80) is added to
Division 1 of the Health and Safety Code, to read:
PART 6.2. Naloxone Grant Program
1179.80. (a) In order to reduce the rate of fatal overdose from
opioid drugs including heroin and prescription opioids, the State
Department of Public Health shall, subject to an appropriation for
this purpose in the Budget Act of 2016, 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.
(b) The department may award grants itself or enter into contracts
to carry out the provisions of subdivision (a). The award of
contracts and grants is exempt from Part 2 (commencing with Section
10100) of Division 2 of the Public Contract Code and is exempt from
approval by the Department of General Services prior to their
execution.
(c) Not more than 10 percent of the funds appropriated shall be
available to the department for its administrative costs in
implementing this section. If deemed necessary by the department, the
department may allocate funds to other state departments to assist
in the implementation of subdivision (a).
SEC. 3. Section 1324.9 of the Health and Safety Code is amended to
read:
1324.9. (a) The Long-Term Care Quality Assurance Fund is hereby
created in the State Treasury. Notwithstanding Section 13340 of the
Government Code, moneys in the fund shall be continuously
appropriated, without regard to fiscal year, to the State Department
of Health Care Services for the purposes of this article and Article
7.6 (commencing with Section 1324.20). Notwithstanding Section
16305.7 of the Government Code, the fund shall contain all interest
and dividends earned on moneys in the fund.
(b) Notwithstanding any other law, beginning August 1, 2013, all
revenues received by the State Department of Health Care Services
categorized by the State Department of Health Care Services as
long-term care quality assurance fees shall be deposited into the
Long-Term Care Quality Assurance Fund. Revenue that shall be
deposited into this fund shall include quality assurance fees imposed
pursuant to this article and quality assurance fees imposed pursuant
to Article 7.6 (commencing with Section 1324.20).
(c) Notwithstanding any other law, the Controller may use the
funds in the Long-Term Care Quality Assurance Fund for cashflow loans
to the General Fund as provided in Sections 16310 and 16381 of the
Government Code.
SEC. 4. Section 120955 of the Health and Safety Code is amended to
read:
120955. (a) (1) To the extent that state and federal funds are
appropriated in the annual Budget Act for these purposes, the
director shall establish and may administer a program to provide drug
treatments to persons infected with human immunodeficiency virus
(HIV), the etiologic agent of acquired immunodeficiency syndrome
(AIDS), and to persons who are HIV-negative who have been prescribed
preexposure prophylaxis included on the ADAP formulary for the
prevention of HIV infection. To the extent allowable under federal
law, and as appropriated in the annual Budget Act, the director may
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 related medical copays, coinsurance, and deductibles.
If the director makes a formal determination that, in any fiscal
year, funds appropriated for the program will be insufficient to
provide all of those drug treatments to existing eligible persons for
the fiscal year and that a suspension of the implementation of the
program is necessary, the director may suspend eligibility
determinations and enrollment in the program for the period of time
necessary to meet the needs of existing eligible persons in the
program.
(2) The director, in consultation with the AIDS Drug Assistance
Program Medical Advisory Committee, shall develop, maintain, and
update as necessary a list of drugs to be provided under this
program. The list shall be exempt from the requirements of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340), Chapter 4 (commencing with Section 11370), and Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code), and shall not be subject to the review and
approval of the Office of Administrative Law.
(b) The director may grant funds to a county public health
department through standard agreements to administer this program in
that county. To maximize the recipients' access to drugs covered by
this program, the director shall urge the county health department in
counties granted these funds to decentralize distribution of the
drugs to the recipients.
(c) The director shall establish a rate structure for
reimbursement for the cost of each drug included in the program.
Rates shall not be less than the actual cost of the drug. However,
the director may purchase a listed drug directly from the
manufacturer and negotiate the most favorable bulk price for that
drug.
(d) Manufacturers of the drugs on the list shall pay the
department a rebate equal to the rebate that would be applicable to
the drug under Section 1927(c) of the federal Social Security Act (42
U.S.C. Sec. 1396r-8(c)) plus an additional rebate to be negotiated
by each manufacturer with the department, except that no rebates
shall be paid to the department under this section on drugs for which
the department has received a rebate under Section 1927(c) of the
federal Social Security Act (42 U.S.C. Sec. 1396r-8(c)) or that have
been purchased on behalf of county health departments or other
eligible entities at discount prices made available under Section
256b of Title 42 of the United States Code.
(e) The department shall submit an invoice, not less than two
times per year, to each manufacturer for the amount of the rebate
required by subdivision (d).
(f) Drugs may be removed from the list for failure to pay the
rebate required by subdivision (d), unless the department determines
that removal of the drug from the list would cause substantial
medical hardship to beneficiaries.
(g) The department may adopt emergency regulations to implement
amendments to this chapter made during the 1997-98 Regular Session,
in accordance with the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code). The initial adoption of emergency regulations
shall be deemed to be an emergency and considered by the Office of
Administrative Law as necessary for the immediate preservation of the
public peace, health and safety, or general welfare. Emergency
regulations adopted pursuant to this section shall remain in effect
for no more than 180 days.
(h) Reimbursement under this chapter shall not be made for any
drugs that are available to the recipient under any other private,
state, or federal programs, or under any other contractual or legal
entitlements, except that the director may authorize an exemption
from this subdivision where exemption would represent a cost savings
to the state.
(i) The department may also 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 up to, but not exceeding, the
amount of that cost-sharing obligation. This cost sharing may only
be applied in circumstances in which the other payer recognizes the
ADAP payment as counting toward the individual's cost-sharing
obligation. The department may 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, including medical copayments and deductibles for outpatient
care, and premiums to purchase or maintain health insurance coverage.
SEC. 5. Section 120960 of the Health and Safety Code is amended to
read:
120960. (a) The department shall establish uniform standards of
financial eligibility for the drugs under the program established
under this chapter.
(b) Nothing in the financial eligibility standards shall prohibit
drugs to an otherwise eligible person whose modified adjusted gross
income does not exceed 500 percent of the federal poverty level per
year based on family size and household income. However, the director
may authorize drugs for persons with incomes higher than 500 percent
of the federal poverty level per year based on family size and
household income if the estimated cost of those drugs in one year is
expected to exceed 20 percent of the person's modified adjusted gross
income.
(c) A county public health department administering this program
pursuant to an agreement with the director pursuant to subdivision
(b) of Section 120955 shall use no more than 5 percent of total
payments it collects pursuant to this section to cover any
administrative costs related to eligibility determinations, reporting
requirements, and the collection of payments.
(d) A county public health department administering this program
pursuant to subdivision (b) of Section 120955 shall provide all drugs
added to the program pursuant to subdivision (a) of Section 120955
within 60 days of the action of the director.
(e) For purposes of this section, the following terms shall have
the following meanings:
(1) "Family size" has the meaning given to that term in Section
36B(d)(1) of the Internal Revenue Code of 1986, and shall include
same or opposite sex married couples, registered domestic partners,
and any tax dependents, as defined by Section 152 of the Internal
Revenue Code of 1986, of either spouse or registered domestic
partner.
(2) "Federal poverty level" refers to the poverty guidelines
updated periodically in the Federal Register by the United States
Department of Health and Human Services under the authority of
Section 9902(2) of Title 42 of the United States Code.
(3) "Household income" means the sum of the applicant's or
recipient's modified adjusted gross income, plus the modified
adjusted gross income of the applicant's or recipient's spouse or
registered domestic partner, and the modified adjusted gross incomes
of all other individuals for whom the applicant or recipient, or the
applicant's or recipient's spouse or registered domestic partner, is
allowed a federal income tax deduction for the taxable year.
(4) "Internal Revenue Code of 1986" means Title 26 of the United
States Code, including all amendments enacted to that code.
(5) "Modified adjusted gross income" has the meaning given to that
term in Section 36B(d)(2)(B) of the Internal Revenue Code of 1986.
SEC. 6. Section 120965 of the Health and Safety Code is repealed.
SEC. 7. Part 7.5 (commencing with Section 122450) is added to
Division 105 of the Health and Safety Code, to read:
PART 7.5. Communicable Disease Testing and Prevention
122450. (a) Of the funds appropriated in the 2016 Budget Act for
this purpose, the State Department of Public Health shall do all of
the following:
(1) Purchase and distribute hepatitis B vaccine and related
materials to local health jurisdictions and community-based
organizations to test and vaccinate high-risk adults.
(2) Purchase hepatitis C test kits and related materials to
distribute to local health jurisdictions and community-based testing
programs.
(3) Train nonmedical personnel to perform HCV and HIV testing
waived under the federal Clinical Laboratory Improvement Amendments
of 1998 (CLIA) (42 U.S.C. Sec. 263a) in local health jurisdictions
and community-based settings.
(4) Provide technical assistance to local governments and
community-based organizations to increase the number of syringe
exchange and disposal programs throughout California and the number
of jurisdictions in which syringe exchange and disposal programs are
authorized.
(b) The State Department of Public Health may issue grants for the
materials and activities provided for in subdivision (a).
SEC. 8. Section 125281 is added to the Health and Safety Code, to
read:
125281. From funds appropriated to the department in the Budget
Act of 2016 for these purposes, the department shall allocate funds
to the diagnostic and treatment centers for Alzheimer's disease
established pursuant to Section 125280 to be used for all of the
following purposes:
(a) To determine the standard of care in early and accurate
diagnosis drawing on peer-reviewed evidence, best practices, Medicare
and Medicaid policy and reimbursement, and experience working with
patients seeking services at a center.
(b) To conduct targeted outreach to health professionals through
medical school instruction, hospital grant rounds, continuing
education, community education, and free online resources.
(c) To provide low-cost, accessible detection and diagnosis tools
that the center shall make available via open source portals of the
postsecondary higher educational institution that established the
center. Furthermore, the department shall post these tools on its
Internet Web site to serve as a resource for the state.
(d) To endorse and disseminate low-cost, accessible detection and
diagnosis tools for broad use by health professionals practicing in a
variety of settings.
(e) To address unique health disparities that exist within diverse
populations, with special focus and attention on reaching African
Americans, Latinos, and women.
(f) To evaluate the educational effectiveness and measure the
impact of these efforts, including pretests and posttests for health
professionals, metrics, and documented practice change.
SEC. 9. Section 130301 of the Health and Safety Code is amended to
read:
130301. The Legislature finds and declares the following:
(a) The federal Health Insurance Portability and Accountability
Act (Public Law 104-191), known as HIPAA, was enacted on August 21,
1996.
(b) HIPAA extends health coverage benefits to workers after they
terminate or change employment by allowing the worker to participate
in existing group coverage plans, thereby avoiding the additional
expense associated with obtaining individual coverage as well as the
potential loss of coverage because of a preexisting health condition.
(c) Administrative simplification is a key feature of HIPAA,
requiring standard national identifiers for providers, employers, and
health plans and the development of uniform standards for the coding
and transmission of claims and health care information.
Administration simplification is intended to promote the use of
information technology, thereby reducing costs and increasing
efficiency in the health care industry.
(d) HIPAA also contains standards for safeguarding the privacy and
security of health information. Therefore, the development of
policies for safeguarding the privacy and security of health records
is a fundamental and indispensable part of HIPAA implementation that
must accompany or precede the expansion or standardization of
technology for recording or transmitting health information.
(e) The federal Department of Health and Human Services has
published, and continues to publish, rules pertaining to the
implementation of HIPAA. Following a 60-day congressional concurrence
period, health providers and insurers have 24 months in which to
implement these rules.
(f) These federal rules directly apply to state and county
departments that provide health coverage, health care, mental health
services, and alcohol and drug treatment programs. Other state and
county departments are subject to these rules to the extent they use
or exchange information with the departments to which the federal
rules directly apply.
(g) In view of the substantial changes that HIPAA will require in
the practices of both private and public health entities and their
business associates, the ability of California government to continue
the delivery of vital health services will depend upon the
implementation of, and compliance with, HIPAA in a manner that is
coordinated among state departments as well as our partners in county
government and the private health sector.
(h) The implementation of HIPAA shall be accomplished as required
by federal law and regulations and shall be a priority for state
departments.
SEC. 10. Section 130303 of the Health and Safety Code is amended
to read:
130303. The office shall assume statewide leadership,
coordination, policy formulation, direction, and oversight
responsibilities for HIPAA implementation and compliance. The office
shall exercise full authority relative to state entities to establish
policy, provide direction to state entities, monitor progress, and
report on implementation and compliance activities.
SEC. 11. Section 130305 of the Health and Safety Code is amended
to read:
130305. The office shall be staffed, at a minimum, with the
following personnel:
(a) Legal counsel to perform activities that may include, but are
not limited to, determining the application of federal law pertaining
to HIPAA.
(b) Staff with expertise in the rules promulgated by HIPAA.
(c) Staff, as necessary, to coordinate and monitor the progress
made by all state entities in HIPAA implementation and compliance.
SEC. 12. Section 130306 of the Health and Safety Code is amended
to read:
130306. The office shall perform the following functions:
(a) Standardizing the HIPAA implementation process used in all
state entities, which includes the following:
(1) Developing an overall state strategy for HIPAA implementation
and compliance that includes timeframes within which specified
activities will be completed.
(2) Specifying tools, such as protocols for assessment and
reporting, and any other tools as determined by the director for
HIPAA implementation and compliance.
(3) Developing uniform policies on privacy, security, and other
matters related to HIPAA that shall be adopted and implemented by all
state entities. In developing these policies, the office shall
consult with representatives from the private sector, state
government, and other public entities affected by HIPAA.
(4) Providing an ongoing evaluation of HIPAA implementation and
compliance in California and refining the plans, tools, and policies
as required to effect implementation.
(5) Developing standards for the office to use in determining the
extent of HIPAA compliance.
(b) Representing the State of California in HIPAA discussions with
the federal Department of Health and Human Services and at the
Workgroup for Electronic Data Interchange and other national and
regional groups developing standards for HIPAA implementation,
including those authorized by the federal Department of Health and
Human Services to receive comments related to HIPAA. The office may
review and approve all comments related to HIPAA that state entities
or representatives from the University of California, to the extent
authorized by its Regents, propose for submission to the federal
Department of Health and Human Services or any other body or
organization.
(c) Monitoring the HIPAA implementation and compliance activities
of state entities and requiring these entities to report on their
activities at times specified by the director using a format
prescribed by the director. The office shall seek the cooperation of
counties in monitoring HIPAA implementation and compliance in
programs that are administered by county government.
(d) Providing state entities with technical assistance as the
director deems necessary and appropriate to advance the state's
implementation and compliance of HIPAA as required by the schedule
adopted by the federal Department of Health and Human Services. This
assistance shall also include sharing information obtained by the
office relating to HIPAA.
(e) Reviewing and approving all HIPAA legislation and regulations
proposed by state entities, other than state control agencies, prior
to the proposal's review by any other entity and reviewing all
analyses and positions, other than those prepared by state control
agencies, on HIPAA related legislation being considered by either
Congress or the Legislature.
(f) Ensuring state departments claim federal funding for those
activities that qualify under federal funding criteria.
(g) Maintaining an Internet Web site that is accessible to the
public to provide information in a consistent and accessible format
concerning state HIPAA implementation activities, timeframes for
completing those activities, HIPAA implementation requirements that
have been met, and the promulgation of federal regulations pertaining
to HIPAA implementation.
SEC. 13. Section 130307 of the Health and Safety Code is repealed.
SEC. 14. Section 130309 of the Health and Safety Code is amended
to read:
130309. (a) All state entities subject to HIPAA
shall complete an assessment, in a form specified by the office to
determine the impact of HIPAA on their operations.
(b) All state entities shall cooperate with the office to
determine whether they are subject to HIPAA, including, but not
limited to, providing a completed assessment as prescribed by the
office.
SEC. 15. Section 130310 of the Health and Safety Code is amended
to read:
130310. All state entities shall cooperate with the efforts of
the office to monitor HIPAA implementation and compliance activities
and to obtain information on those activities.
SEC. 16. Section 130312 of the Health and Safety Code is repealed.
SEC. 17. Section 130313 of the Health and Safety Code is amended
to read:
130313. To the extent that funds are appropriated in the annual
Budget Act, the office shall perform the following functions in order
to comply with HIPAA requirements:
(a) Ongoing support of departmental HIPAA project management
offices.
(b) The development, revision, and issuance of HIPAA compliance
policies.
(c) Modifications of programs in accordance with any revised
policies.
(d) Staff training on HIPAA compliance policies and programs.
(e) Coordination and communication with other affected entities.
(f) Evaluate, monitor, and report on HIPAA implementation and
compliance activities of state entities affected by HIPAA.
(g) Consultation with appropriate stakeholders.
SEC. 18. Section 138.7 of the Labor Code, as amended by Section 80
of Chapter 46 of the Statutes of 2012, is amended to read:
138.7. (a) Except as expressly permitted in subdivision (b), a
person or public or private entity not a party to a claim for workers'
compensation benefits shall not obtain individually identifiable
information obtained or maintained by the division on that claim. For
purposes of this section, "individually identifiable information"
means any data concerning an injury or claim that is linked to a
uniquely identifiable employee, employer, claims administrator, or
any other person or entity.
(b) (1) (A) The administrative director, or a statistical agent
designated by the administrative director, may use individually
identifiable information for purposes of creating and maintaining the
workers' compensation information system as specified in Section
138.6.
(B) The administrative director may publish the identity of claims
administrators in the annual report disclosing the compliance rates
of claims administrators pursuant to subdivision (d) of Section
138.6.
(2) (A) The State Department of Public Health may use individually
identifiable information for purposes of establishing and
maintaining a program on occupational health and occupational disease
prevention as specified in Section 105175 of the Health and Safety
Code.
(B) (i) The State Department of Health Care Services may use
individually identifiable information for purposes of seeking
recovery of Medi-Cal costs incurred by the state for treatment
provided to injured workers that should have been incurred by
employers and insurance carriers pursuant to Article 3.5 (commencing
with Section 14124.70) of Chapter 7 of Part 3 of Division 9 of the
Welfare and Institutions Code.
(ii) The Department of Industrial Relations shall furnish
individually identifiable information to the State Department of
Health Care Services, and the State Department of Health Care
Services may furnish the information to its designated agent,
provided that the individually identifiable information shall not be
disclosed for use other than the purposes described in clause (i).
The administrative director may adopt regulations solely for the
purpose of governing access by the State Department of Health Care
Services or its designated agents to the individually identifiable
information as defined in subdivision (a).
(3) (A) Individually identifiable information may be used by the
Division of Workers' Compensation and the Division of Occupational
Safety and Health as necessary to carry out their duties. The
administrative director shall adopt regulations governing the access
to the information described in this subdivision by these divisions.
Any regulations adopted pursuant to this subdivision shall set forth
the specific uses for which this information may be obtained.
(B) Individually identifiable information maintained in the
workers' compensation information system and the Division of Workers'
Compensation may be used by researchers employed by or under
contract to the Commission on Health and Safety and Workers'
Compensation as necessary to carry out the commission's research. The
administrative director shall adopt regulations governing the access
to the information described in this subdivision by commission
researchers. These regulations shall set forth the specific uses for
which this information may be obtained and include provisions
guaranteeing the confidentiality of individually identifiable
information. Individually identifiable information obtained under
this subdivision shall not be disclosed to commission members. No
individually identifiable information obtained by researchers under
contract to the commission pursuant to this subparagraph may be
disclosed to any other person or entity, public or private, for a use
other than that research project for which the information was
obtained. Within a reasonable period of time after the research for
which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
(4) The administrative director shall adopt regulations allowing
reasonable access to individually identifiable information by other
persons or public or private entities for the purpose of bona fide
statistical research. This research shall not divulge individually
identifiable information concerning a particular employee, employer,
claims administrator, or any other person or entity. The regulations
adopted pursuant to this paragraph shall include provisions
guaranteeing the confidentiality of individually identifiable
information. Within a reasonable period of time after the research
for which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
(5) (A) This section shall not operate to exempt from disclosure
any information that is considered to be a public record pursuant to
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code)
contained in an individual's file once an application for
adjudication has been filed pursuant to Section 5501.5.
(B) Individually identifiable information shall not be provided to
any person or public or private entity who is not a party to the
claim unless that person identifies himself or herself or that public
or private entity identifies itself and states the reason for making
the request. The administrative director may require the person or
public or private entity making the request to produce information to
verify that the name and address of the requester is valid and
correct. If the purpose of the request is related to preemployment
screening, the administrative director shall notify the person about
whom the information is requested that the information was provided
and shall include the following in 12-point type:
"IT MAY BE A VIOLATION OF FEDERAL AND STATE LAW TO DISCRIMINATE
AGAINST A JOB APPLICANT BECAUSE THE APPLICANT HAS FILED A CLAIM FOR
WORKERS' COMPENSATION BENEFITS."
(C) Any residence address is confidential and shall not be
disclosed to any person or public or private entity except to a party
to the claim, a law enforcement agency, an office of a district
attorney, any person for a journalistic purpose, or other
governmental agency.
(D) This paragraph does not prohibit the use of individually
identifiable information for purposes of identifying bona fide lien
claimants.
(c) Except as provided in subdivision (b), individually
identifiable information obtained by the division is privileged and
is not subject to subpoena in a civil proceeding unless, after
reasonable notice to the division and a hearing, a court determines
that the public interest and the intent of this section will not be
jeopardized by disclosure of the information. This section shall not
operate to restrict access to information by any law enforcement
agency or district attorney's office or to limit admissibility of
that information in a criminal proceeding.
(d) It is unlawful for any person who has received individually
identifiable information from the division pursuant to this section
to provide that information to any person who is not entitled to it
under this section.
SEC. 19. Section 138.7 of the Labor Code, as amended by Section 81
of Chapter 46 of the Statutes of 2012, is repealed.
SEC. 20. Section 5848.5 of the Welfare and Institutions Code is
amended to read:
5848.5. (a) The Legislature finds and declares all of the
following:
(1) California has realigned public community mental health
services to counties and it is imperative that sufficient
community-based resources be available to meet the mental health
needs of eligible individuals.
(2) Increasing access to effective outpatient and crisis
stabilization services provides an opportunity to reduce costs
associated with expensive inpatient and emergency room care and to
better meet the needs of individuals with mental health disorders in
the least restrictive manner possible.
(3) Almost one-fifth of people with mental health disorders visit
a hospital emergency room at least once per year. If an adequate
array of crisis services is not available, it leaves an individual
with little choice but to access an emergency room for assistance
and, potentially, an unnecessary inpatient hospitalization.
(4) Recent reports have called attention to a continuing problem
of inappropriate and unnecessary utilization of hospital emergency
rooms in California due to limited community-based services for
individuals in psychological distress and acute psychiatric crisis.
Hospitals report that 70 percent of people taken to emergency rooms
for psychiatric evaluation can be stabilized and transferred to a
less intensive level of crisis care. Law enforcement personnel report
that their personnel need to stay with people in the emergency room
waiting area until a placement is found, and that less intensive
levels of care tend not to be available.
(5) Comprehensive public and private partnerships at both local
and regional levels, including across physical health services,
mental health, substance use disorder, law enforcement, social
services, and related supports, are necessary to develop and maintain
high quality, patient-centered, and cost-effective care for
individuals with mental health disorders that facilitates their
recovery and leads towards wellness.
(6) The recovery of individuals with mental health disorders is
important for all levels of government, business, and the local
community.
(b) This section shall be known, and may be cited, as the
Investment in Mental Health Wellness Act of 2013. The objectives of
this section are to do all of the following:
(1) Expand access to early intervention and treatment services to
improve the client experience, achieve recovery and wellness, and
reduce costs.
(2) Expand the continuum of services to address crisis
intervention, crisis stabilization, and crisis residential treatment
needs that are wellness, resiliency, and recovery oriented.
(3) Add at least 25 mobile crisis support teams and at least 2,000
crisis stabilization and crisis residential treatment beds to
bolster capacity at the local level to improve access to mental
health crisis services and address unmet mental health care needs.
(4) Add at least 600 triage personnel to provide intensive case
management and linkage to services for individuals with mental health
care disorders at various points of access, such as at designated
community-based service points, homeless shelters, and clinics.
(5) Reduce unnecessary hospitalizations and inpatient days by
appropriately utilizing community-based services and improving access
to timely assistance.
(6) Reduce recidivism and mitigate unnecessary expenditures of
local law enforcement.
(7) Provide local communities with increased financial resources
to leverage additional public and private funding sources to achieve
improved networks of care for individuals with mental health
disorders.
(8) Provide a complete continuum of crisis services for children
and youth 21 years of age and under regardless of where they live in
the state. The funds included in the 2016 Budget Act for the purpose
of developing the continuum of mental health crisis services for
children and youth 21 years of age and under shall be for the
following objectives:
(A) Provide a continuum of crisis services for children and youth
21 years of age and under regardless of where they live in the state.
(B) Provide for early intervention and treatment services to
improve the client experience, achieve recovery and wellness, and
reduce costs.
(C) Expand the continuum of community-based services to address
crisis intervention, crisis stabilization, and crisis residential
treatment needs that are wellness-, resiliency-, and
recovery-oriented.
(D) Add at least 200 mobile crisis support teams.
(E) Add at least 120 crisis stabilization services and beds and
crisis residential treatment beds to increase capacity at the local
level to improve access to mental health crisis services and address
unmet mental health care needs.
(F) Add triage personnel to provide intensive case management and
linkage to services for individuals with mental health care disorders
at various points of access, such as at designated community-based
service points, homeless shelters, schools, and clinics.
(G) Expand family respite care to help families and sustain
caregiver health and well-being.
(H) Expand family supportive training and related services
designed to help families participate in the planning process, access
services, and navigate programs.
(I) Reduce unnecessary hospitalizations and inpatient days by
appropriately utilizing community-based services.
(J) Reduce recidivism and mitigate unnecessary expenditures of
local law enforcement.
(K) Provide local communities with increased financial resources
to leverage additional public and private funding sources to achieve
improved networks of care for children and youth 21 years of age and
under with mental health disorders.
(c) Through appropriations provided in the annual Budget Act for
this purpose, it is the intent of the Legislature to authorize the
California Health Facilities Financing Authority, hereafter referred
to as the authority, and the Mental Health Services Oversight and
Accountability Commission, hereafter referred to as the commission,
to administer competitive selection processes as provided in this
section for capital capacity and program expansion to increase
capacity for mobile crisis support, crisis intervention, crisis
stabilization services, crisis residential treatment, and specified
personnel resources.
(d) Funds appropriated by the Legislature to the authority for
purposes of this section shall be made available to selected
counties, or counties acting jointly. The authority may, at its
discretion, also give consideration to private nonprofit corporations
and public agencies in an area or region of the state if a county,
or counties acting jointly, affirmatively supports this designation
and collaboration in lieu of a county government directly receiving
grant funds.
(1) Grant awards made by the authority shall be used to expand
local resources for the development, capital, equipment acquisition,
and applicable program startup or expansion costs to increase
capacity for client assistance and services in the following areas:
(A) Crisis intervention, as authorized by Sections 14021.4, 14680,
and 14684.
(B) Crisis stabilization, as authorized by Sections 14021.4,
14680, and 14684.
(C) Crisis residential treatment, as authorized by Sections
14021.4, 14680, and 14684.
(D) Rehabilitative mental health services, as authorized by
Sections 14021.4, 14680, and 14684.
(E) Mobile crisis support teams, including personnel and
equipment, such as the purchase of vehicles.
(2) The authority shall develop selection criteria to expand local
resources, including those described in paragraph (1), and processes
for awarding grants after consulting with representatives and
interested stakeholders from the mental health community, including,
but not limited to, the County Behavioral Health Directors
Association of California, service providers, consumer organizations,
and other appropriate interests, such as health care providers and
law enforcement, as determined by the authority. The authority shall
ensure that grants result in cost-effective expansion of the number
of community-based crisis resources in regions and communities
selected for funding. The authority shall also take into account at
least the following criteria and factors when selecting recipients of
grants and determining the amount of grant awards:
(A) Description of need, including, at a minimum, a comprehensive
description of the project, community need, population to be served,
linkage with other public systems of health and mental health care,
linkage with local law enforcement, social services, and related
assistance, as applicable, and a description of the request for
funding.
(B) Ability to serve the target population, which includes
individuals eligible for Medi-Cal and individuals eligible for county
health and mental health services.
(C) Geographic areas or regions of the state to be eligible for
grant awards, which may include rural, suburban, and urban areas, and
may include use of the five regional designations utilized by the
County Behavioral Health Directors Association of California.
(D) Level of community engagement and commitment to project
completion.
(E) Financial support that, in addition to a grant that may be
awarded by the authority, will be sufficient to complete and operate
the project for which the grant from the authority is awarded.
(F) Ability to provide additional funding support to the project,
including public or private funding, federal tax credits and grants,
foundation support, and other collaborative efforts.
(G) Memorandum of understanding among project partners, if
applicable.
(H) Information regarding the legal status of the collaborating
partners, if applicable.
(I) Ability to measure key outcomes, including improved access to
services, health and mental health outcomes, and cost benefit of the
project.
(3) The authority shall determine maximum grants awards, which
shall take into consideration the number of projects awarded to the
grantee, as described in paragraph (1), and shall reflect reasonable
costs for the project and geographic region. The authority may
allocate a grant in increments contingent upon the phases of a
project.
(4) Funds awarded by the authority pursuant to this section may be
used to supplement, but not to supplant, existing financial and
resource commitments of the grantee or any other member of a
collaborative effort that has been awarded a grant.
(5) All projects that are awarded grants by the authority shall be
completed within a reasonable period of time, to be determined by
the authority. Funds shall not be released by the authority until the
applicant demonstrates project readiness to the authority's
satisfaction. If the authority determines that a grant recipient has
failed to complete the project under the terms specified in awarding
the grant, the authority may require remedies, including the return
of all or a portion of the grant.
(6) A grantee that receives a grant from the authority under this
section shall commit to using that capital capacity and program
expansion project, such as the mobile crisis team, crisis
stabilization unit, or crisis residential treatment program, for the
duration of the expected life of the project.
(7) The authority may consult with a technical assistance entity,
as described in paragraph (5) of subdivision (a) of Section 4061, for
purposes of implementing this section.
(8) The authority may adopt emergency regulations relating to the
grants for the capital capacity and program expansion projects
described in this section, including emergency regulations that
define eligible costs and determine minimum and maximum grant
amounts.
(9) The authority shall provide reports to the fiscal and policy
committees of the Legislature on or before May 1, 2014, and on or
before May 1, 2015, on the progress of implementation, that include,
but are not limited to, the following:
(A) A description of each project awarded funding.
(B) The amount of each grant issued.
(C) A description of other sources of funding for each project.
(D) The total amount of grants issued.
(E) A description of project operation and implementation,
including who is being served.
(10) A recipient of a grant provided pursuant to paragraph (1)
shall adhere to all applicable laws relating to scope of practice,
licensure, certification, staffing, and building codes.
(e) Of the funds specified in paragraph (8) of subdivision (b), it
is the intent of the Legislature to authorize the authority and the
commission to administer competitive selection processes as provided
in this section for capital capacity and program expansion to
increase capacity for mobile crisis support, crisis intervention,
crisis stabilization services, crisis residential treatment, family
respite care, family supportive training and related services, and
triage personnel resources for children and youth 21 years of age and
under.
(f) Funds appropriated by the Legislature to the authority to
address crisis services for children and youth 21 years of age and
under for the purposes of this section shall be made available to
selected counties or counties acting jointly. The authority may, at
its discretion, also give consideration to private nonprofit
corporations and public agencies in an area or region of the state if
a county, or counties acting jointly, affirmatively support this
designation and collaboration in lieu of a county government directly
receiving grant funds.
(1) Grant awards made by the authority shall be used to expand
local resources for the development, capital, equipment acquisition,
and applicable program startup or expansion costs to increase
capacity for client assistance and crisis services for children and
youth 21 years of age and under in the following areas:
(A) Crisis intervention, as authorized by Sections 14021.4, 14680,
and 14684.
(B) Crisis stabilization, as authorized by Sections 14021.4,
14680, and 14684.
(C) Crisis residential treatment, as authorized by Sections
14021.4, 14680, and 14684.
(D) Mobile crisis support teams, including the purchase of
equipment and vehicles.
(E) Family respite care.
(2) The authority shall develop selection criteria to expand local
resources, including those described in paragraph (1), and processes
for awarding grants after consulting with representatives and
interested stakeholders from the mental health community, including,
but not limited to, county mental health directors, service
providers, consumer organizations, and other appropriate interests,
such as health care providers and law enforcement, as determined by
the authority. The authority shall ensure that grants result in
cost-effective expansion of the number of community-based crisis
resources in regions and communities selected for funding. The
authority shall also take into account at least the following
criteria and factors when selecting recipients of grants and
determining the amount of grant awards:
(A) Description of need, including, at a minimum, a comprehensive
description of the project, community need, population to be served,
linkage with other public systems of health and mental health care,
linkage with local law enforcement, social services, and related
assistance, as applicable, and a description of the request for
funding.
(B) Ability to serve the target population, which includes
individuals eligible for Medi-Cal and individuals eligible for county
health and mental health services.
(C) Geographic areas or regions of the state to be eligible for
grant awards, which may include rural, suburban, and urban areas, and
may include use of the five regional designations utilized by the
California Behavioral Health Directors Association.
(D) Level of community engagement and commitment to project
completion.
(E) Financial support that, in addition to a grant that may be
awarded by the authority, will be sufficient to complete and operate
the project for which the grant from the authority is awarded.
(F) Ability to provide additional funding support to the project,
including public or private funding, federal tax credits and grants,
foundation support, and other collaborative efforts.
(G) Memorandum of understanding among project partners, if
applicable.
(H) Information regarding the legal status of the collaborating
partners, if applicable.
(I) Ability to measure key outcomes, including utilization of
services, health and mental health outcomes, and cost benefit of the
project.
(3) The authority shall determine maximum grant awards, which
shall take into consideration the number of projects awarded to the
grantee, as described in paragraph (1), and shall reflect reasonable
costs for the project, geographic region, and target ages. The
authority may allocate a grant in increments contingent upon the
phases of a project.
(4) Funds awarded by the authority pursuant to this section may be
used to supplement, but not to supplant, existing financial and
resource commitments of the grantee or any other member of a
collaborative effort that has been awarded a grant.
(5) All projects that are awarded grants by the authority shall be
completed within a reasonable period of time, to be determined by
the authority. Funds shall not be released by the authority until the
applicant demonstrates project readiness to the authority's
satisfaction. If the authority determines that a grant recipient has
failed to complete the project under the terms specified in awarding
the grant, the authority
may require remedies, including the return of all, or a portion, of
the grant.
(6) A grantee that receives a grant from the authority under this
section shall commit to using that capital capacity and program
expansion project, such as the mobile crisis team, crisis
stabilization unit, family respite care, or crisis residential
treatment program, for the duration of the expected life of the
project.
(7) The authority may consult with a technical assistance entity,
as described in paragraph (5) of subdivision (a) of Section 4061, for
the purposes of implementing this section.
(8) The authority may adopt emergency regulations relating to the
grants for the capital capacity and program expansion projects
described in this section, including emergency regulations that
define eligible costs and determine minimum and maximum grant
amounts.
(9) The authority shall provide reports to the fiscal and policy
committees of the Legislature on or before January 10, 2018, and
annually thereafter, on the progress of implementation, that include,
but are not limited to, the following:
(A) A description of each project awarded funding.
(B) The amount of each grant issued.
(C) A description of other sources of funding for each project.
(D) The total amount of grants issued.
(E) A description of project operation and implementation,
including who is being served.
(10) A recipient of a grant provided pursuant to paragraph (1)
shall adhere to all applicable laws relating to scope of practice,
licensure, certification, staffing, and building codes.
(g) Funds appropriated by the Legislature to the commission for
purposes of this section shall be allocated for triage personnel to
provide intensive case management and linkage to services for
individuals with mental health disorders at various points of access.
These funds shall be made available to selected counties, counties
acting jointly, or city mental health departments, as determined by
the commission through a selection process. It is the intent of the
Legislature for these funds to be allocated in an efficient manner to
encourage early intervention and receipt of needed services for
individuals with mental health disorders, and to assist in navigating
the local service sector to improve efficiencies and the delivery of
services.
(1) Triage personnel may provide targeted case management services
face to face, by telephone, or by telehealth with the individual in
need of assistance or his or her significant support person, and may
be provided anywhere in the community. These service activities may
include, but are not limited to, the following:
(A) Communication, coordination, and referral.
(B) Monitoring service delivery to ensure the individual accesses
and receives services.
(C) Monitoring the individual's progress.
(D) Providing placement service assistance and service plan
development.
(2) The commission shall take into account at least the following
criteria and factors when selecting recipients and determining the
amount of grant awards for triage personnel as follows:
(A) Description of need, including potential gaps in local service
connections.
(B) Description of funding request, including personnel and use of
peer support.
(C) Description of how triage personnel will be used to facilitate
linkage and access to services, including objectives and anticipated
outcomes.
(D) Ability to obtain federal Medicaid reimbursement, when
applicable.
(E) Ability to administer an effective service program and the
degree to which local agencies and service providers will support and
collaborate with the triage personnel effort.
(F) Geographic areas or regions of the state to be eligible for
grant awards, which shall include rural, suburban, and urban areas,
and may include use of the five regional designations utilized by the
County Behavioral Health Directors Association of California.
(3) The commission shall determine maximum grant awards, and shall
take into consideration the level of need, population to be served,
and related criteria, as described in paragraph (2), and shall
reflect reasonable costs.
(4) Funds awarded by the commission for purposes of this section
may be used to supplement, but not supplant, existing financial and
resource commitments of the county, counties acting jointly, or city
mental health department that received the grant.
(5) Notwithstanding any other law, a county, counties acting
jointly, or city mental health department that receives an award of
funds for the purpose of supporting triage personnel pursuant to this
subdivision is not required to provide a matching contribution of
local funds.
(6) Notwithstanding any other law, the commission, without taking
any further regulatory action, may implement, interpret, or make
specific this section by means of informational letters, bulletins,
or similar instructions.
(7) The commission shall provide a status report to the fiscal and
policy committees of the Legislature on the progress of
implementation no later than March 1, 2014.
(h) Funds appropriated by the Legislature to the commission
pursuant to paragraph (8) of subdivision (b) for the purposes of
addressing children's crisis services shall be allocated to support
triage personnel and family supportive training and related services.
These funds shall be made available to selected counties, counties
acting jointly, or city mental health departments, as determined by
the commission through a selection process. The commission may, at
its discretion, also give consideration to private nonprofit
corporations and public agencies in an area or region of the state if
a county, or counties acting jointly, affirmatively supports this
designation and collaboration in lieu of a county government directly
receiving grant funds.
(1) These funds may provide for a range of crisis-related services
for a child in need of assistance, or his or her parent, guardian,
or caregiver. These service activities may include, but are not
limited to, the following:
(A) Intensive coordination of care and services.
(B) Communication, coordination, and referral.
(C) Monitoring service delivery to the child or youth.
(D) Monitoring the child's progress.
(E) Providing placement service assistance and service plan
development.
(F) Crisis or safety planning.
(2) The commission shall take into account at least the following
criteria and factors when selecting recipients and determining the
amount of grant awards for these funds, as follows:
(A) Description of need, including potential gaps in local service
connections.
(B) Description of funding request, including personnel.
(C) Description of how personnel and other services will be used
to facilitate linkage and access to services, including objectives
and anticipated outcomes.
(D) Ability to obtain federal Medicaid reimbursement, when
applicable.
(E) Ability to provide a matching contribution of local funds.
(F) Ability to administer an effective service program and the
degree to which local agencies and service providers will support and
collaborate with the triage personnel effort.
(G) Geographic areas or regions of the state to be eligible for
grant awards, which shall include rural, suburban, and urban areas,
and may include use of the five regional designations utilized by the
County Behavioral Health Directors Association of California.
(3) The commission shall determine maximum grant awards, and shall
take into consideration the level of need, population to be served,
and related criteria, as described in paragraph (2), and shall
reflect reasonable costs.
(4) Funds awarded by the commission for purposes of this section
may be used to supplement, but not supplant, existing financial and
resource commitments of the county, counties acting jointly, or a
city mental health department that received the grant.
(5) Notwithstanding any other law, a county, counties acting
jointly, or a city mental health department that receives an award of
funds for the purpose of this section is not required to provide a
matching contribution of local funds.
(6) Notwithstanding any other law, the commission, without taking
any further regulatory action, may implement, interpret, or make
specific this section by means of informational letters, bulletins,
or similar instructions.
(7) The commission may waive requirements in this section for
counties with a population of 100,000 or less, if the commission
determines it is in the best interest of the state and meets the
intent of the law.
(8) The commission shall provide a status report to the fiscal and
policy committees of the Legislature on the progress of
implementation no later than January 10, 2018, and annually
thereafter.
SEC. 21. Section 10752 of the Welfare and Institutions Code is
amended to read:
10752. The department shall, by March 1, 2017, in coordination
with the Department of Finance, 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 penalty assessments pursuant to
subdivision (f) of Section 76000.10 of the Government Code on January
1, 2018.
SEC. 22. Section 14009.5 of the Welfare and Institutions Code is
amended to read:
14009.5. (a) It is the intent of the Legislature, with the
amendments made to this section by the act that added subdivision
(g), to do all of the following:
(1) Limit Medi-Cal estate recovery only for those services
required to be collected under federal law.
(2) Limit the definition of "estate" to include only the real and
personal property and other assets required to be collected under
federal law.
(3) Require the State Department of Health Care Services to
implement the option in the State Medicaid Manual to waive its claim,
as a substantial hardship, when the estate subject to recovery is a
homestead of modest value, subject to federal approval.
(4) Prohibit recovery from the estate of a deceased Medi-Cal
member who is survived by a spouse or registered domestic partner.
(5) Ensure that Medi-Cal members can easily and timely receive
information about how much their estate may owe Medi-Cal when they
die.
(b) Notwithstanding any other provision of this chapter, the
department shall claim against the estate of the decedent, or against
any recipient of the property of that decedent by distribution, an
amount equal to the payments for the health care services received or
the value of the property received by any recipient from the
decedent by distribution, whichever is less, only in either of the
following circumstances:
(1) Against the real property of a Medi-Cal member of any age who
meets the criteria in Section 1396p(a)(1)(B) of Title 42 of the
United States Code and who was or is an inpatient in a nursing
facility in accordance with Section 1396p(b)(1)(A) of Title 42 of the
United States Code.
(2) (A) The decedent was 55 years of age or older when the
individual received health care services.
(B) The department shall not claim under this paragraph when there
is any of the following:
(i) A surviving spouse or surviving registered domestic partner.
(ii) A surviving child who is under 21 years of age.
(iii) A surviving child who is blind or disabled, within the
meaning of Section 1614 of the federal Social Security Act (42 U.S.C.
Sec. 1382c).
(c) (1) The department shall waive its claim, in whole or in part,
if it determines that enforcement of the claim would result in
substantial hardship to other dependents, heirs, or survivors of the
individual against whose estate the claim exists.
(2) In determining the existence of substantial hardship, in
addition to other factors considered by the department consistent
with federal law and guidance, the department shall, subject to
federal approval, waive its claim when the estate subject to recovery
is a homestead of modest value.
(3) The department shall notify individuals of the waiver
provision and the opportunity for a hearing to establish that a
waiver should be granted.
(d) If the department proposes and accepts a voluntary postdeath
lien, the voluntary postdeath lien shall accrue interest at the rate
equal to the annual average rate earned on investments in the Surplus
Money Investment Fund in the calendar year preceding the year in
which the decedent died or simple interest at 7 percent per annum,
whichever is lower.
(e) (1) The department shall provide a current or former member,
or his or her authorized representative designated under Section
14014.5, upon request, a copy of the amount of Medi-Cal expenses that
may be recoverable under this section through the date of the
request. The information may be requested once per calendar year for
a fee to cover the department's reasonable administrative costs, not
to exceed five dollars ($5) if the current or former member meets
either of the following descriptions:
(A) An individual who is 55 years of age or older when the
individual received health care services.
(B) A permanently institutionalized individual who is an inpatient
in a nursing facility, intermediate care facility for the
intellectually disabled, or other medical institution.
(2) The department shall permit a member to request the
information described in paragraph (1) through the Internet, by
telephone, by mail, or through other commonly available electronic
means. Upon receipt of the request for information described in
paragraph (1), the department shall work with the member to ensure
that the member submits documentation necessary to identify the
individual and process the member's request.
(3) The department shall conspicuously post on its Internet Web
site a description of the methods by which a request under this
subdivision may be made, including, but not limited to, the
department's telephone number and any addresses that may be used for
this purpose. The department shall also include this information in
its pamphlet for the Medi-Cal Estate Recovery Program and any other
notices the department distributes to members specifically regarding
estate recovery.
(4) Upon receiving a request for the information described in
paragraph (1) and all necessary supporting documentation, the
department shall provide the information requested within 90 days
after receipt of the request.
(f) The following definitions shall govern the construction of
this section:
(1) "Decedent" means a member who has received health care under
this chapter or Chapter 8 (commencing with Section 14200) and who has
died leaving property to others through distribution.
(2) "Dependents" includes, but is not limited to, immediate family
or blood relatives of the decedent.
(3) "Estate" means all real and personal property and other assets
in the individual's probate estate that are required to be subject
to a claim for recovery pursuant to Section 1396p(b)(4)(A) of Title
42 of the United States Code.
(4) "Health care services" means only those services required to
be recovered under Section 1396p(b)(1)(B)(i) of Title 42 of the
United States Code.
(5) "Homestead of modest value" means a home whose fair market
value is 50 percent or less of the average price of homes in the
county where the homestead is located, as of the date of the decedent'
s death.
(g) The amendments made to this section by the act that added this
subdivision shall apply only to individuals who die on or after
January 1, 2017.
SEC. 23. Section 14046.7 of the Welfare and Institutions Code is
amended to read:
14046.7. (a) General Fund moneys shall not be used for the
purposes of this article.
(b) Notwithstanding subdivision (a), no more than four hundred
twenty-five thousand dollars ($425,000) from the General Fund may be
used annually for state administrative costs associated with
implementing this article.
SEC. 24. Section 14105.436 of the Welfare and Institutions Code is
amended to read:
14105.436. (a) Effective July 1, 2002, all pharmaceutical
manufacturers shall provide to the department a state rebate, in
addition to rebates pursuant to other provisions of state or federal
law, for any drug products that have been added to the Medi-Cal list
of contract drugs pursuant to Section 14105.43 or 14133.2 and
reimbursed through the Medi-Cal outpatient fee-for-service drug
program. The state rebate shall be negotiated as necessary between
the department and the pharmaceutical manufacturer. The negotiations
shall take into account offers such as rebates, discounts, disease
management programs, and other cost savings offerings and shall be
retroactive to July 1, 2002.
(b) The department may use existing administrative mechanisms for
any drug for which the department does not obtain a rebate pursuant
to subdivision (a). The department may only use those mechanisms in
the event that, by February 1, 2003, the manufacturer refuses to
provide the additional rebate. This subdivision shall become
inoperative on January 1, 2010.
(c) For purposes of this section, "Medi-Cal utilization data"
means the data used by the department to reimburse providers under
all programs that qualify for federal drug rebates pursuant to
Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
1396r-8) or that otherwise qualify for federal funds under Title XIX
of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)
pursuant to the Medicaid state plan or waivers. Medi-Cal utilization
data excludes data from covered entities identified in Section 256b
(a)(4) of Title 42 of the United States Code in accordance with
Sections 256b(a)(5)(A) and 1396r-8(a)(5)(C) of Title 42 of the United
States Code, and those capitated plans that include a prescription
drug benefit in the capitated rate and that have negotiated contracts
for rebates or discounts with manufacturers.
(d) Upon implementation of paragraphs (4) and (5) of subdivision
(b) of Section 14105.33 for drugs pursuant to this section,
subdivisions (a) and (c) shall become inoperative and "utilization
data" shall be described pursuant to subdivision (b) of Section
14105.33. The department shall post on its Internet Web site a notice
that it has implemented paragraphs (4) and (5) of subdivision (b) of
Section 14105.33 for drugs pursuant to this section.
(e) Effective July 1, 2009, all pharmaceutical manufacturers shall
provide to the department a state rebate, in addition to rebates
pursuant to other provisions of state or federal law, equal to an
amount not less than 10 percent of the average manufacturer price
based on Medi-Cal utilization data for any drug products that have
been added to the Medi-Cal list of contract drugs pursuant to Section
14105.43 or 14133.2.
(f) Pharmaceutical manufacturers shall, by January 1, 2010, enter
into a supplemental rebate agreement for the rebate required in
subdivision (e) for drug products added to the Medi-Cal list of
contract drugs on or before December 31, 2009.
(g) Effective January 1, 2010, all pharmaceutical manufacturers
who have not entered into a supplemental rebate agreement pursuant to
subdivisions (e) and (f) shall provide to the department a state
rebate, in addition to rebates pursuant to other provisions of state
or federal law, equal to an amount not less than 20 percent of the
average manufacturer price based on Medi-Cal utilization data for any
drug products that have been added to the Medi-Cal list of contract
drugs pursuant to Section 14105.43 or 14133.2 prior to January 1,
2010. If the pharmaceutical manufacturer does not enter into a
supplemental rebate agreement by March 1, 2010, the manufacturer's
drug product shall be made available only through an approved
treatment authorization request pursuant to subdivision (i).
(h) For a drug product added to the Medi-Cal list of contract
drugs pursuant to Section 14105.43 or 14133.2 on or after January 1,
2010, a pharmaceutical manufacturer shall provide to the department a
state rebate pursuant to subdivision (e). If the pharmaceutical
manufacturer does not enter into a supplemental rebate agreement
within 60 days after the addition of the drug to the Medi-Cal list of
contract drugs, the manufacturer shall provide to the department a
state rebate equal to not less than 20 percent of the average
manufacturers price based on Medi-Cal utilization data for any drug
products that have been added to the Medi-Cal list of contract drugs
pursuant to Section 14105.43 or 14133.2. If the pharmaceutical
manufacturer does not enter into a supplemental rebate agreement
within 120 days after the addition of the drug to the Medi-Cal list
of contract drugs, the pharmaceutical manufacturer's drug product
shall be made available only through an approved treatment
authorization request pursuant to subdivision (i). For supplemental
rebate agreements executed more than 120 days after the addition of
the drug product to the Medi-Cal list of contract drugs, the state
rebate shall equal an amount not less than 20 percent of the average
manufacturers price based on Medi-Cal utilization data for any drug
products that have been added to the Medi-Cal list of contract drugs
pursuant to Section 14105.43 or 14133.2.
(i) Notwithstanding any other law, drug products added to the
Medi-Cal list of contract drugs pursuant to Section 14105.43 or
14133.2 of manufacturers who do not execute an agreement to pay
additional rebates pursuant to this section shall be available only
through an approved treatment authorization request.
(j) For drug products added on or before December 31, 2009, a
beneficiary may obtain a drug product that requires a treatment
authorization request pursuant to subdivision (i) if the beneficiary
qualifies for continuing care status. To be eligible for continuing
care status, a beneficiary must be taking the drug product and the
department must have record of a reimbursed claim for the drug
product with a date of service that is within 100 days prior to the
date the drug product was placed on treatment authorization request
status. A beneficiary may remain eligible for continuing care status,
provided that a claim is submitted for the drug product in question
at least every 100 days and the date of service of the claim is
within 100 days of the date of service of the last claim submitted
for the same drug product.
(k) Changes made to the Medi-Cal list of contract drugs under this
section shall be exempt from the requirements of the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4
(commencing with Section 11370), and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code), and shall not be subject to the review and approval of the
Office of Administrative Law.
SEC. 25. Section 14105.45 of the Welfare and Institutions Code is
amended to read:
14105.45. (a) For purposes of this section, the following
definitions shall apply:
(1) "Average acquisition cost" means the average weighted cost
determined by the department to represent the actual acquisition cost
paid for drugs by Medi-Cal pharmacy providers, including those that
provide specialty drugs. The average acquisition cost shall not be
considered confidential and shall be subject to disclosure pursuant
to the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
(2) "Average manufacturers price" means the price reported to the
department by the federal Centers for Medicare and Medicaid Services
pursuant to Section 1927 of the Social Security Act (42 U.S.C. Sec.
1396r-8).
(3) "Average wholesale price" means the price for a drug product
listed as the average wholesale price in the department's primary
price reference source.
(4) "Estimated acquisition cost" means the department's best
estimate of the price generally and currently paid by providers for a
drug product sold by a particular manufacturer or principal labeler
in a standard package.
(5) "Federal upper limit" means the maximum per unit reimbursement
when established by the federal Centers for Medicare and Medicaid
Services.
(6) "Generically equivalent drugs" means drug products with the
same active chemical ingredients of the same strength and dosage
form, and of the same generic drug name, as determined by the United
States Adopted Names (USAN) and accepted by the federal Food and Drug
Administration (FDA), as those drug products having the same
chemical ingredients.
(7) "Legend drug" means any drug whose labeling states "Caution:
Federal law prohibits dispensing without prescription," "Rx only," or
words of similar import.
(8) "Maximum allowable ingredient cost" (MAIC) means the maximum
amount the department will reimburse Medi-Cal pharmacy providers for
generically equivalent drugs.
(9) "Innovator multiple source drug," "noninnovator multiple
source drug," and "single source drug" have the same meaning as those
terms are defined in Section 1396r-8(k)(7) of Title 42 of the United
States Code.
(10) "Nonlegend drug" means any drug whose labeling does not
contain the statement referenced in paragraph (7).
(11) "Pharmacy warehouse," as defined in Section 4163 of the
Business and Professions Code, means a physical location licensed as
a wholesaler for prescription drugs that acts as a central warehouse
and performs intracompany sales or transfers of those drugs to a
group of pharmacies under common ownership and control.
(12) "Professional dispensing fee" has the same meaning as that
term is defined in Section 447.502 of Title 42 of the Code of Federal
Regulations.
(13) "Specialty drugs" means drugs determined by the department
pursuant to subdivision (f) of Section 14105.3 to generally require
special handling, complex dosing regimens, specialized
self-administration at home by a beneficiary or caregiver, or
specialized nursing facility services, or may include extended
patient education, counseling, monitoring, or clinical support.
(14) "Volume weighted average" means the aggregated average volume
for a group of legend or nonlegend drugs, weighted by each drug's
percentage of the group's total volume in the Medi-Cal
fee-for-service program during the previous six months. For purposes
of this paragraph, volume is based on the standard billing unit used
for the legend or nonlegend drugs.
(15) "Wholesaler" means a drug wholesaler that is engaged in
wholesale distribution of prescription drugs to retail pharmacies in
California.
(16) "Wholesaler acquisition cost" means the price for a drug
product listed as the wholesaler acquisition cost in the department's
primary price reference
source.
(b) (1) Reimbursement to Medi-Cal pharmacy providers for legend
and nonlegend drugs shall not exceed the lowest of either of the
following:
(A) The estimated acquisition cost of the drug plus a professional
dispensing fee.
(B) The pharmacy's usual and customary charge as defined in
Section 14105.455.
(2) (A) Until April 1, 2017, the professional dispensing fee shall
be seven dollars and twenty-five cents ($7.25) per dispensed
prescription, and the professional dispensing fee for legend drugs
dispensed to a beneficiary residing in a skilled nursing facility or
intermediate care facility shall be eight dollars ($8) per dispensed
prescription. For purposes of this paragraph, "skilled nursing
facility" and "intermediate care facility" have the same meaning as
those terms are defined in Division 5 (commencing with Section 70001)
of Title 22 of the California Code of Regulations.
(B) Commencing April 1, 2017, the department shall implement a new
professional dispensing fee or fees.
(i) When establishing the new professional dispensing fee or fees,
the department shall establish the professional dispensing fee or
fees consistent with subsection (d) of Section 447.518 of Title 42 of
the Code of Federal Regulations.
(ii) The department shall consult with interested parties and
appropriate stakeholders in implementing this subparagraph.
(C) If the department determines that a change in the amount of a
professional dispensing fee is necessary pursuant to this section in
order to meet federal Medicaid requirements, the department shall
establish the new professional dispensing fee through the state
budget process.
(3) The department shall establish the estimated acquisition cost
of legend and nonlegend drugs as follows:
(A) For single source and innovator multiple source drugs, the
estimated acquisition cost shall be equal to the lowest of the
average wholesale price minus 17 percent, the average acquisition
cost, the federal upper limit, or the MAIC.
(B) For noninnovator multiple source drugs, the estimated
acquisition cost shall be equal to the lowest of the average
wholesale price minus 17 percent, the average acquisition cost, the
federal upper limit, or the MAIC.
(C) Average wholesale price shall not be used to establish the
estimated acquisition cost once the department has determined that
the average acquisition cost methodology has been fully implemented.
(4) For purposes of paragraph (3), the department shall establish
a list of MAICs for generically equivalent drugs, which shall be
published in pharmacy provider bulletins and manuals. The department
shall establish a MAIC only when three or more generically equivalent
drugs are available for purchase and dispensing by retail pharmacies
in California. The department shall update the list of MAICs and
establish additional MAICs in accordance with all of the following:
(A) The department shall base the MAIC on the mean of the average
manufacturer's price of drugs generically equivalent to the
particular innovator drug plus a percent markup determined by the
department to be necessary for the MAIC to represent the average
purchase price paid by retail pharmacies in California.
(B) If average manufacturer prices are unavailable, the department
shall establish the MAIC in one of the following ways:
(i) Based on the volume weighted average of wholesaler acquisition
costs of drugs generically equivalent to the particular innovator
drug plus a percent markup determined by the department to be
necessary for the MAIC to represent the average purchase price paid
by retail pharmacies in California.
(ii) Pursuant to a contract with a vendor for the purpose of
surveying drug price information, collecting data, and calculating a
proposed MAIC.
(iii) Based on the volume weighted average acquisition cost of
drugs generically equivalent to the particular innovator drug
adjusted by the department to represent the average purchase price
paid by Medi-Cal pharmacy providers.
(C) The department shall update MAICs at least every three months
and notify Medi-Cal providers at least 30 days prior to the effective
date of a MAIC.
(D) The department shall establish a process for providers to seek
a change to a specific MAIC when the providers believe the MAIC does
not reflect current available market prices. If the department
determines a MAIC change is warranted, the department may update a
specific MAIC prior to notifying providers.
(E) In determining the average purchase price, the department
shall consider the provider-related costs of the products that
include, but are not limited to, shipping, handling, storage, and
delivery. Costs of the provider that are included in the costs of the
dispensing shall not be used to determine the average purchase
price.
(5) (A) The department may establish the average acquisition cost
in one of the following ways:
(i) Based on the volume weighted average acquisition cost adjusted
by the department to ensure that the average acquisition cost
represents the average purchase price paid by retail pharmacies in
California.
(ii) Based on the proposed average acquisition cost as calculated
by the vendor pursuant to subparagraph (B).
(iii) Based on a national pricing benchmark obtained from the
federal Centers for Medicare and Medicaid Services or on a similar
benchmark listed in the department's primary price reference source
adjusted by the department to ensure that the average acquisition
cost represents the average purchase price paid by retail pharmacies
in California.
(B) For the purposes of paragraph (3), the department may contract
with a vendor for the purposes of surveying drug price information,
collecting data from providers, wholesalers, or drug manufacturers,
and calculating a proposed average acquisition cost.
(C) (i) Medi-Cal pharmacy providers shall submit drug price
information to the department or a vendor designated by the
department for the purposes of establishing the average acquisition
cost. The information submitted by pharmacy providers shall include,
but not be limited to, invoice prices and all discounts, rebates, and
refunds known to the provider that would apply to the acquisition
cost of the drug products purchased during the calendar quarter.
Pharmacy warehouses shall be exempt from the survey process, but
shall provide drug cost information upon audit by the department for
the purposes of validating individual pharmacy provider acquisition
costs.
(ii) Pharmacy providers that fail to submit drug price information
to the department or the vendor as required by this subparagraph
shall receive notice that if they do not provide the required
information within five working days, they shall be subject to
suspension under subdivisions (a) and (c) of Section 14123.
(D) (i) For new drugs or new formulations of existing drugs, if
drug price information is unavailable pursuant to clause (i) of
subparagraph (C), drug manufacturers and wholesalers shall submit
drug price information to the department or a vendor designated by
the department for the purposes of establishing the average
acquisition cost. Drug price information shall include, but not be
limited to, net unit sales of a drug product sold to retail
pharmacies in California divided by the total number of units of the
drug sold by the manufacturer or wholesaler in a specified period of
time determined by the department.
(ii) Drug products from manufacturers and wholesalers that fail to
submit drug price information to the department or the vendor as
required by this subparagraph shall not be a reimbursable benefit of
the Medi-Cal program for those manufacturers and wholesalers until
the department has established the average acquisition cost for those
drug products.
(E) Drug pricing information provided to the department or a
vendor designated by the department for the purposes of establishing
the average acquisition cost pursuant to this section shall be
confidential and shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(F) Prior to the implementation of an average acquisition cost
methodology, the department shall collect data through a survey of
pharmacy providers for purposes of establishing a professional
dispensing fee or fees in compliance with federal Medicaid
requirements.
(i) The department shall seek stakeholder input on the retail
pharmacy factors and elements used for the pharmacy survey relative
to both average acquisition costs and professional dispensing costs.
(ii) For drug products provided by pharmacy providers pursuant to
subdivision (f) of Section 14105.3, a differential professional fee
or payment for services to provide specialized care may be considered
as part of the contracts established pursuant to that section.
(G) When the department implements the average acquisition cost
methodology, the department shall update the Medi-Cal claims
processing system to reflect the average acquisition cost of drugs
not later than 30 days after the department has established average
acquisition cost pursuant to subparagraph (A).
(H) Notwithstanding any other law, if the department implements
average acquisition cost pursuant to clause (i) or (ii) of
subparagraph (A), the department shall update actual acquisition
costs at least every three months and notify Medi-Cal providers at
least 30 days prior to the effective date of any change in an actual
acquisition cost.
(I) The department shall establish a process for providers to seek
a change to a specific average acquisition cost when the providers
believe the average acquisition cost does not reflect current
available market prices. If the department determines an average
acquisition cost change is warranted, the department may update a
specific average acquisition cost prior to notifying providers.
(c) The director shall implement this section in a manner that is
consistent with federal Medicaid law and regulations. The director
shall seek any necessary federal approvals for the implementation of
this section. This section shall be implemented only to the extent
that federal approval is obtained.
(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section by
means of a provider bulletin or notice, policy letter, or other
similar instructions, without taking regulatory action.
(e) The department may enter into contracts with a vendor for the
purposes of implementing this section on a bid or nonbid basis. In
order to achieve maximum cost savings, the Legislature declares that
an expedited process for contracts under this section is necessary.
Therefore, contracts entered into to implement this section, and all
contract amendments and change orders, shall be exempt from Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the
Public Contract Code.
(f) (1) The rates provided for in this section shall be
implemented only if the director determines that the rates will
comply with applicable federal Medicaid requirements and that federal
financial participation will be available.
(2) In determining whether federal financial participation is
available, the director shall determine whether the rates comply with
applicable federal Medicaid requirements, including those set forth
in Section 1396a(a)(30)(A) of Title 42 of the United States Code.
(3) To the extent that the director determines that the rates do
not comply with applicable federal Medicaid requirements or that
federal financial participation is not available with respect to any
rate of reimbursement described in this section, the director retains
the discretion not to implement that rate and may revise the rate as
necessary to comply with federal Medicaid requirements.
(g) The director shall seek any necessary federal approvals for
the implementation of this section.
(h) This section shall not be construed to require the department
to collect cost data, to conduct cost studies, or to set or adjust a
rate of reimbursement based on cost data that has been collected.
(i) Adjustments to pharmacy drug product payment pursuant to
Section 14105.192 shall no longer apply when the department
determines that the average acquisition cost methodology has been
fully implemented and the department's pharmacy budget reduction
targets, consistent with payment reduction levels pursuant to Section
14105.192, have been met.
(j) Prior to implementation of this section, the department shall
provide the appropriate fiscal and policy committees of the
Legislature with information on the department's plan for
implementation of the average acquisition cost methodology pursuant
to this section.
SEC. 26. Section 14105.456 of the Welfare and Institutions Code is
amended to read:
14105.456. (a) For purposes of this section, the following
definitions shall apply:
(1) "Generically equivalent drugs" means drug products with the
same active chemical ingredients of the same strength, quantity, and
dosage form, and of the same generic drug name, as determined by the
United States Adopted Names Council (USANC) and accepted by the
federal Food and Drug Administration (FDA), as those drug products
having the same chemical ingredients.
(2) "Legend drug" means any drug with a label that states
"Caution: Federal law prohibits dispensing without prescription," "Rx
only," or words of similar import.
(3) "Medicare rate" means the rate of reimbursement established by
the Centers for Medicare and Medicaid Services for the Medicare
Program.
(4) "Nonlegend drug" means any drug with a label that does not
contain a statement referenced in paragraph (2).
(5) "Pharmacy rate of reimbursement" means the reimbursement to a
Medi-Cal pharmacy provider pursuant to the provisions of paragraph
(3) of subdivision (b) of Section 14105.45.
(6) "Physician-administered drug" means any legend drug, nonlegend
drug, or vaccine administered or dispensed to a beneficiary by a
Medi-Cal provider other than a pharmacy provider and billed to the
department on a fee-for-service basis.
(7) "Volume-weighted average" means the aggregated average volume
for generically equivalent drugs, weighted by each drug's percentage
of the total volume in the Medi-Cal fee-for-service program during
the previous six months. For purposes of this paragraph, volume is
based on the standard billing unit used for the generically
equivalent drugs.
(b) The department may reimburse providers for a
physician-administered drug using either a Healthcare Common
Procedure Coding System code or a National Drug Code.
(c) The Healthcare Common Procedure Coding System code rate of
reimbursement for a physician-administered drug shall be equal to the
volume-weighted average of the pharmacy rate of reimbursement for
generically equivalent drugs. The department shall publish the
Healthcare Common Procedure Coding System code rates of
reimbursement.
(d) The National Drug Code rate of reimbursement shall equal the
pharmacy rate of reimbursement.
(e) Notwithstanding subdivisions (c) and (d), the department may
reimburse providers for physician-administered drugs at a rate not
less than the Medicare rate.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement this section by means of a provider bulletin
or notice, policy letter, or other similar instructions, without
taking regulatory action.
(g) (1) The rates provided for in this section shall be
implemented commencing January 1, 2011, but only if the director
determines that the rates comply with applicable federal Medicaid
requirements and that federal financial participation will be
available.
(2) In assessing whether federal financial participation is
available, the director shall determine whether the rates comply with
the federal Medicaid requirements, including those set forth in
Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the
extent that the director determines that a rate of reimbursement
described in this section does not comply with the federal Medicaid
requirements, the director retains the discretion not to implement
that rate and may revise the rate as necessary to comply with the
federal Medicaid requirements.
(h) The director shall seek any necessary federal approval for the
implementation of this section. To the extent that federal financial
participation is not available with respect to a rate of
reimbursement described in this section, the director retains the
discretion not to implement that rate and may revise the rate as
necessary to comply with the federal Medicaid requirements.
SEC. 27. Section 14105.86 of the Welfare and Institutions Code is
amended to read:
14105.86. (a) For the purposes of this section, the following
definitions apply:
(1) (A) "Average sales price" means the price reported to the
federal Centers for Medicare and Medicaid Services by the
manufacturer pursuant to Section 1847A of the federal Social Security
Act (42 U.S.C. Sec. 1395w-3a).
(B) "Average manufacturer price" means the price reported to the
federal Centers for Medicare and Medicaid Services pursuant to
Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
1396r-8).
(2) "Blood factors" means plasma protein therapies and their
recombinant analogs. Blood factors include, but are not limited to,
all of the following:
(A) Coagulation factors, including:
(i) Factor VIII, nonrecombinant.
(ii) Factor VIII, porcine.
(iii) Factor VIII, recombinant.
(iv) Factor IX, nonrecombinant.
(v) Factor IX, complex.
(vi) Factor IX, recombinant.
(vii) Antithrombin III.
(viii) Anti-inhibitor factor.
(ix) Von Willebrand factor.
(x) Factor VIIa, recombinant.
(B) Immune Globulin Intravenous.
(C) Alpha-1 Proteinase Inhibitor.
(b) The reimbursement for blood factors shall be by national drug
code number and shall not exceed 120 percent of the average sales
price of the last quarter reported.
(c) The average sales price for blood factors of manufacturers or
distributors that do not report an average sales price pursuant to
subdivision (a) shall be identical to the average manufacturer price.
The average sales price for new products that do not have a
calculable average sales price or average manufacturer price shall be
equal to a projected sales price, as reported by the manufacturer to
the department. Manufacturers reporting a projected sales price for
a new product shall report the first monthly average manufacturer
price reported to the federal Centers for Medicare and Medicaid
Services. The reporting of an average sales price that does not meet
the requirement of this subdivision shall result in that blood factor
no longer being considered a covered benefit.
(d) The average sales price shall be reported at the national drug
code level to the department on a quarterly basis.
(e) (1) Effective July 1, 2008, the department shall collect a
state rebate, in addition to rebates pursuant to other provisions of
state or federal law, for blood factors reimbursed pursuant to this
section by programs that qualify for federal drug rebates pursuant to
Section 1927 of the federal Social Security Act (42 U.S.C. Sec.
1396r-8) or otherwise qualify for federal funds under Title XIX of
the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)
pursuant to the Medicaid state plan or waivers and the programs
authorized by Article 5 (commencing with Section 123800) of Chapter 3
of Part 2 of, and Article 1 (commencing with Section 125125) of
Chapter 2 of Part 5 of, Division 106 of the Health and Safety Code.
(2) Upon implementation of paragraphs (4) and (5) of subdivision
(b) of Section 14105.33 for blood factors pursuant to this section,
"utilization data" used to determine the state rebate shall be
described pursuant to subdivision (b) of Section 14105.33. The
department shall post on its Internet Web site a notice that it has
implemented paragraphs (4) and (5) of subdivision (b) of Section
14105.33 for blood factors pursuant to this section.
(3) The state rebate shall be negotiated as necessary between the
department and the manufacturer. Manufacturers who do not execute an
agreement to pay additional rebates pursuant to this section shall
have their blood factors available only through an approved treatment
or service authorization request. All blood factors that meet the
definition of a covered outpatient drug pursuant to Section 1927 of
the federal Social Security Act (42 U.S.C. Sec. 1396r-8) shall remain
a benefit subject to the utilization controls provided for in this
section.
(4) In reviewing authorization requests, the department shall
approve the lowest net cost product that meets the beneficiary's
medical need. The review of medical need shall take into account a
beneficiary's clinical history or the use of the blood factor
pursuant to payment by another third party, or both.
(f) A beneficiary may obtain blood factors that require a
treatment or service authorization request pursuant to subdivision
(e) if the beneficiary qualifies for continuing care status. To be
eligible for continuing care status, a beneficiary must be taking the
blood factor and the department has reimbursed a claim for the blood
factor with a date of service that is within 100 days prior to the
date the blood factor was placed on treatment authorization request
status. A beneficiary may remain eligible for continuing care status,
provided that a claim is submitted for the blood factor in question
at least every 100 days and the date of service of the claim is
within 100 days of the date of service of the last claim submitted
for the same blood factor.
(g) Changes made to the list of covered blood factors under this
or any other section shall be exempt from the requirements of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340), Chapter 4 (commencing with Section 11370), and Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code), and shall not be subject to the review and
approval of the Office of Administrative Law.
SEC. 28. Section 14131.10 of the Welfare and Institutions Code is
amended to read:
14131.10. (a) Notwithstanding any other provision of this
chapter, Chapter 8 (commencing with Section 14200), or Chapter 8.75
(commencing with Section 14591), in order to implement changes in the
level of funding for health care services, specific optional
benefits are excluded from coverage under the Medi-Cal program.
(b) (1) The following optional benefits are excluded from coverage
under the Medi-Cal program:
(A) Adult dental services, except as specified in paragraph (2).
(B) Audiology services and speech therapy services.
(C) Chiropractic services.
(D) Optometric and optician services, including services provided
by a fabricating optical laboratory.
(E) Podiatric services.
(F) Psychology services.
(G) Incontinence creams and washes.
(2) (A) Medical and surgical services provided by a doctor of
dental medicine or dental surgery, which, if provided by a physician,
would be considered physician services, and which services may be
provided by either a physician or a dentist in this state, are
covered.
(B) Emergency procedures are also covered in the categories of
service specified in subparagraph (A). The director may adopt
regulations for any of the services specified in subparagraph (A).
(C) Effective May 1, 2014, or the effective date of any necessary
federal approvals as required by subdivision (f), whichever is later,
for persons 21 years of age or older, adult dental benefits, subject
to utilization controls, are limited to all the following medically
necessary services:
(i) Examinations, radiographs/photographic images, prophylaxis,
and fluoride treatments.
(ii) Amalgam and composite restorations.
(iii) Stainless steel, resin, and resin window crowns.
(iv) Anterior root canal therapy.
(v) Complete dentures, including immediate dentures.
(vi) Complete denture adjustments, repairs, and relines.
(D) Services specified in this paragraph shall be included as a
covered medical benefit under the Medi-Cal program pursuant to
Section 14132.89.
(3) Pregnancy-related services and services for the treatment of
other conditions that might complicate the pregnancy are not excluded
from coverage under this section.
(c) The optional benefit exclusions do not apply to either of the
following:
(1) Beneficiaries under the Early and Periodic Screening Diagnosis
and Treatment Program.
(2) Beneficiaries receiving long-term care in a nursing facility
that is both:
(A) A skilled nursing facility or intermediate care facility as
defined in subdivisions (c) and (d) of Section 1250 of the Health and
Safety Code.
(B) Licensed pursuant to subdivision (k) of Section 1250 of the
Health and Safety Code.
(d) This section shall only be implemented to the extent permitted
by federal law.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement the provisions of this section by means of
all-county letters, provider bulletins, or similar instructions,
without taking further regulatory action.
(f) This section shall be implemented only to the extent that
federal financial participation is available and any necessary
federal approvals have been obtained.
SEC. 29. Section 14132.56 of the Welfare and Institutions Code is
amended to read:
14132.56. (a) (1) Only to the extent required by the federal
government and effective no sooner than required by the federal
government, behavioral health treatment (BHT), as defined by Section
1374.73 of the Health and Safety Code, shall be a covered Medi-Cal
service for individuals under 21 years of age.
(2) It is the intent of the Legislature that, to the extent the
federal government requires BHT to be a covered Medi-Cal service, the
department shall seek statutory authority to implement this new
benefit in Medi-Cal.
(b) The department shall implement, or continue to implement, this
section only after all of the following occurs or has occurred:
(1) The department receives all necessary federal approvals to
obtain federal funds for the service.
(2) The department seeks an appropriation that would provide the
necessary state funding estimated to be required for the applicable
fiscal year.
(3) The department consults with stakeholders.
(c) The department shall develop and define eligibility criteria,
provider participation criteria, utilization controls, and delivery
system structure for services under this section, subject to
limitations allowable under federal law, in consultation with
stakeholders.
(d) (1) The department, commencing on the effective date of the
act that added this subdivision until March 31, 2017, inclusive, may
make available to individuals described in paragraph (2) contracted
services to assist those individuals with health insurance
enrollment, without regard to whether federal funds are available for
the contracted services.
(2) The contracted services described in paragraph (1) may be
provided only to an individual under 21 years of age whom the
department identifies as no longer eligible for Medi-Cal solely due
to the transition of BHT coverage from the waiver program under
Section 1915(c) of the federal Social Security Act to the Medi-Cal
state plan in accordance with this section and who meets all of the
following criteria:
(A) He or she was enrolled in the home and community-based
services waiver for persons with developmental disabilities under
Section 1915(c) of the Social Security Act as of January 31, 2016.
(B) He or she was deemed to be institutionalized in order to
establish eligibility under the terms of the waiver.
(C) He or she has not been found eligible under any other
federally funded Medi-Cal criteria without a share of cost.
(D) He or she had received a BHT service from a regional center
for persons with developmental disabilities as provided in Chapter 5
(commencing with Section 4620) of Division 4.5.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department, without taking any further regulatory action, shall
implement, interpret, or make specific this section by means of
all-county letters, plan letters, plan or provider bulletins, or
similar instructions until regulations are adopted. The department
shall adopt regulations by July 1, 2017, in accordance with the
requirements of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code. Notwithstanding
Section 10231.5 of the Government Code, beginning six months after
the effective date of this section, the department shall provide
semiannual status reports to the Legislature, in compliance with
Section 9795 of the Government Code, until regulations have been
adopted.
(f) For the purposes of implementing this section, the department
may enter into exclusive or nonexclusive contracts on a bid or
negotiated basis, including contracts for the purpose of obtaining
subject matter expertise or other technical assistance. Contracts may
be statewide or on a more limited geographic basis. Contracts
entered into or amended under this subdivision shall be exempt from
Part 2 (commencing with Section 10100) of Division 2 of the Public
Contract Code, Section 19130 of the Government Code, and Chapter 6
(commencing with Section 14825) of Part 5.5 of Division 3 of the
Government Code, and shall be exempt from the review or approval of
any division of the Department of General Services.
(g) The department may seek approval of any necessary state plan
amendments or waivers to implement this section. The department shall
make any state plan amendments or waiver requests public at least 30
days prior to submitting to the federal Centers for Medicare and
Medicaid Services, and the department shall work with stakeholders to
address the public comments in the state plan amendment or waiver
request.
(h) This section shall be implemented only to the extent that
federal financial participation is available and any necessary
federal approvals have been obtained.
SEC. 30. Section 14154 of the Welfare and Institutions Code is
amended to read:
14154. (a) (1) The department shall establish and maintain a plan
whereby costs for county administration of the determination of
eligibility for benefits under this chapter will be effectively
controlled within the amounts annually appropriated for that
administration. The plan, to be known as the County Administrative
Cost Control Plan, shall establish standards and performance
criteria, including workload, productivity, and support services
standards, to which counties shall adhere. The plan shall include
standards for controlling eligibility determination costs that are
incurred by performing eligibility determinations at county
hospitals, or that are incurred due to the outstationing of any other
eligibility function. Except as provided in Section 14154.15,
reimbursement to a county for outstationed eligibility functions
shall be based solely on productivity standards applied to that
county's welfare department office.
(2) (A) The plan shall delineate both of the following:
(i) The process for determining county administration base costs,
which include salaries and benefits, support costs, and staff
development.
(ii) The process for determining funding for caseload changes,
cost-of-living adjustments, and program and other changes.
(B) The annual county budget survey document utilized under the
plan shall be constructed to enable the counties to provide
sufficient detail to the department to support their budget requests.
(3) The plan shall be part of a single state plan, jointly
developed by the department and the State Department of Social
Services, in conjunction with the counties, for administrative cost
control for the California Work Opportunity and Responsibility to
Kids (CalWORKs), CalFresh, and Medical Assistance (Medi-Cal)
programs. Allocations shall be made to each county and shall be
limited by and determined based upon the County Administrative Cost
Control Plan. In administering the plan to control county
administrative costs, the department shall not allocate state funds
to cover county cost overruns that result from county failure to meet
requirements of the plan. The department and the State Department of
Social Services shall budget, administer, and allocate state funds
for county administration in a uniform and consistent manner.
(4) The department and county welfare departments shall develop
procedures to ensure the data clarity, consistency, and reliability
of information contained in the county budget survey document
submitted by counties to the department. These procedures shall
include the format of the county budget survey document and process,
data submittal and its documentation, and the use of the county
budget survey documents for the development of determining county
administration costs. Communication between the department and the
county welfare departments shall be ongoing as needed regarding the
content of the county budget surveys and any potential issues to
ensure the information is complete and well understood by involved
parties. Any changes developed pursuant to this section shall be
incorporated within the state's annual budget process by no later
than the 2011-12 fiscal year.
(5) The department shall provide a clear narrative description
along with fiscal detail in the Medi-Cal estimate package, submitted
to the Legislature in January and May of each year, of each component
of the county administrative funding for the Medi-Cal program. This
shall describe how the information obtained from the county budget
survey documents was utilized and, if applicable, modified and the
rationale for the changes.
(6) Notwithstanding any other law, the department shall develop
and implement, in consultation with county program and fiscal
representatives, a new budgeting methodology for Medi-Cal county
administrative costs that reflects the impact of PPACA implementation
on county administrative work. The new budgeting methodology shall
be used to reimburse counties for eligibility processing and case
maintenance for applicants and beneficiaries.
(A) The budgeting methodology may include, but is not limited to,
identification of the costs of eligibility determinations for
applicants, and the costs of eligibility redeterminations and case
maintenance activities for recipients, for different groupings of
cases, based on variations in time and resources needed to conduct
eligibility determinations. The calculation of time and resources
shall be based on the following factors: complexity of eligibility
rules, ongoing eligibility requirements, and other factors as
determined appropriate by the department. The development of the new
budgeting methodology may include, but is not limited to, county
survey of costs, time and motion studies, in-person observations by
department staff, data reporting, and other factors deemed
appropriate by the department.
(B) The new budgeting methodology shall be clearly described,
state the necessary data elements to be collected from the counties,
and establish the timeframes for counties to provide the data to the
state.
(C) The new budgeting methodology developed pursuant to this
paragraph shall be implemented no sooner than the 2015-16 fiscal
year. The department may develop a process for counties to phase in
the requirements of the new budgeting methodology.
(D) The department shall provide the new budgeting methodology to
the legislative fiscal committees by March 1 of the fiscal year
immediately preceding the first fiscal year of implementation of the
new budgeting methodology.
(E) To the extent that the funding for the county budgets
developed pursuant to the new budget methodology is not fully
appropriated in any given fiscal year, the department, with input
from the counties, shall identify and consider options to align
funding and workload responsibilities.
(F) For purposes of this paragraph, "PPACA" means the federal
Patient Protection and Affordable Care Act (Public Law 111-148), as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (Public Law 111-152) and any subsequent amendments.
(G) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this paragraph
by means of all-county letters, plan letters, plan or provider
bulletins, or similar instructions until the time any necessary
regulations are adopted. The department shall adopt regulations by
July 1, 2017, in accordance with the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. Beginning six months after the implementation
of the new budgeting methodology pursuant to this paragraph, and
notwithstanding Section 10231.5 of the Government Code, the
department shall provide a status report to the Legislature on a
semiannual basis, in compliance with Section 9795 of the Government
Code, until regulations have been adopted.
(b) Nothing in this section, Section 15204.5, or Section 18906
shall be construed to limit the administrative or budgetary
responsibilities of the department in a manner that would violate
Section 14100.1, and thereby jeopardize federal financial
participation under the Medi-Cal program.
(c) (1) The Legislature finds and declares that in order for
counties to do the work that is expected of them, it is necessary
that they receive adequate funding, including adjustments for
reasonable annual cost-of-doing-business increases. The Legislature
further 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. It is therefore the Legislature's intent to provide
appropriate funding to the counties for the effective administration
of the Medi-Cal program at the local level to ensure that counties
can reasonably meet the purposes of the performance measures as
contained in this section.
(2) It is the intent of the Legislature to not appropriate funds
for the cost-of-doing-business adjustment for the 2008-09, 2009-10,
2010-11, 2011-12, 2012-13, 2014-15, 2015-16, and 2016-17 fiscal
years.
(d) The department is responsible for the Medi-Cal program in
accordance with state and federal law. A county shall determine
Medi-Cal eligibility in accordance with state and federal law. If in
the course of its duties the department becomes aware of accuracy
problems in any county, the department shall, within available
resources, provide training and technical assistance as appropriate.
Nothing in this section shall be interpreted to eliminate any remedy
otherwise available to the department to enforce accurate county
administration of the program. In administering the Medi-Cal
eligibility process, each county shall meet the following performance
standards each fiscal year:
(1) Complete eligibility determinations as follows:
(A) Ninety percent of the general applications without applicant
errors and are complete shall be completed within 45 days.
(B) Ninety percent of the applications for Medi-Cal based on
disability shall be completed within 90 days, excluding delays by the
state.
(2) (A) The department shall establish best-practice guidelines
for expedited enrollment of newborns into the Medi-Cal program,
preferably with the goal of enrolling newborns within 10 days after
the county is informed of the birth. The department, in consultation
with counties and other stakeholders, shall work to develop a process
for expediting enrollment for all newborns, including those born to
mothers receiving CalWORKs assistance.
(B) Upon the development and implementation of the best-practice
guidelines and expedited processes, the department and the counties
may develop an expedited enrollment timeframe for newborns that is
separate from the standards for all other applications, to the extent
that the timeframe is consistent with these guidelines and
processes.
(3) Perform timely annual redeterminations, as follows:
(A) Ninety percent of the annual redetermination forms shall be
mailed to the recipient by the anniversary date.
(B) Ninety percent of the annual redeterminations shall be
completed within 60 days of the recipient's annual redetermination
date for those redeterminations based on forms that are complete and
have been returned to the county by the recipient in a timely manner.
(C) Ninety percent of those annual redeterminations where the
redetermination form has not been returned to the county by the
recipient shall be completed by sending a notice of action to the
recipient within 45 days after the date the form was due to the
county.
(e) The department shall develop procedures in collaboration with
the counties and stakeholder groups for determining county review
cycles, sampling methodology and procedures, and data reporting.
(f) On January 1 of each year, each applicable county, as
determined by the department, shall report to the department on the
county's results in meeting the performance standards specified in
this section. The report shall be subject to verification by the
department. County reports shall be provided to the public upon
written request.
(g) If the department finds that a county is not in compliance
with one or more of the standards set forth in this section, the
county shall, within 60 days, submit a corrective action plan to the
department for approval. The corrective action plan shall, at a
minimum, include steps that the county shall take to improve its
performance on the standard or standards with which the county is out
of compliance. The plan shall establish interim benchmarks for
improvement that shall be expected to be met by the county in order
to avoid a sanction.
(h) (1) If a county does not meet the performance standards for
completing eligibility determinations and redeterminations as
specified in this section, the department may, at its sole
discretion, reduce the allocation of funds to that county in the
following year by 2 percent. Any funds so reduced may be restored by
the department if, in the determination of the department, sufficient
improvement has been made by the county in meeting the performance
standards during the year for which the funds were reduced. If the
county continues not to meet the performance standards, the
department may reduce the allocation by an additional 2 percent for
each year thereafter in which sufficient improvement has not been
made to meet the performance standards.
(2) No reduction of the allocation of funds to a county shall be
imposed pursuant to this subdivision for failure to meet performance
standards during any period of time in which the
cost-of-doing-business increase is suspended.
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, and except
as provided in subparagraph (G) of paragraph (6) of subdivision (a),
the department shall, without taking any further regulatory action,
implement, interpret, or make specific this section and any
applicable federal waivers and state plan amendments by means of
all-county letters or similar instructions.
SEC. 31. Section 14301.1 of the Welfare and Institutions Code, as
amended by Section 28 of Chapter 37 of the Statutes of 2013, is
amended to read:
14301.1. (a) For rates established on or after August 1, 2007,
the department shall pay capitation rates to health plans
participating in the Medi-Cal managed care program using actuarial
methods and may establish health-plan- and county-specific rates.
Notwithstanding any other law, this section shall apply to any
managed care organization, licensed under the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code), that has contracted
with the department as a primary care case management plan pursuant
to Article 2.9 (commencing with Section 14088) of Chapter 7 to
provide services to beneficiaries who are HIV positive or who have
been diagnosed with AIDS for rates established on or after July 1,
2012. The department shall utilize a county- and model-specific rate
methodology to develop Medi-Cal managed care capitation rates for
contracts entered into between the department and any entity pursuant
to Article 2.7 (commencing with Section 14087.3), Article 2.8
(commencing with Section 14087.5), and Article 2.91 (commencing with
Section 14089) of Chapter 7 that includes, but is not limited to, all
of the following:
(1) Health-plan-specific encounter and claims data.
(2) Supplemental utilization and cost data submitted by the health
plans.
(3) Fee-for-service data for the underlying county of operation or
other appropriate counties as deemed necessary by the department.
(4) Department of Managed Health Care financial statement data
specific to Medi-Cal operations.
(5) Other demographic factors, such as age, gender, or
diagnostic-based risk adjustments, as the department deems
appropriate.
(b) To the extent that the department is unable to obtain
sufficient actual plan data, it may substitute plan model, similar
plan, or county-specific fee-for-service data.
(c) The department shall develop rates that include administrative
costs, and may apply different administrative costs with respect to
separate aid code groups.
(d) The department shall develop rates that shall include, but are
not limited to, assumptions for underwriting, return on investment,
risk, contingencies, changes in policy, and a detailed review of
health plan financial statements to validate and reconcile costs for
use in developing rates.
(e) The department may develop rates that pay plans based on
performance incentives, including quality indicators, access to care,
and data submission.
(f) The department may develop and adopt condition-specific
payment rates for health conditions, including, but not limited to,
childbirth delivery.
(g) (1) Prior to finalizing Medi-Cal managed care capitation
rates, the department shall provide health plans with information on
how the rates were developed, including rate sheets for that specific
health plan, and provide the plans with the opportunity to provide
additional supplemental information.
(2) For contracts entered into between the department and any
entity pursuant to Article 2.8 (commencing with Section 14087.5) of
Chapter 7, the department, by June 30 of each year, or, if the budget
has not passed by that date, no later than five working days after
the budget is signed, shall provide preliminary rates for the
upcoming fiscal year.
(h) For the purposes of developing capitation rates through
implementation of this ratesetting methodology, Medi-Cal managed care
health plans shall provide the department with financial and
utilization data in a form and substance as deemed necessary by the
department to establish rates. This data shall be considered
proprietary and shall be exempt from disclosure as official
information pursuant to subdivision (k) of Section 6254 of the
Government Code as contained in the California Public Records Act
(Division 7 (commencing with Section 6250) of Title 1 of the
Government Code).
(i) Notwithstanding any other law, on and after the effective date
of the act adding this subdivision, the department may apply this
section to the capitation rates it pays under any managed care health
plan contract.
(j) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may set and implement managed care capitation rates, and
interpret or make specific this section and any applicable federal
waivers and state plan amendments by means of plan letters, plan or
provider bulletins, or similar instructions, without taking
regulatory action.
(k) The department shall report, upon request, to the fiscal and
policy committees of the respective houses of the Legislature
regarding implementation of this section.
(l) Prior to October 1, 2011, the risk-adjusted countywide
capitation rate shall comprise no more than 20 percent of the total
capitation rate paid to each Medi-Cal managed care plan.
(m) (1) It is the intent of the Legislature to preserve the policy
goal to support and strengthen traditional safety net providers who
treat high volumes of uninsured and Medi-Cal patients when Medi-Cal
enrollees are defaulted into Medi-Cal managed care plans.
(2) As the department adds additional factors, such as managed
care plan costs, to the Medi-Cal managed care plan default assignment
algorithm, it shall consult with the Auto Assignment Performance
Incentive Program stakeholder workgroup to develop cost factor
disregards related to intergovernmental transfers and required
wraparound payments that support safety net providers.
(n) (1) The department shall develop and pay capitation rates to
entities contracted pursuant to Chapter 8.75 (commencing with Section
14591), using actuarial methods and in a manner consistent with this
section, except as provided in this subdivision.
(2) The department may develop capitation rates using a
standardized rate methodology across managed care plan models for
comparable populations. The specific rate methodology applied to PACE
organizations shall address features of PACE that distinguishes it
from other managed care plan models.
(3) The department may develop statewide rates and apply
geographic adjustments, using available data sources deemed
appropriate by the department. Consistent with actuarial methods, the
primary source of data used to develop rates for each PACE
organization shall be its Medi-Cal cost and utilization data or other
data sources as deemed necessary by the department.
(4) Rates developed pursuant to this subdivision shall reflect the
level of care associated with the specific populations served under
the contract.
(5) The rate methodology developed pursuant to this subdivision
shall contain a mechanism to account for the costs of high-cost drugs
and treatments.
(6) Rates developed pursuant to this subdivision shall be
actuarially certified prior to implementation.
(7) The department shall consult with those entities contracted
pursuant to Chapter 8.75 (commencing with Section 14591) in
developing a rate methodology according to this subdivision.
(8) Consistent with the requirements of federal law, the
department shall calculate an upper payment limit for payments to
PACE organizations. In calculating the upper payment limit, the
department shall correct the applicable data as necessary and shall
consider the risk of nursing home placement for the comparable
population when estimating the level of care and risk of PACE
participants.
(9) During the first three rate years in which the methodology
developed pursuant to this subdivision is used by the department to
set rates for entities contracted pursuant to Chapter 8.75
(commencing with Section 14591), the department shall pay the entity
at a rate within the certified actuarially sound rate range developed
with respect to that entity, to the extent consistent with federal
requirements and subject to paragraph (11), as necessary to mitigate
the impact to the entity during the transition to the methodology
developed pursuant to this subdivision.
(10) During the first two years in which a new PACE organization
or existing PACE organization enters a previously unserved area, the
department shall pay at a rate within the certified actuarially sound
rate range developed with respect to that entity, to the extent
consistent with federal requirements and subject to paragraph (11).
(11) This subdivision shall be implemented only to the extent that
any necessary federal approvals are obtained and federal financial
participation is available.
(12) This subdivision shall apply for rates implemented no earlier
than January 1, 2017.
(o) This section shall be inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of Chapter 37
of the Statutes of 2013.
SEC. 32. Section 14301.1 of the Welfare and Institutions Code, as
added by Section 29 of Chapter 37 of the Statutes of 2013, is amended
to read:
14301.1. (a) For rates established on or after August 1, 2007,
the department shall pay capitation rates to health plans
participating in the Medi-Cal managed care program using actuarial
methods and may establish health-plan- and county-specific rates. The
department shall utilize a county- and model-specific rate
methodology to develop Medi-Cal managed care capitation rates for
contracts entered into
between the department and any entity pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing with
Section 14087.5), and Article 2.91 (commencing with Section 14089) of
Chapter 7 that includes, but is not limited to, all of the
following:
(1) Health-plan-specific encounter and claims data.
(2) Supplemental utilization and cost data submitted by the health
plans.
(3) Fee-for-service data for the underlying county of operation or
other appropriate counties as deemed necessary by the department.
(4) Department of Managed Health Care financial statement data
specific to Medi-Cal operations.
(5) Other demographic factors, such as age, gender, or
diagnostic-based risk adjustments, as the department deems
appropriate.
(b) To the extent that the department is unable to obtain
sufficient actual plan data, it may substitute plan model, similar
plan, or county-specific fee-for-service data.
(c) The department shall develop rates that include administrative
costs, and may apply different administrative costs with respect to
separate aid code groups.
(d) The department shall develop rates that shall include, but are
not limited to, assumptions for underwriting, return on investment,
risk, contingencies, changes in policy, and a detailed review of
health plan financial statements to validate and reconcile costs for
use in developing rates.
(e) The department may develop rates that pay plans based on
performance incentives, including quality indicators, access to care,
and data submission.
(f) The department may develop and adopt condition-specific
payment rates for health conditions, including, but not limited to,
childbirth delivery.
(g) (1) Prior to finalizing Medi-Cal managed care capitation
rates, the department shall provide health plans with information on
how the rates were developed, including rate sheets for that specific
health plan, and provide the plans with the opportunity to provide
additional supplemental information.
(2) For contracts entered into between the department and any
entity pursuant to Article 2.8 (commencing with Section 14087.5) of
Chapter 7, the department, by June 30 of each year, or, if the budget
has not passed by that date, no later than five working days after
the budget is signed, shall provide preliminary rates for the
upcoming fiscal year.
(h) For the purposes of developing capitation rates through
implementation of this ratesetting methodology, Medi-Cal managed care
health plans shall provide the department with financial and
utilization data in a form and substance as deemed necessary by the
department to establish rates. This data shall be considered
proprietary and shall be exempt from disclosure as official
information pursuant to subdivision (k) of Section 6254 of the
Government Code as contained in the California Public Records Act
(Division 7 (commencing with Section 6250) of Title 1 of the
Government Code).
(i) The department shall report, upon request, to the fiscal and
policy committees of the respective houses of the Legislature
regarding implementation of this section.
(j) Prior to October 1, 2011, the risk-adjusted countywide
capitation rate shall comprise no more than 20 percent of the total
capitation rate paid to each Medi-Cal managed care plan.
(k) (1) It is the intent of the Legislature to preserve the policy
goal to support and strengthen traditional safety net providers who
treat high volumes of uninsured and Medi-Cal patients when Medi-Cal
enrollees are defaulted into Medi-Cal managed care plans.
(2) As the department adds additional factors, such as managed
care plan costs, to the Medi-Cal managed care plan default assignment
algorithm, it shall consult with the Auto Assignment Performance
Incentive Program stakeholder workgroup to develop cost factor
disregards related to intergovernmental transfers and required
wraparound payments that support safety net providers.
(l) (1) The department shall develop and pay capitation rates to
entities contracted pursuant to Chapter 8.75 (commencing with Section
14591), using actuarial methods and in a manner consistent with this
section, except as provided in this subdivision.
(2) The department may develop capitation rates using a
standardized rate methodology across managed care plan models for
comparable populations. The specific rate methodology applied to PACE
organizations shall address features of PACE that distinguish it
from other managed care plan models.
(3) The department may develop statewide rates and apply
geographic adjustments, using available data sources deemed
appropriate by the department. Consistent with actuarial methods, the
primary source of data used to develop rates for each PACE
organization shall be its Medi-Cal cost and utilization data or other
data sources as deemed necessary by the department.
(4) Rates developed pursuant to this subdivision shall reflect the
level of care associated with the specific populations served under
the contract.
(5) The rate methodology developed pursuant to this subdivision
shall contain a mechanism to account for the costs of high-cost drugs
and treatments.
(6) Rates developed pursuant to this subdivision shall be
actuarially certified prior to implementation.
(7) The department shall consult with those entities contracted
pursuant to Chapter 8.75 (commencing with Section 14591) in
developing a rate methodology according to this subdivision.
(8) Consistent with the requirements of federal law, the
department shall calculate an upper payment limit for payments to
PACE organizations. In calculating the upper payment limit, the
department shall correct the applicable data as necessary and shall
consider the risk of nursing home placement for the comparable
population when estimating the level of care and risk of PACE
participants.
(9) During the first three rate years in which the methodology
developed pursuant to this subdivision is used by the department to
set rates for entities contracted pursuant to Chapter 8.75
(commencing with Section 14591), the department shall pay the entity
at a rate within the certified actuarially sound rate range developed
with respect to that entity, to the extent consistent with federal
requirements and subject to paragraph (11), as necessary to mitigate
the impact to the entity during the transition to the methodology
developed pursuant to this subdivision.
(10) During the first two years in which a new PACE organization
or existing PACE organization enters a previously unserved area, the
department shall pay at a rate within the certified actuarially sound
rate range developed with respect to that entity, to the extent
consistent with federal requirements and subject to paragraph (11).
(11) This subdivision shall be implemented only to the extent any
necessary federal approvals are obtained and federal financial
participation is available.
(12) This subdivision shall apply for rates implemented no earlier
than January 1, 2017.
(m) This section shall be operative only if Section 28 of Chapter
37 of the Statutes of 2013 becomes inoperative pursuant to
subdivision (n) of that Section 28.
SEC. 33. Section 14592 of the Welfare and Institutions Code is
amended to read:
14592. (a) For purposes of this chapter, "PACE organization"
means an entity as defined in Section 460.6 of Title 42 of the Code
of Federal Regulations.
(b) The Director of Health Care Services shall establish the
California Program of All-Inclusive Care for the Elderly, to provide
community-based, risk-based, and capitated long-term care services as
optional services under the state's Medi-Cal State Plan and under
contracts entered into between the federal Centers for Medicare and
Medicaid Services, the department, and PACE organizations, meeting
the requirements of the Balanced Budget Act of 1997 (Public Law
105-33) and any other applicable law or regulation.
SEC. 34. Section 14593 of the Welfare and Institutions Code is
amended to read:
14593. (a) (1) The department may enter into contracts with
public or private organizations for implementation of the PACE
program, and also may enter into separate contracts with PACE
organizations, to fully implement the single state agency
responsibilities assumed by the department in those contracts,
Section 14132.94, and any other state requirement found necessary by
the department to provide comprehensive community-based, risk-based,
and capitated long-term care services to California's frail elderly.
(2) The department may enter into separate contracts as specified
in paragraph (1) with up to 15 PACE organizations. This paragraph
shall become inoperative upon federal approval of a capitation rate
methodology, pursuant to subdivision (n) of Section 14301.1.
(b) The requirements of the PACE model, as provided for pursuant
to Section 1894 (42 U.S.C. Sec. 1395eee) and Section 1934 (42 U.S.C.
Sec. 1396u-4) of the federal Social Security Act, shall not be waived
or modified. The requirements that shall not be waived or modified
include all of the following:
(1) The focus on frail elderly qualifying individuals who require
the level of care provided in a nursing facility.
(2) The delivery of comprehensive, integrated acute and long-term
care services.
(3) The interdisciplinary team approach to care management and
service delivery.
(4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals.
(5) The assumption by the provider of full financial risk.
(6) The provision of a PACE benefit package for all participants,
regardless of source of payment, that shall include all of the
following:
(A) All Medicare-covered items and services.
(B) All Medicaid-covered items and services, as specified in the
state's Medicaid plan.
(C) Other services determined necessary by the interdisciplinary
team to improve and maintain the participant's overall health status.
(c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply when
determining the eligibility for Medi-Cal of a person receiving the
services from an organization providing services under this chapter.
(d) Provisions governing the treatment of income and resources of
a married couple, for the purposes of determining the eligibility of
a nursing-facility certifiable or institutionalized spouse, shall be
established so as to qualify for federal financial participation.
(e) (1) The department shall establish capitation rates paid to
each PACE organization at no less than 95 percent 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 Medi-Cal program provided for pursuant to Chapter
7 (commencing with Section 14000).
(2) This subdivision shall be implemented only to the extent that
federal financial participation is available.
(3) This subdivision shall become inoperative upon federal
approval of a capitation rate methodology, pursuant to subdivision
(n) of Section 14301.1.
(f) Contracts under this chapter may be on a nonbid basis and
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(g) (1) Notwithstanding subdivision (b), and only to the extent
federal financial participation is available, the department, in
consultation with PACE organizations, shall seek increased federal
regulatory flexibility from the federal Centers for Medicare and
Medicaid Services to modernize the PACE program, which may include,
but is not limited to, addressing all of the following:
(A) Composition of PACE interdisciplinary teams (IDT).
(B) Use of community-based physicians.
(C) Marketing practices.
(D) Development of a streamlined PACE waiver process.
(2) This subdivision shall be operative upon federal approval of a
capitation rate methodology pursuant to subdivision (n) of Section
14301.1.
(h) This section shall become inoperative if the Coordinated Care
Initiative becomes inoperative pursuant to Section 34 of Chapter 37
of the Statutes of 2013 and shall be repealed on January 1 next
following the date upon which it becomes inoperative.
SEC. 35. Section 14593 is added to the Welfare and Institutions
Code, to read:
14593. (a) (1) The department may enter into contracts with
public or private organizations for implementation of the PACE
program, and also may enter into separate contracts with PACE
organizations, to fully implement the single state agency
responsibilities assumed by the department in those contracts,
Section 14132.94, and any other state requirement found necessary by
the department to provide comprehensive community-based, risk-based,
and capitated long-term care services to California's frail elderly.
(2) The department may enter into separate contracts as specified
in paragraph (1) with up to 15 PACE organizations. This paragraph
shall become inoperative upon federal approval of a capitation rate
methodology pursuant to subdivision (l) of Section 14301.1.
(b) The requirements of the PACE model, as provided for pursuant
to Section 1894 (42 U.S.C. Sec. 1395eee) and Section 1934 (42 U.S.C.
Sec. 1396u-4) of the federal Social Security Act, shall not be waived
or modified. The requirements that shall not be waived or modified
include all of the following:
(1) The focus on frail elderly qualifying individuals who require
the level of care provided in a nursing facility.
(2) The delivery of comprehensive, integrated acute and long-term
care services.
(3) The interdisciplinary team approach to care management and
service delivery.
(4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals.
(5) The assumption by the provider of full financial risk.
(6) The provision of a PACE benefit package for all participants,
regardless of source of payment, that shall include all of the
following:
(A) All Medicare-covered items and services.
(B) All Medicaid-covered items and services, as specified in the
state's Medicaid plan.
(C) Other services determined necessary by the interdisciplinary
team to improve and maintain the participant's overall health status.
(c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply when
determining the eligibility for Medi-Cal of a person receiving the
services from an organization providing services under this chapter.
(d) Provisions governing the treatment of income and resources of
a married couple, for the purposes of determining the eligibility of
a nursing-facility certifiable or institutionalized spouse, shall be
established so as to qualify for federal financial participation.
(e) (1) The department shall establish capitation rates paid to
each PACE organization at no less than 95 percent 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 Medi-Cal program provided for pursuant to Chapter
7 (commencing with Section 14000).
(2) This subdivision shall be implemented only to the extent that
federal financial participation is available.
(3) This subdivision shall become inoperative upon federal
approval of a capitation rate methodology pursuant to subdivision (l)
of Section 14301.1.
(f) Contracts under this chapter may be on a nonbid basis and
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
(g) (1) Notwithstanding subdivision (b), and only to the extent
federal financial participation is available, the department, in
consultation with PACE organizations, shall seek increased federal
regulatory flexibility from the federal Centers for Medicare and
Medicaid Services to modernize the PACE program, which may include,
but is not limited to, addressing:
(A) Composition of PACE interdisciplinary teams (IDT).
(B) Use of community-based physicians.
(C) Marketing practices.
(D) Development of a streamlined PACE waiver process.
(2) This subdivision shall be operative upon federal approval of a
capitation rate methodology pursuant to subdivision ( l )
of Section 14301.1.
(h) This section shall become operative only if Section 28 of
Chapter 37 of the Statutes of 2013 becomes inoperative.
SEC. 36. The amendments made to Section 14131.10 of the Welfare
and Institutions Code by this act shall become operative on July 1,
2016.
SEC. 37. This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.