Senate Bill No. 1477

Introduced by Committee on Health (Senators Hernandez (Chair), Hall, Mitchell, Monning, Nguyen, Nielsen, Pan, Roth, and Wolk)

March 9, 2016

An act to amend Section 100500 of the Government Code, and to amend Sections 101319, 123870, 123900, 123929, 123940, and 123955 of the Health and Safety Code, relating to health.

LEGISLATIVE COUNSEL’S DIGEST

SB 1477, as introduced, Committee on Health. Health.

(1) Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that took effect January 1, 2014. Among other things, PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. Existing state law establishes the California Health Benefit Exchange (the Exchange) within state government, specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of qualified health plans by qualified individuals and qualified small employers.

This bill would state that the California Health Benefit Exchange is also known as Covered California and would deem any reference to the California Health Benefit Exchange or the Exchange to refer to Covered California.

(2) Under existing law, the Robert W. Crown California Children’s Services Act, the State Department of Health Care Services and each county administers the California Children’s Services Program (CCS program) for treatment services for physically defective or handicapped persons under 21 years of age, as specified. Existing law authorizes, if a person is enrolled in the Health Families Program or the AIM-Linked Infants Program, the financial documentation required to establish eligibility for those programs to be used to establish financial eligibility for treatment services under the CCS program. Existing law transitions enrollees of the Healthy Families Program to the Medi-Cal program and renamed the AIM-Linked Infants Program as the Medi-Cal Access Program.

This bill would change references to the Healthy Families Program to the Medi-Cal program, and the AIM-Linked Infants Program to the Medi-Cal Access Program. The bill would also make other technical, nonsubstantive changes.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 100500 of the Government Code is
amended to read:

100500.  

(a) There is in state government the California Health
Benefit Exchange, an independent public entity not affiliated with
an agency or department, which shall begin insert also end insert be known as begin delete the
Exchange. The Exchange end delete begin insert Covered California. Covered California end insert
shall be governed by an executive board consisting of five members
who are residents of California. Of the members of the board, two
shall be appointed by the Governor, one shall be appointed by the
Senate Committee on Rules, and one shall be appointed by the
Speaker of the Assembly. The Secretary of California Health and
Human Services or his or her designee shall serve as a voting, ex
officio member of the board.

(b) Members of the board, other than an ex officio member,
shall be appointed for a term of four years, except that the initial
appointment by the Senate Committee on Rules shall be for a term
of five years, and the initial appointment by the Speaker of the
Assembly shall be for a term of two years. Appointments by the
Governor made after January 2, 2011, shall be subject to
confirmation by the Senate. A member of the board may continue
to serve until the appointment and qualification of his or her
successor. Vacancies shall be filled by appointment for the
unexpired term. The board shall elect a chairperson on an annual
basis.

(c) (1) Each person appointed to the board shall have
demonstrated and acknowledged expertise in at least two of the
following areas:

(A) Individual health care coverage.

(B) Small employer health care coverage.

(C) Health benefits plan administration.

(D) Health care finance.

(E) Administering a public or private health care delivery
system.

(F) Purchasing health plan coverage.

(G) Marketing of health insurance products.

(H) Information technology system management.

(I) Management information systems.

(J) Enrollment counseling assistance, with priority to cultural
and linguistic competency.

(2) Appointing authorities shall consider the expertise of the
other members of the board and attempt to make appointments so
that the board’s composition reflects a diversity of expertise.

(d) Each member of the board shall have the responsibility and
duty to meet the requirements of this title, the federal act, and all
applicable state and federal laws and regulations, to serve the public
interest of the individuals and small businesses seeking health care
coverage through the Exchange, and to ensure the operational
well-being and fiscal solvency of the Exchange.

(e) In making appointments to the board, the appointing
authorities shall take into consideration the cultural, ethnic, and
geographical diversity of the state so that the board’s composition
reflects the communities of California.

(f) (1) A member of the board or of the staff of the Exchange
shall not be employed by, a consultant to, a member of the board
of directors of, affiliated with, or otherwise a representative of, a
carrier or other insurer, an agent or broker, a health care provider,
or a health care facility or health clinic while serving on the board
or on the staff of the Exchange. A member of the board or of the
staff of the Exchange shall not be a member, a board member, or
an employee of a trade association of carriers, health facilities,
health clinics, or health care providers while serving on the board
or on the staff of the Exchange. A member of the board or of the
staff of the Exchange shall not be a health care provider unless he
or she receives no compensation for rendering services as a health
care provider and does not have an ownership interest in a
professional health care practice.

(2) A board member shall not receive compensation for his or
her service on the board, but may receive a per diem and
reimbursement for travel and other necessary expenses, as provided
in Section 103 of the Business and Professions Code, while
engaged in the performance of official duties of the board.

(3) For purposes of this subdivision, “health care provider”
means a person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions
Code, or licensed pursuant to the Osteopathic Act or the
Chiropractic Act.

(g)  A member of the board shall not make, participate in
making, or in any way attempt to use his or her official position
to influence the making of a decision that he or she knows or has
reason to know will have a reasonably foreseeable material
financial effect, distinguishable from its effect on the public
generally, on him or her or a member of his or her immediate
family, or on either of the following:

(1) Any source of income, other than gifts and other than loans
by a commercial lending institution in the regular course of
business on terms available to the public without regard to official
status aggregating two hundred fifty dollars ($250) or more in
value provided to, received by, or promised to the member within
12 months prior to the time when the decision is made.

(2) Any business entity in which the member is a director,
officer, partner, trustee, employee, or holds any position of
management.

(h) There shall not be liability in a private capacity on the part
of the board or a member of the board, or an officer or employee
of the board, for or on account of an act performed or obligation
entered into in an official capacity, when done in good faith,
without intent to defraud, and in connection with the
administration, management, or conduct of this title or affairs
related to this title.

(i) The board shall hire an executive director to organize,
administer, and manage the operations of the Exchange. The
executive director shall be exempt from civil service and shall
serve at the pleasure of the board.

(j) The board shall be subject to the Bagley-Keene Open Meeting
Act (Article 9 (commencing with Section 11120) of Chapter 1 of
Part 1 of Division 3 of Title 2), except that the board may hold
closed sessions when considering matters related to litigation,
personnel, contracting, and rates.

(k) (1) The board shall apply for planning and establishment
grants made available to the Exchange pursuant to Section 1311
of the federal act. If an executive director has not been hired under
subdivision (i) when the United States Secretary of Health and
Human Services makes the planning and establishment grants
available, the California Health and Human Services Agency shall,
upon request of the board, submit the initial application for
planning and establishment grants to the United States Secretary
of Health and Human Services.

(2) If a majority of the board has not been appointed when the
United States Secretary of Health and Human Services makes the
planning and establishment grants available, the California Health
and Human Services Agency shall submit the initial application
for planning and establishment grants to the United States Secretary
of Health and Human Services. Any subsequent applications shall
be made as described in paragraph (1) once a majority of the
members have been appointed to the board.

(3) The board shall be responsible for using the funds awarded
by the United States Secretary of Health and Human Services for
the planning and establishment of the Exchange, consistent with
subdivision (b) of Section 1311 of the federal act.

begin insert

(l) Any reference to the California Health Benefit Exchange or
the Exchange is deemed to refer to Covered California.

end insert

SEC. 2.  

Section 101319 of the Health and Safety Code is
amended to read:

101319.  

Due to the need to rapidly implement, and to provide
local health jurisdictions, hospitals, long-term health care facilities,
clinics, emergency medical systems, and poison control centers begin insert ,
or their trade associations, end insert with timely funding for the purposes
of, this article, funds appropriated in the annual Budget Act or
some other act for purposes of this article for the 2002-03 fiscal
year and subsequent fiscal years shall be allocated through the use
of agreements, which shall not be subject to Part 2 (commencing
with Section 10100) of Division 2 of the Public Contract Code.

SEC. 3.  

Section 123870 of the Health and Safety Code is
amended to read:

123870.  

(a) The department shall establish standards of
financial eligibility for treatment services under the California
Children’s Services Program (CCS program).

(1) Financial eligibility for treatment services under this program
shall be limited to persons in families with an adjusted gross
income of forty thousand dollars ($40,000) or less in the most
recent tax year, as calculated for California state income tax
purposes. begin delete If a person is enrolled in the Healthy Families Program
(Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code), the financial documentation required for that
program in Section 2699.6600 of Title 10 of the California Code
of Regulations may be used instead of the person’s California state
income tax return. end delete If a person is enrolled in the Medi-Cal program
pursuant to Section 14005.26 of the Welfare and Institutions Code,
or enrolled in the begin delete AIM-Linked Infants end delete begin insert Medi-Cal Access end insert Program
pursuant to Chapter 2 (commencing with Section begin delete 15850) end delete begin insert 15810) end insert
of Part 3.3 of Division 9 of the Welfare and Institutions Code, the
financial documentation required to establish eligibility for the
respective programs may be used instead of the person’s California
state income tax return. However, the director may authorize
treatment services for persons in families with higher incomes if
the estimated cost of care to the family in one year is expected to
exceed 20 percent of the family’s adjusted gross income.

(2) Children enrolled in begin delete the Healthy Families Program, end delete the
Medi-Cal program pursuant to Section 14005.26 of the Welfare
and Institutions begin delete Code, end delete begin insert Code end insert or the begin delete AIM-Linked Infants end delete begin insert Medi-Cal
Access end insert Program pursuant to Chapter 2 (commencing with Section
begin delete 15850) end delete begin insert 15810) end insert of Part 3.3 of Division 9 of the Welfare and
Institutions Code, who have a CCS program eligible medical
condition under Section 123830, and whose families do not meet
the financial eligibility requirements of paragraph (1), shall be
deemed financially eligible for CCS program benefits.

(b) Necessary medical therapy treatment services under the
California Children’s Services Program rendered in the public
schools shall be exempt from financial eligibility standards and
enrollment fee requirements for the services when rendered to any
handicapped child whose educational or physical development
would be impeded without the services.

(c) All counties shall use the uniform standards for financial
eligibility and enrollment fees established by the department. All
enrollment fees shall be used in support of the California Children’s
Services Program.

(d) Annually, every family with a child eligible to receive
services under this article shall pay a fee of twenty dollars ($20),
that shall be in addition to any other program fees for which the
family is liable. This assessment shall not apply to any child who
is eligible for full scope Medi-Cal benefits without a share of cost,
for children receiving therapy through the California Children’s
Services Program as a related service in their individualized
education plans, for children from families having incomes of less
than 100 percent of the federal poverty level, or for children
covered under the begin delete Healthy Families Program end delete begin insert end insert begin insert Medi-Cal program
pursuant to Section 14005.26 of the Welfare and Institutions Code end insert
or the begin delete AIM-Linked Infants end delete begin insert Medi-Cal Access end insert Program.

SEC. 4.  

Section 123900 of the Health and Safety Code is
amended to read:

123900.  

(a)  Beginning September 1, 1991, in addition to any
other standards of eligibility pursuant to this article, each family
with a child otherwise eligible to receive services under this article
shall pay an annual enrollment fee as a requirement for eligibility
for services, except as specified in subdivision (f).

(b)  The department shall determine the annual enrollment fee,
begin delete that end delete begin insert which end insert shall be a sliding fee scale based upon family size and
income, and shall be adjusted by the department to reflect changes
in the federal poverty level.

(c)  “Family size” shall include the child, his or her natural or
adoptive parents, siblings, and other family members who live
together and whose expenses are dependent upon the family
income.

(d)  “Family income” for purposes of this article, shall include
the total gross income, or their equivalents, of the child and his or
her natural or adoptive parents.

(e)  Payment of the enrollment fee is a condition of program
participation. The enrollment fee is independent of any other
financial obligation to the program.

(f)  The enrollment fee shall not be charged in any of the
following cases:

(1)  The only services required are for diagnosis to determine
eligibility for services, or are for medically necessary therapy
pursuant to Section 123875.

(2)  The child is otherwise eligible to receive services and is
eligible for full Medi-Cal benefits at the time of application or
reapplication.

(3)  The family of the child otherwise eligible to receive services
under this article has a gross annual income of less than 200 percent
of the federal poverty level.

(4)  The family of a child otherwise eligible to receive services
under this article who is enrolled in the begin delete Healthy Families Program
(Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code). end delete begin insert end insert begin insert Medi-Cal program pursuant to Section 14005.26
of the Welfare and Institutions Code. end insert

(g)  Failure to pay or to arrange for payment of the enrollment
fee within 60 days of the due date shall result in disenrollment and
ineligibility for coverage of treatment services 60 days after the
due date of the required payment.

(h)  The county shall apply the enrollment fee scale established
by the department and shall collect the enrollment fee. The county
may arrange with the family for periodic payment during the year
if a lump-sum payment will be a hardship for the family. The
agency director of California Children’s Services may, on a
case-by-case basis, waive or reduce the amount of a family’s
enrollment fee if, in the director’s judgment, payment of the fee
will result in undue hardship.

(i)  By thirty days after the effective date of this section or
August 1, 1991, whichever is later, the department shall advance
to each county, as a one-time startup amount, five dollars and fifty
cents ($5.50) for each county child who was receiving services
under this article on June 30, 1990, and who was not a Medi-Cal
beneficiary. This one-time payment shall be in addition to the 4.1
percent of the gross total expenditures for diagnoses, treatment,
and therapy by counties allowed under begin delete subdivision (c) of end delete Section
123955.

(j)  Each county shall submit to the state, as part of its quarterly
claim for reimbursement, an accounting of all revenues due and
revenues collected as enrollment fees.

SEC. 5.  

Section 123929 of the Health and Safety Code is
amended to read:

123929.  

(a) Except as otherwise provided in this section and
Section 14133.05 of the Welfare and Institutions Code, California
Children’s Services program services provided pursuant to this
article require prior authorization by the department or its designee.
Prior authorization is contingent on determination by the
department or its designee of all of the following:

(1) The child receiving the services is confirmed to be medically
eligible for the CCS program.

(2) The provider of the services is approved in accordance with
the standards of the CCS program.

(3) The services authorized are medically necessary to treat the
child’s CCS-eligible medical condition.

(b) The department or its designee may approve a request for a
treatment authorization that is otherwise in conformance with
subdivision (a) for services for a child participating in the begin delete Healthy
Families Program end delete begin insert Medi-Cal program pursuant end insert begin insert to Section 14005.26
of the Welfare and Institutions Code end insert or the begin delete AIM-Linked Infants end delete
begin insert Medi-Cal Access end insert Program pursuant to begin delete clause (ii) of subparagraph
(A) of paragraph (6) of subdivision (a) of Section 12693.70 of the
Insurance Code or end delete Chapter 2 (commencing with Section 15810)
of Part 3.3 of Division 9 of the Welfare and Institutions Code,
received by the department or its designee after the requested
treatment has been provided to the child.

(c) If a provider of services who meets the requirements of
paragraph (2) of subdivision (a) incurs costs for services described
in paragraph (3) of subdivision (a) to treat a child described in
subdivision (b) who is subsequently determined to be medically
eligible for the CCS begin delete program end delete begin insert program, end insert as determined by the
department or its designee, the department may reimburse the
provider for those costs. Reimbursement under this section shall
conform to the requirements of Section 14105.18 of the Welfare
and Institutions Code.

(d) (1) By July 1, 2016, or a subsequent date determined by the
department, requests for authorization of services, excluding
requests for authorization of services submitted by dental providers
enrolled in the Medi-Cal Dental program, shall be submitted in an
electronic format determined by the department and shall be
submitted via the department’s Internet Web site or other electronic
means designated by the department. The department may
implement this requirement in phases.

(2) The department shall designate an alternate format for
submitting requests for authorization of services when the
department’s Internet Web site or other electronic means designated
in paragraph (1) are unavailable due to a system disruption.

(3) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may, without taking regulatory action, implement,
interpret, or make specific this subdivision and any applicable
waivers and state plan amendments by means of all-county letters,
plan letters, plan or provider bulletins, or similar instructions.
Thereafter, the department shall adopt regulations by July 1, 2017,
in accordance with the requirements of Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code. The department shall consult with interested
parties and appropriate stakeholders in implementing this
subdivision.

SEC. 6.  

Section 123940 of the Health and Safety Code is
amended to read:

123940.  

(a) (1) Annually, the board of supervisors shall
appropriate a sum of money for services for handicapped children
of the county, including diagnosis, treatment, and therapy services
for physically handicapped children in public schools, equal to 25
percent of the actual expenditures for the county program under
this article for the 1990-91 fiscal year, except as specified in
paragraph (2).

(2) If the state certifies that a smaller amount is needed in order
for the county to pay 25 percent of costs of the county’s program
from this source. The smaller amount certified by the state shall
be the amount that the county shall appropriate.

(b) In addition to the amount required by subdivision (a), the
county shall allocate an amount equal to the amount determined
pursuant to subdivision (a) for purposes of this article from
revenues allocated to the county pursuant to Chapter 6
(commencing with Section 17600) begin insert of Part 5 end insert of Division 9 of the
Welfare and Institutions Code.

(c) (1) The state shall match county expenditures for this article
from funding provided pursuant to subdivisions (a) and (b).

(2) County expenditures shall be waived for payment of services
for children who are eligible pursuant to paragraph (2) of
subdivision (a) of Section 123870.

(d) The county may appropriate and expend moneys in addition
to those set forth in subdivision (a) and (b) and the state shall match
the expenditures, on a dollar-for-dollar basis, to the extent that
state funds are available for this article.

(e) County appropriations under subdivisions (a) and (b) shall
include county financial participation in the nonfederal share of
expenditures for services for children who are enrolled in the
Medi-Cal program pursuant to Section 14005.26 of the Welfare
and Institutions Code, or the begin delete AIM-Linked Infants end delete begin insert Medi-Cal Access end insert
Program pursuant to Chapter 2 (commencing with Section begin delete 15850) end delete
begin insert 15810) end insert of Part 3.3 of Division 9 of the Welfare and Institutions
Code, and who are eligible for services under this article pursuant
to paragraph (1) of subdivision (a) of Section 123870, to the extent
that federal financial participation is available at the enhanced
federal reimbursement rate under Title XXI of the federal Social
Security Act (42 U.S.C. Sec. 1397aa et seq.) and funds are
appropriated for the California Children’s Services Program in the
State Budget.

(f)  begin delete Nothing in this end delete begin insert This end insert section shall begin insert not end insert require the county to
expend more than the amount set forth in subdivision (a) plus the
amount set forth in subdivision begin delete (b) end delete begin insert (b), end insert nor shall it require the state
to expend more than the amount of the match set forth in
subdivision (c).

(g) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department, without taking further regulatory action, shall
implement this section by means of California Children’s Services
numbered letters.

SEC. 7.  

Section 123955 of the Health and Safety Code is
amended to read:

123955.  

(a) The state and the counties shall share in the cost
of administration of the California Children’s Services Program
at the local level.

(b) (1) The director shall adopt regulations establishing
minimum standards for the administration, staffing, and local
implementation of this article subject to reimbursement by the
state.

(2) The standards shall allow necessary flexibility in the
administration of county programs, taking into account the
variability of county needs and resources, and shall be developed
and revised jointly with state and county representatives.

(c) The director shall establish minimum standards for
administration, staffing and local operation of the program subject
to reimbursement by the state.

(d) Until July 1, 1992, reimbursable administrative costs, to be
paid by the state to counties, shall not exceed 4.1 percent of the
gross total expenditures for diagnosis, treatment and therapy by
counties as specified in Section 123940.

(e) Beginning July 1, 1992, this subdivision shall apply with
respect to all of the following:

(1) Counties shall be reimbursed by the state for 50 percent of
the amount required to meet state administrative standards for that
portion of the county caseload under this article that is ineligible
for Medi-Cal to the extent funds are available in the State Budget
for the California Children’s Services Program.

(2) Counties shall be reimbursed by the state for 50 percent of
the nonfederal share of the amount required to meet state
administrative standards for that portion of the county caseload
under this article that is enrolled in the Medi-Cal program pursuant
to Section 14005.26 of the Welfare and Institutions Code or the
begin delete AIM-Linked Infants end delete begin insert Medi-Cal Access end insert Program pursuant to Chapter
2 (commencing with Section begin delete 15850) end delete begin insert 15810) end insert of Part 3.3 of Division
9 of the Welfare and Institutions Code, and who are eligible for
services under this article pursuant to subdivision (a) of Section
123870, to the extent that federal financial participation is available
at the enhanced federal reimbursement rate under Title XXI of the
federal Social Security Act (42 U.S.C. Sec. 1397aa et seq.) and
funds are appropriated for the California Children’s Services
Program in the State Budget.

(3) On or before September 15 of each year, each county
program implementing this article shall submit an application for
the subsequent fiscal year that provides information as required
by the state to determine if the county administrative staff and
budget meet state standards.

(4) The state shall determine the maximum amount of state
funds available for each county from state funds appropriated for
CCS county administration. If the amount appropriated for any
fiscal year in the Budget Act for county administration under this
article differs from the amounts approved by the department, each
county shall submit a revised application in a form and at the time
specified by the department.

(f) The department and counties shall maximize the use of
federal funds for administration of the programs implemented
pursuant to this article, including using state and county funds to
match funds claimable under Title XIX or Title XXI of the federal
Social Security Act (42 U.S.C. Sec. 1396 et seq.; 42 U.S.C. Sec.
1397aa et seq.).