SB 1335, as amended, Mitchell. Medi-Cal benefits: federally qualified health centers and rural health centers: Drug Medi-Cal and specialty mental health services.
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, including specialty mental health services. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions. Under existing law, specialty mental health services are generally provided by mental health plans that contract with the department.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county for various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries, or the department is required to directly arrange for these services if a county elects not to do so.
Existing law provides that federally qualified health center (FQHC) services and rural health clinic (RHC) services, as defined, are covered benefits under the Medi-Cal program to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. Existing law authorizes FQHCs and RHCs to elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services and requires those costs to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service changes.
This bill additionally would authorize FQHCs and RHCs to elect tobegin delete provide services under Drug Medi-Cal and to receive reimbursement for those services pursuant to the terms of a contract or contracts mutually agreed upon by the FQHC or RHC and the county or
the department, pursuant to specified requirements.end deletebegin insert enroll as a Drug Medi-Cal certified provider under Drug Medi-Cal to provide Drug Medi-Cal services and would set forth the reimbursement requirements for these services. The bill would require the costs of providing Drug Medi-Cal services to be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service changes, as specified, and would prohibit the FQHC or RHC from billing the per-visit prospective payment system (PPS) rate for services reimbursed by Drug Medi-Cal.end insert The bill would authorize a county to contract with the FQHCs and RHCs for these Drug Medi-Cal services. The bill would authorize an FQHC or RHC that entered into a contract on or before January 1, 2017, with a mental health plan to provide specialty mental health services to continue to provide, and be reimbursed for, those specialty mental health services if the costs
of providing specialty mental health services are reimbursed outside of the per-visit rate.
The bill’s requirements would be implemented only to the extent that federal financial participation is available and any federal approvals have been obtained.
This bill would incorporate additional changes in Section 14132.100 of the Welfare and Institutions Code proposed by AB 1863, that would become operative only if AB 1863 and this bill are both chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 14132.100 of the Welfare and Institutions
2Code is amended to read:
(a) The federally qualified health center services
4described in Section 1396d(a)(2)(C) of Title 42 of the United States
5Code are covered benefits.
6(b) The rural health clinic services described in Section
71396d(a)(2)(B) of Title 42 of the United States Code are covered
8benefits.
9(c) Federally qualified health center services and rural health
10clinic services shall be reimbursed on a per-visit basis in
11accordance with the definition of “visit” set forth in subdivision
12(g).
13(d) Effective October 1, 2004, and on each October 1 thereafter,
14until no longer
required by federal law, federally qualified health
15center (FQHC) and rural health clinic (RHC) per-visit rates shall
16be increased by the Medicare Economic Index applicable to
17primary care services in the manner provided for in Section
181396a(bb)(3)(A) of Title 42 of the United States Code. Prior to
19January 1, 2004, FQHC and RHC per-visit rates shall be adjusted
20by the Medicare Economic Index in accordance with the
21methodology set forth in the state plan in effect on October 1,
222001.
23(e) (1) An FQHC or RHC may apply for an adjustment to its
24per-visit rate based on a change in the scope of services provided
25by the FQHC or RHC. Rate changes based on a change in the
26scope of services provided by an FQHC or RHC shall be evaluated
27in accordance with Medicare reasonable cost principles, as set
28forth in Part 413
(commencing with Section 413.1) of Title 42 of
29the Code of Federal Regulations, or its successor.
30(2) Subject to the conditions set forth in subparagraphs (A) to
31(D), inclusive, of paragraph (3), a change in scope of service means
32any of the following:
33(A) The addition of a new FQHC or RHC service that is not
34incorporated in the baseline prospective payment system (PPS)
35rate, or a deletion of an FQHC or RHC service that is incorporated
36in the baseline PPS rate.
37(B) A change in service due to amended regulatory requirements
38or rules.
P4 1(C) A change in service resulting from relocating or remodeling
2an FQHC or RHC.
3(D) A change in types of services due to a change in applicable
4technology and medical practice utilized by the center or clinic.
5(E) An increase in service intensity attributable to changes in
6the types of patients served, including, but not limited to,
7populations with HIV or AIDS, or other chronic diseases, or
8homeless, elderly, migrant, or other special populations.
9(F) Any changes in any of the services described in subdivision
10(a) or (b), or in the provider mix of an FQHC or RHC or one of
11its sites.
12(G) Changes in operating costs attributable to capital
13expenditures associated with a modification of the scope of any
14of the services described in subdivision (a) or (b), including new
15or expanded service
facilities, regulatory compliance, or changes
16in technology or medical practices at the center or clinic.
17(H) Indirect medical education adjustments and a direct graduate
18medical education payment that reflects the costs of providing
19teaching services to interns and residents.
20(I) Any changes in the scope of a project approved by the federal
21Health Resources and Services Administration (HRSA).
22(3) No change in costs shall, in and of itself, be considered a
23scope-of-service change unless all of the following apply:
24(A) The increase or decrease in cost is attributable to an increase
25or decrease in the scope of services defined in subdivisions (a) and
26(b), as
applicable.
27(B) The cost is allowable under Medicare reasonable cost
28principles set forth in Part 413 (commencing with Section 413) of
29Subchapter B of Chapter 4 of Title 42 of the Code of Federal
30Regulations, or its successor.
31(C) The change in the scope of services is a change in the type,
32intensity, duration, or amount of services, or any combination
33thereof.
34(D) The net change in the FQHC’s or RHC’s rate equals or
35exceeds 1.75 percent for the affected FQHC or RHC site. For
36FQHCs and RHCs that filed consolidated cost reports for multiple
37sites to establish the initial prospective payment reimbursement
38rate, the 1.75-percent threshold shall be applied to the average
39per-visit rate of all sites for the purposes of
calculating the cost
40associated with a scope-of-service change. “Net change” means
P5 1the per-visit rate change attributable to the cumulative effect of all
2increases and decreases for a particular fiscal year.
3(4) An FQHC or RHC may submit requests for scope-of-service
4changes once per fiscal year, only within 90 days following the
5
beginning of the FQHC’s or RHC’s fiscal year. Any approved
6increase or decrease in the provider’s rate shall be retroactive to
7the beginning of the FQHC’s or RHC’s fiscal year in which the
8request is submitted.
9(5) An FQHC or RHC shall submit a scope-of-service rate
10change request within 90 days of the beginning of any FQHC or
11RHC fiscal year occurring after the effective date of this section,
12if, during the FQHC’s or RHC’s prior fiscal year, the FQHC or
13RHC experienced a decrease in the scope of services provided that
14the FQHC or RHC either knew or should have known would have
15resulted in a significantly lower per-visit rate. If an FQHC or RHC
16discontinues providing onsite pharmacy or dental services, it shall
17submit a scope-of-service rate change request within 90 days of
18the beginning of the following fiscal year. The rate
change shall
19be effective as provided for in paragraph (4). As used in this
20paragraph, “significantly lower” means an average per-visit rate
21decrease in excess of 2.5 percent.
22(6) Notwithstanding paragraph (4), if the approved
23scope-of-service change or changes were initially implemented
24on or after the first day of an FQHC’s or RHC’s fiscal year ending
25in calendar year 2001, but before the adoption and issuance of
26written instructions for applying for a scope-of-service change,
27the adjusted reimbursement rate for that scope-of-service change
28shall be made retroactive to the date the scope-of-service change
29was initially implemented. Scope-of-service changes under this
30paragraph shall be required to be submitted within the later of 150
31days after the adoption and issuance of the written instructions by
32the department, or 150 days
after the end of the FQHC’s or RHC’s
33fiscal year ending in 2003.
34(7) All references in this subdivision to “fiscal year” shall be
35construed to be references to the fiscal year of the individual FQHC
36or RHC, as the case may be.
37(f) (1) An FQHC or RHC may request a supplemental payment
38if extraordinary circumstances beyond the control of the FQHC
39or RHC occur after December 31, 2001, and PPS payments are
40insufficient due to these extraordinary circumstances. Supplemental
P6 1payments arising from extraordinary circumstances under this
2subdivision shall be solely and exclusively within the discretion
3of the department and shall not be subject to subdivision (l). These
4supplemental payments shall be determined separately from the
5scope-of-service adjustments
described in subdivision (e).
6Extraordinary circumstances include, but are not limited to, acts
7of nature, changes in applicable requirements in the Health and
8Safety Code, changes in applicable licensure requirements, and
9changes in applicable rules or regulations. Mere inflation of costs
10alone, absent extraordinary circumstances, shall not be grounds
11for supplemental payment. If an FQHC’s or RHC’s PPS rate is
12sufficient to cover its overall costs, including those associated with
13the extraordinary circumstances, then a supplemental payment is
14not warranted.
15(2) The department shall accept requests for supplemental
16payment at any time throughout the prospective payment rate year.
17(3) Requests for supplemental payments shall be submitted in
18writing to the department and shall set
forth the reasons for the
19request. Each request shall be accompanied by sufficient
20documentation to enable the department to act upon the request.
21Documentation shall include the data necessary to demonstrate
22that the circumstances for which supplemental payment is requested
23meet the requirements set forth in this section. Documentation
24shall includebegin delete allend deletebegin insert bothend insert of the following:
25(A) A presentation of data to demonstrate reasons for the
26FQHC’s or RHC’s request for a supplemental payment.
27(B) Documentation showing the cost implications. The cost
28impact shall be material and significant, two hundred thousand
29dollars
($200,000) or 1 percent of a facility’s total costs, whichever
30is less.
31(4) A request shall be submitted for each affected year.
32(5) Amounts granted for supplemental payment requests shall
33be paid as lump-sum amounts for those years and not as revised
34PPS rates, and shall be repaid by the FQHC or RHC to the extent
35that it is not expended for the specified purposes.
36(6) The department shall notify the provider of the department’s
37discretionary decision in writing.
38(g) (1) An FQHC or RHC “visit” means a face-to-face
39encounter between an FQHC or RHC patient and a physician,
40physician assistant, nurse practitioner, certified nurse-midwife,
P7 1clinical
psychologist, licensed clinical social worker, or a visiting
2nurse. For purposes of this section, “physician” shall be interpreted
3in a manner consistent with the Centers for Medicare and Medicaid
4Services’ Medicare Rural Health Clinic and Federally Qualified
5Health Center Manual (Publication 27), or its successor, only to
6the extent that it defines the professionals whose services are
7reimbursable on a per-visit basis and not as to the types of services
8that these professionals may render during these visits and shall
9include a physician and surgeon, podiatrist, dentist, optometrist,
10and chiropractor. A visit shall also include a face-to-face encounter
11between an FQHC or RHC patient and a comprehensive perinatal
12services practitioner, as defined in Section 51179.1 of Title 22 of
13the California Code of Regulations, providing comprehensive
14perinatal services, a four-hour day of attendance at an adult day
15health
care center, and any other provider identified in the state
16plan’s definition of an FQHC or RHC visit.
17(2) (A) A visit shall also include a face-to-face encounter
18between an FQHC or RHC patient and a dental hygienist or a
19dental hygienist in alternative practice.
20(B) Notwithstanding subdivision (e), an FQHC or RHC that
21currently includes the cost of the services of a dental hygienist in
22alternative practice for the purposes of establishing its FQHC or
23RHC rate shall apply for an adjustment to its per-visit rate, and,
24after the rate adjustment has been approved by the department,
25shall bill these services as a separate visit. However, multiple
26encounters with dental professionals that take place on the same
27day shall constitute a single visit. The department shall
develop
28the appropriate forms to determine which FQHC’s or RHC’s rates
29shall be adjusted and to facilitate the calculation of the adjusted
30rates. An FQHC’s or RHC’s application for, or the department’s
31approval of, a rate adjustment pursuant to this subparagraph shall
32not constitute a change in scope of service within the meaning of
33subdivision (e). An FQHC or RHC that applies for an adjustment
34to its rate pursuant to this subparagraph may continue to bill for
35all other FQHC or RHC visits at its existing per-visit rate, subject
36to reconciliation, until the rate adjustment for visits between an
37FQHC or RHC patient and a dental hygienist or a dental hygienist
38in alternative practice has been approved. Any approved increase
39or decrease in the provider’s rate shall be made within six months
40after the date of receipt of the department’s rate adjustment forms
P8 1pursuant to this subparagraph and shall
be retroactive to the
2beginning of the fiscal year in which the FQHC or RHC submits
3the request, but in no case shall the effective date be earlier than
4January 1, 2008.
5(C) An FQHC or RHC that does not provide dental hygienist
6or dental hygienist in alternative practice services, and later elects
7to add these services, shall process the addition of these services
8as a change in scope of service pursuant to subdivision (e).
9(h) If FQHC or RHC services are partially reimbursed by a
10third-party payer, such as a managed care entity (as defined in
11Section 1396u-2(a)(1)(B) of Title 42 of the United States Code),
12the Medicare Program, or the Child Health and Disability
13Prevention (CHDP) Program, the department shall reimburse an
14FQHC or RHC for the difference between its per-visit PPS
rate
15and receipts from other plans or programs on a contract-by-contract
16basis and not in the aggregate, and may not include managed care
17financial incentive payments that are required by federal law to
18be excluded from the calculation.
19(i) (1) An entity that first qualifies as an FQHC or RHC in the
20year 2001 or later, a newly licensed facility at a new location added
21to an existing FQHC or RHC, and any entity that is an existing
22FQHC or RHC that is relocated to a new site shall each have its
23reimbursement rate established in accordance with one of the
24following methods, as selected by the FQHC or RHC:
25(A) The rate may be calculated on a per-visit basis in an amount
26that is equal to the average of the per-visit rates of three comparable
27
FQHCs or RHCs located in the same or adjacent area with a similar
28caseload.
29(B) In the absence of three comparable FQHCs or RHCs with
30a similar caseload, the rate may be calculated on a per-visit basis
31in an amount that is equal to the average of the per-visit rates of
32three comparable FQHCs or RHCs located in the same or an
33adjacent service area, or in a reasonably similar geographic area
34with respect to relevant social, health care, and economic
35characteristics.
36(C) At a new entity’s one-time election, the department shall
37establish a reimbursement rate, calculated on a per-visit basis, that
38is equal to 100 percent of the projected allowable costs to the
39FQHC or RHC of furnishing FQHC or RHC services during the
40first 12 months of operation as an FQHC or RHC.
After the first
P9 112-month period, the projected per-visit rate shall be increased by
2the Medicare Economic Index then in effect. The projected
3allowable costs for the first 12 months shall be cost settled and the
4prospective payment reimbursement rate shall be adjusted based
5on actual and allowable cost per visit.
6(D) The department may adopt any further and additional
7methods of setting reimbursement rates for newly qualified FQHCs
8or RHCs as are consistent with Section 1396a(bb)(4) of Title 42
9of the United States Code.
10(2) In order for an FQHC or RHC to establish the comparability
11of its caseload for purposes of subparagraph (A) or (B) of paragraph
12(1), the department shall require that the FQHC or RHC submit
13its most recent annual utilization report as submitted to the Office
14of
Statewide Health Planning and Development, unless the FQHC
15or RHC was not required to file an annual utilization report. FQHCs
16or RHCs that have experienced changes in their services or
17caseload subsequent to the filing of the annual utilization report
18may submit to the department a completed report in the format
19applicable to the prior calendar year. FQHCs or RHCs that have
20not previously submitted an annual utilization report shall submit
21to the department a completed report in the format applicable to
22the prior calendar year. The FQHC or RHC shall not be required
23to submit the annual utilization report for the comparable FQHCs
24or RHCs to the department, but shall be required to identify the
25comparable FQHCs or RHCs.
26(3) The rate for any newly qualified entity set forth under this
27subdivision shall be effective retroactively to the later of
the date
28that the entity was first qualified by the applicable federal agency
29as an FQHC or RHC, the date a new facility at a new location was
30added to an existing FQHC or RHC, or the date on which an
31existing FQHC or RHC was relocated to a new site. The FQHC
32or RHC shall be permitted to continue billing for Medi-Cal covered
33benefits on a fee-for-service basis until it is informed of its
34enrollment as an FQHC or RHC, and the department shall reconcile
35the difference between the fee-for-service payments and the
36FQHC’s or RHC’s prospective payment rate at that time.
37(j) Visits occurring at an intermittent clinic site, as defined in
38subdivision (h) of Section 1206 of the Health and Safety Code, of
39an existing FQHC or RHC, or in a mobile unit as defined by
40paragraph (2) of subdivision (b) of Section 1765.105 of the Health
P10 1and
Safety Code, shall be billed by and reimbursed at the same
2rate as the FQHC or RHC establishing the intermittent clinic site
3or the mobile unit, subject to the right of the FQHC or RHC to
4request a scope-of-service adjustment to the rate.
5(k) (1) Notwithstanding any other provision of this section
6requiring the use of a per-visit reimbursement rate, as described
7in subdivision (c), this subdivision shall govern reimbursement
8for services identified in this subdivision.
9(2) An FQHC or RHC may elect to have pharmacy services or
10dental services reimbursed on a fee-for-services basis, utilizing
11the current fee schedules established for those services.
12(3) An FQHC or RHC may elect tobegin delete become certified to provide
13services
in the Drug Medi-Cal program, and reimbursement for
14those services shall be governed by this paragraph.end delete
15Drug Medi-Cal certified provider. If an FQHC or RHC elects to
16enroll as a Drug Medi-Cal certified provider, the costs associated
17with the Drug Medi-Cal services shall not be included in the
18FQHC’s or RHC’s per-visit PPS rate and the reimbursement for
19those services shall be governed by subparagraph (A) or (B).end insert
20(A) If the FQHCbegin delete is locatedend deletebegin insert or RHC elects to provide Drug
21Medi-Cal servicesend insert in a county that has elected to participate in the
22Drug Medi-Cal organized delivery system, the FQHC or RHC
23begin delete may elect toend deletebegin insert
shallend insert receive reimbursement pursuant to a mutually
24agreed upon contract between the county and the FQHC or RHC.
25
begin insert If an FQHC or RHC is denied a contract by the county, the FQHC
26or RHC may follow the contract denial end insertbegin insertprocess set forth in the
27Special Terms and Conditions.end insert
28(B) If thebegin insert FQHC or RHC elects to provide Drug Medi-Cal
29services in aend insert
countybegin insert thatend insert does not elect to participate in the Drug
30Medi-Cal organized delivery system,begin delete anend deletebegin insert theend insert FQHC or RHCbegin delete may begin insert shall receive reimbursement pursuant to a mutually
31elect to contract through the department as a Drug Medi-Cal
32provider.end delete
33agreed upon contract between the county and the FQHC or RHC.
34If the county refuses to contract with the FQHC or RHC, the FQHC
35or RHC may request to contract directly with the department and
36shall be reimbursed for those end insertbegin insertservices
at the fee-for-service rate.end insert
37(4) (A) If an FQHC or RHC elects reimbursement pursuant to
38paragraph (2) or (3), pursuant to which the costs associated with
39providing the services are part of the FQHC’s or RHC’s clinic
40base rate, those costs shall be adjusted out of the FQHC’s or RHC’s
P11 1clinic base rate as scope-of-service changes and payment pursuant
2to subdivision (h) shall not apply.
3(B) An FQHC or RHC that reverses its election under
paragraph
4(2) or (3) shall revert to its prior rate, subject to an increase to
5account for all MEI increases occurring during the intervening
6time period, and subject to any increases or decreases associated
7with applicable scope-of-service adjustments as provided in
8subdivision (e).
9
(5) (A) An FQHC or RHC shall submit a scope-of-service rate
10change request within 90 days of the beginning of any FQHC or
11RHC fiscal year occurring after January 1, 2017, if, during the
12FQHC’s or RHC’s prior fiscal year, both of the following
13occurred:
14
(i) The FQHC or RHC elected reimbursement pursuant to
15paragraph (3).
16
(ii) The costs of providing Drug Medi-Cal services were
17included in the per-visit PPS rate and the removal of those costs
18would have resulted in a significantly lower per-visit PPS rate.
19For purposes of this subparagraph, “significantly lower” means
20an average per-visit PPS rate decrease in excess of 2.5 percent.
21
(B) Within 90 days of receipt of the request for a
22scope-of-service change, the department shall issue the FQHC or
23RHC an interim rate equal to 90 percent of the FQHC’s or RHC’s
24projected allowable cost as determined by the department. The
25audit performed to determine the final rate shall be performed in
26accordance with Section 14170.
27
(6) If an FQHC or RHC makes an election pursuant to
28paragraph (3) and a scope-of-service change is necessary pursuant
29to paragraphs (4) and (5), the FQHC or RHC shall comply with
30
both of the following:
31
(A) After the department approves the request for a
32scope-of-service change and adjusts the per-visit PPS rate pursuant
33to paragraph (4), the FQHC or RHC shall not bill the per-visit
34PPS rate for services reimbursed by the Drug Medi-Cal organized
35delivery system.
36
(B) For the purpose of calculating a per-visit PPS rate, the
37FQHC or RHC shall provide verifiable documentation of the costs
38of an employee who provides both FQHC services and Drug
39Medi-Cal services. Documentation shall attribute costs
40proportionally between FQHC services and Drug Medi-Cal
P12 1services. Only the costs attributable to FQHC services shall be
2included in the per-visit PPS rate.
3
(7) If an FQHC or RHC was enrolled as a Drug Medi-Cal
4certified provider on or before January 1, 2017, the FQHC or
5RHC may continue to provide, and be
reimbursed for, Drug
6Medi-Cal services pursuant to the terms of the contract if the costs
7of providing Drug Medi-Cal services are reimbursed outside of
8the per-visit PPS rate described in subdivision (c).
9(5)
end delete
10begin insert(end insertbegin insert8)end insert (A) If an FQHC or RHC entered into a contract on or before
11January 1, 2017, with a mental health plan to provide specialty
12mental health services to Medi-Cal beneficiaries as part of the
13mental health plan’s network, the FQHC or RHC may continue to
14provide, and be
reimbursed for, those specialty mental health
15services pursuant to the terms of the contract with the mental health
16plan if the costs of providing specialty mental health services are
17reimbursed outside of the per-visit PPS rate described in
18subdivision (c).
19(B) For purposes of this paragraph, “mental health plan” means
20any mental health plan contracting with the department to provide
21specialty mental health services to enrolled Medi-Cal beneficiaries
22under Article 5 (commencing with Section 14680) of Chapter 8.8
23or Chapter 8.9 (commencing with Section 14700).
24
(9) Nothing in this subdivision shall be construed to alter or
25otherwise change the process applicable to an FQHC or RHC
26making an election pursuant to paragraph (2).
27
(10) For purposes of this subdivision, the following definitions
28shall apply:
29
(A) “Drug Medi-Cal organized delivery system” means the
30Drug Medi-Cal organized delivery system authorized under the
31California Medi-Cal 2020 Demonstration, Number 11-W-00193/9,
32as approved by the federal Centers for Medicare and Medicaid
33Services and described in the Special Terms and Conditions.
34
(B) “Special Terms and Conditions” shall have the same
35meaning as set forth in subdivision (o) of Section 14184.10.
36(l) FQHCs and RHCs may appeal a grievance or complaint
37concerning ratesetting, scope-of-service changes, and settlement
38of cost report audits, in the manner prescribed by Section 14171.
39The rights and remedies
provided under this subdivision are
P13 1cumulative to the rights and remedies available under all other
2provisions of law of this state.
3(m) The department shall, no later than March 30, 2008,
4promptly seek all necessary federal approvals in order to implement
5this section, including any amendments to the state plan. To the
6extent that any element or requirement of this section is not
7approved, the department shall submit a request to the federal
8Centers for Medicare and Medicaid Services for any waivers that
9would be necessary to implement this section.
10(n) The department shall implement this section only to the
11extent that federal financial participation is obtained.
Section 14132.100 of the Welfare and Institutions
13Code is amended to read:
(a) The federally qualified health center services
15described in Section 1396d(a)(2)(C) of Title 42 of the United States
16Code are covered benefits.
17(b) The rural health clinic services described in Section
181396d(a)(2)(B) of Title 42 of the United States Code are covered
19benefits.
20(c) Federally qualified health center services and rural health
21clinic services shall be reimbursed on a per-visit basis in
22accordance with the definition of “visit” set forth in subdivision
23(g).
24(d) Effective October 1, 2004, and on each October 1 thereafter,
25until no longer
required by federal law, federally qualified health
26center (FQHC) and rural health clinic (RHC) per-visit rates shall
27be increased by the Medicare Economic Index applicable to
28primary care services in the manner provided for in Section
291396a(bb)(3)(A) of Title 42 of the United States Code. Prior to
30January 1, 2004, FQHC and RHC per-visit rates shall be adjusted
31by the Medicare Economic Index in accordance with the
32methodology set forth in the state plan in effect on October 1,
332001.
34(e) (1) An FQHC or RHC may apply for an adjustment to its
35per-visit rate based on a change in the scope of services provided
36by the FQHC or RHC. Rate changes based on a change in the
37scope of services provided by an FQHC or RHC shall be evaluated
38in accordance with Medicare reasonable cost principles, as set
39forth in Part 413
(commencing with Section 413.1) of Title 42 of
40the Code of Federal Regulations, or its successor.
P14 1(2) Subject to the conditions set forth in subparagraphs (A) to
2(D), inclusive, of paragraph (3), a change in scope of service means
3any of the following:
4(A) The addition of a new FQHC or RHC service that is not
5incorporated in the baseline prospective payment system (PPS)
6rate, or a deletion of an FQHC or RHC service that is incorporated
7in the baseline PPS rate.
8(B) A change in service due to amended regulatory requirements
9or rules.
10(C) A change in service resulting from relocating or remodeling
11an FQHC or RHC.
12(D) A change in types of services due to a change in applicable
13technology and medical practice utilized by the center or clinic.
14(E) An increase in service intensity attributable to changes in
15the types of patients served, including, but not limited to,
16populations with HIV or AIDS, or other chronic diseases, or
17homeless, elderly, migrant, or other special populations.
18(F) Any changes in any of the services described in subdivision
19(a) or (b), or in the provider mix of an FQHC or RHC or one of
20its sites.
21(G) Changes in operating costs attributable to capital
22expenditures associated with a modification of the scope of any
23of the services described in subdivision (a) or (b), including new
24or expanded service
facilities, regulatory compliance, or changes
25in technology or medical practices at the center or clinic.
26(H) Indirect medical education adjustments and a direct graduate
27medical education payment that reflects the costs of providing
28teaching services to interns and residents.
29(I) Any changes in the scope of a project approved by the federal
30Health Resources and Services Administration (HRSA).
31(3) No change in costs shall, in and of itself, be considered a
32scope-of-service change unless all of the following apply:
33(A) The increase or decrease in cost is attributable to an increase
34or decrease in the scope of services defined in subdivisions (a) and
35(b), as
applicable.
36(B) The cost is allowable under Medicare reasonable cost
37principles set forth in Part 413 (commencing with Section 413) of
38Subchapter B of Chapter 4 of Title 42 of the Code of Federal
39Regulations, or its successor.
P15 1(C) The change in the scope of services is a change in the type,
2intensity, duration, or amount of services, or any combination
3thereof.
4(D) The net change in the FQHC’s or RHC’s rate equals or
5exceeds 1.75 percent for the affected FQHC or RHC site. For
6FQHCs and RHCs that filed consolidated cost reports for multiple
7sites to establish the initial prospective payment reimbursement
8rate, the 1.75-percent threshold shall be applied to the average
9per-visit rate of all sites for the purposes of
calculating the cost
10associated with a scope-of-service change. “Net change” means
11the per-visit rate change attributable to the cumulative effect of all
12increases and decreases for a particular fiscal year.
13(4) An FQHC or RHC may submit requests for scope-of-service
14changes once per fiscal year, only within 90 days following the
15beginning of the FQHC’s or RHC’s fiscal year. Any approved
16increase or decrease in the provider’s rate shall be retroactive to
17the beginning of the FQHC’s or RHC’s fiscal year in which the
18request is submitted.
19(5) An FQHC or RHC shall submit a scope-of-service rate
20change request within 90 days of the beginning of any FQHC or
21RHC fiscal year occurring after the effective date of this section,
22if, during the FQHC’s or RHC’s prior fiscal year, the FQHC
or
23RHC experienced a decrease in the scope of services provided that
24the FQHC or RHC either knew or should have known would have
25resulted in a significantly lower per-visit rate. If an FQHC or RHC
26discontinues providing onsite pharmacy or dental services, it shall
27submit a scope-of-service rate change request within 90 days of
28the beginning of the following fiscal year. The rate change shall
29be effective as provided for in paragraph (4). As used in this
30paragraph, “significantly lower” means an average per-visit rate
31decrease in excess of 2.5 percent.
32(6) Notwithstanding paragraph (4), if the approved
33scope-of-service change or changes were initially implemented
34on or after the first day of an FQHC’s or RHC’s fiscal year ending
35in calendar year 2001, but before the adoption and issuance of
36written instructions for applying for a
scope-of-service change,
37the adjusted reimbursement rate for that scope-of-service change
38shall be made retroactive to the date the scope-of-service change
39was initially implemented. Scope-of-service changes under this
40paragraph shall be required to be submitted within the later of 150
P16 1days after the adoption and issuance of the written instructions by
2the department, or 150 days after the end of the FQHC’s or RHC’s
3fiscal year ending in 2003.
4(7) All references in this subdivision to “fiscal year” shall be
5construed to be references to the fiscal year of the individual FQHC
6or RHC, as the case may be.
7(f) (1) An FQHC or RHC may request a supplemental payment
8if extraordinary circumstances beyond the control of the FQHC
9or RHC occur after December 31, 2001,
and PPS payments are
10insufficient due to these extraordinary circumstances. Supplemental
11payments arising from extraordinary circumstances under this
12subdivision shall be solely and exclusively within the discretion
13of the department and shall not be subject to subdivision (l). These
14supplemental payments shall be determined separately from the
15scope-of-service adjustments described in subdivision (e).
16Extraordinary circumstances include, but are not limited to, acts
17of nature, changes in applicable requirements in the Health and
18Safety Code, changes in applicable licensure requirements, and
19changes in applicable rules or regulations. Mere inflation of costs
20alone, absent extraordinary circumstances, shall not be grounds
21for supplemental payment. If an FQHC’s or RHC’s PPS rate is
22sufficient to cover its overall costs, including those associated with
23the extraordinary circumstances, then a
supplemental payment is
24
not warranted.
25(2) The department shall accept requests for supplemental
26payment at any time throughout the prospective payment rate year.
27(3) Requests for supplemental payments shall be submitted in
28writing to the department and shall set forth the reasons for the
29request. Each request shall be accompanied by sufficient
30documentation to enable the department to act upon the request.
31Documentation shall include the data necessary to demonstrate
32that the circumstances for which supplemental payment is requested
33meet the requirements set forth in this section. Documentation
34shall includebegin delete allend deletebegin insert bothend insert of
the following:
35(A) A presentation of data to demonstrate reasons for the
36FQHC’s or RHC’s request for a supplemental payment.
37(B) Documentation showing the cost implications. The cost
38impact shall be material and significant, two hundred thousand
39dollars ($200,000) or 1 percent of a facility’s total costs, whichever
40is less.
P17 1(4) A request shall be submitted for each affected year.
2(5) Amounts granted for supplemental payment requests shall
3be paid as lump-sum amounts for those years and not as revised
4PPS rates, and shall be repaid by the FQHC or RHC to the extent
5that it is not expended for the specified purposes.
6(6) The department shall notify the provider of the department’s
7discretionary decision in writing.
8(g) (1) An FQHC or RHC “visit” means a face-to-face
9encounter between an FQHC or RHC patient and a physician,
10physician assistant, nurse practitioner, certified nurse-midwife,
11
clinical psychologist, licensed clinical social worker, or a visiting
12nurse. For purposes of this section, “physician” shall be interpreted
13in a manner consistent with the Centers for Medicare and Medicaid
14Services’ Medicare Rural Health Clinic and Federally Qualified
15Health Center Manual (Publication 27), or its successor, only to
16the extent that it defines the professionals whose services are
17reimbursable on a per-visit basis and not as to the types of services
18that these professionals may render during these visits and shall
19include a physician and surgeon, osteopath, podiatrist, dentist,
20optometrist, and chiropractor. A visit shall also include a
21face-to-face encounter between an FQHC or RHC patient and a
22comprehensive perinatal practitioner, as defined in Section
51179.7
23of Title 22 of the California Code of Regulations, providing
24comprehensive perinatal services, a four-hour day of attendance
25at an adult day health care center, and any other provider identified
26in the state plan’s definition of an FQHC or RHC visit.
27(2) (A) A visit shall also include a face-to-face encounter
28between an FQHC or RHC patient and a dental hygienist, a dental
29hygienist in alternative practice, or a marriage and family therapist.
30(B) Notwithstanding subdivision (e), if an FQHC or RHC that
31currently includes the cost of the services of a dental hygienist in
32alternative practice, or a marriage and family therapist for the
33purposes of establishing its FQHC or RHC rate chooses to bill
34these services as a separate visit, the FQHC or
RHC shall apply
35for an adjustment to its per-visit rate, and, after the rate adjustment
36has been approved by the department, shall bill these services as
37a separate visit. However, multiple encounters with dental
38professionals or marriage and family therapists that take place on
39the same day shall constitute a single visit. The department shall
40develop the appropriate forms to determine which FQHC’s or
P18 1RHC’s rates shall be adjusted and to facilitate the calculation of
2the adjusted rates. An FQHC’s or RHC’s application for, or the
3department’s approval of, a rate adjustment pursuant to this
4subparagraph shall not constitute a change in scope of service
5within the meaning of subdivision (e). An FQHC or RHC that
6applies for an adjustment to its rate pursuant to this subparagraph
7may continue to bill for all other FQHC or RHC visits at its existing
8per-visit rate, subject to reconciliation, until the
rate adjustment
9for visits between an FQHC or RHC patient and a dental
hygienist,
10a dental hygienist in alternative practice, or a marriage and family
11therapist has been approved. Any approved increase or decrease
12in the provider’s rate shall be made within six months after the
13date of receipt of the department’s rate adjustment forms pursuant
14to this subparagraph and shall be retroactive to the beginning of
15the fiscal year in which the FQHC or RHC submits the request,
16but in no case shall the effective date be earlier than January 1,
172008.
18(C) An FQHC or RHC that does not provide dental
hygienist,
19dental hygienist in alternative practice, or marriage and family
20therapist services, and later elects to add these services and bill
21these services as a separate visit, shall process the addition of these
22services as a change in scope of service pursuant to subdivision
23(e).
24(h) If FQHC or RHC services are partially reimbursed by a
25third-party payer, such as a managed care entity (as defined in
26Section 1396u-2(a)(1)(B) of Title 42 of the United States Code),
27the Medicare Program, or the Child Health and Disability
28Prevention (CHDP) Program, the department shall reimburse an
29FQHC or RHC for the difference between its per-visit PPS rate
30and receipts from other plans or programs on a contract-by-contract
31basis and not in the aggregate, and may not include managed care
32financial incentive payments that are required by
federal law to
33be excluded from the calculation.
34(i) (1) An entity that first qualifies as an FQHC or RHC in the
35year 2001 or later, a newly licensed facility at a new location added
36to an existing FQHC or RHC, and any entity that is an existing
37FQHC or RHC that is relocated to a new site shall each have its
38reimbursement rate established in accordance with one of the
39following methods, as selected by the FQHC or RHC:
P19 1(A) The rate may be calculated on a per-visit basis in an amount
2that is equal to the average of the per-visit rates of three comparable
3FQHCs or RHCs located in the same or adjacent area with a similar
4caseload.
5(B) In the absence of three comparable FQHCs or RHCs with
6a similar
caseload, the rate may be calculated on a per-visit basis
7in an amount that is equal to the average of the per-visit rates of
8three comparable FQHCs or RHCs located in the same or an
9adjacent service area, or in a reasonably similar geographic area
10with respect to relevant social, health care, and economic
11characteristics.
12(C) At a new entity’s one-time election, the department shall
13establish a reimbursement rate, calculated on a per-visit basis, that
14is equal to 100 percent of the projected allowable costs to the
15FQHC or RHC of furnishing FQHC or RHC services during the
16first 12 months of operation as an FQHC or RHC. After the first
1712-month period, the projected per-visit rate shall be increased by
18the Medicare Economic Index then in effect. The projected
19allowable costs for the first 12 months shall be cost settled and the
20prospective
payment reimbursement rate shall be adjusted based
21on actual and allowable cost per visit.
22(D) The department may adopt any further and additional
23methods of setting reimbursement rates for newly qualified FQHCs
24or RHCs as are consistent with Section 1396a(bb)(4) of Title 42
25of the United States Code.
26(2) In order for an FQHC or RHC to establish the comparability
27of its caseload for purposes of subparagraph (A) or (B) of paragraph
28(1), the department shall require that the FQHC or RHC submit
29its most recent annual utilization report as submitted to the Office
30of Statewide Health Planning and Development, unless the FQHC
31or RHC was not required to file an annual utilization report. FQHCs
32or RHCs that have experienced changes in their services or
33caseload subsequent to the filing of
the annual utilization report
34may submit to the department a completed report in the format
35applicable to the prior calendar year. FQHCs or RHCs that have
36not previously submitted an annual utilization report shall submit
37to the department a completed report in the format applicable to
38the prior calendar year. The FQHC or RHC shall not be required
39to submit the annual utilization report for the comparable FQHCs
P20 1or RHCs to the department, but shall be required to identify the
2comparable FQHCs or RHCs.
3(3) The rate for any newly qualified entity set forth under this
4subdivision shall be effective retroactively to the later of the date
5that the entity was first qualified by the applicable federal agency
6as an FQHC or RHC, the date a new facility at a new location was
7added to an existing FQHC or RHC, or the date on which an
8existing FQHC
or RHC was relocated to a new site. The FQHC
9or RHC shall be permitted to continue billing for Medi-Cal covered
10benefits on a fee-for-service basis under its existing provider
11number until it is informed of its FQHC or
RHC enrollment
12approval, and the department shall reconcile the difference between
13the fee-for-service payments and the FQHC’s or RHC’s prospective
14payment rate at that time.
15(j) Visits occurring at an intermittent clinic site, as defined in
16subdivision (h) of Section 1206 of the Health and Safety Code, of
17an existing FQHC or RHC, or in a mobile unit as defined by
18paragraph (2) of subdivision (b) of Section 1765.105 of the Health
19and Safety Code, shall be billed by and reimbursed at the same
20rate as the FQHC or RHC establishing the intermittent clinic site
21or the mobile unit, subject to the right of the FQHC or RHC to
22request a scope-of-service adjustment to the rate.
23(k) (1) Notwithstanding any other provision of this section
24requiring the use
of a per-visit reimbursement rate, as described
25in subdivision (c), this subdivision shall govern reimbursement
26for services identified in this subdivision.
27(2) An FQHC or RHC may elect to have pharmacy services or
28dental services reimbursed on a fee-for-services basis, utilizing
29the current fee schedules established for those services.
30(3) An FQHC or RHC may elect tobegin delete become certified to provide begin insert enroll as a
31services in the Drug Medi-Cal program, and reimbursement for
32those services shall be governed by this paragraph.end delete
33Drug Medi-Cal certified provider. If an FQHC or RHC elects to
34enroll as a Drug Medi-Cal certified provider, the costs associated
35
with the Drug Medi-Cal services shall not be included in the
36FQHC’s or RHC’s per-visit PPS rate and the reimbursement for
37those services shall be governed by subparagraph (A) or (B).end insert
38(A) If the FQHCbegin delete is locatedend deletebegin insert or RHC elects to provide Drug
39Medi-Cal servicesend insert in a county that has elected to participate in the
40Drug Medi-Cal organized delivery system, the FQHC or RHC
P21 1begin delete may elect toend deletebegin insert shallend insert receive reimbursement pursuant to a mutually
2agreed upon contract between the county and the FQHC or RHC.
3
begin insert
If an FQHC or RHC is denied a contract by the county, the FQHC
4or RHC may follow the contract denial process set forth in the
5Special Terms and Conditions.end insert
6(B) If thebegin insert FQHC or RHC elects to provide Drug Medi-Cal
7services in aend insert countybegin insert thatend insert does not elect to participate in the Drug
8Medi-Cal organized delivery system,begin delete an FQHC or RHC may elect
9to contract through the department as a Drug Medi-Cal provider.end delete
10
begin insert the FQHC or RHC shall receive reimbursement pursuant to a
11mutually agreed upon contract between
the county and the FQHC
12or RHC. If the county refuses to contract with the FQHC or RHC,
13the FQHC or RHC may request to contract directly with the
14department and shall be reimbursed for those services at the
15fee-for-service rate.end insert
16(4) (A) If an FQHC or RHC elects reimbursement pursuant to
17paragraph (2) or (3), pursuant to which the costs associated with
18providing the services are part of the FQHC’s or RHC’s clinic
19base rate, those costs shall be adjusted out of the FQHC’s or RHC’s
20clinic base rate as scope-of-service changes and payment pursuant
21to subdivision (h) shall not apply.
22(B) An FQHC or RHC that reverses its election under paragraph
23(2) or (3) shall revert to its prior rate, subject to an increase to
24account for all Medicare Economic Index
increases occurring
25during the intervening time period, and subject to any increases
26or
decreases associated with applicable scope-of-service
27adjustments as provided in subdivision (e).
28
(5) (A) An FQHC or RHC shall submit a scope-of-service rate
29change request within 90 days of the beginning of any FQHC or
30RHC fiscal year occurring after January 1, 2017, if, during the
31FQHC’s or RHC’s prior fiscal year, both of the following
32occurred:
33
(i) The FQHC or RHC elected reimbursement pursuant to
34paragraph (3).
35
(ii) The costs of providing Drug Medi-Cal services were
36included in the per-visit PPS rate and the removal of those costs
37would have resulted in a significantly lower per-visit PPS rate.
38For purposes of this subparagraph, “significantly lower” means
39an average per-visit PPS
rate decrease in excess of 2.5 percent.
P22 1
(B) Within 90 days of receipt of the request for a
2scope-of-service change, the department shall issue the FQHC or
3RHC an interim rate equal to 90 percent of the FQHC’s or RHC’s
4projected allowable cost as determined by the department. The
5audit performed to determine the final rate shall be performed in
6accordance with Section 14170.
7
(6) If an FQHC or RHC makes an election pursuant to
8paragraph (3) and a scope-of-service change is necessary pursuant
9to paragraphs (4) and (5), the FQHC or RHC shall comply with
10both of the following:
11
(A) After the department approves the request for a
12scope-of-service change and adjusts the per-visit PPS rate pursuant
13to paragraph (4), the FQHC or RHC shall not bill the per-visit
14PPS rate for services reimbursed by the Drug Medi-Cal organized
15
delivery system.
16
(B) For the purpose of calculating a per-visit PPS rate, the
17FQHC or RHC shall provide verifiable documentation of the costs
18of an employee who provides both FQHC services and Drug
19Medi-Cal services. Documentation shall attribute costs
20proportionally between FQHC services and Drug Medi-Cal
21services. Only the costs attributable to FQHC services shall be
22included in the per-visit PPS rate.
23
(7) If an FQHC or RHC was enrolled as a Drug Medi-Cal
24certified provider on or before January 1, 2017, the FQHC or
25RHC may continue to provide, and be reimbursed for, Drug
26Medi-Cal services pursuant to the terms of the contract if the costs
27of providing Drug Medi-Cal services are reimbursed outside of
28the per-visit PPS rate described in subdivision (c).
29(5)
end delete
30begin insert(end insertbegin insert8)end insert (A) If an FQHC or RHC entered into a contract on or before
31January 1, 2017, with a mental health plan to provide specialty
32mental health services to Medi-Cal beneficiaries as part of the
33mental health plan’s network, the FQHC or RHC may continue to
34provide, and be reimbursed for, those specialty mental health
35services pursuant to the terms of the contract with the mental health
36plan if the costs of providing specialty mental health services are
37reimbursed outside of the per-visit PPS rate described in
38subdivision (c).
39(B) For purposes of this paragraph, “mental health plan” means
40any
mental health plan contracting with the department to provide
P23 1specialty mental health services to enrolled Medi-Cal beneficiaries
2under Article 5 (commencing with Section 14680) of Chapter 8.8
3or Chapter 8.9 (commencing with Section 14700).
4
(9) Nothing in this subdivision shall be construed to alter or
5otherwise change the process applicable to an FQHC or RHC
6making an election pursuant to paragraph (2).
7
(10) For purposes of this subdivision, the following definitions
8shall apply:
9
(A) “Drug Medi-Cal organized delivery system” means the
10Drug Medi-Cal organized delivery system authorized under the
11California Medi-Cal 2020 Demonstration, Number 11-W-00193/9,
12as approved by the federal Centers for Medicare and
Medicaid
13Services and described in the Special Terms and Conditions.
14
(B) “Special Terms and Conditions” shall have the same
15meaning as set forth in subdivision (o) of Section 14184.10.
16(l) FQHCs and RHCs may appeal a grievance or complaint
17concerning ratesetting, scope-of-service changes, and settlement
18of cost report audits, in the manner prescribed by Section 14171.
19The rights and remedies provided under this subdivision are
20cumulative to the rights and remedies available under all other
21provisions of law of this state.
22(m) The department shall, no later than March 30, 2008,
23promptly seek all necessary federal approvals in order to implement
24this section, including any amendments to the state plan. To the
25extent
that any element or requirement of this section is not
26approved, the department shall submit a request to the federal
27Centers for Medicare and Medicaid Services for any waivers that
28would be necessary to implement this section.
29(n) The department shall implement this section only to the
30extent that federal financial participation is obtained.
Section 14124.28 is added to the Welfare and
32Institutions Code, immediately following Section 14124.26, to
33read:
Notwithstanding any other provision of this article
35or regulation adopted thereunder, a county may contract with a
36federally qualified health center (FQHC) or rural health center
37(RHC), in accordance with subdivision (k) of Section 14132.100,
38for the provision of alcohol and drug use services within the county
39service area.
The amendments made by this act to subdivision (k)
2of Section 14132.100 of, and the changes made by this act by the
3addition of Section 14124.28 to, the Welfare and Institutions Code
4shall be implemented only to the extent that federal financial
5participation is available and any necessary federal approvals have
6been obtained.
Section 1.5 of this bill incorporates amendments to
8Section 14132.100 of the Welfare and Institutions Code proposed
9by both this bill and Assembly Bill 1863. It shall only become
10operative if (1) both bills are enacted and become effective on or
11before January 1, 2017, (2) each bill amends Section 14132.100
12of the Welfare and Institutions Code, and (3) this bill is enacted
13after Assembly Bill 1863, in which case Section 1 of this bill shall
14not become operative.
O
95