BILL ANALYSIS Ó
SB 1335
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SENATE THIRD READING
SB
1335 (Mitchell)
As Amended August 18, 2016
Majority vote
SENATE VOTE: 39-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Health |17-0 |Wood, Maienschein, | |
| | |Bonilla, Burke, | |
| | |Campos, Chiu, Gomez, | |
| | |Roger Hernández, | |
| | |Lackey, Nazarian, | |
| | |Patterson, | |
| | | | |
| | | | |
| | |Ridley-Thomas, | |
| | |Rodriguez, Santiago, | |
| | |Steinorth, Thurmond, | |
| | |Waldron | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, Bonta, | |
| | |Calderon, Chang, Daly, | |
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| | |Eggman, Gallagher, | |
| | |Eduardo Garcia, | |
| | |Holden, Jones, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Wagner, | |
| | |Weber, Wood, McCarty | |
| | | | |
| | | | |
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SUMMARY: Authorizes federally qualified health centers (FQHCs)
and rural health clinics (RHCs) to provide Drug Medi-Cal (DMC)
services and be reimbursed for such services. Specifically,
this bill:
1)Permits an FQHC or RHC to elect to enroll as a DMC certified
provider and provides that the costs associated with the DMC
services shall not be included in the FQHC's or RHC's per
visit prospective payment system (PPS) rate and reimbursement
for those services is as follows:
a) If the FQHC or RHC elects to provide DMC services in a
county that has elected to participate in the DMC organized
delivery system, the FQHC or RHC shall receive
reimbursement pursuant to a mutually agreed upon contract
between the county and the FQHC or RHC; and,
b) If the FQHC or RHC elects to provide DMC services in a
county that does not elect to participate in the DMC
organized delivery system, the FQHC or RHC shall receive
reimbursement pursuant to a mutually agreed upon contract
between the county and the FQHC or RHC. If the county
refuses to contract with the FQHC or RHC, the FQHC or RHC
may request to contract directly with the Department of
Health Care Services (DHCS) and shall be reimbursed for
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those services at the fee-for-service (FFS) rate.
2)Provides that if an FQHC or RHC elects reimbursement for DMC
services, 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, as
specified.
3)Indicates that if an FQHC or RHC that reverses its election
under 1) above, then the FQHC or RHC must revert to its prior
rate, subject to an increase to account for all Medicare
Economic Index increases or decreases associated with
applicable scope-of-service adjustments, as specified.
4)Requires an FQHC or RHC to submit a scope-of-service rate
change request within 90 days of the beginning of any FQHC or
RHC fiscal year occurring after January 1, 2017, if, during
the FQHC's or RHC's prior fiscal year, both of the following
occurred:
a) The FQHC or RHC elected reimbursement under 1) above;
b) The costs of providing DMC services were included in the
per-visit PPS rate and the removal of those costs would
have resulted in a significantly lower per-visit PPS rate.
Specifies that "significantly lower" means an average
per-visit PPS rate decrease in excess of 2.5%.
5)Requires, within 90 days of receipt of the request for a
scope-of-service change, the DHCS to issue the FQHC or RHC an
interim rate equal to 90% of the FQHC's or RHC's projected
allowable cost as determined by DHCS. Requires the audit for
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the final rate to comply with existing requirements.
6)Provides that if an FQHC or RHC elects to enroll as a DMC
provider under 1) above, and a scope-of-service change is
necessary, as specified, the FQHC or RHC must comply with both
of the following:
a) After DHCS approves the request for a scope-of-service
change and adjusts the per-visit PPS rate, the FQHC or RHC
shall not bill the per-visit PPS rate for services
reimbursed by the DMC organized delivery system; and,
b) For the purpose of calculating a per-visit PPS rate, the
FQHC or RHC shall provide verifiable documentation of the
costs of an employee who provides both FQHC services and
DMC services. Documentation shall attribute costs
proportionally between FQHC services and DMC services.
Only the costs attributable to FQHC services shall be
included in the per-visit PPS rate.
7)Specifies that if an FQHC or RHC was enrolled as a DMC
certified provider on or before January 1, 2017, the FQHC or
RHC may continue to provide, and be reimbursed for, DMC
services pursuant to the terms of the contract if the costs of
providing DMC services are reimbursed outside of the per-visit
PPS rate, as specified.
8)Provides that if an FQHC or RHC entered into a contract on or
before January 1, 2017, with a mental health plan to provide
specialty mental health services to Medi-Cal beneficiaries as
part of the mental health plan's network, the FQHC or RHC may
continue to provide, and be reimbursed for, those specialty
mental health services pursuant to the terms of the contract
with the mental health plan if the costs of providing
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specialty mental health services are reimbursed outside of the
per visit the PPS rate, as specified.
9)Defines mental health plan as any mental health plan
contracting with DHCS to provide specialty mental health
services to enrolled Medi-Cal beneficiaries, as specified.
10)Makes other technical and conforming changes, including
chaptering out amendments.
FISCAL EFFECT: According to Assembly Appropriations Committee:
1)Minor one-time costs for revising regulations and seeking any
necessary federal approvals to allow the payment procedures
authorized under the bill (General Fund (GF)/federal).
2)Unknown, potentially significant costs for DHCS to conduct
provider enrollment activities, contract directly with
clinics, and to recalculate the 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
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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 DMC services may improve access, no significant increase
in utilization or costs for services is assumed to be directly
attributable to this bill.
COMMENTS: 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 mental health plans (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
FQHCs and RHCs.
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 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.
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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.
Analysis Prepared by:
Rosielyn Pulmano / HEALTH / (916) 319-2097 FN:
0004540