BILL ANALYSIS Ó
SB 1335
Page 1
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1335
(Mitchell) - As Amended August 1, 2016
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|Policy |Health |Vote:|17 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill authorizes federally qualified health centers (FQHCs)
and rural health clinics (RHCs) (clinics) to provide Drug
Medi-Cal (DMC) services, and describes payment and contracting
arrangements. Specifically, this bill:
1)Permits clinics to elect to become certified to provide
services in the DMC program, and receive reimbursement for
these services either through a contract with counties or the
state, as applicable.
SB 1335
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2)Authorizes the reimbursement to be outside the regular
prospective payment system (PPS) rate reimbursement structure
that applies to clinics.
3)Requires adjustment to a clinic's base PPS rate if a clinic's
PPS rate already accounts for DMC services.
4)Requires Department of Health Care Services (DHCS) to
implement this bill only to the extent that federal financial
participation is obtained.
5)Allows clinics with existing contracts with county mental
health plans to provide specialty mental health services to
continue to provide and be reimbursed for such services, as
long as reimbursement is outside of the per-visit PPS rate.
6)Makes other technical and conforming changes.
7)Includes chaptering amendments to address conflicts with AB
1863 (Wood).
FISCAL EFFECT:
1)Minor one-time costs for revising regulations and seeking any
necessary federal approvals to allow the payment procedures
authorized under the bill (GF/federal).
2)Unknown, potentially significant costs for DHCS to conduct
provider enrollment activities, contract directly with
clinics, and to recalculate the prospective payment system
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(PPS) rate for clinics that wish to carve out costs associated
with DMC services or contract directly with the department
(GF/federal). The bill requires that if clinics elect to
contract directly for DMC services, and costs associated with
providing the services are part of the clinic's base PPS rate,
the costs must be adjusted out of the clinic's base rate as a
"scope-of-service change." In addition, current law requires
DHCS to enroll providers and provides for state direct
contracting in certain situations.
Recalculating a PPS rate requires a detailed review of
utilization and expenditures by clinics. For example, assuming
the cost per review is about $10,000 and 30 clinics seek a
recalculation, the administrative costs to DHCS would be about
$300,000, plus costs for provider enrollment and related
activities (GF/federal). It is unclear how many clinics
currently contract for DMC services, or who would elect to
contract and apply for a scope-of-service change to ensure DMC
services are carved out of the PPS rate.
3)Although clarification that clinics can contract with counties
for Drug Medi-Cal services may improve access, no significant
increase in utilization or costs for services is assumed to be
directly attributable to this bill.
COMMENTS:
1)Purpose. 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 should
be eliminated. This bill will help community clinics more
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easily provide substance use disorder treatment services to
our most vulnerable communities by allowing clinics to elect
reimbursement on a fee-for-service basis pursuant to contracts
with counties, instead of the PPS basis. This expands the
services offered and provider types available at clinics.
2)Clinic Reimbursement. Because of their unique role in
providing health care to underserved communities and the
uninsured, policymakers have historically attempted to ensure
that community clinics remain financially viable. Federal law
requires federally funded health programs to pay clinics using
a special reimbursement structure commonly called a
prospective payment system (PPS). According to DHCS Form
3090, the Freestanding FQHC Cost Report Form, PPS rates are a
clinic-specific per-visit rate, and are calculated by dividing
costs for Medi-Cal-reimbursable services by Medi-Cal
reimbursable visits. PPS rates are also adjusted by a growth
rate to account for inflation. In addition, clinics can
request a recalculation of their PPS rates based on a change
in their scope of services. All clinics must provide at least
a defined scope of primary care and mental health services,
but may provide additional services as well. For Medi-Cal,
current PPS rates vary from around $80 to over $650 per visit,
depending on the mix of services provided at each clinic.
3)Drug Medi-Cal (DMC). The DMC Treatment Program is a
county-funded Medi-Cal benefit that provides medically
necessary substance use disorder treatment services for
eligible Medi-Cal beneficiaries. Services include outpatient
drug free, narcotic replacement therapy, day care
rehabilitative, Naltrexone, and counseling in residential
facilities for pregnant and post-partum women. DHCS is in the
midst of implementing a DMC organized delivery system waiver,
under which participating counties are creating organized
networks of substance abuse care. Participating counties will
also offer an enhanced level of drug treatment services.
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4)Related Legislation. Chapter 760, Statutes of 2015 (SB 147,
Hernández) authorizes a three-year payment reform pilot
project for federally qualified health centers (FQHCs) using
an alternative payment methodology (APM) to the PPS rate.
5)Staff Comment. DHCS notes this bill's explicit authorization
to contract with counties for DMC services, and the
authorization to continue existing contracts for specialty
mental health, could reduce the department's flexibility to
ensure appropriate alignment of financial and programmatic
responsibility for DMC and specialty mental health services
between the state and the county mental health plans.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081