BILL ANALYSIS Ó
SB 1335
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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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