BILL NUMBER: SB 1335 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 18, 2016
AMENDED IN ASSEMBLY AUGUST 1, 2016
AMENDED IN SENATE APRIL 20, 2016
AMENDED IN SENATE APRIL 5, 2016
INTRODUCED BY Senator Mitchell
( Coauthor: Assembly Member
Gonzalez )
FEBRUARY 19, 2016
An act to amend Section 14132.100 of, and to add Section 14124.28
to, the Welfare and Institutions Code, relating to Medi-Cal.
LEGISLATIVE COUNSEL'S DIGEST
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 to
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.
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. 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 1. Section 14132.100 of the Welfare and Institutions Code
is amended to read:
14132.100. (a) The federally qualified health center services
described in Section 1396d(a)(2)(C) of Title 42 of the United States
Code are covered benefits.
(b) The rural health clinic services described in Section 1396d(a)
(2)(B) of Title 42 of the United States Code are covered benefits.
(c) Federally qualified health center services and rural health
clinic services shall be reimbursed on a per-visit basis in
accordance with the definition of "visit" set forth in subdivision
(g).
(d) Effective October 1, 2004, and on each October 1 thereafter,
until no longer required by federal law, federally qualified health
center (FQHC) and rural health clinic (RHC) per-visit rates shall be
increased by the Medicare Economic Index applicable to primary care
services in the manner provided for in Section 1396a(bb)(3)(A) of
Title 42 of the United States Code. Prior to January 1, 2004, FQHC
and RHC per-visit rates shall be adjusted by the Medicare Economic
Index in accordance with the methodology set forth in the state plan
in effect on October 1, 2001.
(e) (1) An FQHC or RHC may apply for an adjustment to its
per-visit rate based on a change in the scope of services provided by
the FQHC or RHC. Rate changes based on a change in the scope of
services provided by an FQHC or RHC shall be evaluated in accordance
with Medicare reasonable cost principles, as set forth in Part 413
(commencing with Section 413.1) of Title 42 of the Code of Federal
Regulations, or its successor.
(2) Subject to the conditions set forth in subparagraphs (A) to
(D), inclusive, of paragraph (3), a change in scope of service means
any of the following:
(A) The addition of a new FQHC or RHC service that is not
incorporated in the baseline prospective payment system (PPS) rate,
or a deletion of an FQHC or RHC service that is incorporated in the
baseline PPS rate.
(B) A change in service due to amended regulatory requirements or
rules.
(C) A change in service resulting from relocating or remodeling an
FQHC or RHC.
(D) A change in types of services due to a change in applicable
technology and medical practice utilized by the center or clinic.
(E) An increase in service intensity attributable to changes in
the types of patients served, including, but not limited to,
populations with HIV or AIDS, or other chronic diseases, or homeless,
elderly, migrant, or other special populations.
(F) Any changes in any of the services described in subdivision
(a) or (b), or in the provider mix of an FQHC or RHC or one of its
sites.
(G) Changes in operating costs attributable to capital
expenditures associated with a modification of the scope of any of
the services described in subdivision (a) or (b), including new or
expanded service facilities, regulatory compliance, or changes in
technology or medical practices at the center or clinic.
(H) Indirect medical education adjustments and a direct graduate
medical education payment that reflects the costs of providing
teaching services to interns and residents.
(I) Any changes in the scope of a project approved by the federal
Health Resources and Services Administration (HRSA).
(3) No change in costs shall, in and of itself, be considered a
scope-of-service change unless all of the following apply:
(A) The increase or decrease in cost is attributable to an
increase or decrease in the scope of services defined in subdivisions
(a) and (b), as applicable.
(B) The cost is allowable under Medicare reasonable cost
principles set forth in Part 413 (commencing with Section 413) of
Subchapter B of Chapter 4 of Title 42 of the Code of Federal
Regulations, or its successor.
(C) The change in the scope of services is a change in the type,
intensity, duration, or amount of services, or any combination
thereof.
(D) The net change in the FQHC's or RHC's rate equals or exceeds
1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs
that filed consolidated cost reports for multiple sites to establish
the initial prospective payment reimbursement rate, the 1.75-percent
threshold shall be applied to the average per-visit rate of all sites
for the purposes of calculating the cost associated with a
scope-of-service change. "Net change" means the per-visit rate change
attributable to the cumulative effect of all increases and decreases
for a particular fiscal year.
(4) An FQHC or RHC may submit requests for scope-of-service
changes once per fiscal year, only within 90 days following the
beginning of the FQHC's or RHC's fiscal year. Any approved increase
or decrease in the provider's rate shall be retroactive to the
beginning of the FQHC's or RHC's fiscal year in which the request is
submitted.
(5) An FQHC or RHC shall submit a scope-of-service rate change
request within 90 days of the beginning of any FQHC or RHC fiscal
year occurring after the effective date of this section, if, during
the FQHC's or RHC's prior fiscal year, the FQHC or RHC experienced a
decrease in the scope of services provided that the FQHC or RHC
either knew or should have known would have resulted in a
significantly lower per-visit rate. If an FQHC or RHC discontinues
providing onsite pharmacy or dental services, it shall submit a
scope-of-service rate change request within 90 days of the beginning
of the following fiscal year. The rate change shall be effective as
provided for in paragraph (4). As used in this paragraph,
"significantly lower" means an average per-visit rate decrease in
excess of 2.5 percent.
(6) Notwithstanding paragraph (4), if the approved
scope-of-service change or changes were initially implemented on or
after the first day of an FQHC's or RHC's fiscal year ending in
calendar year 2001, but before the adoption and issuance of written
instructions for applying for a scope-of-service change, the adjusted
reimbursement rate for that scope-of-service change shall be made
retroactive to the date the scope-of-service change was initially
implemented. Scope-of-service changes under this paragraph shall be
required to be submitted within the later of 150 days after the
adoption and issuance of the written instructions by the department,
or 150 days after the end of the FQHC's or RHC's fiscal year ending
in 2003.
(7) All references in this subdivision to "fiscal year" shall be
construed to be references to the fiscal year of the individual FQHC
or RHC, as the case may be.
(f) (1) An FQHC or RHC may request a supplemental payment if
extraordinary circumstances beyond the control of the FQHC or RHC
occur after December 31, 2001, and PPS payments are insufficient due
to these extraordinary circumstances. Supplemental payments arising
from extraordinary circumstances under this subdivision shall be
solely and exclusively within the discretion of the department and
shall not be subject to subdivision (l). These supplemental payments
shall be determined separately from the scope-of-service adjustments
described in subdivision (e). Extraordinary circumstances include,
but are not limited to, acts of nature, changes in applicable
requirements in the Health and Safety Code, changes in applicable
licensure requirements, and changes in applicable rules or
regulations. Mere inflation of costs alone, absent extraordinary
circumstances, shall not be grounds for supplemental payment. If an
FQHC's or RHC's PPS rate is sufficient to cover its overall costs,
including those associated with the extraordinary circumstances, then
a supplemental payment is not warranted.
(2) The department shall accept requests for supplemental payment
at any time throughout the prospective payment rate year.
(3) Requests for supplemental payments shall be submitted in
writing to the department and shall set forth the reasons for the
request. Each request shall be accompanied by sufficient
documentation to enable the department to act upon the request.
Documentation shall include the data necessary to demonstrate that
the circumstances for which supplemental payment is requested meet
the requirements set forth in this section. Documentation shall
include all both of the following:
(A) A presentation of data to demonstrate reasons for the FQHC's
or RHC's request for a supplemental payment.
(B) Documentation showing the cost implications. The cost impact
shall be material and significant, two hundred thousand dollars
($200,000) or 1 percent of a facility's total costs, whichever is
less.
(4) A request shall be submitted for each affected year.
(5) Amounts granted for supplemental payment requests shall be
paid as lump-sum amounts for those years and not as revised PPS
rates, and shall be repaid by the FQHC or RHC to the extent that it
is not expended for the specified purposes.
(6) The department shall notify the provider of the department's
discretionary decision in writing.
(g) (1) An FQHC or RHC "visit" means a face-to-face encounter
between an FQHC or RHC patient and a physician, physician assistant,
nurse practitioner, certified nurse-midwife, clinical psychologist,
licensed clinical social worker, or a visiting nurse. For purposes of
this section, "physician" shall be interpreted in a manner
consistent with the Centers for Medicare and Medicaid Services'
Medicare Rural Health Clinic and Federally Qualified Health Center
Manual (Publication 27), or its successor, only to the extent that it
defines the professionals whose services are reimbursable on a
per-visit basis and not as to the types of services that these
professionals may render during these visits and shall include a
physician and surgeon, podiatrist, dentist, optometrist, and
chiropractor. A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a comprehensive perinatal services
practitioner, as defined in Section 51179.1 of Title 22 of the
California Code of Regulations, providing comprehensive perinatal
services, a four-hour day of attendance at an adult day health care
center, and any other provider identified in the state plan's
definition of an FQHC or RHC visit.
(2) (A) A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a dental hygienist or a dental
hygienist in alternative practice.
(B) Notwithstanding subdivision (e), an FQHC or RHC that currently
includes the cost of the services of a dental hygienist in
alternative practice for the purposes of establishing its FQHC or RHC
rate shall apply for an adjustment to its per-visit rate, and, after
the rate adjustment has been approved by the department, shall bill
these services as a separate visit. However, multiple encounters with
dental professionals that take place on the same day shall
constitute a single visit. The department shall develop the
appropriate forms to determine which FQHC's or RHC's rates shall be
adjusted and to facilitate the calculation of the adjusted rates. An
FQHC's or RHC's application for, or the department's approval of, a
rate adjustment pursuant to this subparagraph shall not constitute a
change in scope of service within the meaning of subdivision (e). An
FQHC or RHC that applies for an adjustment to its rate pursuant to
this subparagraph may continue to bill for all other FQHC or RHC
visits at its existing per-visit rate, subject to reconciliation,
until the rate adjustment for visits between an FQHC or RHC patient
and a dental hygienist or a dental hygienist in alternative practice
has been approved. Any approved increase or decrease in the provider'
s rate shall be made within six months after the date of receipt of
the department's rate adjustment forms pursuant to this subparagraph
and shall be retroactive to the beginning of the fiscal year in which
the FQHC or RHC submits the request, but in no case shall the
effective date be earlier than January 1, 2008.
(C) An FQHC or RHC that does not provide dental hygienist or
dental hygienist in alternative practice services, and later elects
to add these services, shall process the addition of these services
as a change in scope of service pursuant to subdivision (e).
(h) If FQHC or RHC services are partially reimbursed by a
third-party payer, such as a managed care entity (as defined in
Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the
Medicare Program, or the Child Health and Disability Prevention
(CHDP) Program, the department shall reimburse an FQHC or RHC for the
difference between its per-visit PPS rate and receipts from other
plans or programs on a contract-by-contract basis and not in the
aggregate, and may not include managed care financial incentive
payments that are required by federal law to be excluded from the
calculation.
(i) (1) An entity that first qualifies as an FQHC or RHC in the
year 2001 or later, a newly licensed facility at a new location added
to an existing FQHC or RHC, and any entity that is an existing FQHC
or RHC that is relocated to a new site shall each have its
reimbursement rate established in accordance with one of the
following methods, as selected by the FQHC or RHC:
(A) The rate may be calculated on a per-visit basis in an amount
that is equal to the average of the per-visit rates of three
comparable FQHCs or RHCs located in the same or adjacent area with a
similar caseload.
(B) In the absence of three comparable FQHCs or RHCs with a
similar caseload, the rate may be calculated on a per-visit basis in
an amount that is equal to the average of the per-visit rates of
three comparable FQHCs or RHCs located in the same or an adjacent
service area, or in a reasonably similar geographic area with respect
to relevant social, health care, and economic characteristics.
(C) At a new entity's one-time election, the department shall
establish a reimbursement rate, calculated on a per-visit basis, that
is equal to 100 percent of the projected allowable costs to the FQHC
or RHC of furnishing FQHC or RHC services during the first 12 months
of operation as an FQHC or RHC. After the first 12-month period, the
projected per-visit rate shall be increased by the Medicare Economic
Index then in effect. The projected allowable costs for the first 12
months shall be cost settled and the prospective payment
reimbursement rate shall be adjusted based on actual and allowable
cost per visit.
(D) The department may adopt any further and additional methods of
setting reimbursement rates for newly qualified FQHCs or RHCs as are
consistent with Section 1396a(bb)(4) of Title 42 of the United
States Code.
(2) In order for an FQHC or RHC to establish the comparability of
its caseload for purposes of subparagraph (A) or (B) of paragraph
(1), the department shall require that the FQHC or RHC submit its
most recent annual utilization report as submitted to the Office of
Statewide Health Planning and Development, unless the FQHC or RHC was
not required to file an annual utilization report. FQHCs or RHCs
that have experienced changes in their services or caseload
subsequent to the filing of the annual utilization report may submit
to the department a completed report in the format applicable to the
prior calendar year. FQHCs or RHCs that have not previously submitted
an annual utilization report shall submit to the department a
completed report in the format applicable to the prior calendar year.
The FQHC or RHC shall not be required to submit the annual
utilization report for the comparable FQHCs or RHCs to the
department, but shall be required to identify the comparable FQHCs or
RHCs.
(3) The rate for any newly qualified entity set forth under this
subdivision shall be effective retroactively to the later of the date
that the entity was first qualified by the applicable federal agency
as an FQHC or RHC, the date a new facility at a new location was
added to an existing FQHC or RHC, or the date on which an existing
FQHC or RHC was relocated to a new site. The FQHC or RHC shall be
permitted to continue billing for Medi-Cal covered benefits on a
fee-for-service basis until it is informed of its enrollment as an
FQHC or RHC, and the department shall reconcile the difference
between the fee-for-service payments and the FQHC's or RHC's
prospective payment rate at that time.
(j) Visits occurring at an intermittent clinic site, as defined in
subdivision (h) of Section 1206 of the Health and Safety Code, of an
existing FQHC or RHC, or in a mobile unit as defined by paragraph
(2) of subdivision (b) of Section 1765.105 of the Health and Safety
Code, shall be billed by and reimbursed at the same rate as the FQHC
or RHC establishing the intermittent clinic site or the mobile unit,
subject to the right of the FQHC or RHC to request a scope-of-service
adjustment to the rate.
(k) (1) Notwithstanding any other provision of this section
requiring the use of a per-visit reimbursement rate, as described in
subdivision (c), this subdivision shall govern reimbursement for
services identified in this subdivision.
(2) An FQHC or RHC may elect to have pharmacy services or dental
services reimbursed on a fee-for-services basis, utilizing the
current fee schedules established for those services.
(3) An FQHC or RHC may elect to become certified to
provide services in the Drug Medi-Cal program, and reimbursement for
those services shall be governed by this paragraph.
enroll as a Drug Medi-Cal certified provider. If an FQHC or RHC
elects to enroll as a Drug Medi-Cal certified provider, the costs
associated with the Drug Medi-Cal services shall not be included in
the FQHC's or RHC's per-visit PPS rate and the reimbursement for
those services shall be governed by subparagraph (A) or (B).
(A) If the FQHC is located or RHC elects
to provide Drug Medi-Cal services in a county that has elected
to participate in the Drug Medi-Cal organized delivery system, the
FQHC or RHC may elect to shall receive
reimbursement pursuant to a mutually agreed upon contract between the
county and the FQHC or RHC. If an FQHC or RHC is denied a
contract by the county, the FQHC or RHC may follow the contract
denial process set forth in the Special Terms and
Conditions.
(B) If the FQHC or RHC elects to provide Drug Medi-Cal
services in a county that does not elect to
participate in the Drug Medi-Cal organized delivery system,
an the FQHC or RHC may elect to
contract through the department as a Drug Medi-Cal provider.
shall receive reimbursement pursuant to a mutually
agreed upon contract between the county and the FQHC or RHC. If the
county refuses to contract with the FQHC or RHC, the FQHC or RHC may
request to contract directly with the department and shall be
reimbursed for those services at the
fee-for-service rate.
(4) (A) If an FQHC or RHC elects reimbursement pursuant to
paragraph (2) or (3), pursuant to which the costs associated with
providing the services are part of the FQHC's or RHC's clinic base
rate, those costs shall be adjusted out of the FQHC's or RHC's clinic
base rate as scope-of-service changes and payment pursuant to
subdivision (h) shall not apply.
(B) An FQHC or RHC that reverses its election under paragraph (2)
or (3) shall revert to its prior rate, subject to an increase to
account for all MEI increases occurring during the intervening time
period, and subject to any increases or decreases associated with
applicable scope-of-service adjustments as provided in subdivision
(e).
(5) (A) An FQHC or RHC shall submit a scope-of-service rate change
request within 90 days of the beginning of any FQHC or RHC fiscal
year occurring after January 1, 2017, if, during the FQHC's or RHC's
prior fiscal year, both of the following occurred:
(i) The FQHC or RHC elected reimbursement pursuant to paragraph
(3).
(ii) The costs of providing Drug Medi-Cal services were included
in the per-visit PPS rate and the removal of those costs would have
resulted in a significantly lower per-visit PPS rate. For purposes of
this subparagraph, "significantly lower" means an average per-visit
PPS rate decrease in excess of 2.5 percent.
(B) Within 90 days of receipt of the request for a
scope-of-service change, the department shall issue the FQHC or RHC
an interim rate equal to 90 percent of the FQHC's or RHC's projected
allowable cost as determined by the department. The audit performed
to determine the final rate shall be performed in accordance with
Section 14170.
(6) If an FQHC or RHC makes an election pursuant to paragraph (3)
and a scope-of-service change is necessary pursuant to paragraphs (4)
and (5), the FQHC or RHC shall comply with both of the following:
(A) After the department approves the request for a
scope-of-service change and adjusts the per-visit PPS rate pursuant
to paragraph (4), the FQHC or RHC shall not bill the per-visit PPS
rate for services reimbursed by the Drug Medi-Cal organized delivery
system.
(B) For the purpose of calculating a per-visit PPS rate, the FQHC
or RHC shall provide verifiable documentation of the costs of an
employee who provides both FQHC services and Drug Medi-Cal services.
Documentation shall attribute costs proportionally between FQHC
services and Drug Medi-Cal services. Only the costs attributable to
FQHC services shall be included in the per-visit PPS rate.
(7) If an FQHC or RHC was enrolled as a Drug Medi-Cal certified
provider on or before January 1, 2017, the FQHC or RHC may continue
to provide, and be reimbursed for, Drug Medi-Cal services pursuant to
the terms of the contract if the costs of providing Drug Medi-Cal
services are reimbursed outside of the per-visit PPS rate described
in subdivision (c).
(5)
( 8) (A) If an FQHC or RHC entered into a
contract on or before January 1, 2017, with a mental health plan to
provide specialty mental health services to Medi-Cal beneficiaries as
part of the mental health plan's network, the FQHC or RHC may
continue to provide, and be reimbursed for, those specialty mental
health services pursuant to the terms of the contract with the mental
health plan if the costs of providing specialty mental health
services are reimbursed outside of the per-visit PPS rate described
in subdivision (c).
(B) For purposes of this paragraph, "mental health plan" means any
mental health plan contracting with the department to provide
specialty mental health services to enrolled Medi-Cal beneficiaries
under Article 5 (commencing with Section 14680) of Chapter 8.8 or
Chapter 8.9 (commencing with Section 14700).
(9) Nothing in this subdivision shall be construed to alter or
otherwise change the process applicable to an FQHC or RHC making an
election pursuant to paragraph (2).
(10) For purposes of this subdivision, the following definitions
shall apply:
(A) "Drug Medi-Cal organized delivery system" means the Drug
Medi-Cal organized delivery system authorized under the California
Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the
federal Centers for Medicare and Medicaid Services and described in
the Special Terms and Conditions.
(B) "Special Terms and Conditions" shall have the same meaning as
set forth in subdivision (o) of Section 14184.10.
(l) FQHCs and RHCs may appeal a grievance or complaint concerning
ratesetting, scope-of-service changes, and settlement of cost report
audits, in the manner prescribed by Section 14171. The rights and
remedies provided under this subdivision are cumulative to the rights
and remedies available under all other provisions of law of this
state.
(m) The department shall, no later than March 30, 2008, promptly
seek all necessary federal approvals in order to implement this
section, including any amendments to the state plan. To the extent
that any element or requirement of this section is not approved, the
department shall submit a request to the federal Centers for Medicare
and Medicaid Services for any waivers that would be necessary to
implement this section.
(n) The department shall implement this section only to the extent
that federal financial participation is obtained.
SEC. 1.5. Section 14132.100 of the Welfare and Institutions Code
is amended to read:
14132.100. (a) The federally qualified health center services
described in Section 1396d(a)(2)(C) of Title 42 of the United States
Code are covered benefits.
(b) The rural health clinic services described in Section 1396d(a)
(2)(B) of Title 42 of the United States Code are covered benefits.
(c) Federally qualified health center services and rural health
clinic services shall be reimbursed on a per-visit basis in
accordance with the definition of "visit" set forth in subdivision
(g).
(d) Effective October 1, 2004, and on each October 1 thereafter,
until no longer required by federal law, federally qualified health
center (FQHC) and rural health clinic (RHC) per-visit rates shall be
increased by the Medicare Economic Index applicable to primary care
services in the manner provided for in Section 1396a(bb)(3)(A) of
Title 42 of the United States Code. Prior to January 1, 2004, FQHC
and RHC per-visit rates shall be adjusted by the Medicare Economic
Index in accordance with the methodology set forth in the state plan
in effect on October 1, 2001.
(e) (1) An FQHC or RHC may apply for an adjustment to its
per-visit rate based on a change in the scope of services provided by
the FQHC or RHC. Rate changes based on a change in the scope of
services provided by an FQHC or RHC shall be evaluated in accordance
with Medicare reasonable cost principles, as set forth in Part 413
(commencing with Section 413.1) of Title 42 of the Code of Federal
Regulations, or its successor.
(2) Subject to the conditions set forth in subparagraphs (A) to
(D), inclusive, of paragraph (3), a change in scope of service means
any of the following:
(A) The addition of a new FQHC or RHC service that is not
incorporated in the baseline prospective payment system (PPS) rate,
or a deletion of an FQHC or RHC service that is incorporated in the
baseline PPS rate.
(B) A change in service due to amended regulatory requirements or
rules.
(C) A change in service resulting from
relocating or remodeling an FQHC or RHC.
(D) A change in types of services due to a change in applicable
technology and medical practice utilized by the center or clinic.
(E) An increase in service intensity attributable to changes in
the types of patients served, including, but not limited to,
populations with HIV or AIDS, or other chronic diseases, or homeless,
elderly, migrant, or other special populations.
(F) Any changes in any of the services described in subdivision
(a) or (b), or in the provider mix of an FQHC or RHC or one of its
sites.
(G) Changes in operating costs attributable to capital
expenditures associated with a modification of the scope of any of
the services described in subdivision (a) or (b), including new or
expanded service facilities, regulatory compliance, or changes in
technology or medical practices at the center or clinic.
(H) Indirect medical education adjustments and a direct graduate
medical education payment that reflects the costs of providing
teaching services to interns and residents.
(I) Any changes in the scope of a project approved by the federal
Health Resources and Services Administration (HRSA).
(3) No change in costs shall, in and of itself, be considered a
scope-of-service change unless all of the following apply:
(A) The increase or decrease in cost is attributable to an
increase or decrease in the scope of services defined in subdivisions
(a) and (b), as applicable.
(B) The cost is allowable under Medicare reasonable cost
principles set forth in Part 413 (commencing with Section 413) of
Subchapter B of Chapter 4 of Title 42 of the Code of Federal
Regulations, or its successor.
(C) The change in the scope of services is a change in the type,
intensity, duration, or amount of services, or any combination
thereof.
(D) The net change in the FQHC's or RHC's rate equals or exceeds
1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs
that filed consolidated cost reports for multiple sites to establish
the initial prospective payment reimbursement rate, the 1.75-percent
threshold shall be applied to the average per-visit rate of all sites
for the purposes of calculating the cost associated with a
scope-of-service change. "Net change" means the per-visit rate change
attributable to the cumulative effect of all increases and decreases
for a particular fiscal year.
(4) An FQHC or RHC may submit requests for scope-of-service
changes once per fiscal year, only within 90 days following the
beginning of the FQHC's or RHC's fiscal year. Any approved increase
or decrease in the provider's rate shall be retroactive to the
beginning of the FQHC's or RHC's fiscal year in which the request is
submitted.
(5) An FQHC or RHC shall submit a scope-of-service rate change
request within 90 days of the beginning of any FQHC or RHC fiscal
year occurring after the effective date of this section, if, during
the FQHC's or RHC's prior fiscal year, the FQHC or RHC experienced a
decrease in the scope of services provided that the FQHC or RHC
either knew or should have known would have resulted in a
significantly lower per-visit rate. If an FQHC or RHC discontinues
providing onsite pharmacy or dental services, it shall submit a
scope-of-service rate change request within 90 days of the beginning
of the following fiscal year. The rate change shall be effective as
provided for in paragraph (4). As used in this paragraph,
"significantly lower" means an average per-visit rate decrease in
excess of 2.5 percent.
(6) Notwithstanding paragraph (4), if the approved
scope-of-service change or changes were initially implemented on or
after the first day of an FQHC's or RHC's fiscal year ending in
calendar year 2001, but before the adoption and issuance of written
instructions for applying for a scope-of-service change, the adjusted
reimbursement rate for that scope-of-service change shall be made
retroactive to the date the scope-of-service change was initially
implemented. Scope-of-service changes under this paragraph shall be
required to be submitted within the later of 150 days after the
adoption and issuance of the written instructions by the department,
or 150 days after the end of the FQHC's or RHC's fiscal year ending
in 2003.
(7) All references in this subdivision to "fiscal year" shall be
construed to be references to the fiscal year of the individual FQHC
or RHC, as the case may be.
(f) (1) An FQHC or RHC may request a supplemental payment if
extraordinary circumstances beyond the control of the FQHC or RHC
occur after December 31, 2001, and PPS payments are insufficient due
to these extraordinary circumstances. Supplemental payments arising
from extraordinary circumstances under this subdivision shall be
solely and exclusively within the discretion of the department and
shall not be subject to subdivision (l). These supplemental payments
shall be determined separately from the scope-of-service adjustments
described in subdivision (e). Extraordinary circumstances include,
but are not limited to, acts of nature, changes in applicable
requirements in the Health and Safety Code, changes in applicable
licensure requirements, and changes in applicable rules or
regulations. Mere inflation of costs alone, absent extraordinary
circumstances, shall not be grounds for supplemental payment. If an
FQHC's or RHC's PPS rate is sufficient to cover its overall costs,
including those associated with the extraordinary circumstances, then
a supplemental payment is not warranted.
(2) The department shall accept requests for supplemental payment
at any time throughout the prospective payment rate year.
(3) Requests for supplemental payments shall be submitted in
writing to the department and shall set forth the reasons for the
request. Each request shall be accompanied by sufficient
documentation to enable the department to act upon the request.
Documentation shall include the data necessary to demonstrate that
the circumstances for which supplemental payment is requested meet
the requirements set forth in this section. Documentation shall
include all both of the following:
(A) A presentation of data to demonstrate reasons for the FQHC's
or RHC's request for a supplemental payment.
(B) Documentation showing the cost implications. The cost impact
shall be material and significant, two hundred thousand dollars
($200,000) or 1 percent of a facility's total costs, whichever is
less.
(4) A request shall be submitted for each affected year.
(5) Amounts granted for supplemental payment requests shall be
paid as lump-sum amounts for those years and not as revised PPS
rates, and shall be repaid by the FQHC or RHC to the extent that it
is not expended for the specified purposes.
(6) The department shall notify the provider of the department's
discretionary decision in writing.
(g) (1) An FQHC or RHC "visit" means a face-to-face encounter
between an FQHC or RHC patient and a physician, physician assistant,
nurse practitioner, certified nurse-midwife, clinical psychologist,
licensed clinical social worker, or a visiting nurse. For purposes of
this section, "physician" shall be interpreted in a manner
consistent with the Centers for Medicare and Medicaid Services'
Medicare Rural Health Clinic and Federally Qualified Health Center
Manual (Publication 27), or its successor, only to the extent that it
defines the professionals whose services are reimbursable on a
per-visit basis and not as to the types of services that these
professionals may render during these visits and shall include a
physician and surgeon, osteopath, podiatrist, dentist, optometrist,
and chiropractor. A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a comprehensive perinatal
practitioner, as defined in Section 51179.7 of Title 22 of the
California Code of Regulations, providing comprehensive perinatal
services, a four-hour day of attendance at an adult day health care
center, and any other provider identified in the state plan's
definition of an FQHC or RHC visit.
(2) (A) A visit shall also include a face-to-face encounter
between an FQHC or RHC patient and a dental hygienist, a dental
hygienist in alternative practice, or a marriage and family
therapist.
(B) Notwithstanding subdivision (e), if an FQHC or RHC that
currently includes the cost of the services of a dental hygienist in
alternative practice, or a marriage and family therapist for the
purposes of establishing its FQHC or RHC rate chooses to bill these
services as a separate visit, the FQHC or RHC shall apply for an
adjustment to its per-visit rate, and, after the rate adjustment has
been approved by the department, shall bill these services as a
separate visit. However, multiple encounters with dental
professionals or marriage and family therapists that take place on
the same day shall constitute a single visit. The department shall
develop the appropriate forms to determine which FQHC's or RHC's
rates shall be adjusted and to facilitate the calculation of the
adjusted rates. An FQHC's or RHC's application for, or the department'
s approval of, a rate adjustment pursuant to this subparagraph shall
not constitute a change in scope of service within the meaning of
subdivision (e). An FQHC or RHC that applies for an adjustment to its
rate pursuant to this subparagraph may continue to bill for all
other FQHC or RHC visits at its existing per-visit rate, subject to
reconciliation, until the rate adjustment for visits between an FQHC
or RHC patient and a dental hygienist, a dental hygienist in
alternative practice, or a marriage and family therapist has been
approved. Any approved increase or decrease in the provider's rate
shall be made within six months after the date of receipt of the
department's rate adjustment forms pursuant to this subparagraph and
shall be retroactive to the beginning of the fiscal year in which the
FQHC or RHC submits the request, but in no case shall the effective
date be earlier than January 1, 2008.
(C) An FQHC or RHC that does not provide dental hygienist, dental
hygienist in alternative practice, or marriage and family therapist
services, and later elects to add these services and bill these
services as a separate visit, shall process the addition of these
services as a change in scope of service pursuant to subdivision (e).
(h) If FQHC or RHC services are partially reimbursed by a
third-party payer, such as a managed care entity (as defined in
Section 1396u-2(a)(1)(B) of Title 42 of the United States Code), the
Medicare Program, or the Child Health and Disability Prevention
(CHDP) Program, the department shall reimburse an FQHC or RHC for the
difference between its per-visit PPS rate and receipts from other
plans or programs on a contract-by-contract basis and not in the
aggregate, and may not include managed care financial incentive
payments that are required by federal law to be excluded from the
calculation.
(i) (1) An entity that first qualifies as an FQHC or RHC in the
year 2001 or later, a newly licensed facility at a new location added
to an existing FQHC or RHC, and any entity that is an existing FQHC
or RHC that is relocated to a new site shall each have its
reimbursement rate established in accordance with one of the
following methods, as selected by the FQHC or RHC:
(A) The rate may be calculated on a per-visit basis in an amount
that is equal to the average of the per-visit rates of three
comparable FQHCs or RHCs located in the same or adjacent area with a
similar caseload.
(B) In the absence of three comparable FQHCs or RHCs with a
similar caseload, the rate may be calculated on a per-visit basis in
an amount that is equal to the average of the per-visit rates of
three comparable FQHCs or RHCs located in the same or an adjacent
service area, or in a reasonably similar geographic area with respect
to relevant social, health care, and economic characteristics.
(C) At a new entity's one-time election, the department shall
establish a reimbursement rate, calculated on a per-visit basis, that
is equal to 100 percent of the projected allowable costs to the FQHC
or RHC of furnishing FQHC or RHC services during the first 12 months
of operation as an FQHC or RHC. After the first 12-month period, the
projected per-visit rate shall be increased by the Medicare Economic
Index then in effect. The projected allowable costs for the first 12
months shall be cost settled and the prospective payment
reimbursement rate shall be adjusted based on actual and allowable
cost per visit.
(D) The department may adopt any further and additional methods of
setting reimbursement rates for newly qualified FQHCs or RHCs as are
consistent with Section 1396a(bb)(4) of Title 42 of the United
States Code.
(2) In order for an FQHC or RHC to establish the comparability of
its caseload for purposes of subparagraph (A) or (B) of paragraph
(1), the department shall require that the FQHC or RHC submit its
most recent annual utilization report as submitted to the Office of
Statewide Health Planning and Development, unless the FQHC or RHC was
not required to file an annual utilization report. FQHCs or RHCs
that have experienced changes in their services or caseload
subsequent to the filing of the annual utilization report may submit
to the department a completed report in the format applicable to the
prior calendar year. FQHCs or RHCs that have not previously submitted
an annual utilization report shall submit to the department a
completed report in the format applicable to the prior calendar year.
The FQHC or RHC shall not be required to submit the annual
utilization report for the comparable FQHCs or RHCs to the
department, but shall be required to identify the comparable FQHCs or
RHCs.
(3) The rate for any newly qualified entity set forth under this
subdivision shall be effective retroactively to the later of the date
that the entity was first qualified by the applicable federal agency
as an FQHC or RHC, the date a new facility at a new location was
added to an existing FQHC or RHC, or the date on which an existing
FQHC or RHC was relocated to a new site. The FQHC or RHC shall be
permitted to continue billing for Medi-Cal covered benefits on a
fee-for-service basis under its existing provider number until it is
informed of its FQHC or RHC enrollment approval, and the department
shall reconcile the difference between the fee-for-service payments
and the FQHC's or RHC's prospective payment rate at that time.
(j) Visits occurring at an intermittent clinic site, as defined in
subdivision (h) of Section 1206 of the Health and Safety Code, of an
existing FQHC or RHC, or in a mobile unit as defined by paragraph
(2) of subdivision (b) of Section 1765.105 of the Health and Safety
Code, shall be billed by and reimbursed at the same rate as the FQHC
or RHC establishing the intermittent clinic site or the mobile unit,
subject to the right of the FQHC or RHC to request a scope-of-service
adjustment to the rate.
(k) (1) Notwithstanding any other provision of this section
requiring the use of a per-visit reimbursement rate, as described in
subdivision (c), this subdivision shall govern reimbursement for
services identified in this subdivision.
(2) An FQHC or RHC may elect to have pharmacy services or dental
services reimbursed on a fee-for-services basis, utilizing the
current fee schedules established for those services.
(3) An FQHC or RHC may elect to become certified to
provide services in the Drug Medi-Cal program, and reimbursement for
those services shall be governed by this paragraph.
enroll as a Drug Medi-Cal certified pr ovider. If an FQHC
or RHC elects to enroll as a Drug Medi-Cal certified provider, the
costs associated with the Drug Medi-Cal services shall not
be included in the FQHC's or RHC's per-visit PPS rate and the
reimbursement for those services shall be governed by subparagraph
(A) or (B).
(A) If the FQHC is located or RHC elects
to provide Drug Medi-Cal services in a county that has elected
to participate in the Drug Medi-Cal organized delivery system, the
FQHC or RHC may elect to shall receive
reimbursement pursuant to a mutually agreed upon contract between the
county and the FQHC or RHC. If an FQHC or RHC is denied a
contract by the county, the FQHC or RHC may follow the contract
denial process set forth in the Special Terms and Conditions.
(B) If the FQHC or RHC elects to provide Drug Medi-Cal
services in a county that does not elect to
participate in the Drug Medi-Cal organized delivery system,
an FQHC or RHC may elect to contract through the department as a Drug
Medi-Cal provider. the FQHC or RHC shall receive
reimbursement pursuant to a mutually agreed upon contract
between the county and the FQHC or RHC. If the county
refuses to contract with the FQHC or RHC, the FQHC or RHC may request
to contract directly with the department and shall be reimbursed for
those services at the fee-for-service rate.
(4) (A) If an FQHC or RHC elects reimbursement pursuant to
paragraph (2) or (3), pursuant to which the costs associated with
providing the services are part of the FQHC's or RHC's clinic base
rate, those costs shall be adjusted out of the FQHC's or RHC's clinic
base rate as scope-of-service changes and payment pursuant to
subdivision (h) shall not apply.
(B) An FQHC or RHC that reverses its election under paragraph (2)
or (3) shall revert to its prior rate, subject to an increase to
account for all Medicare Economic Index increases occurring during
the intervening time period, and subject to any increases or
decreases associated with applicable scope-of-service adjustments as
provided in subdivision (e).
(5) (A) An FQHC or RHC shall submit a scope-of-service rate change
request within 90 days of the beginning of any FQHC or RHC fiscal
year occurring after January 1, 2017, if, during the FQHC's or RHC's
prior fiscal year, both of the following occurred:
(i) The FQHC or RHC elected reimbursement pursuant to paragraph
(3).
(ii) The costs of providing Drug Medi-Cal services were included
in the per-visit PPS rate and the removal of those costs would have
resulted in a significantly lower per-visit PPS rate. For purposes of
this subparagraph, "significantly lower" means an average per-visit
PPS rate decrease in excess of 2.5 percent.
(B) Within 90 days of receipt of the request for a
scope-of-service change, the department shall issue the FQHC or RHC
an interim rate equal to 90 percent of the FQHC's or RHC's projected
allowable cost as determined by the department. The audit performed
to determine the final rate shall be performed in accordance with
Section 14170.
(6) If an FQHC or RHC makes an election pursuant to paragraph (3)
and a scope-of-service change is necessary pursuant to paragraphs (4)
and (5), the FQHC or RHC shall comply with both of the following:
(A) After the department approves the request for a
scope-of-service change and adjusts the per-visit PPS rate pursuant
to paragraph (4), the FQHC or RHC shall not bill the per-visit PPS
rate for services reimbursed by the Drug Medi-Cal organized delivery
system.
(B) For the purpose of calculating a per-visit PPS rate, the FQHC
or RHC shall provide verifiable documentation of the costs of an
employee who provides both FQHC services and Drug Medi-Cal services.
Documentation shall attribute costs proportionally between FQHC
services and Drug Medi-Cal services. Only the costs attributable to
FQHC services shall be included in the per-visit PPS rate.
(7) If an FQHC or RHC was enrolled as a Drug Medi-Cal certified
provider on or before January 1, 2017, the FQHC or RHC may continue
to provide, and be reimbursed for, Drug Medi-Cal services pursuant to
the terms of the contract if the costs of providing Drug Medi-Cal
services are reimbursed outside of the per-visit PPS rate described
in subdivision (c).
(5)
( 8) (A) If an FQHC or RHC entered into a
contract on or before January 1, 2017, with a mental health plan to
provide specialty mental health services to Medi-Cal beneficiaries as
part of the mental health plan's network, the FQHC or RHC may
continue to provide, and be reimbursed for, those specialty mental
health services pursuant to the terms of the contract with the mental
health plan if the costs of providing specialty mental health
services are reimbursed outside of the per-visit PPS rate described
in subdivision (c).
(B) For purposes of this paragraph, "mental health plan" means any
mental health plan contracting with the department to provide
specialty mental health services to enrolled Medi-Cal beneficiaries
under Article 5 (commencing with Section 14680) of Chapter 8.8 or
Chapter 8.9 (commencing with Section 14700).
(9) Nothing in this subdivision shall be construed to alter or
otherwise change the process applicable to an FQHC or RHC making an
election pursuant to paragraph (2).
(10) For purposes of this subdivision, the following definitions
shall apply:
(A) "Drug Medi-Cal organized delivery system" means the Drug
Medi-Cal organized delivery system authorized under the California
Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the
federal Centers for Medicare and Medicaid Services and described in
the Special Terms and Conditions.
(B) "Special Terms and Conditions" shall have the same meaning as
set forth in subdivision (o) of Section 14184.10.
(l) FQHCs and RHCs may appeal a grievance or complaint concerning
ratesetting, scope-of-service changes, and settlement of cost report
audits, in the manner prescribed by Section 14171. The rights and
remedies provided under this subdivision are cumulative to the rights
and remedies available under all other provisions of law of this
state.
(m) The department shall, no later than March 30, 2008, promptly
seek all necessary federal approvals in order to implement this
section, including any amendments to the state plan. To the extent
that any element or requirement of this section is not approved, the
department shall submit a request to the federal Centers for Medicare
and Medicaid Services for any waivers that would be necessary to
implement this section.
(n) The department shall implement this section only to the extent
that federal financial participation is obtained.
SEC. 2. Section 14124.28 is added to the Welfare and Institutions
Code, immediately following Section 14124.26, to read:
14124.28. Notwithstanding any other provision of this article or
regulation adopted thereunder, a county may contract with a federally
qualified health center (FQHC) or rural health center (RHC), in
accordance with subdivision (k) of Section 14132.100, for the
provision of alcohol and drug use services within the county service
area.
SEC. 3. The amendments made by this act to subdivision (k) of
Section 14132.100 of, and the changes made by this act by the
addition of Section 14124.28 to, the Welfare and Institutions Code
shall be implemented only to the extent that federal financial
participation is available and any necessary federal approvals have
been obtained.
SEC. 4. Section 1.5 of this bill incorporates amendments to
Section 14132.100 of the Welfare and Institutions Code proposed by
both this bill and Assembly Bill 1863. It shall only become operative
if (1) both bills are enacted and become effective on or before
January 1, 2017, (2) each bill amends Section 14132.100 of the
Welfare and Institutions Code, and (3) this bill is enacted after
Assembly Bill 1863, in which case Section 1 of this bill shall not
become operative.