BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  June 21, 2016 


                            ASSEMBLY COMMITTEE ON HEALTH


                                   Jim Wood, Chair


          SB  
          1335 (Mitchell) - As Amended April 20, 2016


          SENATE VOTE:  39-0


          SUBJECT:  Medi-Cal benefits:  federally qualified health centers  
          and rural health centers:  Drug Medi-Cal and specialty mental  
          health services.


          SUMMARY:  Authorizes federally qualified health centers (FQHCs)  
          and rural health clinics (RHCs) to provide specialty mental  
          health and Drug Medi-Cal (DMC) services and be reimbursed for  
          such services under a contract with the county or the Department  
          of Health Care Services (DHCS) and authorizes the reimbursement  
          to be outside the regular Medi-Cal reimbursement structure that  
          applies to FQHCs and RHCs.  Specifically, this bill:  


          1)Permits an FQHC or RHC to do the following: 


             a)   Elect to have specialty mental health services  
               reimbursed pursuant to the terms of the contract/s and  
               outside of the per-visit prospective payment system (PPS)  
               if an FQHC or RHC and one or more mental health plans that  
               contract with DHCS for specialty mental health mutually  
               agree to enter into a contract to have the FQHC or RHC  








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               provide specialty mental health services to Medi-Cal  
               beneficiaries as part of the mental health plan's (MHP)  
               network; and,  


             b)   Elect to become certified to provide services in the DMC  
               program, and receive reimbursement for these services as  
               follows:


               i)     If the FQHC is located in a county that has elected  
                 to participated in the DMC organized delivery system  
                 (ODS), elect to receive reimbursement under a contract  
                 mutually agreed upon between the county and an FQHC or  
                 RHC; or,


               ii)    If the county does not elect to participate in DMC,  
                 the FQHC or RHC can elect to contract through DHCS as a  
                 DMC provider.


          2)Requires, if an FQHC or RHC elects reimbursement under 1)  
            above, pursuant to which the costs associated with providing  
            the services are part of the FQHC's or RHC's clinic base rate,  
            those costs must 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.


          3)Requires DHCS to implement this bill only to the extent that  
            federal financial participation is obtained.


          4)Makes other technical and conforming changes. 


          EXISTING LAW:  









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          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 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 DMC, under which 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.  Allows MHPs to include individual counties, counties  
            acting jointly, or an organization or nongovernmental entity  
            determined by DHCS to meet MHP standards. 
          
          6)Requires MHPs to provide specialty mental health services to  
            eligible Medi-Cal beneficiaries, including both adults and  
            children.
          
          FISCAL EFFECT:  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 (GF)/federal funds (FF)).








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          2)One-time costs, likely less than $200,000, to recalculate the  
            PPS rate for clinics that contract with counties or the state  
            to provide specialty mental health services or services under  
            DMC (GF/FF). 

            The bill would require clinics that contract to provide those  
            additional services to be paid pursuant to the contract for  
            those services. The bill would require the DHCS 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 DMC.   
            Therefore, most clinics would probably not elect to contract  
            for services that would require them to recalculate their PPS  
            rate.



          COMMENTS:


          1)PURPOSE OF THIS BILL.  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 DMC and  
            as providers contracted with county specialty MHPs 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  








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            FQHCs and RHCs.


          2)BACKGROUND.  FQHCs and RHCs serve a significant portion of the  
            uninsured and underinsured in California.  They are open-door  
            providers that treat patients on a sliding scale fee structure  
            and make their services available regardless of a patient's  
            ability to pay.  There are approximately 600 FQHCs and 350  
            RHCs in California.  All FQHCs, and a majority of the RHCs,  
            are either non-profit community clinics or government  
            entities.  Because clinics are safety net providers, their  
            continued survival depends heavily on the stability and  
            adequacy of revenues from the Medi-Cal program.  FQHCs and  
            RHCs are paid by Medi-Cal on a "per visit" basis in an amount  
            equal to the clinic's cost of delivering services.   
            Essentially, DHCS calculates the annual cost of care provided  
            by each clinic and divides the total by the number of visits  
            to determine a per visit rate.



          Community clinics and health centers provide health care to 14%  
            of Californians.  This figure is even higher in rural or  
            remote areas that struggle to attract and retain health care  
            providers.  Mental health and substance abuse services are  
            part of the essential health care benefits under the Patient  
            Protection and Affordable Care Act.  As such, they are a part  
            of Medi-Cal.  Along with the expansion of these benefits, the  
            expansion of the Medi-Cal program overall has increased the  
            number of beneficiaries to over 14 million, placing even  
            greater demands on Medi-Cal providers.

          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.  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  








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            established to reimburse providers for the difference between  
            their PPS rate and their Medi-Cal managed care reimbursement  
            rate.

          The Medi-Cal Specialty Mental Health Services Program and DMC  
            are "carved-out" of the broader Medi-Cal program, are  
            administered by DHCS, and operated under federal waivers  
            approved by the Centers for Medicare and Medicaid Services.   
            DHCS contracts with a MHP in each county to provide or arrange  
            for the provision of Medi-Cal specialty mental health  
            services.  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 DMC waiver  
            referred to as DMC ODS, under which counties can elect to  
            opt-in to administer the benefit, and 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 DMC 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 or state DMC programs  
            is allowed, and that contracting would be through contract and  
            outside the normal PPS Medi-Cal rate paid to FQHCs and RHCs.

          3)SUPPORT.  The California Primary Care Association, the sponsor  
            of this bill, and the California Pan-Ethnic Health Network  
            state that this bill clarifies that FQHCs and RHCs can  
            contract with DMC or MHP providers and receive reimbursement  
            for DMC and MHP-contracted services outside of the PPS rate  
            and this bill will have little or no cost to the state while  
            increasing access for these services for Medi-Cal enrollees.   
            The California Chapter of the American College of Emergency  
            Physicians notes that this bill will improve access to  
            addiction and mental health treatment.  The County Health  
            Executives Association of California points out that this bill  
            will help to increase counties' ability to recruit FQHCs and  
            RHCs to provide behavioral health and substance use disorder  








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            services and to improve counties' ability to deliver  
            integrated services for Medi-Cal eligible individuals.  


          4)RELATED LEGISLATION.  AB 1863 (Wood) adds marriage and family  
            therapists (MFTs) to the list of healthcare professionals that  
            qualify for a face-to-face encounter with a patient at FQHCs  
            or RHCs for purposes of a per-visit Medi-Cal payment under the  
            PPS.  Makes conforming changes, including requiring an FQHC or  
            an RHC that includes the costs of the services of an MFT that  
            chooses to bill these services as a separate visit, to apply  
            for an adjustment to its per-visit rate; that multiple  
            encounters with an MFT on the same day constitutes a single  
            visit; adjustment of rates; and, change in scope of service  
            requirements.  AB 1863 is pending in Senate Health Committee. 


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Primary Care Association (co-sponsor)
          Community Clinic Association of Los Angeles County (co-sponsor)
          Los Angeles County Board of Supervisors (co-sponsor)
          AIDS Project Los Angeles
          Alliance for Rural Community Health
          AltaMed Health Services Corporation 
          Asian Health Services
          California Chapter of the American College of Emergency  
          Physicians


          California Health+Advocates
          California Pan-Ethnic Health Network









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          Coalition of Orange County
          Community Clinic Consortium
          County Health Executives Association of California


          County of Los Angeles


          East Valley Community Health Center
          Health and Life Organization, Inc.
          Health Center Partners of Southern California
          Kheir Center
          L.A. Care Health Plan


          La Clinica de La Raza
          Los Angeles LGBT Center
          Mountain Valleys Health Centers
          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


          Opposition


          None on file.




          Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916)  
          319-2097










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