BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1335|
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THIRD READING
Bill No: SB 1335
Author: Mitchell (D)
Amended: 4/20/16
Vote: 21
SENATE HEALTH COMMITTEE: 9-0, 4/13/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SUBJECT: Med-Cal benefits: federally qualified health
centers and rural health centers: Drug Medi-Cal and
specialty mental health services
SOURCE: California Primary Care Association
Community Clinic Association of Los Angeles County
Los Angeles County Board of Supervisors
DIGEST: This bill authorizes federally qualified health
centers (FQHCs) and rural health clinics (RHCs) to receive
reimbursement from county specialty mental health plans and
through Drug Medi-Cal under the terms of a contract between the
FQHC and RHC and either the county or the Department of Health
Care Services (DHCS) outside of the regular Medi-Cal
reimbursement structure that applies to FQHCs and RHCs.
ANALYSIS:
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Existing law:
1)Establishes the Medi-Cal program as California's Medicaid
program, administered by DHCS, which provides comprehensive
health care coverage for low-income individuals. FQHC and RHC
services are covered benefits under the Medi-Cal program.
2)Requires FQHCs and RHCs to be reimbursed on a per-visit basis.
Defines a "visit" as a face-to-face encounter between an FQHC
or RHC patient and specified health care providers. The
Medi-Cal reimbursement to FQHCs and RHCs on a per-visit rate
is known as the Prospective Payment System (PPS).
3)Permits an FQHC or RHC to elect to have pharmacy or dental
services reimbursed on a fee-for-service (FFS) basis,
utilizing the current fee schedules established for those
services. Requires these costs to be adjusted out of the
FQHC's or RHC's clinic base rate as scope-of-service change.
4)Establishes the Drug Medi-Cal program, under which the DHCS is
authorized to enter into contracts with each county for
various alcohol and drug treatment services for Medi-Cal
beneficiaries.
5)Requires DHCS to implement managed mental health care for
Medi-Cal beneficiaries through contracts with mental health
plans. Mental health plans may include individual counties,
counties acting jointly, or an organization or nongovernmental
entity determined by DHCS to meet mental health plan
standards.
6)Requires mental health plans to provide specialty mental
health services to eligible Medi-Cal beneficiaries, including
both adults and children.
This bill:
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1)Requires, if an FQHC or RHC and a county specialty mental
health plan mutually agree to enter into a contract to have
the FQHC or RHC provide specialty mental health services to
Medi-Cal beneficiaries as part of the mental health plan's
network, the FQHC or RHC to elect to have specialty mental
health services reimbursed pursuant to the terms of the
contract or contracts and outside of the per-visit PPS rate.
2)Permits an FQHC or RHC to elect to become certified to provide
services in the Drug Medi-Cal program. Requires reimbursement
for Drug Medi-Cal program services to be reimbursed pursuant
to the terms of the contract or contracts and outside of the
per-visit PPS rate.
3)Permits, if the FQHC or RHC is located in a county that has
elected to participate in the Drug Medi-Cal Organized Delivery
System (ODS), the FQHC or RHC to elect to receive
reimbursement pursuant to a mutually agreed upon contract
between the county and the FQHC or RHC.
4)Permits, if the county does not elect to participate in the
Drug Medi-Cal ODS, an FQHC or RHC to elect to contract through
DHCS as a Drug Medi-Cal provider.
5)Requires, if an FQHC or RHC elects to receive from a county
specialty mental health plan or from Drug Medi-Cal, the
reimbursement the FQHC or RHC receives to be adjusted out of
the FQHC's or RHC's clinic base rate as scope-of-service
changes, and the PPS payment would not apply.
6)Permits a county and a county mental health plan to contract
with FQHCs or RHCs under this bill for the provision of
alcohol and drug use services within the county service area,
and for the provision of specialty mental health services.
7)Implements this bill only to the extent that federal financial
participation is available and any necessary federal approvals
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have been obtained.
Comments
1)Author's statement. According to the author, as the growing
need for behavioral health care services continues to go
unmet, barriers that impair the ability of community clinics
and health centers to participate as providers in the Drug
Medi-Cal Program and as providers contracted with county
specialty mental health plans should be eliminated. This bill
will help community clinics more easily provide substance use
disorder treatment and medically necessary specialty mental
health services to our most vulnerable communities by allowing
FQHCs and RHCs to elect reimbursement on a FFS basis instead
of the PPS basis, thereby expanding the services offered and
provider types available at FQHCs and RHCs.
2)FQHCs and RHCs. FQHCs and RHCs are federal designated clinics
that are required to serve medically underserved populations
that provide primary care services. Medi-Cal reimbursement to
FQHCs and RHCs is governed by state and federal law. FQHCs and
RHCs are reimbursed by Medi-Cal on a per-visit rate which is
known as the PPS, which is higher than the typical Medi-Cal
FFS reimbursement rate. For Medi-Cal managed care plan
patients, DHCS reimburses FQHCs and RHCs for the difference
between its per-visit PPS rate and the payment made by the
plan. This payment is known as a "wrap around" payment. The
Medi-Cal managed care wrap-around rate was established to
reimburse providers for the difference between their PPS rate
and their Medi-Cal managed care reimbursement rate.
3)Specialty mental health and Drug Medi-Cal "carve out" and
contracting with FQHCs. The Medi-Cal Specialty Mental Health
Services Program and Drug Medi-Cal are "carved-out" of the
broader Medi-Cal program and is administered by DHCS and
operated under federal waivers approved by the Centers for
Medicare and Medicaid Services (CMS). DHCS contracts with a
Mental Health Plan in each county to provide or arrange for
the provision of Medi-Cal specialty mental health services.
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Under the terms of the specialty mental health waiver and
state regulation, FQHC services are not covered by county
mental health plans.
DHCS is in the process of implementing the new Drug Medi-Cal
waiver referred to as the Drug Medi-Cal ODS, under which
counties can elect to opt-in to administering the benefit.
Medi-Cal beneficiaries will receive a richer drug treatment
benefit package than in counties that do not opt-in. As
counties have begun planning to implement the new Drug
Medi-Cal ODS, at least one county counsel in Los Angeles
County has questioned whether county specialty mental health
plans can claim FFP if they contract with FQHCs. This bill
would clarify that contracting with county specialty mental
health plans and county and state Drug Medi-Cal programs is
allowed, and that contracting would be through contract and
outside the normal PPS Medi-Cal rate paid to FQHCs and RHCs.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
1) 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).
2)One-time costs, likely in the low millions, to recalculate the
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).
The bill requires clinics that contract to provide those
additional services to be paid pursuant to the contract for
those services. This bill requires DHCS to recalculate the PPS
for those clinics to adjust the costs for providing such
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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. For example, assuming
that the cost of performing such a review is about $10,000 and
that 500 clinics seek a recalculation, the administrative
costs to DHCS would be about $5 million.
3)Unknown potential state cost savings from shifting services
currently being provided under the PPS rate (paid by the
state) to specialty mental health or Drug Medi-Cal which are
funded by counties (General Fund). Overall, the bill is likely
to increase utilization of services at FQHCs and RHCs, by
allowing them to receive direct reimbursement for those
services from counties. Under current law, FQHCs and RHCs can
provide mental health services and may provide services that
could be reimbursed under Drug Medi-Cal. Currently, the cost
of providing those services to Medi-Cal beneficiaries is
included in the PPS rate paid to clinics. To the extent that
services currently being provided are removed from the PPS
rate and paid for under those contracts, there could be some
cost shifting from the state to the counties. The extent of
that impact is unknown.
SUPPORT: (Verified 5/26/16)
California Primary Care Association (co-source)
Community Clinic Association of Los Angeles County (co-source)
Los Angeles County Board of Supervisors (co-source)
AIDS Project Los Angeles
Alliance for Rural Community Health
AltaMed Health Services Corporation
Asian Health Services
California Pan-Ethnic Health Network
Community Clinic Consortium
County Health Executives Association of California
East Valley Community Health Center
Health and Life Organization, Inc.
Health Center Partners of Southern California
Kheir Center
La Clinica de La Raza
Los Angeles LGBT Center
Mountain Valleys Health Centers
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Neighborhood Healthcare
North East Medical Services
Northeast Valley Health Corporation
Sacramento Native American Health Center, Inc.
San Ysidro Health Center
South Central Family Health Center
The Coalition of Orange County
OPPOSITION: (Verified 5/26/16)
None received
ARGUMENTS IN SUPPORT: This bill is jointly sponsored by the
California Primary Care Association (CPCA), the Los Angeles
County Board of Supervisors, and the Community Clinic
Association of Los Angeles County. CPCA writes that this bill
will improve Californian's access to substance use disorder
treatment by eliminating a barrier which prevents community
health centers from participating in Drug Medi-Cal and county
specialty mental health programs by allowing FQHCs the option to
contract with their counties for these services and be
reimbursed on par with other health care providers. CPCA states
that, under the Medi-Cal expansion and new Drug Medi-Cal ODS
waiver, FQHCs are critically needed in the behavioral health
continuum of care, but find it difficult to contract with
counties, even when the counties want to contract with health
centers. This contracting is important to better integrate FQHCs
into the county specialty mental health plan or Drug Medi-Cal
System. Such contracting also allows FQHCs to provide different
types of services with different types of providers (i.e. peer
support specialists, group counseling, drug abuse counselors)
which may be more limited under the current FQHC PPS payment
system. CPCA concludes that this bill will improve access to
behavioral health service by providing legal certainty and
clarify that FQHCs and RHCs can provide these important
behavioral health services outside of the PPS rate.
Prepared by:Scott Bain / HEALTH /
5/28/16 17:00:37
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