Amended in Assembly August 19, 2016

Senate BillNo. 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 Safetybegin insert Code, and to amend Section 14184.20 of, and to add and repeal Section 14124.12 of, the Welfare and Institutionsend insert Code, relating to health.

LEGISLATIVE COUNSEL’S DIGEST

SB 1477, as amended, 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.begin delete Theend delete

begin insert

(3) Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which health care services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by the federal Medicaid program. Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed care plans. Under the Medi-Cal program, existing law provides for the provision of health, dental, and vision benefits to eligible children pursuant to the federal Children’s Health Insurance Program (CHIP). Existing federal regulations, published on May 6, 2016, revise regulations governing Medicaid managed care plans to, among other things, align, where feasible, those rules with those of other major sources of coverage, including coverage through qualified health plans offered through an American Health Benefit Exchange, such as the Exchange, and promote quality of care and strengthen efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries.

end insert
begin insert

This bill, until January 1, 2020, would authorize the department to enter into contracts for the purposes of undertaking certain administrative activities concerning those revised federal regulations published on May 6, 2016. The bill would exempt contracts entered into or amended under this authority from specified provisions of the State Contract Act, specified provisions governing personal services contracts, and the provisions governing the requirement of advertising in the California State Contracts Register. The bill would require contracts entered into pursuant to these provisions to be publicly available pursuant to the California Public Records Act.

end insert

begin insert (4)end insertbegin insertend insertbegin insertThisend insert bill wouldbegin insert correct anend insertbegin insert erroneous cross-reference and wouldend insert also make other technical, nonsubstantive changes.

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P3    1

SECTION 1.  

Section 100500 of the Government Code is
2amended to read:

3

100500.  

(a) There is in state government the California Health
4Benefit Exchange, an independent public entity not affiliated with
5an agency or department, which shall also be known as Covered
6California. Covered California shall be governed by an executive
7board consisting of five members who are residents of California.
8Of the members of the board, two shall be appointed by the
9Governor, one shall be appointed by the Senate Committee on
10Rules, and one shall be appointed by the Speaker of the Assembly.
11The Secretary of California Health and Human Services or his or
12her designee shall serve as a voting, ex officio member of the
13board.

14(b) Members of the board, other than an ex officio member,
15shall be appointed for a term of four years, except that the initial
16appointment by the Senate Committee on Rules shall be for a term
17of five years, and the initial appointment by the Speaker of the
18Assembly shall be for a term of two years. Appointments by the
19Governor made after January 2, 2011, shall be subject to
20confirmation by the Senate. A member of the board may continue
21to serve until the appointment and qualification of his or her
22successor. Vacancies shall be filled by appointment for the
23unexpired term. The board shall elect a chairperson on an annual
24basis.

25(c) (1) Each person appointed to the board shall have
26demonstrated and acknowledged expertise in at least two of the
27following areas:

28(A) Individual health care coverage.

29(B) Small employer health care coverage.

30(C) Health benefits plan administration.

31(D) Health care finance.

P4    1(E) Administering a public or private health care delivery
2system.

3(F) Purchasing health plan coverage.

4(G) Marketing of health insurance products.

5(H) Information technology system management.

6(I) Management information systems.

7(J) Enrollment counseling assistance, with priority to cultural
8and linguistic competency.

9(2) Appointing authorities shall consider the expertise of the
10other members of the board and attempt to make appointments so
11that the board’s composition reflects a diversity of expertise.

12(d) Each member of the board shall have the responsibility and
13duty to meet the requirements of this title, the federal act, and all
14applicable state and federal laws and regulations, to serve the public
15interest of the individuals and small businesses seeking health care
16coverage through the Exchange, and to ensure the operational
17well-being and fiscal solvency of the Exchange.

18(e) In making appointments to the board, the appointing
19authorities shall take into consideration the cultural, ethnic, and
20geographical diversity of the state so that the board’s composition
21reflects the communities of California.

22(f) (1) A member of the board or of the staff of the Exchange
23shall not be employed by, a consultant to, a member of the board
24of directors of, affiliated with, or otherwise a representative of, a
25carrier or other insurer, an agent or broker, a health care provider,
26or a health care facility or health clinic while serving on the board
27or on the staff of the Exchange. A member of the board or of the
28staff of the Exchange shall not be a member, a board member, or
29an employee of a trade association of carriers, health facilities,
30health clinics, or health care providers while serving on the board
31or on the staff of the Exchange. A member of the board or of the
32staff of the Exchange shall not be a health care provider unless he
33or she receives no compensation for rendering services as a health
34care provider and does not have an ownership interest in a
35professional health care practice.

36(2) A board member shall not receive compensation for his or
37her service on the board, but may receive a per diem and
38reimbursement for travel and other necessary expenses, as provided
39in Section 103 of the Business and Professions Code, while
40engaged in the performance of official duties of the board.

P5    1(3) For purposes of this subdivision, “health care provider”
2means a person licensed or certified pursuant to Division 2
3(commencing with Section 500) of the Business and Professions
4Code, or licensed pursuant to the Osteopathic Act or the
5Chiropractic Act.

6(g)  A member of the board shall not make, participate in
7making, or in any way attempt to use his or her official position
8to influence the making of a decision that he or she knows or has
9reason to know will have a reasonably foreseeable material
10financial effect, distinguishable from its effect on the public
11generally, on him or her or a member of his or her immediate
12family, or on either of the following:

13(1) Any source of income, other than gifts and other than loans
14by a commercial lending institution in the regular course of
15business on terms available to the public without regard to official
16status aggregating two hundred fifty dollars ($250) or more in
17value provided to, received by, or promised to the member within
1812 months prior to the time when the decision is made.

19(2) Any business entity in which the member is a director,
20officer, partner, trustee, employee, or holds any position of
21management.

22(h) There shall not be liability in a private capacity on the part
23of the board or a member of the board, or an officer or employee
24of the board, for or on account of an act performed or obligation
25entered into in an official capacity, when done in good faith,
26without intent to defraud, and in connection with the
27administration, management, or conduct of this title or affairs
28related to this title.

29(i) The board shall hire an executive director to organize,
30administer, and manage the operations of the Exchange. The
31executive director shall be exempt from civil service and shall
32serve at the pleasure of the board.

33(j) The board shall be subject to the Bagley-Keene Open Meeting
34Act (Article 9 (commencing with Section 11120) of Chapter 1 of
35Part 1 of Division 3 of Title 2), except that the board may hold
36closed sessions when considering matters related to litigation,
37personnel, contracting, and rates.

38(k) (1) The board shall apply for planning and establishment
39grants made available to the Exchange pursuant to Section 1311
40of the federal act. If an executive director has not been hired under
P6    1subdivision (i) when the United States Secretary of Health and
2Human Services makes the planning and establishment grants
3available, the California Health and Human Services Agency shall,
4upon request of the board, submit the initial application for
5planning and establishment grants to the United States Secretary
6of Health and Human Services.

7(2) If a majority of the board has not been appointed when the
8United States Secretary of Health and Human Services makes the
9planning and establishment grants available, the California Health
10and Human Services Agency shall submit the initial application
11for planning and establishment grants to the United States Secretary
12of Health and Human Services. Any subsequent applications shall
13be made as described in paragraph (1) once a majority of the
14members have been appointed to the board.

15(3) The board shall be responsible for using the funds awarded
16by the United States Secretary of Health and Human Services for
17the planning and establishment of the Exchange, consistent with
18subdivision (b) of Section 1311 of the federal act.

19(l) Any reference to the California Health Benefit Exchange or
20the Exchange is deemed to refer to Covered California.

21

SEC. 2.  

Section 101319 of the Health and Safety Code is
22amended to read:

23

101319.  

Due to the need to rapidly implement, and to provide
24local health jurisdictions, hospitals, long-term health care facilities,
25clinics, emergency medical systems, and poison control centers,
26or their trade associations, with timely funding for the purposes
27of, this article, funds appropriated in the annual Budget Act or
28some other act for purposes of this article for the 2002-03 fiscal
29year and subsequent fiscal years shall be allocated through the use
30of agreements, which shall not be subject to Part 2 (commencing
31with Section 10100) of Division 2 of the Public Contract Code.

32

SEC. 3.  

Section 123870 of the Health and Safety Code is
33amended to read:

34

123870.  

(a) The department shall establish standards of
35financial eligibility for treatment services under the California
36Children’s Services Program (CCS program).

37(1) Financial eligibility for treatment services under this program
38shall be limited to persons in families with an adjusted gross
39income of forty thousand dollars ($40,000) or less in the most
40recent tax year, as calculated for California state income tax
P7    1purposes. If a person is enrolled in the Medi-Cal program pursuant
2to Section 14005.26 of the Welfare and Institutions Code, or
3enrolled in the Medi-Cal Access Program pursuant to Chapter 2
4(commencing with Section 15810) of Part 3.3 of Division 9 of the
5Welfare and Institutions Code, the financial documentation required
6to establish eligibility for the respective programs may be used
7instead of the person’s California state income tax return. However,
8the director may authorize treatment services for persons in families
9with higher incomes if the estimated cost of care to the family in
10one year is expected to exceed 20 percent of the family’s adjusted
11gross income.

12(2) Children enrolled in the Medi-Cal program pursuant to
13Section 14005.26 of the Welfare and Institutions Code or the
14Medi-Cal Access Program pursuant to Chapter 2 (commencing
15with Section 15810) of Part 3.3 of Division 9 of the Welfare and
16Institutions Code, who have a CCS program eligible medical
17condition under Section 123830, and whose families do not meet
18the financial eligibility requirements of paragraph (1), shall be
19deemed financially eligible for CCS program benefits.

20(b) Necessary medical therapy treatment services under the
21California Children’s Services Program rendered in the public
22schools shall be exempt from financial eligibility standards and
23enrollment fee requirements for the services when rendered to any
24handicapped child whose educational or physical development
25would be impeded without the services.

26(c) All counties shall use the uniform standards for financial
27eligibility and enrollment fees established by the department. All
28enrollment fees shall be used in support of the California Children’s
29Services Program.

30(d) Annually, every family with a child eligible to receive
31services under this article shall pay a fee of twenty dollars ($20),
32that shall be in addition to any other program fees for which the
33family is liable. This assessment shall not apply to any child who
34is eligible for full scope Medi-Cal benefits without a share of cost,
35for children receiving therapy through the California Children’s
36Services Program as a related service in their individualized
37education plans, for children from families having incomes of less
38than 100 percent of the federal poverty level, or for children
39covered under the Medi-Cal program pursuant to Section 14005.26
P8    1of the Welfare and Institutions Code or the Medi-Cal Access
2Program.

3

SEC. 4.  

Section 123900 of the Health and Safety Code is
4amended to read:

5

123900.  

(a)  Beginning September 1, 1991, in addition to any
6other standards of eligibility pursuant to this article, each family
7with a child otherwise eligible to receive services under this article
8shall pay an annual enrollment fee as a requirement for eligibility
9for services, except as specified in subdivision (f).

10(b)  The department shall determine the annual enrollment fee,
11which shall be a sliding fee scale based upon family size and
12income, and shall be adjusted by the department to reflect changes
13in the federal poverty level.

14(c)  “Family size” shall include the child, his or her natural or
15adoptive parents, siblings, and other family members who live
16together and whose expenses are dependent upon the family
17income.

18(d)  “Family income” for purposes of this article, shall include
19the total gross income, or their equivalents, of the child and his or
20her natural or adoptive parents.

21(e)  Payment of the enrollment fee is a condition of program
22participation. The enrollment fee is independent of any other
23financial obligation to the program.

24(f)  The enrollment fee shall not be charged in any of the
25following cases:

26(1)  The only services required are for diagnosis to determine
27eligibility for services, or are for medically necessary therapy
28pursuant to Section 123875.

29(2)  The child is otherwise eligible to receive services and is
30eligible for full Medi-Cal benefits at the time of application or
31reapplication.

32(3)  The family of the child otherwise eligible to receive services
33under this article has a gross annual income of less than 200 percent
34of the federal poverty level.

35(4)  The family of a child otherwise eligible to receive services
36under this article who is enrolled in the Medi-Cal program pursuant
37to Section 14005.26 of the Welfare and Institutions Code.

38(g)  Failure to pay or to arrange for payment of the enrollment
39fee within 60 days of the due date shall result in disenrollment and
P9    1ineligibility for coverage of treatment services 60 days after the
2due date of the required payment.

3(h)  The county shall apply the enrollment fee scale established
4by the department and shall collect the enrollment fee. The county
5may arrange with the family for periodic payment during the year
6if a lump-sum payment will be a hardship for the family. The
7agency director of California Children’s Services may, on a
8case-by-case basis, waive or reduce the amount of a family’s
9enrollment fee if, in the director’s judgment, payment of the fee
10will result in undue hardship.

11(i)  By thirty days after the effective date of this section or
12August 1, 1991, whichever is later, the department shall advance
13to each county, as a one-time startup amount, five dollars and fifty
14cents ($5.50) for each county child who was receiving services
15under this article on June 30, 1990, and who was not a Medi-Cal
16beneficiary. This one-time payment shall be in addition to the 4.1
17percent of the gross total expenditures for diagnoses, treatment,
18and therapy by counties allowed under Section 123955.

19(j)  Each county shall submit to the state, as part of its quarterly
20claim for reimbursement, an accounting of all revenues due and
21revenues collected as enrollment fees.

22

SEC. 5.  

Section 123929 of the Health and Safety Code is
23amended to read:

24

123929.  

(a) Except as otherwise provided in this section and
25Section 14133.05 of the Welfare and Institutions Code, California
26Children’s Servicesbegin delete programend deletebegin insert Programend insert services provided pursuant
27to this article require prior authorization by the department or its
28designee. Prior authorization is contingent on determination by
29the department or its designee of all of the following:

30(1) The child receiving the services is confirmed to be medically
31eligible for the CCS program.

32(2) The provider of the services is approved in accordance with
33the standards of the CCS program.

34(3) The services authorized are medically necessary to treat the
35child’s CCS-eligible medical condition.

36(b) The department or its designee may approve a request for a
37treatment authorization that is otherwise in conformance with
38subdivision (a) for services for a child participating in the Medi-Cal
39program pursuant to Section 14005.26 of the Welfare and
40Institutions Code or the Medi-Cal Access Program pursuant to
P10   1 Chapter 2 (commencing with Section 15810) of Part 3.3 of Division
29 of the Welfare and Institutions Code, received by the department
3or its designee after the requested treatment has been provided to
4the child.

5(c) If a provider of services who meets the requirements of
6paragraph (2) of subdivision (a) incurs costs for services described
7in paragraph (3) of subdivision (a) to treat a child described in
8subdivision (b) who is subsequently determined to be medically
9eligible for the CCS program, as determined by the department or
10its designee, the department may reimburse the provider for those
11costs. Reimbursement under this section shall conform to the
12requirements of Section 14105.18 of the Welfare and Institutions
13Code.

14(d) (1) By July 1, 2016, or a subsequent date determined by the
15department, requests for authorization of services, excluding
16requests for authorization of services submitted by dental providers
17enrolled in the Medi-Cal Dental program, shall be submitted in an
18electronic format determined by the department and shall be
19submitted via the department’s Internet Web site or other electronic
20means designated by the department. The department may
21implement this requirement in phases.

22(2) The department shall designate an alternate format for
23submitting requests for authorization of services when the
24department’s Internet Web site or other electronic means designated
25in paragraph (1) are unavailable due to a system disruption.

26(3) Notwithstanding Chapter 3.5 (commencing with Section
2711340) of Part 1 of Division 3 of Title 2 of the Government Code,
28the department may, without taking regulatory action, implement,
29interpret, or make specific this subdivision and any applicable
30waivers and state plan amendments by means of all-county letters,
31plan letters, plan or provider bulletins, or similar instructions.
32Thereafter, the department shall adopt regulations by July 1, 2017,
33in accordance with the requirements of Chapter 3.5 (commencing
34with Section 11340) of Part 1 of Division 3 of Title 2 of the
35Government Code. The department shall consult with interested
36parties and appropriate stakeholders in implementing this
37subdivision.

38

SEC. 6.  

Section 123940 of the Health and Safety Code is
39amended to read:

P11   1

123940.  

(a) (1) Annually, the board of supervisors shall
2appropriate a sum of money for services for handicapped children
3of the county, including diagnosis, treatment, and therapy services
4for physically handicapped children in public schools, equal to 25
5percent of the actual expenditures for the county program under
6this article for the 1990-91 fiscal year, except as specified in
7paragraph (2).

8(2) If the state certifies that a smaller amount is needed in order
9for the county to pay 25 percent of costs of the county’s program
10from this source. The smaller amount certified by the state shall
11be the amount that the county shall appropriate.

12(b) In addition to the amount required by subdivision (a), the
13county shall allocate an amount equal to the amount determined
14pursuant to subdivision (a) for purposes of this article from
15revenues allocated to the county pursuant to Chapter 6
16(commencing with Section 17600) of Part 5 of Division 9 of the
17Welfare and Institutions Code.

18(c) (1) The state shall match county expenditures for this article
19from funding provided pursuant to subdivisions (a) and (b).

20(2) County expenditures shall be waived for payment of services
21for children who are eligible pursuant to paragraph (2) of
22subdivision (a) of Section 123870.

23(d) The county may appropriate and expend moneys in addition
24to those set forth inbegin delete subdivisionend deletebegin insert subdivisionsend insert (a) and (b) and the
25state shall match the expenditures, on a dollar-for-dollar basis, to
26the extent that state funds are available for this article.

27(e) County appropriations under subdivisions (a) and (b) shall
28include county financial participation in the nonfederal share of
29expenditures for services for children who are enrolled in the
30Medi-Cal program pursuant to Section 14005.26 of the Welfare
31and Institutions Code, or the Medi-Cal Access Program pursuant
32to Chapter 2 (commencing with Section 15810) of Part 3.3 of
33Division 9 of the Welfare and Institutions Code, and who are
34eligible for services under this article pursuant to paragraph (1) of
35subdivision (a) of Section 123870, to the extent that federal
36financial participation is available at the enhanced federal
37reimbursement rate under Title XXI of the federal Social Security
38Act (42 U.S.C. Sec. 1397aa et seq.) and funds are appropriated for
39the California Children’s Services Program in the State Budget.

P12   1(f) This section shall not require the county to expend more than
2the amount set forth in subdivision (a) plus the amount set forth
3in subdivision (b), nor shall it require the state to expend more
4than the amount of the match set forth in subdivision (c).

5(g) Notwithstanding Chapter 3.5 (commencing with Section
611340) of Part 1 of Division 3 of Title 2 of the Government Code,
7the department, without taking further regulatory action, shall
8implement this section by means of California Children’s Services
9numbered letters.

10

SEC. 7.  

Section 123955 of the Health and Safety Code is
11amended to read:

12

123955.  

(a) The state and the counties shall share in the cost
13of administration of the California Children’s Services Program
14at the local level.

15(b) (1) The director shall adopt regulations establishing
16minimum standards for the administration, staffing, and local
17implementation of this article subject to reimbursement by the
18state.

19(2) The standards shall allow necessary flexibility in the
20administration of county programs, taking into account the
21variability of county needs and resources, and shall be developed
22and revised jointly with state and county representatives.

23(c) The director shall establish minimum standards for
24administration, staffing and local operation of the program subject
25to reimbursement by the state.

26(d) Until July 1, 1992, reimbursable administrative costs, to be
27paid by the state to counties, shall not exceed 4.1 percent of the
28gross total expenditures for diagnosis, treatment and therapy by
29counties as specified in Section 123940.

30(e) Beginning July 1, 1992, this subdivision shall apply with
31respect to all of the following:

32(1) Counties shall be reimbursed by the state for 50 percent of
33the amount required to meet state administrative standards for that
34portion of the county caseload under this article that is ineligible
35for Medi-Cal to the extent funds are available in the State Budget
36for the California Children’s Services Program.

37(2) Counties shall be reimbursed by the state for 50 percent of
38the nonfederal share of the amount required to meet state
39administrative standards for that portion of the county caseload
40under this article that is enrolled in the Medi-Cal program pursuant
P13   1to Section 14005.26 of the Welfare and Institutions Code or the
2Medi-Cal Access Program pursuant to Chapter 2 (commencing
3with Section 15810) of Part 3.3 of Division 9 of the Welfare and
4Institutions Code, and who are eligible for services under this
5article pursuant to subdivision (a) of Section 123870, to the extent
6that federal financial participation is available at the enhanced
7federal reimbursement rate under Title XXI of the federal Social
8Security Act (42 U.S.C. Sec. 1397aa et seq.) and funds are
9appropriated for the California Children’s Services Program in the
10State Budget.

11(3) On or before September 15 of each year, each county
12program implementing this article shall submit an application for
13the subsequent fiscal year that provides information as required
14by the state to determine if the county administrative staff and
15budget meet state standards.

16(4) The state shall determine the maximum amount of state
17funds available for each county from state funds appropriated for
18CCS county administration. If the amount appropriated for any
19fiscal year in the Budget Act for county administration under this
20article differs from the amounts approved by the department, each
21county shall submit a revised application in a form and at the time
22specified by the department.

23(f) The department and counties shall maximize the use of
24federal funds for administration of the programs implemented
25pursuant to this article, including using state and county funds to
26match funds claimable under Title XIX or Title XXI of the federal
27Social Security Act (42 U.S.C. Sec. 1396 et seq.; 42 U.S.C. Sec.
281397aa et seq.).

29begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 14124.12 is added to the end insertbegin insertWelfare and
30Institutions Code
end insert
begin insert, end insertimmediately following Section 14124.11begin insert, to
31read:end insert

begin insert
32

begin insert14124.12.end insert  

(a) The department may enter into contracts for the
33purposes of undertaking administrative activities by the
34department’s Mental Health and Substance Use Disorder Services
35Division concerning Parts 431, 433, 438, 440, 457, and 495 of
36Title 42 of the Code of Federal Regulations, as amended May 6,
372016, as published in the Federal Register (81 Fed. Reg. 27498),
38and any associated federal policy guidance issued by the federal
39Centers for Medicare and Medicaid Services.

P14   1
(b) Contracts entered into or amended pursuant to subdivision
2(a) shall be exempt from Chapter 6 (commencing with Section
314825) of Part 5.5 of Division 3 of Title 2 of the Government Code,
4Section 19130 of the Government Code, and Part 2 (commencing
5with Section 10100) of Division 2 of the Public Contract Code and
6shall be exempt from the review or approval of any division of the
7Department of General Services.

8
(c) Contracts entered into pursuant to this section shall be
9publicly available pursuant to the California Public Records Act
10(Chapter 3.5 (commencing with Section 6250) of Division 7 of
11Title 1 of the Government Code).

12
(d) This section shall remain in effect only until January 1, 2020,
13and as of that date is repealed, unless a later enacted statute, that
14is enacted before January 1, 2020, deletes or extends that date.

end insert
15begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 14184.20 of the end insertbegin insertWelfare and Institutions Codeend insert
16
begin insert is amended to read:end insert

17

14184.20.  

(a) Consistent with federal law, the Special Terms
18and Conditions, and this article, the department shall implement
19the Medi-Cal 2020 demonstration project, including, but not limited
20to, all of the following components:

21(1) The Global Payment Program, as described in Section
2214184.40.

23(2) The Public Hospital Redesign and Incentives in Medi-Cal
24(PRIME) program, as described in Section 14184.50.

25(3) The Whole Person Care pilot program, as described in
26Section 14184.60.

27(4) The Dental Transformation Initiative, as described in Section
2814184.70.

29(b) In the event of a conflict between any provision of this article
30and the Special Terms and Conditions, the Special Terms and
31Conditions shall control.

32(c) The department, as appropriate, shall consult with the
33designated public hospitals, district and municipal public hospitals,
34and other local governmental agencies with regard to the
35implementation of the components of the demonstration project
36under subdivision (a) in which they will participate, including, but
37not limited to, the issuance of guidance pursuant to subdivision
38(d).

39(d) Notwithstanding Chapter 3.5 (commencing with Section
4011340) of Part 1 of Division 3 of Title 2 of the Government Code,
P15   1the department may implement, interpret, or make specific this
2article or the Special Terms and Conditions, in whole or in part,
3by means of all-county letters, plan letters, provider bulletins, or
4other similar instructions, without taking regulatory action. The
5department shall provide notification to the Joint Legislative
6Budget Committee and to the Senate Committees on
7Appropriations, Budget and Fiscal Review, and Health, and the
8Assembly Committees on Appropriations, Budget, and Health
9within 10 business days after the above-described action is taken.
10The department shall make use of appropriate processes to ensure
11that affected stakeholders are timely informed of, and have access
12to, applicable guidance issued pursuant to this authority, and that
13this guidance remains publicly available until all payments related
14to the applicable demonstrationbegin insert projectend insert component are finalized.

15(e) For purposes of implementing this article or the Special
16Terms and Conditions, the department may enter into exclusive
17or nonexclusive contracts, or amend existing contracts, on a bid
18or negotiated basis. Contracts entered into or amended pursuant
19to this subdivision shall be exempt from Chapter 6 (commencing
20with Section 14825) of Part 5.5 of Division 3 of Title 2 of the
21Government Code and Part 2 (commencing with Section 10100)
22of Division 2 of the Public Contract Code, and shall be exempt
23from the review or approval of any division of the Department of
24General Services.

25(f) During the course of the demonstration term, the department
26shall seek any federal approvals it deems necessary to implement
27the demonstration project and this article. This shall include, but
28is not limited to, approval of any amendment, addition, or technical
29correction to the Special Terms and Conditions, and any associated
30state plan amendment, as deemed necessary. This article shall be
31implemented only to the extent that any necessary federal approvals
32are obtained and federal financial participation is available and is
33not otherwise jeopardized.

34(g) The director may modify any process or methodology
35specified in this article to the extent necessary to comply with
36federal law or the Special Terms and Conditions of the
37demonstration project, but only if the modification is consistent
38with the goals set forth in this article for the demonstration project,
39and its individual components, and does not significantly alter the
40relative level of support for participating entities. If the director,
P16   1after consulting with those entities participating in the applicable
2demonstration project component and that would be affected by
3that modification, determines that the potential modification would
4not be consistent with the goals set forth in this article or would
5significantly alter the relative level of support for affected
6participating entities, the modification shall not be made and the
7director shall execute a declaration stating that this determination
8has been made. The director shall retain the declaration and provide
9a copy, within five working days of the execution of the
10declaration, to the fiscal and appropriate policy committees of the
11Legislature, and shall work with the affected participating entities
12and the Legislature to make the necessary statutory changes. The
13director shall post the declaration on the department’s Internet
14Web site and the director shall send the declaration to the Secretary
15of State and the Legislative Counsel.

16(h) In the event of a determination that the amount of federal
17financial participation available under the demonstration project
18is reduced due to the application of penalties set forth in the Special
19Terms and Conditions, the enforcement of the demonstration
20project’s budget neutrality limit, or other similar occurrence, the
21department shall develop the methodology by which payments
22under the demonstration project shall be reduced, in consultation
23with the potentially affected participating entities and consistent
24with the standards and process specified in subdivisionbegin delete (h).end deletebegin insert (g).end insert
25 To the extent feasible, those reductions shall protect the ability to
26claim the full amount of the total computable disproportionate
27share allotment through the Global Payment Program.

28(i) During the course of the demonstration term, the department
29may work to develop potential successor payment methodologies
30that could continue to support entities participating in the
31demonstration project following the expiration of the demonstration
32term and that further the goals set forth in this article and in the
33Special Terms and Conditions. The department shall consult with
34the entities participating in the payment methodologies under the
35demonstration project, affected stakeholders, and the Legislature
36in the development of any potential successor payment
37methodologies pursuant to this subdivision.

38(j) The department may seek to extend the payment
39methodologies described in this article through demonstration year
4016 or to subsequent time periods by way of amendment or
P17   1extension of the demonstration project, amendment to the Medi-Cal
2State Plan, or any combination thereof, consistent with the
3applicable federal requirements. This subdivision shall only be
4implemented after consultation with the entities participating in,
5or affected by, those methodologies, and only to the extent that
6any necessary federal approvals are obtained and federal financial
7participation is available and is not otherwise jeopardized.

8(k) (1) Notwithstanding any other law, and to the extent
9authorized by the Special Terms and Conditions, the department
10may claim federal financial participation for expenditures
11associated with the designated state health programs identified in
12the Special Terms and Conditions for use solely by the department
13as specified in this subdivision.

14(2) Any federal financial participation claimed pursuant to
15paragraph (1) shall be used to offset applicable General Fund
16expenditures. These amounts are hereby appropriated to the
17department and shall be available for transfer to the General Fund
18for this purpose.

19(3) An amount of General Fund moneys equal to the federal
20financial participation that may be claimed pursuant to paragraph
21(1) is hereby appropriated to the Health Care Deposit Fund for use
22by the department.



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