BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1335 (Mitchell) - Med-Cal benefits: federally qualified
health centers and rural health centers: Drug Medi-Cal and
specialty mental health services
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|Version: April 20, 2016 |Policy Vote: HEALTH 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 9, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1335 would authorize federally qualified health
centers (FQHCs) and rural health clinics (RHCs) to receive
reimbursement for services provided for specialty mental health
services or Drug Medi-Cal outside of the normal reimbursement
structure for FQHCs and RHCs.
Fiscal
Impact:
One-time costs, likely in the low hundreds of thousands for
revising regulations and seeking any necessary federal
approvals to allow the payment procedures authorized under the
bill (General Fund and federal funds).
One-time costs, likely less than $200,000, to recalculate the
prospective payment system (PPS) rate for clinics that
contract with counties or the state to provide specialty
mental health services or services under Drug Medi-Cal
(General Fund and federal funds).
SB 1335 (Mitchell) Page 1 of
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The would bill require clinics that contract to provide those
additional services to be paid pursuant to the contract for
those services. The bill would require the Department to
recalculate the PPS for those clinics to adjust the costs for
providing such services out of the clinic's PPS rate base. The
process for recalculating a PPS rate requires a detailed
review of utilization and expenditures by clinics. The PPS
rate paid to clinics is likely to be much higher than the
rates paid by counties for specialty mental health services or
drug Medi-Cal. Therefore, most clinics would probably not
elect to contract for services that would require them to
recalculate their PPS rate.
Background: Under current law, the Medi-Cal program provides health care
coverage for certain low income and disabled individuals.
In the Medi-Cal fee-for-service system, federally qualified
health centers (FQHCs) and rural health clinics (RHCs) are paid
a per-visit payment known as the prospective payment system
(PPS). The PPS rate is based on a baseline rate that reflects a
clinic's costs to provide services in 1999-2000, adjusted for
inflation. Those costs include the costs of eligible
face-to-face visits (e.g. with a physician) and other services
provided to Medi-Cal beneficiaries that are not eligible for
billing as a face-to-face visit (e.g. visits with a registered
nurse). When a Medi-Cal beneficiary in the managed care system
receives care from an FQHC or RHC, the managed care plan makes a
per-visit payment to the clinic. Because the rates paid by
managed care plans are significantly below the PPS rate, the
state makes a supplemental "wrap-around" payment to the clinic
to bring the total payment up to the PPS rate.
Under current law, specialty mental health and Drug Medi-Cal are
"carved out" of the regular Medi-Cal managed care program.
Specialty mental health is provided by county mental health
plans that contract with the Department of Health Care Services.
Historically, Drug Medi-Cal has been operated on a
fee-for-services basis, with providers contracting with counties
or directly with the state. The Department is in the process of
implementing a new Drug Medi-Cal waiver that will allow counties
that opt-in to provide Drug Medi-Cal benefits through an
organized delivery system (a kind of managed care system). The
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non-federal share of the costs for both specialty mental health
and Drug Medi-Cal are paid for by counties, generally using
realignment funds.
Proposed Law:
SB 1335 would authorize federally qualified health centers
(FQHCs) and rural health clinics (RHCs) to receive reimbursement
for services provided for specialty mental health services or
Drug Medi-Cal outside of the normal reimbursement structure for
FQHCs and RHCs.
Specific provisions of the bill would:
Require FQHCs and RHCs that elect to contract with a county
mental health plan to provide specialty mental health services
to be reimbursed for those services pursuant to the contract
and not through the PPS rate;
Require FQHCs and RHCs that elect to provide Drug Medi-Cal
services (either under contract with a county or the
Department of Health Care Services) to be reimbursed for those
services pursuant to the contract and not through the PPS
rate;
Require FQHCs and RHCs that elect to accept reimbursement
described above to have their PPS rate adjusted to remove the
cost of those services from the PPS rate;
Specifically authorize FQHCs and RHCs to provide specialty
mental health services and Drug Medi-Cal services under
contract;
Provide that the provisions of the bill shall only be
implemented to the extent that federal approval has been
received and federal financial participation is available.
Related
Legislation: AB 858 (Wood, 2015) would have added marriage and
family therapists to the list of health care providers that
qualify for face-to-face encounter payments from the Medi-Cal
program to federally qualified health centers and rural health
clinics. That bill was vetoed by Governor Brown.
Staff comments: As noted above, the PPS rate paid to clinics is
generally higher than the rates paid by counties for specialty
mental health services or for Drug Medi-Cal services. Therefore,
it is unlikely that many clinics would opt to shift payment for
those services out of their PPS rate to the contract rate paid
by counties. Rather, clinics are more likely to contract with
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counties to provide specialty mental health or Drug Medi-Cal
services that are not included in their PPS rate (for example,
group therapy sessions).
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